Saturday, August 25, 2007

Customs union the solution for border delays

The London Free Press
By Rory Leishman

The Pont de l’Europe linking Strasbourg, France, and Kehl, Germany, used to straddle one of the most heavily fortified borders in the world. Today, cars and trucks whiz across the bridge without stopping: There are no border guards, no customs officials and no immigration officers to impede the free flow of goods and people between France and Germany.

Consider, in contrast, the supposedly longest undefended, border in the world between Canada and the United States. Thanks to tight border security, cars and trucks attempting to cross any of the major border points between these two countries routinely experience delays of an hour or more.

In reaction to the September 11 terrorist attack, the United States immediately closed the border altogether. No traffic was allowed to enter the United States by land, sea or air. And for days after the border was reopened, intensified inspections by United States customs officials caused trucking delays of 12-to-18 hours.

The result was a severe economic blow to employers and workers on both sides of the border. On average, some $1.4 billion worth of goods, services and investment income daily crosses the Canada/United States border. More than 100 million people cross that same border every year.

In the aftermath of the September 11 attack, all cross-border traffic was severely curtailed. Some plants such as those in the automobile sector that depend on just-in-time deliveries across the border had to shut down.

At this week’s summit in Montebello, Quebec, Prime Minister Stephen Harper and President George Bush discussed plans for keeping the border open during future emergencies. Meanwhile, on the provincial level in Ontario, Transportation Minister Donna Cansfield has disclosed that by the end of this year, her department will begin issuing new, more secure driver’s licences with imbedded citizenship information. She hopes that these licences will meet the requirements of a law enacted by the United States Congress that could require everyone seeking entry into the United States to present a passport or some other secure identification document as soon as next summer.

The introduction of easier documentation, more customs inspectors and other similar measures is all to the good, but cannot eliminate the underlying problem of chronic border costs. It has been estimated that brokerage fees, duties, customs administration and waiting times for shipments across the Canada/United States border routinely cost companies at least $10 billion a year.

Allan Gotlieb, Canadian Ambassador to the United States from 1981 to 1988, has long argued that there is only one sufficient remedy: namely, the elimination of all controls on the border between Canada and the United States. In his view, cars and trucks and goods and passengers should be able to sale across the Bluewater Bridge between Canada and the United States in the same way that traffic freely moves across the Pont de L’Europe between France and Germany.

Gotlieb is not alone in taking this view. In recent studies of cross-border trade, Danielle Goldfarb and William B. P. Robson of the C. D. Howe Institute and Alexander Moens of the Fraser Institute have come to the same conclusion.

Of course, eliminating border controls would be no simple matter. Among other measures, Canada and the United States would first have to harmonize their external tariffs, establish mutually acceptable procedures for preventing terrorists from infiltrating their countries, and reach agreement on common food and safety standards.

To the dismay of our more strident Canadian nationalists, some of these issues were discussed at the Montebello summit. Prime Minister Stephen Harper was justifiably dismissive of the alleged threat to Canadian independence. He asked reporters: “Is the sovereignty of Canada going to fall apart if we standardize jelly beans?”

Instead of relying on half measures, Harper should propose an outright customs union and the eventual elimination of all border controls between Canada and the United States. With solid Canadian support, the idea should meet with a favourable reception in the White House and Congress. It stands to reason that the free and unimpeded flow of people and goods across the border between Canada and the United States would enhance the North American Free Trade Agreement which has proven hugely beneficial in boosting living standards for millions of people in both countries.

No comments: