BTB & Facilitating Cross-Border Trade: Two Steps Forward, One Step Back?

By Keith Edmund White, Editor-in-Chief

Good news:  The Beyond the Border Initiative (BTB) and the Regulatory Cooperation Council (RCC) make the news! 

Bad news:  Facilitating cross-border trade and securing the border is tough work.

The Financial Post's thoughtful piece lays out the following Canada-U.S. border economic hurdles:

• Regulatory symmetry > customs issues when it comes to barriers for small to medium sized businesses engaged in cross-border trade.  Why's this important?  The success of the Regulatory Cooperation Council, a two-year project to bring greater symmetry along Canada-U.S. regulatory standards, means the success of businesses on both sides of the border.      
• Attempts to cut-down on border custom wait times shifts compliance issues to shipping, favoring bigger companies who (a) have greater awareness of fast-track programs and (b) possess the advanced tax remittance systems these programs require.

From the November 27th article by Denise Deveau:

The Beyond the Border initiative signed between Canada and the U.S. last year, has as many proponents as it does detractors. While most industry observers support the spirit behind the initiative, when it comes to the transfer of goods across the border, there are noticeable gaps between theory and practical application.

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Because customs has pushed back border requirement compliance to the shippers, the pressure is actually moving further back into the supply chain, he adds. “If they don’t make an investment in systems that comply, then it’s too bad. Customs would argue, why should we worry about releasing your goods if you don’t make the data available to us?”

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To date, only larger companies have been able to achieve the status because they are the only ones with the sophisticated tax remittance systems required to qualify. “Beyond the Border is supposed to make it easier for anyone to use it,” Ms. Wagner explains. “But there is a lack of awareness on the part of importers that programs are available and not limited to large entities.”

The lack of awareness and slow uptake will make it increasingly difficult for non-“trusted trader” players to compete, she says. “For Beyond the Border to work, we need that uptake. Otherwise it’s too much investment for too little payoff for businesses.”

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The data argument may be the most high-profile topic to date, but according to Joy Nott, president and CEO of I.E. Canada (Canadian Association of Importers and Exporters) in Toronto, there’s a much bigger one that dwarfs everything else: harmonizing the overall regulatory environment between Canada and the U.S. 

“That’s far bigger than the data elements that customs wants. In fact it has nothing to do with data, and everything to do with standards.”