Land transportation and border securityA dead end for free trade? II

Published 27 May 2008

Tightening border security along the U.S.-Canada border is hampering trade, experts say; delays owing to security checks have cascading effects, as supplies and raw materials are late arriving at manufacturing plants

American company Casco was an early poster child of free trade. The maker of corn-based feed, starch, and sweeteners saw its tariffs go from nearly 20 percent in the late 1980s to zero (see first part of this article in last Friday’s HS Daily Wire). During the 1990s, the company expanded from one to three plants in Ontario — in Brockville, Port Colborne, and London — to tap burgeoning opportunities in the U.S. Northeast. Exports soared and the company prospered. The dream for Casco, and many others, may be silently slipping away, however. Barrie McKenna writes in the Toronto Globe and Mail that longer and more frequent inspections, duplication, border congestion, mounting fees, and rising shipping costs are chipping away at the company’s once impressive competitive edge (and that was before the Canadian dollar rocketed to parity). It is U.S. DHS, the U.S. Food and Drug Administration (FDA), the U.S. Department of Agriculture (USDA) — part of a mushrooming security and safety bureaucracy at the border. Casco’s trucks and plants are members of every trusted and secure shipper program going — at substantial hassle and expense. Its trucks, plants, and drivers are secured, inspected and validated, sometimes by several U.S. agencies. Yet delays triggered by the unexpected have risen every year since the 2001 terrorist attacks in the United States. “It’s not in anybody’s best interest — it’s not in the United States’ best interest and it’s not in Canada’s best interest to have a border that simply acts as an impediment to trade so that economic activity is halted,” Robert Kee, managing director of Casco, said.

Experts have dubbed this phenomenon a “thickening” of the border. To Kee, it is simply time and money. The company exports tens of thousands of shipments a year to the United States, accounting for 20 percent of its sales. He conservatively estimates that unnecessary delays add an hour to each shipment — costing him at least $1 million a year. “It’s insidious and it’s subtle because none of us who buy food products see that the price has been increased by ‘x’ percent,” Kee said. “But it’s there … We understand and fully accept security of food safety and people. The challenges we face are not ones that are doing anything to increase security or food safety.” Kee cites the example of random checks by the FDA, mandated by a post-9/11 bioterrorism