Trade: Unsticking the border

Restrictions and new fees have slowed traffic across the Canada-U.S. border. Will the new president help speed it up?

“Buy American” grabbed all the headlines in the weeks leading up to President Barack Obama’s visit to Canada today, and it will be interesting to see how he parses the issue of protectionism when he meets with Prime Minister Stephen Harper.

The news of the provisions has Canadians both dismayed and frustrated. “I think Canadians are starting to realize that though he’s an impressive symbol of global leadership, he’s also an American president,” says Ottawa resident and president of the Canadian Somali Congress, Ahmed Hussen. “That means he’ll be governing the country very much in American interests.”

“Protectionism is bad, period,” says Chamber of Commerce president Perrin Beatty. Though Beatty says he’s “somewhat reassured” by Obama’s statements indicating he does not want a trade war, he’s concerned about another point: that state- and local-level governments will attempt to source locally, when disbursing stimulus funds. That could mean bypassing NAFTA — as neither state nor local governments signed on to the treaty.

That’s why Gary Hufbauer, of the D.C.-based Peterson Institute of International Economics, says that when Prime Minister Stephen Harper meets with Obama today, he should ask for assurances that NAFTA provisions — which ensure access to procurement — will fully apply to any contracts issued by state or local governments when the funding comes, in whole or part, from the stimulus package. This, Hufbauer stresses, should be a blanket assurance, issued by the Office of Management and Budget. It should not await case-by-case determination by Federal agency heads or state procurement officers.

“President Obama could have gotten the Senate and House to drop the Buy American provision if he had insisted. The fact that he went for an intermediate step indicates that he didn’t want a face-off with his Democratic allies in Congress when there were bigger issues at stake in the stimulus package,” Hufbauer explains.

Regardless, in Perrin Beatty’s view, the issue that Canadian businesses most wish to see resolved in speedy fashion during the Obama presidency remains the so-called “thickening border”. He’s alluding to a series of restrictions and new fees that have slowed traffic along the 49th parallel in the years since 9/11.

On January 23, the secretary of homeland security, Janet Napolitano, ordered a review of border security. Beatty confesses himself “troubled” by the tone of the order. “It makes no sense to throw resources at the 49th parallel in this way,” he says. “Rather than closing the border further, we should be pushing it out more, so that individuals and cargo coming into North America get greater scrutiny.”

During the aftermath of 9/11, some commentators, such as Peter Andreas, a researcher at Brown University, noted that the U.S. was implementing border policies that treated the Canadian and Mexican borders the same way. “That makes no sense,” Beatty says. “They should be responding to conditions as they exist, rather than imposing policies that make sense for one border and not another. The Mexican border suffers from massive illegal immigration and drug traffic. These are problems that simply don’t apply to the northern border on an equivalent scale.”

Unfortunately, Obama’s choice for secretary of homeland security also happens to be the former governor of Arizona, which borders Mexico. More than most, Napolitano’s understanding of border issues is informed by the Mexican situation, not the Canadian one. However, Beatty is hopeful that President Obama, a Chicagoan, will be able to make the distinction between the two.

Hussen is also hopeful for the Obama presidency — on another front. He was impressed that the U.S. was able to elect a minority president, and he hopes that symbolism will galvanize Canadians from diverse backgrounds to take a career in politics more seriously.

But in the meantime, Hussen says he is just a little disappointed that the president didn’t make any time in his schedule for normal people. “He’s here for what, six hours?” Hussen says. “That’s really not very long. Not that I would have gone out to see him — but I know some people would have liked to have had that opportunity.”