Canada, U.S. Chambers Call for Lower Cost, More Efficient Border

(The Canadian Press via CCLA)

The Canadian and U.S. chambers of commerce are sounding the alarm on the mounting costs and delays encountered by companies trying to do business in both countries, saying some of the barriers are unreasonable and hurting the economy.

The two countries’ largest business lobby groups, with over three million member firms, issued 17 recommendations Wednesday on how to improve efficiency while maintaining security at what was once called the world’s longest undefended border.

But the chambers agree that one of the key changes needed – an attitudinal shift back to the good old days – is not in the offing for now, at least not on the part of the U.S. government following the terrorist attacks experienced on Sept. 11, 2001.

“Obviously, the events of 9-11 changed a whole lot,” said Canadian chamber policy head Mike Murphy. “We used to have a different attitude about the border . . . I just think it is going to take some time.”

Since the attacks, the U.S. has created a new government Department of Homeland Security and has erected increasingly layered and complex barriers of regulations and inspections.

That has increased wait times for Canadian shippers moving cargo into the U.S., as well as costs.

The report cites several examples of how the regulations have added to costs, including a 2005 U.S. requirement that health certificate numbers be printed on each case of meat and poultry shipped into the U.S., which is estimated to cost one food exporter about $700,000 a year.

“The reality is every incremental cost does filter down to the individual consumer and it makes North American businesses less competitive globally,” said Adrean Scheid Rothkopf of the U.S. chamber.

One of the problems, say businesses, is that neither the U.S. nor Canadian governments have hired and trained sufficient staff to administer the new security and safety regulations they have imposed.

One businessman, Robert Kee of Canadian corn products maker Casco Inc., said his company’s shipments are “held on a regular basis” simply because the trucks sometime arrive at the border when food inspectors are not present, or not working during a weekend.

The two chambers recommended that the two governments establish “trusted shipper and credentialing programs” for frequent low-risk shippers, mutually recognized pre-clearance, increase staffing to ensure 24/7 service at all major crossings, establish a “trusted traveller program” for executives, technical and professionals who frequently cross the border on business, and establish enhanced drivers’ licenses that citizens of each country could use in place of passports.

Murphy said the recommendations do not require large outlays of government funds, and many have been under discussion between the two governments for years. What is needed, he said, is an infusion of trust on the part of both governments that the other side is equally vigilant.

But trust may be in short supply in Washington, says Peter Morici, a University of Maryland School of Business professor and former chief economist that the U.S. trade commission.

“The perception here is that Canada has more porous borders,” he said. “So it’s not going to be satisfactory to us unless we have an integrated system so we are very knowledgeable about what goes in and out of Canada, and that raises very understandable sovereignty issues for you.”

Jason Conley, who specializes on security issues for the American chamber, said the U.S. administration is aware of the impact a tight border has on the economies of both countries, and that while some progress has been made, security trumps trade on the issue.

“It is a challenge because at the end of the day, they (homeland security) will be judged on how well they secure the border,” he said.

The joint press release is on the website of the Canadian Chamber of Commerce is here and the more lengthy report is here. Both are in PDF format.