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Canada braces for economic impact of Trump’s trusted traveller bans

Joe Castaldo, The Globe and Mail
February 16, 2020

Industry groups are worried about potential tightening at the Canada-U.S. border after the Trump administration suspended enrollment in expedited travel programs for New York State residents over security concerns, warning that Canadian businesses could suffer the fallout from a U.S. political fight.

“American security politics is an exhausting, cynical game of chess that manufacturers on both sides of the border are frequently forced to play,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association. “We will be seeking to educate U.S. lawmakers on the unnecessary burden they are putting on their own industries with this move.”

The U.S. Department of Homeland Security (DHS) barred New York residents on Feb. 6 from enrolling in travel programs such as Nexus and FAST, which allow members to cross the Canada-U.S. border more quickly. Existing members of the programs in New York will also not be able to renew.

Federal officials said the action is necessary owing to a recently enacted New York law that allows undocumented immigrants to obtain driver’s licences. The law also prevents the New York Department of Motor Vehicles from sharing records with federal authorities. DHS said it needs access to the data for national security purposes, and that without information from the DMV, U.S. Customs and Border Protection cannot properly vet applicants to the travel programs.

New York State sued the federal administration over the suspension, arguing it will hurt the state’s economy by creating delays at the border and that the information sought by DHS can be obtained elsewhere. Governor Andrew Cuomo said the move by U.S. President Donald Trump’s administration is “punishment for refusing to fall in line with their dangerous and divisive agenda.”

The FAST program for commercial truck drivers is designed to speed trade by allowing members to use dedicated lanes and booths at border crossings. (The acronym stands for fast and secure trade.) Nearly 30,000 commercial drivers are enrolled at four New York-Canada ports of entry, according to DHS. If New York drivers can longer access the program and existing members cannot renew, supply chains on both sides of the border could face delays. “Anything that restricts or slows people down, including drivers through the FAST program or people using the Nexus card to do business, is going to be a problem,” said Dennis Darby, president and chief executive of Canadian Manufacturers and Exporters.

He is not expecting an immediate impact (a FAST membership is valid for five years) but the directive from the DHS could create a growing problem. “It could be a heck of a lot more than a nuisance if it persists,” Mr. Darby said.

New York State is Ontario’s third-largest trading partner for both imports and exports, and manufacturing is tightly integrated. Companies depend on just-on-time delivery rather than storing inventory, and delays at the border can increase costs.

Mr. Darby said the Canadian Manufacturers and Exporters has contacted officials in Ottawa about its concerns, along with the National Association of Manufacturers in the United States. “We are doing everything we can to make sure that policy makers understand this has implications for the business community,” he said.

The Canada Border Services Agency declined to comment on the industry’s concerns, but a spokesperson said the organization “constantly monitors and adjusts its operations accordingly to meet operational demands and those based on traffic volumes.”

New York State residents also will no longer be able to enroll or renew their memberships in the Nexus program, which is for “pre-approved, low-risk travelers” entering Canada or the U.S. at designated ports of entry. About 24.5 per cent of visitors to the Niagara region in Ontario come from the U.S., according to a report from the area’s economic development group. Janice Thomson, president and CEO of Niagara Falls Tourism, said the majority of U.S. visitors cross the border with passports and not Nexus cards, however. “We trust the authorities involved will resolve the situation,” she said.

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