Wednesday, July 27, 2011

Fishing for a Border Problem

Border regulations between Canada and the United States represent the dual efforts of securing each nation from outside threats and facilitating the swift movement of people and goods. This is a central hallmark of the border today. When the movement of goods and people across the border is hampered, the consequences can hurt economically. The idea of moving goods and people across the border with as little resistance as possible is not some new, radical idea.

In June 1935, members of academia and the government from Canada and the United Stats met at St. Lawrence University for the first Conference on Canadian – American Affairs. This conference hoped to raise issues pertaining to the Canadian – American relationship. It was truly the first of its kind. At the start of the conference, Dr. James Shotwell remarked that “it is the first time in the history of Canada and the United States that representative citizens of both counties meet together to take stock of the fundamentals in their interrelationship in all the varied fields of intellectual, economic, social and political activity… it is therefore, a matter of course that the imaginary line which runs from Maine and New Brunswick to the Oregon country should be reduced to an almost invisible thread in all that has to do with the interchange and interplay of ideas in the arts and techniques.”

During the panel on transportation, the Secretary for Canada to the International Joint Commission, Lawrence Burpee, remarked “on these international waters, as well as on the artificial channels connecting them, the inhabitants of the United States and Canada at present have absolutely the same rights of navigation. To all intents and purposes the water boundary does not exist.”

At the root of the last statement was this basic understanding that has led fisherman from across Canada and the United States to seek a day of fun in the Thousand Island – St. Lawrence River area. On May 30 of this year, Roy M. Anderson of Baldwinsville, New York was fishing in the St. Lawrence River with friends when he drifted about 400 yards into Canadian waters. Shortly after this act, members of the Canadian Border Services Agency (CBSA) approached Mr. Anderson and asked if he had called ahead to announce his intensions to fish in Canadian waters. When Anderson told them, “no,” he was told that he needed to pay $1,000 on the spot in order to keep Canadian Customs from impounding his boat. Anderson was fishing in Canadian waters under the assumption that as long as a fisherman does not drop anchor in Canada, there would be no reason to call customs.

The incident immediately raised eyebrows on both sides of the border. For some, the incident represented the at times Byzantine security requirements in a post 9/11 environment. The Ottawa Sun reported that not dropping anchor has “been the understanding, on both sides of the border, according to Canadian Conservative Senator Bob Runciman, ‘for generations.’” The incident eventually made it to the attention of American politicians. Congressman Bill Owens (NY – 23) took up the cause of the fisherman and started a dialogue with counterparts in Parliament on the Canadian side of the border. Soon, the Canadian Ambassador to the United States, Governor Cuomo of New York, Senator Charles Schumer and many other politicians were involved over what would seem to be a small incident.  By July 12, the Canadian Border Agency announced that fisherman would be able to call by cell phone when they crossed into Canada.

Of the change, Representative Owens stated that:

I think practically we’re in a scenario where we’re back to where it was before—but legally there’s this possibility of enforcement and that’s always going to make people jittery. It’s a little disappointing because it really doesn’t address the situation, and how it’s functioned quite well for likely 100 years.

The latest development reported in the Watertown Daily Times on Wednesday was that Vic Toews, the Canadian Public Safety minister has requested a broad policy review of his agency on boating on the border. The issue has risen because of pressure within the Canadian Border agency to allow Americans to fish in Canadian Waters without anchoring.

On both sides of border, the story of one fisherman being given a fine would not make it to the desks of each nation’s respective Ambassadors. Once again, this issue has raised that dilemma of what is appropriate security. Understandably, there must be a balance between security and freedom of movement. In the end, this event will be little remembered on either side of the border. But, the Borderlands of Canada and the United States mutually rely on each other for economic sustainability. As a result of the larger economic consequences of this event, an annual fishing tournament in Massena, NY was restricted to U.S. waters, and attendance was down.

The appearance of freedom of movement is essential for businesses, conference planers and tourists for them to make the jump across the border. When individuals and businesses are weary of border regulations, chances are they would stay away from cross-border trade and the needed influxes of capital. Border regulations – American and Canadian – need to be transparent, streamlined, and wildly available to the public. While most of the U.S. – Canada border is of artificial construction, so are the policies for regulating the movement of people.

Monday, July 4, 2011

An independence for North America

This weekend signifies to the world the independence of two of the nations of North America. On July 1st, Canada celebrated the moment when the founders of the Confederation met and agreed to unite New Brunswick, Nova Scotia, Quebec and Ontario into the Dominion of Canada in 1867. It was a testament to the resolve of the Canadian leaders to stand on their own two feet in the wake of the U.S. Civil War (although it would not be until Canadian Constitution Act of 1982 that Canada would be fully emancipated from Great Britain.)

