The CanadaUS Border: Completing the Agenda

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The Canada-US BorderCompleting the Agenda
THE CANADIAN CHAMBER OF COMMERCE LA CHAMBRE DE
COMMERCE DU CANADA

• Robert Keyes
• Canadian Chamber of Commerce
• June 4, 2003

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What Does The Border Do?

• protects against contraband /smuggling
• processes goods/people -- trade flows
• gathers statistics/counts trade flows
• brings in revenue --3 of federal revenue
• enforces compliance with laws
• defines our space/sovereignty/identity

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What Kind of Border?
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The Border Is Not Simple

• complexity
• modes road, air, port, rail,
• people, private, commercial
• supporting infrastructure behind border
• border is not just 49th parallel
• scrutinize traffic from Asia/Europe
• traffic through Cda to US and vice versa
• trade rules
• borders where trade agreements take effect
• dont erect non-tariff barriers in name of
  security (either by default or mischief)

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Making The Border Work

• goal a seamless, fluid transparent border
• neutral decision-making locational perspective
• strategic issue for Canada in NAFTA context
• affects business decisions on location of new
  facilities
• economic integration
• Cda US each others largest trading partner
• massive flow of vehicles and people
• business situation production/marketing/financia
  l/ distribution/research systems are connected

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Border Authorities

• tough job balance security and trade
• quick judgements
• complex situations/limited information
• but many functions rooted in old procedures and
  sometimes old attitudes
• quasi-police powers, who likes customs officers?
• CCRA Corporate Business Plan
• still emphasizes compliance than facilitation

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Going Through Customs.
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Attitudes

• ... much work remains to be done on the second
  phase of the border initiative, including adding
  infrastructure at crossings as well as changing
  the 19th century mindset of customs officers.
  In the 21st century, hardly any of our revenue
  comes from customs, but were still operating
  with a 19th century paradigm. Customs agents
  were not put on the planet to make traffic move
  quickly. They were put there to collect taxes.
  Wed collect a lot more taxes if that border is
  open than we collect if we get every shirt that
  somebody didnt want to declare.
• Hon. John Manley, Sept 5/02

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Pre-Sept 2001

• increasing cross-border traffic people/goods
• growth outstripping border systems/machinery
• benign neglect/complacency/ lacking
• differing Canadian vs US priorities
• facilitation vs security/policing
• Chrétien/Clinton CUSP process never took off
• little vision

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Post-Sept 2001

• Cdn priority keep border open and secure
• US priority keep border secure and open
• security trumps trade Amb. Cellucci, 25/03/03
• primary mission of DHS security against terror
• opportunity to fix pre-existing problems
• Sept 01-June 03 rapid change new
  programs/approaches
• security and trade facilitation
• challenge how to achieve both outcomes

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Coalition for Secure Trade Efficient Borders

• 55 business organizations involved
• November 2001 report, 77 recommendations
• purpose
• coordinated business input on border issues
• forum for Ministers/officials to update business
• monitor developments
• clearing house for information exchange
• sounding board for government
• keep up pressure for change/progress

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Canada-US Smart Border Action Plan

• comprehensive response to border situation
• Canada took initiative to the US full marks
• strong personal role by Min. Manley
• overdue initiatives --good progress made
• urgent to maintain momentum and complete
• complement with improved infrastructure
• bottlenecks hamper progress
• a good start to improving a plugged border
• but treats symptoms not underlying problems
  (Dristan/Ex-laxsolution)

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Key Initiatives NEXUS

• a program to speed crossings at land borders by
  pre-approving low risk travellers
• 80/5 yrs, personal interview needed, 4 centres
• one application for both countries
• still port by port -- no single card countrywide
• at 7 locations now, not a 24/7 operation
• NEXUS Air will extend to airports
• slow take up in some areas, teething problems
• hampered by border congestion

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Key Initiative FAST

• FAST Fast and Secure Trade
• allows commercial shipments to clear faster
• identifies low risk drivers/cargoes, advance
  notice
• at 6 crossings now, 6 more by end 2003
• goal cover all major crossings by end of 2004
• border congestion limits usefulness
• limited registration areas -5 now

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Key Initiative Infrastructure

• Border Infrastructure Fund 600 million
  allocated in November 2001
• spending now being detailed
• May 21st 325 million for Niagara and Sarnia
  upgrades
• May 27th 300 million for Windsor
• 25 of truck volume between Cda-US
• spending on highway, security, access

