Developing a Collaborative Research Agenda June 7, 2006 David Davidson, Project Director

1. Developing a Collaborative Research Agenda June 7, 2006 David Davidson, Project Director

2. What is the BPRI? • Mission—provide high quality research on policy issues related to Canada-US border • Multidisciplinary research institute, w/ emphasis on trade, transportation, security, environment, energy, immigration

3. Canadian Trade w/ Washington • Supports 108,000 jobs in Washington • Daily: 3,100 trucks, $41 million of goods • Daily: 19,500 cars • Tourists, commuters, business travelers

4. Trade Linked to Policy • Economic policy has intentional effects • Softwood tariff • Monetary policy (exchange rate) • Security policy has unintentional effects • Mandates for new screening or IDs • Visa regulations • Alert levels

5. Cascade Gateway Canada Dep’t. of Energy, Mines & Resources Victoria – Vancouver B.C. [map]. 6th ed. 1:500,000. N.T.S. No. 92 S.E. 1973

6. Collaborative Approaches • External Advisory Board • Participation in transportation community • Consultation with agencies • Academic partners

7. External Advisory Board • Todd Harrison,WSDOT, Asst. Regional Administrator • Jim Miller,WCOG, Executive Director • Ken Casavant,Washington State University, Professor • Alicia Nolan,FHWA, Northern Border Transportation Program Coordinator • Chris Lawless,B.C. Investment Management Corporation, Chief Economist • Pat Jacobsen,TransLink, Chief Executive Officer • Greg Boos,Chang & Boos Attorneys at Law

8. Consultation Process • Pre-RFP meetings • WSDOT (freight, policy, and rail offices), USDOT, WCOG, TRAC @ U.W., Pipeline Safety Trust, Whatcom Transp. Authority • RFP circulated • Internal project review • External board review

9. First Round Research • The Effect of Post-9/11 Security Measures on Commodity Trade Flows at Major Canada/U.S. Ports of Entry. Steve Globerman, Ph.D., WWU • Explaining Border Crossings at U.S.-Canada Border Stations in Whatcom County: An Econometric Investigation. Hart Hodges, Ph.D., WWU

10. First Round Research (cont.) • The Impact of Tariff Harmonization and Perimeter Security Measures on Whatcom County's Industrial Structure and Transportation Patterns. Paul Storer, Ph.D., WWU • Cross-Border Port Competitiveness and the Environment in the Puget Sound and Georgia Basin. Jean Melious, J.D., WWU

11. Second Round Research • Projections of Washington – British Columbia Trade and Traffic by Commodity, Route, and Border Crossing.Ken Casavant, Ph.D. & Eric Jessup, Ph.D., WSU • Understanding the Impact of Variability in Border Crossing Times on Regional Supply Chains.Anne Goodchild, Ph.D., UW, with added economic analysis by Steve Globerman, Ph.D., WWU

12. Second Round Research (cont.) • An Investigation of Congestion Pricing Options for Southbound Freight at the Pacific Highway Crossing.Mark Springer, Ph.D., & Matt Roelofs, Ph.D., WWU • Risk Evaluation of Invasive Species Transport Across the U.S. – Canada Border in Washington State.Wayne Landis, Ph.D., WWU

13. In-House Staff Products • Border Policy Brief • WHTI’s Effects on WA State • Canadian Natural Gas & WA State • Immigration Near the B.C. – WA Border • Cross-border transit

14. David Davidson, Project Director Border Policy Research Institute Western Washington University 516 High Street Bellingham, WA 98225-9110 (360)650-2642 david.davidson@wwu.edu BPRI web site: www.ac.wwu.edu/~bpri

15. Hodges: Explaining Border Crossings Canadian Same Day Travelers Western Washington University Center for Economic and Business Research

16. Canadian Same Day Travelers Exchange Rate Western Washington University Center for Economic and Business Research

17. Variables Considered • Exchange Rates • Relative Prices • Gasoline • Cigarettes • Clothing • Health Care • Electronics • Wages • Store Openings • “History” Western Washington University Center for Economic and Business Research

18. Variables that Really Matter • Exchange Rates YES • Relative Prices • Gasoline YES • Cigarettes • Clothing • Health Care YES (weakly) • Electronics • Wages • Store Openings • “History” YES Western Washington University Center for Economic and Business Research

19. Predicting 2002-2005 Forecast Western Washington University Center for Economic and Business Research

20. David Davidson, Project Director Border Policy Research Institute Western Washington University 516 High Street Bellingham, WA 98225-9110 (360)650-2642 david.davidson@wwu.edu BPRI web site: www.ac.wwu.edu/~bpri

21. Storer: Tariff harmonization & perimeter security • Perimeter security. • Customs Union. • Rules of Origin.

22. General Methodology • Predict the effects of deeper integration on sector-level trade-flows. • Construct sector-level freight flow benchmarks. • Apply sectoral trade flow growth rates to freight flows.

23. The Effect of a Customs Union Computable General Equilibrium (CGE) models predict trade effects. The Strategic Freight Transportation Analysis database was used for freight benchmarks. Transportation impacts rival those of NAFTA (example: 25% increase in trade).

24. Ghosh and Rao (Journal of Policy Modeling, 2005) Impact on Canadian Exports: Agriculture: + 20%, Resources: +1%.. Impact on Canadian Imports: Food: + 171.2%, Resources: +2.5%. The impact of the customs union is mainly due to elimination of rules of origin rather than to the common external tariff.

25. Sector Shares for Canada-Related Freight(Source: SFTA)

26. 2003 Rules of Origin Liberalization