Thoughts and Opinions On Today's Important Issues

Wednesday, April 23, 2008

Canada Loses Big Time

It looks like the Three Amigos had a good time in New Orleans. I wonder if they went to Bourbon Street and did a bit of a sightseeing too. I would have loved to have seen Stephen Harper with his hair down!

However, if one looks at what Canada was able to achieve at the 2-day session with respect to a border crossing in the Detroit/Windsor area, it was a huge loss. It was virtually ignored.

From what my sources tell me, there is no doubt but that Canada made a big push to try to get Washington on side to build the new DRIC bridge. I had heard about a number of Ministers that went to Washington over the past year to meet with the US Federal Government officials to try to get them on side.

I will let you judge the results for yourself. The key is not the Joint Statement by the three Government leaders but rather the reports prepared by the North American Competitiveness Council (NACC). That group was set up in this fashion:

  • "the North American leaders recognized that to accelerate progress under the SPP they would benefit from direct advice from the private sector. They encouraged business leaders from the three countries to form the North American Competitiveness Council."

Here are the relevant parts from the various reports that they have prepared for the Leaders. Note the marked change in emphasis. There is no doubt but that the cranes "flying" to "roost" at the Ambassador Bridge for the next year or so for teh Gateway project has influenced the thinking of many people more than any words can say:



    Accelerate work on the border crossing infrastructure in the Detroit-Windsor region through the Bi-National Partnership process and the Detroit River International Crossing Study. The infrastructure in this region is extremely important to the economies of Canada and the United States as well as to the NAFTA-wide supply chain security. Given the age and condition of the existing infrastructure, and vulnerability to unforeseen circumstances, high priority should be given to ensure adequate and reliable bridge-crossing capacity in the Detroit-Windsor region, including capacity that can accommodate the transport of dangerous goods. U.S. and Canadian governments should also invest in infrastructure and capacity improvements at other high-volume crossings, including at Blaine, Washington; Buffalo, New York; and Calais, Maine.


    We are seeing significant progress in many areas including ...the Detroit-Windsor crossing...

    In terms of specific border crossings where infrastructure enhancement is considered critical, Canada and the United States agreed to develop a timeline toward the implementation of a new crossing at Detroit-Windsor. The NACC members look forward to participating in the planning for this new crossing.


    Supply-chain development. Efficient transportation networks are critical to establishing competitive supply chains across North America. As agreed by Ministers in Los Cabos, governments should move quickly to modernize and expand transportation infrastructure at the borders. However, at high volume crossings on both the northern and southern land borders of the United States, such as the Detroit-Windsor and Nuevo Laredo-Laredo crossings, progress has been much slower than expected. It is imperative that location decisions and financing agreements for expansion of critical border infrastructure at these and other high-volume border points be expedited given their strategic importance to North American supply chain development.

I don't know about you but to me this seems a rather dramatic change in just over one year. To be blunt about it, when you look at the 2008 report, what the business people are concerned about are the nuts and bolts of border crossings and not the issues that the bureaucrats want them to take a look at like spending billions of dollars on building an unnecessary border crossing in this area.

Here is the boring stuff in the report to make your eyes glaze over unless you are in the import-export business:

  • Facilitated entry for cargo.
    While disappointed by the breakdown of negotiations in 2007 on the planned pilot project for land preclearance, the NACC is encouraged that governments are discussing the recent United States proposal for “facilitated entry” for cargo. The NACC continues to favor a more comprehensive approach to reducing border congestion that would entail shifting the customs clearance process, to the extent possible, away from ports of entry, and toward the inbound side of choke points such as border bridges and tunnels. In the longer term, as many inspection processes as possible should be moved away from the border. For example, food and agricultural inspections currently carried out at the border could be relocated to manufacturing facilities where government inspectors are already present. In the meantime, other steps recommended by the NACC in 2007 would help to speed the secure processing of cargo shipments. These include: raising the threshold for low-value clearance of goods; simplifying the NAFTA certification requirements; simplifying the NAFTA rules of origin; enhancing the benefits of participation in FAST (in the United States by implementing the dedicated greenlane concept for trucks/maritime containers and in Canada by allowing access to the CSA/FAST program for all goods from all countries in all transportation modes); agreeing on full mutual recognition of the PIP and C-TPAT programs; and achieving the target of one million NEXUS participants within the next eighteen months. We also urge the Mexican government to implement a program similar to C-TPAT, enabling United States and Mexican customs organizations to achieve a mutual recognition agreement that would provide reciprocal benefits for participants in each country’s program. In the short term, we urge the United States and Mexican governments to standardize and extend hours of operations at crucial border crossings.

    The recent United States Customs and Border Protection proposed rulemaking on “Importer Security Filing and Additional Carrier Requirements,” better known as the “10+2” initiative, imposes potentially costly new requirements on importers. This proposal requires submission (and resubmission) of hundreds of millions of data elements at a tremendous cost to the government and trade community. Additionally, we are concerned that the proposed data elements are inconsistent with those agreed to under the WCO SAFE Framework of Standards, potentially burdening North American companies with duplicative data requirements and additional costs.

Do you see what I mean? It's almost as if George Bush flew over the Detroit area in Air Force One, saw the work being done on the Ambassador Gateway Project and decided that he had other places to spend his money. It is as if he said to his bureaucrats to let private enterprise take the risk and the heck with the Canadians!

I am sure that Ambassador Wilson's faux pas with NAFTA did not help either. His usefulness as Canadian Ambassador to the US has to be just about over and should last only until a new US President is elected. Stephen Harper had NAFTA to protect and did not need to use up any IOU's to fight a battle for the bureaucrats.

The reality is that the business people understand that the issue is traffic flow not bridge capacity. They need to eliminate chokepoints and not put in extra lanes over the river. Building new bridges achieves nothing if a truck still cannot get through the border quickly.

This has to be a massive defeat for the DRIC supporters. But it should not be a surprise. If you remember this letter, the President has already said that DRIC is finished. Why nobody has focused on this letter is beyond me: