A dead end for free trade? II

law. Typically, shipments are cleared electronically and sail cleanly to their destination. A small number of trucks are held up at random, however, pending release by FDA inspectors. The hitch is that inspectors are not always on duty. So shipments, particularly at night and on weekends, can be held up for hours and even days, waiting for an inspector to “release” the load with the click of a mouse. The FDA inspector never actually looks at the cargo. When those delays occur, Casco sometimes opts to send a back-up shipment to the same customer, who might otherwise have to shut a production line because it’s missing a key ingredient. Dispatching an extra truck can double the company’s shipping expense. It is the antithesis of free and just-in-time manufacturing. What is more, America’s food supply is not any more secure, Kee said, because the loads are not actually inspected.

Canadian authorities, prodded by increasingly panicked business leaders, are no longer hiding their frustration with what they see as an indifferent and intransigent U.S. government. On a recent visit to Washington, Canadian industry inister Jim Prentice complained bitterly that the border is becoming a “two-headed monster” — neither safe, nor efficient. “We want security and prosperity,” he told a high-powered audience that included top U.S. officials. “Instead, we make it difficult to have either.” One of the problems with enhanced security is that the people who enforce the rules are rewarded for vigilance, not efficiency, according to Gary Hufbauer of the Peterson Institute for International Economics in Washington. “The mindset is: ‘If I delay a shipment, I’ll cause a hassle, but I’ll keep my job,’” remarked Hufbauer, a former top U.S. trade and treasury official. “The incentives are skewed to being supercautious.” Trade thrives on predictability. Instead, the border has become inherently unpredictable. “That volatility is as important as the time and cost,” Hufbauer added.

How the United States turned free trade with its biggest trading partner into an obstacle course for exporters is simple, and yet intractable. Long before Prentice’s rant, Canadian officials lost a fundamental argument in Washington as they fought to mitigate the economic damage from the post-9/11 security ramp-up, according a former Canadian diplomat, who spoke on condition of anonymity. Canadian officials failed to convince key U.S. decision makers, most notably DHS czar Michael Chertoff, to trust what they could not control, the source said. “There’s a mentality of