The World's Longest Undefended Border - The Canada-US Law ...

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This issue went to press in January, 2009.

CANADA-UNITED STATES LAW
JOURNAL
2008-2009 Editorial Board
Editor-in-Chief
Michael D. Emancipator
Managing Editor
LerVal M. Elva
Symposium Editor-in-Chief
Eric Stephens
Symposium Managing Editor
Jason Kral
Ryan Galloway
Sally Kim
Mark Klinko
Mike Arnold
Kate Beukenkamp
Carl Brooker
Kuangshi Cao
Margaux Day
Steve de Eyre
Ryan DeYoung
Executive Editors
Carolyn Kobus
Brett Lamborn
Matt Troy
Associate Editors
Andrew Finn
Mandie Koeth
Joseph Monroe
Adam Morris
Faraz Nayyar
Ryan Quinn
Katherine Saks
Faculty Adviser
Dan Ujczo
Janaki Umarvadia
Luke Wake
J. Hunter Whyte
Ashley Sheroian
Eric Sidle
Jonathan Smith
Sean Sobel
Radha Subramanian
J. Cathryne Watson
Student Publications Coordinator
Alice Simon
International Research Librarian
Andrew Dorchak
The Canada-United States Law Journal is published by the Canada-
United States Law Institute at Case Western Reserve University
School of Law and University of Western Ontario Faculty of Law.

CANADA-UNITED STATES
LAW INSTITUTE
Robert H. Rawson, Jr.
Interim Dean
Case Western Reserve University
School of Law
United States Director
Jon Groetzinger
Professor of Law
Case Western Reserve University
School of Law
Dr. Ian Holloway, Q.C.
Dean
Professor of Law
University of Western Ontario
Faculty of Law
Canadian Director
Chios C. Carmody
Professor of Law
University of Western Ontario
Faculty of Law
Managing Director
Daniel D. Ujczo
Case Western Reserve University
School of Law
Program Coordinator
Deborah Turner
Case Western Reserve University
School of Law

Executive Committee and Advisory Board
Founder
Sidney Picker, Jr.
Chair
Dr. Henry T. King, Jr.
Executive Committee
Donald B. Cameron, Jr.
Practice Group Leader
International Trade
Troutman Sanders LLP
Washington, DC
Richard O. Cunningham
Senior International Trade
Partner
Steptoe & Johnson, LLP
Washington, DC
Lawrence L. Herman
Partner
Cassels Brock & Blackwell LLP
Toronto, ON
Selma M. Lussenburg
Toronto, ON
James P. McIlroy
Counsel on Public Policy
McIlroy & McIlroy, Inc.
Toronto, ON
R. Richard Newcomb
Chair, International Trade
Practice Group
DLA Piper
Washington, DC
J. Michael Robinson, Q.C.
Counsel
Fasken Martineau DuMoulin LLP
Toronto, ON
Graham E. Taylor
Associate General Counsel
Global Business Law
The Dow Chemical Company
Midland, MI
2008-2009 Student Committee
Executive Student Directors & Senior Research Fellows
Jonathan Barra
Steve de Eyre
Associate Student Directors & Research Fellows
Andrew Finn
Amanda Koeth
Bruce Yi

Advisory Board
Joseph W. Bauer
Vice President & General Counsel,
The Lubrizol Corporation
Stephen de Boer
Director, Oceans & Environmental
Law Division
Dpt. of Foreign Affairs
and Int’l Trade
Cyndee Todgham Cherniak
Counsel,
Lang Michener LLP
Morton A. Cohen
CEO,
Clarion Capital Corporation
David Crane
The Toronto Star
Stephen E. Flynn
National Security Studies,
Council on Foreign Relations
Paul D. K. Fraser, Q.C.
Of Counsel (Retired)
Jonathan T. Fried
Canadian Ambassador to Japan
Richard G. Goetz
Leader,
International Practice Group,
Dykema Gossett, PLLC
Praveen Goyal
U.S. Government Relations
Research in Motion
Hon. William C. Graham, P.C.,Q.C.
Chancelor, Trinity College, University
of Toronto; Atlantic Council of Canada
& Co-Vice Chair of Canadian Int’l
Council;
Rt. Hon. Herb Gray, P.C., C.C.
Chair, Canada Int’l Joint Commission
& Chancellor, Carleton University
Paul A. Guthrie, Q.C.
Vice President, Law and General
Counsel
Canadian Pacific Railway
C. Thomas Harvie
Senior VP and General Counsel
Goodyear Tire & Rubber Company
George Haynal
Vice President, Government Affairs
Bombardier, Inc.
Bill Hearn
Partner,
McMillan Binch Mendelsohn
Jon R. Johnson
Solo Practioner
Henry T. King, Jr.
Case Western Reserve University
School of Law
Jack Lessenberry
Performing & Communication Arts,
Wayne State University
Gail D. Lilley
Partner,
Blake, Cassels & Graydon LLP

Rosemary McCarney
President & CEO
Foster Plan Canada
Douglas McCreery
Spieth, Bell, McCurdy & Newell Co.,
L.P.A.
Paul A. Meyer
Counsel,
Watson Wyatt Worldwide
Sharon O'Flaherty
Senior Attorney,
Eaton Corporation
Catherine A. Pawluch
Leader Transportation Law Practice
Group,
Gowling Lafleur Henderson
Stephen J. Petras, Jr.
Partner
International Team Leader,
Baker & Hostetler, LLP
S. Richard Petry, II
Fmr. Senior Counsel,
Int’l Eaton Corporation
Thomas A. Piraino Jr.
Vice President, General Counsel &
Secretary,
Parker-Hannifin Corporation
Simon V. Potter
Partner, McCarthy Tetrault
Daniel M. Price
Deputy Asst. to the President & Deputy
Nat’l Security Advisor For Int’l
Economic Affairs
Silvana Alzetta-Reali
Vice President, Secretary & Division
Counsel
Coca-Cola Ltd.
David Robinson
Fmr. Legal Adviser to the U.S. Dpt. Of
State; Adjunct Senior Fellow, Council
on Foreign Relations
Matthew Schaefer
Professor,
University of Nebraska-Lincoln
College of Law
T. Bradbrooke Smith
Special Counsel,
Stikeman Elliott
John A. Terry
Partner,
Torys LLP
P. Kelly Tompkins
Executive Vice President & Chief
Administrative Officer,
RPM International, Inc.
M. Catherine Vernon
Assistant General Counsel,
Formica Corporation
On behalf of the Canada-United States Law Institute, the Journal
gratefully acknowledges a grant of support for the 2008 Conference
from the Government of Canada through the Canadian Studies Grant
Programs of the Department of Foreign Affairs and International
Trade/International Academic Relations Division, as well as
additional support from the Canadian Consulate in Detroit, Michigan.

EDITOR’S NOTES
Volume 34 of the Canada-United States Law Journal contains the
proceedings of the Canada-United States Law Institute’s 2008 Conference
titled, “The Post – 9/11 ‘Safe and Secure’ Canada-United States Border in
the Era of Global Supply Chains: Gateway or Checkpoint? The World’s
Longest Undefended Border.” Where in a truly collaborative effort, experts
from Canada and the United States met and discussed their various
experiences and views on the benefits of open and free trade weighed against
the necessity for a safe and secure border. I personally enjoyed attending the
Conference, and on behalf of the Journal staff, we thank all the speakers for
such an informative event.
The 2008 Conference and publication of this volume could not have been
so successful without the help from the combined effort from a group of
incredible people. First, I would like to thank Dr. Henry T. King, Jr. for his
lasting dedication to the Institute, where the Institute and Dr. King go handin-hand;
it is hard to think of one and not the other. He has been a pillar on
which this Institute was built, and I believe the session published in this
volume honoring Dr. King is very revealing of that devotion. Additionally, I
am thankful to Dan Ujczo for providing me with guidance and support. He
does a remarkable job of managing such a large and complex organization. I
would like to thank Deborah Turner, Dr. King’s Program Coordinator.
Deborah is an enormous asset who often knows more than anyone about the
Institute’s inner-workings. I would like to thank Eric Stephens and Jason
Kral, the Editors of the ‘Joint Working Group’ Journal, also a product of the
Institute, for their comradery. We often experienced the same difficulties and
unknowns in managing a journal. In addition, I would like to thank each of
our Executive and Associate Editors who edited the sessions for readability
and cited the strongest authorities for each factual assertion in the articles.
Also, I thank Andy Dorchak, our research librarian, for assisting the editors
in finding authorities for the articles.
And finally, I would like to thank LerVal Elva, Managing Editor. I was
fortunate to have Val as the Managing Editor, but even more privileged to
have known her as my friend these past three years. I cannot imagine what
this experience could have been like if I did not have Val’s constant help and
support. Together, we have produced a product of which we are proud, and
which we hope you enjoy. So on behalf of the entire Journal staff, we
appreciate your continued support and welcome your contributions.
Michael D. Emancipator
Editor-in-Chief

Canada· ·United States
LAW INSTITUTE
VOLU
UME 34, NO. 1
2008
PROCEEDINGS OF THE CANADA-UNITED
STATES LAW
INSTITUTE
CONFERENCE
on
THE WORLD’S
LONGEST UNDEFENDED BORDER: GATEWAY OR CHECKPOINT?THE
POST-9/11 “SAFE AND SECURE”CANADA-UNITEDD STATES BORDER IN THE ERA OF
GLOBALL SUPPLY CHAINS
Cleveland, Ohio
April 18-19, 2008
Conference Speakers ........................................................................................................................v
List of Conferencee Participants .................................................................................................... xvii
Welcome and Opening of 2008 Annual Conference
Session Chair — Dr. Henry T. King, Jr. ....................................................................................
1
Speaker — Valerie McCall ..........................................................................................................
4
The Canada-Unitedd States Supply Chain in the Era of Global Economic Competitiveness
Session Chair — P. Kelly Tompkins ............................................................................................
7
Canadian Speaker — Garland Chow ........................................................................................ 10
United States Speaker — Paul Vandevert ................................................................................. 22
Discussion Following the Remarks of Garland Chow and Paul Vandevert .............................. 31
Doing
Business Across the Canada-United States Border: Gateway or Checkpoint?
Session Chair — Ronald L. Rose ............................................................................................... 35
Canadian Speaker — David Bradley ........................................................................................ 36
United States Speaker — Jason Conley ..................................................................................... 45
Canadian Speaker — Thomas
Garlock ..................................................................................... 52
i

Discussion Following the Remarks of David Bradley, Jason Conley and Thomas Garlock ..... 57
Remarks from Canadian Ambassador Wilson
Introduction — Lee Friedman ................................................................................................... 65
Speaker — Hon. Michael Wilson ............................................................................................... 67
Discussion Following the Remarks of Hon. Michael Wilson ................................................... 80
A Safe and Secure Canada-United States Border: Customs-Trade Partnership Against Terrorism
(C-TPAT); Partners in Protection (PIP); Free and Secure Trade (FAST); E-Manifest (ACE/ACI);
Trusted Traveler Programs (NEXUS); and Integrated Border Enforcement Teams (IBETs)
Session Chair — Birgit Matthiesen ........................................................................................... 91
Canadian Speaker — Warren Coons ........................................................................................ 92
United States Speaker — Todd C. Owen ................................................................................. 101
Canadian Speaker — Joy Aldous ............................................................................................ 109
Discussion Following the Remarks of Warren Coons, Todd C. Owen and Joy Aldous ......... 117
The Tipping Point: Effects of Post 9/11 Border Security on Canada-United States Economic
Competitiveness
Session Chair — Margaret Martin .......................................................................................... 127
Canadian Speaker — Paul Storer ........................................................................................... 128
United States Speaker — Gary Hufbauer ................................................................................ 137
Discussion Following the Remarks of Paul Storer and Gary Hufbauer .................................. 142
Honoring Dr. Henry T. King, Jr.
Dan Ujczo ................................................................................................................................ 149
Michael Scharf ........................................................................................................................ 152
Greg Peterson .......................................................................................................................... 155
Robert Noble ............................................................................................................................ 158
Gary Simson ............................................................................................................................ 162
Ian Holloway ........................................................................................................................... 163
David King .............................................................................................................................. 165
Dr. Henry T. King, Jr. ............................................................................................................. 167
The Way to a Safe, Secure & Efficient Canada-United States Border
Speaker — Dan Ujczo ............................................................................................................. 169
Speaker — Richard Gordon .................................................................................................... 170
Speaker—Stephen E. Flynn, Ph.D. .......................................................................................... 171
ii

Moving People Across the Canada-United States Border: Legislative and Regulatory
Developments in Immigration, the Western Hemisphere Travel Initiative, and Enhanced Drivers’
License Programs
Session Chair — Catherine A. Pawluch .................................................................................. 185
United States Speaker — Praveen Goyal ................................................................................ 187
Canadian Speaker — Ken Oplinger ........................................................................................ 193
Discussion Following the Remarks of Praveen Goyal and Ken Oplinger ............................... 203
Moving Your Goods and Services Across the Canada-United States Border: Compliance,
Efficiency, and Challenges
Session Chair — Silvana Alzetta-Reali ................................................................................... 217
Canadian Speaker — Cyndee Todgham Cherniak .................................................................. 219
United States Speaker — Susan Kohn Ross............................................................................. 220
Discussion Following the Remarks of Cyndee Todgham Cherniak and Susan Kohn Ross .... 242
Balancing Canada-United States Security and Economic Competitiveness: The Great Lakes and
St. Lawrence River
Session Chair — Douglas McCreery ...................................................................................... 249
United States Speaker — Rear Admiral John E. Crowley, Jr. ................................................ 250
Discussion Following the Remarks of Rear Admiral John E. Crowley, Jr. ............................ 261
Enhancing the Canada-United States Gateways and Corridors: East, West and Within
Session Chair — Chios Carmody ............................................................................................ 267
Canadian Speaker — Sean O’Dell .......................................................................................... 269
Canadian Speaker — David Oxner ......................................................................................... 278
United States Speaker — Hugh Conroy .................................................................................. 284
Discussion Following the Remarks of Sean O’Dell, David Oxner and Hugh Conroy ............ 292
The Intersection of Border Security and Free Trade Agreements
Session Chair — Maureen Irish .............................................................................................. 303
Canadian Speaker — Greg Kanargelidis ................................................................................ 304
United States Speaker — David R. Hamill .............................................................................. 311
Canadian Speaker — Cyndee Todgham Cherniak .................................................................. 318
Discussion Following the Remarks of Greg Kanargelidis, David R. Hamill and Cyndee
Todgham Cherniak……………………………………………………………………………325
Copyright ©2008 Canada-United States Law Journal
iii

CANADA-UNITED STATES LAW INSTITUTE CONFERENCE
on
THE WORLD’S LONGEST UNDEFENDED BORDER:GATEWAY OR CHECKPOINT?THE POST-
9/11 “SAFE AND SECURE”CANADA-UNITED STATES BORDER IN THE ERA OF GLOBAL
SUPPLY CHAINS
April 18-19, 2008
LIST OF SPEAKERS
Joy Aldous is the Director of the Licensing, Export and Accounting Policy Division in
the Admissibility Branch of the Canada Border Services Agency. She has over 30 years
of experience in the agency and has contributed to many initiatives including Customs
Self Assessment, ACROSS, Titan and the Customs Commercial System.
David Bradley joined OTA in 1985 and became its president in 1991. In 1997, he was
given the added responsibility of Chief Executive Officer of the Canadian Trucking
Alliance. Before entering the trucking industry, David was a management consultant with
one of the large global consulting firms based in Toronto and a financial markets analyst
at a Canadian chartered bank. David completed his undergraduate work in economics at
the University of Toronto and earned a master’s degree in economics from Queen’s
University.
Cyndee Todgham Cherniak joined the International Trade Law Group, the Business
Law Group and Tax Group as counsel in Lang Michener’s Toronto office in October
2007. She is known for her expertise in the area of free trade agreements, regional trade
agreements and preferential trading arrangements (collectively, PTAs). She appears
before regulatory bodies and tribunals such as the Canadian International Trade Tribunal,
and makes representations to the Canada Revenue Agency, the Canada Border Services
Agency, the Export and Import Controls Bureau, the Department of Foreign Affairs and
International Trade, the Canadian Food Inspection Agency, the Department of Finance
and the Ontario Ministry of Revenue.
Cyndee is the co-founder of Trade Lawyers Blog, Women Lawyers Blog and Canada
Law Blog. Cyndee is a vice-chair of the American Bar Association, International Law
Section customs and membership committees and the Diversity Task Force. She is pastchair
of the ABA, Women’s Interest Network, and a member of the organizing
committee of the 2006 ABA Annual General Meeting. Cyndee is the chair of the
Canadian Bar Association, National Commodity Tax, Customs and Trade Section,
Customs Subcommittee.
v

Garland Chow is Associate Professor in the Operations and Logistics Division and
Director of the Bureau of Intelligent Transportation Systems and Freight Security
(BITSAFS) in the Sauder School of Business at the University of British Columbia. Dr.
Chow actively teaches and writes in the fields of supply chain, business logistics and
freight transport planning, management and policy. He is an internationally known
authority on motor carrier transportation and author of over 200 articles and reports.
Recent research includes: the role of Canadian firms in global supply chains, the
relevance of Canada’s labor standards to long distance truck drivers, modeling the supply
chains utilizing the Asia Pacific gateway and the modeling of total logistics cost
performance.
Since June 2005, he has been the director of BITSAFS. The Bureau has the mandate to
encourage and conduct research on the use of intelligent transportation systems to enable
secure, safe and efficient movement across borders. Dr. Chow’s principle research within
BITSAFS has been the modeling of the intermodal transport chain across all modes and
the use of these models to simulate public policy and IT scenarios. Other BITSAFS
projects include vehicle infrastructure integration, the intelligent gateway concept, smart
corridors, and securing the marine container supply chain.
Jason Conley is the Senior Manager for Homeland Security policy for the U.S. Chamber
of Commerce, the world’s largest business federation. As such, he is responsible for the
organization’s advocacy, policy, and outreach on issues including transportation security
for all modes, supply chain management, and customs policy. Notably, Mr. Conley led
the Chamber’s successful lobbying campaign on recently-enacted SAFE Port Act of
2006, and Implementing Recommendations of the 9/11 Commission Act. Prior to joining
the Chamber of Commerce, Mr. Conley served as Vice President of National Strategies, a
boutique public policy firm in Washington, DC. While with National Strategies, he
provided Fortune 500 clients with strategic counsel and coalition management services
on policy issues related to transportation, telecommunications, and public safety.
Prior to joining National Strategies, Mr. Conley served for three years as Director of
Government Relations & Deputy General Counsel for the Intelligent Transportation
Society of America. Mr. Conley directed federal government relations for the intelligent
transportation industry. Mr. Conley led a broad coalition of public and private sector
transportation stakeholders in a successful lobbying campaign to increase federal funding
for intelligent transportation systems in the surface transportation legislation, known as
SAFE TEA-LU. Earlier in his career, Jason practiced with the Washington, D.C. firm of
Cooper, Carvin & Rosenthal, L.L.P. Jason graduated from The Columbus School of Law
at the Catholic University of America. He also received a B.A. in Politics from Wake
Forest University. He is an active member of both the District of Columbia Bar and the
Virginia State Bar. He is also a member of the American Bar Association’s Homeland
Security Task Force and the Legal and Policy Committee of the U.S. Customs and Border
Protection’s Trade Support Network.
vi

Hugh Conroy is a project manager at the Whatcom Council of Governments (WCOG), a
U.S. metropolitan planning organization in Bellingham, Washington. For 11 years, his
work has centered on the WCOG’s leadership of the International Mobility and Trade
Corridor Project (IMTC)–a binational and cross-border transportation planning coalition.
Ongoing regional coordination and multi-agency project delivery through the IMTC
Project have covered a variety of United States-Canada cross-border trade and travel
issues. Public and private entities, working through the IMTC, continue to identify
priorities for the regional border gateway, plan improvements, assemble project funding
partnerships, and cooperatively oversee implementation of several initiatives. Over the
last four years, Hugh has also been participating on the Canada-U.S. Transportation
Border Working Group (TBWG), working on coordination of national programs and
policies related to our countries’ shared interests in cross-border transportation. Hugh
received a master’s degree in Public Policy and Management from Carnegie Mellon
University and his undergraduate degree from the University of California at Berkeley.
Warren Coons is the director of Integrated Border Enforcement Teams (IBETs), where
the shared outcome will be enhanced border security coverage and improved
international relationships along the shared border, as a result of focusing on improving
information-sharing between Canadian and US law enforcement agencies and conducting
intelligence-led investigations. Border-related investigations, based on intelligence from
all IBET partners, will be more effective, rather than random enforcement activity. Law
enforcement interoperability will improve with the development of a technically
successful communications system linking multi-agencies that will facilitate joint
operations, while addressing health and safety concerns for law enforcement officers
along the 49th parallel.
Rear Admiral John E. Crowley, Jr. assumed his current position as the Commander,
Ninth Coast Guard District on April 18, 2006. As the operational commander for the
Great Lakes region, he leads over 7,700 regular, reserve, auxiliary and civilian men and
women, two air stations, two air facilities, four sectors, one sector field office, four
marine safety units, eleven cutters, forty-six small boat stations, and five aids to
navigation teams. Under his direction, Coast Guard personnel provide maritime security
over 6,500 miles of shoreline and 1,500 miles of international border and provide the
world’s premiere search and rescue, marine safety and environmental protection,
maritime law enforcement, aids to navigation and icebreaking services to the region’s
citizens.
Most recently, Rear Admiral Crowley was the Judge Advocate General and the Chief
Counsel of the U. S. Coast Guard. In this capacity he served as the Principal Legal
Advisor to the Commandant and oversaw the administration of Military Justice in the
Coast Guard. He served as the Secretary of Homeland Security’s representative to the
vii

Maritime Security Policy Coordinating Committee which was responsible for drafting the
National Strategy for Maritime Security and its eight supporting plans. Prior to attending
law school he was the Assistant to the Secretary of Transportation’s representative to the
Third United Nation’s Conference on the Law of the Sea.
Stephen Flynn is the Jeane J. Kirkpatrick senior fellow for National Security Studies at
the Council on Foreign Relations. He is the author of the critically acclaimed The Edge of
Disaster: Rebuilding a Resilient Nation (Random House, 2007), and the national
bestseller, America the Vulnerable (Harper Collins 2004). At the Council, Dr. Flynn
directs an ongoing private sector working group on homeland security. He was the
Director and principal author for the task force report, America: Still Unprepared - Still
in Danger, (2002) co-chaired by former Senators Gary Hart and Warren Rudman. Dr.
Flynn is a Consulting Professor at the Center of International Security and Cooperation at
Stanford University and a Senior Fellow at the Wharton School's Risk Management and
Decision Processes Center at the University of Pennsylvania. Since 9/11 he has provided
testimony on nineteen occasions on Capital Hill. He has served as the principal advisor to
the bipartisan Congressional Port Security Caucus and is a member of the Marine Board
of the National Research Council. He is a frequent media commentator and has appeared
on Meet the Press, 60 Minutes, The News Hour with Jim Lehrer, The Today Show,
Nightline, the Charlie Rose Show, CNN and on National Public Radio. Three of his
articles have been featured in the prestigious journal, Foreign Affairs. Excerpts of his
books have been featured in Time, as the cover story for U.S. News & World Report and
as the subject of two CNN documentaries.
From August 2000 to February 2001, Dr. Flynn served as the lead consultant on the
homeland security issue to the U.S. Commission on National Security (Hart-Rudman
Commission). He has served in the White House Military Office during the George H.
W. Bush administration and as a director for Global Issues on the National Security
Council staff during the Clinton administration.
A 1982 graduate of the U.S. Coast Guard Academy, Dr. Flynn served in the Coast Guard
on active duty for 20 years, including two tours as commanding officer at sea, received
several professional awards including the Legion of Merit, and retired at the rank of
Commander. He received the M.A.L.D. and Ph.D. degrees in International Politics from
the Fletcher School of Law and Diplomacy, Tufts University , in 1990 and 1991. He was
a Guest Scholar in the Foreign Policy Studies Program at the Brooking Institution from
1991-92, and he was an Annenberg Scholar-in Residence at the University of
Pennsylvania.
Dr. Flynn is the principal for Stephen E. Flynn Associates LLC, where he provides
independent advisory services on improving enterprise resiliency and transportation and
logistics security. He also serves on the advisory board for the San Diego-based Crossflo
Systems.
viii

Thomas E. Garlock is the General Manager of the Niagara Falls Bridge Commission,
the bi-national entity that owns, operates and maintains the Rainbow, Whirlpool Rapids
and Lewiston-Queenston Bridges spanning the Niagara River between Canada and the
United States. The Commission’s crossings carry the second highest volume of traffic on
the Canada-United States Border. Appointed as the fifth General Manager by the
Commission in November of 2000, Mr. Garlock previously held positions in New York
State Government and business. Mr. Garlock is a director and past president of the Public
Border Operators Association (PBOA), a member of the Board, treasurer and past
chairman of the Niagara Falls, Canada, Chamber of Commerce, a member of the Board
of the Niagara Tourism & Convention Corporation and a member of the Board of
WNED, Public Television, Buffalo-Toronto.
During Mr. Garlock’s tenure, the Commission has completed more than $110 million in
capital improvements, introduced a state-of-the-art security/surveillance system and
developed its own electronic toll system tied to NEXUS, the bi-national trusted traveler
program. The Commission’s operating budget is self supporting through toll, lease and
investment income.
Garlock is a graduate of Empire State College of the State University of New York, with
a degree in Government and Public Policy. He is a native of Lockport, New York, where
he resides with his wife, Laurie, and daughter, Erin.
Praveen Goyal is Director of U.S. Government Relations for Research In Motion (RIM).
Perhaps best known for its BlackBerry wireless handheld devices, RIM is a leading
designer and manufacturer of innovative wireless solutions for the worldwide mobile
communications market. At RIM, Praveen's responsibilities include developing and
implementing policy strategies and representing RIM before federal and state
policymakers. Praveen is a graduate of Yale College and Harvard Law School , and his
career has included various positions serving as counsel within the Federal
Communications Commission, U.S. Congress, and the telecommunications industry.
Dave Hamill focuses on international, customs trade policy and disputes, and export
controls and sanctions issues. Dave has represented Fortune 500 companies whose
imports and exports are regulated by the Department of Homeland Security (DHS) and
the Bureau of Customs and Border Protection (CBP). His experience includes assisting
companies with customs audits, including focused assessments, importer self-assessments
and NAFTA verifications. His client work covers the wide range of commercial
enforcement laws and policies that DHS and CBP administer, which include the
following: duty preference programs such as NAFTA; tariff classification; valuation;
entry procedures; custom brokerage; country of origin marking; bind rulings; antiterrorism
and border protection (e.g. the Customs- Trade Partnership Against Terrorism
(C-TPAT), the Bioterrorism Act (BTA) regulations, and the new advance manifest
ix

equirements); export controls and sanctions; voluntary disclosures; seizures and
forfeitures, fraud and strategic investigations; and civil and criminal penalties.
Before joining Arent Fox, Dave served from1991-2000 as a senior counsel and attorneyadvisor
at the US Department of the Treasury. During his tenure at the Treasury
Department, he served as the chief legal advisor to the US chair of the NAFTA Rules of
Origin Working Group, where he represented the United States at the trilateral NAFTA
Working Group meetings convened to monitor the implementation and administration of
the NAFTA concerning rules of origin, country of origin marking, and custom
administration. In addition, he served as a legal advisor to Treasury's Commercial
Operations Advisory Committee of the Customs Service (COAC), where he worked to
resolve various issues between the private sector representatives and the government.
Dave also represented the Treasury Department at the Negotiating Group on Market
Access meeting convened under the Free Trade Area of the Americas (FTAA).
Dave has spoken at various industry and client conferences on customs and trade matters,
and recently co-authored an article on C-TPAT for the Canadian International Lawyer.
While attending law school at Georgetown University he served as associate editor for
the Tax Lawyer.
Gary Clyde Hufbauer resumed his position as Reginald Jones Senior Fellow in 1998.
Previously he was the Marcus Wallenberg Professor of International Financial
Diplomacy at Georgetown University, and served in the U.S. Treasury Department from
1974 to 1980. Dr. Hufbauer holds an A.B from Harvard College, a Ph.D. in Economics
from King College at Cambridge University, and a J.D. from Georgetown University
Law Center. His co-authored publications include Economic Sanctions Reconsidered,
(third edition, 2007), US Taxation of Foreign Income (2007), US-China Trade Disputes:
Rising Tide, Rising Stakes (2006), and NAFTA Revisited: Achievements and Challenges
(2005).
Greg Kanargelidis is a Partner practicing in the International Trade Group and the
Commodity Tax and Customs Group. His practice involves all areas of international
trade, customs and commodity tax.
Greg’s international trade law practice involves representing clients with respect to crossborder
trade issues arising from the Canada – U.S. Free Trade Agreement, the North
American Free Trade Agreement, the World Trade Organization and its various
agreements, and other bilateral and regional trade agreements. He has considerable
experience in representing Canadian and foreign clients in trade remedy matters, such as
antidumping and subsidy investigations as well as advising clients on the consistency of
existing or planned measures with international trade rules. In the area of customs law, he
has extensive experience advising Canadian and foreign companies on such matters as
tariff classification; customs valuation; rules of origin; export and import controls;
x

marking rules; seizures and ascertained forfeitures; administrative monetary penalties;
and voluntary disclosures. Greg also assists clients with respect to planning, compliance
and appeals involving commodity taxes such as the goods and services tax, the
harmonized sales tax, the Quebec sales tax, the provincial sales tax, and commodityspecific
excise taxes and excise duties.
Greg is a Contributing Editor to Federated Press’ Sales and Use Tax Journal. He is a
regular contributor to the International Law Office Newsletter on trade and customs
matters, to Carswell's GST & Commodity Tax newsletter on customs and international
trade topics, and to the Canadian Association of Importers and Exporters' TradeWeek. He
has written for the International Trade Association's International Trade newsletter,
Trademark World, the Licensing Journal, the Texas Transnational Law Quarterly and the
Banking & Finance Law Review. He has lectured at Osgoode Hall Law School and has
prepared papers for, and spoken at, several conferences on commodity tax related topics,
including those organized by the Canadian Bar Association, the Ontario Bar Association,
The Law Society of Upper Canada, the Canadian Institute of Chartered Accountants
Commodity Tax Symposium, the Canadian Tax Foundation, INFONEX, Federated Press,
the Strategy Institute and the Council for International Tax Education.
Valarie J. McCall, Chief of Government Affairs for Cleveland Mayor Frank Jackson,
was appointed to the RTA Board of Trustees in July 2006. Ms. McCall serves as the
Administration's primary liaison to the state government and federal government, and
monitors mayoral appointments to internal and external boards and commissions.
Previously, Ms. McCall served as Cleveland City Council's youngest City Clerk, Clerk of
Council, in the City's history. Sworn in to the office in May 2002, she streamlined the
processing of legislation, installed an effective management team and reorganized the
day-to-day operations of the office to maximize efficiency. As Clerk of Council, Ms.
McCall was the chief administrative officer for the 21-member Cleveland City Council,
and supervised a staff of 41. Prior to becoming the Clerk of Council, Ms. McCall served
as the City of Cleveland's Director of the Empowerment Zone, where she was responsible
for a $200 million budget. She supervised the distribution of funds for job training and
placement programs, as well as direct lending programs that assisted businesses in four
targeted neighborhoods.
Sean O'Dell is currently the Executive Director of the Windsor Gateway Project with
Transport Canada. Mr. O'Dell has more than 25 years of experience working with
governments, international organizations and multi-national companies. In addition, he
has considerable experience in developing broad strategic assessments and
recommendations in a wide variety of financial, economic and policy areas. Over the past
25 years, Mr. O'Dell has occupied positions with the Government of Alberta Treasury in
Edmonton, Alberta; in the Economics Department of the University of Western Ontario
in London, Ontario; with Natural Resources Canada in Ottawa; as Chief Economist of the
xi

