Security trumps trade at the U.S. border

Deeper economic integration has been stalled by a risk-averse U.S. government

Security trumps trade at the border

Tim Sloan/AFP/Getty Images

On the morning of Sept. 11, 2001, then-foreign minister John Manley was relaxing on an Air Canada flight from Germany when a pair of flight attendants asked him to come up to the cockpit. The pilots wanted to know what to tell the passengers about the extraordinary events on the ground. They gave Manley headphones for listening to radio updates. Airports in Toronto, Montreal, and Ottawa were closing. “It was chaos,” he recalled. “No one knew if it was four planes or a dozen.”

Canada’s then-ambassador to the United States, David Kergin, had just arrived at his office near the Capitol to see black smoke rising from the Pentagon building across the Potomac River. “We very quickly concluded maybe we were best to stay in the embassy because it was secure,” he recalls. As rumours abounded of bombs in the U.S. capital, the ambassador had a call from prime minister Jean Chrétien. “You know, the world will never be the same again,” Chrétien told him. It wasn’t—and neither was Canada’s relationship with the U.S.

Ottawa’s relations with Washington had generally focused on trade disputes such as softwood lumber and agriculture. Since then, the focus of time, energy, and spending has been the border. No longer is the U.S. Trade Representative’s Office the most important for Ottawa. Now the Department of Homeland Security (DHS), created in the aftermath of the attacks, eclipses all else. The job of DHS is not to ensure trade and prosperity, but help to prevent another attack. And Canadians have felt the difference.

What was once proudly touted as the world’s “longest undefended border” is now monitored by Predator drones and radar. Neighbours who could casually cross the border for a dinner or a hockey game now show a passport to get across. Businesses fill out proliferating stacks of paperwork to move goods across the border. “Nobody would have expected it [before 9/11],” says Eddie Goldenberg, who was a top aide to Chrétien. “And my own view is they have gone overboard since 9/11. It clearly has negative consequences. I think U.S. tourism is down because a lot of Americans don’t have passports. It’s become very complicated with goods, for just-in-time delivery, particularly for the automotive industry.”

Meanwhile, the infrastructure hasn’t kept up. A second bridge between Detroit and Windsor—more trade passes through that border crossing than between the U.S. and all of Japan—has been talked about for years but remains unbuilt. “It’s pathetic,” says Tom Ridge, the former Pennsylvania governor who was appointed by president George W. Bush as homeland security adviser and then the first secretary of homeland security. The failure to build a new bridge and the failure to enact “pre-clearance” facilities at the land border have been examples of what he calls government “inertia.” “Overall I’ve been disappointed,” Ridge told Maclean’s. “There has been modest progress but there remains cultural and institutional resistance.”

It wasn’t supposed to be this way. The sight of trucks lining up for hours while the border effectively shut down in the wake of the attacks jolted both governments. Ridge recalls that Bush pulled him aside after a daily meeting at the White House. “He said we had to do something different at the border because we had almost brought commerce to a screeching halt,” Ridge says.

In Ottawa, Chrétien’s preoccupation was “to get the right balance between being seen to be doing nothing and being seen to increase the level of anxiety in the population,” Manley recalls. “The PM was very concerned about overreacting to all of this.” But back in Washington, ambassador Kergin was trying to convey that south of the border there was no such thing as overreacting. “The key message back to Canada was that this is an extraordinarily traumatic event to the United States,” he says. “We had to be determined and aggressive in finding ways we could work with them on security issues because that became their only priority.”

That tension between overreacting and under-reacting to the events of 9/11 came to define Canada-U.S. relations for the next decade.

Chrétien’s desire for a balanced approach was on display as he sought to make the appropriate expression of Canadian solidarity with the people of the United States. He decided on a public outdoor rally on Parliament Hill—in contrast to the secure religious service Bush held at the National Cathedral in Washington. “Security personnel did not like that idea, but the prime minister wanted to be outdoors,” Manley says. “We were expecting 25,000 people—and there were 100,000 people raising Canadian and American flags and singing both our national anthems,” recalls Paul Cellucci, then the U.S. ambassador. “Those days are something I will never, ever forget.”