Ninety-one years earlier, in July, the founding fathers – representing the varying political and economic interests of thirteen independent colonies – agreed, after much debate, to a declaration of their independence. The political deal brokers of their time put their names on a document that, as British subjects, would possibly result in their hanging. Today, both Canada and the United States remember these founding moments with mass public celebrations across the continent. This weekend (regardless of the border) celebrates the breaking of past rules and norms, and lays out a new and uncertain path. Since the founding and consolidation of these two nations, there has been little forward motion towards advancing the freedom of movement for people. It would almost seem natural that two nations - born of the same womb – would strive for a stronger, and friendlier, relationship.

On February 4th of this year, President Barack Obama and Prime Minister Stephen Harper met at the White House to try and advance the relationship. In the text released on their meeting, Obama and Harper announced that: “To preserve and extend the benefits our close relationship has helped bring to Canadians and Americans alike, we intend to pursue a perimeter approach to security, working together within, at, and away fromthe borders of our two countries to enhance our security and accelerate the legitimate flow of people, goods, and services between our two countries. We intend to do so in partnership, and in ways that support economic competitiveness, job creation, and prosperity.”

Throughout the Obama – Harper Declaration, the two governments agree to further the harmonization of border and customs standards, information sharing, and improving cross-border commercial trade. The document falls way short of any meaningful forward motion in the U.S. – Canada relationship. While there has been progress in allowing labor to move across the border easier, it does not share in the same spirit of the documents being celebrated in Canada (British North American Act) and the United States (Declaration of Independence). Those two documents advanced the public discourse and took innovative and bold steps. Although their have been efforts to streamline security after 9/11, the process could still be described as “Byzantine.” The two nations should work to stop terrorists, drug smugglers and illegal aliens at port of entries into North America, and less focus on the border. The continental security approach would allow for the freeing of manpower and resources that are currently being used to police the world’s longest and most peaceful border. A truly continental approach would eventually lead to the dismantling of border crossings between the two countries. This approach would mirror the approach laid out by the European Union. On continental Europe, nations have retained their political independence while streamlining customs and trade standards.

Canadian Anxieties

Canadians may be rightfully intimidated by such a security and trade arrangement. Many Canadians are consciously and subconsciously intimidated by the cultural, political, economic and military dominance of the United States. The opening of borders and the “harmonizing of policies” will inevitably make a Canadian wince. For such a process to move forward, everyone in both countries needs to get active in this debate. A truly integrated approach to continental security will not succeed unless the public is entirely engaged in the debate from the bottom up. The President and Prime Minister cannot carry this on their backs alone. A top-down approach failed with regards to the Security and Prosperity partnership (SPP). State and provincial legislators need to carry the debate, along with the media and public discourse.

This Independence Day weekend could be the start of the next leap forward in thinking of continental security and the movement of people and goods. The next Independence Day weekend could be the start of a new way of thinking of the North American relationship. 

Tuesday, June 21, 2011

Piping into Canadian Energy

If you were to guess what county the United States receives more oil from, you are likely to respond with Saudi Arabia, or Iraq, or maybe Venezuela. But according to the U.S. Energy Information Administration numbers for March 2011, the U.S. imported 82,637 barrels of oil from Canada; 40,901 from Mexico; 34,356 from Saudi Arabia and 33,070 from Venezuela. The numbers do not lie. They tell us that more oil is imported from Mexico and Canada than from any other countries. Like it or not, this indicates that if we are to continue our dependence on fueling our cars, planes and lawn mowers with petroleum based fuels, we need to appreciate the importance of North America in oil production. The International Energy Agency (IEA) announced last week that North America will be the fastest growing oil-producing region during the next five years. This news has occurred at a time of growing frustration between Canadian and American energy, environmental and business interests.

One of the most talked about cross border issues discussed in the Canadian press lately has centered on the U.S. approval of the Keystone XL pipeline. When completed, the pipeline will transport 500,000 barrels of crude oil every day from the Canadian oil sands in Alberta south across the American Midwest to oil refineries in Texas. Both the EPA and the Department of State have been independently evaluating the proposed project. In Canada, the news of the review has been closely followed in the press while it barely makes news in the United States.

The truth is that there will be no easy solution from the EPA and the Department of State. The United States is addicted to L'or noir and will not be tapering its usage in the near future. From this perspective, the pipeline will deliver a dependable supply of oil to American refineries without a reliance on OPEC nations. On the other hand, our national consciousness still remembers the sight of a burning oilrig dumping petroleum into the environmentally sensitive Gulf of Mexico. What would happen if the pipeline bursts somewhere in the Midwest?  The Department of State and the EPA have both stated recently that there will be no decision on the pipeline expansion until late in the year.