International Energy Agency (OECD) in Paris, France; and as a private consultant based
in Paris, France and Toronto, Canada.
In 2003, Mr. O'Dell rejoined the Canadian federal government as Acting Director
General, Policy and Economics in the Large Final Emitters Group at Natural Resources
Canada. He has been with Transport Canada since 2005 and represents the Canadian
federal government in the bi-national partnership with the United States to implement a
30-year transportation strategy addressing the various challenges at the Windsor-Detroit
Gateway, including free and secure trade, security, environmental concerns and
community impacts.
Kenneth Oplinger currently serves as the President/CEO of the Bellingham/Whatcom
Chamber of Commerce & Industry, where he has been since October 2003. He has been
leading Chambers of Commerce in the Western US for over sixteen years, ten of those
years in California.
Ken is a graduate of Willamette University in Salem, Oregon, where he received a BA in
Political Science and Spanish. Ken is also a graduate of the Institute for Organizational
Management at UCLA. He is a Past President of SUPERCHEX, the Chamber Executives
organization representing Northern California Chamber Executives, and served as the
Chairman of the Board of WACE, the Western Association of Chamber Executives, in
2006. Ken is an Accredited Chamber Executive, having received his accreditation in
February 2003 from WACE. Ken currently serves as the co-chair of the BESTT Coalition
(Business for Economic Security, Tourism and Trade), a bi-national coalition of business
and industry concerned about the affects of implementing the Western Hemisphere
Travel Initiative (WHTI) on the Canada/US Border. He also serves on the Planning
Commission for the City of Blaine, WA.
As the President of the Bellingham/Whatcom Chamber of Commerce & Industry, Ken
serves as the Chief Executive Officer for a Chamber with a membership of some 1000,
representing almost 175,000 people across Whatcom County, Washington. The
Bellingham/Whatcom Chamber of Commerce & Industry is the regional leader in
creating a strong local economy, promoting the community, representing the interests of
business with government, political action for the business community and providing
networking opportunities.
Todd C. Owen is the Executive Director of the Cargo and Conveyance Security Office
within U.S. Customs and Border Protection’s Office of Field Operations. As the
Executive Director for the Cargo and Conveyance Security (CCS) Office since May
2006, Mr. Owen is directly responsible for all cargo security programs and policies for
CBP. Included within the CCS Office are the Container Security Initiative Office, the
Secure Freight Initiative Office, the Non-Intrusive Inspection Technology Office (which
includes radiation detection equipment and large scale imaging equipment, policies, and
xii

programs), the Customs-Trade Partnership Against Terrorism Program (C-TPAT) Office,
the national Canine Enforcement Program, the Cargo Verification Office which manages
cargo enforcement policies and activities with the U.S. Coast Guard and the
Transportation Security Administration, the Cargo Control Office which oversees trade
security policies and programs including in-bound, manifest and carrier compliance
programs, and the National Targeting Center for Cargo, located in Northern Virginia.
Previously, Mr. Owen was the Director of the C-TPAT program.
As the Director of the C-TPAT Program from January 2005 through May 2006, Mr.
Owen strengthened this industry partnership program by more clearly defining the
security measures which must be adopted for a member to be eligible to receive the trade
facilitation benefits afforded by CBP. Strong management controls were implemented
and hiring was increased, allowing for a significant increase in the level of foreign site
assessments performed worldwide under this program.
Mr. Owen began his career as an Import Specialist in Cleveland, Ohio in 1990, and
transferred to Miami in 1992. Through his eight years in South Florida, Mr. Owen held
various trade related positions within Field Operations and the Office of Strategic Trade,
before being selected for the New Orleans Area Port Director position in 2000.
Mr. Owen, a career member of the Senior Executive Service, is a graduate of John
Carroll University in Cleveland, Ohio, and was a senior executive fellow at Harvard
University’s John F. Kennedy School of Government. Mr. Owen also holds a Masters
degree in Public Administration from St. Thomas University in Miami, Florida.
David Oxner is the Director of the Gateway Initiative for the Department of
Transportation and Public Works and the Province. His executive portfolio includes the
following senior assignments: Department of Transportation and Public Works;
Department of Tourism, Culture and Heritage; the Office of Economic Development; the
former City of Dartmouth; Halifax Board of Trade; McCain Foods Transportation Group;
and the Toronto Dominion Bank.
Susan Kohn Ross joined Mitchell Silberberg & Knupp LLP as International Trade
Counsel on January 1, 2008. Prior to that she was affiliated with Rodriguez O'Donnell
Ross Gonzalez & Williams, P.C. having joined it in June 2002 as the Los Angeles
resident partner. She was previously the founder of S.K. Ross & Assoc., P.C. She is a
graduate of the University of California at Los Angeles and Southwestern University
School of Law and has practiced for more than twenty years in the areas of Customs,
international trade, transportation and import/export law. She is a co-founder of Trade
Lawyers Log and Women Lawyers Blog. She is also the co-creator of C-TPAT Made
Easy, Inc., an on-line application program which facilitates companies becoming
members of the Customs-Trade Partnership Against Terrorism.
xiii

Paul Storer is Professor and Chair of the Economics Department at Western Washington
University. He is a member of the board of directors of the Pacific Northwest Regional
Economic Conference (PNREC) and served as editor of the Northwest Journal of
Business and Economics from 2001 through 2005. Storer's research focuses on Canada-
US business and economic relations and cross-border integration.
Among Storer's recent publications (both joint with Steven Globerman) are: "Canada-
U.S. Integration Following NAFTA" (in North American Economic and Financial
Integration, Elsevier, 2004) and The Impacts of 9/11 on Canada-U.S. Trade (University
of Toronto Press, 2008). He has previously published in such journals as the Canadian
Journal of Economics, Canadian Public Policy, the American Review of Canadian
Studies, Contemporary Economic Policy, and the Journal of Banking and Finance. Storer
is also a co-author on the 13 th edition of the introductory economics textbook by Lipsey,
Ragan, and Storer.
Storer has a Ph.D. in economics from the University of Western Ontario and BA and MA
degrees in economics from the University of Toronto. Prior to joining Western
Washington University, Storer was employed as an economist at the Bank of Canada and
served on the faculty of the economics department of the Université du Québec à
Montréal.
Paul Vandevert has been the International Trade Attorney for Ford Motor Company
since 2000. In this position he has been responsible for a wide variety of international
trade and Customs related matters for Ford around the world, including managing a
Customs audit in Norway, structuring duty-efficient transactions in South Africa,
appearing before the WTO Committee on Non-Preferential Rules of Origin on behalf of
the US automotive industry, managing Ford's participation as an industrial consumer in
the Hot-Rolled and Corrosion Resistant Steel Sunset Reviews before the US International
Trade Commission, as well as managing Ford's defense in an US Customs penalty case
involving recordkeeping. Prior to joining Ford, Paul was International Trade Counsel at
Delphi Automotive Systems Corp from Delphi's spin-off from General Motors in 1999,
and prior to that, he was an attorney with General Motors, also responsible for global
international trade and Customs matters from 1994. Paul began his career as an
international trade and Customs lawyer in 1987 with the law firm of Soller, Shayne and
Horn in New York City.
Paul earned an A.B. in Comparative Literature at Columbia University (1981) and a J.D.
from Case Western Reserve University Law School (1987). He has been admitted to
practice in the states of Ohio (1987), Connecticut (1989), New York (1991) and
Michigan (2000). In addition, he is a member of the bars of U.S. Court of International
Trade, the Court of Appeals for the Federal Circuit, and the federal district courts of the
Northern District of Ohio, the Southern and Eastern Districts of New York and the
Eastern District of Michigan. Paul is a member of the Customs Committee and
International Law Section of the American Bar Association, the International Law
xiv

Section of the Michigan State Bar Association, and the Court of International Trade Bar
Association (CITBA).
Paul has written several articles on international trade and customs issues, including a
comment for the Case Western Reserve Journal of International Law entitled " The
Uruguay Round and the World Trade Organization: A New Era Dawns in The Private
Law of International Customs And Trade" (Winter 1999) and has spoken at numerous
conferences and workshops on various aspects of Customs law. Paul is currently a
member of the Legal/Policy Committee of the Trade Support Network, which is working
with the U.S. Customs Service to develop and implement the Automated Customs
Environment (ACE). Paul has completed the Customs Valuation & Transfer Pricing
Workshops, sponsored by the World Customs Organization in Brussels.
Ambassador Michael Wilson assumed his responsibilities as Ambassador on March 13,
2006, becoming the 22nd representative of Canada to the United States. Prior to taking up
his current position in Washington, Ambassador Wilson was Chairman of UBS Canada,
an operating division of UBS AG, one of the world's leading financial institutions where
he oversaw all UBS operations in Canada, which included the Investment Bank, pension
fund management, and Wealth Management businesses. Prior to joining UBS in July
2001, Ambassador Wilson was responsible for RBC Financial Group's institutional asset
management business. He also served as a Vice Chairman of RBC Dominion Securities,
responsible for senior client relationships and advice to both Canadian and international
companies and governments.
In 1979, Ambassador Wilson was elected to the House of Commons. In September 1984
he was appointed Minister of Finance and remained in that position until May 1991. He
then became Minister of Industry, Science and Technology and Minister for International
Trade. During his tenure as a member of the Cabinet, Ambassador Wilson represented
Canada at the IMF, IBRD, OECD, GATT and the G-7 Ministers meetings.
xv

CANADA-UNITED STATES LAW INSTUTITE CONFERENCE
on
THE WORLD’S LONGEST UNDEFENDED BORDER:GATEWAY OR CHECKPOINT?
THE POST 9-11 "SAFE AND SECURE"CANADA-US BORDER IN THE ERA OF GLOBAL SUPPLY
CHAINS
April 18-19, 2008
LIST OF PARTICIPANTS
Joy Aldous**
Silvana Alzetta-Reali *
William Anderson
Christi Bartman
Richelle Beatty
Mary Lynn Becker
Maurice Bernier
Louis-Felix Binette
Douglas Bingeman
David Bradley**
Stephen Brererton
Gary Broadbent
Catherine Brooke
George Brown
Mark Butler
Donald Cameron
Chios Carmody*
Kathleen Carrick
Anne Cascadden
Cyndee Todgham Cherniak**
Daniel Cherrin
Garland Chow**
Denise Climenhage
Jason Conley**
Hugh Conroy**
Jennifer Cook
Warren Coons**
James Corcoran
George Costaris
David Crane
Rear Admiral John E. Crowley, Jr. **
Richard Cunningham
Brendan Delay
James Doherty
xvii

Andy Dorchak
Malcolm Douglas
Christine Drennen
LerVal Elva
Michael Emancipator
Jonathan Entin
Stephen Flynn
Kendra Fogarty
Kathryn Friedman
Lee Friedman*
Thomas Garlock**
Arif Ghouse
Richard Gordon
Praveen Goyal**
James Graham
Jon Groetzinger
David R. Hamill**
Bill Hearn
Jennifer Hemmingway
Lawrence Herman
Dana Hicks
Ian Holloway
Gary Hufbauer**
DavidHunter
Maureen Irish*
Erik Jensen
Katharine Johnson
Greg Kanargelidis**
Charles Kerester
Asim Khan
Sally Kim
Henry T. King, Jr.*
David King
Mark Klinko
Carolyn Kobus
Jason Kral
Rainer Kunau
Brett Lamborn
Kristin Larrick
Ronald Lawton
Patrick LeClair
Gail Lilley
Jean-Francois Marion
Margaret Martin*
Birgit Matthiesen*
Valarie McCall**
xviii

Megan McCarthy
Kyle McCoy
R. Douglas McCreery*
Peter McGuire
Andrew McIntosh
Lisa Mencini
Michael Miller
Greg Mizanin
Richard Newcomb
Robert Noble
Sean O'Dell**
Kim O'Neil
Kenneth Oplinger**
Todd Owen**
David B. Oxner**
Michael Parks
Catherine A. Pawluch*
Gregory Peterson
Stephen Petras
Richard Petry
Michael Pierson
Nancy Pratt
Annie Prigge
Will Randall
Tom Renz
J. Michael Robinson
Ronald L. Rose*
Susan Kohn Ross**
Bryan Roth
Marianne Rude
Danielle Rust
Adria Sankovic
Michael Scharf
Kelly Schmidt
Morris Shanker
Brondy Shanker
Tara Shaw
R. Monty Silley
Gary Simson
Eric Stephens
Paul Storer**
P. Kelly Tompkins*
Matthew Troy
Marcel Turcot
Allen Turner
Deborah Turner
xix

Dan Ujczo
Janaki Umarvadia
Paul Vandevert**
Catherine Vernon
Richard Ulrich
Luke Wake
Clyde Weaver
Hon. Michael Wilson**
Michael Wager
* Session Moderator
** Session Speaker
xx

CANADA-UNITED STATE LAW INSTITUTE
ANNUAL CONFERENCE
On
THE WORLD’S LONGEST UNDEFENDED BORDER:GATEWAY OR
CHECKPOINT?THE POST-9/11 “SAFE AND SECURE”CANADA-
UNITED STATES BORDER IN THE ERA OF GLOBAL SUPPLY
CHAINS
APRIL 18, 2008

WELCOME AND OPENING OF 2008 ANNUAL CONFERENCE
Session Chair – Dr. Henry T. King, Jr.
Speaker – Valerie McCall
INTRODUCTION
Dr. Henry T. King, Jr.
DR. KING: I am Henry King, the Chair of the Canada-U.S. Law Institute
Executive Committee, Chair of the annual conference. 1 On behalf of the
Canada-U.S. Law Institute, Case Western Reserve University School of Law,
and the University of Western Ontario Faculty of Law, I welcome you to our
24th annual conference which we have titled "The World's Longest
Undefended Border, Gateway or Checkpoint?" It is my privilege and
pleasure to now open the conference proceedings.
For the past 24 years, the Institute has assembled the leaders of
government and industry, legal practitioners, scholars, and nongovernmental
organizations in one forum to address the issues confronting the Canada-U.S.
relationship. 2
There are three principles that govern our conference. First, the
conference is multidisciplinary in nature. 3 As I have just stated, there are
actors from all of the various sectors of our bilateral relationship. 4 This is
designed to encourage frank and comprehensive discussion among our
participants.
Second, the conference is designed to enforce our cross-border
relationship. 5 We encourage active dialogue with our panelists during the
question and answer period as well as holding informal discussions between
ourselves during breaks, meals, and at the hotel. I am happy to report that
1
See Canada-United States Law Institute, Executive Committee and Advisory Board,
http://cusli.org/about/advisory_board.html (last visited Sept. 26, 2008).
2
See Canada-United States Law Institute, The History of the Institute,
http://cusli.org/about/history.html#conferences (last visited Sept. 26, 2008).
3
See id at General Introduction.
4
See Canada-United States Law Institute, Panelists, 2008 CUSLI Annual Conference,
http://cusli.org/conferences/annual/panelists.html (last visited Sept. 26, 2008).
5
See Canada-United States Law Institute, History, supra note 2, at General Introduction.
1

2 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
many professional and personal friendships have grown from this
conference, including many of my own.
Finally, the subject of the annual conference is forward-looking in scope. 6
We look toward the future of Canada-U.S. relations as opposed to
summarizing the past. 7 With that in mind, this year we address the post of
9/11 safe and secure border and the era of global supply chains.
I note that this conference follows several related Institute events that
meet recent memory, which I am certainly very familiar with. Our 2001
conference addressed the impact of Federalism and border issues on Canada-
U.S. relations. 8 Our 2003 conference addressed the Canada-U.S. security and
the economy and the North American context. 9 And our 2005 conference,
"Understanding Each Other Across the Longest Undefended Border in
History." 10 In short, there are no issues of greater importance to Canada and
the United States, and our continental national homeland and economic
security and prosperity. 11 Nowhere do these concepts intercept, overlap, and,
at times, conflict more than at the Canada-U.S. border. 12
I look forward to hearing from our distinguished panelists throughout the
next two days as they address these issues. I offer my heartfelt appreciation
to the session chairs and speakers for contributing to our conference. I also
thank the administrations at Case Western Reserve University School of Law
and the University of Western Ontario Faculty of Law for their longstanding
support of the Institute and the annual conference. I offer my deepest thanks
to the Institute's executive committee and advisory board for all of their
efforts in making this conference a reality.
I offer my special appreciation and welcome to all of you for joining us
throughout this weekend. A significant note, I welcome the representatives of
the U.S. Department of Homeland Security, Public Safety Canada, the U.S.
Department of Commerce, Industry Canada, Agriculture and Agri-Food
Canada, and Ohio's congressional delegation, including staff members from
the office of U.S. Senator George Voinovich and U.S. Representative Dennis
Kucinich.
6
See id at Establishment of Annual Conference.
7
See id.
8
See Sidney Picker, Jr., Introduction and History of the Canada/U.S. Law Institute, 27
CAN.-U.S. L.J. 1 (2001).
9
See Henry T. King, Conference Introduction and Welcome, 29 CAN.-U.S. L.J. 1 (2003).
10
See Sidney Picker, Jr., Introduction and History of the Canada-United States Law Institute,
31 CAN.-U.S. L.J. 1 (2005).
11
See Library of Parliament, The Western Hemisphere Travel Initiative: Balancing Security
and Economic Interests, http://www.parl.gc.ca/information/library/PRBpubs/prb0609-e.htm
(last visited Oct. 20, 2008) (analysis of benefits and costs of increased border security).
12
See id.

King and McCall—Welcome and Opening of 2008 Annual Conference 3
I firmly extend our welcome to our staff, State and Provincial partners
who are very important actors in these issues as well as the broader Canada-
U.S. relationship. And I once again extend my great appreciation and
welcome to the representatives of the Canadian Department of Foreign
Affairs and International Trade.
The Department has been a long-standing supporter of the Institute in this
conference. 13 Indeed the Canadian Consul General in Detroit has supported
each and every one of these conferences for the past 24 years. 14 I thank
Consul General Robert Noble together with his staff, George Costaris, Mary
Lynn Becker, Dennis Moore, and Doug Bingeman. They have been
instrumental in the success of our Institute. I also welcome our long-time
friend of our Institute, the Canadian Consul General from Buffalo, Mr.
Stephen Brereton.
Cleveland, Buffalo and Detroit have a bond joined by our geography,
history, and challenges as well as opportunities for the future. 15 This bond
joins us together, and as we will see, to our greater friends in Canada.
I also wanted to welcome Dana Hicks, the Honorary Consul from
Charlotte, North Carolina, and Mr. McIntosh from Tampa, Florida.
Beyond welcoming you to this conference at Case Western Reserve
University School of Law, I welcome you to the city of Cleveland where I
have spent the last 40 years of my life. I welcome our great friends from our
city and region and particularly those representing the Cleveland consulate
core, and the Greater Cleveland International Lawyers Group. Cleveland has
unlimited potential and a bright future. As a result, it gives me great pleasure
to introduce to you Ms. Valerie McCall representing the City of Cleveland.
Valerie, the floor is yours.
13
See Canada-United States Law Institute, Executive Committee and Advisory Board,
http://cusli.org/about/advisory_board.html (last visited Oct. 20, 2008) (listing Stephen De
Boer from the Department of Foreign Affairs and International Trade as a member of the
Canada-United States Law Institute Advisory Board).
14
See id.
15
See ABC News, Jobs Are Up, but Is the U.S. Competitive Enough,
http://abcnews.go.com/Politics/Story?id=3702377&page=1 (last visited Oct. 20, 2008) (describing
increased job losses in the Great Lakes region).

4 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
SPEAKER
Valerie McCall *
MS. McCALL: Thank you.
Good morning everyone. On behalf of Mayor Frank Jackson, I just want
to say it is a pleasure and an honor to be sitting here before you this morning.
I actually was sitting here looking through the program book, and wish I
would have cleared my calendar for the entire time because this is just
phenomenal.
As we talk about the post-9/11 era on an international level, please keep
in mind we are still discussing that on a local level. We have discussions
about interoperability and what happens, what-if on a local level, that we all
know we are first responders. How do we tie what is happening here locally
to what is happening here globally?
And so I just want to reiterate Mayor Jackson's—not only his dedication
and support to all of our international partners, but why this conference being
here in the City of Cleveland on the campus of Case Western Reserve
University is so important to us.
And I would be remiss if I did not tell you that because you are here–and
you are from Canada, we ordered up great weather for you, so we hope you
get out, take advantage, go walk around in the evening, take advantage of
everything that is going on here. We appreciate you being here. We look
forward to our continued partnership.
And as everyone knows, the reason why it is important for me to be here
this morning in particular is just to reiterate and to continue to state that the
City of Cleveland as a government is open for business in its international
relations department, trust me.
I was discussing with my friend, Steve, that on Sunday morning, I am on
a plane trip to China–I am coming to Canada, do not worry–but because
there is an interest in what happens here in Cleveland. And as we begin to
stimulate our own local economy, we know we cannot do that without global
partnerships.
*
Valarie J. McCall, Chief of Government Affairs for Cleveland Mayor Frank Jackson,
was appointed to the RTA Board of Trustees in July 2006. Ms. McCall serves as the Administration's
primary liaison to the state government and federal government, and monitors mayoral
appointments to internal and external boards and commissions. Previously, Ms. McCall
served as Cleveland City Council's youngest City Clerk, Clerk of Council in the City's history.
Sworn in to the office in May 2002, she streamlined the processing of legislation, installed an
effective management team and reorganized the day-to-day operations of the office to maximize
efficiency.

King and McCall—Welcome and Opening of 2008 Annual Conference 5
And so again, on behalf of Mayor Jackson, it is a privilege and an honor
to be here. It is a privilege and an honor to sit next to you as well, my friend,
as we work together to try to move this region forward. So thank you.
DR. KING: Thank you, Valerie. And also thank you to Mayor Jackson.
MS. McCALL: Absolutely.
DR. KING: My friends, the format of the conference is that each panel
will be governed by a session chair. We will briefly introduce the panelists.
The panel will then proceed with approximately 15- to 20-minute
presentations per speaker. We will conclude with approximately a 15-minute
question and answer period.
Our student reporters will bring microphones to each of you during the
question and answer period. Please note that all comments are on the record,
so please identify yourselves by name and the entity you represent.
We generally will have a short break after each panel for further
discussion will follow. We respectfully request that you promptly return to
the conference room upon hearing the call to order. I look forward to sharing
this weekend with you.
So I now invite Kelly Tompkins, Garland Chow, and Paul Vandevert to
the stage for our first panel.
Thank you.

THE CANADA-UNITED STATES SUPPLY CHAIN IN THE ERA
OF GLOBAL ECONOMIC COMPETITIVENESS
Session Chair – P. Kelly Tompkins
Canadian Speaker – Garland Chow
United States Speaker – Paul Vandevert
INTRODUCTION
P. Kelly Tompkins
MR. TOMPKINS: Good morning. My name is Kelly Tompkins. I am an
Executive Vice President of RPM International. 1 And sitting next to my
colleague from Ford, I feel like a really small company with a mere $3.5
billion in sales. 2 That said, it is my pleasure to chair this opening panel. I can
assure you that the expertise lies to my left and right; indeed, I am merely the
appetizer for the main course, which my two colleagues will serve us in a
few minutes.
Let me also thank Henry King for his kind, if not persuasive invitation.
Those of you who have known Henry, he is very capable of twisting arms,
although he did not need to do that in this case. Henry, thank you, it is a
pleasure to be here.
DR. KING: Thank you.
MR. TOMPKINS: Our topic today is U.S.-Canada Supply Chain
Logistics. I am assuming that most everyone in the room is not an expert in
supply chain logistics. Fortunately, our opening speaker, Professor Chow,
will give us the big picture view of supply chain logistics to frame our
discussion.
Following Professor Chow, Paul Vandevert will take us a little deeper
into the automotive industry, in particular Ford, to give us a real-life example
of the tension between supply chain logistics, economic considerations, and
border security.
1
See generally RPM International, Inc., available at www.rpminc.com (last visited Oct.
8, 2008).
2
See E-xact Achieves PCI Compliance Again in 2008, E-xact Transactions Ltd. (April 14,
2008), available at http://www.e-xact.com (last visited Oct. 8, 2008).
7

8 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
I was struck by some of the economic statistics between the U.S. and
Canada which Valerie mentioned as she was heading off to China this
weekend; that was shocking to me. Not only did Canada import $248 billion
from the U.S. in '07, but the province of Ontario buys more from the U.S.
than does China at about $160 billion. 3 So we are talking about significant
economic stakes.
The Ambassador Bridge, which we are all familiar with, which connects
Windsor and Detroit, exports roughly that which is equal to the U.S. exports
to China across that one bridge alone. 4 From a two-way trade standpoint, we
are talking about nearly $2 billion a day between our two countries, $1
million a minute, a 400,000 people per day crossing on average. 5 Clearly we
are talking about significant economic relationships and economic
implications.
As Sam Palmisano, the chairman of IBM, remarked recently, we are in a
globally-connected world, and when we are globally connected, work moves
to the places where it is done best, most efficiently, highest quality, and that
is the essence of the global supply chain. 6
Perhaps as a working definition—and I can assure you Professor Chow
will give us a more refined explanation of global supply chains—we refer to
it simply getting the right product at the right place at the right time at the
right price. 7 That is really the essence of the global supply chain.
As I mentioned, Paul will take us into the automotive industry where the
assembly of one car can involve three, four, five border crossings. 8 Producing
each part in the most efficient location improves productivity, lowers costs,
increases profits and that is the essence of today's global supply chain
manager's challenge. 9 Inefficiency, whether it is due to a lagging
3
Imports, exports and trade balance of goods on a balance-of-payments basis, by country
or country grouping, Statistics Canada, available at
http://www40.statcan.ca/l01/cst01/gblec02a.htm (last visited Oct. 9, 2008); See also, Ontario
Exports/Imports by Country, Ont. Econ. Dev., available at
http://www.2ontario.com/welcome/ooit_317.asp (last visited Oct. 9, 2008).
4
See generally Stephanie Fitch & Joann Muller, The Troll Under The Bridge, Forbes, at
134 (Nov. 15, 2004).
5
See Imports, exports and trade balance of goods on a balance-of-payments basis, by
country or country grouping, supra note 3.
6
See generally Samuel Palmisano, The Globally Integrated Enterprise, 85 Foreign Affairs
127, 127-136 (2006).
7
See generally William Hoffman, Global supply chain? What global supply chain?;
People talk about them, but BDP study says they're still relatively rare, J. Com.,
June 4, 2007, at 42.
8
See generally Fred Blazer & Dennis Desrosiers, Nasty rattle in the offing if Auto
Pact isn't tuned up, The Globe and Mail (Toronto), Dec 18, 1986, at A7.
9
Ruud Bossman, The New Supply Chain Challenge: Risk Management in a Global Economy,
FM Global (2006), available at http://www.fmglobal.com/pdfs/ChainSupply.pdf (last

Chow & Vandevert—The Canada-U.S. Supply Chain 9
infrastructure or well-intended but improperly-scoped security, is the key to
the competitiveness of an integrated North American economy vis-a-vis Asia
and Europe among other regions of the world. 10
So among our questions today are, is the border thickening, and if so,
what are the trade implications? Are well-intended security rules and
regulations having unintended consequences to our collective
competitiveness around the world from the perspective of global supply
chain considerations? Do our regulators and policymakers really appreciate
the full economic impact of delays and just-in-time delivery systems on U.S.
and Canadian suppliers, customers, OEM's, and ultimately consumers?
Hopefully during the course of the next hour, we can address some of these
and other questions, and I look forward to active participation by the
audience.
So with that, let me introduce our first speaker, Professor Garland Chow,
an Associate Professor of Logistics and Supply Chain Management at the
University of British Columbia in Vancouver. 11 He teaches and writes in the
field of supply chain logistics, freight transport pricing, an internationally
known authority, and has done extensive research on the role of Canadian
firms in the global supply chain, the relevance of Canadian labor standards,
the long-distance truckers, modeling of supply chains, utilizing the Asia-
Pacific Gateway, and I could go on and on. 12 Suffice it to say, we have great
expertise on this topic. So with that, I will turn it over to Garland and let him
frame our global supply chain logistical challenge for us. Garland.
visited on Oct. 9, 2008).
10
See generally id.
11
Chow, Garland, Sauder School of Business, available at
www.sauder.ubc.ca/AM/Template.cfm?Section=Faculty_Research_Directory_alphabetical&T
emplate=/CM/ContentDisplay.cfm&ContentID=6665 (last visited on Oct. 9, 2008).
12
Id.

10 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
CANADIAN SPEAKER
Garland Chow *
DR. CHOW: Thank you. Actually last night, Dan, you mentioned that
Cleveland has the Rock and Roll Hall of Fame. 13 Well, you know, that got
me thinking. It got me thinking about when I was in the University, I was
thinking about The Rolling Stones. Now, at my age, and I think some of you
all, we are thinking about the kidney stones. You know, back in those days
some of you folks were getting in trouble with the authorities because you
had long hair. Now you are longing for hair. And did not we all anticipate
those big weekends where we empty a keg of beer? Now on weekends,
instead of thinking about a keg, K-E-G, we are thinking about our EKG.
Well, not only have we changed, but also the geoeconomic landscape that
we live in has changed. You know, for practically anywhere from 20 to 30
years after World War II and the Korean Conflict, both U.S. and Canada
experienced a significant period of economic growth with much of that
value-added activity performed right here in North America. 14 This is
enabled in part by the world's best transportation system because in the
United States, we developed the national interstate highway system, and in
Canada, in parallel, the Trans-Canada Highway, supplemented by the
railroad. 15 In cooperation with the railroads, this meant we had good internal
transportation to move goods around so that, yes, where work was best done
in North America, or at least in United States or in Canada, it was done
there. 16
*
Garland Chow is Associate Professor in the Operations and Logistics Division and Director
of the Bureau of Intelligent Transportation Systems and Freight Security (BITSAFS) in
the Sauder School of Business at the University of British Columbia. Dr. Chow actively
teaches and writes in the fields of supply chain, business logistics and freight transport planning,
management and policy. He is an internationally known authority on motor carrier transportation
and author of over 200 articles and reports. Recent research includes: the role of
Canadian firms in global supply chains, the relevance of Canada’s labor standards to long
distance truck drivers, modeling the supply chains utilizing the Asia Pacific gateway and the
modeling of total logistics cost performance.
13
See generally Rock and Roll Hall of Fame and Museum, available at
http://www.rockhall.com (last visited on Oct. 9, 2008).
14
See generally Karen Rasler & William Thompson, War and the Economic Growth of
Major Powers, 29 Am. J. Pol. Sci. 513, 513-538 (1985).
15
See generally Cynthia Clark Northup, The American Economy: A Historical Encyclopedia,
111 AFL-CIO (2003).
16
See generally id.

Chow & Vandevert—The Canada-U.S. Supply Chain 11
Now as Paul will bring out more detail, free trade between the U.S. and
Canada was pioneered by the auto industry in the 1960's, and with the FTA
and NAFTA agreements in 1989 and 1994 respectively, integrated supply
chains further developed within North America primarily through the
reduction in trade barriers. 17 Since then, globalization has taken place. 18 I am
not going to thrill you with a bunch of numbers because you are all well
aware of that the numbers. Much of the world's low-cost manufacturing has
migrated to Asia, spurring the impressive growth of not only Asian countries
but trade between Asia and developed countries such as North America,
Canada, United States. 19
This is all very interesting, but globalization is more than just offshore
sourcing to low-cost manufacturing companies. 20 The rise of global supply
chains in which imports and exports are exchanged across borders as part of
the production and marketing processing of a single company or a network of
companies means that firms should not be asking where should we create an
entire product or service. No. What firms should be asking, and what they are
asking, is where is the best place to locate each specific activity? And that is
the essence of the supply chain. 21 The supply chain, as Kelly mentioned, is
getting the right product to the right place at the right time in the right
quantity and in the right condition. 22 When a consumer says I want a product,
then someone has to design it. Where is it going to be designed? It can be
designed anyplace in the world. 23 That product has to be developed and
engineered. Where is that going to happen? It can be done anyplace in the
world. 24
The raw materials have to be sourced. Where is it going to be sourced? It
can come from many places in the world. 25 And components need to be
sourced. Where are they going to come from? They can come from many
different places in the world. 26 Lots of products today go through several
17
See generally Paul Wonnacott & Ronald Wonnacott, Free Trade between the United
States and Canada: Fifteen Years Later, 8 Can Pub. Pol’y 412, 412-427 (1982).
18
See generally Duncan Bell, History and Globalization: Reflections on Temporality, 79
Int’l Aff. 801, 801-814 (2003).
19
See generally Louis Kraar, Asia’s Rising Export Powers in the 1990s, Fortune, at 23
(Fall 1989).
20
See generally John Isaac, Product Development Challenges in a Global Market, 25
Printed Cir. Design & Mfr., 24, 24-27 (2008).
21
See generally Hoffman, supra note 7.
22
See id.
23
See Dawn Calleja, Earning its Wings; Boeing’s New Dreamliner Is Lighter, More Fuel-
Efficient and Easier to Build. Talk about Flying Economy, GLOBE AND MAIL – Toronto, April
25, 2008, at B2.
24
25
26
See generally id.
See generally id.
See generally id.

12 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
steps in manufacturing. 27 You manufacture an intermediate product which
then is transformed again and again and again until it gets the final
manufacturing or to the OEM for final assembly. 28 Where is it going to be
done? It can be done at many different places. 29 And finally there is
distribution. Where do you locate your distribution centers? Where do you
locate your stocks of finished goods? Typically they are close to the
customer. 30
Let us look at an example. Now, some of you may have heard about the
Boeing situation. 31 And as complicated as it looks, Boeing will assemble,
they will assemble. 32 They conceptualize by the way what this product's
going to look like, a 787. They are going to assemble it in Seattle, but where
do all the components come from? 33 It is a joint effort where they have
source, the design and engineering, and the production of many different
parts all over the world. 34 If you look at it, you are going to see the United
States, you are going to see Italy, you are going to see France, you are going
to see Australia, and you are going to see Sweden. 35 And right down there on
the bottom, you will see wind body faring landing gear doors from Boeing
Canada. 36
And I know that right in British Columbia we have a company called
Avcorp. 37 While they are not supplying parts and components to this plane,
they do supply significant assemblies to Boeing for other aircraft. 38
Here is another good example. Bombardier Transportation. 39 Bombardier
recently signed a contract to provide 88 advanced rapid transit cars to
Malaysia in Kuala Lumpur. 40 In this case, they have partnered with
Hartasuma,or HSB. 41 They are partnering with a Malaysian company. 42
27
See generally Clare Ansberry, The Economy — The Outlook: Manufacturing Confounds
Economists, WALL ST. J., May 5, 2003, at A2.
28
See generally Mitzi -Weiss Montoya & Roger Calantone, Development and Implementation
of a Segment Selection Procedure for Industrial Product Market, 18 Mktg. Sci. 373, 373-
395 (1999).
29
See generally Calleja, supra note 23.
30
See generally id.
31
Id.
32
Id.
33
Id.
34
Id.
35
Id.
36
Id.
37
See generally Avcorp confirms deal to supply CJ4 Cessna, THE TORONTO STAR, Sept.
11, 2008, at B02.
38
Id.
39
See generally Bombardier to Upgrade Kuala Lumpur Lines, THE GLOBE AND MAIL –
Toronto, Aug. 31, 2007, at B5.
40
Id.
41
Id.

