The hypothesis
Stricter border controls have significant affects on North American economy with little security gains. This will be analyzed by taking into account a number of factors; the social-economic issues arising that is, its impact on growth of USA’s economy and the social integration of North America.
Body
Prior to September 11th Terrorist attacks in USA, North America enjoyed a freer trade and movement of persons across its borders between the USA and Canada. During this period, the amount of trade between these two countries flourished and increased gradually across the years.
As a result, the domestic economies between the two countries grew due to the cast market provided by the two countries. This was enhanced due to the fact that there were few cross border restrictions and thus few barriers to trade. As a result, people could quickly and easily cross the border and engage in trade. Human and capital mobility was much easier as there were few restrictions and there existed a uniform cross border regulation.
After the September 11th attacks, the USA was forced to take a closer look at its homeland security and make an overhaul of it to prevent an occurrence of such issues arising in the future. One of the homeland security agenda was to take a look at the USA-Canada border and make overhaul changes.
This sudden shift was propagated by among other issues such as; the fact that Canada was considered a soft terrorist haven where terrorists would plan attacks on the USA, cross the border easily and carry out the attacks on American soil. Due to this fact, the US had to introduce extra security measures to ensure that terrorist and unwanted persons do not cross over into the US.
These new security measures introduced did not discriminate across the various reasons that take place on a day to day basis on the US-Canada border but were applied generally. As a result the largest causality of the new security measures at the border was trade and the socio-economic integration of North America. Due to this, access to market and human resource has been reduced significantly over the years after the September 11th attacks.
There are new, more rigid requirements and regulations that traders and travelers across the border have to fulfill before they are allowed to gain entry into the United States. Thus the dream of a borderless economy has seized to exist as the strict border regulations have hampered its growth. Due to this, the business community has incurred extra costs both financially and non-financially as they try to adjust their business procedures to the new security requirements at the border.
As from 2001, a number of security programs were initiated to increase security at the border but this affected the inflow and outflow of stock trade between both countries and also increased limitations for persons entering the United States from the western hemisphere.
All in all, these procedures have resulted to the Canadian economy incurring substantial costs or losses. Implementation of tight security measures at the Canada-US border has led to huge economic repercussions which in turn are borne by both the Canadian and the United States tax payers.
This is evident since both governments have heavily invested on border security by spending hundreds of millions of dollars. There is a huge possibility that the most recent tightening of border security may act as a restriction to prospective exporters to the United States or to potential investors sorting out the most appropriate location to invest in a fabrication facility.
The security regulations that were implemented led to expensive compliance requirements for Canadian and US based companies that carried out cross border business transactions. As for multi-national firms, investing in the north of the border may be out of question especially where there is a possibility of delays in their supply chains due to the border security measures that require strict scrutiny of merchandise.
At the border, security induced delays, directly attributed to a rise in shipment costs and this factor proves to be an economic burden. As it was in 2004, approximately 6.9 million trucks originating from Canada crossed the border to the United States and according to a survey carried out in 2005, the time spent at border crossings increased to a total of 32 minutes due to delays caused by the security procedures put in place and these delays resulted to a total cost of 290 million dollars which the Canadian exporters bore.
Although these firms have employed several strategies, these strategies unveil both strengths and probable flaws in the capability of cross-border supply chains to endure upcoming interruptions (Andrea & Smith, 2002 11).
Furthermore, there are other sources of costs accredited to the border other than security. Based on data collected in 2002, a study that was carried out estimated the sum 10 billion US dollars being used for the subsistence of the Canada-US border. The implementation of new border security procedures has led to the imposition of passports as well as other secure travel credentials for travel across the hemispheric region.
As a fraction of a sweeping anti-terrorism bill, the United States Congress voted for the Western Hemisphere Travel Initiative (WHTI). This bill aimed to improve security at the border, recognize as well as seize any person who may be well thought-out to be a security risk. The key disadvantage of this policy was that it proved to be quite costly since huge capacities of both Canadians and Americans have no valid passports; a procedure that is both expensive and intricate to acquire.
In order to obtain a United States passport, one would have to part with about 100 dollars hence proving to be costly as well as burdensome. As a result, this new bill could relentlessly affect both business and travel for both countries and also between the United States and other destinations across the hemispheric region.
The passport requirement resulted to a 12.3 percent reduction in visits from the US to Canada in 2008; this resulted to an estimated net loss of 905 million dollars to the Canadian economy while United States suffered a loss of 319 million Canadian dollars due to a drop in Canadian visits to the US by about 1.7 million visits.
A survey carried out by the Ontario Ministry of Tourism showed that due to the passport requirement procedure, Ontario experienced a loss of 652 million dollars and a further 6,500 tourism jobs were lost, this proves to be a major burden to the Canadian economy.
This passport requirement regulation not only affects citizens of other countries with the intention of visiting the US but it also affects the US citizens with the aim of re-entering their country since they are required to provide a valid passports so as to be allowed to enter their home country. By this the social integration of North America is adversely affected by the mere fact of increasing security measures at the border (Martin 2006 3).
Business for Economic Security, Trade and Tourism (BESTT) Coalition, opted for nationalized standards for secure drivers’ licenses to be set in conjunction with the lines of the US Real-I.D. The Real-I.D project has been heavily criticized by different fronts each with their own different views. More so, this program has been estimated to incur huge expenses on states hence many resist its execution.
In the state of Virginia, the New York Times article estimates the cost of implementing the program to approximately 169 million dollars and an additional of 63 million dollars as the continual annual costs. It has been estimated that between 9.1 billion to 12.8 billion dollars will be used across all the states so as to implement the Real-I.D program annually; an aspect that greatly surpasses the 100 million dollars budget set by the Congressional Budget Office.
