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Canada-US Border

The Border, Canada-US Trade and the Post-9/11 Security Regime with implications for Immigration and Diversity. Canada-US Border. largest bilateral trade relationship in the world ($1.5B per day) Mostly through Great Lakes crossings Cross-border supply chains 150,000 cars per day

MikeCarlo
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Canada-US Border

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  1. The Border, Canada-US Trade and the Post-9/11 Security Regimewith implications for Immigration and Diversity

  2. Canada-US Border • largest bilateral trade relationship in the world ($1.5B per day) • Mostly through Great Lakes crossings • Cross-border supply chains • 150,000 cars per day • Increasing global trade through Canada to US • Many miles of unfenced, unposted wilderness

  3. Canadian Exports to US 2007 • Fuels(25%) • Cars, trucks and parts (19%) • Electricity generation equipment (7%) • Plastics (3.4%) • Electrical Machinery (3.4%) • All other categories 3% or less

  4. US Exports to Canada 2007 • Cars, trucks and parts (22%) • Electricity generating equipment (16%) • Electrical machinery (7%) • Plastics (5%) • Fuels (3.5%) • All other categories 3% or less

  5. Ontario Economy • Largest manufacturing work force in North America except California • 1994-2003, manufacturing employment +33% • Exports are 59% of GDP, mostly manufactured goods • More than ½ of Canadian Exports • Automotives account for 38% of exports • 80-90% of cars manufactured in Ontario sold in US.

  6. Merchandise Trade Crossing • Oil, iron ore and other resource products cross by pipeline, water and rail • largest rail crossing by value at Sarnia (by weight at Fort Frances) • Most manufactured goods cross by truck, • almost half on two bridges at Windsor/Detroit and Fort Erie/Buffalo • Rapid movement of goods to support just-in-time production systems, especially in automotive industry

  7. Mode Share of Canada – US Trade

  8. Ontario Border Crossings

  9. Ambassador Bridge: busiest freight border crossing • More than 25% of all US-Canada trade, 35% or road trade • 10,000 commercial vehicles on a typical day • Privately owned, 80 years old, 4 lanes • 6 lane replacement planned • Additional crossing planned down river

  10. Other SW Ontario Crossings • Bluewater Bridge (Sarnia – Port Huron, 12.5% of road trade) • Detroit – Windsor tunnel (#1 passenger crossing) • CN rail tunnel Sarnia – Port Huron, CPR rail tunnel Windsor – Detroit • Windsor – Detroit truck ferry for hazardous materials

  11. Peace Bridge • Number 2 bridge, handles most of the freight through the Port of Buffalo • Also 80 years old, owned and managed by an international commission • Ongoing expansion plans complicated by local and environmental concerns • 2003-8: truck traffic steady but cars down 11%

  12. Other Niagara Frontier Crossings • Queenston – Lewiston Bridge (#4 road crossing, freight in transit) • Rainbow Bridge • Whirlpool Bridge • International Railway Bridge (used by CN and CPR)

  13. Impacts of September 11, 2001 on US-Canada Border • Near closure of Ambassador bridge, hundreds of factories shut down • Heightened security leading to long delays at borders for both freight and passengers • Western Hemisphere Travel Initiative: passport or comparable document required between Canada and US • Land border implementation June 2009 • fewer than 30% of Americans and 50% of Canadians had passports in 2007 • Summer 2007, delays comparable to 2002

  14. Cross-border supply chains • Value added in both Canada and US • Automotive industry • 1965 Automotive Products Trade Agreement • Components may cross border more than once • Agriculture (Livestock) • Pork: piglets raised in Canada, shipped to US for fattening and slaughter • Other cross-border supply chains: machinery, mineral energy, forest products, seafood

  15. Frequency of supply and distance (2002 CAR study)

  16. Impacts of border on auto industry • 1 hour shutdown of assembly plant costs about $60,000 – this could be the cost of a delay in components delivery • US assembled car contains about $1000 Canadian content, Canada assembled car contains $7500 US content (2002 CAR study) • Canadian automotive plants more vulnerable to cross-border delivery risk

  17. Current Threats to Ontario’s Automotive Industry • Credit crisis, low demand • Slow border crossings • High dollar • Changes in relative labour costs • End of Auto Pact protections • Shift of US production away from border • Potential massive subsidization for retooling US plants

  18. Economic Impacts of Border Delays • Labor and capital cost of idling trucks • Risk of factory shutdowns due to failure to deliver components on time • Inventory stockpiling to insure against delays • Reduced tourism • 7.1M jobs in US and 3M jobs in Canada depend on cross-border trade (US and Canada C of C) • Estimated annual delay cost at over $10B (Ontario C of C).

  19. Addressing the border problem • Expand and improve border operations • New and expanded crossing infrastructure • More booths, more personnel • Improved technologies • Better Canada-US coordination • Move functions away from the border • Risk-based assessment • E-manifest • “reverse inspection”

  20. Addressing the border problem (cont.) • Alternative modes • Road/rail intermodal • Short-sea shipping • The perimeter approach

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