Chow & Vandevert—The Canada-U.S. Supply Chain 13
But wait a minute. How is this product produced, and where? Well, first
of all, the components are sourced globally. 43 Some from United States, some
from Canada, and much from other parts of the world. 44 All of those are
going to converge in Canada where in Montreal Bombardier will in fact
manufacture these cars. 45 They are going to manufacture it just like Ikea. 46 It
is going to be knocked down. Where does it go after that? It goes to Malaysia
where the partner, HSB, will actually assemble a final product and customize
it so that it meets the needs of the citizens of Kuala Lumpur. 47
Illustrating Canadian participation in global supply chains, you see that
with respect to the large companies in Canada, they are acting globally, 48
where more than almost 80 percent of those companies in some way
participate in global supply chain by sourcing research, raw materials, using
global suppliers, selling to global suppliers, and so on. 49
Of course as companies decrease in size, they have less exposure. 50 They
also have less assets and less ability to go offshore. 51 So as you get to smaller
companies as illustrated by the light blue and the red, you see less
participation in those global supply chains. 52 I am sure that the same pattern
exists in the United States. 53 So with this globalization, however, nothing has
really changed between Canada and the U.S. 54 Today, as has been the case
for decades, Canada and U.S. trade, which totals in 2007 $562 billion, is
number one. 55 We are the number one traders in the United States, and for
Canada, the U.S. is the number one trade partner. 56
42
Id.
43
See generally id.
44
See generally id.
45
See generally id.
46
See Ikea Products are Manufactured All Over the World, available at
http://www.ikea.com/ms/en_GB/about_ikea/press_room/manufacturesproduct.pdf (last visited
on Oct. 14, 2008).
47
See generally Bombardier to Upgrade Kuala Lumpur Lines, supra note 39.
48
See generally Danielle Goldfarb and Kip Beckman, Canada’s Changing Role in Global
Supply Chains, THE CONFERENCE BOARD OF CANADA (Mar. 2007) available at
http://www.internationaltransportforum.org/2009/pdf/CDN_GlobalSupply.pdf (discussing
how companies increasingly use inputs from two or more countries to produce a single good
or service).
49
Id.
50
See Press Release Arati Sontakay, Small Business Growth Means More Jobs in Virginia,
Maryland, and Washington, D.C., http://www.wachovia.com/inside/page/0,,134_307%5
E348,00.html (last visited on Oct. 14, 2008).
51
Id.
52
See generally id.
53
See generally id.
54
See generally Imports, exports and trade balance of goods on a balance-of-payments
basis, by country or country grouping, supra note 3.
55
See generally id.
56
See generally Top Trading Partners - Total Trade, Exports, Imports, U.S. Census Bu-

14 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
U.S. exports to Canada is $249 billion. 57 That is number one for the U.S.,
and it is number one for Canada. 58 Canada exports to the U.S., in other words
imports into the U.S., $313 billion. 59 Yes, it is number two for the U.S. 60
China is number one to bringing in more products from China than they are
from Canada, but it is, again, number one for Canada. 61 Now, Canada's trade
with the U.S. is a much larger percentage of GDP than it is for the U.S. 62
Therefore, Canada as a trading nation has a greater dependency, or has a
bigger stake in this. 63
In fact, here is the saying that is so true: If trade is a foundation on which
Canada's economy is built, then trade with the United States is its
cornerstone. 64
But what we see here is the following. First of all, let us do a little
thinking here as to what these numbers mean. Entry, middle, and end. Entry
level exports or imports, they are usually raw materials. 65 They are goods that
go into the production process of whoever is buying them. And they come in
right at the beginning of that production process.
On the other hand, middle entry products, those are products that are
going into the process of production to the buyer, but they have already been
processed. 66 In other words, more value has been added to this product.
And finally, if it is an end product, then it is a finished good. 67 If it is an
end product and a country sells it to Canada, then for all practical purposes,
we are not doing anything to it. 68 We are just reselling it. We are retailing it
or wholesaling it.
reau, available at http://www.census.gov/foreign-trade/statistics/highlights/top/top0712.html
(last visited Oct. 4, 2008).
57
Id.
58
Id.
59
Id.
60
Id.
61
Imports, exports and trade balance of goods on a balance-of-payments basis, by country
or country grouping, supra note 3.
62
See generally id.
63
See generally Paul Wonnacott & Ronald Wonnacott, supra note 17.
64
See generally Imports, exports and trade balance of goods on a balance-of-payments
basis, by country or country grouping, supra note 3.
65
See generally Asia-Pacific Human Development Report, Adjusting to a New Era for
Textiles and Clothing, available at
http://www.undp.org.fj/_resources/main/files/asiapacifichdr2006/Chap%2004.pdf (last visited
Oct. 12, 2008).
66
See generally id.
67
See generally id.
68
See Product of Canada, Eh?, available at
http://www.cbc.ca/marketplace/2007/10/24/product_of_canada_eh/ (last visited on Oct. 14,
2008).

Chow & Vandevert—The Canada-U.S. Supply Chain 15
So what you see here is that since NAFTA there has been growth in all
three of these, but the greater growth has been in the middle and end product
areas. 69 In other words, it signifies an integration between the Canadian
supply chains and the U.S. supply chains, or better yet, that the supply chains
of the U.S. and Canada are integrated. 70
To add to that, let us look at the products that are imported into Canada
from the United States. Notice that the entry level, in other words, raw
materials coming from the United States to Canada is very low. 71 It was low
before, and it has hardly grown since NAFTA's started. 72 On the other hand
look at that middle one. The middle entry products are not only very large,
but very significant in terms of growth as is with the end products. 73
And what does this all represent? It means that the Canada-U.S.
economies are highly integrated together. 74 In fact, they have discovered in
this research that 70 percent of the goods moving back and forth are in the
same product category. 75 In other words, these are products that are in the
same industry going as an input into the production process. 76 They are
coming the other direction to the other country. 77 That represents an
integrated supply chain between players and stakeholders in both countries.
Let me give you a few examples of this. Here is the North American beef
industry. When you look at the notes when, you will see that there is a
tremendous amount of trade between Canada and the U.S. with regards to
beef, whether it be the actual steers, whether it be fresh or frozen meet, it is
going back and forth, indicating an integrated economy. 78 Now of course this
is a market though that has been impacted by a number of factors such as
BSE or what is called Mad Cow Disease. 79 So that hurt the situation badly. 80
But the United States had such a large demand for this product they have
overcome this problem and started importing not only from the Canada, but
also from Mexico and Uruguay. 81 Canada is not the only source. 82 But on the
other hand, the United States is not the only market. 83
69
See generally 48 C.F.R. Parts 1, et al.
70
See Paul O’Conner, Canada, not China, is Partner in Our Economic Prosperity, Crain’s
Chi. Bus., Apr. 14, 2008.
71
See generally id.
72
See generally id.
73
See generally id.
74
See generally O’Connor, supra note 70.
75
See Goldfarb, supra 48.
76
See id.
77
See id.
78
See generally Sebastien Pouliot & Daniel Sumner, Traceability, liability, and incentives
for food safety and quality, 90 Am. J. Agric. Econ., 15 (2008).
79
Id.
80
Id.
81
See Greg Doud and Julie McWright, U.S. Beef Imports through August Continue at

16 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Another example parallel to this is the swine and pork industry. And I was
very fortunate to hear one of the participants at this conference actually
elaborate on what is happening here. This is the perfect example of
specialization, the perfect example of where one country can do something
better than the other. 84 A lot of the pork export from Canada to the U.S. is
what is called weanlings. 85
In other words, Canada, and in particular, Manitoba, is very good at the
sow industry where they actually birth the young pigs, get them to a certain
age, and then export them to the United States where they are raised and
where they are slaughtered and then processed. 86 So here is a highly
integrated industry in which the specialization of the first year of these hogs
and pigs are in Canada, then they are exported to the U.S. for the rest of their
life. 87
However, there are barriers. 88 Those barriers are not necessarily
transportation. 89 In this case there are of course competitors in the United
States. 90 They are seeking protectionist-type of regulations. 91 And one
particular one which apparently is being considered right now is the
requirement for the animal identification so you can track this animal all the
way back. 92 And apparently this is going to result in some extra costs and
some barriers that would make it very difficult to freely move the young
weanlings from Canada to the United States. 93 Here is another example. This
is actually a company in British Columbia. This company, Alco Ventures,
has its main plant in Langley, British Columbia. 94 But it also has a plant in
Record-setting Pace, Issues Update 2005, Nov. 2005, at 42.
82
See id.
83
See id.
84
See Kevin Grier, Risks to Canada’s Domestic and Export Markets, Advances in Pork
Production, Vol. 17 2006, at 19.
85
See, Karl Jynoch, Manitoba Pork, The Hog Industry in Manitoba (2008), available at
http://www.mnpork.com/producers/2008/mpc2008.pdf (last visited Oct. 7, 2008).
86
Id.
87
See generally United States Department of Agriculture, mCool Update (2008), available
at http://www.beefretail.org/prodMCOOL.aspx (last visited Oct. 8, 2008).
88
See generally Grier, supra note 85.
89
See generally id.
90
See generally National Pork Producers Council, National Pork Producers Council Discuss
MCool, Issue Paper (2003), available at
http://www.thepigsite.com/swinenews/5635/issue-paper-national-pork-producers-councildiscuss-mcool
(last visited Oct. 8, 2008).
91
See generally id.
92
See generally United States Department of Agriculture, supra note 87.
93
See generally National Pork Producers Council supra note 90.
94
See generally Alco Ventures Inc., available at
http://gawain.membrane.com/decks/railing_systems/alco_ventures.html (last visited Oct. 8,
2008).

Chow & Vandevert—The Canada-U.S. Supply Chain 17
Cambridge, Ontario and a plant in Bakersfield, California. 95 What do they
do? They make windows and aluminum rails. 96 Now, you might think, well,
is that a pretty standard product? Well, the answer is no. These rails can be
shaped in many different ways, they can be customized for the customers,
they need to be in certain lengths so that there is a lot of customization done
and quality is important. 97
So this company has three plants in North America to serve customers in
North America. 98 But wait a minute, where do they get their supplies? Well,
the first source of supplies is a supplier in Port Coquitlam which is not too far
from Langley, so you would consider them an onshore local supplier. 99 So
this supplier by the way is ensuring that the Langley plant, the Bakersfield
plant, and the Cambridge, Ontario plant are getting the supplies that they
need, such as the railings and the processed aluminum that they are going to
use to develop the product. 100
But they also source from China. 101 In fact, what they do is that they have
this Port Coquitlam supplier actually manage the sourcing from China. 102
Why is that the case? Because of a simple, simple principle of logistics. The
bigger your shipment, the lower the cost. 103 And so what they will do is they
will have China ship all the way to Coquitlam, and in Coquitlam, they will
consolidate the China supplies with the domestic supplies so you have one
large load going to Cambridge and Bakersfield, and of course Langley. 104
And then it will be from these sites they serve the customers. 105
But then we have another problem, and that is while the Cambridge,
Ontario, is in the heart of the market. 106 But on the other hand, the Langley,
BC, plant is on the Canadian side of the border, it has to get across the
border, and the uncertainty of serving customers on the other side of the
border has caused them to set up a distribution center in Kent, Washington so
that in order to serve the United States market, they will operate from the
Kent, Washington distribution center to deliver products. 107 Of course they
will deliver from Cambridge, Ontario into the U.S. Midwest and Central
95
96
97
98
99
100
101
102
103
104
105
106
See generally id.
See generally id.
See generally id.
See generally id.
See generally id.
See generally id.
See generally id.
See generally id.
See generally id.
See generally id.
See generally id.
April Robinson, Small Cambridge Firm Gives Big to the United Way, The Record (Sep.
26, 2008), available at http://news.therecord.com/article/420328 (last visited Oct. 9, 2008).
107
See Alco Ventures, supra note 94.

18 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
states, and of course the Bakersfield, California will take care of that very
large single market in California. 108
So here is a supply chain that sources from domestically, internationally.
It has plants in Canada and the United States, and it uses distribution centers
to effectively source, manufacture, and deliver the products. That is supply
chain management, sourcing, making, and delivering at as low a cost as
possible, but still providing a service that the customer wants.
Now one last example. Fuji Film. 109 I have a friend who ran the regional
distribution center in Richmond, BC, which is no longer a distribution
center. 110 I asked him, what does the company bring into British Columbia?
He said that it used to bring in container after container of product into
British Columbia. 111 Then they would leave British Columbia and go to
Toronto to go to Toronto distribution center. 112 But that has all
disappeared. 113 Why did it disappear? Because North America is a North
American market, not a Canadian market. And as a consequence, as there
was enough growth in North America, Fuji Film set up its own plant in
Greenwood, South Carolina. 114 By setting up the plant, it now had the
economies to scale, the long production runs to be economical, and therefore
they stop moving products from Japan although they would bring some
components, but now the production is in North America. 115
But for that plant to be economical, for the production runs to be very
large, you had to combine the U.S. and the Canadian demand for the
product. 116 One problem with that, if the border at the border was so thick
and the product could not get across, then they would either have to hold
huge inventories on the Canadian side, or they would continue to send the
products via Vancouver to Toronto. 117 Luckily at least at that time, they felt
that the border was not too thick. Yes. They consolidated everything, so you
see the movement of products moving around. 118
108
109
See generally id.
See generally Fuji Film, available at http://www.fujifilm.com (last visited Oct. 9, 2008).
110
See generally id.
111
See generally The Ministry of Small Business and Economic Development and the
Ministry of Transportation, British Columbia Ports Strategy (2005), available at
http://www.gov.bc.ca/ecdev/down/bc_ports_strategy_sbed_mar_18_05.pdf (last visited on
Oct. 13, 2008).
112
113
114
G1.
115
116
117
118
See generally id.
See id.
John Welbes, Fuji’s U.S. Operations at Home in S.C., Columbia State, Feb. 8, 1998, at
See generally id.
See generally id.
See generally id.
See generally id.

Chow & Vandevert—The Canada-U.S. Supply Chain 19
There are a number of industries of course that are very important and
affected by the border. One study indicated that the five largest supply chains
moving between the U.S. and Canada are of course automobile
manufacturing, the mineral market which is concentrated in Alberta moving
to the United States, the machinery and equipment market which is
concentrated in Ontario, and forest products which are concentrated actually
in Quebec and Ontario as well as the West Coast. 119 And each coast serves
the respective ends of the country, and agriculture and fish where most the
fish products of course come from, BC to California or the Maritimes to New
England. 120
Now, we are leaving out one important supply chain though, and that is
the international global supply chain. 121 Many products can move to North
America. And how do they get there from Eastern China via West Coast
ports? And as you can see from the map, there are a number of West Coast
entry points into North America. 122
As it turns out, Prince Albert and Vancouver save at least two days from
going to Los Angeles or Oakland. 123 The result of that is that what customers
want is to minimize the total logistics cost of moving a product from Asia to
North America. To do that, Canada has decided that we must develop the
Asia-Pacific Gateway because it really is a gateway and corridor to North
America with a natural advantage of being closest to Asia with regard to
port-to-port movements. 124 To do that, Canada is embarking on the Asia-
Pacific Gateway and corridor initiative. 125 It is one of three initiatives, two of
which will be discussed later on. But it is one in which Canada has private
investment, 21st century governance. 126 They are moving on strategic
infrastructure, changing policies, and trying to improve security and border
efficiency. 127 The result of that hopefully is to move products effectively
119
See generally Canadian Logistics Industry, Canada-U.S. Perspective, available at
http://strategis.ic.gc.ca/epic/site/dsib-logi.nsf/en/h_pj00163e.html (last visited on Oct. 12,
2008).
120
See generally id.
121
See generally id.
122
1.
123
See Ron White, West Coast Ports have Sinking Feeling, L.A. Times, Mar. 5, 2008, at C-
Peter Bradley, Spreading the Wealth, DC VELOCITY, Mar. 2008, available at
http://www.dcvelocity.com/articles/?article_id=1760&channel=8 (last visited on Oct. 7,
2008).
124
Bill Dibenedetto, Building a Trade Gateway, Pacific Shipper, 2008 WL 18127345 (Sep.
22, 2008).
125
126
127
See id.
See id.
See id.

20 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
through Canada to get to not only Canadian consumers, but also U.S.
consumers. 128
So why do we talk all about this? It is because there is a challenge, and
that challenge is a thickening of the border. 129 The fact is inefficiencies at the
borders mean inefficiencies in the supply chain. 130 We have already seen
enough studies to prove this, and I know that many of the later participants
are going to discuss that as well. 131
There is a Canada-U.S. Chamber of Commerce report just this year. 132
You can see the sense of frustration in that report. 133 25 recommendations on
change. 134 The conference board study of Canada in 2007, and the main point
here is that there is a lack of predictability at the border, and there is a
thickening in the border that will eventually erode Canada's attractiveness as
a foreign investment location. 135 So can we afford that? Can we let that
happen? Because the integrated supply chain that has developed because of
NAFTA which has made North America competitive is being affected. 136
Can we afford for that to happen? Can we afford for North American
production to lose access to the most efficient sources of raw materials and
components? Can we afford for North American producers to lose access to
markets that are the best for them?
So there are some issues. And many of these are being covered in this -- I
know -- the seminar today and tomorrow. Yes, I have indicated that Canada
has the various corridor programs like the Asia-Pacific Gateway and corridor
program. 137 Canada is taking action because it has to because it needs
efficient trade with the United States. 138 But how important is a seamless
border to the United States?
Transport agencies can only do so much. How important is a seamless
border to the Department of Homeland Security and CBSA? Infrastructure is
a challenge, but what about the regulatory barriers which might be the root
128
129
See id.
Barrie McKenna, Biden Favours Trade that is ‘fair’ not Free, GLOBE AND MAIL, Aug.
27, 2008 at B1.
130
Hercules E. Haralambides and Maria P. Londono-Kent, Supply Chain Bottlenecks, 31
Int’l. J. Transp. Econ. 2, 171 (2004).
131
See id.
132
Louise Egan, Update 1 – Canada, U.S. must Unclog Border – Business Groups, Reuters,
Feb. 20, 2008, available at
http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSN2037733120080220
(last visited Oct. 4, 2008).
133
See generally id.
134
135
136
137
138
See generally id.
See id.
See id.
See Dibenedetto, supra note 124.
See Egan, supra note 132.

Chow & Vandevert—The Canada-U.S. Supply Chain 21
problem? 139 And institutional change is needed as the current institutions are
ineffective, there needs to be a continental perspective. 140 What has been
achieved through trade liberalization is being undone with these thicker
borders. 141 There is an increasing need to address the complete supply chain
from Asia and North America. 142
Thank you very much.
MR. TOMPKINS: Thanks, Garland.
Our next speaker is Paul Vandevert. Paul is a very experienced
international trade attorney with Ford, began his career in private practice in
New York City, and is a proud graduate of this institution. 143 He reminded
me that he usually sits in the back of the room, so Paul, welcome to the front
of the room.
Paul is going to take us into a little bit of a deeper look into the
automotive industry which I think will bring a real-life example to the
broader policy issues that Garland so well articulated a few minutes ago.
Paul, the floor is yours.
139
See The Conference Board of Canada, The Impact to Barriers to Competition on Canada-U.S.
Relative Productivity (2004), available at
http://www.conferenceboard.ca/canadaproject/research/2-
BackgrounderForBarriersToCompetition.pdf (last visited on Oct. 13, 2008).
140
See generally id.
141
Michele Fratianni and Heejoon Kang, Borders and International Terrorism, June 14,
2004, available at
http://www.kelley.iu.edu/GPO/documents/Borders%20and%20international%20terrorism.pdf
(last visited on Oct. 8, 2008).
142
See generally Canadian Logistics Industry, supra note 119.
143
Canada-U.S. Law Institute, Paul Vandevert, available at
http://cusli.org/conferences/annual/bios/vandevert.html (last visited on Oct. 6, 2008).

22 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
UNITED STATES SPEAKER
Paul Vandevert †
MR. VANDEVERT: Thank you. As Kelly mentioned, I am a graduate of
Case and, unfortunately, like many wayward children, I have come home
with maybe some not-so-good news. I was telling Professor King when I
came in this morning, my remarks for today coincidentally, but actually
became the subject of a conference call I had with our Washington office and
with our competitors in the auto industry on just this issue about the
thickening of the borders and the measures that the various governments are
taking, primarily the United States, and our concern about them.
To give you a bit of an overview, as Kelly mentioned I am the in-house
customs and international trade attorney for Ford. 144 We were founded in
1903, and we began doing business in Canada in 1904. So we have now been
doing business across the border for 104 years. 145
Some of the more astute of you, those who study the auto industry and
things like that may notice that I have got four brands up here, two just
recently dropped off the map with our sales of Aston Martin, Jaguar, and
Land Rover. 146 But nonetheless, we have a collection of five globally-
†
Paul Vandevert has been the International Trade Attorney for Ford Motor Company
since 2000. In this position he has been responsible for a wide variety of international trade
and Customs related matters for Ford around the world, including managing a Customs audit
in Norway, structuring duty-efficient transactions in South Africa, appearing before the WTO
Committee on Non-Preferential Rules of Origin on behalf of the US automotive industry,
managing Ford's participation as an industrial consumer in the Hot-Rolled and Corrosion
Resistant Steel Sunset Reviews before the US International Trade Commission, as well as
managing Ford's defense in an US Customs penalty case involving recordkeeping. Prior to
joining Ford, Paul was International Trade Counsel at Delphi Automotive Systems Corp from
Delphi's spin-off from General Motors in 1999 and prior to that, he was an attorney with General
Motors, also responsible for global international trade and Customs matters from 1994.
Paul began his career as an international trade and Customs lawyer in 1987 with the law firm
of Soller, Shayne and Horn in New York City.
144
Canada United States Law Institute - Conferences & Events - 2008 CUSLI Annual
Conference - Panelists - Paul Vedevert, available at
http://cusli.org/conferences/annual/bios/vandevert.html (last visited Nov. 8, 2008).
145
The 1904 Model C Ford – Canada’s First Ford, available at
http://media.ford.com/article_display.cfm?article_id=18757 (last visited Nov. 4, 2008) (stating
that “[o]n October 10, 1904, eight workmen began to build the first Ford automobile in Canada
– the 1904 Model C. It was assembled in . . . Windsor, Ontario.”).
146
See generally Ford to Announce Jaguar Sale to Tata on Wed, available at
http://www.reuters.com/article/mergersNews/idUSN2434519120080324 (last viewed Nov. 4,
2008); See also, Ford Selling Aston Martin in $925 Million Deal, available at
http://money.cnn.com/2007/03/12/news/companies/aston_martin_sale/index.htm (last viewed

Chow & Vandevert—The Canada-U.S. Supply Chain 23
recognized brands, and we are manufacturing vehicles on all six continents
except for Antarctica, which will have to be the seventh. 147 And we are
selling our vehicles in all automotive markets. 148 At times it is tough. We
may not sell very many in every place, but we are selling in almost every
country around the world. 149
Also as was mentioned, the auto industry I think can take credit for, while
it is certainly not the only industry, but has certainly been a pioneer, and I do
not know that we can overestimate the benefits to our industry, and therefore
to the national economies of Canada and the United States, of free trade
across the border and open borders. 150
The Automotive Products Trade Agreement of 1965, which would put the
U.S. in a free trade environment with Canada now for over 40 years. 151 And I
am going to keep stressing the number of years that we have been doing
business because there is a point to that. The APTA was a conditional free
trade agreement. 152 It allowed for free trade and parts and materials and then,
consequently, vehicles only as long as the parts and material were used in the
original production of motor vehicles. 153
The industry both recognized and facilitated the further development of
what was becoming a completely integrated production base in Canada and
the United States while the automotive industry respects and treasures the
political, social, economic, and cultural differences among the three North
Nov. 4, 2008).
147
See Mira Wilkins & Frank Ernest Hill, American Business Abroad: Ford on Six Continents
(Wayne State U. Press, 1964).
148
See generally Ford Global and International Information, available at
http://www.ford.com/about-ford/company-information/ford-international-websites (last visited
Nov. 4, 2008) (showing Ford’s presence in international markets).
149
Id.
150
See generally David J. Andrea & Brett C. Smith, The Canada-U.S. Border: An Automotive
Case Study 1 (Center for Automotive Res. 2002) (stating that the “[a]utomotive trade
flowing between the two countries in 2000 was US$43.6 billion of vehicles and US$34.6
billion of automotive parts.”); See also id. at 3 (indicating that “[o]ver 97 percent of Canadian
automotive exports are shipped to the United States and approximately 80 percent of all of
Canada’s automotive imports originate in the United States. This level of integration [from
NAFTA] . . . has broken down the political pressures of local production for local consumption
and other allocation mechanisms that compromised the rationalization of production
capacities in the most market-efficient manner”).
151
See 19 U.S.C. § 2001 (1965).
152
See generally CBC News In-depth, Auto Industry: History in Canada, available at
http://www.cbc.ca/news/background/autos/ (last visited October 31, 2008) (last visited Nov. 8,
2008) (describing that “[the APTA] established a conditional free trade zone for both vehicles
and original equipment parts”).
153
19 U.S.C. § 2011.

24 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
American countries. 154 But for purposes of doing business, North America is
a single operation. 155
Ford's purchasing is based in the United States, but when buyers source
material and parts, they are sourcing for Canada, United States, and Mexico,
and the only distinction is a plant code. 156 And actually in my business, it can
become a problem. It is like, wait, Canada is a border, we need to do some
formalities. 157 But it is important that as a business to remember that North
America is where we do business. We do not do business in Canada and
Mexico and the United States.
In 1989, it was broader to trade in all sectors, although NAFTA was an
intervening event, with unconditionally duty-free trade of qualifying goods
between Canada and the United States occurring in 1998. 158 And then on
NAFTA of which in one sense we are all familiar, but it is good to reflect for
just a few minutes on the importance of it. I mean NAFTA, it is almost
assumed. 159 In fact, actually within the company when we are doing audit
risks and things like that, I have had trouble. I personally think, and you will
see why in a minute, the benefits to Ford alone of NAFTA are huge. 160
154
C.f. Paul Parker & Tesshu Koshiba, Trade Policy, Open Regionalism and NAFTA: The
Socio-economic Context for Japanese Automobile Investments in North America, 29 Environments
35 (2001) (discussing the importance of the automotive industry respecting differing
cultures post-NAFTA).
155
See, e.g., Ford Motor Company, 2007 Annual Report (2008), available at
http://www.ford.com/doc/2007_ar.pdf (last visited Nov. 6, 2008) (annual report discussing the
separate branches of Ford Motor Company, including Ford North America).
156
See generally Ford Assembly Plants by Code Letter, available at
http://www.wctatel.com/web/crye/plntcode.htm (last visited Nov. 8, 2008); See also Sturges,
Dave, Assembly Plants and Body Numbers, available at
http://www.mafca.com/downloads/Technical/Assembly%20Plants%20Body%20Number.pdf
(last visited Nov. 5, 2008) (discussing the different plant codes for Ford Model “A”s).
157
See generally U.S. Customs and Border Protection, Importing into the United States: A
Guide for Commercial Importers, available at
http://www.cbp.gov/linkhandler/cgov/newsroom/publications/trade/iius.ctt/iius.pdf (last visited
Nov. 4, 2008) (outlining the procedure for importing into the United States).
158
See Panel Report, Canada – Certain Measures Affecting the Automotive Industry,
WT/DS139/R at 3 (Feb. 11, 2000) (“Trade in automotive products was also affected by the
Canada – United States Free Trade Agreement (CUSFTA), which entered into force 1 January
1989. The CUSFTA provided for the elimination of duties on automotive products by 1 January
1998, so long as the products qualified under CUSFTA origin rules”).
159
See generally Nejdet Delener, Strategic Planning and Multinational Trading Blocs, 48-
52 (Greenwood Publishing Group, 1999) (discussing why industry groups, including automotive
manufacturers, find trading blocs, such as NAFTA, beneficial).
160
See generally id at 52 (benefits of NAFTA to the automotive industry); See also Kelly,
William P., Restructuring under NAFTA: What are the considerations and how do we implement
them? Has NAFTA Changed Patterns of Manufacturing Location, Distribution, and
Market Penetration? – A U.S. Perspective, 23 Can.-U.S. L.J., 497 (1997) (discussing the benefits
of NAFTA to Ford).

Chow & Vandevert—The Canada-U.S. Supply Chain 25
I have actually argued that our NAFTA qualifying operations should be
audited not because of the money we are laying out, but because of the
money we are not laying out because if we are not qualifying right actually,
we could owe a significant amount of money. 161
I wanted to put some actual numbers in front of you. And my hope is that
as we go through the conference over the next two days, you will be able to
put into some kind of perspective the remarks and issues and discussion that
we will have. These numbers are just Ford. But consider that there are six
major automotive manufacturers operating in North America: GM, Ford,
Chrysler, Toyota, Nissan, Honda. 162 Those are the big six. And we also have
Mercedes, BMW. 163 I am going to stumble on some of our very significant
but smaller European competitors and transplants. 164
MR. HICKS: Kia.
MR. VANDEVERT: Kia? Kia is not yet manufacturing in North America
I do not believe. 165 And CAMI, correct. 166 That is a GM and Suzuki joint
venture. 167
But just for Ford, overall into the United States, and I apologize for not
having numbers for Canada, Ford makes 200,000 separate import
transactions called entries a year. 168 We rank in the top five U.S. importers by
entry volume. 169 Of those 200,000, over 163,000 come from Canada alone. 170
161
See generally Robert Feinschreiber & Charles L. Crowley, Import Handbook: A compliance
and Planning Guide, 114-18 (John Wiley and Sons, 1997) (giving formulations for
non-qualifying operations shipping non-originating goods).
162
See, e.g., Marvin B. Lieberman, Lawrence J. Lau & Mark D. Williams, Firm-Level
Productivity and Management Influence: A Comparison of U.S. and Japanese Automobile
Producers, 36 Management Science 1193, 1194 (1990).
163
See generally Mercedes-Benz USA, About Mercedes-Benz USA, available at
http://www.mbusa.com/mercedes/MBHome.html#/companyInfo/ (last visited Nov. 4, 2008);
See also BMW of North America, Company Information, available at
http://www.bmwusa.com/Standard/Content/CompanyInformation/ (last visited Nov. 4, 2008).
164
See generally ACEA - European Automotive Manufactures' Association, available at
http://www.acea.be/index.php/collection/about_us_acea_members/ (last visited Nov. 6, 2008)
(listing members, including, BMW, Volkswagen Group, Volvo, DAF, Renault, Fiat Group,
Scania AB, Porsche, Mercedes, PSA Peugeot Citroën, Jaguar, and MAN AG).
165
See State of Georgia Office of Communications, Kia to Build Assembly Plant Invest in
Georgia, available at
http://www.georgia.org/Mobile/PressCenter/NewsItems/Kia+to+Build+Assembly+Plant+Inve
st+in+Georgia.htm (last visited Nov. 4, 2008) (manufacturing plant set to reach full operations
in 2009).
166
See generally CAMI Automotive Inc., About CAMI, available at
http://www.cami.ca/aboutCami/aboutCami.shtml (last visited Nov. 5, 2008).
167
Id.
168
See generally Katherine Young, A NAFTA success story, DALLAS MORNING NEWS, Dec.
7, 2003, at D1 (discussing auto-industry trade under NAFTA).
169
See generally Robert Malone, Biggest Importers and Exporters, FORBES, July 5, 2006.
170
See generally Young, supra note 168.

26 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
And then of those 163, 156,000 entries enter through two U.S. ports, Port
Huron and Detroit. 171 That is 156,000 separate entries crossing into the
United States every year through two ports. 172
A total of our top 20 Canadian suppliers account for over 92,000 of our
entries. 173 And I consolidated our supply base because, as I said before, we
treat both our production facilities and receipt facilities and our suppliers by
codes, and we all have ship-from codes, ship-to codes. 174 But I put together
some of the suppliers, and I guess if there is a security problem, it might be
Henry's former company, TRW, because they are a major supplier, and
maybe that is the whole problem right there. 175
Anyway, entered value which in this particular context is not as
significant, but we import goods valued at over $15 billion. 176 Again, we rank
in the top five by entered valued. 177 Over half of that comes from Canada. 178
And although I was told in a bar review exam that the good thing about
lawyers is we do not have to do the math, I quickly calculated that of $313
billion exported from Canada and United States, if we have $8 billion, Ford
alone accounts for two-and-a-half percent of Canada's trade with the United
States. 179 And I think that would put the automotive industry at well over ten
percent. That actually surprised me.
To show the importance of free trade, and I am not even addressing the
things that Garland just addressed, which are supply chain, the actual facts,
and the mechanics of industry. This is an important point. Under NAFTA we
save or avoid in duties over $1 billion, and I do not want to be too specific
about the number. 180 But I will tell you that number is actually extremely
conservative, on the low side of the amount of the money that we avoid in
duties. Our effected duty rate on goods imported from Canada is 0.1
171
See generally id.
172
See generally id.
173
See generally id.
174
See generally Bryce G. Hoffman, Ford heads off supplier problems; Sophisticated computer
programs, CIA techniques tell automaker who is ailing, DETROIT NEWS, Feb. 26, 2007.
175
See Andrew Leckey, Shaped-Up TRW Looks Attractive, CHI. TRIB., Sept. 28, 1987, at
C3.
176
See generally Young, supra note 168.
177
See generally Malone, supra note 169.
178
See generally Young, supra note 168.
179
See generally Top Trading Partners - Total Trade, Exports, Imports, U.S. Census Bureau,
available at http://www.census,gov/foreign-trade/statistics/highlights/top/top0712.html
(last visited Nov. 8, 2008).
180
See generally Preuninger, Jim, NAFTA Grows Up, Supply & Demand Chain News, July
30, 2008, available at http://www.sdcexec.com/print/Supply-and-Demand-Chain-
Executive/NAFTA-Grows-Up/1$10560 (last visited Nov. 9, 2008).

Chow & Vandevert—The Canada-U.S. Supply Chain 27
percent. 181 And that is just really the very, very few suppliers that do not
qualify or cannot qualify their parts for NAFTA. 182
Actually for supply chain and for operational purposes, this is an
interesting fact. I have here that we effectively claim duty-free imports in
over 99 percent of our entries from both Canada and Mexico. 183 We measure
two points in that. We measure what we call first time through, meaning that
a shipment has a NAFTA certificate of origin, we have it in-hand, and we
can claim the NAFTA benefit at the time of entry. 184 And then if a shipment
does not but we can subsequently qualify the goods or get proof of
qualification, we will then claim NAFTA, and the effective is the
combined. 185
But operationally, and this again gets back to concerns about measures
that will thicken the border, the reason that we want first-time through or
emphasize first-time through is we want actually our duty-claim process to
be as quick and as efficient as our physical crossing. 186 And it would be
ironic, to say the least, if our first-time-through rate was better than our
ability to physically move our goods across the border. 187 In fact, actually, I
would not have a job anymore. It would be a really interesting statistic that I
could sit around at a bar and tell people because our plants would be shut
down.
And here is where I can do some offering of opinion. With Ford making
just on the Canadian border over 163,000 individual shipments a year, can
anyone reasonably think that we have the ability to increase shipping time or
increase inventory stored? Or if we could, what would be the cost of that,
what would be the impact of that?
I would like to suggest that, and this is not just the United States, this is
all customs authorities, security is, and let it be very, very clear, Ford Motor
Company are a bunch of people who live in Canada and the United States
181
See generally Daniel L. Kiselbach & Katherine Xilinas, Reducing duties on imported
goods, Law Wkly, Apr. 8, 2005 (discussing the calculation of duty rates).
182
See generally 19 U.S.C. § 3332.
183
See generally Krista Boryskavich et al., The Auto Pact, Kluwer L. Int’l., 2003, (noting
that “NAFTA provides for the duty-free movement of vehicles and parts as long as the North
American content requirements are met”).
184
See generally Condon, Bradley J., NAFTA, WTO, and Global Business Strategy: How
AIDs, Trade, and Terrorism Affect Our Economic Future, Greenwood Pub. Group, 2002,
(discussing NAFTA customs procedures and the preferential tariff treatment received by importers
with a valid certificate of origin).
185
See generally id.
186
See generally Cliff Sosnow, Prakash Narayanan & Elysia Van Zeyl, Canada: Budget
2008: The Trade and Border Security Agenda, Blake, Cassels & Graydon, L.L.P., March 18,
2008, available at http://www.mondaq.com/article.asp?articleid=58258 (last visited Nov. 9,
2008).
187
See generally id.

