Border zealots seize on protectionist sentiment

The economic downturn has brought the usual protectionist currents. Unfortunately, border crossings become even more entangled with these sentiments. The CBC reports of one such ugly occurrence. The US administration must take the firehose to this anti-growth protectionist pandering and douse it before the wheels of trade grind down. This is not good news for the prospect of recovery.

Obama tries to say the right thing

... but it is what he does that is worrisome. On his first presidential visit to Canada he says he wants to "grow trade". That, indeed, is the real question. Canadians have to be concerned about a U.S. administration that seems to be more interested in command and control. It's piecemeal socialistic answers to every problem, making the guise of crisis the impetus for increasing regulatory and confiscatory policy, is sure to dampen economic prospects for America's greatest trading partner. How can trade really grow if the U.S. government drives toward economic policies that render the dynamism of the American people crippled by an increasingly overbearing state? Not too sure that Canadians should be all that excited about this visit. Canadians need America to be strong and prosperous.

Stand on guard for thee, free trade

The trade tensions inherent in the U.S. move toward protectionist measures has one good result: it brings to the foreground the highly integrated North American economy. Canada, in particular, is a key U.S. trading partner that accounts for about 80% of total Canadian exports. It takes about 20% of U.S. total exports, and imports more U.S. goods and services than the entire European Union, an economy 10-times Canada's size. Last year trade between the two nations reached $700-billion. That trade accounts for much prosperity - and many jobs.

The more politicians own up to these facts with their constituents, the more policy will move toward greater integration. Canadians should take the first step forward to be sure that they don't, in trade retaliation, bite the hand that feeds them. It is important that the Canadian government take the high road and work toward unilateral removal of trade barriers should the U.S. regress toward an unfortunate period of protectionism. Self-interest and common sense will prevail.

The darkness approaches

Socialist approaches to economic challenges always have an ugly nationalist side to its agenda. Some Canadians celebrating Obamafest are in for a nasty awakening. Indeed, the global economy is in for a chill if the protectionist measures built into the U.S. Congress' protectionist-laden stimulus bill pass into law. We are in for another bout of policy failure echoing the abuses of the market system espoused by FDR's New Deal. Did not America learn then?

This is an opportunity for the new U.S. administration to show its commitment to free trade. It is also an opportunity to recognize the inextricable trade relationships Canada and Mexico have with America. Of course, its failure to do so will only make the economic lesson that much more difficult. This could turn into a trade war if proper leadership does not direct these issues. Let's see what kind of vision President Obama has. Regrettably, he has given free-traders and free-marketers little reason to be optimistic.

One union to stand for: currency union

The Canadian dollar rode the commodity boom from 2002 to its peak above par with the greenback in October 2007. Since then it has ridden the the brutal commodity slide. Whether the oil market regains some of the lost ground - it has been a correction from $140 a barrel to the sub $40 now floating crude oil - remains highly debatable. What we do know is that the loonie has settled back to the sad position it had been in for decades. This is as damaging for the Canadian economy as the "high" Canadian dollar was to the industrial complex of Eastern Canada. Once again Canadian industry will revert to the patterns of industrial production born not out of true competitive efficiencies and comparative advantage, but out of devaluation and handicapped productivity. Worse, the shock the revalued loonie had on markets will not necessarily right the ship for many industries that previously enjoyed growth on the back of weak Canadian dollar. Will the Canadian film industry bounce back? Will tourism increase substantially? Will other Canadian firms forced to scramble to become more efficient in 2007/08 be able to regain some lost market share in their export business? How will Canadian-based NHL teams deal with the increased labour costs associated with a depressed Canadian dollar? The disruption this revaluation of the loonie causes is significant.




Industry needs stability of exchange rates. The North American economy - if it is to achieve higher levels of integration - needs currency stability. Working on currency issues in the current economic climate may not seem politically feasible, but it may be more palatable now than at the top of a business cycle. There are solutions to the current economic challenges facing the United States and Canada (and Mexico) that are institutional. These are solutions that are "outside the box", and have immense potential to reshape the economies of the nations of North America. The challenge from the global economy will force us to turn to our neighbours. Now would be a good time to sound a bell. Let's hear more about currency union.

The security pinch grows

An article in the National Post today reports that the United States is deploying new surveillance technology along the U.S. borders with Canada and Mexico. This new technology includes the use of unmanned drones that will monitor the vast terrain from above.

It is understandable that America is moving to secure its borders. Given the threats of both terrorist activity and illegal immigration, the current North American framework gives the U.S. government little options. However, this is very damaging to the interests of both Canada and Mexico. It is also damaging to the long-term interests of the United States.

The costs of maintaining a security perimeter around the U.S. will only grow - both in terms of technology and personnel. But more importantly, the disruption of legitimate and productive cross border traffic will hamper economic growth in all three countries. Trade is an integral part of the North American economy. Few will argue this. It seems, though, that few are standing up to seriously address the competing forces at work here. Security and trade will only work efficiently if borders are eliminated.

The implementation of a broader security perimeter around North America is the only way to facilitate the contradicting agendas of increased trade and security. Here it is important that the governments of both Canada and Mexico show leadership and forethought in addressing specific needs of the U.S. Harmonization of security measures and trade issues should be a priority.

There are those that would chose not to make compromises that infringe on national autonomy. But these instincts are a dangerous impulse. The sooner North Americans work together to become a larger and more connected family, the better. The strains of global economy will be felt more acutely if Canada and Mexico do not proactively nip this unfortunate impulse in the bud. North Americans need each other.