The debate over the pipeline once again highlights our energy problems. Do we continue to find new sources of oil for the livelihood of our nation, or do we say "NO" to the pipeline right now and absorb the painful economic costs now for a cleaner future. These are questions that need to be discussed at the national level. On June 15, Republican members of the House Energy and Commerce Committees passed legislation that would force President Obama to make a decision by November 1st of this year. Yet, this received little public attention. Prime Minister Harper of Canada has also pressed the United States government to hurry up and make a decision.

Will the pipeline extension be approved? The answer is most likely yes. Would this help stabilize oil prices in a turbulent global market? Yes. Unfortunately, the discussion does not draw any attention to the need to find alternative sources of energy. The environmental side of this story has been drowned out by the need for reliable and cheep energy sources.

It may be too late for this debate, but North Americans should focus on cross-border renewable energy sources. At the moment, Quebec, Canada is one of the largest producers of hydroelectric power in the world. Canada has some of the most abundant and cleanest hydroelectric power plants in the world. If you are reading this in New York City, there is a good chance the electricity powering your computer came from Quebec. Energy researchers have been working on harnessing the power of the world's most dramatic tides into usable electricity in the Bay of Fundy between Maine and Nova Scotia. In the Thousand Islands between Ontario and New York State windmills have become fixtures of the landscape.

This new way of harnessing energy will require new transmission lines to handle a increased electrical capacity. This not cheep, but it is needed in order to build a North American energy grid for the twenty first century. Canada and the United States should be the global leaders in creating new sources of energy, not China.

None of these solutions alone will be able to replace the loss of oil, but many small renewable projects aggregated across the continent may one day help make the needed transition from fossil fuels to renewable energy.

Wednesday, June 15, 2011

Economic Recovery from Above

Last Thursday the government released two very important economic indicators. The Department of Labor and the Department of Commerce released the latest numbers on the trade deficit of the United States and the unemployment rate. The Bureau of Economic Analysis (BEA) of the Department of Commerce announced on June 9th that the trade deficit declined a total of $175.6 billon in goods and services sold internationally. This number represents a small bright spot in an otherwise bleak economic forecast, and is very good news. Simply put, more exports equals more money flowing into the United States as opposed to flowing out. While imports from Japan have declined, the gap with China continued to grow.

On the other hand, the same day, the Department of Labor announced that the jobless rate climbed to 427,000 for the first week of June, an increase from 426,000. This number once again reflects the sluggish economic recovery and a national economy where the private sector is still avoiding massive new employment. Our great recession will not end until the 14-million unemployed Americans return to work. A solution to our problem will not come from God, or China or even the IMF and World Bank. One route to economic growth may lie with one of our strongest and closest of partners: Canada.

Canada and the United States are forever linked as neighbors. As of April 2011, the United States imported $26 billion dollars worth of goods from Canada while exporting $23 billion.
 For two centuries, the border between the two countries remained porous. In an age when “9/11” was only known as the day after 9/10, goods and people frequently crossed the border utilizing communities’ economic comparative advantages. While the population of the United States is distributed all across the country and fairly desolate along the northern border, approximately 75% of Canadians live within 100 miles of the Canadian-American border. The result is a growth of a “border community” in which people on both sides frequently cross to achieve the best deals on consumer goods. In the past, Americans have traveled north for cheaper prescription drugs and Canadians have traveled south to shop in the malls and shopping centers in border towns. This activity highlights the comparative advantage on both sides of the border. Companies also have paid attention to the benefits of the border.

In the northern New York community of Plattsburgh, the Quebec manufacturing company Bombardier moved some of its railroad production south of the border to take advantage of tax incentives. If you ride on a railcar of the New York MTA, it most likely started its life in Canada and completed in New York State. This is only one example. The community has taken advantage of its proximity to Montreal, Quebec and has labeled itself “Montreal’s American Suburb.” The community realized that its proximity, and lower tax rates, makes the region a bastion for enticing Canadian companies to move south of the border. Montreal is home to much of the Canadian pharmaceutical industry. Some of these companies could be enticed to move south to New York or Vermont.  They could be the ignition for restarting the American industrial engine. In turn, in many American border communities, the nearest population centers are across the border in Canada. Thus, in some instances Canadian cities could benefit from employed Americans going to Vancouver or Montreal to make consumer purchases.

The first step, from Fort Kent, Maine to Point Roberts, Washington, is that these communities need to develop plans for enticing Canadian companies to relocate across the border. The Canadian and American economies’ high level of interconnectivity means that developments on one side of the border will have spill-over effects across the border. Today there are many security impediments to transporting good across the border, but this should not be an impediment for trade. Nurturing the Canadian-American relationship, often neglected in Washington, D.C., is one avenue for jumpstarting the American economy in a region of the United States suffering from long-term unemployment.