Transcript Document

The Border, Canada-US Trade and
the Post-9/11 Security Regime
with implications for Immigration and Diversity
Bill Anderson
[email protected]
Ontario Research Chair in Cross-Border
Transportation Policy
University of Windsor
Prepared for Citizenship and Immigration Canada
January 14, 2009
Canada-US Border
• largest bilateral trade relationship in the world
($1.5B per day)
• Mostly through Great Lakes crossings
• Cross-border supply chains
• 150,000 cars per day
• Increasing global trade through Canada to
US
• Many miles of unfenced, unposted wilderness
Canadian Exports to US 2007
•
•
•
•
•
•
Fuels(25%)
Cars, trucks and parts (19%)
Electricity generation equipment (7%)
Plastics (3.4%)
Electrical Machinery (3.4%)
All other categories 3% or less
US Exports to Canada 2007
•
•
•
•
•
•
Cars, trucks and parts (22%)
Electricity generating equipment (16%)
Electrical machinery (7%)
Plastics (5%)
Fuels (3.5%)
All other categories 3% or less
Ontario Economy
• Largest manufacturing work force in North
America except California
• 1994-2003, manufacturing employment +33%
• Exports are 59% of GDP, mostly
manufactured goods
• More than ½ of Canadian Exports
• Automotives account for 38% of exports
• 80-90% of cars manufactured in Ontario sold
in US.
Merchandise Trade Crossing
• Oil, iron ore and other resource products
cross by pipeline, water and rail
– largest rail crossing by value at Sarnia (by
weight at Fort Frances)
• Most manufactured goods cross by truck,
– almost half on two bridges at
Windsor/Detroit and Fort Erie/Buffalo
• Rapid movement of goods to support just-intime production systems, especially in
automotive industry
Mode Share of Canada – US
Trade
Mode
Exports
Imports
Road (truck)
49%
75%
Rail
20%
12%
Marine
6%
2%
Air
5%
8%
20%
3%
Other (pipeline)
Ontario Border Crossings
Border Infrastructure
Ambassador Bridge: busiest
freight border crossing
• More than 25% of all US-Canada trade, 35%
or road trade
• 10,000 commercial vehicles on a typical day
• Privately owned, 80 years old, 4 lanes
• 6 lane replacement planned
• Additional crossing planned down river
Other SW Ontario Crossings
• Bluewater Bridge (Sarnia – Port Huron,
12.5% of road trade)
• Detroit – Windsor tunnel (#1 passenger
crossing)
• CN rail tunnel Sarnia – Port Huron, CPR rail
tunnel Windsor – Detroit
• Windsor – Detroit truck ferry for hazardous
materials
Peace Bridge
• Number 2 bridge, handles most of the freight
through the Port of Buffalo
• Also 80 years old, owned and managed by an
international commission
• Ongoing expansion plans complicated by
local and environmental concerns
• 2003-8: truck traffic steady but cars down
11%
Other Niagara Frontier Crossings
• Queenston – Lewiston Bridge (#4 road
crossing, freight in transit)
• Rainbow Bridge
• Whirlpool Bridge
• International Railway Bridge (used by CN and
CPR)
Impacts of September 11, 2001
on US-Canada Border
• Near closure of Ambassador bridge, hundreds of
factories shut down
• Heightened security leading to long delays at borders
for both freight and passengers
• Western Hemisphere Travel Initiative: passport or
comparable document required between Canada and
US
– Land border implementation June 2009
– fewer than 30% of Americans and 50% of Canadians had
passports in 2007
• Summer 2007, delays comparable to 2002
Cross-Border Supply Chains
Cross-border supply chains
• Value added in both Canada and US
• Automotive industry
– 1965 Automotive Products Trade Agreement
– Components may cross border more than once
• Agriculture (Livestock)
– Pork: piglets raised in Canada, shipped to US for
fattening and slaughter
• Other cross-border supply chains: machinery,
mineral energy, forest products, seafood
Frequency of supply and
distance (2002 CAR study)
Impacts of border on auto
industry
• 1 hour shutdown of assembly plant costs
about $60,000 – this could be the cost of a
delay in components delivery
• US assembled car contains about $1000
Canadian content, Canada assembled car
contains $7500 US content (2002 CAR study)
• Canadian automotive plants more vulnerable
to cross-border delivery risk
Current Threats to Ontario’s
Automotive Industry
•
•
•
•
•
•
•
Credit crisis, low demand
Slow border crossings
High dollar
Changes in relative labour costs
End of Auto Pact protections
Shift of US production away from border
Potential massive subsidization for retooling
US plants
Economic Impacts of Border
Delays
• Labor and capital cost of idling trucks
• Risk of factory shutdowns due to failure to deliver
components on time
• Inventory stockpiling to insure against delays
• Reduced tourism
• 7.1M jobs in US and 3M jobs in Canada depend on
cross-border trade (US and Canada C of C)
• Estimated annual delay cost at over $10B (Ontario C
of C).
