The Pivotal Partnership: Opportunities & Challenges Concerning The Border: Balancing Openness and Security

About 300,000 people cross the border between the US and Canada daily. This constant stream poses challenges for balancing openness and security across the borders. The factors contributing to this balance were addressed by Edward Alden, Council on Foreign Relations, and Paul Frazer, a former Canadian Ambassador and current President of PD Frazer Associates.

Border Security

Edward Alden, author of the book The Closing of the American Border: Terrorism, Immigration, and Security Since 9/11, introduced his presentation on the importance of secure borders by retelling the story of a Dec. 14, 1999 immigration incident. The final car off the Victoria, BC, to Port Angeles, WA, ferry had previously cleared US Immigration and Naturalization Service checks in Victoria. Although there had not been any intelligence reports suggesting threats, veteran Customs officer Diane Dean saw that the driver seemed unusually nervous. She decided to have the car examined in secondary inspection. In the spare tire well, customs officials found explosive materials twice as powerful as TNT and timing devices to set off a bomb.

The car’s driver, Ahmed Ressam (traveling under a forged passport as Benni Noris), was arrested and identified as an Algerian al-Qaeda member who had received extensive terrorist training in Afghanistan and lived for a time in Montreal, Quebec. He was a known felon and wanted in Canada. He had planned to bomb the Los Angeles International Airport on New Year's Eve 1999, an attack in which hundreds of people could have been killed.

Mr. Alden noted that this incident exposed several border security weaknesses: First, even though Ressam was a known felon who was wanted in Canada, US Customs did not know this. Second, he had passed inspection on the Victoria side of the border. “That was in the lax security days pre-9/11,” Mr. Alden said, “but things are much the same today, 15 years later.”

Tightening the Border

After the 9/11 attacks, all border crossings went to a Level 1 Alert. Every car at the border was subjected to full scrutiny and, at the slightest suspicion, was sent to secondary inspection. In one day, the line waiting to enter the US was 10 miles long and required a 10-15-hour wait. Auto companies on both sides of the border rely on just-in-time delivery as parts move from Canada to the US. When car parts were delayed at the border during the 9/11 Level 1 Alert, there were disastrous impacts on commerce. The Level 1 Alert caused Ford, Chrysler, and GM to close down plants, and industry output fell 15% in one week.

The lessons learned:

1. Border security is too weak. Little or no information is gathered and shared between countries about who and what is crossing the border

2. To check people individually will destroy commercial relationships and lead to economic catastrophe

Smart Border Accord

Clearly, a new border strategy is needed, and Mr. Alden advocated that the US and Canada share information, resources, and expertise to find the balance between openness and security. “The border is a bulwark for security,” he acknowledged, “but it must not damage the largest two-way trade relationship in the world.”

On February 4, 2011, President Barack Obama and Prime Minister Stephen Harper announced the United States-Canada joint declaration, Beyond the Border: A Shared Vision for Perimeter Security and Economic Competitiveness.

Beyond the Border articulates a shared approach to security in which both countries work together to address threats within, at, and away from our borders, while expediting lawful trade and travel. The policy notes that “given the intertwined nature of the economies and societies of the US and Canada, as well as shared critical infrastructure and key resources, a threat to one country is a threat to both. As each other’s largest trading partners, we also recognize the importance of expedited and secure cross-border travel and trade to creating jobs and supporting economic competitiveness.”

 Border Crossings of Trucks and Personal Vehicles

Gathering and Sharing Information

The overall strategy of the Beyond the Border Action Plan focuses on gathering and sharing information and segmenting that information to identify which travelers require closer scrutiny, Mr. Alden reported.

The Action Plan enables the gathering and sharing of information by aligning Canada and US passport requirements and visa policies, visa denials, and entry and exit data. Both countries now check entrants against a shared terrorist watch list. More facilities for finger print capture are preventing travel on fraudulent documents. In Europe, all Europeans must register for the Electronic System for Travel Authorization (ESTA), and a similar plan could be implemented in the US and Canada.

Segmentation

Segmentation identifies “trusted travelers” who can be sped through borders, so that border officials can focus their time on less known and perhaps questionable travelers. Travelers can obtain a NEXUS card after being examined that allows quick entry, similar to the TSA pre-check program in the US. The card identifies those travelers who do not need to be checked in depth.