28 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
and Mexico and a whole bunch of other countries around the world. 188 We do
not want to be afraid that terrorists or criminals or other bad people are going
to hurt us. We are as interested and as patriotic as anybody else because we
are anybody else. We are not just a big blue oval sitting up there and I think
that is sometimes lost.
So security is important, and we recognize and support the interest of the
government in maintaining the national security and the regional security of
us, people, but we also need to have security of economy. We all need jobs.
We all need to eat, and we need to have the means that we can eat. And some
of the measures that have been suggested threaten them. 189
We would suggest that security measures be risk-based, meaning that the
customs authorities based on information provided to them by shippers, by
importers, by exporters, by carriers, by brokers, freight forwarders, all the
service providers and all of the participants in the supply chain, that with
information provided by those, all those participants, they can make
programmable risk assessments as to which shipments pose threats. 190
But first, I need to go back and cover C-TPAT. Ford was one of the
original seven members in C-TPAT. 191 I do not know how many of you
know that. It is the Customs-Trade Partnership Against Terrorism. 192 It was
one of the first programs announced by U.S. Customs after the events of 9/11
in which participants voluntarily joined with Customs, provided them with
data so that Customs can determine whether or not a particular supply chain
is both secure and in the level of risk that the supply chain represents. 193 Ford
was one of the original seven members. 194 We were just revalidated as Tier 3,
meaning that we are within the class of the lowest risk importers validated by
U.S. Customs. 195
188
See generally Ford Global and International Information, available at
http://www.ford.com/about-ford/company-information/ford-international-websites (last visited
Nov. 9, 2008).
189
See Egan, supra note 132 (internet update showing the need for the U.S. and Canada to
open up the border).
190
See generally Gabriele G. S. Suder, Corporate Strategies Under International Terrorism
and Adversity 72 (2006).
191
Id.
192
Id.
193
See Bishop, Owen, A “Secure” Package? Maritime Cargo Container Security after
9/11, 29 Transp. L.J. 313 (2002) (reviewing the border process).
194
Suder, Gabriele G. S., Corporate Strategies Under International Terrorism and Adversity
72 (2006) (explaining the different ways that companies helped create and deal with C-
TPAT).
195
See Supply Chain Security Best Practices Catalogue, CBP, available at
http://www.cbp.gov/linkhandler/cgov/trade/cargo_security/ctpat/ctpat_members/ctpat_best_pr
actices.ctt/ctpat_best_practices.pdf (last visited Nov. 3, 2008) (description of border programs).

Chow & Vandevert—The Canada-U.S. Supply Chain 29
And now, back to Ford’s 163,000 individual shipments coming across the
border every year. 196 If you get Ford out of the way and maybe GM and
Chrysler, you put roughly 300,000, 500,000 shipments all out of the way. 197
Now who is left? Probably the higher-risk shipments. Probably the bad guys.
If you get all of these shipments and entries out of the way, does not Customs
stand a better chance of actually seeing and interdicting the bad guys? 198 We
think so.
Non-discriminatory methods are those that treat all shipments, all
importers, and all shippers in the same way by simply saying everybody has
to provide the same data at the same time. 199 Quite frankly, I do not see how
anyone can handle the volume of information going back to it. That would
mean that just from Canada alone, Ford will be filing complete sets of
information for every single one of the 163,000 transactions, just with
Canada. 200 And remember, we have over 200,000. 201 And GM has a slightly
greater volume, Chrysler has somewhat of a lesser volume, and then there are
Toyota, Honda, Nissan, and this is just the automotive industry. 202 And we
would suggest that it is not going to work I think is the simplest way and the
most smart way to say it.
I would just like to close with a couple of personal reflections. I have
been practicing Customs law for just over 20 years now. And when the
events of 9/11 and the subsequent things, I actually have not spent, at least
initially, a great deal of time on security. It is not what Customs law has
traditionally been. 203 Customs law traditionally has been issues of terror
classification, valuation, and other actually relatively academic or intellectual
exercises involved in the trade of goods. 204
Recently by necessity, I have had to focus much more on this. I think that
we are now having to address this issue. In the week following 9/11, the wait
times coming into the United States; the border was actually virtually shut
196
See generally Ford Motor Company, About Ford: Annual Reports, available at
http://www.ford.com/about-ford/investor-relations/company-reports/annual-reports (last visited
Nov. 9, 2008).
197
Id.
198
See Customs and Border Patrol, Supply Chain Security Best Practices Catalogue,
http://www.cbp.gov/linkhandler/cgov/trade/cargo_security/ctpat/ctpat_members/ctpat_best_pr
actices.ctt/ctpat_best_practices.pdf (last visited Nov. 3, 2008) (describing border programs).
199
See Suder, Gabriele G. S., supra note 194.
200
See generally Ford Motor Company, supra note 196.
201
Id.
202
Id.
203
Kranig, Jeff, Five Things Every Lawyer Should Know About Customs & International
Trade Law, 18-APR CBA Rec. 37 (Apr. 2004) (introducing basic tenants of custom and trade
law).
204
See generally id.

30 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
down. 205 The wait times just coming into Michigan; were measured in terms
of kilometers. 206 The lines were 10 to 11 kilometers long on the Canadian
side. 207 And in the box where it said Number of Hours, the wait could not be
estimated. 208
We are very concerned. I am very concerned that what I am calling nondiscriminatory
assessment methods will result in the same thing. 209 And I do
not know that if the national economies can afford that; I certainly know that
the Big Three cannot. 210 That may be one of the crippling blows. 211
And in closing, I would suggest to you that we might want to think or
remind ourselves of the effect of Smoot-Hawley in the 1930s. 212 Measures
that are being proposed now in the name of security could well be the 21st
century post-9/11 equivalent of Smoot-Hawley. 213
So as I said, I am the prodigal son who has finally come home, and gee
mom and dad, I have some kind of bad news to tell you. However I would
like just to close and say that this kind of forum and this gathering of people
is a huge step for us in the right direction. That is, if people start thinking
about it and talking about it, we will come up with the right solution because
that is the important part.
Security is at threat and we are at threat. We have to recognize that. But
there has to be a reasonable practical solution in everyone's economic, social,
and cultural interest. Everything has to be considered.
Thank you.
MR. TOMPKINS: Paul, thank you very much.
At this time we will take questions from the audience. I have a number of
questions for my colleagues, but I will to defer to the audience.
205
See Natl. Comm. On Terrorist Attacks Upon the U.S., The 9/11 Commission Report,
available at http://www.9-11commission.gov/hearings/hearing7/witness_bonner.htm (last
visited Nov. 4, 2008) (The Deposition of Robert C. Bonner).
206
Robert Pear, After the Attack: The Northern Border; Tightened Inspections Mean Delays
from Maine to West, N.Y. TIMES, Sep. 14, 2001, available at
http://query.nytimes.com/gst/fullpage.html?res=9A06E7DD1E38F937A2575AC0A9679C8B6
3&sec=&spon=&pagewanted=all (last visited Nov. 5, 2008) (detailing the difficulties faced
at border crossings after 9/11).
207
See id.
208
See generally id.
209
Amador, Angelo, Statement of the U.S. Chamber of Commerce, Apr. 29, 2008,
http://www.aaccla.org/NR/rdonlyres/est7pgeefndgb2voxq7xnenvbcriqjrlzgcgu5da347375vqjjf
zoxpb6mig2ogursq5kfdlu2dm7b66g4fz5ynyxce/080429amador_whti.pdf (last visited Nov. 5,
2008) (discussing the WHTI and the harmful effects that it could have on the U.S. economy).
210
See generally id.
211
See generally id.
212
Hudec, Robert E., “Circumventing” Democracy: The Political Morality of Trade Negotiations,
25 N.Y.U. J. Int’l. & Pol., 316 (1993) (discussing the harmful effects of Smoot-
Hawley).
213
See generally id.

Chow & Vandevert—The Canada-U.S. Supply Chain 31
DISCUSSION FOLLOWING THE REMARKS OF GARLAND CHOW
AND PAUL VANDEVERT
MR. GARLOCK: Good morning. I am Tom Garlock with the Niagara
Falls Bridge Commission, and my question is for Paul Vandevert.
Paul, has Ford Motor Company calculated the cost of compliance with
security regulations since September of 2001? Do you have any kind of a
handle on what it costs a company to comply?
MR. VANDEVERT: The answer is yes and no. However it is because
truth be told, Ford has not had to, and I think this is generally true for the big
automotive manufacturers, but not the smaller suppliers and not other
industries. But one of the points that we have been making or have been
trying to make to the customs authorities is our supply chains prior to 9/11
were very, very secure. 214 And, just-in-time manufacturing methods and
quantities are a really big deal. 215
So we cannot afford to have a container that is supposed to have 15,000
parts in it and turn up with only say 14,000 because if there is only 14,000,
that means the line shuts down because at least to date we have not
distributed or sold our products with "Oh, we will get you the engine later."
"We did not have it now, but we wanted to get it to you, so we just decided
to, you know, send it." "We will ship it without the engine."
And that has been a difficult thing because we know that it has increased
the cost, but it is also been something which as the Customs authorities keep
telling us, well, you know, we know you have to spend some money on this.
But we have been trying to tell them we had actually very secure supply
chains before. 216 Take that. That is a good thing.
MR. TOMPKINS: Another question in the back.
MS. MATTHIESEN: Thank you. My first question is for Paul. I am
Birgit Matthiesen from the Canadian Embassy, and you and I have spoken,
Paul.
MR. VANDEVERT: Hi.
MS. MATTHIESEN: Paul, the two stats that you just quoted, and it is
163,000 shipments per year from Canada, $8 billion of import value from
Canada alone on here. 217 I am hoping it is not like the first question, but give
me a sense of the percentage in either value or physical shipment over the
border from Canada that is not a finished vehicle, that it is a vehicle
somewhere in the process of being manufactured. And if I can have just one
quick question for Garland.
214
215
216
217
See generally Hoffman, supra note 7.
See generally id.
See generally id.
See generally Canadian Logistics Industry, supra note 119.

32 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Garland, the distribution center for Alco Ventures in Kent, Washington
has been in operation for how long; when did they realize they needed to
have a distribution center in Kent, Washington?
Those are my two questions. Thank you.
MR. VANDEVERT: As far as the values go, I was looking at that, and
then I buried it. By numbers, there is a huge discrepancy. Our top supplier of
parts by terms of transactions is number two, but by value of parts is number
147. 218 And what it is, it supplies things like plastic, probably plastic gaskets
and things like that. 219 So the value of their goods is $14 million. 220 But the
number of shipments for those parts, very low value, but in terms of border
crossing, they are a high-volume shipper. 221
And for security we are trying not to measure by value. You just cannot
measure security by value because the rhetorical question that is
unanswerable is, what price security? So that is why I was concentrating on
the volume of transactions because even if value does not make a difference,
the number of transactions that a supplier has and the number of times and
the amount of information that we have to report is a big deal. 222
MR. TOMPKINS: Not to mention currency implications in value as well.
Garland, I think the other question was directed your way.
DR. CHOW: Yes. And the answer is I do not know the exact date. They
did have to ensure that they had product easily accessible, but whether it was
before or after 9/11, I do not know. That is something I better check on.
MR. TOMPKINS: Yes, two questions over here.
MR. OPLINGER: This is for Paul. I appreciated the sort of the 30,000-
foot level viewpoint from Ford on trying to get your products back and forth.
But since you mentioned C-TPAT, I am wondering if you can maybe speak
more specifically about that as one the original seven founders of it. How is
that working for Ford, and what are recommendations -- maybe in 30
seconds to a minute -- would you see as being able to improve that so that
you could utilize it more efficiently?
MR. VANDEVERT: Well, as I said, in many respects, our lives did not
change that much with C-TPAT because we already had a highly secure
supply chain. 223 That being said, being in C-TPAT and being the lowest risk
status is incredibly important because the basic proposition of C-TPAT is not
so much that there are actual benefits; I mean, CDP has acknowledged that
218
See generally Ford Motor Company, Company Information, available at
http://www.ford.com/about-ford/company-information (last visited on Oct. 15, 2008).
219
See generally id.
220
See generally id.
221
See generally id.
222
See generally id.
223
See generally id.

Chow & Vandevert—The Canada-U.S. Supply Chain 33
today they cannot tell you there is an actual benefit, but the real benefit is in
the next event as they are trying to sort out and open up the border who will
get through first. 224
What I was trying to say is that we think that C-TPAT is an excellent
foundation and should be further developed and further enhanced. And it
could actually address for Customs, not just -- and these are actually remarks
that Ford has actually made publicly in testimony to Senate Finance
Committee. We actually believe that C-TPAT lays the foundation for not just
having a very effective security assessment and risk-based method, but they
could actually expand customs efforts into such things as anti-counterfeiting.
And we for example suggested what I call the Tier 4, that if we provided
detailed data of our entire supply chain and our suppliers and our related
importers, that if Customs could sort all those out, then counterfeited parts of
which we are very concerned about could be more easily targeted and more
effectively targeted.
So I see C-TPAT and Ford sees C-TPAT as a great foundation that we
really would hope that Customs would look harder at, work on, and develop.
MR. TOMPKINS: For the last question at the top of the hour, our Chair,
Dr. King.
DR. KING: Paul, I am intrigued by your risk-based approach toward
Customs. First, I would be interested in how you implemented, and also, the
question of whether other suppliers of other products are not going to coin
discrimination in favor of the automotive industry. I notice our chairman said
that he was concerned about the approach on chemicals.
So how do you escape out of these barriers, assuming it is a good
approach? I think it is a good approach.
MR. VANDEVERT: Well, assume it is a good approach. Actually, when
I say risk-based, it is Customs that would be doing it. 225 And this is one of
our points, C-TPAT is an enforcement method that Customs has designed
and implemented, and the elements of C-TPAT, providing information and
Customs validating them is not just for the automotive industry. 226 It is for all
industry sectors. 227
So it is the ability of Customs to understand the differences of each of the
industries that are participating. We are all in the supply chain, but there are
differences. 228 But that is better handled, and I genuinely believe when I said
programmable, I think that a risk-based assessment is something that can
224
See generally Customs and Border Patrol, C-TPAT Overview, available at
http://www.cbp.gov/xp/cgov/trade/cargo_security/ctpat/what_ctpat/ctpat_overview.xml (last
visited on Oct. 13, 2008).
225
See generally id.
226
See generally id.
227
See generally id.
228
See generally Hoffman, supra note 7.

34 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
literally be put into a computer so that when shipments are coming across
and data fields are provided, that a computer can run a program that can say
this is low risk, this is medium risk, this is high risk. But that would require
the program and Customs to understand what each of the industries, what the
data they provide means.
I mean, if he is shipping chemicals that are highly combustible material,
that does not means it is a bomb, it just means it is highly combustible, but
those are things that can be identified, and as I say, objectively programmed.
Again, it is not for us to do the assessments, it is for Customs to do it.
MR. TOMPKINS: Paul, thank you. Garland, thank you very much for a
terrific discussion. And we look forward to networking during the break or
later on today and tomorrow.
That will conclude our panel. Thank you.
(Session concluded.)

DOING BUSINESS ACROSS THE CANADA-UNITED STATES
BORDER: GATEWAY OR CHECKPOINT?
Session Chair – Ronald L. Rose
Canadian Speaker – David Bradley
United States Speaker – Jason Conley
Canadian Speaker – Thomas Garlock
INTRODUCTION
Ronald L. Rose
MR. ROSE: My name is Ron Rose, and I am acting as chairman of this
session. Just a few remarks. I want to say how honored I am to be here. As
the other speakers have said, this is a very timely meeting. It is an important
and necessary dialogue in the time from my viewpoint as a corporate
bankruptcy lawyer, probably the only one in the room. Our economy in the
United States is as bad as I have seen it in my 40-year career. And for the
community in which I live and work, and the automotive industry, which is
Detroit, the economic union between the United States, Mexico, and Canada
is of crucial importance to our economic future. 1
As we have already heard–and we will hear throughout the conference–
there is bound to be tension between the need for security on the one hand,
and open, free, efficient, and dependable border crossings on the other. And
those of us from Detroit have always told our children instead of, “come
home on time,” we say, “come home just-in-time.” There are a couple of
articles in the front of the materials that talk about the thickening border. As
the last speaker has talked about it, one trucker said that he could go through
immediately or would end up waiting seven hours.
Drilling down a little bit further into the problems caused on a plant level,
in Detroit today, the shutting down of a production line can cost a supplier
between $500,000 and $1 million an hour as fines. 2 So that is just an
1
See generally Isabel Studer, THE NORTH AMERICAN AUTO INDUSTRY 1 (Institute for
Research on Public Policy, September 2004) (noting that “Canada and Mexico are largely
dependent on their access to the US auto market”).
2
See generally Katy Wight, Driving Innovation,
35

36 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
indication of the absolute necessity of being able to get product across the
border on a timely basis because whether it is paid or not paid, those are the
damages that our OEM suffer because of the failure to get products across
the border.
CANADIAN SPEAKER
David Bradley *
MR. BRADLEY: I will say a little about who we are. CTA is a federation
of the provincial trucking associations in Canada. 3 We represent over 4,000
trucking companies across the country, 4 and most of those would be involved
as part of their day-to-day business in cross-border trucking. 5
I expect that virtually all the sessions at this conference will either end or
begin by saying that we understand the validity and the concern around
security. And then there is the big "but" that will follow. I want to say that as
well. Truckers are patriots, and certainly the patience and calmness that they
demonstrated, particularly in those days and weeks immediately following
9/11 was quite exemplary. Animals should not be put through what they were
put through, having to sit forever in lines, not in the best of conditions. 6 So
the trucking industry understands the security imperative, but we also believe
that accords need to mean something. The Smart Border Accord of
December 2001 enunciated what we thought was a clear policy, that yes, we
need to have improved security and we need to have improved trade
facilitation that is based on risk management. 7 That is something that we
subscribe to, we bought into, and the "buts" will now follow.
http://www.polyonics.com/DocsCenter/AutomotiveIndustry.pdf (last visited January 25, 2009)
(discussing the costs to suppliers during automotive shutdowns).
*
David Bradley joined OTA in 1985 and became its president in 1991. In 1997, he was
given the added responsibility of Chief Executive Officer of the Canadian Trucking Alliance.
Before entering the trucking industry, David was a management consultant with one of the
large global consulting firms based in Toronto and a financial markets analyst at a Canadian
chartered bank. David completed his undergraduate work in economics at the University of
Toronto and earned a master’s degree in economics from Queen’s University.
3
See Canadian Trucking Alliance, http://www.cantruck.com/ (last visited January 25,
2009).
4
Id.
5
Id.
6
See generally Barrie Mckenna, Dead End for Free Trade, THE GLOBE AND MAIL, May
17, 2008 (generally discussing the wait times truckers experience at the border).
7
See generally Edward Alden, Thickening Border: Fading Smartness, THE GLOBE AND
MAIL, October 4, 2008, at A25 (noting that the authors of the Smart Border Accord recognized
that the way to reach the Accord’s goals of improved security and trade was to “manage

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 37
But before we do that, I think it is worthy of saying and repeating, I do
not care how many times, that Canada and the United States still are this
world's largest bilateral trade relationship. 8 How much longer that is going to
continue with the rise of China remains to be seen. In fact, in the last couple
of years, there has been the odd month where China's trade with the United
States actually exceeded Canada-US trade for the first time. 9 But, still,
overall Canada is the number one trading partner. 10 And we have seen a
literal explosion of trade between the two countries since the first Canada-
U.S. free trade agreement was signed back in 1989. 11 Even today with slower
economic growth, we are still seeing about a $1.5 billion in value of trade a
day crossing the border. 12
Something that Canadians believe in very much is we like following the
rules. We sometimes are called the Boy Scouts of North America. 13 That is
the way we are as a people. We like rules, and we like following rules, and so
the relationship between Canada and the United States in terms of trade has
been one that is based on rules and rules-based trading. Instead of trade wars,
our bilateral trading relationship is founded on dispute resolution
mechanisms. From our perspective under NAFTA, maybe those mechanisms
have really not worked the way we thought in all cases, but that is the way
that we like to approach things.
Our economic relationship is one based on integrated production, and you
have heard the speaker from Ford previously talking about that. And you
know, a piston will cross the border between Ontario and Michigan up to six
times before you have a finished vehicle, so it is very much based on
integrated production.
U.S.-Mexico trade is based on something different, -- low wages. 14
Canada is not a low-wage country, we are a high-wage country. 15 We need to
risk”).
8
See Karen Blotnicky, Consumer Optimism: Can It Ward Off Lengthy Recession?, THE
CHRONICLE HERALD, January 4, 2008 (discussing the large trading relationship between Canada
and the United States).
9
See generally James Morrison, Embassy Row, THE WASHINGTON TIMES, January 5, 2009
(discussing the growing trade relationship between the United States and China).
10
See Karen Blotnicky, Consumer Optimism: Can It Ward Off Lengthy Recession?, THE
CHRONICLE HERALD, January 4, 2008 (discussing the large trading relationship between Canada
and the United States).
11
See id.
12
See Roger F. Noriega, Assistant Secretary of State for Western Hemisphere Affairs,
Remarks to the Economic Club of Toronto, Trade and the Canada-U.S. Border (March 29,
2004) http://www.state.gov/p/wha/rls/rm/31949.htm (noting that approximately $1.1 billion in
goods crosses the Canadian-U.S. border each day).
13
See generally MARKETA GEILSLEROVA, CANADIAN CENTRE FOR FOREIGN POLICY
DEVELOPMENT, DEVELOPING CULTURE POLICY: CANADA IN THE WORLD ROUNDTABLE REPORT
3 (May 12, 2000) (discussing how Canada can live up to their “boy scout” role).
14
See Isabel Studer, THE NORTH AMERICAN AUTO INDUSTRY 1 (Institute for Research on

38 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
pay for our medical system, and that is paid for through the individual
taxpayer. Canada is a very high tax and relatively high wage country. 16 So
we are not a threat in terms of siphoning off of jobs the way that some of
these other countries are. Where things are produced in North America
between Canada and U.S. depends on capacity utilization, productivity, those
factors, those sorts of things. Forty percent of Canada-US trade is intra-firm,
whether it is the Big Three or other manufacturing operations. 17 So we are
very, very highly integrated and operate on quite a different basis than say
trade with Mexico; however, in recent years there has been so much fixation
on the southern border that Canada has been sometimes caught in the
whiplash.
For Canada, trade is not only something that is important to us, our
economic survival depends upon it. 25 percent of our GDP is dependent upon
trade with the United States, 18 so when the elephant sneezes, we get a cold.
And so it is extremely important to us, we are very vulnerable in that regard.
However, trade is a two-way street, and this is something that I wish some
of the more protectionist politicians in your country were more aware of.
Canada is the top export market for the United States and has been for
decades, certainly since the end of World War II. 19 A quarter of all U.S.
exports go to Canada. 20 For 39 of the U.S. states, Canada is their number one
export market, and it is in the top three for eight of the others. 21 And this is
Public Policy, September 2004) (stating that “lower labor costs for a qualified work force
continue to be a Mexican comparative advantage”).
15
See generally BUREAU OF ECONOMIC ANALYSIS INT’L ECONOMIC ACCOUNTS,TABLE 4:
EMPLOYMENT AND WAGE RATES FOR MANUFACTURING MOFA’S IN HIGH-WAGE AND LOW-
WAGE HOST COUNTRIES (1992)
http://www.bea.gov/international/datatables/0395iid/table4.htm (listing Canada as a high wage
country).
16
See LAWRENCE F. WOLPER,HEALTH CARE ADMINISTRATION:PLANNING,IMPLEMENTING,
AND MANAGING ORGANIZED DELIVERY SYSTEMS 22 (Jones & Bartlett Publishers 2004) (stating
that “Canada indirectly provides health services through a tax-funded public system”).
17
See generally Isabel Studer, THE NORTH AMERICAN AUTO INDUSTRY 1 (Institute for
Research on Public Policy, September 2004) (noting that “trade linkages show that Canada
and Mexico are largely dependent on their access to the US auto market”).
18
See generally BLAYNE HAGGART, GOV’T OF CANADA: ECONOMICS DIVISION, CANADA
AND THE UNITED STATES: TRADE, INVESTMENT, INTEGRATION AND THE FUTURE 2 (April 2001)
http://dsp-psd.tpsgc.gc.ca/Collection-R/LoPBdP/BP/prb013-e.htm (noting that Canadian trade
with the US accounts for approximately 33% of Canada’s GDP).
19
See generally ROGER F. NORIEGA, ASSISTANT SECRETARY OF STATE FOR WESTERN
HEMISPHERE AFFAIRS, REMARKS TO THE ECONOMIC CLUB OF TORONTO, TRADE AND THE
CANADA-U.S. BORDER (March 29, 2004) http://www.state.gov/p/wha/rls/rm/31949.htm (noting
that Canada is the largest export market for 39 U.S. states).
20
See Jack Jedwab, Canada and the United States: More Trade, More Economic Optimism
Despite ‘Mad’ Month of June Analysis (2004) http://www.acs-aec.ca/oldsite/Polls/Poll55.pdf.
21
See ROGER F. NORIEGA, ASSISTANT SECRETARY OF STATE FOR WESTERN HEMISPHERE
AFFAIRS, REMARKS TO THE ECONOMIC CLUB OF TORONTO, TRADE AND THE CANADA-U.S.

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 39
something that is interesting, and I am not sure if anybody in the room knew
this or not, maybe you did, but Canada is the number one supplier of energy
to the United States, including oil. 22 And when you look at all of the conflicts
in the world that may or may not have something to do with oil, it has been a
pretty good relationship I think between Canada and the U.S., and there is
more crude to come out of the oil sands than out of Saudi Arabia. 23 It is just a
little more expensive, but we are pretty free and open about sharing it with
the United States. 24
The U.S. sells more to Canada than it does to all 25 countries in the EU
even though the population of the EU is 15 times that of Canada, five times
more than they sell to Japan, half of all U.S. auto exports come to Canada,
and the U.S. sells more agricultural exports to Canada than anywhere else in
the world, about $400 per person per year. 25 So we are a good customer as
well.
Just in the last few weeks, a new study has been released by Brookings
Institution that I thought was sort of interesting for this particular conference
because it looks at the Great Lakes states and provinces. 26 And this is a real,
an economic powerhouse that A: I do not think we are tapping into our
potential, and B: I think perhaps we are letting it slip away because if you
took those jurisdictions and put them together as a country, they would be the
second largest economic unit on Earth after the United States and bigger than
Japan, Germany, U.K., China and all the other ones that seem to get the
headlines.
One of the quotes that I like from the study is that it says the region
occupies the front lines in global restructuring. 27 I think that is true. And how
we restructure and how we approach that I think will depend on how wealthy
and prosperous we will be in the future.
BORDER (March 29, 2004) http://www.state.gov/p/wha/rls/rm/31949.htm (noting that Canada
is the largest export market for 39 U.S. states); See generally, Cletus C. Coughlin and Howard
J. Wall, NAFTA and the Changing Pattern of State Exports (February 2002),
http://research.stlouisfed.org/wp/2000/2000-029.pdf (discussing the increase in state exports to
Canada after NAFTA).
22
NRC: CANADA REMAINS TOP OIL, NATURAL GAS SUPPLIER TO U.S.,
http://petrochemical.ihs.com/news-07Q2/nrc-supplier-us.jsp (last visited January 25, 2009).
23
Id.
24
Id.
25
See UNITED STATES DEPARTMENT OF AGRICULTURE, U.S. AGRICULTURAL TRADE:
EXPORTS, http://www.ers.usda.gov/Briefing/AgTrade/exports.htm (noting that Canada became
the lead agricultural exporting country in 2002).
26
John C. Austin, et al., The Vital Connection: Reclaiming Great Lakes Economic Leadership
in the Bi-National U.S.-Canadian Region, BROOKINGS INSTITUTE, March 24, 2008,
http://www.brookings.edu/reports/2008/0324_greatlakes_canada_austin.aspx.
27
Id.

40 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Trucking plays a key role in this integrated production process. In fact, we
see ourselves as part of the manufacturing process. We are not a stand-alone
industry out there carrying air, clogging the highways. .
Our vehicles haul 62 percent of Canada-U.S. trade by value, and 80
percent of U.S. exports to Canada are moved by truck. 28 A truck crosses the
border about once every two-and-a-half seconds on average. That is 24 hours
a day, 365 days a year. More than 20,000 a day enter the United States from
Canada. 29 And the reason for that again is that we are a key component in the
supply chain. The just-in-time inventory system which really has been a
competitive advantage for North American manufacturing over the last 30
years developed around the trucking industry, so we have seen spectacular
growth in our industry over that same period. 30
As part of the supply chain, the message that I would like to impart is that
-- and we are starting to hear people talk about the supply chain a little more
these days than they have recently. But anything that impacts upon the
reliability and the predictability of the North America's supply chain or the
regional supply chain that operates in this immediate area ultimately impacts
upon direct investment in North America.
Certainly for Canada we have seen examples where because of concerns
over the border, manufacturers have decided, “well, we will just avoid the
whole thing, and we will set up shop in the U.S”. And clearly, that is a
challenge we face in Canada, and there are those in the United States, and I
would be doing the same thing, that are trying to capitalize on that and bring
more direct investment in at the expense of Canada. But ultimately because
our manufacturing bases are integrated, it hurts all of us. And it is something
that we need to be aware of.
Where we want to be and where the Smart Border Accord said we would
be is that the border needs to be more efficient and more secure than it was
on September 10th, 2001. Remember, there were problems at the border
before 9/11. I guess the question that I want to ask is: Are we there?
The “thickening of the border” is another new expression that has started
to be used in the last year or so. Our most productive time in trying to make
the border more efficient was in the immediate period after 9/11 where for
the first time Canadian-U.S. Customs officials actually got together and said
we have got a problem here, how are we going to deal with it? 31
28
See RESEARCH AND INNOVATIVE TECHNOLOGY ADMINISTRATION,BUREAU OF
TRANSPORTATION STATISTICS,NORTH AMERICAN FREIGHT TRANSPORTATION:U.S.TRADE WITH
CANADA AND MEXICO (June 2006),
http://www.bts.gov/publications/north_american_freight_transportation/pdf/entire.pdf.
29
Id.
30
Id.
31
See Daniel Drache, Canada-U.S. Relations and the Impermeable Border Post 9/11: The
Co-Management of North America, CONFINES, May 2008, at 70.

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 41
In Canada there were some risk-based solutions that were percolating on
our side of the border, and in the days and weeks following 9/11, by
changing the focus of those programs slightly, programs like FAST, the Fast,
Free, and Secure Trade program, were born. FAST is supposed to be a risk
management program where low-risk people and goods are supposed to be
able to move more freely and quickly across the border. 32 That was good
thing. But we have seen that approach be replaced over time by a “check
everything/everyone/all the time approach. This change in approach reflected
the words of the former U.S. ambassador to Canada, Paul Cellucci, who was
actually very good to deal with on some of these issues, who never missed
the chance to say that security trumps trade. It became part of his mantra, and
obviously the administration's mantra. 33 You cannot say that security trumps
trade and then at the same time espouse the virtues of the Smart Border
Report in my view.
So things like the FAST program and ACE, which you will hear about,
the automation of the border, those are all good in principle, and in many
senses they are still in their infancy. But they have been experiencing
growing pains, and we really have not seen the benefits of those programs
yet.
Also denigrating the benefits of those programs has been the layer upon
layer of other measures that we have seen heaped upon the supply chain in
the inter-meeting period, more inspections. Becoming a member of C-TPAT
now does not necessarily mean that you are going to have fewer inspections.
However, that has not necessarily turned out to be the case. There are a
certain number of random inspections that must occur, even within the low
risk population. In addition, I have heard that CBP has told trucking
companies they (CBP) do not even want carriers to advertise they are FAST
or C-TPAT certified anymore because that just makes them a target for the
drug traffickers, so they have to be inspected that much more.” We really
seem to have lost focus here, and we are told no longer to promote the fact
that we are secure and that we have gone through the process.
We have seen technology glitches. The amount of programming the
federal government has tried to introduce in a short period of time without
properly testing, without the necessary resources is just bizarre. In fact this
past weekend, the ACE system went down. It could not handle the number of
transactions – even in a down economy, on a weekend.
32
See Press Release, Department of Homeland Security, Free and Secure Trade (FAST)
Implementation on the US/Mexico Border (Dec. 4, 2003)
http://www.dhs.gov/xnews/releases/press_release_0309.shtm (discussing FAST and what it’s
designed to do).
33
See Gloria Galloway, U.S. Rebukes Canada, THE GLOBE AND MAIL, March 26, 2003.

