Posted on 02/12/2008 11:13:25 AM PST by BGHater
Is free trade between Canada and the United States in free fall? Not quite, but trade between the two countries is certainly in decline. Take a look at the chart atop Michael Hart's commentary to the right. Canada's exports to the United States, at $397-billion in 2006, are no higher than they were in the year 2000. Imports are also flat. Take inflation away from these numbers and what's left is real decline. The world's largest undefended border has become a trade war zone through which fewer goods and services are moving.
Bureaucratic and diplomatic talk around the growing Canada-U.S. border problem has been voluminous. It is now almost a cliche to hear business and government leaders lament the "thickening" of the border, as if the border issue were comparable to being overweight and something that could be cured with a gimmicky diet or two. The result has been a proliferation of announced schemes --Smart Border Accords, Security and Prosperity Partnerships, Customs-Trade arrangements, Container Security Initiatives, the Western Hemisphere Travel Initiative, NEXUS travel measures -- but little or no real improvement in a border that is becoming a barrier to trade. The border's getting thicker.
Other indicators of decline include shipping and cross-border travel movements. Mr. Hart, professor of trade policy at Carleton University, notes that the number of U.S. residents travelling to Canada peaked in 1999 at 44.6 million and has declined every year since to reach 31.6 million in 2005. With the Canadian dollar at par, that figure is unlikely to climb in future.
In a paper prepared for the Woodrow Wilson International Center's Canadian Insitute, Mr. Hart lays much of the blame for this on Ottawa's handling of U.S. relations under former prime minister Jean Chretien. "Canada blew it," Mr. Hart says. The trouble is that not much progress has been made by Prime Minster Stephen Harper. A new burst of leadership is needed, from a business sector prepared to speak out and politicians willing to take on the inertia and incrementalism that now has border progress paralyzed.
Another Woodrow Wilson paper, by Gary Hufbauer of the Peterson Institute in Washington, sees the border as a major obstacle to Canadian and U.S. growth. The barriers include the Canadian dollar, differing regulatory regimes, wasteful security programs and extreme U.S. precautions against terrorism. His solution is more radical regulatory integration and establishment of a single currency. Neither is likely to happen.
Still, the Hart and Hufbauer papers paint bleak Canada-U.S. trade outlooks. Even with all the attempts to work around the expanding U.S. anti-terrorism effort, Mr. Hufbauer says "the security tax is rising." New passport requirements pile on top of new container-scanning regulations and intensified truck inspection regimes --all adding new delays and costs to the trade system.
Also bogging down progress is the general inertia surrounding the frequent calls for improving infrastructure at the border --bridges, roads, border crossings. What is to be done? Mr. Hart talks of "the fire I would like to light under Canadian and U.S. policymakers." He says this is more than just a trade issue or a border issue, but neither government seems ready to lift the border out of the bureaucratic and diplomatic process-driven swamp it has become.
Even business groups seem to take the process for granted. They claim good co-operation from officials at the Canada Border Services Agency and Public Safety Minister Stockwell Day. But Mr. Day's success in beating back the U.S. Homeland Security machine has been regrettably dismal. In any case, the border crisis requires a much broader view than the narrow, petty and useless perspective of security.
Last June, the Conference Board of Canada reported that Canadian businesses are reacting to the border problems by reverting to old pre-free trade methods. Just-in-time shipping is being replaced by inventory stockpiling. Companies are shipping longer distances to reach border points that are easier to cross. The existence of the border problems, moreover, reaches through to businesses looking to locate plants. If the Canada-U.S. border is thick, then why locate in Canada?
Despite the numbers showing a clear fall-off in real Canada-U.S. trade, despite mounting anecdotal evidence that Canadian business is suffering through higher costs and risks of lower investment, despite years now of complaints from Canadians as individual and corporate travellers and shippers -- nothing much is happening.
Most complacent of all seem to be the Harper Tories in Ottawa, from whom little or nothing is heard on the subject. The political view seems to be that we should not rock the U.S. policy boat too much. Even Canadian business groups seem remarkably complacent, willing to muddle through the bureaucratic games. Meanwhile, Canada's greatest trade asset -- the border with the United States --is killing trade.
We ship to Canada and the taxes on imports are extremely high. Free trade? Not on your life.
Sounds like we have more pandering for open borders from the nutty globalist crowd.
Of course, not mentioned in all this, is that free trade deals have shipped jobs and manufacturing out of both countries to Communist China and other places. If both countries no longer manufacture products and goods like they used to....they will not be trading as much with each other.
The SPP and NAU will exacerbate this problem...since those deals will only move goods from Communist China thru Mexico and the USA into Canada
Open borders do not fix trade problems, they make them worse
Don’t bet the farm on that. It is the plan in time. I suggest you watch any multinational meetings and plans very closely.