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Key Initiative Infrastructure

• also has to be matched by staffing, especially on
  the US side
• will take time to come to fruition due to
  approvals, including environmental
• not a quick fix but certainly welcome and badly
  needed

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Other Items 30 Point Plan

• information exchange
• harmonized processing, joint facilities
• reverse inspections
• legal issues in the way
• clearance away from the border
• streaming of traffic
• critical infrastructure protection
• joint enforcement/intelligence
• integrated enforcement teams

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New US Initiatives

• since 30 Point Plan, new initiatives
• NSEERS, visa requirements
• entry-exit controls (US-VISIT)
• advance notification requirements

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NSEERS(National Security Entry Exit Registration
System)

• program to monitor non-immigrant alien population
  visiting the US
• requires males of certain age and birthplace to
  register upon entry
• major impact on truck drivers, business
  travellers

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Entry-Exit System (US-VISIT)

• US-VISIT United States Visitor Immigrant
  Status Indicator Technology
• long rumoured Section 110 of INS Act
• new system mandated to collect information on
  foreign nationals (including biometrics)
• Act requires collect data on non-US citizens,
  non-residents/aliens by end of 2004
• timing air and seaports by end of 03, at 50
  busiest land ports by end 04, everywhere by end
  05

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US-VISIT

• question how to be implemented?
• eventually, info on arrival and departure of
  every foreign national
• details still being developed -- stay tuned
• promise of an exemption for Cdns but.
• exemption from what? Still have to stop at
  Customs in both directions
• Cdn officials to send data on non-US or Canadian
  nationals to US?
• concern what happens to data?

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Advance Notification

• consistent trend in all jurisdictions
• US Customs strawman proposals
• lots of reaction, mostly negative,draw out ideas
• what is realistic yet meets security objective
• ports 24 notification rule in place (Canada by
  2004)
• air, land, rail draft rules due anytime
• key issues time frames/pre-post lading

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Food and the Border

• impact of Bioterrorism Act on food shipments
• prior notice on food shipments by Dec 03
• most notifications via normal customs system,
  which will satisfy both customs FDA needs
• final rule expected by early October
• agents all food exporters into US must have a
  US agent
• requirement in effect by Dec 2003
• part of FDA registration process

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Next Steps

• better infrastructure
• fix the bottlenecks, especially approaches to
  crossings
• NEXUS/FAST a good start
• but, spend wisely - anticipate the needs and
  changing business patterns/needs
• separate streams of traffic
• facilitate frequent/regular low risk shipments
• commuters vs. commercial vs. tourists
• essential to redesign/expand border infrastructure

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Roles-Business

• self-regulation/cooperation with governments
• respect for the rules dont cheat
• system depends on voluntary compliance
• appreciation for national objectives
• invest in systems and technology
• costs involved but also competitiveness
  improvements
• business is not anti-security
• security audits, employee awareness, risk
  management
• control and protection of information
• supply chain security upstream and downstream

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Roles - Business

• governments cant do it alone
• command and control only goes so far
• business must play a role and be an integral part
  of border systems
• companies trade governments dont
• border in middle of production lines just in
  time systems have to work
• trading partners public and private looking
  for business ideas, input, vigilance
• business opportunities

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Next Steps

• technology use it to the fullest
• integrate information systems
• single document, useable anywhere along border,
  at any crossing point
• two countries -- create joint systems
• get rid of paper (e.g., airport declaration
  cards)
• electronic data requirements
• advance notification here to stay
• could be a boost to border efficiency if it can
  eliminate waits/slowdowns
• boost to cargo/container security issues (i.e.,
  tracking)

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Next Steps

• a new vocabulary for border processes
• integrate
• cooperate
• harmonize
• mutual recognition
• streamline
• coordinate
• share
• goal a seamless bi-national system

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Next Steps

• rationalize government structures
• get rid of silos, only do things once
• share info, integrate communications and
  databases -- real time
• joint authorities
• bi-national planning security imperatives
• also federal/provincial/municipal roles
• Canadian governance structure outdated
• time for border czar?
• new Cabinet level committee on Cda-US relations

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Final Thoughts

• foster a long term vision/strategy
• go beyond fixing short term border problems
• leadership/commitment from the top
• including better customer relations
• will a better border come about
• by default -- reactive fixes, incremental
  technology, commerce/security bringing Canada and
  US closer
• OR
• by design -- engage all partners in a cohesive
  vision for the Canada-US community that reflects
  our increasing economic integration