42 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Of course there is also a temptation by other departments to get involved
now. If you can wrap yourself in the security flag, then perhaps you too can
get access to the gravy train. We have seen the FDA and the APHIS program
coming into effect, whereby every truck, whether it is hauling auto parts or
foodstuffs, is now subject to FDA inspection. 34 In fact, I have heard it said
that General Motors is probably now the single-largest hauler of fresh-cut
flowers in the continent because every truck that hauls their goods is now
subject to the APHIS fees.
At today’s border, you are guilty until you are proven innocent. Every
trucking company in North America is subject to the rogue employee who
decides he is going to run some marijuana across the border. You can have
all the fences and C-TPAT designations in the world, and you are not going
to prevent that from happening. If it does happen to you as a carrier you
immediately lose your FAST and C-TPAT designation. 35 Eventually
somebody will come up to see if you are doing what you said you would do
when you became C-TPAT certified. They will probably tell you that the
solution is to introduce a snitch line in your operation, and they will give you
back your FAST designation. In the meantime, your customer has gone
somewhere else, and you are not going to get that business back. You are all
lawyers, I do not know if that is natural justice or not, but that is the way we
deal with things in this day in age.
We have seen capacity leaving the transborder market. You just have to
flip through the U.S. trade magazines, and you will see advertisements for
drivers with the captions “No Canada,” or “No border.” The drivers do not
want the hassle. Drivers do not get paid for sitting in line-ups – most are paid
by the mile – so when they see the same guy every day when they are
crossing the border checking to make sure he is not a terrorist, it gets a bit
hard on them. So yes, we have seen capacity leave the market. Now, for
some trucking companies, that is good. Those that make the investment in
these new so-called security programs will stay in that market; those that will
not or cannot will be forced out. However, if the goal is an efficient and
productive supply chain, the less capacity, the higher the cost and the less the
choice of service providers.
This past summer -- despite the fact that truck traffic across the Canada-
U.S. border being down about 10 percent at the busiest border crossings, --
34
See generally Northern Border Security: Joint Statement of Brenna Neinast and Michele
James Before the Senate Homeland Security and Governmental Affairs Committee, 110th
Cong. (July 2, 2008), available at
http://hsgac.senate.gov/public/_files/070208NeinastJames.pdf (discussing inspection statistics
for the Canada U.S. Border).
35
See generally In Transit Newsletter, http://www.dflaw.com/intransitNov2005.pdf (last
visited January 25, 2009) (noting that companies that have drivers apprehended for drug offenses
at the border may trigger a suspension of FAST privileges).

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 43
the, lineups into the US, particularly at Port Huron but also at Detroit and the
Niagara frontier, were as long as they were back in the days following 9/11. 36
The Ontario Ministry of Transportation had to put port-a-potties up on
Highway 402 in Sarnia approaching Port Huron. 37 The Blue Water Bridge is
the third busiest border crossing in North America. 38
So we begin to wonder, where are we going? There is an alphabet soup of
US security measures that we now must comply with. And, Canada is not
blameless in all of this. We are watching very closely to see how the
remodeled Canadian version of C-TPAT and ACE are going to work.
There are various cost estimates out there that the chambers of commerce
and different people have looked at. I provide the results for one, single
trucking company. This is actually a trucking company based in Western
Canada with a fleet of about 400 trucks, so he is probably in that $60 to $70
million a year operation. His increased annual costs are about $2.4 million
from complying with all of the US programs. In a low-margin business, that
is pretty tough, and that equates for this one company -- even if you include
all his trucks, and let us say they are all crossing the border -- to about $500
per truck per year.
Interestingly the Brookings Institute paper of March 2008 paper, suggests
the largest challenge to further economic integration in the Great Lakes
region is posed by Homeland Security concerns and measures that have
slowed border and binational economic exchange. 39 And this threatens to
crimp trade and commerce at a time when the region in both nations have
tremendous shared stake in enhanced economic integration. 40 How can our
political leaders talk about competing with China, when our governments
continue to heap these sorts of costs on the supply chain?
I will end with what needs to be done. Complacency within the business
community and at the most senior levels of government, both in the US and
in Canada has in part allowed for the layering of programs we have seen. 41
DHS was created to bring several disparate agencies of government together,
but there is still a silo effect, and some of this layering is a reflection of that.
36
See Press Release, Ontario Trucking Association, Cross-Border Truck Trips Down in
2007: Further Proof of Troubled Ontario Economy (January 14, 2008)
http://www.sasktrucking.com/forms/crossborder.pdf.
37
See John Manley, Does the U.S. Really Want to Renegotiate NAFTA?, THE GLOBE AND
MAIL, April 4, 2008.
38
See Marsha Stopa, New Blue Water Span Not Expected to Bring Trade Shift, CRAIN’S
DETROIT BUSINESS, July 14, 1997.
39
See John C. Austin, et al., The Vital Connection: Reclaiming Great Lakes Economic
Leadership in the Bi-National U.S.-Canadian Region, BROOKINGS INSTITUTE, March 24, 2008,
http://www.brookings.edu/reports/2008/0324_greatlakes_canada_austin.aspx.
40
Id.
41
See U.S. GOV’T.ACCOUNTABILITY OFFICE,REPORT TO THE CONGRESS:HIGH RISK SERIES:
AN UPDATE 47 (January 2009) (discussing DHS’s numerous programs and its inefficiencies).

44 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
We need to get more of our customers beyond the Big Three involved in
some of the preferred shipper programs like FAST. Nothing worse for a
trucking company than to make the investment, get your driver into the
program, and then find that the freight you are hauling is not FAST, and you
sit with everybody else anyway. We need to get the business community
more involved. We need to ensure that our programs are as best as possible,
bilateral and harmonized, and that they provide mutual recognition. We do
not have that at the present time. Someone I hope at some point will do a
cost-benefit analysis to see if any of this is actually having an impact in terms
of improving safety. We certainly hope it is.
We would like to see the NAFTA partners, the signatories to the Smart
Border Accord, i.e., the U.S. and Canadian governments, keep their
promises. The Smart Border Accord and subsequent follow-up agreements
called for a pilot of land preclearance at Fort Erie for freight destined to the
US. But then the CBP unilaterally changed its mind. When is a deal a deal?
We need to make sure we have the infrastructure to support the level of
trade of today and of tomorrow. You can still take a truck from Toronto to
Miami, you will go through 17 stop lights, 16 of them are in Windsor,
gateway to the Detroit and the single largest (by volume) land crossing in
North America. You can have the bridges, all new booths at the bridges, but
if the government agencies do not put enough people there to man the
booths, it does not do much good.
The Security and Prosperity Partnership that the three NAFTA leaders
like to talk about, to me, has been an entirely underwhelming process in
terms of advancing the cause of a more efficient and more secure border.
The threat of increasing protectionist sentiment is raising its head in the
US, at least in some of the rhetoric accompanying the presidential
nominations process and must be checked.
Again, to accomplish any of this, we need to have all of the trade
community, all of the business community involved because these are no
longer just the truckers' problems.
Thanks very much.
MR. ROSE: Next on the agenda is Jason Conley, who is the Senior
Manager for Homeland Security Policy for the United States Chamber of
Commerce.

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 45
UNITED STATES SPEAKER
Jason Conley †
MR. CONLEY: Thank you so much. I would like to just first thank the
Canada-U.S. Law Institute for allowing me to come and share a few thoughts
with you. This is an excellent event.
These are issues that we are dealing with from a policy perspective in
Washington on a daily basis. It is something that is quite important to the
U.S. Chamber, and we are just glad that there is an event of this quality that
is bringing these issues to light.
As I mentioned, I do represent the United States Chamber of Commerce.
We are the world's largest business federation. 42 We represent approximately
3 million businesses around the world. We have 106 AmChams around the
world, and 95 percent of our members are small businesses, so we are very,
very keen on the impact that security is having on the ability of these small
businesses to compete because those regulatory burdens quite often mean the
difference between property and bankruptcy for a small firm operating on
thin margins. 43
The Chamber also has a Homeland Security Task Force that has been in
existence for about five years. 44 We have 140 companies and trade
associations. 45 We also have associations representing most major modal
†
Jason Conley is the Senior Manager for Homeland Security policy for the U.S. Chamber
of Commerce, the world’s largest business federation. As such, he is responsible for the organization’s
advocacy, policy, and outreach on issues including transportation security for all
modes, supply chain management, and customs policy. Notably, Mr. Conley led the Chamber’s
successful lobbying campaign on recently-enacted SAFE Port Act of 2006, and Implementing
Recommendations of the 9/11 Commission Act. Prior to joining the Chamber of
Commerce, Mr. Conley served as Vice President of National Strategies, a boutique public
policy firm in Washington, DC. While with National Strategies, he provided Fortune 500
clients with strategic counsel and coalition management services on policy issues related to
transportation, telecommunications, and public safety.
42
See U.S. Chamber of Commerce: About Us,
http://www.uschamber.com/about/default.htm (last visited January 25, 2009) (stating that the
Chamber is the largest business federation).
43
See Stephen Brugger, The AmCham Network, EUROPEAN AMERICAN BUSINESS 2008,
http://www.european-american-business.com/2008/p_009.php.
44
See U.S. Chamber of Commerce: National Security & Emergency Preparedness Issues,
http://www.uschamber.com/issues/index/defense/default (last visited January 25, 2009) (discussing
the Chamber’s Homeland Security Task Force and its focus “on providing policy
guidance and recommendations on critical homeland security issues affecting our economy”).
45
See generally U.S. Chamber of Commerce: National Security Task Force,
http://www.uschamber.com/about/committees/natlsecurity.htm (last visited January 25, 2009)
(discussing how the Task Force represents more than 100 companies, associations, and state

46 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
stakeholder groups in the United States that participate in that task force. 46
The Chamber works very closely with Department of Homeland Security, 47
and the business community in the United States sees Homeland Security as
a shared responsibility.
The private sector owns and operates 85 percent of critical infrastructure,
and DHS has correctly recognized this fact. They have worked with the
Chamber on issues such as a national infrastructure protection plan, the
national response framework, and on various projects related to information
sharing. 48
What is often overlooked in this entire debate about Homeland Security
often comes to the question of, what other layers of security can we add?
What government regulations can we add? What is often overlooked are the
measures that the business community has undertaken since 9/11 to enhance
their security without the benefits of participating in C-TPAT, FAST or other
programs, or without the benefit of regulations.
But U.S. and Canadian firms have improved security at physical facilities
that employs security training, contingency planning, and have voluntarily
cooperated with law enforcement on both sides of the border to share
information about suspicious activities. 49 So I think that is something to keep
in mind as we start thinking about how secure are we, and what layers of
regulation do we need?
I would first like to just start with a couple of thoughts on the U.S.-
Canada trade relationship without going into any statistics or details because
I think those have been very well-covered. I will talk about a couple of key
topics in supply chain security. A couple things you will not hear me say that
are extraordinarily important. The Western Hemisphere Travel Initiative is
something that we are very, very concerned about. I do not have time to
remark on that today, but it is something that the U.S. Chamber and our local
chambers of commerce around the country are vigorously following and
working with the Department of Homeland Security to ensure that as that
and local chambers).
46
See generally Press Release, IPA, IPA President Invited to Continue Serving as Member
of Various U.S. Chamber of Commerce Committees (October 31, 2007)
http://www.ipanews.net/Steinberg.asp (discussing how the company’s President will continue
his role on the Chamber’s Homeland Security Task Force).
47
See U.S. Chamber of Commerce: National Security & Emergency Preparedness Issues,
http://www.uschamber.com/issues/index/defense/default (last visited January 25, 2009) (discussing
the Chamber’s Homeland Security Task Force and its focus “on providing policy
guidance and recommendations on critical homeland security issues affecting our economy”).
48
Id.
49
See generally Office of the Privacy Commissioner of Canada, Annual Report to Parliament
2003-2004, http://www.privcom.gc.ca/information/ar/200304/200304_e.asp (last visited
January 25, 2009) (noting how the U.S. and Canada share watch lists and other information
with each other).

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 47
deadline approaches, that the word gets out to provide the requisite
documentations so that we actually do not see an impact on those local
economies. And then I will talk briefly about what the business community is
doing, and then maybe just a look ahead as what we see in the election year.
Underlying all the statistics you have heard today about the importance of
the U.S.-Canada trade relationship is the fact that we, as Garland pointed out
a little bit earlier, do not simply trade goods, we manufacturer them, and we
make things together. And this integrated manufacturing process has been an
important part of the NAFTA story. And why that is important for Homeland
Security is because firms with integrated North American supply chains,
their goods clear Customs multiple times during that manufacturing process,
whereas a company that simply imports a television from Korea or from
China may clear Customs once. 50 So when you talk about the thickening of
the border and the layers of security, that goes to the heart of North American
competitiveness, and that is why the Chamber takes these issues very
seriously.
I know the speaker earlier referenced Ten-Plus-Two in importer security
filings. While that is only required now for the Maritime sector, it is
something that will certainly be coming down the road for other sectors. The
U.S. Chamber is very concerned about the application of Ten-Plus-Two
across the board. We do believe that these non-discriminatory approaches
can provide challenges that really are not risk-based, and we prefer to see
proposals that are risk-based. One area that is also non-discriminatory that
the Chamber's been working on very much lately is APHIS fees. 51 The U.S.
Department of Agriculture published an interim rule in November 2006 that
requires APHIS fees for all conveyances originating in Canada irrespective
of risk. 52 That means the shipment of auto parts from General Motors or Ford
50
See generally Sheldon Alberts, Prentice Sounds Alarm Over 'Thickening' Border, Canada.com,
May 07, 2008, http://www.canada.com/topics/news/politics/story.html?id=3dac511dc111-4b4c-af25-3fbf142f8524
(stating that "Not long from now, we will see the first Chineseor
Indian-manufactured vehicles arrive on North American shores, ready to be sold to eager
consumers. These vehicles will have encountered a border delay only once”).
51
See Press Release, U.S. Department of Agriculture, USDA Amends User Fee Regulations
for Agricultural Services (Dec. 10, 2004)
http://www.aphis.usda.gov/lpa/news/2004/12/aqiusers.html (discussing how the USDA is
amending its user fee regulations by adjusting fees charged for certain agricultural quarantine
and inspection services to reflect the anticipated costs of providing these activities through
fiscal year 2010).
52
See generally The U.S Chamber of Commerce and The Canadian Chamber of Commerce,
Finding the Balance:
Reducing Border Costs While Strengthening Security, February 2008,
http://www.chamber.ca/cmslib/general/0802FindingTheBalance20083393251.pdf (last visited
January 25, 2009) (discussing how all commercial conveyances and airline passengers must
pay the APHIS fee, irrespective of the cargo being carried).

48 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
is treated the same way as a shipment of seafood or fresh fruits. This is
something that unfortunately we do not believe will be rolled back. There has
been a lot of discussion. The industry has been working very vigorously with
the Department of Agriculture and Customs and Border Protection on this.
But unfortunately, it looks like that there will only be limited exemptions
when the final rule is published later this year.
Now, about C-TPAT, it has grown from the seven companies in early
2002 to over 8,000 companies. 53 It has been a success story. And while the
program is voluntary, it has become somewhat obligatory because so many
of the major importers require their supplies to be C-TPAT members and to
be validated. And so there are costs that are associated with that. The real
challenge is that there are not really robust benefits. So the automated
targeting systems score is going to be less, and therefore there will be a
reduction in inspections, but I think that it is incumbent upon CBP to develop
even more robust benefits for C-TPAT because some companies, especially
in our membership, are talking about whether it makes sense to continue in
C-TPAT; whether they are really seeing the benefits for all of the
expenditures that they are making. And I would like to say that this ties back
into the infrastructure issue. Infrastructure is extraordinarily important.
Expanding those lanes at the border crossings at the approaches is very
important. A FAST lane is only fast to the extent that you can actually make
it to that lane. So to the extent that security is an issue, it has to be seen in
conjunction with some of the infrastructure issues.
And then something that the Chamber has been very actively working on
with respect to United States and Europe is developing a mutual recognition
agreement between the U.S.'s C-TPAT program and Europe AEO program. 54
We would like to see something very similar between the United States and
Canada. Mutual recognition is we think a key to reducing some of the costs
for companies that have to have global footprints that have to comply with
AEO programs around the world. And one area where CBP and CBSA are
making some progress is post-incident resumption of trade. 55 It was remarked
earlier that the major benefit of C-TPAT is providing some priority if you
53
See Message from the Commissioner Announcing C-TPAT Importer Security Criteria,
http://cbp.gov/xp/cgov/trade/cargo_security/ctpat/security_criteria/criteria_importers/commi_i
mporter_criteria.xml (last visited January 25, 2009) (noting how C-TPAT “has grown to more
than 8,800 enrolled companies”).
54
Cf. Susan Kohn Ross, Mutual Recognition - C-TPAT and AEO Meet, July 12, 2008,
http://tradelawyersblog.com/blog/archive/2008/july/article/mutual-recognition-c-tpat-and-aeomeet/?tx_ttnews%5Bday%5D=12&cHash=90182162c4
(discussing the efforts to find a way
to bring AEO and C-TPAT programs together).
55
See Assessing the Resiliency of the Nation’s Supply Chain,
http://cbp.gov/xp/cgov/newsroom/congressional_test/supply_chain.xml (last visited January
25, 2009) (discussing CBP’s efforts in post-event resumption of trade).

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 49
have an incident, a pandemic, or a terrorist incident or something that closes
ports of entries. When you actually go into the recovery period, who has
priority? And so that is something that we would like to see more developed.
And there is also communicating with the trade community. I think it was
perfectly awful that many major importers and carriers did not have adequate
information in the days following 9/11 about when borders were going to be
reopened. 56 We cannot repeat that process. There needs to be a robust
communication with the trade community.
And finally, one issue I would just like to touch on is the land border
preclearance. There was a pilot program that was the subject of negotiation
for several years for allowing Customs clearance to take place on the
Canadian side of the border and for U.S. Customs officers to be stationed
there. 57 Those negotiations broke down over a series of very thorny legal
issues, but we think that preclearance is really the right strategy. We need to
think of a way of pushing that security out away from the border deeper into
the supply chain. One area is agriculture, food production, where you
actually have inspectors in some of the manufacturing facilities. 58 Something
like that is essential; that cooperation and integration are essential. Pushing
that security away from the border is essential to alleviating some of these
congestion issues.
And I think it is an approach you will see the Department of Homeland
Security taking on in other areas. For example, with respect to domestic air
cargo, TSA is required to screen 100 percent of all air cargo carried on
passenger planes by 2010. 59 Now how do they intend to do that? One way is
to have a certified cargo screener program where they actually do the
screening at the cargo facilities, in secure cargo facilities well in advance of
where that cargo is transported with the plane. That requires a secure chain of
custody and a few other hurdles, but really we think that is really the right
approach.
And just as the Customs and border protection over the past five years
have pushed the borders out, we think that it is important to push some of the
security measures away from the border. And very briefly, I will mention
what the business community is doing on this. The security prosperity
partnership is something that we are very strongly supporting. The Chamber
is the co-secretariat in the United States for the North America
Competitiveness Council, and this is 14 businesses in the United States, 10 or
56
Id.
57
Press Release, Department of Homeland Security, Joint U.S.-Canada Agreement for
Land Pre-Clearance Pilots (Dec. 17, 2004)
http://www.dhs.gov/xnews/releases/press_release_0571.shtm (discussing the pilot program).
58
Id.
59
See generally, Editorial, New System for Screening Bags Falls Short Of Promises, USA
TODAY, Dec. 30, 2002 (discussing new baggage screening procedures).

50 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
11 in Canada, and 10 in Mexico making recommendations to the three
leaders about measures that they can take on regulatory cooperation on areas
including supply chain security, that we think can enhance competitiveness. 60
And we issued our first report in September of 2007 to leaders that provided
51 specific recommendations on measures that can be taken to improve trade
between the three NAFTA countries. 61 There have been follow-up meetings
in Montebello, and there will be a meeting next week in New Orleans where
we will release another set of recommendations to leaders. 62 That report will
be posted on the Chamber website, www.uschamber.com on April 22nd. 63 I
would encourage you to read that.
The U.S. Chamber is also working with the Canadian Chamber. 64
Someone mentioned our report a bit earlier, but in February we released a
report finding balance; reducing border costs while strengthening security,
and that is available on our website as well. 65 I would encourage you to read
this. This makes a series of recommendations on specific measures that can
be taken to reduce that congestion within the next 18 months. 66
The Chamber also will continue to work with Congress to message these
issues. We are the largest lobbying organization in the United States
according to our lobbyists' direct filings. 67 But this is something the Chamber
60
See generally U.S. Chamber of Commerce, International Trade and investment: Policy
Accomplishments for 2007,
http://www.uschamber.com/issues/accomplishments/international.htm (last visited January 25,
2009) (listing recent Chamber activities by country).
61
See North American Competitiveness Council, Building a Secure and Competitive North
America: Private Sector Priorities for the Security and Prosperity Partnership of North America
(August, 2007),
http://www.uschamber.com/NR/rdonlyres/e2hlgdvndhghqunbdaz2nb2i67bfxh5ihc6zvuswzkkt
wggtshf6pbrdeuvr5ththfdas7hy56l7tpozzazrctux5md/NACCReporttoLeadersFINALAugust21
2007.pdf.
62
See North American Competitiveness Council, Meeting the Global Challenge: Private
Sector Priorities for the Security and Prosperity Partnership of North America (April, 2008),
http://www.aaccla.org/NR/rdonlyres/e6vkczq2emyrq6xekjdu5tbsbnaaopifurlhqqwmeoscqtrmv
h4sz5kw2en72iihtafwxpwnjjm6s2fyn3mlpal6i5e/NACCReporttoLeadersApril172008FINAL.
pdf.
63
Id.
64
See The U.S Chamber of Commerce and The Canadian Chamber of Commerce, Finding
the Balance: Reducing Border Costs While Strengthening Security, February 2008,
http://www.uschamber.com/NR/rdonlyres/ehbod3f5v2yynuq3kr2vrxtiwvrnut6qteexitpyd7n4ef
36usxji4v3uus47b4ekzba5of625r3js5vt66wggm2v6f/0802_finding_balance_report.pdf
visited January 25, 2009) (a joint report from the U.S. and Canadian Commerce agencies).
65
Id.
66
67
Id.
See Dan Morain, Tinseltown Filling Campaign Coffers. Democrats Are Reaping the
Benefits of Wealthy and Glamorous Donors While Entertainment Executives Hope to Be
Heard In Washington, LOS ANGELES TIMES, October 18, 2007 (noting that the Chamber ranks
first in lobby spending).
(last

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 51
takes very, very seriously. We will hold members of Congress accountable
on how they vote on border security issues.
And then just turning to politics for a brief second. I think that since this
is an election year, you really will not see that many opportunities for new
legislation. Last year was a very busy year with the 9/11 Commission
legislation. That was a mammoth piece of legislation that the Department is
still, and will for several years be, spending time implementing. 68
However, the Senate Finance Committee is preparing a Customs and
Trade Authorization bill. The Ways & Means Committee in the House will
hold their hearings this summer. We expect a vehicle to start moving in the
fall, but probably not until the following year will you actually see a bill
come to the floor. But that could be a vehicle for addressing some of these
issues.
We talked about thieves. I am firmly convinced that the APHIS issue is
something that has to be addressed from a legislative perspective. The other
thing in this election year that it is really important for the business
community to get out there and talk about is the importance of NAFTA and
why NAFTA needs to be continued. This political rhetoric that we are
hearing from various campaigns and certain corridors needs to have a
counter-punch. The U.S. Chamber is at the forefront of getting out there and
saying that NAFTA is important to the United States economy, it is
important to American businesses. It means jobs, and this also means jobs in
Canada.
And so I think it is incumbent that the business community get out there
and make this case, and that we work cooperatively with Department of
Homeland Security on finding security measures that really do not impact
trade; that we work together with them to find innovative approaches because
I do not think security is going away. I do not think, from my interaction with
Congress, that seven years out from 9/11 that Congress has forgotten about
this. This is very much on their agenda. When you walk into the Committee
on Homeland Security's offices, the first thing that you are confronted with
are four-foot posters of the towers, the twin towers being attacked, and
posters of the Pentagon being attacked. This is something that members of
Congress think about on a daily basis. They hear about it from their
constituents. They are very concerned. And so I do not think that there is
really a political will to roll back a lot of security measures altogether, but
68
See generally Open Letter to the Members of The United States House of Representatives
Re: 9/11 Commission Recommendations Act of 2007,
http://www.uschamber.com/issues/letters/2007/070109_911_recommendations.htm (last visited
January 25, 2009) (letter from the executive vice president for Government Affairs expressing
the Chambers commitment to fighting the 9/11 Commission legislation).

52 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
there can be a way to think about how we can do this in a smarter and more
efficient way and a way that does not inhibit trade.
Thank you very much.
MR. ROSE: Next is Tom Garlock, who is the general manager of the
Niagara Falls Bridge Commission which is responsible for the Rainbow
Bridge, the Whirlpool Rapids Bridge, and the Livingston Queens Bridge
going across the Niagara River.
CANADIAN SPEAKER
Thomas Garlock ‡
MR. GARLOCK: Thank you, Ron. Just a little further explanation of
what we are. We are a binational compact entity. 69 We work equally in the
interests of Canada and the United States. We are a public benefit
corporation and a member of the Public Border Operators Association, and
that is the 11 organizations operating 10 of the major crossings, primarily
between Ontario and Michigan, and Ontario and New York. 70
I have been the general manager at the Niagara Falls Bridge Commission
since November of 2000, and I will share with you that the only trepidation
that I experienced when I was considering taking the position was, ‘gee, am I
going to be bored?’ Needless to say, that has not been the case.
‡
Thomas E. Garlock is the General Manager of the Niagara Falls Bridge Commission, the
bi-national entity that owns, operates and maintains the Rainbow, Whirlpool Rapids and Lewiston-Queenston
Bridges spanning the Niagara River between Canada and the United States.
The Commission’s crossings carry the second highest volume of traffic on the Canada-United
States Border. Appointed as the fifth General Manager by the Commission in November of
2000, Mr. Garlock previously held positions in New York State Government and business.
Mr. Garlock is a director and past president of the Public Border Operators Association
(PBOA), a member of the Board, treasurer and past chairman of the Niagara Falls, Canada,
Chamber of Commerce, a member of the Board of the Niagara Tourism & Convention Corporation
and a member of the Board of WNED, Public Television, Buffalo-Toronto.
69
See Niagara Falls Bride Commission, What is the NFBC?,
http://niagarafallsbridges.com/what_is_nfbc.php3 (stating “the 1938 U.S. Congressional Third
Session created the Niagara Bridge Falls Commission as it currently is constituted” and “the
Extra Provincial Corporations Act of the Province of Ontario, Canada licenses the NFBC”).
70
See Paul J. Koessler, The Western Hemisphere Travel Initiative: Perspectives of a
Community on the U.S.-Canada Border, (Jul. 2007) available at
http://homeland.house.gov/SiteDocuments/20070720115534-77386.pdf, (oral testimony to
The House Committee on Homeland Security, stating “[T]he Peace Bridge is a member of the
Public Border Operator Association (PBOA) which represents nine publicly owed border
crossings between the Province of Ontario and the States of Michigan and New York.”).

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 53
The situation that I found at the border in the months prior to September
of 2001 was very, very different. The U.S.-Canada border had been
historically understaffed by the United States. 71 All of the border operators
were constantly talking to Washington about additional staffing. All of the
emphasis was on the border of Mexico. 72 But I remember almost every day
the very prophetic words of Mark Romoff, one of Steve Brereton's
predecessors, a consul general in Buffalo, 73 when he told me, ‘be careful,
Tom, what you wish for. More inspectors may just bring more inspection.’
And I think about that almost every day.
The growing NAFTA generated volume and regularly experienced delays
at the borders, as did our tourism and casual travelers. In Niagara, of course,
tourism is very, very important to communities on both sides of the river, 74
and so we would be very concerned at the height of the summer when people
were sitting in their automobiles for an extended period of time trying to
cross.
Then came the tragic events of that September 11, and things did start to
change. 75 We have seen a significant increase in U.S. personnel at the
border. 76 There is no question that there are thousands more being deployed
by CBP and Border Patrol and other agencies to address the issues of the
Canada-U.S. border. 77 But again, thinking back to Mark's words, the intensity
and length of inspection has grown dramatically, as well over those last
number of years. 78 And so even though there may be more capacity to handle
more volume, it still leads to significant queues. And as David pointed out,
71
See Lisa M. Seghetti, Border Security: U.S.-Canada Immigration Border Issues, CRS
Report for Congress, Order Code RS21258 at 2, (Dec. 2004) available at
http://www.ndu.edu/library/docs/crs/crs_rs21258_28dec04.pdf (“[C]ompared to its southern
counterpart, the northern border historically has been understaffed and lacked the necessary
infrastructure to adequately screen individuals seeking entry into the United States”).
72
Id.
73
See Government of Canada: Stephen Brereton Biography,
http://www.canadainternational.gc.ca/buffalo/officesbureaux/con_gen_bio.aspx?lang=eng&menu_id=261&menu=L
(last visited January 25,
2009).
74
See Niagara Economic Development Corporation, Key Industries,
http://www.niagaracanada.com/content/?page=KeyIndustries (last visited Oct. 13, 2008).
75
Alan D. MacPherson & James E. McConnell, A Survey of Cross-Border Trade at a Time
of Heightened Security: The Case of the Niagara Bi-National Region, 37 AM. REV. CAN.
STUD. 301, 302-303 (2007).
76
Press Release, Customs and Border Protection, CBP Border Patrol Agents Increase
Northern Border Security (Dec. 30, 2003) available at
http://www.cbp.gov/xp/cgov/newsroom/news_releases/archives/cbp_press_releases/122003/1
2302003.xml
77
Id.
78
See William B. Cassidy, Bordering on Frustration, Traffic World, Dec. 2007, at 16.

54 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
some of the wait times were just horrendous. 79 And we will tell you that in
the months since then, we have worked closely with border operators with
CBP to at least settle upon a very accurate measure of wait time. 80 And so we
are hoping to avoid that situation that I think Paul mentioned in the earlier
session. You look at the CBP website, and they cannot tell you how long the
wait is going to be. 81
At the very least, we need to make sure that users know what they are
going to confront at the border. And the public border operators are
committed to making sure that the public knows what the situation is so they
can make some decisions. We work closely with the Peace Bridge Authority
to make clear what the conditions are on all four bridges over the Niagara
River, and so our customers can choose the one that best suits their needs
given the day and the hour. 82
The infrastructure in September of 2000 was already very ageing. 83 My
commercial bridge, the Lewiston-Queenston, opened to traffic in 1962 84 and
there had been very, very little change to the crossing in the intervening 40
some years. 85 This was typical of what we saw all the way along the border. 86
Then finally, as has been said by other speakers, security was overriding
facilitation very, very aggressively. 87 Well, what has happened in the
intervening years? I can tell you that there has been more the $350 million in
investment, primarily in port structure, and in some cases, crossings among
the PBOA members. 88 At our crossing we have redacted the Lewiston-
Queenston. It is now five lanes that flex in either direction. 89 And in
cooperation with the government of Canada, the province of Ontario, and the
Commission, we have spent more than $60 million to do exactly what was
referenced earlier in making sure that FAST means something. And now if
79
See Ontario Trucking Association Press Release supra note 36.
80
See U.S. Customs and Border Protection, CBP Border Wait Times,
http://apps.cbp.gov/bwt/ (Providing a to-the-minute estimation of wait times).
81
Id.
82
See Niagara Falls Bridge Commission, Traffic Conditions,
http://niagarafallsbridges.com/traffic_conditions.php3 (last visited Oct. 13, 2008).
83
See Niagara Falls Bridge Commission, supra note 69.
84
Id.
85
Id.
86
Id.
87
Dunniela Kaufman , Does Security Trump Trade?, 13 L. & BUS. REV. AM. 619, 625
(2007).
88
See generally Kathlyn Horibe, No Shortage of Challenges for Cross-Border Trade,
CANADIAN SAILINGS, Jun. 30, 2008, available at
http://www.canadiansailings.ca/Archive/tabid/120/selectedmoduleid/500/ArticleID/16120/Def
ault.aspx (Discussing how government entities have invested over US$3 billion in infrastructure
over the last sever years, where cross-border programs have also benefited and shown
positive return on investment).
89
Niagara Falls Bridge Commission, supra note 69.

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 55
you are FAST load, you get into a dedicated lane about a kilometer-and-ahalf
back from inspection, and you can cross very, very efficiently.
As an aside for personal users, we have dedicated the Whirlpool Rapids
Bridge to NEXUS users only. 90 The traffic jam on the Whirlpool is three
cars, and it is as close as you will get to how the border with 50 years ago as
you will find anywhere.
But going forward, not only are there dramatic improvements planned for
the Peace Bridge, but at the Blue Water as well, we have $45 million of
construction underway at the Queenston Plaza with another $70 million to
follow shortly we hope. 91 Over the next five to ten years, even absent a new
Detroit River international crossing, there is about a billion dollars that is
planned to be expended. Having said that though, infrastructure will not cure
the facilitation problem in and of itself. It is a very important piece, but there
has to be a will to manage the infrastructure in a very intelligent way.
I will give you one brief example. As we are rebuilding Queenston,
Canada Food Inspection Agency has had a facility there since the mid
1980s. 92 The best we can determine, they have had 11 offloads of animals
into this facility since the year 2000. But on a very limited footprint they are
insisting that we spend upwards of $1.5 to $2 million to build them a new
facility.
They have acquiesced in moving it off the footprint if that is absolutely
necessary, but they have rejected our recommendation that they do a joint
agreement with USDA, who is just one mile from the bridge on the other side
of the river. 93 And to have the Canadians that go to the USDA facility and do
his or her inspection in a facility that is far superior to the one that they have
in Queenston right now. The answer comes back no. We insist on doing it on
Canadian soil. And this goes back to what Jason and David said about
preclearance. It is a good idea. Obviously it has some challenges, but if
people in both countries work creatively, I am confident that they can be
overcome, and it would have made for a far more efficient crossing at the
Peace Bridge, but also at the Thousand Islands Bridge where the plan was for
90
See Niagara Falls Bridge Commission, NEXUS holders take Whirlpool Rapids,
http://niagarafallsbridges.com/which_bridge.php3 (last visited Oct. 13, 2008).
91
2007, Annual Report, Niagara Falls Bridge Commission, available at
http://niagarafallsbridges.com/NFBCAnnual.pdf.
92
Canadian Food Inspection Agency, Organization Details,
http://pub.directinfo.agr.gc.ca/cgi-bin/x500_OrgUnitDet?lang=0&DN=OU=AP-PA,OU=CA-
SC,OU=OPOFO-BOPON,OU=OFVPO-BVPOP,OU=CFIA-ACIA,O=GC,C=CA (last visited
Oct. 25, 2008).
93
See United States Department of Agriculture, Animal and Plant Health Inspection Service,
Port Veterinarian List,
http://www.aphis.usda.gov/import_export/animals/animal_import/animal_imports_portvets.sht
ml#BN (last visited Oct. 13, 2008).