Commercial shippers who make daily forays across the borders can participate in The Customs-Trade Partnership Against Terrorism (C-TPAT). C-TPAT is a voluntary supply chain security program focused on improving the security of private companies' supply chains with respect to terrorism. Companies who achieve C-TPAT certification must have a documented process for determining and alleviating risk throughout their international supply chain. C-TPAT certification allows companies to be considered low risk, resulting in expedited processing of their cargo, including fewer Customs examinations.

The intention of the Beyond the Border Action Plan is to create better security and easier management at borders. However, implementation lags behind due to a lack of infrastructure and the technology to capture, process, and share information, Mr. Alden acknowledged. “There has been significant progress and the borders are more secure, but there is still much more that needs to be done,” he concluded.

Cross-Border Trade

Paul Frazer has 20 years of experience in international trade and diplomacy. He served as Canada’s Ambassador to the Czech Republic and Slovakia and was also a Minister at the Canadian Embassy in Washington, DC.

Ambassador Frazer pointed out that security and trade are core national interests for the US and Canada that are linked at the border. And, he noted, this is a long border encompassing 5,525 miles in total, or 3 times the length of the US-Mexico border. And this border is extremely active with 120 land and road crossings, funneling the legitimate flow of people and goods.

 Active Border: 120 Land/Road Crossings

“Massive trade flows pass from Canada through the US and into Mexico,” Mr. Frazer noted. And many of those flows link Canadian and US cities. Mr. Frazer noted that Montreal-US metro center pairs have bilateral trade exceeding $45 billion per year, with $19 billion in exports and $25 billion in imports. For example, bilateral trade between Montreal and New York-New-Jersey-Long Island or with Chicago-Napier-Joliet exceeds $1 billion annually for each metro pair, and at the state level, Illinois-Canada trade represents $28 billion/year. Because significant US-Canada travel is focused on metro pairs, Mr. Frazer proposed allowing pre-clearance facilities in major airports that allow travelers to return through district airports.

 Canada is the #1 Export Destination for 35 States

Canada also is the number 1 export market for 35 US states, he reported. Delays in implementing improved border processes are costly to the states in jobs and revenues. Mr. Frazer presented examples of the number of US jobs created by trade with Canada and the export value of trade to Canada for several congressional districts (2014 data). For example, 8,258 jobs in the seventh congressional district in Houston, Texas, are dependent on trade with Canada and exports $2.8 billion worth of goods. “The states have a lot at risk in the discussion about border security and openness,” Mr. Frazer said.

 Jobs Are Local In Every State

A Call to Advocacy

“We need trained people, modern infrastructure, and advanced technology to protect the border,” Mr. Frazer said, stressing the role of Senate Presidents to advocate at the federal level for better border processes. “There are major stakeholders in every state who are affected by border issues. It is in your constituents’ interests for you to advocate that Congress address these issues. We need a modern border infrastructure so workers and businesses do not endure the economic penalty that comes from bad border processes. Do what you can to get business leaders and stakeholders to make border issues a priority on the federal agenda,” Mr. Frazer concluded.

Discussion

Tom Finneran (Moderator): What does the US export to Canada?

Mr. Frazer: The lead export sectors are:

Cars and car parts

Precision instruments for high-end engineering and multibillion-dollar machines such as oil-sands diggers that are made in Wisconsin

Energy export–sending US crude to refineries in Quebec

Value-added items connected to high-wage jobs

Tourism to the US (which is considered an export)

John Burchett (Google): Since 9/11, a passport has been now required to cross the US-Canada border. But many low-to-moderate income people do not have a passport. And there is limited capacity for the passport agency to process them. Has US-Canada travel diminished because of the passport requirement? Picture

Mr. Alden: Passport fraud was rampant before 9/11. The passport requirement was not well-implemented—it is expensive and has been slow to accomplish. An alternative would be a less expensive ($30) Passport Card, like the enhanced drivers’ license concept.

Sen. David Long (IN): The Windsor-Detroit Bridge project will be an improvement, but what about other border crossings? What is needed and where would it be best to make investments in the border?