The PM then struck an ad hoc committee of ministers to deal with the response to the attacks and named Manley as the top liaison with the Americans. Manley soon spoke with Bush’s secretary of state, Colin Powell, who expressed gratitude to Canada for taking in stranded airline passengers, but said the administration had nothing else to “ask” of Canada yet. But Canadian officials had long been working on plans to improve the border, and the attacks created an opportunity to pull them off the shelf. As soon as Ridge moved to Washington—and was still unpacking boxes in his new office—Manley showed up, border proposals in hand and a high-level delegation in tow, including then-RCMP commissioner Giuliano Zaccardelli, in full bright-red Mountie regalia. “That always gets attention,” notes Manley.

Manley and Ridge quickly began holding regular meetings. “The great thing for Canada about the Ridge nomination was that the president had someone next to the Oval Office who happened to have a strong affinity for Canada and understood the border as a commercial reality,” says Manley. At the heart of their approach was the notion of top importance to Canada: “risk management.” The idea was to decrease the time spent scrutinizing people and cargo that could be vetted ahead of time by the government through “trusted traveller” and “trusted shipper” programs. That way, inspection resources could be focused on the scrutiny of people and cargo that the government knew less about.

The accord was signed in December 2001 and consisted of an agreement to work on such initiatives as better information sharing, collecting biometric data about travellers, and creating pilot projects for border pre-clearance. But the goals were never fully realized. By February 2005, Ridge was replaced as secretary of homeland security by a former federal judge, Michael Chertoff, who brought a law-enforcement sensibility to the task. “We really lost momentum with Chertoff. We couldn’t get regular meetings and he had other issues on his agenda,” says Manley.

The talks also became bogged down by differences in cultures and institutions. A key proposal in the smart-border accord was to create pilot projects of pre-clearance sites for cargo traffic. The idea was that inspectors from the other country could carry out customs clearance before a truck even got to the border. By moving the physical inspection away physically, the border could be de-clogged. But the two countries could not agree on the details. U.S. Customs officers wanted to be able to carry their weapons within Canada—where Canadian officers were then unarmed. Canada did not want to give U.S. Customs the authority to stop and fingerprint travellers who approached a border crossing point, but turned around at the last minute—arguing this would violate the Charter of Rights and Freedoms.

To date, land pre-clearance remains unresolved, something Ridge calls “a great frustration to me.” He argues that U.S. Customs officers could have agreed to operate without arms in exchange for RCMP protection on the job. “In my mind, if I have the RCMP backing me up, I’m comfortable with that.”

Anne McLellan, who in 2003 was named to head the newly created Department of Public Safety and Emergency Preparedness, said that U.S. officials never became fully comfortable with the idea of risk management. “It was never said this way, and they would deny it, but it was basically a zero-risk mentality,” says McLellan. Ten years later, little has changed. “We keep referring to the ‘new normal.’ ”

In an effort to rebalance trade and security, president Bush invited Chrétien and then-Mexican president Vicente Fox to his ranch in Crawford, Texas, in March 2005. There the leaders launched the Security and Prosperity Initiative, known as the SPP. They instructed officials in all three countries to work together to make borders function better and harmonize regulations to help make trade more efficient. But after years of trilateral summits, few long-standing border concerns had been resolved.

The process was doomed from the start, some say. First, there was the involvement of Mexico, whose border issues with the U.S. are very different. “Trying to do it trilaterally just complicates things,” says Manley. “I think that’s what doomed SPP.” And the three leaders were also weak politically. Meanwhile, the bureaucratic process lacked public transparency and gave business groups a privileged advisory role. By the time the three leaders met for another summit at the forest resort of Montebello, Que., in 2007, critics accused them of secretly trying to create a “North American Union.”

“There was a flotilla of opposition floating down the river to Montebello and it was all premised on conspiracy theories about selling our sovereignty down the river,” says McLellan. The officials thought they were taking incremental steps, but protesters accused them of everything from giving away Canadian water to plotting to force all Americans to speak Spanish. They were unprepared for the backlash. “We actually thought we would be criticized for not doing enough,” recalls McLellan.

