Less is more in border of the future
Drop the barriers, business implores
Windsor Star / Oct 2000
By Doug Williamson
Open roadways instead of a blocked border. For businessmen like Steve Reko, it's a million-dollar dream.
The Windsor tool and die company owner routinely sends half a dozen trucks a day across the bridge, bearing exports to American companies. Frequently he sends service crews over to fix problems or retrieve products from customers as far away as California.
His company does at least $80 million a year in business, employing 500.
But having a border costs him $1 million a year: The lost time for truckers waiting while their cargo is inspected by U.S. Customs; the brokers paid to help clear the paper trail; the specialists who prepare import/export licences.
Reko is saving duty payments because of 10 years of free trade between Canada and the United States, but: "A million dollars is a million dollars."
"It's always been an inconvenience," Reko says of the border. "Now we get cleared a lot faster. But if we have to send people on a service call that can become quite cumbersome. It's a cost. It would be nice to eliminate it. Time is money. The time (the driver) spends at the border, he'd probably be in Toledo."
Reko is part of a growing body of businessmen, academics and government officials in favour of doing away with the border for commercial traffic. The proposal received a significant boost last week from an American think-tank that suggested the U.S., Canada and Mexico greatly eliminate border formalities.
"It is our contention that, substantially, the U.S.-Canada border is likely to disappear before any politician finds the political courage to negotiate its removal," says the study prepared by the Carnegie Endowment for International Peace based in Washington, D.C.
The authors spent two years researching the issue, examining life in border communities such as Windsor-Detroit.
A key recommendation is that one trading partner be responsible for all inspections and tariff collections on behalf of the other two countries when cargo enters NAFTA space, which would eliminate duplication at each border.
"Business and commercial interests are the drivers of better cross-border relations across all research sites," the Carnegie study says.
Canadian and U.S. border officials are mulling changes even as businessmen like Reko cry out for help. Today and Friday delegates are discussing the subject in Vancouver and Blaine, Wash. as part of the second meeting of the Canada-U.S. Partnership, a group formed by Prime Minster Jean Chretien and U.S. President Bill Clinton last year.
Under NAFTA and the FTA, Canada-U.S. trade has doubled since 1989, from $195 billion US to more than $400 billion. Michigan is Canada's largest state trading partner and vice versa.
Having a border ultimately hurts consumers, argue Reko and others, since lost-time costs are typically passed on.
"This is the ultimate vision -- an economic community with no borders," says Alfie Morgan, an international trade expert and member of the business faculty of the University of Windsor. "Trucks are moving warehouses now. It's totally unwarranted. The U.S. and Canadian economies are totally integrated. Why on Earth are we keeping this border other than to torture ourselves?"
Morgan believes Canada should adopt U.S. guidelines and harmonize manufacturing, product inspection and licensing procedures so border clearances are obviated.
"We should play by their rules, let's not kid ourselves. We're not independent -- we're fully integrated.
"It would put an end to the turf wars. It is time we put an end to these adversarial things," says Morgan, referring to intergovernmental agencies vying for budgets and power. "As far as business people are concerned, borders disappeared in the mid-'80s."
U.S. shippers into Canada are increasingly concerned about border procedures that cause delays or even stall trade, says John Carroll, head of international business for the Detroit Regional Chamber of Commerce.
More trade the better
"It's inevitable that borders are dropping everywhere in the world," Carroll says. "The more we trade to each others' benefit, the better off we all are."
Facing a constant terrorist threat, U.S. trade officials are wary of a totally open border. Their goal is to look at traffic before it gets to the border to decide: Is it high-risk or low-risk?
"Our goal of course is to separate out the legitimate traffic from the higher risk traffic and we are using a risk-management approach to look at traffic flow," says Bob Trotter, assistant commissioner, office of strategic trade and northern border co-ordinator for U.S. Customs Service, Washington, D.C.
The U.S. has specific security concerns on the Canadian border: Drug smuggling, an increase in alien smuggling, terrorists sneaking into the United States and trade fraud.
"We have concerns that Canada may be used as a trade shipment point" to disguise the origin of certain goods and sneak them into the United States, Trotter says.
Canada's top border official says the millennium has arrived but we're still waiting for a modern trading border.
"The border has to catch up with reality," acknowledges George Haynal, deputy minister of the Americas in Ottawa. "These (trading) flows are growing exponentially. The border wasn't built to manage these kinds of extraordinary flows."
Despite the Canadian border squeeze, Haynal, who was scheduled to attend today's border talks in Vancouver, says our trading relationship with the United States is in "extraordinarily" good shape.
"What's extraordinary about these (trade) flows is how little problems there are," he says. Canada takes in $1 billion every day in trade merchandise, Haynal says and border procedures and infrastructure must change to meet this demand.
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