56 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Canada Border Services Agency was to abandon their site at Lansdowne
which is very, very limited, and move to the U.S. side in Alexandria Bay. 94
There has to be a will to thin the border, and we are not seeing that,
particularly out of Washington at this point. 95 And certainly Ottawa is
loathed to appear to be soft on security for very good reasons. The other issue
with infrastructure, we have 15 lanes at Rainbow Canada, we have 18 lanes
at Rainbow U.S. 96 As I say, there has been more personnel added to the
border on the U.S. side, but in Canada, it is unusual to see more than seven or
eight of those lanes staffed going into Canada. And so even though the
infrastructure has been provided, it is not solving some of the problems.
Finally, I want to end on a little bit of a philosophical note here in a
school devoted to the learning of law and the understanding of law. And I am
very proud to say that my daughter is a graduate of this fine institution. There
are many lawyers in the room, and there are many lawyers that will graduate
from this institution who will find their way to government and will be
counseling policymakers on how to make things work. It is very important to
talk about how to make things work, not how to say no, where both nations
are very concerned about their sovereignty. But we are two peoples with such
a close culture and a closely-matched set of values 97 that I think that we can
find a way to work more closely together in a way that protects our security
while also facilitating trade, tourism, and the occasional visitor.
In a free society such as Canada or the United States, at some point we are
going to have to come to grips with the simple fact that when we are free, we
will experience risk. 98 And from time to time, bad things will happen. But
how much of our freedom do we want to sacrifice to eliminate all that risk? It
is a question for both societies. It is one we are going to have to grapple with
over the next few years, and I hope everyone in the legal profession who is
counseling policymakers in both Capitols will take that to heart.
Thank you very much.
94
See Press Release, Sen. Charles Schumer, Thousand Island Bridge At Alexandria Bay
Right Place For Innovative Border Crossing Plan That Keeps Traffic Moving While Maintaining
Secure Border (May 6, 2006) available at
http://www.senate.gov/~schumer/SchumerWebsite/pressroom/record.cfm?id=260751.
95
See MacPherson, supra note 75.
96
See Niagara Falls Bridge Commission, supra note 69.
97
Colin Robertson, Canada-United States Relationship: An Example Of And An Innovation
For The World, 32 Can.-U.S. L.J. 296 (2006).
98
See Philip Shenon, Threats And Responses: Warnings; Security Chief Says Nation Must
Expect Suicide Attacks, N.Y. Times, Mar. 13, 2003, at A13 (warning that inevitable suicide
bombing attempts in the United States will be difficult to prevent).

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 57
DISCUSSION FOLLOWING THE REMARKS OF DAVID BRADLEY,
JUSTIN CONLEY AND THOMAS GARLOCK
DR. KING: Yeah. I was intrigued by the early clearance reference by
Jason Conley. And I wonder to what extent that can be the solution to some
of these difficulties. Do you have any forecast for the future of the early
clearance problem approach?
MR. CONLEY: I can say this, that, you know, from our discussion with
the Department of Homeland Security, they indicated that they had
negotiated for approximately 18 months on this issue and coming back and
forth over some. So it was a question of the privacy issues and Canadian
charter versus some of the real law enforcement needs to have actual
information about who was actually approaching and being able to vent that
information, collect that, and save that information. So I think that that
negotiation broke down, but that does not mean that you cannot have actual
cooperation, additional cooperation, and pushing some of those inspection
functions away from some of those ports of entry. And I think that you have
seen it in other areas. You are seeing it in -- import safety was going to
become a very important area just as border security has been important for
the past several years. I think import safety will be driving a lot of the crossborder
changes. You have seen it to some degree with the Container Security
Initiative. 99 We actually have U.S. Customs officials stationed at 58 ports
around the world where there is a lot of cooperation there obviating the need
for additional inspections at the U.S. port. 100
So there are examples. Preclearance for airline passengers at airports has
been standard at several airports in Canada for a long time. 101 If you ask the
Department why that is different, they say, ‘well, the airport is a sterile
environment, it is a protected environment, and somehow it is unique.’ But if
the principle works in some instances, I think we need to expand the
envelope and say where it works in other instances. How do we actually have
those inspections functions that are sufficient at the Canadian ports of entry
so that you actually do not have to have some of that intermodal cargo
scanned or inspected again when it comes into Prince Rupert, and then it
crosses again into the United States and the Midwest? I think that if you can
de-layer security in that way, it can go a long way to improve inefficiencies.
It is incumbent on all of us to think about creative solutions like that rather
99
See U.S. Customs and Border Protection, Container and Security Initiative,
http://www.cbp.gov/xp/cgov/trade/cargo_security/csi/ (last visited Oct. 14, 2008).
100
Id.
101
See Transport Canada, Preclearance Program,
http://www.tc.gc.ca/roadsafety/importation/pre/menu.htm (last visited Oct. 14, 2008).

58 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
than just saying no, no, no. We can do that, we have done it, we will do it,
but it is important to say what we will need to move forward.
DR. KING: Do we need legislation?
MR. CONLEY: I think -- Yeah. In some instances you need legislation,
but there are certain things that the Department can do with an existing
authority.
MR. BRADLEY: I would agree. I think it is not the entire solution. I am
not sure how big a solution it is. In certain circumstances, certain geographic
areas, it makes sense. It is not going to work at every border crossing. But, I
think that if CBP were being completely honest, they just do not like the
idea. They never have liked the idea. Former DHS secretary Tom Ridge
supported the idea but the department seemed to have other ideas. Secretary
Chertoff is clearly less interested in this measure.
So I think there is a cultural or a philosophical opposition. I am told CBP
has concerns about the preclearance of air passengers heading to the US that
has taken place for years at the international airports in Toronto, Montreal, or
Vancouver, even though it seems to work quite well. So again, it comes back
to, I think, the philosophy and the culture of security as opposed to trying to
find solutions that may make sense. There are legal issues, too, obviously.
MR. LAWTON: All of the presentations were really good.
David, in particular, I was interested to know whether you have a handle
or a feel for how much fuel is used up in the waiting process.
MR. BRADLEY: Yeah. Well, I cannot give you a number, but I can tell
you it is substantial. 102 It is a real issue in cities like Windsor where, there is a
great concern over greenhouse gas emissions and pollutions from trucks
having to sit in line waiting to cross. 103 The environmental argument seems to
get lost in all of this.
MR. CONROY: Hugh Conroy from the Whatcom Council of
Governments in Washington State. Maybe this is a question for both Jason
and David.
There has been a lot of discussion in both panels about the pertinence of
integrated manufacturing across the border and the ability in those cases for
manufacturers to lean on their suppliers to also get involved in programs like
C-TPAT. But you know, it is my sense that it is maybe not the case across
102
GERALD DIAMOND & MICHAEL PARKER, PRELIMINARY AIR QUALITY ASSESSMENT
RELATED TO TRAFFIC CONGESTION AT WINDSOR’S AMBASSADOR BRIDGE 6 (Government of
Ontario, Ministry of the Environment 2004) (finding that when truck traffic [was idling], the
increase in particulate matter was sufficient to increase the Air Quality Index by one complete
level).
103
See, The Weather Network, Air Quality, A Provincial Perspective,
http://www.theweathernetwork.com/index.php?product=airquality&airqualitycode=on&pagec
ontent=airqsummary (last visited Oct. 16, 2008) (designating Windsor as the “Smog Capital of
Canada”).

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 59
the border and maybe even at the border crossings that all suppliers or all
shippers of goods have this incentive to get into a program like C-TPAT. For
the rest of the freight movements, are there any examples you are aware of
where either inspection agencies or carriers have managed to convince
shippers that there are incentives or reasons for them to engage in these
programs to the effect of greater enrollment and just getting more traffic into
those programs?
MR. BRADLEY: From-time-to-time on a case-by-case basis, there has
been examples of that. I would say that the most productive period for those
sorts of discussions would have been about four or five years ago when the --
and I am only speaking from a trucking perspective -- when there was an
under-capacity of trucking service available, consequently the price of
shipping across the border started to go up, and carriers were charging crossborder
fees and those sorts of things. 104 That is what got shippers' attention at
that point, it was a productive period. Today you have got an over-capacity
supply, rates are being cut, prices are coming down. 105 That is not a good
thing from a truckers’ perspective. Unless the increased costs of border
crossing are being transferred to the customer directly, they do not see it.
MR. CONLEY: We have quite a few members who participate in the C-
TPAT who are major importers, especially those sourcing in Northeast
Asia. 106 We know that CBP has leaned on a lot of companies to participate,
especially the major importers, because it goes to the point that Paul from
Ford made earlier. That if you actually have the high volumes of trade, if you
look at the top 10 containerized importers, Home Depot and Wal-Mart and
Target, and if you have those guys taken care of, then you have shrunk the
haystack. And so it helps Customs better align their resources to address
those that still present a heightened risk.
MR. ROBINSON: Michael Robinson from Fasken Martineau in Toronto.
Could any of the panelists give us an update on what is going on with the
second crossing at Windsor-Detroit? It seems to have gone to sleep for a
while. I do not know whether it is political. The last word was we are going
to get the bridge, and then supposedly governments have to cooperate and are
not. So I just do not know what is going on.
MR. BRADLEY: Well, I will try to answer that. Again, it comes back to
when do promises mean something. The timelines for the release of the
104
Larry McKeown & Willa Rea, Wheels of change: Employment in Canada's trucking
industry, 1988-1994, STATISTICS CANADA, http://www.statcan.gc.ca/pub/61-532-x/3500-
eng.html, (stating “[T]he unemployment rate for truckers between 1991 and 1993 averaged 15
per cent”).
105
Cf. id., (stating, “[T]he year 1994 shows a drop in the average number of months of job
tenure. Possible explanations include the hiring of more drivers as business improves and the
retirement of older drivers” and “ the demand for truckers is increasing”).
106
Customs and Border Protection, supra note 80.

60 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
DRIC report -- I just keep extending. The timeline keeps being pushed out. I
recall two government press releases that came out within 48 hours of each
other a few years back where the timeline for completion increased by an
entire year between the issuance of the first and second releases.
Nevertheless, the situation as I understand it now is that we will see the
final DRIC report this spring. 107 Spring lasting until -- what, is it June 22nd --
and I have been reminded of that by officials at both levels of government.
And so I am hoping that at that point we will see the report and it will say
where the bridge is going to be. It will be a big surprise to everybody of
course. However, the question is whether the politicians at from the senior
levels of government will have the will to act expeditiously on the
recommendation. This issue has been so fraught with local politics in
Windsor. I know the mayor of Windsor, and we have had good discussion on
this issue and collaboration on others. But we have reached the point now
where the senior levels of government have got to say, “we have listened, we
have consulted, this is the recommendation, we are getting on with it.” It
remains to be seen whether the will is there to do that.
My forecast is still it will be 30 years before we see a second bridge, and I
desperately hope I am wrong this time. All the latest political commitments
are that the bridge will be constructed by 2013. 108 I hope they are right.
MR. CONLEY: Yeah. I would not add anything to that other than the
transportation infrastructure is across the country at major border crossings
that was needed yesterday. And that actually obtaining funding for that and
the design and construction of that infrastructure can be exceedingly and
frustratingly slow.
But it is something that the U.S. Chamber thinks is very important. That
particular crossing has such a high volume of the U.S. trade with Canada 109
that we think that is a project of national significance that deserves special
attention. So it is one of the things we will be advocating for is that
additional capacity.
MR. CARMODY: Additional question over here. My name is Chios
Carmody, I teach at the University of Western Ontario.
We have been hearing a lot over the last couple of months about the
possibilities of renegotiating NAFTA, and it may be that as time progresses,
in fact, that idea of renegotiation takes on more and more substance. If we
107
See, Detroit River International Crossing,
http://www.partnershipborderstudy.com/reports.asp (last visited Oct. 16, 2008).
108
Detroit River International Crossing, Frequently Asked Questions, March 2008,
http://www.partnershipborderstudy.com/pdf/FAQ_March_2008-B.pdf, pg. 5 (last visited Oct.
16, 2008).
109
Cf, U.S. Dep’t of State, Background Note: Canada,
http://www.state.gov/r/pa/ei/bgn/2089.htm, (last visited Oct. 17, 2008) (the annual volume of
trade crossing the Ambassador Bridge is equal total annual U.S. exports to Japan).

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 61
are to renegotiate, and some Canadian commentators have been talking about
the possibility of renegotiation, 110 is there anything that we currently have in
our trucking or transport arrangements that might possibly be included in an
enhanced version of that, at least on a sort of wish list basis so that they
become binding commitments in law rather than things that we simply talk
about from a policy perspective?
MR. BRADLEY: Well, that is the issue. There is a transportation chapter
in the current NAFTA agreement. However, the decision by the Clinton
administration to unilaterally ignore the requirement to open the Southern
border -- . 111 that was to have taken place about 10 years ago 112 There is a
US-Mexico pilot underway now, so we will see but it is a matter of great
political angst in some of the southern states. Mexico-Canada trade is
growing, but it is such a small part of our economy that that is not a really
big deal. 113 I have a few carriers going to Mexico, but there will never be that
many.
The lack of resolution to the southern border issue has stymied the
trilateral discussions that were to have taken place to harmonize regulations
across the border in terms of truck weights and dimensions, safety
regulations, those sorts of things. There has been no progress on those
matters.
So from my perspective, it would be, let us get back to what we agreed to
in 1989 and just do it. So that is where we are at.
MS. ROSS: Tom, you made the remark that you are working—I think you
said CBP—on trying to unify the definition of wait times. I wonder if you
can take a minute and expand on that because I know that that has been a
thorny issue at both borders.
MR. GARLOCK: Yes, and in fact, CBP told us in January that they are
thinking about taking the formula that we have developed at the Niagara
Falls Bridge Commission, not only across the northern border but across the
southern border as well. And what it consists of is a very detailed
examination of mile markers leading up to the PIL, computation of how
many PILs are open, and the average inspection time. And we found the
formula to be accurate within two or three minutes, and this is true at our
110
Jeffrey Simpson, Whatever the Fears, NAFTA’s Here To Stay, GLOBE &MAIL, Apr. 22,
2008, at A15.
111
See, North American Free Trade Agreement, http://www.nafta-secalena.org/DefaultSite/index_e.aspx?DetailID=78
(last visited Oct. 17, 2008).
112
Id.
113
DFAIT, Canada’s Merchandise Exports,
http://www.international.gc.ca/eet/pdf/PFACT_Annual_MerchTrade_by_Country_Eng_Aug2
008.pdf (last visited Oct. 17, 2008) (In 2007, only 1.101% of Canada’s merchandise exports
went to Mexico, compared with 79.035% destined for the United States).

62 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
bridges, at the Peace Bridge as well. I know that they are starting to roll out
the formula at the Michigan-Ontario crossings as well.
Obviously, it does not do anything to reduce the queue. But I think if it
creates awareness among officers from both agencies, just what the queue is,
and we have eliminated the disagreement about what constitutes the queue
that hopefully human nature being what it is, gee, I do not want my betters in
Washington or Ottawa looking at these report times and wondering what is
wrong with my report. And it is working very, very well. CBP is taking it
seriously. They have assigned the director of the eastern Great Lakes to roll
this out along the northern border. And as I have said, they have started to
look at using it on the Mexican border as well. I think this summer you are at
least going to be able to count on the accuracy on the wait times that both the
operators and the CBP are announcing, and the CBSA is starting to buy into
it as well.
MS. COOK: Hi. My name is Jennifer Cook, I am from the Consulate in
Denver. My question is for Jason, but also other people on the panel.
From a communications perspective, you discuss how the business
community really needs to get out there and explain the implications and the
impacts that are going on in the case of the political rhetoric. Well, the
political rhetoric has put a face to the out-of-work, unemployed factory
worker in Ohio. What are the barriers in the business community and also
government communicators like me who are trying to illustrate the issues?
Why has it been so difficult for us to get the word out?
MR. CONLEY: You know, the U.S. Chamber has been very active on
messaging the importance of all free trade agreements. We actually have a
grass roots campaign called TradeRoots. 114
And so we have been working in getting small businesses in locations
across the country to say why trade is important to them. And so we have
been activating that group for all – for DR-CAFTA, for the Columbia Free
Trade Agreement, and for the Korea Free Trade Agreement. 115 And I think
that that sort of grass roots effort where you just do not have people in
Washington, and to have the Chamber and NAM and others to say, ‘well,
free trade's great and NAFTA's great.’ That is not enough. We need those
small businesses who are employers in important congressional districts out
there talking about why this is important.
And then I think it is also important to talk about, you know, why
NAFTA matters, not just in the border states, but in Kentucky and Tennessee
and in Florida and other states where you just may not think NAFTA and
114
See U.S. Chamber of Commerce: Trade Roots, http://www.traderoots.org/ (last visited
January 25, 2009).
115
See U.S. Chamber of Commerce: Trade Roots, Faces of Trade,
http://www.traderoots.org/state_faces_trade.jsf?issueId=2216 (last visited Oct. 25, 2008).

Bradley, Conley & Garlock—Doing Business Across the Canada-United States Border 63
think Canadian trade when you think about those states. But actually the
Canadian Embassy actually has a very good map. It has been one of the
single most useful pieces of material, you know, that we have been about to
set up and show Congress and talk about and target our message to certain
members. And until a member actually sees them, they say, ‘well, wow I did
not realize that was important in my state, that that meant jobs, you know, in
Hazard, Kentucky,’ or wherever that may be.
And so I think it is important to sort of dig down, and you just cannot
have all organizations talking to one another in Washington. Well,
conferences like this are great, and similar ones in D.C. happen all the time.
It is important to get out there in the field and talk about that and have small
businesses at the forefront saying why this is important to us.
DR. KING: I agree.
MR. ROSE: Thank you all very much.
(Session concluded.)

REMARKS FROM CANADIAN AMBASSADOR WILSON
Speaker - Hon. Michael Wilson
INTRODUCTION
Lee Friedman
MS. FRIEDMAN: Welcome to today's City Club forum. My name is Lee
Friedman, and I have the privilege of serving as the president of The City
Club of Cleveland.
For 95 years and from the heart of Downtown Cleveland, Ohio, 1 The City
Club has served as one of the nation's premiere public podiums for civic
dialogue about the most important topics of the day. 2 It is my honor this
afternoon to introduce our distinguished guest.
The Honorable Michael Wilson serves as the Canadian Ambassador to the
United States. 3 He describes the Canadian-American relationship as one
defined by family and friends, our shared history, and our commitment to
innovation and economic prosperity.
Prior public life, Ambassador Wilson's career was in investment banking
with responsibilities in corporate government and international finance. 4 At
UBS Canada, one of the world's leading financial institutions, he oversaw all
operations in Canada, which included the investment bank, pension fund
management, and wealth management businesses. 5
1
See The City Club – History, http://www.cityclub.org/content/aboutus/index/history.asp
(last visited Sept. 29, 2008) (noting that The City Club of Cleveland was incorporated in
1912).
2
See generally The City Club – About Us,
http://www.cityclub.org/content/aboutus/index/index.asp (last visited Sept. 29 2008) (noting
that The City Club is the longest uninterrupted forum series in the country and that most of the
major issues that have affected American life in the 20 th century have been discussed at The
City Club).
3
Embassy Washington: The Ambassador, http://geo.international.gc.ca/canam/washington/ambassador/default-en.asp
(last visited Sept. 28, 2008).
4
Id.
5
Id.
65

66 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Before joining UBS in 2001, Ambassador Wilson was responsible for
RBC Financial Group's institutional asset management business. 6 Serving as
a vice chairman of RBC Dominion Securities, his responsibilities included
senior client relationships and advising Canadian and international
companies as well as governments. 7
The Prime Minister of Canada, Stephen Harper, has said that the
Ambassador's in-depth knowledge and experience in the financial sector and
in government make him a strong advocate for Canada in negotiations with
our most important bilateral partner. 8
Ambassador Wilson began his career in government in 1979 when he was
elected to the Canadian House of Commons. 9 After several years, he was
appointed Minister of Finance and then Minister of Industry Science and
Technology. 10 In his later role as Minister for International Trade, he
participated in negotiating the North American Free Trade Agreement. 11
Ambassador Wilson is active in a number of professional and community
organizations, including the NeuroScience Canada partnership and the Center
For Addiction and Mental Health. 12 He is an officer of the Order of Canada
and has honorary degrees from the University of Toronto and York
University. 13
Please join me in welcoming the Honorable Michael Wilson, the
Canadian Ambassador to the United States.
6
7
8
Id.
Id.
Press Release, Office of the Prime Minister, Prime Minister Announces Diplomatic
Nominations (Feb. 16, 2006), http://pm.gc.ca/eng/media.asp?id=1020.
9
E.g., Embassy Washington: The Ambassador, supra note 3.
10
See id.
11
See Michael Wilson Mission: Washington, CBC NEWS ONLINE, Feb. 17, 2006,
http://www.cbc.ca/news/background/canada_us/mission_washington.html (discussing Ambassador
Wilson’s involvement in developing North American Free Trade Agreement).
12
See Embassy Washington: The Ambassador, supra note 3.
13
Id.

Hon. Michael Wilson—Remarks from Canadian Ambassador 67
CANADIAN SPEAKER
Honorable Michael Wilson *
AMB. WILSON: Good afternoon ladies and gentlemen, Admiral
Crowley. It is a great pleasure for me to be with you today. And, Lee, thank
you very much for your very kind introduction. It is a great pleasure for me
to be here for a particular reason, and that is that the relationship that we
have between the United States and Canada is extremely important. It is our
number one relationship by far, but it is also particularly important here
because if you look out from the tall buildings, you can practically see
Canada on the other side of Lake Erie. I am delighted to be here in Cleveland
to be able to discuss with you some aspects of this.
Now, I do not need to remind anybody here that this city is the cultural,
industrial, and financial center of Ohio. 14 And it is one of the most livable
cities in the United States. 15 It is also, and I saw this with my very eyes, the
Rock and Roll capital of the world. 16 And just to the remind you that there is
a little element of Canada in that, one of your recent inductees this year to the
Hall of Fame was Leonard Cohen, great Canadian poet, novelist, and
troubadour, 17 and he has probably got one of the best voices in the
entertainment business today.
*
Michael Wilson assumed his responsibilities as Ambassador on March 13, 2006, becoming
the 22nd representative of Canada to the United States. Prior to taking up his current position
in Washington, Ambassador Wilson was Chairman of UBS Canada, an operating division
of UBS AG, one of the world's leading financial institutions where he oversaw all UBS operations
in Canada, which included the Investment Bank, pension fund management, and Wealth
Management businesses. Prior to joining UBS in July 2001, Ambassador Wilson was responsible
for RBC Financial Group's institutional asset management business. He also served as a
Vice Chairman of RBC Dominion Securities, responsible for senior client relationships and
advice to both Canadian and international companies and governments.
14
See Cleveland – Ohio History Central,
http://www.ohiohistorycentral.org/entry.php?rec=687 (last visited Sept. 28, 2008) (noting
Cleveland’s importance as an industrial, economic and cultural center in the Midwest).
15
See Press Release, Economist Intelligence Unit, Vancouver Tops Livability Ranking
According to a New Survey by the Economist Intelligence Unit (Oct. 3, 2005),
http://www.eiuresources.com/mediadir/default.asp?PR=660001866 (listing Cleveland as one
of the highest scoring cities for livability in the U.S.).
16
See MIKE OLSZEWSKI, RADIO DAZE: STORIES FROM THE FRONT IN CLEVELAND’S FM AIR
WARS 317 (2003) (explaining Cleveland’s image as the “rock ‘n’ roll capital of the world”).
17
See Press Release, Rock and Roll Hall of Fame and Museum, The Rock and Roll Hall of
Fame Announces its Inductees for 2008 (Dec. 13, 2007),
http://www.rockhall.com/pressroom/2008-inductee-announcement (announcing that Leonard
Cohen was one of the 2008 inductees to the Rock and Roll Hall of Fame).

68 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Now you have had some setbacks in your economy, and we have suffered
some of those setbacks in Canada, so we do have something in common
here. 18 But looking past that, I think one of the things that we should never
forget is the amount of dynamism, the experimentation, and the creativity
that has made this state great over many, many years and will continue to do
so. 19 Your entrepreneurial vigor, your business innovation, your persistence
has made you very successful in the international business world. 20 In fact,
Ohio is the eighth largest exporter in the United States, 21 and the number 2
exporter to Canada. 22 I am not going to tell you who is number one because I
do not want to draw any comparisons that you might not be happy with. 23
But they do not live too far away.
Canada has become your most important business partner. 24 Canada is
your top export market. 25 And I do not need to tell people in this room today
that Canada and the United States do many things together. 26 Obviously we
do a lot of trading together, but also in the defense world, in the foreign
diplomacy world, we are good partners and we work together. 27 Sometimes
we think and act in a like-minded way, sometimes we think and act
18
See generally Brett Popplewell & Chris Sorensen, Bleakness Reflected in Glass of
House Red; Financial Crisis Begins Seeping into All Corners of Canada's Economy, TORONTO
STAR, Oct. 7, 2008, at B01, available at 2008 WLNR 19030176 (discussing global financial
crisis’ effects on Canadian economy).
19
See Ohio.gov, Job Creation in Ohio,
http://csa.das.ohio.gov/TurnaroundOhio/JobCreationinOhio/tabid/70/Default.aspx (last visited
Oct. 11, 2008) (noting that creativity and innovation built Ohio).
20
See generally Exports, Jobs, and Foreign Investment: Ohio,
http://www.trade.gov/td/industry/otea/state_reports/ohio.html (last visited Oct. 8, 2008) (discussing
Ohio’s foreign investments and exports).
21
See id. (noting that Ohio recorded the eighth largest export total of all 50 states in 2007).
22
International Business Information – The Export Patterns of States of the U.S.A.,
http://www.ic.gc.ca/epic/site/ibi-iai.nsf/en/bi18597e.html (last visited Oct. 8, 2008).
23
See id. (noting that Michigan is the largest state exporter to Canada).
24
See Embassy Washington, 2005 Ohio Trade Fact Sheets,
http://geo.international.gc.ca/can-am/washington/state_trade_2005/ohio-en.asp (last visited
Oct. 8, 2008) (reporting that Canada is Ohio’s most important trade partner).
25
See Embassy Washington, 2007 Ohio Trade Fact Sheets,
http://geo.international.gc.ca/can-am/washington/state_trade_2007/ohio-en.asp (last visited
Oct. 8, 2008) (noting that Canada is Ohio’s largest foreign export market).
26
See generally U.S. Department of State, Background Note: Canada,
http://www.state.gov/r/pa/ei/bgn/2089.htm (last visited Oct. 14, 2008) (“The relationship
between the United States and Canada is the closest and most extensive in the world.”).
27
See Foreign Affairs and International Trade Canada – Defence, Security and Foreign
Policy, http://geo.international.gc.ca/can-am/main/defence/default-en.asp (last visited Oct. 8,
2008) (describing the United States as Canada’s most important ally and defence partner).

Hon. Michael Wilson—Remarks from Canadian Ambassador 69
differently. 28 But we try to manage these differences through dialogue,
through understanding, and that is a major part of my job in Washington.
I am grateful to the Canada-United States Law Institute and The City
Club of Cleveland for the opportunity to comment briefly on the Canada-
U.S. relationships from three points of view. The first is the challenges
involving and maintaining border security without inhibiting the free flow of
people, goods, and services. 29 Second, the economic growth in Ohio through
trade with Canada. 30 And third, Canada's commitment to defending our
continent and its values. 31
Now I base my comments on two premises that I think underpin the
theme of this year’s Canada-U.S. Law Institute conference. The first is that
we must make sure that the Canada-U.S. border provides gateways to
prosperity, not cumbersome checkpoints that stifle our competitiveness. The
second is that we must move beyond the idea of sharing the longest
undefended border in the world. We now share the longest secure border in
the world, and I want to talk about that a little later.
First on maintaining a secure border without jeopardizing two-way trade
between Canada and the United States. Most of you are probably aware that
Canada is the United States' most important partner in economic growth. 32 It
is the largest bilateral relationship in the world today. 33 Since the Canada-
28
See generally Ian Austen, Simmering Trade Disputes Will Greet Bush in Canada, N.Y.
TIMES, Nov. 27, 2004, available at
http://www.nytimes.com/2004/11/27/business/worldbusiness/27canada.html?fta=y (discussing
the trade disputes between the United States and Canada within an overall good trade relationship);
Press Release, USTR, US, Canada Reach Agreement on Lumber Dispute (Apr. 27,
2006),
http://www.ustr.gov/Document_Library/Press_Releases/2006/April/US,_Canada_Reach_Agre
ement_on_Lumber_Dispute.html (discussing softwood lumber accord between United States
and Canada).
29
See generally ABA Immigration and Nationality Committee, The Canada-U.S. Border:
Balancing Trade, Security and Migrant Rights in the Post-9/11 Era, 19 GEO.IMMIGR. L.J. 199
(2005) (discussing issues of balancing security and free-flow of goods across the Canada-U.S.
border).
30
See generally Embassy Washington, 2007 Ohio Trade Fact Sheets, supra note 25 (discussing
the extensive trade relationship between Ohio and Canada).
31
See generally About DND/CF – National Defence and the Canadian Forces,
http://www.forces.gc.ca/site/about/index_e.asp (last visited Oct. 13, 2008) (explaining that the
Canadian Forces work with the United States to defend North America through arrangements
such as the North American Aerospace Defence Command (NORAD)).
32
See Embassy Washington: The Canada-U.S. Trade and Investment Partnership,
http://geo.international.gc.ca/can-am/washington/trade_and_investment/trade_partnershipen.asp
(last visited Oct. 10, 2008) (noting that Canada and the United States share one of the
world’s largest and most comprehensive trading and investment relationship).
33
See AGRICULTURE AND AGRI-FOOD CANADA, TRADE IN GRAINS AND OILSEEDS BETWEEN
CANADA AND THE UNITED STATES 1 (2007), http://www.agr.gc.ca/itpddpci/country/Trade_in_Grains_e.pdf
(“Canada and the United States enjoy the largest bilateral

70 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
U.S. Free Trade Agreement was signed in 1988, there is no doubt that our
bilateral trade has been the key to this growth. 34 During those 20 years,
Canada-U.S. trade has tripled. 35 Investment flows have also increased
substantially. 36 In this context, the Canada-U.S. border is a challenge for both
of us. And I would like to explain why.
The border is huge, much longer than the distance from Cleveland to
Moscow. 37 Trade volumes are likewise huge. 38 Two-way trade crosses the
Canada-U.S. border at the rate of $1.7 billion a day, well over a million
dollars every minute. 39
In 2007, Canada bought $248 billion worth of goods from the United
States. 40 Now, we all hear a lot about the trade relationship between the
United States and China. 41 Well, China bought $56 billion from you. 42 In
other words, Canada buys nearly four times as much as China. 43 And by the
way, Mexico buys about three times as much as China. 44 So your two
trading relationship in the world.”).
34
See Canada-US Trade Relationship – U.S. Commercial Service Harrisburg,
http://www.buyusa.gov/harrisburg/can_ustrade.html (last visited Oct. 11, 2008) (“These trade
agreements have helped fuel unparalleled economic growth, with bilateral trade between Canada
and the United States nearly tripling during the past twelve years.”).
35
See id.
36
See Government of Canada, 1989 Free Trade Agreement,
http://www.canadianeconomy.gc.ca/English/economy/1989economic.html (last visited Oct.9,
2008) (noting that investments between the United States and Canada have increased greatly
since the Canada-U.S. Free Trade Agreement).
37
See generally Geobytes, City Distance Tool,
http://www.geobytes.com/citydistancetool.htm (last visited Oct. 13, 2008) (calculating the
distance between Cleveland, OH and Moscow, Russia to be 7794 km); Canadainfo, Canada &
the United States Border,
http://www.craigmarlatt.com/canada/canada&the_world/canada&us_border.html (last visited
Oct. 13, 2008) (noting the length of Canada-United States boundary to be 8891 km long).
38
See Canada-U.S. Trade Relationship – U.S. Commercial Service Canada,
http://www.buyusa.gov/canada/en/traderelationsusacanada.html (last visited Oct. 14, 2008)
(noting large trade volume between the United States and Canada).
39
See Embassy Washington: The Canada-U.S. Trade and Investment Partnership, supra
note 32 (reporting that in 2007, over $1.6 billion worth of goods and services crossed the
border every day).
40
See U.S. Department of State, Background Note: Canada, supra note 26 (reporting that
the United States exported $248.9 billion worth of merchandise to Canada).
41
See generally U.S. Department of State, Economic Relations Between the United States
and China, http://www.state.gov/p/eap/rls/64718.htm (last visited Oct. 12, 2008) (describing
the trade relationship between the United States and China).
42
Cf. Press Release, U.S. Department of Health and Human Services, Fact Sheet on U.S.
Imports from the People’s Republic of China (May 12, 2008),
http://www.hhs.gov/news/facts/importsfromchina.html (reporting that the United States exported
$65.2 billion to China in 2007).
43
See id.; U.S. Department of State, Background Note: Canada, supra note 26.
44
See generally Press Release, U.S. Department of Health and Human Services, Fact

Hon. Michael Wilson—Remarks from Canadian Ambassador 71
NAFTA partners together buy seven times as much from the United States as
China does. 45
Trade with Canada supports over seven million jobs across the United
States. 46 That is one in 25 jobs depend on free and open trade with Canada. 47
And upwards of 400,000 people a day on average cross our border going
both ways. 48 And as trade has extended freely across the border, more and
more industries, companies, and suppliers operate on both sides of the
border. 49 Assembling the parts of a single finished car, for example, can
involve, three, four, five, or more border crossings in the various stages of
manufacturing. 50 That is what we call the North American supply chain. 51 It
is the efficiency of North American supply chains that make our businesses
more competitive with Asia and Europe and spurs innovation in our
workforce. 52
Sheet on U.S. Imports from the People’s Republic of China (May 12, 2008),
http://www.hhs.gov/news/facts/importsfromchina.html (reporting that the United States exported
$65.2 billion to China in 2007); U.S. Department of State, Background Note: Mexico,
http://www.state.gov/r/pa/ei/bgn/35749.htm (last visited Oct. 9, 2008) (reporting that Mexico
imported $141 billion from the United States 2007).
45
See generally U.S. Department of State, Background Note: Mexico, supra note 44; U.S.
Department of State, Background Note: Canada, supra note 26; Press Release, U.S. Department
of Health and Human Services, Fact Sheet on U.S. Imports from the People’s Republic
of China (May 12, 2008), http://www.hhs.gov/news/facts/importsfromchina.html.
46
See Embassy Washington: 2007 Ohio Trade Fact Sheets, supra note 25 (reporting that
Canada-U.S. trade supports 7.1 million jobs in the U.S.).
47
See Stephen Brereton, Op-Ed., A Million Dollars a Minute, PITTSBURGH-POST GAZETTE,
June 20, 2008, available at http://www.post-gazette.com/pg/08172/891221-35.stm (reporting
that one in twenty-five American jobs are supported by trade with Canada).
48
See Blog.Cleveland.com, Bottlenecks at the Border are Taking a Toll on U.S.-Canada
Trade, http://blog.cleveland.com/business/2008/07/bottleneck_at_the_border_aging.html (July
20, 2008 00:06 EST) (noting that, on average, 400,000 people cross the Canada-U.S. border
each day).
49
See DONALD F. WOOD ET AL., INTERNATIONAL LOGISTICS 80 (2002) (noting that many
companies operate on both sides of U.S.-Canada border).
50
See Jim Prentice, Minister of Indus., Address at the Toronto Board of Trade: Check
Against Delivery (Feb. 29, 2008), available at
http://www.ic.gc.ca/epic/site/ic1.nsf/en/01926e.html (“An automotive part can cross the Canada–U.S.
border several times before it is installed in a vehicle.”).
51
See Marlene Jennings, Session 12: The Future of the Evolving, Special Canada-U.S.
Relationship: New Dimensions and Possible Future Progress and Concerns. Differing Approaches
to Our Common Values and Experiences, 31 CAN.-U.S. L.J. 385, 387-88 (2005)
(discussing shipments in North American supply chains).
52
Cf. Shawnee K. Vickery et al., The Effects of an Integrative Supply Chain Strategy on
Customer Service and Financial Performance: An Analysis of Direct Versus Indirect Relationships,
21 J. OPERATIONS MGMT. 523, 528 (2003) (noting the positive relationship between
supply chain integration and customer service and performance improvement with respect to
productivity, quality, market share, and profitability).

