Some Practical Ideas for the Next Border/Trade Agreement

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By David Bradley

With 2014 marking the 20th anniversary of NAFTA and talk of perhaps opening the agreement up, or at least a new border agreement, now’s the time to take stock of where we’re at and where we might go from here.

NAFTA has been good for the economies of the three signatory countries. As a derived demand industry and since trucks haul most of the goods traded, trucking has been a chief beneficiary. But it hasn’t always been smooth sailing. Nor, has NAFTA achieved its full promise at least as it pertains to freight transportation.

Amongst the early casualties of the unilateral decision by the United States to not allow Mexican trucks to travel beyond the border “commercial zone” which was supposed to happen by December 1995 – a situation which persists to this day other than in various pilots – was the demise of trilateral efforts to achieve greater harmonization of continental trucking standards. More importantly, the US’s pre-occupation with the southern border has at times stymied bilateral solutions over concerns that “if we do it for Canada, we’d have to do it for Mexico” or “we have to treat you the same as the Mexicans.”

Then there was the 9/11 tragedy and the resulting heightening of security that has led to a “thickening” of the border. While we were told both enhanced security and trade facilitation was achievable if companies and individuals became trusted traders, it hasn’t always worked out that way.

Over the years there have been various Canada-US border initiatives; the most recent being the Beyond the Border (BTB) Action Plan aimed at bringing more balance to the security-trade facilitation equation. So far, actual deliverables – at least among the measures of most interest to trucking such as restoring in-transits and allowing the repositioning of foreign empty trailers – have been somewhat elusive but we maintain hope for some positive outcomes.

Going forward, we don’t expect any significant changes. EU-style borders or labour mobility are not in the cards. But, there are things that could be done that would enhance the competitiveness of North American supply chains by creating more tangible benefits to trusted traders; further border automation; the efficient use of current border infrastructure and strategic new investment; and, labour mobility rules consistent with modern logistics practices.

The terms pre-clearance/pre-inspection/pre-screen are sometimes used interchangeably. A case in point is the pilot (a BTB initiative) now underway at Buffalo/Fort Erie. What is being piloted is not pre-clearance as some think, but rather a CBP pre-inspection on the Canadian side after which the truck will cross to the US side, come to a rolling stop and then either be cleared or sent to secondary. Whether this two-stop approach is better than the current one stop remains to be seen. So far the results have been promising but pre-clearance – where there are no stops for trusted traders because the driver, conveyance and freight have all been risk assessed and released prior to arrival at the border – would be a much better option.

The US and Canadian e-manifest programs – ACE and ACI – represent the starting point for border automation. Under ACE carriers can use transponders to transmit RFID signals to CBP. Unfortunately, the Canadian program does not include the transponder option even though if available it would speed clearance. But, even better would be to take things a step further and introduce an RFID enabled border crossing ID card for commercial drivers, eliminating the need for transponders and/or multiple cards (FAST, TWIC, CDRP). The existing FAST card infrastructure could serve as the platform. Tiered security clearance levels – e.g., where FAST lane access or front-of-the-line access to secondary — could be restricted to those with a high clearance level.

In terms of border infrastructure a few more bridges or at least some additional spans/lanes would be helpful at least at some of the busiest crossings. Having some of that capacity reserved for commercial traffic only would also be good. But if our experience in trying to get that second bridge built at Detroit-Windsor — North America’s single largest gateway for trade is any indication, it’ll be tough. It is incredible that the only thing preventing that project from moving forward is for the US federal government to pick-up the US$250 million cost of the US customs plaza.

NAFTA did not address the antiquated labour mobility rules governing the point-to-point movement of goods by a foreign carrier – i.e., cabotage. Again, there is currently no prospect for EU-style cabotage. But, some increased flexibility would improve efficiency and productivity and allow for more effective utilization of drivers and vehicles. Harmonizing the immigration cabotage rules with the equipment cabotage rules would seem to make sense.

These ideas are really not particularly bold. They are practical and would have a beneficial impact on cross-border operations. Whether they ever see the light of day, only time will tell.

David H. Bradley is CEO of the Canadian Trucking Alliance and President of the Ontario Trucking Association. He can be reached at 416-249-7401 ext. 227 or by e-mail: dbradley@ontruck.org

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