Will Sequester's Border Trade Effects Dampen BTB?

Will sequester dampen the blue skies of BTB?

By Keith Edmund White
Editor-in-Chief

Will one of the unintended victims of sequester be the Beyond the Border Initiative (BTB)?

For now, no.  

But recent reports suggest a prolonged sequester may turn BTB into a moribund agreement. 




Suquester's Indirect BTB Hit

Mark Kennedy's recent report, appearing in The National Post, includes a chat with Jayson Myers, president of the Canadian Manufactures and Exporters.

The topic:  how sequestration will impact Canada-U.S. trade and the continued success of BTB.

First, if you look at the recent BTB report card, you'll see that most of the items didn't require significant American investment.  So it seems the direct sequester effect--reduction in federal government spending--isn't crippling BTB.

But isn't the real problem here the uncertainty of sequester cuts and how they might impact the bottom-line of businesses conducting cross-business trade? 

If this happens, the real threat to BTB will be reduced support in the business community.   

And what about that hefty $1-billion investment America wants the Canadian government to make?

While BTB may not grab U.S. headlines, it does grab them in Canada.  And if Canadian support diminishes for the border agreement, it seems unlikely that BTB's full potential will be realized.

Sequester is Already Adding Uncertainty for Cross-Border Businesses

A recent Federal Times article highlights just how vexing sequester will be to cross-border traders:

At Customs and Border Protection, with some 60,000 employees, “we’ve got everything on the table,” acting Chief Operating Officer Thomas Winkowski said last week when asked whether the agency is contemplating furloughs or reductions in force. “It just depends on how this rolls out.

“There are a lot of unanswered questions,” he said, including how OMB would implement the cuts.

Whatever the final decisions, they will not damage border security, Winkowski insisted.

“We were stood up to protect this country … and that’s what we will continue to do,” he said.

Will Continued Uncertainty Take the Wind from BTB's Sails?

And the National Post echoes this concern and connects it to BTB:

On Thursday, leaders of Canada’s business community said this country should brace itself for significant cross-border delays.
Everyone — from exporters that need to quickly ship their products by truck, to tourists planning to drive or fly for a vacation getaway in the U.S. —will be affected.

Jayson Myers, president of Canadian Manufacturers and Exporters, said in an interview that his association expects the delays will be longest at the Canada-U.S. land border crossings. “What we’re hearing is that we could be facing four or five-hour delays at the border.”

…

The scenario threatens to erode the Beyond the Border deal, a 2011 agreement that Prime Minister Stephen Harper and U.S. President Barack Obama reached to create a “perimeter security” wall against terrorists while also easing congestion at the border.

The deal grew out of how the U.S. reacted to the 9/11 attacks on its own country — imposing stringent security measures which slowed traffic at the Canada-U.S. border to a crawl.

Myers said he hopes both countries find ways to prioritize how to spend money in their much-touted deal.

But there are widespread fears about whether parts of the initiative will now be put on the backburner by the U.S. because of the budget cuts.

“The Beyond the Border initiative is so important,” said Myers.

“It is to increase efficiency at the border, make sure that border delays and costs of crossing the border are minimized. And this just turns the clock right back to 2001.”