72 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
What has developed in many sectors is an integrated continental economy
using North American supply chains. 53 An example here in Ohio is Honda. 54
It has used new supplier opportunities with Honda Canada to develop a
supply chain model that benefits both of our countries and has resonated
throughout the company's global operations. 55 This is the North American
economic space, our path to future prosperity.
Now, why is it important? Well, today over a third of the Canada-U.S.
trade occurs between branches of the same corporation, and a similar amount
for trade within established supply chains. 56
Now, we can see how inefficiencies in the supply chain at our shared
border take us in the wrong direction. They decrease competitiveness for
North American companies, but it also follows that a smart and efficient
border is essential for our highly integrated industries. 57 So a border problem
is not just a Canadian problem, it is also a United States’ problem. 58
And at the same time, both countries are rightly concerned about North
American security. 59 This is not in dispute. We secure our continent best by
seeking out problems before they hit the border, and sometimes before they
reach North American shores. 60 And we do this best by working
53
See Ministerial Declaration: Canada-Mexico-United States Trilateral Transportation
Meeting, http://www.tc.gc.ca/mediaroom/statements/2008/2008-06-10.htm (last visited Oct.
14, 2008) (noting the growth of integrated supply chains).
54
See generally Honda of America Manufacturing, Inc., Marysville, Ohio,
http://www.ohio.honda.com (last visited Oct. 12, 2008) (describing Honda as an economic
engine for Ohio).
55
See HONDA, HONDA NORTH AMERICAN ENVIRONMENTAL REPORT 2008 23 (2008),
http://www.honda.ca/HondaCorp/en/pdf/Honda2008NAEnviroReport.pdf (discussing Honda
plants in Ohio, Tennessee, and Ontario that are integrated into a single system geared toward
optimizing efficiency throughout the supply chain).
56
See IAN F. FERGUSSON, CRS REPORT FOR CONGRESS: UNITED STATES-CANADA TRADE
AND ECONOMIC RELATIONSHIP: PROSPECTS AND CHALLENGES 4-5 (2008), available at
http://www.nationalaglawcenter.org/assets/crs/RL33087.pdf (noting that one study estimates
45% of U.S.-Canada trade occurs intra-firm).
57
See Roger F. Noriega, Assistant Sec’y of State for W. Hemisphere Affairs, Remarks to
the Economic Club of Toronto: Trade and the Canada-U.S. Border (Mar. 29, 2004), available
at http://www.state.gov/p/wha/rls/rm/31949.htm (discussing the joint efforts of the U.S. and
Canada to ensure efficient movement of goods across border).
58
See MINISTER OF PUBLIC WORKS AND GOV’T SERVICES CANADA, CANADA-UNITED
STATES ACCORD ON OUR SHARED BORDER 2 (2000), available at http://dsppsd.pwgsc.gc.ca/Collection/Ci51-95-2000E.pdf
(discussing Canada and the United States’
commitment to combating shared problems on the border).
59
See generally Security and Prosperity Partnership of North America: Security Agenda,
http://www.spp-psp.gc.ca/overview/security-en.aspx (last visited Oct. 16, 2008) (discussing
the joint efforts between Canada, U.S., and Mexico to ensure the security of North America).
60
See id. (discussing the SPP’s efforts to identify problems before they reach North America).

Hon. Michael Wilson—Remarks from Canadian Ambassador 73
collaboratively with our American counterparts. 61 The effectiveness of that
close collaboration came through very clearly in my meeting yesterday with
the U.S. Coast Guard. The Admiral and I were just talking about that over
lunch.
At the Coast Guard they described the working relationship with their
Canadian counterparts, and the word that came up a number of times was
seamless. But it is broader that that. Every day law enforcement agencies on
both sides of the border are working closely to assess trends, information,
and progress in their joint efforts to make sure that our border remains open
for business, but closed to terrorists and criminals. 62
So even though the security preparedness is much better on both sides of
the border since 9/11, I regret to have to say that the border is thickening. 63
Often a new border rule or a regulation can appear to be quite sensible taken
in its own. But taken together with a myriad of other rules in effect can
significantly increase the cost of the cross-border transaction. 64
For example, hours of service regulations for truckers specifying the time
limits that a trucker may drive makes sense from a safety perspective, but
when that same truck driver is faced with border congestion due to increased
border inspections funded by a multitude of new inspection fees, he or she
can easily run out of time sitting in the line-up at the border. 65 This can delay
the just-in-time delivery of supplies to the other side of the border, causing a
whole production line to slow down or even to shut down. Against a backlog
of increasing fuel costs, these increased rules and fees drive down profits for
our best corporate citizens. 66 More importantly they reduce the North
American competitive advantage in a highly cost-competitive global
marketplace. 67
61
See id. (discussing close collaborative approach to North American safety).
62
See Public Safety Canada, Canada-U.S. Border Security,
http://www.publicsafety.gc.ca/prg/le/bs/index-eng.aspx (last visited Oct. 12, 2008) (discussing
the joint effort of Public Safety Canada and the Attorney General of the U.S. to address crossborder
crimes).
63
See generally PM Voices Concerns About ‘Thickening’ of U.S. Border, CBC NEWS, Apr.
22, 2007, http://www.cbc.ca/world/story/2008/04/22/three-amigos.html (reporting that Prime
Minister Stephen Harper raised concerns about the “thickening” of the Canada-U.S. border at
the end of the Three Amigos summit).
64
See Blog.Cleveland.com, supra note 48 (discussing transportation backups at the Canada-U.S.
border).
65
See id.
66
See id. (noting that border security measures are costing companies money).
67
See NORTH AMERICAN COMPETITIVENESS COUNCIL, ENHANCING COMPETITIVENESS IN
CANADA, MEXICO, AND THE UNITED STATES 14 (2007),
http://www.ceocouncil.ca/en/more_type/?type_id=5&year=2007 (follow “Enhancing Competitiveness
in Canada, Mexico, and the United States – Initial Recommendations of the North
American Competitiveness Council (NACC)” hyperlink) (discussing how the need for heightened
security at the border has added to costs and undermined North American competitive

74 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Now, let me give you another example, and this is in the news quite
frequently. Most of us have probably heard of the Western Hemisphere
Travel Initiative, WHTI, or if not by that name, certainly the new U.S. travel
document requirements for Canadians to enter and Americans to return to the
United States. 68 Our goal here is that a critical mass of a limited number of
acceptable documents be in place in both countries by the time WHTI is
implemented, and the target date for that is June of 2009. 69
Several provinces and states are also working on plans for enhanced
driver's licenses to be used as an alternative to travel documents. 70 And the
goal is that with proper planning and with the availability of choices of
WHTI compliant documents, we can implement WHTI without increasing
the gridlock at the border, and that is an important objective for us all. 71 Now
I know for many of you here today, keeping the border smart is top of mind,
and one of my jobs is to keep that top in mind.
Now, let me turn briefly to my second point, and that is economic growth
in Ohio through trade with Canada, a focus on the Buckeye state today. But
you should know Canada also ranked number one in 35 states as the leading
export market for U.S. goods in 2007. 72 As I said earlier, you are one of those
number one states. 73 Now almost half of Ohio's goods, 46 percent, go to
Canada. 74 Ohio exports 13 times as much to Canada as it does to China. 75
advantage).
68
See Press Release, U.S. Department of Homeland Security, Homeland Security and
State Departments Announce WHTI Land and Sea Final Rule (Mar. 27, 2008),
http://www.dhs.gov/xnews/releases/pr_1206634226418.shtm (explaining that WHTI requires
travelers, including U.S. citizens and Canadians, to present a passport or other approved secure
document to enter the United States).
69
See id. (noting that document requirements of WHTI will be effective June 1, 2009).
70
See id. (reporting that the U.S. Department of Homeland Security has officially designated
the Washington State Enhanced Driver’s License as a WHTI-compliant document, and
those additional states and Canadian provinces plan to issue Enhanced Driver’s Licenses in the
next several months).
71
See generally id. (explaining that the implementation of WHTI will enable Customs and
Border Protection officers to quickly and accurately identify travelers).
72
See Connect 2 Canada: Trade, http://www.connect2canada.com/facts/trade/ (last visited
Oct. 12, 2008) (“In 2007 Canada was the # 1 export market for 35 states.”).
73
See Embassy Washington: 2007 Ohio Trade Fact Sheets, supra note 25 (noting that
Canada is Ohio’s largest foreign export market).
74
See Embassy Washington: 2008 Ohio Trade Fact Sheets,
http://geo.international.gc.ca/can-am/washington/state_trade_2008/oh-en.asp (last visited Oct.
8, 2008) (reporting that Canada purchases 46% of Ohio’s foreign-bound goods).
75
Cf. OHIO DEPARTMENT OF DEVELOPMENT, OHIO EXPORTS 2007: ORIGIN OF MOVEMENT
SERIES 5 (2008), available at http://www.odod.ohio.gov/research/files/b000000004.pdf (reporting
that Canada receives 46% of Ohio's exports compared to China’s 4%).

Hon. Michael Wilson—Remarks from Canadian Ambassador 75
And your state has a significant trade surplus with Canada, a surplus that has
been growing. 76
Sometimes it is difficult for people in the street to understand that trade
both ways creates jobs. 77 They see imports, but they do not see exports. And
therefore, they do not link exports necessarily to jobs. 78 Yet each hour around
the clock, over $3.7 million in trade crosses Ohio's border on the way to and
from Canada, trade that supports more than 275,000 jobs right here in Ohio. 79
And when I talk about trade with the United States, I always mention
trade that we have in energy products. We are a major partner in U.S. energy
security, so very important in today's world. 80 Canada's largest export to Ohio
is energy, about $4.2 billion worth in 2006. 81 The U.S. imports far more oil
and energy products from Canada than from any other country. 82 Canada
supplies more crude oil to the United States than Saudi Arabia and Iraq
combined. 83 In other words, the safest and most abundant source of energy
outside of the United States for the United States is just across the northern
border in very friendly hands. 84
I would like to add a few points here about Canada's economy. Our
economy has been relatively strong. 85 And having an economically
flourishing neighbor makes for a good market for Ohio products. 86 Despite
76
See generally Embassy Washington: 2008 Ohio Trade Fact Sheets, supra note 74 (reporting
that in 2007, Ohio exported more to Canada than it imported).
77
See generally id. (reporting that the Canada-U.S. trade supports 276,500 Ohio jobs).
78
But cf. David Griswold, The U.S. Trade Deficit and Jobs: The Real Story, CTR. FOR
TRADE POLICY STUDIES: FREE TRADE BULLETIN, Feb. 2003, http://www.freetrade.org/node/97
(last viewed Oct. 12, 2008) (demonstrating that the premise that exports create jobs is commonly
accepted - it is imports that people believe eliminate jobs).
79
See Embassy Washington: 2008 Ohio Trade Fact Sheets, supra note 74 (reporting that
the Canada-U.S. trade supports 276,500 Ohio jobs).
80
See U.S. Dept. of State, International Aspects of U.S. Energy Security,
http://www.state.gov/e/rm/2003/19447.htm (last visited Oct. 11, 2008) (identifying cooperation
with Canada as a part of U.S. energy security policy).
81
See Embassy Washington, 2007 Ohio Trade Fact Sheets, supra note 25 (reporting that
Ohio imported $4.154 billion worth of crude petroleum from Canada in 2006).
82
See Energy Information Administration, Crude Oil and Total Petroleum Imports Top 15
Countries,
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/curr
ent/import.html (last visited Oct. 11, 2008) (listing Canada as the largest exporter of crude oil
and petroleum to the U.S.).
83
Cf. id. (showing Canadian oil supplies to be slightly less than the amount supplied by
Saudi Arabia and Iraq combined).
84
See id. (listing Canada as the number one supplier of crude oil and total petroleum to the
U.S.).
85
DEP'T OF FINANCE CANADA,STRONG LEADERSHIP.ABETTER CANADA:ECONOMIC
STATEMENT 16 (2007), available at
http://www.fin.gc.ca/ec2007/pdf/EconomicStatement2007_E.pdf.
86
See generally id. at 30 (identifying that Canadians now have increased purchasing pow-

76 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
the disruptions in several markets, our economy is still forecasted to expand
by 1.3 percent in 2008, and then just short of 2 percent in 2009. 87 We will be
affected by any slowdown in the United States, but overall we have a
reasonable outlook. 88 This is reflected in the current, very strong Canadian
dollar. 89 While it is hurting our export industries, 90 we are feeling wealthier,
meaning our dollar goes further when we buy goods in the United States or
when we take holidays here. 91
Canada has the best fiscal situation in the G-7 countries. 92 We have ten
years of budget surpluses and a sharpening decline in debt-to-GDP ratio. 93
Inflation remains low, stable, and predictable. 94 While our banking and
financial system has not been able to avoid the turbulence in U.S. and global
capital markets, prudent financial market oversight has limited both the
extent of our housing boom and the growth of sub-prime related debt. 95 As a
result, our banking system has come through this difficult period in a
relatively strong shape. 96
Finally, following a series of cuts to personal and corporate income taxes,
the tax burden facing individuals and businesses has become significantly
more competitive, particularly when compared with most other OECD
countries. 97 So you should expect to see more Ohio goods and services going
north to Canada.
er).
87
See generally id. at 8 (listing positive growth projections for the Canadian economy
despite the harsh economic climates elsewhere).
88
See generally id. (discussing the challenge to the Canadian economy from the housing
and credit crisis in the United States).
89
See id. (reporting the Canadian dollar has traded above parity with the U.S. dollar for the
first time in 30 years).
90
See id. at 27 (explaining that the higher dollar presents a “significant challenge” to exporters).
91
See id. at 30 (explaining that the higher dollar reduced the price of imported consumer
goods and increased Canadians’ real purchasing power).
92
Id. at 52.
93
See id. at 31 (reporting that the Canadian government has shifted from large deficits to
surpluses beginning in the early1990s).
94
Id. at 24.
95
See generally id. at 16 (explaining that the effects of recent turmoil in global financial
markets and a declining U.S. housing market continue to pose challenges to the Canadian
economy).
96
But see Duncan Mavin, Joining the Ranks of Banking's Big Losers, FINANCIAL POST,
May 30, 2008, http://www.financialpost.com/story.html?id=549749 (disputing the belief that
Canadian banks have done well during the current financial crisis).
97
See DEP'T OF FINANCE CANADA, supra note 86, at 80 (showing Canada's marginal effective
tax rate to be lower than the average tax rate of OECD countries).

Hon. Michael Wilson—Remarks from Canadian Ambassador 77
Of course, the Canada-U.S. relationship goes well beyond trade. 98 I would
like to conclude with some comments on my third point: Canada's
commitment to defense cooperation. Canada and the United States have built
broad and deep foundations through 350 agreements and treaties that cement
our mutual cooperation. 99
We have a long history together defending our continent and our values.
As I mentioned earlier, a very significant era of cooperation is in public
safety or what is called here Homeland Security. 100 Mutual support, border
security, law enforcement, intelligence communities, and many other behindthe-scenes
activities to keep North America safe. 101 Our defense industries
have been integrated since the Second World War. 102
Last October, for instance, Boeing delivered to Canada a second C-17
large transport aircraft, and that is a $1.8 billion deal. 103 Just three months
ago the Canadian government announced a $1.4 billion contract with
Lockheed Martin for 17 Super Hercules aircraft, and there is a maintenance
contract that would add about $3 billion more. 104
For half a century though, we have shared joint command of the North
American Aerospace Defense Command, NORAD. 105 This May, a month
98
See generally Richard J. Kilroy, Jr., Perimeter Defense and Regional Security Cooperation
in North America: United States, Canada, and Mexico, HOMELAND SECURITY AFFAIRS,
Dec. 2007, at 1, 3, http://www.hsaj.org/pages/supplement/issue1/pdfs/supplement.1.3.pdf
(discussing the defense and regional security cooperation between Canada and the United
States).
99
See id. at 4 (noting that Canada and the U.S. are party to “over 80 treaty-level defence
agreements, more than 250 memoranda of understanding between the two defence departments,
and approximately 145 bilateral forums in which defence matters are discussed”).
100
See generally id. at 6 (identifying Canada’s relationship with the U.S. regarding Homeland
Security).
101
See generally id. at 5 (reporting on the diplomatic efforts between Canada and the U.S.
as it relates to the defense of the Northern Hemisphere).
102
See id. at 3 (commenting on the significance of military ties between Canada and the
U.S. during World War II).
103
See Press Release, Holly Bridges, Dep’t of Nat’l Defence, Second CC-177 Globemaster
III Arrives at 8 Wing Trenton (Oct. 19, 2007),
http://www.airforce.forces.gc.ca/8wing/news/releases_e.asp?cat=99&id=4597 (reporting that
Canada has received its second giant strategic airlifter, the CC-177 Globemaster III).
104
Press Release, Lockheed Martin, Lockheed Martin Receives $1.4 Billion Contract for 17
C-130J Super Hercules Aircraft for Canada (Jan. 18, 2008),
http://www.lockheedmartin.com/news/press_releases/2008/0118ae_c-130canada.html (last
visited Oct. 9, 2008).
105
See North American Aerospace Defense Command,
http://www.norad.mil/about/agreement.html (last visited Oct. 9, 2008) (describing the agreement
to establish a bi-national command between Canada and the U.S. for control of continental
air defenses signed on May 12, 1958).

78 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
from now, will mark the 50th anniversary of the signing of the original
NORAD agreement to defend the continent. 106
Since 9/11 more than 18,000 Canadian soldiers have served in
Afghanistan. 107 Their mission is two-fold: to make sure that a resurgent
Taliban does not threaten the great gains made in Afghanistan under the
protection of the NATO mission, 108 and to help create an environment where
a reconstruction development and good governance can flourish. 109 And it is
flourishing. There are some good signs here. 110 We have got a long way to
go, but a lot of progress has been made in the last five or six years. 111
Afghanistan is Canada's largest recipient of foreign aid. 112 A number of
Canadians have died there, 82 soldiers, a diplomat, and a civilian aid
worker. 114
Currently about 2,500 members of the Canadian forces are serving in
Afghanistan as part of the U.N.-sanctioned and NATO-led International
Security Assistance Force. 113 We are in the most dangerous part of that
country in the south right along the Pakistan border. 114
And just last month we had quite a strong political debate. 115 Last month
our House of Commons voted to extend Canada's mission in Afghanistan for
another two years to July of 2011 provided that certain conditions are met. 116
106
See id.
107
See CanadianAlly.com, Counterterrorism,
http://www.canadianally.com/ca/Counterterrorism-en.asp (last visited Oct. 9, 2008) (reporting
that since October 2001, Canada has deployed approximately 18,000 soldiers in Afghanistan).
108
See generally CBC News, Canada in Afghanistan,
http://www.cbc.ca/news/background/afghanistan/canada.html (last visited Oct. 9, 2008) (explaining
that the Canadian military focus must shift gradually from combat to training Afghan
national security forces).
109
Id.
110
See Government of Canada, Progress in Afghanistan,
http://www.canadainternational.gc.ca/canada-afghanistan/progress-progres/index.aspx (last
visited Oct. 11, 2008) (reporting on the progress already made in Afghanistan despite the
challenges that remain).
111
Id.
112
See Canadian International Development Agency, http://www.cida.gc.ca/afghanistan-e
(last visited Oct. 9, 2008).
114
See generally CBC News, Canada’s Casualties,
http://www.cbc.ca/news/background/afghanistan/casualties/list.html (last visited Oct. 9, 2008)
(listing updated casualty figures from Canada's involvement in Afghanistan).
113
Foreign Affairs and International Trade, Canada in Afghanistan,
https://international.gc.ca/foreign_policy/nato/canada_in_afghanistan-en.asp (last visited Oct.
9, 2008).
114
See Canada Wants NATO Help in Afghanistan, USA TODAY, Jan. 28, 2008,
http://www.usatoday.com/news/world/2008-01-28-canada-afghanistan_N.htm (identifying
Canada as the only NATO country willing to position troops in the dangerous southern region
of Afghanistan).
115
See generally Canada's House of Commons Extends Afghan Mission, CNN.COM, Mar.

Hon. Michael Wilson—Remarks from Canadian Ambassador 79
We needed a country to partner with us in Canada, in our province, where
our combat forces are responsible for an area about the size of West Virginia.
And at the recent NATO summit in Bucharest, the French announced that
that they would send an additional battalion to Eastern Afghanistan, which is
where the United States is predominantly centered, and this has allowed the
U.S. to commit to send troops to reinforce our forces in the south, and that
has very well been used for Canada. 117 Canada also welcomes the
deployment of 3,200 U.S. Marines who will be with us in South Afghanistan
for the balance of this year. 118 Our collective work in Afghanistan is another
great example of how our two countries work so well together.
Now, I began today by noting that Canada and the United States do many
things together. We make things together, we are business partners, and we
are clearly allies. 119 The Canada-U.S. Law Institute framed its conference this
year with a question: The World's Longest Undefended Border: Gateway Or
Checkpoint? In response, I will repeat what I said at the outset. The Canada-
U.S. border is the longest secured border in the world. 120 Trade between us is
vital for a shared competitiveness in the very tough global economy. 121
Together we must ensure that our border provides a gateway for our
economic prosperity. The government of Canada has one first-priority
relationship, and that is with the United States. 122 And I am proud to stand
before you today to speak here on behalf of Canada because I know I am
among friends.
13, 2008, http://edition.cnn.com/2008/WORLD/americas/03/13/canada.afghanistan/index.html
(reporting on the political opposition within the House of Commons to Canada's military involvement
in Canada).
116
See id. (noting that Canada's continued participation in Afghanistan is conditioned on
receiving another country's assistance in governing the southern region).
117
See Colin Brown, Sarkozy Comes to Bush's Rescue with 1,000-Strong Force for Afghanistan,
THE INDEPENDENT, Apr. 4, 2008,
http://www.independent.co.uk/news/world/politics/sarkozy-comes-to-bushs-rescue-with-
1000strong-force-for-afghanistan-804543.html.
118
See id.
119
See Foreign Affairs and International Trade Canada, A Unique and Vital Relationship,
http://geo.international.gc.ca/can-am/main/front_page/relationship-en.asp (last visited Oct. 11,
2008) (identifying the economic and defense elements of the relationship).
120
See Government of Canada, Building a Smart Border for the 21 st
Century,
http://www.canadianembassy.org/border/declaration-en.asp (last visited Oct., 11, 2008)
(commenting on the security of the border).
121
See generally NORTH AMERICAN COMPETITIVENESS COUNCIL, MEETING THE GLOBAL
CHALLENGE 11 (2008),
http://www.uschamber.com/publications/reports/0804_global_challenge.htm (describing the
need for North American governments to increase cooperation in light of the competitive
global competition).
122
See generally Foreign Affairs and International Trade Canada, A Unique and Vital Relationship,
supra note 121 (identifying elements of the Canada-U.S. relationship that establish
its paramount importance to the Canadian government).

80 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Thank you very much.
MS. FRIEDMAN: Today, at The City Club of Cleveland, we are listening
to the Honorable Michael Wilson, Canadian Ambassador to the United
States. We will return to our speaker in a minute for our traditional City Club
questions. We encourage you to formulate questions now, and remind you
that your questions should be brief and to be point.
DISCUSSION FOLLOWING THE REMARKS OF HON. MICHAEL
WILSON
MR. SMITH: Ambassador Wilson, before my question, I must say that I
worked for a good while with Sunlight of Canada and have a real
appreciation of the country. From my complete ignorance before, I became
very, very impressed. The only question I have is you mentioned the secure
border. How is it secure from, say, Minnesota to Washington?
AMB. WILSON: It is a question that we face every day because we do
not have a lot of physical security along the border. 123 But where we do our
work, and it is very effective work, is through a variety of cooperative
ventures. 124 As I said, we have good cooperation with local police, with the
national police forces, in our case the RCMP, and in your case, the FBI. 125
But also we compare notes regularly, intelligence information, and in that
way, try to help each other understand where the threat is, and do what we
can to address that threat. 126
This is all focused on what we call integrated border enforcement teams,
IBETs. 127 And these are integrated teams. 128 I have sat around the table with
them, and I cannot tell unless I am listening carefully for an accent. I cannot
tell whether it is an American or a Canadian talking because they work so
well together.
That is really the principle basis or the principle method that we use. 129 It
is using information that we collect behind the borders so that before the
123
See generally Kevin Bohn, Security on U.S.-Canada Border Fails Terror Test,
CNN.COM, Sept. 27, 2007, http://www.cnn.com/2007/US/09/27/border.security/index.html
(reporting that there is a great disparity in the law enforcement presence between the U.S.-
Canada border and the U.S.-Mexico border).
124
See Foreign Affairs and International Trade Canada, Border Cooperation,
http://geo.international.gc.ca/can-am/main/border/default-en.asp (last visited Oct. 11, 2008)
(detailing the cooperative measures between the United States and Canada).
125
See generally Treasury Board of Canada Secretariat, Royal Canadian Mounted Police,
http://www.tbs-sct.gc.ca/dpr-rmr/2006-2007/inst/rcm/rcm10-eng.asp (last visited Oct. 11,
2008) (detailing the multijurisdictional efforts of the RCMP in protecting Canada).
126
See id.
127
128
129
Id.
Id.
See id.

Hon. Michael Wilson—Remarks from Canadian Ambassador 81
threat hits the borders, in most cases we know who it is, and we can deal with
it accordingly. 130
MR. TAFT: Ambassador, I think it is fair to say Americans have a very
ambivalent view of the Canadian health care system. 131 We are envious of
your universal coverage, but skittish at the notion that along with universal
coverage may come degrees of waiting for service that impatient Americans
might not tolerate. 132 What might we learn, what might you help convey to us
as insights about how to construct a national health care system that would be
withdrawing the Canadian experience and be helpful to us?
AMB. WILSON: I am not going to get into detail on that. What I will say
is I think there are things we can learn from each other on health care system.
You have pointed out one of the issues that we have in our system that the
waiting lists are too long; governments are committed to address this;
governments federally and provincially are committed to address this, but it
is a challenge. 133
We have I would say –is that because there is a single payer which covers
a large portion of our health care costs that we have a tighter control on the
total expenditures. 134 But part of the outcome of that is that there is not
sufficient amount of money to address some of these problems of waiting
lists. I will make a comment that I may live to regret when I go and see my
doctor in Canada next, but I have a sense that one of the outcomes, one of the
characteristics of the U.S. system is that it is much more expensive than the
Canadian system; I think we spend about 11 percent of GDP or north of 15
percent, so there is quite a difference there. 135
What this has resulted in is a greater effort on the part of doctors in this
country to provide more of a sense of service to you. I will give you an
130
131
See id.
See Harris Interactive, Harris Poll #56,
http://www.harrisinteractive.com/harris_poll/index.asp?PID=486 (last visited Oct. 11, 2008)
(showing that just less than half of Americans feel very positively about the Canadian Health
Care system).
132
See Timothy Stoltzfus Jost, Op-Ed., Universal Coverage: Nothing to Fear, ABC NEWS,
Oct. 18, 2006,
http://abcnews.go.com/Health/PrescriptionForChange/Story?id=2578064&page=2 (last visited
Oct. 11, 2008).
133
See generally Health Canada, Health Care System, http://www.hc-sc.gc.ca/hcssss/qual/acces/wait-attente/index-eng.php
(last visited Oct. 11, 2008) (reporting on Canadian
government’s ten-year plan to reduce waiting times for access to health care).
134
See National Union of Public and General Employees, U.S. should adopt Canada's public
health care model, http://www.nupge.ca/news_2004/n22se04c.htm (last visited Oct. 12,
2008) (listing the advantages to Canada's health care system as it relates to controlling costs).
135
See Press Release, Canadian Institute for Health Information, Health Care Spending to
Reach $160 Billion This Year (Nov. 13, 2007),
http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page=media_13nov2007_e (reporting that
Canadian government expected to spend 10.6% of GDP on healthcare in 2007).

82 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
example. I had a small procedure done. I was going to bed that night around
quarter to 10, and then my phone rang. It was my doctor saying how do you
feel, any pain? Here is something that you might want to do for that pain.
And I would never expect to see that or have that in Canada. I do not
know whether this was an unusual doctor, but there is also a greater sense of
competition in this country. "I want you as my patient," and not "I know I
have got patients coming to me because it is a universal system."
So, I think it works pretty well, but there are issues. We do have
problems, but I am not going to stand here and tell you what you should do
with your system.
UNIDENTIFIED SPEAKER: Mr. Ambassador, thank you for your
remarks. For many years we talked about a ferry between Cleveland and
Canada. 136 Do you have any information on that?
AMB. WILSON: We had some meetings with the Port of Cleveland this
morning. We talked about that proposal. We are some distance between the
idea that has been discussed, tossed around for some years now, and the
fruition. But what we did talk about, I was really quite encouraged by and I
will speak personally here. I was not sufficiently aware of some of the
opportunities that we should be following between our two countries
utilizing shipping on the Great Lakes that is short sea shipping. 137
Short sea shipping is going to be more and more of an option of dealing
with some of the transportation challenges that we have between our two
countries. 138 Particularly the case in the Great Lakes area where we cannot
cross by highways except at bridge points, such as the Detroit-Windsor
crossing or the crossings along the Niagara Peninsula. 139
So we did talk about some of the possibilities of having points in the
middle of Lake Erie, as an example, on both sides where we could bypass the
highways with trucking and take some of the congestion off the roads. And
maybe provide a greater sense of certainty on the timing of the arrival of the
business inputs, the parts that are important in the manufacturing process.
What I am saying is on that specific proposal, is that we have offered to
try and facilitate some action, but it does not sound to me that we are too
136
See generally Port of Cleveland, Trans-Erie Ferry,
http://www.portofcleveland.com/maritime/ferry.asp (last visited Oct. 10, 2008) (discussing a
proposed trans-Erie ferry).
137
See generally Transport Canada, Short Sea Shipping Market Feasibility Study,
http://www.tc.gc.ca/TDC/projects/marine/a/5563.htm (last visited Oct., 10, 2008) (reporting
on the advantages of short sea shipping, including at the Great Lakes).
138
See generally id. (speaking of the need to reduce highway and rail congestion through
short sea shipping).
139
See generally Transport Canada, International Structures,
http://www.tc.gc.ca/programs/surface/bridges/internationalstructures.htm (last visited Sept. 30,
2008) (list of international bridges in Canada).

Hon. Michael Wilson—Remarks from Canadian Ambassador 83
close right now. But on the broader concept, I came away from the meetings
feeling quite positively.
MS. PAWLUCH: Good afternoon, Mr. Ambassador. In the interest of full
disclosure, I am a Canadian. I am from Toronto, and I am here participating
in the Canada-U.S. Law Institute Annual Conference. I have the privilege of
serving on the advisory board.
My question, Mr. Ambassador, concerns the concept of a continental
perimeter. Over the last few years we have heard the concept of perhaps
moving towards a continental perimeter, where we essentially establish the
boundaries around the continent and have goods and people moving more
freely within the continent, à la European Union, for example. 140 And some
of the comments that you made today reinforce the fact that we have moved
towards collaborations in different respects in terms of border security. And
indeed I talked to some of the participants here, someone from the Halifax
Port Authority who tells me that there are shared responsibilities at Halifax
with both U.S. and Canada. 141
What are your thoughts on a continental perimeter? And is that something
that we should be moving towards in terms of effecting efficiency in our
continental trade?
AMB. WILSON: I think that both of our countries are collaborating and
doing things in third countries. 142 I will give you a couple of examples. We
share information on container traffic, and we share that work, both of us do
work in other countries to identify potential higher risk or high-risk
containers that need further information on them. 143 But before we are going
to be comfortable in seeing them arrive at one another of our ports, we have
people in United States ports and the United States people in Canadian ports
again to be the North American side of that work that is done in other
countries. 144
We have what we call migration integrity officers, and these are people
who work at our ports of embarkation for air traffic, passenger traffic coming
to Canada. 145 So what we want to do with that is ensure that people who get
140
See generally Robert A. Pastor, North America’s Second Decade, FOREIGN AFFAIRS,
Jan.-Feb. 2004, http://www.foreignaffairs.org/20040101faessay83112-p10/robert-apastor/north-america-s-second-decade.html
(describing the lessons North America can learn
from the European experience with integration).
141
See generally Port of Halifax, http://www.portofhalifax.ca/english/about-us/who-weare/index.html
(last visited Sept. 30, 2008) (general information about the Port of Halifax).
142
See generally Embassy Washington: Container Security,
http://geo.international.gc.ca/can-am/washington/defence/containersecurity-en.asp (last visited
Oct. 1, 2008) (explaining that the U.S. and Canadian customs and border security officials
work side by side).
143
See id.
144
145
See id.
See Embassy Washington: Migration Integrity Officers,

84 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
on our planes have the proper documentation that do not appear to be a
security risk and where we are quite comfortable with having them come to
our country. 146 We have turned away in the thousands of people over the past
ten years or so, like about 20,000 or 30,000 people. 147 So it is effective in
identifying people who we do not want to see come to our country.
So there are ways that we can work together. One area that we are looking
at right now quite frankly is general aviation. If we can work together on
identifying general aviation problems before they leave Europe or Asia on
their way to North America, then we can have a much easier flow of general
aviation traffic north-south. And I think that this type of traffic is going to
become more and more apparent as time goes by. So that is another area.
A final area that I would mention which makes an awful lot of sense to
me is how we deal with pandemics. How we would deal with a SARS, with
an avian flu, something like that. If we can have common standards of
preparedness but also common standards of identification of the problem
before it gets to our borders or as it gets to our coast lines, then again, we can
help each other. 148 Birds do not understand what a border is down there, and
so we do not know where that bird is going to come. It could come to
Canada, or it could come to the United States. Again, the more we can
understand and collaborate in third countries, the more we are helping each
other.
UNIDENTIFIED SPEAKER: Ambassador Wilson, just a few years ago
Americans traveling to Canada were able to exchange their dollars, $1 for an
excess of a $1.30 Canadian dollars. 149 Currently, that has completely
changed. American dollar gets less than one Canadian dollar. 150 You have
had a tremendous experience before you became an ambassador in the
financial world. I am very curious as to what your understanding is as to why
this has occurred. Is the American economy that weak, or is the Canadian
economy that strong, or is it a combination of both of those?
http://geo.international.gc.ca/can-am/washington/defence/mioposition-en.asp (last visited Oct.
1, 2008) (explaining that Canada deploys officers abroad to stop improperly documented
travelers before they enter Canada).
146
See id.
147
See id. (reporting that more than 40,000 persons who appeared to be inadmissible to
Canada were intercepted by the Migration Integrity Officers in the past six years).
148
See generally Global Pandemic Influenza Readiness, http://www.hc-sc.gc.ca/ahcasc/intactiv/pandem-flu/questionsbk1-eng.php
(last visited Oct. 6, 2008) (explaining that the
cornerstone of Canada’s preparedness plan for pandemic influenza is to collaborate at an international
level).
149
See FXHistory – Historical Currency Exchange Rates,
http://www.oanda.com/convert/fxhistory (last visited Oct. 6, 2008).
150
See Bank of Canada, http://www.bank-banque-canada.ca/en/rates/exchange.html (last
visited Oct. 6, 2008) (current U.S. Dollar to Canadian Dollar exchange rates).