Mr. Frazer: Today we have inadequate, outdated physical plants and inadequate personnel at many border crossings. Security checks slow down the cross-border traffic. At Niagara Falls, for example, 1 bridge on the Canadian side has modern, up-to-date facilities and the process works smoothly. On the US side, there are long waits, which is especially a problem for tour buses and trucks. We need 10-12 lanes, not the current 4-6 lanes; we need special truck inspection lines and a NEXUS program for trusted travelers. We also need well-trained and coordinated officers from all the agencies that control the border, including CBP, agriculture, DEA, FDA, and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

Mr. Alden: The challenge is getting the US to commit funds to border modernization. There was a losing battle to get funding on the US side for the Windsor-Detroit Bridge, so the Canadians took on the cost. In addition, there are legal and regulatory hurdles to building new infrastructure and considerations of local communities’ needs and concerns.

Mr. Frazer: Appropriating federal funds for borders is a serious issue in Washington, DC, because the US Congress cannot appropriate funds for items not in the President’s draft budget. One bill sought to allocate $100 million for some bridge improvements, but this could not win approval.

Sen. John Cullerton (IL): What are some innovative ways to fund these projects beyond looking to the US Congress, for example, cooperating on sharing Canada-US user fees?

Mr. Frazer: Bridges are self-supporting money machines. Public-private partnerships to build modern border-crossing facilities would be financially attractive to some investors. Sophisticated equipment could be donated to the CBP as “gifts in kind.”

Vans Stevenson (Motion Picture Association of America): There seems to be more scrutiny now at the border, more questions are asked. Picture

Mr. Alden: There is a random quality to how deeply people are questioned, which may depend on the agent, or how busy it is at the border, or if the person appears suspicious for some reason.  Canadians are thorough in their examinations; they are worried about weapons crossing the border.

Mr. Frazer: If you say you are coming into Canada on business, you’ll be asked more questions because they want to ensure that you are not taking a job away from a Canadian.

Ralph Fernandez (The Recording Industry Association of America): How much of a threat to Canada-US trade is China? Is China replacing the US as a trading partner with Canada? What should the US be concerned about in terms of global trade?

Mr. Alden: Manufacturing in the modern world relies on an elaborate supply chain; many parts are made by many companies in many places. The important question is “Where do you fit in the supply chain?” China is where products are finally assembled from parts manufactured in North America. Manufacturing the parts is the higher skilled, higher wage part of the supply chain. The US should focus on providing the more complex and sophisticated parts of the process so that it becomes a critical hub in the supply chain.

Mr. Frazer: Innovation is what keeps the US and Canada ahead in competition and central to the supply chain. States and provinces should identify supply chain opportunities to find markets for products that they can produce.

Sen. Jonathan Dismang (AR): There is a significant bilateral trade between Arkansas and Canada. I agree that advocacy in Washington is essential. Who is leading this issue in the Senate and House?

Mr. Frazer: There is a lack of leadership on the federal level. There is good will and open minds in the Senate Committee on Homeland Security and Governmental Affairs, but it is not clear who will lead the process and, the US House of Representatives can do nothing to allocate funding. It will require pulling the two parties together.

Speaker Biography

Edward Alden

Edward Alden is the Bernard L. Schwartz senior fellow at the Council on Foreign Relations (CFR), specializing in U.S. economic competitiveness. In addition, Mr. Alden is the director of the CFR Renewing America publication series and co-author of the recent CFR Working Paper Managing Illegal Immigration to the United States. The former Washington bureau chief of the Financial Times, his work focuses on immigration and visa policy, and on U.S. trade and international economic policy.

Mr. Alden was the project co-director of the 2011 Independent Task Force on U.S. Trade and Investment Policy, which was co-chaired by former White House chief of staff Andrew Card and former Senate majority leader Thomas Daschle. He was also the project director for the 2009 Independent Task Force on U.S. Immigration Policy.

Mr. Alden is the author of the book The Closing of the American Border: Terrorism, Immigration, and Security Since 9/11 (HarperCollins), which was named a 2009 finalist for the J. Anthony Lukas Book Prize for nonfiction writing. The judges called it "a masterful job of comprehensive reporting, fair-minded analysis, and structurally sound argumentation." His forthcoming book, Failure to Adjust: How Americans Got Left Behind in the Global Economy, and How to Get Ahead, focuses on the federal government’s failure to respond effectively to the competitive challenges on issues as trade, currency, worker re-training, education, infrastructure and support for innovation.

