Business and government leaders on both sides of the Canada-U.S. border are working to make an admirable economic relationship even stronger. Today’s hot topics: border security and infrastructure, energy and North American competitiveness.
BORDERLINE BUSINESS
by Randall Anthony Mang
It's hard to fathom, but the fact is more than $1.8 billion worth of goods and services flow between Canada and the U.S. each day. Despite occasional trade disputes and diplomatic foibles, Canada- U.S. trade has been a boon to both nations. Since NAFTA’s implementation in 1989, bilateral trade – responsible for millions of jobs on both sides of the border – has tripled, rising to nearly $680 billion in 2004 alone.
The focus now is on how North Americans can prosper even more from this relationship.
Minister of International Trade David Emerson says, “A bold part of our government’s agenda is to re-establish a respectful, constructive relationship with the United States. Canadians are going to be better for it.”
Emerson is among those who urge that a strong North American economic platform is increasingly vital.
“We are committed, along with our NAFTA counterparts, to focus on how we can strengthen North American competitiveness.
We have to develop North American supply chains – cross-border supply chains and clusters – that create efficiency for our industries and allow us to take on the world’s most competitive economies.”
Perrin Beatty, president and CEO of
Canadian Manufacturers & Exporters, says border efficiency is a bottom-line issue. “We need a seamless, if not invisible, border between Canada and its largest trading partner.”
He notes that while efforts made by Canadian and American governments, businesses and citizens since 9/11 have resulted in more secure and better-managed borders, “serious problems still remain.”
Scotty Greenwood, executive director of the Washington-based Canadian-American Business Council, sees particular risk in the Western Hemisphere Travel Initiative, new U.S. legislation that will eventually require American and Canadian citizens to present passports or other secure travel documents at the border.
“People are viewing this as a peopleflow issue, but in fact it could seriously hamper commerce, especially truck traffic,” says Greenwood. “The (WHTI) must be carefully implemented, along with appropriate infrastructure, to avoid any negative impact.”
Canadian Chamber of Commerce president and CEO Nancy Hughes Anthony pulls back the lens further, asking, “At the border, why are we still asking people to count litres of wine? If the issue is more about security than commercial protection, then let’s focus on that. We can learn from the European experience and employ intelligent solutions.
“I genuinely believe that governments and the business community accept the difficulties of security. But we can’t allow these concerns to be the death knell of this huge and great relationship.”
Regulatory waves Nowhere else are Canada-U.S. border issues more amplified than at the Detroit- Windsor crossing – the gateway through which 30 per cent of all North American trade flows.
While most debate focuses on the need for new bridge and tunnel crossings, Canadian businessman Blair McKeil, president of tug, barge and shipping firm McKeil Marine Limited, says ferrying trucks and other cargo could be a bigger part of the solution to ease border congestion.
“We have barges trading on the Great Lakes that carry the equivalent of 400 truckloads on a single shipment,” notes McKeil, “and others that could shuttle 10,000 tractor trailers per week between Windsor and Detroit to help alleviate congestion at that border crossing.”
And yet, McKeil vessels chartered by the U.S.-based Detroit
Windsor Truck Ferry presently run at only 50 per cent of their capacity, a result of regulatory burden.
Detroit Windsor Truck Ferry vice president Gregg Ward says Canadian rules require new short-sea shipping operators to pay for all customs services on a costrecovery basis – a cost burden not faced by existing bridge and tunnel operators. A U.S. Harbor Maintenance tax levied on U.S.-bound cargo is another disincentive.
“Governments have said they will remove these barriers, but they have not,” says Ward. “Truckers are not social engineers. They make decisions on a basis of cost and speed.”
McKeil says with regulatory and other barriers removed border waterways offer a ready means to help address border congestion.
Perrin Beatty says, “We need to be much more creative about how we handle borders in North America. Otherwise, one layer of new and costly regulations will simply get piled upon the last one.”
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Associations and Partners also appearing in this report:
Interview with Senior Vice President and Chief Economist of TD Bank Financial Group
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