Yeah it aint all roses up north either... American owned companies in Canada keep shutting down Canadian sawmills since they now export more raw timber to the US for US sawmills as opposed to milled lumber from Canada...
The only thing Canada seems to be making money on ATM is oil, uranium and Electrical exports to the USA...
Canada also looses “brain trust” as a lot more of us in the engineering and medical fields leave Canada to live in the USA...
Canada’s continued US bashing is coming home to roost. What is overlooked by Canada is that Canada needs the US while the US doesn’t really need Canada.
Because of the military, economic and other support by the US, admittedly with the self-interest of the US, Canada has effectively de-militartized itself and relied on the US for security thus allowing Canada to sink it’s economy into a European model welfare state.
If the US took its marbles and stayed home, Canada’s economy would collapse-—faster than it is now.
Lots of “Atlas Shrugging” across the border due to high taxation in Canada. I know several such.
>>Canada’s continued US bashing is coming home to roost. What is overlooked by Canada is that Canada needs the US while the US doesn’t really need Canada.<<
As an expat Canadian living in the US, that is TRUE. I have been brainwashed by the anti American CBC News since I was a child, and it took a lot of intelligence and chutzpah on my part to question my socialist UNIONIZED teachers on where this hatred is coming from.
Then one day, when I was 21, I had a sincere conversation with my anti American classmate. He simply blurted out :”because Americans have everything, we are just jealous of them.”
It all seemed clear after that...
We were all brainwashed. Then 9-11 happened and it woke me from my hypnosis. Sadly, many Canadians still live in a trance.
>>We were all brainwashed. Then 9-11 happened and it woke me from my hypnosis. Sadly, many Canadians still live in a trance.<<
MOST Canadians are still in a trance. EVERYTHING that goes wrong in Canada it becomes ‘THOSE AMERICANS”. It has become a simple trigger because they are easier to blame.
When I come back to “Honh-couver”, I am always met with protests from unions asking for more money. BC Canadians cant even get themselves to simply admit: why are they paying Ottawa in EQUALIZATION PAYMENTS and pay GST while Alberta does NOT.
Of course...it’s the Americans fault. I feel for Americans coming to visit that beggar infested city that makes San Francisco look like Oklahoma City.
Other than the federal and provincial SALES taxes, I’m calling BS on that taxation fib.
Whose economy would collapse quicker, Canada without US trade, or the US without 30 % of its OIL?
Bit of a poser, huh?
You are mistaken on both your points.
Since the early 1990’s. BC has been RECEIVING “equalization payments” from the fedgov thanks to the fiscal and anti-resource extraction policies of the NDP driving the provincial economy into the tank.
Currently there are only TWO provinces paying INTO the equalization fund, and they are Ontario and Alberta.
Additionally, there is GST on EVERY consumer purchase in the nation, Alberta included.
Nutty is believing in this day and age that walling off a neighboring country like Canada would be good for our country. If you think border security is the be-all-end-all, defect to North Korea.
I hope that Canadians and Americans can meet each other half way on this. When Bush leaves office, we’re going to find out how much of this border policy is political posturing and how much of it is just a reaction to negligence on the part of the Canadian government. The US doesn’t want Canada to be an attractive staging ground for terrorist attacks on the US. But given the number of credible attacks in the CONUS over the past 6 years (where are they?) the neverending obsession with airport security and regional security everywhere but in North America, I have little confidence in the US government either.
BC is only an intermittent contributor to equalization payments - its economy is just not that strong. Albertans pay the GST just like all other Canadians, excpet for those provinces in the Maritimes, and I think Quebec, whose provincial governments sold them out by signing up for the HST (harmonized sales tax - combined GST and PST). BCers pay higher taxes than say, Ontarians, because they love big provincial government, despite the fact that Ontario is the largest total contributor to equalization payments, and second only to Alberta in per-capita equalization payments, since they are flush with oil money.
Let me re=phrase that: I was talking about the PST. You are correct, BC LOVES big govt and btw they tax their citizens, it;s not even funny that border cities in BC run to Alberta to buy their stuff, even cross into WA state like what I did when I was living in Vancouver.
Ontario deserves to pay that amount on the GST because they seem so arrogant to think of themselves as the “center of the universe”, let them have it.
“Canada needs the US while the US doesn’t really need Canada”
It is this sort of arrogant nonsense that will be the death of us. Canada is now our number ONE supplier of energy. Unless you want to freeze in the dark, you need to rethink the inanity of your statement...
“Canada needs the US while the US doesn’t really need Canada”
It is this sort of arrogant nonsense that will be the death of us. Canada is now our number ONE supplier of energy. Unless you want to freeze in the dark, you need to rethink the inanity of your statement...
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