Policy
Addressing the border
problem
• Expand and improve border operations
–
–
–
–
New and expanded crossing infrastructure
More booths, more personnel
Improved technologies
Better Canada-US coordination
• Move functions away from the border
– Risk-based assessment
– E-manifest
– “reverse inspection”
Addressing the border
problem (cont.)
• Alternative modes
– Road/rail intermodal
– Short-sea shipping
• The perimeter approach
Perimeter approach to North
American Security
• Proposed by US Ambassador Gordon Giffen in 2000
• Precedent in US/Canada export control perimeter
• Shift security from US-Canada border to US-Canada
perimeter
• Requires adoption of common security standards and
integration of law enforcement efforts
• In the extreme case could lead to “open” border
comparable to EU.
Perimeter approach: practical
problems
• Harmonization in some areas may be difficult or
controversial:
– firearms
– refugee and other immigration policies
• NAFTA is not a customs union and does not allow
free movement of labor
Perimeter approach: political
obstacles
• From the US side
– Public reluctant to trust officials of a foreign
government to maintain security
• From the Canadian side
– Public sees this as a reduction in Canadian
sovereignty (autonomy), because
American standards are likely to prevail
Risk-based assessment
• Pre-qualifying some individuals or firms as
low-risk – “making the haystack smaller”
• Comparable to basing insurance rates on
demographic characteristics
• Exempting low-risk travelers or shippers from
some security procedures
• Requires low-risk certification by both
countries
Trusted traveler program:
NEXUS
• US or Canadians register for program ($50)
• Requires background info and interview with border
officials of other country
• Biometric identification
• Special lanes on bridges and other crossings and at
airports
• Chambers of Commerce: goal to enroll one million
people in NEXUS by late 2009
“Trusted shipper” programs
(Supply Chain Security)
• Expedited clearance for companies whose
supply chain facilities and procedures are
inspected and certified by border agencies
• Cooperation from importers, carriers, brokers,
warehouse operators, manufacturers etc.
• On-site inspections
• Background screening of individuals
Trusted Shipper (cont.)
• PIP (Partners in Protection, Canada) and CTPAT (Customs-Trade Partnership Against
Terrorism, US)
• FAST bilateral program, pre-qualifies drivers,
carriers and importers as low risk
• FAST lanes at about 20 crossings
• TWIC (Transport Workers Identity
Credentials), needed for access to US port
facilities
Practical problems with
trusted shipper programs
• Separate lanes are not long enough to avoid
backups
• Program participants still subject to
secondary search
• Cost of compliance for membership up to
$100,000
• Many firms decide its not worth it
• Complaints that they discriminate against
smaller firms
Potential issues for
immigration and diversity
• In the border regions, a FAST card is a
precondition for employment as a truck driver
• Applications must be approved by both US
and Canada
• Some criticism based on lack of transparency
(Truck News, Feb 2007)
• Anecdotal evidence that immigrant groups
may be disadvantaged or be reluctant to
apply
Grounds for denial of FAST
Card application
• Provide false information on application
• Convicted for a criminal offense in any
country
• Violate of customs or immigration program
• “Fail to meet other requirements of the FAST
Commercial Driver Program”
Issues of special relevance to
immigrants
• Information required on
– Rehabilitation under Canadian Immigration
laws
– Waivers of inadmissibility issued under US
immigration laws
• “any personal information you provide will be
shared with other government and law
enforcement agencies”
Issues to be addressed
• Are certain groups more likely to have their
applications rejected? (no statistical evidence that I
know of)
• Do rejected applicants pursue review option and
discover reason for rejection?
• Are certain groups reluctant to apply in the first place
or reluctant to reapply if they are rejected?
• What help can be provided to immigrant drivers and
business people seeking certification?
• Effect on Temporary Foreign Worker Program
Broader political challenges
• Some US interests may benefit from
border problems
• “Anti free trade” forces in Canada may
favor border delays
• US-Canada border issues often linked
with US-Mexico border issues
3 Asymmetries
• Proportional weight: US-Canada trade makes
up a larger share of Canada’s economy.
• Vulnerability: abandonment of cross-border
supply chains biased against smaller
economy.
• Political influence: US preferences likely to
prevail in joint decision making.