Mr. Alden was previously the Canadian bureau chief for the Financial Times based in Toronto, and before that was a reporter at the Vancouver Sun specializing in labor and employment issues. He also was the managing editor of the newsletter Inside U.S. Trade, widely recognized as the leading source of reporting on U.S. trade policies. He has won several national and international awards for his reporting. Mr. Alden has done numerous TV and radio appearances as an analyst on political and economic issues, including NewsHour with Jim Lehrer, McLaughlin Group, NPR, the BBC, CNN, and MSNBC. His work has also appeared in Foreign Policy, Foreign Affairs, the Japan Times, the San Jose Mercury News, and the Toronto Globe and Mail. He is the coauthor, with Franz Schurmann, of Democratic Politics and World Order, a monograph published by Berkeley's Institute of International Studies in 1990.

Mr. Alden holds a master's degree in international relations from the University of California, Berkeley, and pursued doctoral studies before returning to a journalism career. He also has a bachelor's degree in political science from the University of British Columbia. He was the winner of numerous academic awards, including a Mellon fellowship in the humanities and a MacArthur Foundation graduate fellowship.

Paul Frazer

Ambassador Paul Frazer brings to his clients 20 years well-grounded in Washington, DC and several years working abroad. He draws upon extensive experience in both the public and private sectors to counsel clients on the best strategic approach to securing their interests. No one in Washington can claim his international and domestic U.S. and Canadian policy bona fides.

Paul advises a broad and varied range of private and public sector North American clients on a wide selection of issue areas including among others energy & the environment, trade, natural resources/mining, health care, and financial services as they are affected by legislative and/or regulatory action in Washington, DC.

Prior to 2001, Paul served with the Canadian Foreign Service, taking assignments in Ottawa, New York, Warsaw, and in Prague as Ambassador to the Czech Republic and Slovakia. From 1995 to 2001 he was a Minister at the Canadian Embassy in Washington, DC.

During his time in Ottawa, he was Communications Director to the Prime Minister and Spokesperson to the Foreign Minister. He also previously served as Assistant, International Economic Affairs to the Minister of Finance and as Executive Director of Canada’s $200 million economic and political assistance program for Central Europe and the former Soviet Union.

A graduate of McGill and Carleton Universities, Paul is a Past Fellow of Harvard University’s Weatherhead Center for International Affairs. From 2010 until 2014, Paul served as U.S. Co-Chair of the Woodrow Wilson Center’s Canada Institute advisory board, now serving as Immediate Past Chair. He is a Trustee of Pearson College of the Pacific in British Columbia.

With prior service on the Board of the Canadian-American Business Council, Paul serves as Special Advisor on Canada-U.S. Relations to the President of the Canadian Chamber of Commerce.

Alberta Venture named Paul to its “2011 List of Alberta’s Most Influential People.” In 2013, Paul was named to the inaugural "Power 50" listing of the most influential Canadian government and business leaders by Canadian Business.

Paul is a frequent speaker at international conferences, and is often a guest on national TV, radio, and in the print media providing views on bilateral political/economic, security, and trade questions.

Other Summer 2016 Forum Highlights articles:

Edward Alden

Bernard L. Schwartz Senior Fellow

Council on Foreign Relations

Mr. Alden’s new book Failure
to Adjust: How Americans Got Left Behind in the Global Economy
focuses on the federal government’s failure to respond effectively to competitive challenges on issues such as trade, currency, worker retraining programs, education, infrastructure, and support for innovation.

When car parts were delayed at the border during the 9/11 Level 1 Alert, there were disastrous impacts on commerce. The Level 1 Alert caused Ford, Chrysler, and GM to close down plants, and industry output fell 15% in one week.

“...given the intertwined nature of the economies and societies of the US and Canada, as well as shared critical infrastructure and key resources, a threat to one country is a threat to both. As each other’s largest trading partners, we also recognize the importance of expedited and secure cross-border travel and trade to creating jobs and supporting economic competitiveness.”

Segmentation identifies “trusted travelers” who can be sped through borders, so that border officials can focus their time on less known and perhaps questionable travelers.

C-TPAT certification allows companies to be considered low risk, resulting in expedited processing of their cargo, including fewer Customs examinations.

Paul Frazer

President

PD Frazer Associates

...Montreal-US metro center pairs have bilateral trade exceeding $45 billion per year, with $19 billion in exports and $25 billion in imports.

John Burchett

Vans Stevenson

Sen. Jonathan Dismang

Edward Alden

Paul Frazer

Senate Presidents’ Forum

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