February 21, 2008 / 12:14 AM / 9 years ago

Canada, U.S. must unclog border: business groups

<p>A U.S Customs Officer checks the identification papers of a driver entering the U.S. from Canada at the Detroit-Windsor tunnel in Detroit, January 31, 2008. Canada and the United States must take steps now to unclog their border for exporters, who are hurting from costly delays and fees due to post-2001 security concerns, business leaders said on Wednesday.Rebecca Cook</p>

OTTAWA (Reuters) - Canada and the United States must take steps now to unclog their border for exporters, who are hurting from costly delays and fees due to post-2001 security concerns, business leaders said on Wednesday.

A joint report on reducing border costs by the Canadian Chamber of Commerce and the U.S. Chamber of Commerce laid out 17 recommendations for both governments to deliver over the next 18 months.

Canada-U.S. trade is worth about $1.5 billion a day -- the world's largest bilateral trading relationship.

Since the Sept. 11, 2001, suicide attacks on the United States, shippers on both sides of the border have been subject to a growing number of inspections and fees. These "risk becoming an unmanageable burden," according to the report, especially as the North American economy slows in the wake of the U.S. subprime mortgage meltdown.

Canadian manufacturers are already smarting from a sharp appreciation of their dollar against the U.S. dollar and a drop in demand from the crucial U.S. market.

"We're in an economic environment in Canada today where we've got to have a really good hard look as to what's helping and what's hampering our ability to compete as an economy," Michael Murphy, executive vice-president of policy for the Canadian chamber, told reporters.

"The border is one area where you can actually do some good and help bring relief ... It's one of the two or three most important things that I think government can address," he said.

Steps Ottawa and Washington should take range from simple ones such as committing more money to ensure round-the-clock staffing for border booths to more complex ones such as mutual recognition of each country's "trusted shipper" programs, which allow businesses to obtain certification in the aim of reducing border inspections.

FOOD SHIPMENTS DELAYED

One Canadian food company reported that even with this certification, its cargo is often held up at the border simply because the U.S. food inspectors are not on duty that day.

Robert Kee, managing director of corn processor Casco Inc., said his shipments of sweetener and animal feed to U.S. clients have been delayed for up to three weeks, with no improvement to security or food safety as result.

A pilot program to speed up processing of low-risk food importers, the development of a "single-window" government platform and facilitating business travel are some other recommendations.

Canadian Trade Minister David Emerson has sounded increasingly frustrated in recent weeks with what he has called a "bottom-up thickening" of the border, and has called for high-level political commitment by Washington for smoother trade with Canada.

Both governments are starting to understand the magnitude of the problem for their economies, the business groups said, but Washington has already signaled that there are some issues that are nonnegotiable due to security concerns.

"There are certain concerns they do have, there are certain things we don't expect movement on," said Adrean Scheid Rothkopf, managing director for North America at the U.S. Chamber of Commerce.

Last year, Washington walked away from talks on a pilot program for customs preclearance before the border after a disagreement over whether U.S. authorities could fingerprint individuals on Canadian soil.

The U.S. Department of Homeland Security also last year moved ahead with ending oral declarations by travelers crossing the border, even though the deadline for requiring passports had been delayed.

Reporting by Louise Egan; Editing by Peter Galloway

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