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Canadian Importers Association

Trading in the Millennium

by Robert Armstrong

As we enter the new millennium, the international trade community, especially importers and exporters and their service providers, face many challenges similar to those that we have faced in the last decade. The movement of goods across borders, specifically the Canada-U.S. border, the major ports of entry for marine cargo, as well as air and rail cargo, grows at a rate that has caused infrastructure problems and concerns with customs clearance procedures.

One only needs to look back to last year to reflect on concerns that the Canadian Importers Association has addressed on behalf of the import community, such as those involving the Ports of Vancouver and Fort Erie, to understand the scope of these challenges.

Port of Vancouver: This summer, trucking services withdrawn from the Port of Vancouver damaged the local and national economies as well as the port’s international reputation. It lost cargo to many other ports and exporters. Local businesses shut down. Canadian importers were also deeply affected.

To cope with this, freight-forwarders and high-volume importers had to re-route traffic to other ports, making complicated and often expensive arrangements to ship goods via-rail to other provinces for back-hauling.

The association met with senior operations people from each of the terminals at the Port - Vanterm, Deltaport, and Centerm - to ensure that the swift movement of imported containers once the dispute was resolved.

Then, a second work stoppage occurred due to the truckers in B.C. On Nov. 4, 1999, the British Columbia Maritime Employers Association served a seventy-two hour lockout notice to the longshoreman’s union as the International Longshoreman’s and Warehousemen’s Union’s refused to put a contract offer to its membership.

The Association was very relieved that the federal government’s ultimatum ended the shutdown of west coast ports on Nov. 15.

Customs Contraband and CFIA Asian Beatle Inspections: The high costs borne by the importer as a result of these two government programs is also a concern. We look forward to a cost-effective solution this year.

Port of Fort Erie: The infrastructure, in particular the highways on both sides of the U.S.-Canada border at all crossways, must be adequate for the massive increase in truck and car traffic.

The Port of Fort Erie now has a delay in construction. At this port, the Peace Bridge has already reached full capacity and commercial traffic volumes are expected to double in the next three to five years.

Tariff Retaliation: During the spring of 1999, Canadian Importers followed the trade dispute between Canada and the European Union concerning hormone-treated beef. On July 12, the Canadian Government received a World Trade Organization (WTO) arbitration report that set $11.3 million as the value of trade damage suffered by Canada due to the ban on Canadian hormone-treated beef, down from the $70 million Canada had stated was required.

On July 29 the Canadian Government announced that tariffs of 100 percent would be imposed on exports of beef, pork, cucumbers and gherkins into Canada from the European Union.

The association responded promptly to the retaliatory Tariff Proposal with a submission to the Department of Finance, opposing the Department’s proposal to withdraw tariff concessions because its retaliatory tariffs went beyond the government’s stated goal. They implicated innocent players outside the ambit of the trade dispute. Most importantly, its retaliatory tariffs could harm Canadian importers more than manufacturers or exporters in the European Union.

Similarly, on July 5 the Canadian Government requested authority from the WTO to enable Canada to retaliate against Australia for its ban on imports of Canadian fresh, chilled and frozen salmon. In 1998, a WTO panel ruled that Australia’s ban was unjustified and discriminatory. Following a failed Australian appeal to the WTO Appellate Body, a WTO Arbitrator gave Australia until July 6, 1999, to implement the WTO rulings. Australia didn’t meet the deadline.

The Association remains vehemently opposed to the use of retaliatory tariffs to settle trade disputes.

WTO in Seattle: On December 3, 1999 the third ministerial conference of the WTO concluded without setting an agenda for the next round of negotiations, showing how difficult it is to make decisions by consensus with 135 members. We sincerely hope that our Minister of International Trade, the Honourable Pierre Pettigrew, can be a leader to convince all trade ministers to come back to the table and revive talks to accelerate the global trade process.

Customs Blueprint Consultation Process: The Association submitted its initial response with its stated priorities to Revenue Canada’s Blueprint last year.

In early September, Revenue Canada unveiled the draft Customs Blueprint Action Plan containing Revenue Canada’s timetable to introduce programs. Adherence to these timelines hinge upon the passage enabling legislation.

The Association needs to ensure that the final Action Plan reflects the concerns of importers. Customs-Self Assessment must be available to any importer that qualifies and the government must implement cost-effective programs on a timely basis. Customs procedures must not slow the process.

Our goal must be for an open border, one that is transparent to business. The Canada-U.S. Border Accord needs to be expanded to include equivalent customs procedures in Canada and the United States.

Harmonized customs procedures, particularly identical release procedures (or release based upon an importer’s profile), will strengthen business. Importers and their foreign vendors need to partner with their international logistics service providers to demand better cross-border Customs administrations.