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February 25, 2001 

The Canada/United States Accord on Our Shared Border-
A Call to Action for 2001 and Beyond

On February 25, 1995 Prime Minister Chretien and the then President Clinton announced agreement on the Accord which targeted four objectives:

• The promotion of international trade
• The facilitation of people movement
• The provision of enhanced protection against drugs, smuggling and the illegal and irregular movement of people
• The reduction of costs for both governments and users

The CAN/AM Border Trade Alliance has been involved with the governments as a major border stakeholder on the subject of Accord implementation from day one. It has been and continues to be an enthusiastic supporter of the objectives of what still is an enlightened bi-national initiative.

The current concerns, therefore, are based not about the Accord itself but rather about the gap between progress to date and, given the economic and trade environment that has evolved beyond anyone's expectations, the enormous task ahead in both the short and long term.

As mentioned the evolution of economic and trade trends has been very dramatic:

• With NAFTA and the low value of the Canadian dollar, trade and tourism are growing beyond all expectations, with trade having doubled from 1989 to 1998 and projected to double again by 2005.
• As trade increases, over 70% of that trade (by value) moves by truck. Truck movements are increasing at the rate of 9% a year through  selected border crossings located along the border.
• US and Canadian economies are progressively becoming more integrated and further driving the need for the border processes to be seamless, faster, and less costly to legal traders and carriers.

While some useful achievements have occurred under the Accord related to the use of technology (to expedite the release of goods and the movement of low risk travelers), better coordination of infrastructure investment, and the collection and exchange of information, the cumulative effect of these efforts has been marginal at best.

The fundamental problems and challenges remain:

• Both commercial and traveler processes remain essentially parallel, even though real efficiencies are only possible with harmonized or integrated processes.
• Legislative barriers on the Canadian side prevent US regulatory authorities from working on Canadian soil to processes goods destined for the US. This in turn prevents more effective use of space at key crossings where bridge and  tunnel space constraints argue for this kind of flexibility.
• The lack of integrated processes and Canadian legislation make the task of developing joint facilities very impractical and in fact more costly.
• Despite some marginal improvements by the Government of Canada providing resources for Customs, especially by the US government, has been both inadequate and unpredictable. At the present time for example over half of the primary examination lanes remain closed, at any point in time, due to lack of staff.
• The legislation and procedures governing the movement of people, especially business travelers are confusing, difficult to administer and result in needless delays in Immigration secondaries.

As a result the fundamental problems that the Accord was to address remain and are worsening:

• Time delays resulting from the congestion and slow throughput at key land and air border crossings are worsening
• Business costs are still too high because of these delays and the excessive regulatory burden. Companies that largely target the US market are not investing in Canada despite its dollar and labor force advantages because of a concern about border hassles.
• Trade and manufacturing are disrupted because of time delays associated with the movement of both goods and travelers, in particular business travelers.
• Both US and Canadian government regulatory agencies are forced to tie up scarce resources on processing low risk work instead of re-deploying them on a coordinated basis to the control of high risk goods, contraband, and illegal people movement.

When the current situation is examined therefore some rather startling conclusions can be drawn:

• While the efforts to date should be applauded they are clearly inadequate. Given the delays and congestion the time has long passed to tinker with change. The trade, investment and economic stakes for both countries are just too high.
• It is time to fundamentally re-conceptualize the border while introducing improvements along the way to deal with the immediate needs.
• While trade is clearly a driver so is the concern about contraband, drugs and the illegal movement of people.  Both facilitation and control objectives have to be accommodated in any future changes to the border.
• Sovereignty and other legitimate differences between Canada and the US also have to be acknowledged and again accommodated in any future border reforms. Given the concerns globally about free trade and globalization these factors will likely play out even more aggressively over the short term.

Our suggestion, therefore to deal with all this builds on previous input and introduces some new ideas.

 We suggest that a two-pronged approach be adopted - a strategic plan that begins now to set and deliver long-term (4-7 years) reforms and a tactical plan (1-2 years) that targets more immediate improvements on an urgent basis.

Over the long term we recommend that:

• The US and Canada should focus on strengthening the external borders to both countries and, over time, freeing up the movement of people and goods at the common border between the two countries. More specially this would mean:
• A total integration of Canadian and US border processes for both travelers and goods
• The virtual elimination of border processes between Canada and the US and for the controls that are still needed:
• A shift of those controls to the first point of arrival into either country or in the case of travelers right back to posts abroad (point of origin) so that only  admissible individuals can actually physically land on U.S. or Canadian soil and develop joint asylum policy to eliminate "asylum shopping". OR
• A transformation of the controls from one performed at any border to some other form of control such as audit, mandatory reporting, or domestically driven controls of some type  OR
• If the control serves no purpose its complete elimination.

This concept, better known as perimeter clearance, is the only way to take us to a world where the economic realities of the US/Canada relationship can be reconciled with the equally legitimate sovereignty and security interests of both countries.

Over the short term we recommend that:

• Additional Customs and Immigration resources be allocated to both US and Canadian ports.  These incremental resources should be allocated on the basis of agreed upon forecasts of goods and travelers flows in both directions and be driven by pre-determined volume formulae.

 *   To expedite the movement of travelers:

Both countries agree upon the integrated design and technology to be used in a joint single  expedited traveler system that involve the use of cards by pre-approved travelers from either the US or Canada. This integrated concept, currently being tested via the Nexus project at the Blue Water Bridge, should be extended to all modes- airport, private aircraft, private boat, and all land border ports by January 2002.

The US government extend the current in-transit pre-clearance processes to all airports that qualify by January 2002.

Review and implement revised policy and procedures related to the admissibility of business travelers, from both NAFTA and non-NAFTA countries, so those current hassles encountered by legitimate business travelers are removed.

 

• To expedite the movement of goods there is a need for:

The Canadian government to initiate the preparation of legislation to allow US officials to work on Canadian soil in the clearance of people and goods in any mode-land, marine and air. This is the basis for then implementing Accord Processing Zones at the land border crossings (essentially the very small geographical areas within the perimeter of each border crossing processing area). These zones will allow simultaneous enforcement of both countries' laws by representatives of both countries' Agencies regardless if located on the Canadian or U.S. side (as space dictates at each individual location). The Accord Processing Zone implementation at the land border will also result in true joint facilityoperations becoming a reality voiding the current limitation of having to have the actual border line run through the building which currently locates the buildings in the wrong place. The Accord Processing Zone implementation would also provide the effective operation of all Commercial Vehicle Processing Centers.

In effect the principles now enshrined in the In-Transit Pre-clearance legislation would be transposed to goods and to the land border and other modes such as air cargo, courier, and postal.

 

• The Canadian and US governments to integrate the release and accounting processes and procedures for the handling of goods into both the US and Canada by September 2001.

• The Canadian and US governments to agree on the priorities for port facilities capital expenditure and to agree on a prototype design for a joint facility that is based on the integrated commercial processes and the legislation that allow regulatory officials to work on the other country's soil.

• Reconfiguration of the streaming of trucks to that those shipments that currently enjoy expedited treatment by either Canada or the US physically move across the border without being impeded by those in line for traditional primary processing.