While the trilateral effort fizzled, the trade relationship was becoming more about managing complex global supply chains. Manufacturers complained that as companies sourced parts on both sides of the border, quick delivery and just-in-time delivery became more important, and border delays more damaging. Meanwhile, Canada has found itself on the losing side of battles against a passport requirement, new agriculture inspection fees, and other red tape. The administration of President Barack Obama this year twice proposed a $5.50 fee for Canadian passengers entering the U.S. “This is crazy stuff,” says Manley. “The border is not just an issue of security.”

Meanwhile, the U.S. has started flying surveillance drones to monitor parts of the border, a move Manley calls “ridiculous” and “unnecessary.” At the same time, the Canadian government has declined U.S. requests to raise the relatively low limit on the value of goods individuals can bring into Canada without paying duty at the border, which would have allowed inspectors to focus on more pressing priorities. A “smart” border remains elusive.

The 9/11 attacks had the long-term effect of knocking both countries off of a path to deeper economic integration, says Chris Sands, a specialist in Canada-U.S. relations at the Hudson Institute, a think tank in Washington. “Suddenly Republicans were more nationalistic, put security first, and the borders were being reasserted. And Democrats were still leery of trade and the effect on trade union jobs,” he notes. “During the late Bush years, and you still see it under Obama, there is no one in Congress who champions these co-operation projects.”

Canada spent the decade trying to adapt to the changes in Washington. It set up an advocacy office inside the Canadian Embassy to help individual provinces lobby the U.S. Congress, a move criticized as a threat to national unity. Canada expanded the number of consulates, engaged more with state governors and regional governors’ associations, and created coalitions with U.S. businesses to press its issues, such as teaming up with Home Depot to lobby on softwood lumber or with U.S. pasta producers to fight protectionism on wheat. It’s a strategy Sands calls “an American face on a Canadian petition.”

Ottawa also broke with the long-time practice of sending career diplomats to serve as ambassadors to Washington. Instead, it sent former premiers like Frank McKenna and Gary Doer. “That represents an appreciation in Ottawa that diplomacy doesn’t work anymore and Canada has to play politics as just another one of many interests competing for time and attention,” says Sands.

But Canada also learned that relations with the White House don’t necessarily affect votes in Congress or business deals, for better or for worse. When Canada decided to not participate in Bush’s Iraq war, trade relations were not affected. “In terms of trade flows, even in Pentagon contracts, we didn’t see any great differences,” says Kergin. On the other hand, Canada’s participation in the Afghanistan war drew expressions of gratitude, but it didn’t make the eventual softwood lumber deal any easier or lead to a breakthrough on pre-clearance. “The Americans were happy, but did it have any impact economically? No,” says Goldenberg.

Manley, now the president of the Canadian Council of Chief Executives, says America’s approach to security has not changed. “While Tom Ridge and I were able to talk the language of managing risk, that is not part of the equation [today],” he notes. “This is a system that seems to be intent on eliminating risk. It has cost the world incredible amounts of money, not only in technology but in lost time and productivity.”

It was against this backdrop of dashed hopes that, in February, Prime Minister Stephen Harper and President Obama launched negotiations aimed at creating a “perimeter security” deal to ease border crossing. It’s an idea that Cellucci had floated in 2001. “I mentioned we should consider a perimeter,” Cellucci says. “And I got a call from the Prime Minister’s Office saying, ‘We think that if you say “perimeter,” some people in Canada are going to think you are going to put the two countries together.’ So I said I will call it a ‘zone of confidence.’ And I think we have built a zone of confidence and I think the current negotiations will build on that.”

The current U.S. ambassador to Canada, David Jacobson, said in an interview that the two governments plan to announce a joint border “action plan” that will include additional border infrastructure and information sharing. The approach will indeed be one of “risk management,” says Jacobson. “If you do this wisely you can have a more efficient border and a more secure border at the same time,” he says.

Jacobson declined to confirm whether land pre-clearance is in the deal, but says, “We are moving in the direction of moving things away from the border.” Jacobson says he expects that Canadians will soon have a faster, easier and cheaper experience of crossing the border. “There is excitement and enthusiasm at the highest levels of government that we are going to get this done right,” he adds.

For his part, Manley, who started with similar hopes in 2001, remains cautious. “We can no longer take for granted that the U.S. will be committed to free trade and free access of people across the border,” he says. “We should strive for those things, but I’m not counting on them.”

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