Article rank
11 Dec 2008
National Post
BY MATTHEW COUTTS
National Post mcoutts@nationalpost.com
New eyes on border

A U.S. drone delivered to North Dakota will soon begin northern patrols

Sitting on the tarmac at a North Dakota Air Force Base is the future of U.S. northern border security: an unmanned patrol airplane similar to ready-to-fire aircraft used in Afghanistan, identical to drones scouting above the U.S. border with Mexico and the first of its kind ready to fly along the Canadian border, in search of drug runners, illegal immigrants and terrorists heading south.
The Predator B Unmanned Aircraft System, a plane with a thin, cylindrical body, three wheels and no cockpit, was delivered to Grand Forks by U.S. Customs and Border Protection authorities last weekend and will be launched on patrol missions above the western Prairie landscape early next year. The US$10million, remote-controlled craft is equipped with video equipment and heat sensors capable of spotting people crossing the border illegally by avoiding ports of entry.
Once heralded as t he world’s longest undefended border, the thin line of security between Canada and the United States is now viewed by many Americans as a sieve, capable of being exploited by terrorists, and a major concern for national defence in the post-9/11 world.
In recent years, U.S. Customs and Border Protection and the Department of Homeland Security have upgraded security measures making documents such as passports mandatory for visitors from Canada, increasing the number of agents and screening measures at border ports and installing extra cameras and motion detectors along undefended portions of the line.
The idea of a physical security fence running along the Canadian border, similar to one found along the Mexican border, is still an option being endorsed by some state governors.
The use of unmanned aerial vehicles were first proposed in the 2005 Secure Border Initiative as part of a “virtual fence” that also includes fixed towers and mobile radars. The aircraft went into action along the U.S.-Mexico border immediately, but this will be the first one will take flight along the United States’s northern border.
According to a statement from border protection’s air and marine assistant commissioner, the aerial patrol with help “identify and intercept potential terrorist or illegal cross-border activity” while supporting Canadian and U.S. law enforcement agencies.
Border patrol officials say they make about 4,000 arrests and intercept about 18,000 kilograms of illegal drugs each year along the Canadian border.
Juan Munoz-Torres,
a spokesman for border protection’s ai r and marine operations, said the CanadaU.S. border poses significant security concerns because of the distance between checkpoints and a geography which is often hard to reach by land. Aerial patrols will help close those gaps while answering questions about how many people are slipping into the country between checkpoints.
“We don’t know what we don’t know so I can’t tell you what we will find or what we won’t find. As we begin operations, we will see what type of activity is taking place and we will then start working in order to stop that activity,” he said.
Three mo r e Predators are expected to join the pa tro l along Canada’s nearly 9,000kilometre border. For now, Federal Aviation Administration authority will only allow the aerial patrol along a 480-kilometre stretch along North Dakota and Minnesota.
Senator Kent Conrad, a North Dakota Democrat who has been working for four years to shore up security along the Canada-U.S. border, said the Predator’s arrival is the beginning of a secure border.
“It is vital to America’s security that we protect our borders, particularly the northern border,” Sen. Conrad said.
“ The Grand Forks Air Branch plays an essential role in helping shut the door on terrorists who want to sneak across remote border points to strike on U.S. soil.”
Colonel John E. Michel, commander of Grand Forks Air Force Base, told the Grand Forks Herald the base will eventually house more than 20 unmanned aerial vehicles, at least six of which will be used for surveillance.
Similar aircraft have patrolled the country’s southwestern border since 2005, leading to the confiscation of more than 8,000 kilograms of marijuana and the arrest of 4,000 illegal immigrants flowing from Mexico.
Similar versions of the unmanned aircraft, equipped with missiles, are being used in reconnaissance missions in Afghanistan and Iraq. Those to fly along Canada’s border will be unarmed, equipped instead with Raytheon electro-optical sensors and a synthetic aperture radar that can help document natural changes to the area.
The Predator is 20 metres long and weighs more than 4,500 kilograms. It will patrol at an altitude of 15,000 metres. It can fly 418 kilometres per hour and stay aloft for 18 hours before landing to refuel. With its cameras and sensors, it can detect a moving person from 11 kilometres away.
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The "third option" refrain...again

In the news recently is a renewed call for a trade pact between Canada and Europe. See Canada and Europe ponder trade pact. When will Canadians dispense with nationalistic pretenses and whole-heartedly embrace the good fortune of being America's primary trading partner? Fears about having all your eggs in one basket are misplaced. While the glorious effects of globalization have lifted the economic clout of Europe and the Far East, America remains a powerful and dynamic market. Canadians would be better served to work toward an improved North American trade framework, freeing up labour mobility and capital constraints. Yes, there are expanding markets abroad, but unfettered trade will gravitate Canada toward trade among partners in this hemisphere. Better that Canada work with the U.S. to improve the economic vitality of Latin America than to play politics with Europe and China. There is tremendous potential that can be unleashed here in the Americas.

The economic cost of the Canada-U.S border

Most Canadians do not realize the impact of the current leadership void in tackling cross border security issues with the United States. Without an integrated security perimeter commercial relations between the two countries will become increasingly strained. It is imperative that border issues be resolved and that Canadians recognize the importance of a joint security plan. In a recently published study by the Woodrow Wilson International Center Michael Hart details the trade costs of this failure. See Free Trade in Free Fall? Assessing the Impact of Nontariff Barriers on Canada-U.S. Trade accessible at http://www.wilsoncenter.org/index.cfm?topic_id=1420&fuseaction=topics.event_summary&event_id=372221