A great deal of money will be spent on ensuring security is enhanced at the Canada-US border thus imposing huge burdens on the economies of both countries yet it acts as a hindrance to cross border trade and also a major impediment to tourism. On the other hand, increasing security at the border has led to a rise at the rate at which illegal drugs, criminals and smuggled commodities are intercepted. It is most certain that these security measures that are to be implemented will negatively impact the North American economic integration.
In 1999, the presidents of both countries propagated the Canada-US Partnership that set out several principles for border cooperation. These guiding principles were:
- Rationalize and synchronize both border policies and management.
- To enhance cooperation hence lead to increased efficiency in customs, in enforcement of the law, in immigration as well as in protection of the environment both at and beyond the border.
- Cooperate with each other on threats facing both Canada and the United States.
The objective of these principles was to bring about integration and bi-national approach in management of the border. After a decade the prospective of a bona fide bi-national approach to management of the border failed. After the terrorist attacks in September 11, 2001, the events of that day became the determining factor of all policies regarding to the Canada-US border.
Security of the border became the prime objective and it even surpassed trade between the two countries. Since “security triumphs trade”, several problems have been encountered due to the tightened security at the border such as; increased costs as well as delays are incurred by passengers and commercial flows. A tighter security at the border brings about negative implications on the North American economy yet it provides little security gains.
In the past, Canada widely viewed border issues on a commercial basis and it heavily relied on the 1994 Free Trade Agreement. The chief purpose of free trade was to remove non-tariff barriers but the United States decided to make their security boundary pushy and invasive.
However, the commerce first perspective drastically changed after the 2001 attacks in the United States since the US prioritized security over trade; a key factor that affected the economies of both Canada and the United States. This issue proved the international community wrong whereby, instead of border management becoming a low priority matter especially after the post-national era, it is now highly prioritized particularly at the Canada-US border.
Due to a shift in focus by both countries to border security after the September 11th attacks, there occurred negative effects on trade between both countries hence programs were put in place thereby increasing border security under the new policy regulations that had less restraining border crossing measures for pre-approved business associates.
In the determining of whether stricter border controls have significant affects on North American economy with little security gains, it is critical to look into the roles of Canada as well as the United States with regards to the airports.
This is because it is in these very airports where there is a severe concentration of trans-border human as well as cargo passage and it is in these very airports where intensive security checks and screening is carried out. In most recent times, airports have surpassed the land border as the major portals of transit and also as the chief points of transportation as well as security.
Improved amalgamation with the US along the air border will lead to an enhancement in Canada’s economic aggressiveness by assisting in both the establishment and development of proper “gateway” airports in Canada. Security measures at the airport are a critical issue in the daily economic activities of both countries since a secure channel for the movement of both commodities and people is vital.
In December 2009, when the “underwear bomber” attempted to blow up a plane at Southern Ontario travelling to Detroit, passengers that were travelling from Montreal’s Trudeau Airport to the US had to face extensive lineups and intensified security procedures. Due to tighten security at the airports, movement of people as well as merchandise from Canada to the US is a major issue for Canada’s gateway airports (Goldfarb 2004 14).
This aspect hinders accessibility of people and goods across both countries and hence affects trade and the North American economy as a whole.
Conclusion
It is true to state that stricter border controls have significant affects on North American economy with little security gains for both the United States and also Canada. This is evident since tightening of the security at the border has more cons on trade between both countries than the pros on security matters.
In order to inflict stricter border controls, both countries have been forced to heavily invest on the necessary technology so as to curb insecurity and in a bid to counter terrorism but this factor negatively affects the economies of both countries since the burden of resources lies on the tax payers. An example of such technology is the introduction of Real-I.D apparently which has sparked controversy among the American citizens on top of being a very costly project.
The Western Hemisphere Travel Initiative (WHTI) that was introduced by the United States where everyone that intends to travel to the US must have passports has stirred up North American integration in addition to disrupting cross-border travel from Canada to the United States.
The Canada-US border has been the longest undefended border that facilitated free movement of goods under the free trade agreement but this seized to be the case after the implementation of intense security measures at the border. This factor led to delays of commodities at the border resulting to huge losses for business traders. It is evident that stricter border controls results to having negative implications on the growth of USA’s economy as well as the integration of North America.
The security gains that have been experienced due to a tighter security at the Canada-US border have been little or minimal as compared to economic losses that have been experienced by both Canada and the United States hence forcing firms based in both countries to look for new purchases or sales opportunities outside North America so as to make up for the losses incurred or for expansion purposes.
This concisely illustrates that stricter border controls have had considerable affects on the North American economy while providing insignificant security gains.
Implementing tighter security measures at the Canada-US border results to minute security achievements since the current border enforcement measures have proven to be inefficient in preventing tons of shipment of drugs as well as thousands of immigrants crossing the border annually hence reducing the chances of preventing terrorists into the country.
In addition to this, counter-terrorism successes are fewer, less frequent, less discernible and quite secretive. While the strict border control may give reassurance and calm to the United States’ citizens, it only does more harm than good since it acts as a hindrance to legitimate trade and travel than as a hindrance to terrorists. This categorizes cross-border security as more of a trade barrier for both Canada and the United States.
Reference List
Andrea, J. and Smith, C. (2002). The Canada-U.S. Border: an automotive case study. Web.
Goldfarb, D. (2004). Thinking the unthinkable: security threats, cross-border implications, and Canada’s long-term strategies. Retrieved from https://www.cdhowe.org/public-policy-research/thinking-unthinkable-security-threats-cross-border-implications-and-canadas-long-term-strategies
Martin, P. (2006). The mounting costs of securing the undefended border. Institute for research on public policy, vol. 1, 1-4.