U.S. fiscal woes complicate border deal
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WASHINGTON - The Canada-U.S. Beyond the Border initiatives haven't exactly been a top priority for the White House since Prime Minister Stephen Harper and President Barack Obama announced a "shared vision" for a border deal two years ago.
Obama had an election to win in 2012, and Capitol Hill has been consumed with efforts to reduce the country's mammoth national debt, prompting stakeholders on both sides of the border to gripe that progress on Beyond the Border's so-called action plan has, so far, lacked action.
"There's a kind of general feeling of: 'OK, we're doing all right, but we'd like more please, and can we move faster?'" Chris Sands, an expert on Canada-U.S. relations and North American economic integration, said in a recent interview.
Officials are still working on initiatives from the first year of the action plan while stakeholders had hoped to be well into a second-year agenda by now, said Sands, a self-described "fly on the wall" in some of the ongoing negotiations.
"Part of it is budgetary issues," he said.
"The Obama administration knows that this is supposed to happen and they know there are pilot projects, but there's no money. How do you do all this with sequestration looming?"
Sequestration — a massive package of sweeping, automatic spending cuts to an array of U.S. federal departments and agencies — is set to kick in on March 1.
The mandated measures would amount to US$1.2 trillion in cuts by 2021. If Congress fails to act, Americans will be facing the type of austerity measures that won't bode well for some of the costlier cross-border projects envisioned by Beyond the Border, aimed at intelligence-sharing, easing and streamlining cross-border trade and harmonizing regulations.
Birgit Matthiessen, the Washington-based senior adviser for the Canadian Manufacturers and Exporters, is among those expressing frustration at the pace of the action plan.
"We're in the second year of the two-year action plan and the CME has made it quite clear to both Washington and Ottawa that we're hoping the second year is a lot more ambitious than the first," she said.
The long-existing problems plaguing land border crossings have received particularly short shrift, Matthiessen says.
"They've announced bold initiatives at sea ports and for air cargo, and that's great, those are good, we applaud them," she said.
"But for our members, it's the land border that's crucial. Customs officials on both sides of the border continue to stop and hinder legitimate business travellers coming across the borders on both sides. The rules are 20 years old; they're out of date, they're archaic. We need clear, updated guidlelines to reflect the modern-day business world."
There have nonetheless been some small but significant achievements, including a recent announcement that the U.S. and Canada had increased and matched the value thresholds for “expedited customs clearance” to $2,500 for both countries. The previous threshold for goods for was $1,600.
Courier UPS applauded the news.
“Canadian and U.S. businesses are the true beneficiaries of the Beyond the Border Action Plan and this change,” Mike Tierney, president of UPS Canada, said in a statement.
“Each day, more than $1 billion worth of goods crosses our common border, bringing the annual value of traded goods to more than $580 billion. Yet, every year $16 billion in trade activity has been lost due to border delays. This change will allow for swifter movement of goods for importers and exporters of all sizes.”
Despite such modest successes, there has also been controversy in recent months surrounding Beyond the Border, with U.S. and Canadian officials facing a backlash over proposals to eliminate secondary meat inspections under the deal.
That backlash intensified in September amid one of the largest food recalls in Canadian history.
During the type of secondary inspection that would be eliminated under the proposals, U.S. Department of Agriculture officials discovered E. coli in a shipment of beef from the XL Foods plant in Brooks, Alta., at a Montana border crossing.
Progress on Beyond the Border — or lack thereof — is the focus of an event on Monday in the U.S. capital hosted by the U.S. Chamber of Commerce.
Monday marks the two-year anniversary of Obama and Harper's announcement of a "shared vision" for the border following an Oval Office meeting between the two leaders.
Senior bureaucrats from both the U.S. and Canada — members of the Regulatory Co-operation Council, tasked with turning that vision into reality — will be on hand for a meeting that will delve into the steps already taken, and those yet to come, on Beyond the Border.
A joint Canada-U.S. report card on the action plan's progress, released in December, acknowledged the future challenges.
“While significant progress has been made over the past year, our work is not yet done,” it said.
"Work on several additional initiatives is underway, including the harmonization of trusted-trader programs, the full implementation of an entry/exit program at the land border, and the negotiation of a pre-clearance agreement for the land, rail and marine modes, together with an update to the existing pre-clearance agreement for the air mode.”
Two high-profile stakeholders urged action in a recent editorial published in The Hill, the U.S. congressional newspaper.
"The challenge now is to move beyond pilot projects, feasibility studies, and regulatory reviews to fuller implementation — transforming words and good intentions into more concrete and longer-term action," wrote John Engler and John Manley.
Engler is president of the Business Roundtable, an association of chief executive officers of leading U.S. companies with more than $7.3 trillion in annual revenues. Manley heads the Canadian Council of Chief Executives, representing the CEOs of 150 Canadian companies.
"We encourage our leaders to keep pressing their officials for tangible results .... Ongoing effort and constant attention by governments, business and labour have made the Canada-U.S. partnership an enormous success, enhancing our global competitiveness. Let's keep it that way."