Hon. Michael Wilson—Remarks from Canadian Ambassador 85
AMB. WILSON: I think it is a combination, but you are quite right. Let
me put the numbers in another way. –You could buy one of our dollars for
about 62 or $0.63 in 2002, and now it is either side of a hundred. 151 It got up
to 108, 109 for a very brief period last year. 152
I think there are a number of causes for that. One, I think the sum of the
things that I mentioned in my remarks about having a strong fiscal position, a
strong inflation picture in this country, and I think the other very important
factor has been the strength of the commodity markets, not just oil and gas,
but copper, lead, zinc, nickel. 153 These have been tremendously strong. 154
And while we do not have an economy that I would describe as a resource
economy, we have, to say it another way, you produce about the same
proportion of your economy and natural resources as we do, but the
difference is that you use all of your resources. You consume them all
internally for the most part. 155 We will export quite a few. 156 About 35
percent of our exports are in resource products. 157 That has a significant
impact on the value of our dollar. 158 There are economists in this room that
will correct me I am sure if I state this inappropriately, but if you look at the
price index for resource-based products, there is a very close correlation
between that price index and the level of Canadian dollar. 159
So that combination of things I think would give you a large part of the
reason, and yet you cannot deny the fact that the United States dollar has
been under pressure relative to other currencies. 160 We are not alone in seeing
that relationship changed in the past few years. So that is the other side of the
equation.
MR. CARMODY: Mr. Ambassador, my name is Chios Carmody, and I
teach at the University of Western Ontario in London, Ontario.
151
See FXHistory – Historical Currency Exchange Rates, supra note 153.
152
See id.
153
See TSX Edges Upward, New York Blue Chips Lose a Little Ground, TORONTO STAR,
Feb. 16, 2008, http://www.thestar.com/Business/article/304093 (reporting that there has been a
continued strength in the commodities sectors).
154
See id. (“Things like copper and aluminum, as well as agricultural commodities, have
been going absolutely crazy here.”).
155
See generally CENTRAL INTELLIGENCE AGENCY, THE CIA WORLD FACTBOOK 2008
(2008) (export details of all countries).
156
Statistics Canada, Merchandise Trade of Canada,
http://www40.statcan.ca/l01/cst01/trad45a.htm (last visited Oct. 8, 2008) (Canada’s exports
data).
157
Id. (listing Canada’s export of resources products to be approximately 40% of its total
exports)
158
See MICHAEL HOLDEN,EXPLAINING THE RISE IN THE CANADIAN DOLLAR 5 (2007), available
at http://www.parl.gc.ca/information/library/PRBpubs/prb0326-e.pdf.
159
See id.
160
See id. at 12 (noting that the market for US dollar assets has been weakening).

86 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
A lot of your speech to us today was about the need for openness, the fact
that we have traditionally had a strong relationship with the United States,
and the fact that we hope to have an open relationship with the United States
in the future.
Now just on Tuesday of this week in Ottawa, our Finance Minister
announced that he was prepared to block the sale of significant Canadian
assets to an American purchaser. 161 And while these decisions are
occasionally made, although rarely in Canada's case have they been made in
this fashion, I am curious to know what reaction you have been receiving as
our principle representative in the United States to this particular
designation. 162
AMB. WILSON: You are the first person who has asked me a question on
that particular issue, so the simple answer to your question is I have not
received a lot of attention from Americans on this particular issue.
I think it is important to understand that there is a process, and that
process is underway. The minister, it was not the Minister of Finance, but it
was the Minister of Industry,-- has sent a letter to the American company
wishing to acquire the asset, and then the American company has 30 days to
come back with a response to the concerns that are expressed to the company
on the issue. 163 A meeting was held earlier this week, that between the U.S.
company and the minister's officials, and we will see what happens as a
result of the discussions that they had early in the week. 164
So I think it is a little premature to draw specific conclusions. Clearly the
Minister has expressed some significant concerns, but we will see what
happens as his process works its way through.
UNIDENTIFIED SPEAKER: Mr. Ambassador, thank you so much for
coming today. Being involved in bulk commodity trade throughout North
America, when we talk about a thickening border, our concern as an industry
overall is repetitive programs, and maybe you can speak towards that
specifically with regards to ACI, AMS, now we are getting into the TWIC
program in the United States and a possible counterpart in Canada. 165 Is there
161
See generally Federal Government Blocks Sale of MDA Space Division, CBC NEWS,
Apr. 10, 2008, http://www.cbc.ca/money/story/2008/04/10/mdablock.html (reporting that
Canadian government has blocked the sale of the space division of a Vancouver-based firm to
a U.S. firm).
162
See id. (“In the 23-year history of the Investment Canada Act, the federal government
has never blocked a foreign takeover because of a failure of the ‘net benefit’ test.”).
163
See id.
164
See id.
165
See generally Transport Security Administration,
http://www.tsa.gov/what_we_do/layers/twic/program_info.shtm (last visited Oct. 9, 2008)
(information about TWIC).

Hon. Michael Wilson—Remarks from Canadian Ambassador 87
any collaborative work going on between the two countries to maybe
streamline this process or create one standard?
AMB. WILSON: I cannot speak specifically to the programs that you talk
about, but what we try to do working together is to have programs that are
comparable in their impacts going south or going north. That is a broad
objective. Sometimes there are differences in objectives that a U.S. program
may be different than a Canadian program. 166 There are some cases where
one country may not have a program for a variety of reasons. 167
But just to step back from your question, the greater degree of
commonality and simplicity in the way we design the documentation that is
needed to go to cross the borders, the better it is going to be.
I think that we have to realize in our countries the significance of the
border, but not as a line itself, but as to how it affects other parts of our ways
of life. 168 We have been talking today more in the context of trade,
sometimes in security, but there are so many cross-border issues that we are
facing, whether it is cross-border water issues, cross-border climate change,
other environmental issues, travel, the whole question of pandemics. 169
There are so many of these issues that are affected by the border. We have
to develop an approach to managing the border that is going to recognize the
basic relationship between our two countries, which is a wonderful
relationship. It is a very solid relationship, it was built over many, many
years, and we cannot let how we deal with that line to undermine that
relationship. 170 And that is the basic message that I want to leave with you
today.
And I will give you a broader comment on this to why it is important. My
mother was born in the United States. My mother-in-law was born in the
United States. We had someone say earlier that they were born in the United
States. We had the gentleman saying that he worked for a Canadian
company. There are so many common elements of how we as people talk to
each other, and I think one of the great things about the relationship is that
we have an understanding, we have an instinctive feel of what people on the
other side of the border are because we do a lot of things together. We travel
166
See generally Alice Woolley, Legitimating Public Policy, 58 U. TORONTO L.J. 153, 153-
54 (2008) (discussing that many Canadian programs are created as a result of public policy
concerns).
167
Id. (United States and Canada have individual policy concerns as well).
168
See generally Health Canada, Canada-United States Border Air Quality Strategy,
http://www.hc-sc.gc.ca/ewh-semt/air/out-ext/great_lakes-grands_lacs-eng.php (last visited
Oct. 9, 2008) (explaining that Canada and the United States are working together to tackle
cross-border air pollution problems).
169
See id.
170
See U.S. Department of State, Background Note: Canada, supra note 26 (“The relationship
between the United States and Canada is the closest and most extensive in the world.”).

88 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
north and south, 700,000 come down, and 500,000 go north from the state of
Ohio. 171
So there is all this interaction, and that leads to better understanding. And
the more we have a better understanding, the more we are going to be able to
solve any of the problems that we have between us. And that is one of the
fundamental bases for our concern about the border is you put too many
things along the border, and we undermine that capacity to meet, talk to each
other, understand each other, and ultimately work well together as very good
neighbors.
UNIDENTIFIED SPEAKER: Mr. Ambassador, has Canadian industry
been able to exploit the tar sands in Western Canada?
AMB. WILSON: Well, we call the tar sands in Western Canada oil sands
now. 172 The oil sands are a huge resource for Canada. 173 The number of the
reserves there that that can be exploited is almost as great as the oil reserves
of Saudi Arabia. 174
Put it into some context. We are producing now at a rate of 1.1 million
barrels a day. 175 Projects in line, and projects that are well advanced of the
drawing board, we will get that up to three, three-and-a-half million barrels a
day. 176 So we are now getting into a level of importance that is quite
significant.
An awful lot of money has been spent on technology to get us to the point
where we are today. 177 There is still a good deal more money being spent.
We are moving to a an open-pit mining process to something that is more
akin to a conventional drilling, what the oil people call the in-situ process
when you stick the pipe down into the ground, pump heavy, very hot steam
down and bring it up as a commodity that can be worked with to produce
oil. 178
A challenge that we face today is the challenge of climate change. 179 To
heat that water going into the ground or the water that is now used in the
171
See Embassy Washington, 2007 Ohio Trade Fact Sheets, supra note 25 (reporting that
Canadians made more than 507,600 visits to Ohio, and Ohio residents made more than
706,600 visits to Canada).
172
See 60 Minutes: The Oil Sands of Alberta (CBS television broadcast Jan. 22, 2006).
173
See id.
174
See id. (reporting that there are 175 billion barrels of proven oil reserves in Alberta
compared to 260 billion barrels in Saudi Arabia).
175
See id.
176
See id. (predicting the oil production to triple within a decade).
177
See id. (explaining that prospectors lost millions of dollars trying to squeeze the oil out
of the sand).
178
See Oil Shale and Tar Sands Programmatic EIS,
http://ostseis.anl.gov/guide/tarsands/index.cfm (last visited Oct. 9, 2008).
179
See id. (noting that the process has an impact on global warming).

Hon. Michael Wilson—Remarks from Canadian Ambassador 89
process requires a lot of fuel. 180 At this point it is natural gas. 181 We are
looking at other ways of heating that water, making it steam. 182 But at this
point some of the environmentalists in the United States refer to this oil as
being dirty oil because it is emitting more greenhouse gases. 183 We recognize
that. We have reduced the intensity of greenhouse gas emissions. 184 We have
reduced them by, I think, 27 percent in the last 10 or 15 years. 185 And as a
result of announcements made by the government about a month or so ago,
there are going to be very strict limitations on the amount of CO2 emissions
that will be allowed with any oil sands project or any coal-based utility fuels
that will be in process after 2012. 186
So we are taking this dirty oil challenge seriously. A lot of money is
going into addressing the issue, but it will continue to be 173 billion barrels
of oil reserves down there. 187 That will be around for quite a long time as that
production wraps up from where it is today.
MR. CAIRNS: Mr. Ambassador, I will spot you one on ancestry. My
mother was born in the great province of Nova Scotia.
AMB. WILSON: Good.
MR. CAIRNS: My question relates to the Great Lakes Water Compact. 188
I think it is hung up in the Ohio legislature for reasons that even real estate
lawyers do not quite understand. 189 But I wonder if you would comment on
the importance of that compact to both Canada and the United States?
AMB. WILSON: Well, I think it is terribly important for both of our
countries. 190 My understanding is this is the last state to be able to approve
the compact. 191 We have discussed it in my visit here, discussed the
importance of it for Canada. But for the Great Lakes, I think it is very
180
See id. (explaining that the process requires large amounts of energy).
181
See generally id. (explaining that the process requires large amounts of energy).
182
See generally id. (current process is expensive and detrimental to the environment).
183
See 60 Minutes: The Oil Sands of Alberta, supra note 176.
184
See generally id. (reporting that oil companies are saying they will reduce greenhouse
gasses).
185
See generally id. (reporting that by Canadian law, the oil companies are required to refill
old mines and plant new trees).
186
See generally Shankar Vedantam, Kyoto Treaty Takes Effect Today, WASH. POST, Feb.
15, 2005, at A04 (reporting that under the Kyoto Treaty, Canada has committed to reduce its
greenhouse gas emissions to 8 percent below its 1990 levels).
187
See 60 Minutes: The Oil Sands of Alberta, supra note 176 (reporting that there are 175
billion barrels of proven oil reserves in Alberta).
188
See generally John McCarthy, Ohio Agreement to Join Great Lakes Water Plan Stalls
Again, ASSOCIATED PRESS, May 30, 2008,
http://www.mlive.com/business/index.ssf/2008/05/ohio_agreement_to_join_great_l.html
(reporting that Ohio is reluctant to join the Great Lakes Water Compact).
189
See id.
190
191
Id. (“The Great Lakes Compact is crucial to protect the lakes.”).
See id. (describing Ohio as the “last roadblock” to the Great Lakes Compact).

90 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
important as we see some of the challenges, environmental challenges that
we have in the Great Lakes, the water levels being one in particular. 192
So it is a very important agreement, and we would certainly encourage the
legislature here to approve it. I think there are eight states and two provinces
that are subject to this agreement, and seven states and two provinces have
spoken, and we hope that Ohio will speak as well. 193
UNIDENTIFIED SPEAKER: Mr. Ambassador, just wondering what your
thoughts are on our current Democratic Presidential candidates' comments
about modifying or altering the NAFTA agreement. 194
AMB. WILSON: I think it is clear from my remarks today that we feel
that the North America Free Trade Agreement has been very successful for
Canada. 195 We think it has been successful for all three countries, and we
recognize that it is a controversial issue in the United States. 196 Obviously it
was a very important issue in the primaries, the voting that you had here
about a month or so ago.
We want to see what the final outcome is, and we watch with great
interest to be quite frank with you because it has been such a success for our
country. Trade among the three countries has gone from $300 billion to $900
billion in 13 years. 197 So it is a three-way investment. It has increased about
the same order and magnitude. So we have to treat this agreement with
T.L.C.
MS. FRIEDMAN: Today the City Club of Cleveland will conclude with
the Honorable Michael Wilson, Canadian Ambassador of the United States.
Thank you, Mr. Ambassador. Thank you, ladies and gentlemen. We are now
adjourned.
(Session concluded.)
192
See id. (explaining that the Senate feels the protections are crucial to try to keep arid
states from siphoning water from the Great Lakes).
193
See id. (reporting that Ohio would be the last state to join seven other states and two
Canadian provinces).
194
See generally Canada Must Defend NAFTA, NAT’L POST (Canada), Mar. 29, 2008,
http://www.nationalpost.com/opinion/story.html?id=407546 (reporting that Hillary Clinton
and Barack Obama have made NAFTA an issue in their democratic nomination race).
195
See id. (finding that almost two-thirds of Canada’s economic growth since the mid-
1990s could be traced to NAFTA).
196
Id. (reporting that under NAFTA, Canada’s exports to the United States have nearly
tripled and the United States’ exports to Canada have almost doubled).
197
See Canada-US Trade Relationship – U.S. Commercial Service Harrisburg, supra note
34 (finding that bilateral trade between Canada and the United States has nearly tripled during
the past twelve years).

A SAFE AND SECURE CANADA-UNITED STATES BORDER:
CUSTOMS-TRADE PARTNERSHIP AGAINST TERRORISM (C-
TPAT); PARTNERS IN PROTECTION (PIP); FREE AND SECURE
TRADE (FAST); E-MANIFEST (ACE/ACI); TRUSTED
TRAVELER PROGRAMS (NEXUS); AND INTEGRATED
BORDER ENFORCEMENT TEAMS (IBETs)
Session Chair – Birgit Matthiesen
Canadian Speaker – Warren Coons
United States Speaker – Todd C. Owen
Canadian Speaker – Joy Aldous
INTRODUCTION
Birgit Matthiesen
MS. MATTHIESEN: My name is Birgit Matthiesen. I work at the
Canadian Embassy in Washington, D.C. I am in the Economic and Trade
Policy section of that embassy.
This panel is going to be the border guys. These are going to be
spokespersons and representatives from the Canadian Border Service
Agency, the Customs and Border Protection, and the RCMP, and they are
here to talk to you about not only their programs but the alphabet soup of
CSI, FAST, C-TPAT, AMS, AMI, 1 et cetera, et cetera.
We are going to start with Warren Coons. He is with the RCMP – and I
did not realize you are a Superintendent – and he is the Director of the
Integrated Border Enforcement Team which Ambassador Wilson made
reference to.
We will move to his left, Mr. Todd Owens. He is the Executive Director
at U.S. Customs and Border Protection for cargo and conveyance security.
1
See generally Canada Border Services Agency, http://www.cbsa-asfc.gc.ca (last visited
Oct. 10, 2008); U.S. Customs and Border Protection, http://www.cbp.gov (last visited Oct. 10,
2008); Royal Canadian Mounted Police, http://www.rcmp-grc.gc.ca (last visited Oct. 10,
2008).
91

92 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
And we will end up with Joy Aldous, Director of Commercial Policy,
Admissibility Branch of the Canada Border Services Agency. And, hopefully
after her presentation we will have some dynamic Q and A.
And so I would like to hand the mike over to Warren.
CANADIAN SPEAKER
Warren Coons *
MR. COONS: Thank you very much, Birgit. First of all, it is a pleasure to
be here today to speak about something that is certainly very important to the
RCMP and I believe very important to all law enforcement agencies that
have a nexus to the border in both of our countries.
There was a question asked at Ambassador Wilson's luncheon this
afternoon about how we secure the border between Minnesota and
Washington, 2 and hopefully during this presentation, you will get a better
idea of how exactly we intend to do that.
As everybody here is aware, we have a very long and unique border. 3 It is
characterized by remote, sparsely populated areas in some parts of the
countries, our two countries, and as well, urban centers in other parts of the
country. 4 This geography and the demographics of the borders pose certain
challenges to law enforcement and also opportunities for criminality. 5
*
Warren Coons is the director of Integrated Border Enforcement Teams (IBETs), where
the shared outcome will be enhanced border security coverage and improved international
relationships along the shared border, as a result of focusing on improving information-sharing
between Canadian and US law enforcement agencies and conducting intelligence-led investigations.
Border-related investigations, based on intelligence from all IBET partners, will be
more effective, rather than random enforcement activity. Law enforcement interoperability
will improve with the development of a technically successful communications system linking
multi-agencies that will facilitate joint operations, while addressing health and safety concerns
for law enforcement officers along the 49th parallel.
2
See generally UNITED STATES-CANADA BORDER DRUG THREAT ASSESSMENT vii
(2001) available at www.rcmp-grc.gc.ca/pdfs/cid/CanadaUSDrugThreat.pdf (last visited Oct
12, 2008) (discussing how the United States and Canada are dealing with criminal issues at the
border).
3
See generally UNITED STATES-CANADA BORDER DRUG THREAT ASSESSMENT ix
(2007) available at http://www.hsdl.org/hslog/?q=node/4233 (follow “Border Drug Threat
Assessment 2007” hyperlink) (last visited Oct. 12, 2008) (providing a general overview of the
geography of the Canada United States border).
4
See Id.
5
See generally Id.

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 93
Since 9/11 in particular, there has been a change in the attitude towards
the perception of the border, in some quarters the border is perceived as a
threat. 6 The level of that threat is certainly debatable; 7 however, there are a
couple of givens that we definitely accept. And they are first of all, that it is
virtually impossible to eliminate 100 percent of threats along the border. 8
And the second is that organized crime has and will continue to exploit any
vulnerabilities or gaps along that border. 9 So for these reasons, it is
imperative that law enforcement remain ever-vigilant and innovative and
most importantly, intelligence-led, 10 something I will touch upon a little bit
later as we confront the challenges at the border.
So, just to give you a brief history of the Integrated Border Enforcement
Teams: in December of 2001, our two governments signed the Smart Border
Declaration. 11 The four pillars of that Smart Border Declaration are the
secure flow of goods, people, and secure infrastructure, and as well, the
coordination of intelligence sharing and information sharing in the pursuit of
those initiatives. 12
The Smart Border Declaration also had a 30-point action plan included in
it. 13 One of those points was the establishment of Integrated Border
Enforcement Teams across our two countries. 14 Initially IBETs were a local
initiative in Washington State and British Columbia, and highly successful in
that area. 15 As a result of 9/11, as they looked around for opportunities to
improve border security, it was determined that IBET would be an
appropriate response for our two countries. 16
6
See generally John Noble, Fortress America or Fortress North America? 11 L. & BUS.
REV. AM. 461 (2005) (arguing that the United States and Canada should continue to cooperate
in the areas of police, intelligence and immigration sectors post 9/11).
7
See generally id.
8
9
See generally id.
See INTEGRATED BORDER ENFORCEMENT TEAMS (IBETS) CANADA-UNITED STATES
IBET THREAT ASSESSMENT (2007), available at http://www.rcmpgrc.gc.ca/security/ibets_threat_assess_e.htm
(last visited Oct. 12, 2008) (assessing the role of
the IBET program in national security issues at the Canada-United States border).
10
See generally id.
11
See U.S.-CANADA SMART BORDER: 30POINT ACTION PLAN UPDATE (December 6,
2002), available at http://www.whitehouse.gov/news/releases/2002/12/20021206-1.html (providing
an overview of the Smart Border Declaration and Associated 30-Point Action Plan).
12
See id.
13
14
15
See id.
See id.
See Noble, supra note 6 (discussing Integrated Border Enforcement Teams, their creation,
and use).
16
See Hon. Lawrence Macaulay, Solicitor General of Canada, Address at Launching of the
Central St. Lawrence Valley Integrated Border Enforcement Team: Talking Points (Feb. 28,
2002) available at http://www.ps-sp.ca/publications/speeches/20020228_e.asp (last visited
Oct. 12, 2008) (speaking about the actions by the United States and Canada in response to the

94 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
The five core agencies in the IBETs as it stands today are the Canada
Border Services Agency, RCMP, U.S. Customs Border Protection Office of
Border Patrol, U.S. Immigration and Customs Enforcement, ICE, and U.S.
Coast Guard. 17
There are 15 IBET regions and 24 IBET units across Canada. 18 I say
Canada because in Canada we have dedicated - the RCMP and CBSA have
dedicated - resources to the
Integrated Border Enforcement Teams while in the United States 19 they
work under the IBET philosophy, that we can call upon our U.S partners in
those core agencies and work closely and collaboratively with them on a
regular basis; 20 however, they do not have dedicated resources attached to the
IBET program. 21 There are a lot of good reasons to expect that that could
change in the near future, but I certainly do not want to let anything out of
the bag here especially considering some of the people in the room here
today. But we would hope that the IBET program is something that is
embraced, and that dedicated resources will be put into this initiative on both
sides of the border in the near future.
I should also, as we move forward, clear up any misunderstandings there
may be about how we might operate. Even though we talk about integrated
teams, from a law enforcement perspective, there is no gun-toting police
officers from Canada working in the United States or vice-versa. 22 When we
attacks on 9/11 and the effectiveness of those actions including the Integrated Border Enforcement
Teams).
17
See Nunez-Neto, Blas, CRS REPORT FOR CONGRESS, BORDER SECURITY:THE ROLE OF
THE U.S. BORDER PATROL at 19, available at
http://www.fas.org/sgp/crs/homesec/RL32562.pdf.
18
See INTEGRATED BORDER ENFORCEMENT TEAMS (IBETS) CANADA-UNITED STATES
IBET THREAT ASSESSMENT, supra note 9 (assessing the role of the IBET program in national
security issues at the Canada-United States border).
19
See generally Building Cross-Border Links: A Compendium of Canada-US Government
Collaboration, http://www.csps-efpc.gc.ca/research/publications/html/p128/28_e.html (last
visited Oct. 7, 2008) (providing information regarding RCMP and CBSA involvement in
Integrated Border Enforcement Teams); Royal Canadian Mounted Police: Horizontal Initiatives,
http://www.tbs-sct.gc.ca/dpr-rmr/2006-2007/inst/rcm/rcm10-eng.asp (last visited Oct. 7,
2008) (providing information regarding money invested by the CBSA and RCMP in the Integrated
Border Enforcement Teams).
20
See generally LEBEUF, MARCEL-EUGENE, CANADA-US LAW ENFORCEMENT BORDER
PARTNERSHIP- AN EVOLVING SITUATION (2002) available at http://dsppsd.pwgsc.gc.ca/Collection/JS62-118-2003E.pdf
(last visited Oct 12, 2008) (discussing collaboration
between Canada and United States at the Integrated Border Enforcement Team level).
21
See generally id.
22
See Moll, Frederic J., The Legal & Technological Advantage of a North American Perimeter
in the War Against Terrorism: How the Implementation of a Schengen-Type System will
Best Serve the Security Interests of the United States and Canada, 2004 SYRACUSE SCIENCE
&TECHNOLOGY LAW REPORTER 2, at 7 (Spring 2004) (discussing whether United States
agents should be permitted to carry guns in Canadian airports and joint border facilities).

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 95
are talking about actual enforcement work, there are still barriers in places
that prevent us from crossing the border with our firearms. 23 That does not
happen, but we work were closely together exchanging intelligence and
information on a regular basis. 24
However, from the intelligence side, there is integration where we are
working in each other's countries. 25 There are five co-locations Integrated
Border Intelligence Teams (IBIT) across both of our countries, three in the
United States, two in Canada. 26 And these have representatives from all the
agencies who are working together, exchanging intelligence, and working
through problems in the same office in each of our countries. 27
So the IBET model: I touched upon the intelligence-led policing, which
we believe is so important. IBETs are intelligence-led enforcement teams
comprised of federal, state, provincial, and local law enforcement personnel
working together to enhance our border security. 28
So what exactly is intelligence-led? Essentially what it means is that our
border is so long and diverse that it is impossible and ineffective to string law
enforcement officers on each side, every mile along our border. 29 It simply
will not work.
We must collaborate and, yes, integrate our operations to the greatest
extent possible and rely on the intelligence to direct our operations to where
we believe we will have the greatest opportunity for success. 30
And we must also ensure that there is a seamless and fluid exchange of
information between our border investigative units and our inland
investigative units because organized crime does not reside at the border. 31
Organized crime is in Toronto, Montreal, Vancouver, Los Angeles,
Philadelphia, New York, other places as well. 32 The primary places are the
large centers where it resides. 33
23
24
See id.
See generally Building Cross-Border Links: A Compendium of Canada-US Government
Collaboration, supra note 19.
25
See LEBEUF, supra note 20 at 8 (discussing the importance of integration from an intelligence
standpoint and the continued collaboration between Canada and the United States).
26
See Building Cross-Border Links: A Compendium of Canada-US Government Collaboration,
supra note 19.
27
See id.
28
See generally LEBEUF, supra note 20 at 8.
29
See Noble, supra note 6.
30
See generally INTEGRATED BORDER ENFORCEMENT TEAMS (IBETS) CANADA-UNITED
STATES IBET THREAT ASSESSMENT, supra note 9.
31
See generally id.
32
33
See generally id.
See generally id.

96 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
Now, the IBET model. The way that it is structured in the IBET world is
that there is an International Joint Management Team. 34 There is a senior
representative from each of the five core agencies that meet quarterly along
with U.S. attorneys and Canadian Department of Justice and a smattering of
other local officials depending on where the meetings are held. This group is
responsible essentially for the management of and oversees the IBET
program. 35
At the next level there is an International Coordination Team, which is
housed at RCMP headquarters in Ottawa, 36 which consists of representatives
from all of the core agencies; 37 at least one representative from all the core
agencies, some have more. This is the group that essentially administers the
IBET program and deals with policy issues on a daily basis. 38
But the most critical aspect of the IBET program is its local Joint
Management Teams. 39 These are groups of not only the five core agencies in
each of the local areas, but the all of the other law enforcement agencies in
that particular area recruited to participate in the JMT. 40 The joint
management team meets on a monthly basis to assess - to bring the
intelligence from its agencies, assess that intelligence, and prioritize
targeting. 41 In some of our most productive IBET units - just to give you an
example - there are 13 law enforcement agencies that sit around the table. 42
They discuss what the threats are in their areas, and they decide at that table
what investigations the IBET will work on. 43 There is actually a secret vote
that is held once they pare it down to three investigations. 44
That is the level of collaboration and cooperation that we have within
some joint management teams. Now it does not mean that every agency that
sits around the table is going to participate in each investigation, but rather
those that can, those that have the resources, those that have the interest in
that particular investigation will participate. 45 But even those that do not have
34
See Nunez-Neto, supra note 17 at 19.
35
See id.
36
See id.
37
See id (describing the Integrated Border Enforcement Teams’ National Coordination
Team and its organization and structure).
38
See id (discussing the Integrated Border Enforcement Teams’ national Coordination
Team and its duties and responsibilities).
39
See generally id (describing IBET joint management teams’ structure, organization,
responsibilities and actions).
40
See generally LEBEUF, supra note 20 (discussing the organization and effectiveness of
Integrated Border Enforcement Teams).
41
See generally id.
42
43
44
45
See generally id.
See generally id.
See generally id.
See generally id.

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 97
an understanding of what the threats are in that area and what the local JMT
is working on. This serves to simplify so that we are not running over each
other as we move through criminal investigations. The JMT serves a very
important function, and is really at the heart of the IBET program.
Our IBET priorities are national security, organized crime, and other
border criminality. 46 National security is the number one priority of all law
enforcement agencies in each of our countries. 47 But the reality is that the
vast majority of what we work on in the IBET program is organized crime
files. 48 And of those organized crime files, primarily smuggling organizations
with drugs being the second most common investigation in which we are
engaged. 49
So the case for IBET and why it is the most appropriate model. First of
all, like all entities, law enforcement has been impacted by significant
changes in the global environment. 50 Integrated economies, technological
advances, mobility, mass migration have obviously increased the number of
trans-border transactions that occur on a regular basis. 51 Organized crime has
exploited globalization, and they are more integrated than ever before. 52 And
they are not restricted by any borders. 53
Based on our IBET threat assessments, which are done collaboratively for
all our agencies, organized crime is the largest threat at the Canada-U.S.
border. 54 They are sophisticated, and they exploit vulnerabilities in
demographics and geography. 55
The picture that you see above is actually a picture of a tunnel that was
constructed between Canada and the U.S. near Aldergrove, British Columbia
under Zero Avenue. And thanks to the awareness of a CBSA officer who
noticed some people that he had had previous dealings with around the
Quonset hut in that area, we discovered this tunnel before it was completed. 56
46
See INTEGRATED BORDER ENFORCEMENT TEAMS (IBETS) CANADA-UNITED STATES
IBET THREAT ASSESSMENT, supra note 9.
47
See generally LEBEUF, supra note 20.
48
See INTEGRATED BORDER ENFORCEMENT TEAMS (IBETS) CANADA-UNITED STATES
IBET THREAT ASSESSMENT, supra note 9.
49
See id.
50
See generally Richard B. Stewart, The Global Regulatory Challenge to U.S. Administrative
Law, 37 N.Y.U. INT’L L. & POL. 695 (2005) (discussing the effects of globalization on
administrations including law enforcement).
51
See CHRISTOPHER RUDOLPH, INTERNATIONAL MIGRATION AND HOMELAND
SECURITY: COORDINATION AND COLLABORATION IN NORTH AMERICA, 2005 L. & BUS.
REV. AM. 433, 434 (discussing migration, homeland security, and globalization).
52
See INTEGRATED BORDER ENFORCEMENT TEAMS (IBETS) CANADA-UNITED STATES
IBET THREAT ASSESSMENT, supra note 9.
53
See generally id.
54
55
56
See generally id.
See generally id.
See Terry Frieden, Drug Tunnel Found Under Canada Border, CNN NEWS, July 22,

98 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
You should know that law enforcement waited for it to be completed and
actually prevented the smuggling organization from smuggling contraband
during their maiden voyage through the tunnel. 57 The second picture is just a
little snippet...
In the second photo - and we can just talk about it - but essentially you
would have seen a helicopter come down, a little video, a helicopter come
down and drop a load of narcotics as part of Project E Printer/Frozen Timber,
which occurred in British Columbia and Washington state. 58 Essentially that
investigation involved a smuggling ring that would move narcotics across the
border via helicopter and drop in remote areas, remote places in the U.S.
state and national parks. 59 It was a very successful investigation led by U.S.
ICE, Washington state police, RCMP and CBSA. 60
These are some of the kinds of investigations that we encounter, although
perhaps the more dramatic, but the point is that organized crime is very
adaptable. 61 If we are just positioned along the border in a line, they will go
over us, or they will go under us. 62 So we need to be integrated, intelligenceled
and focus our collective resources where the intelligence demonstrates
that they would be most effective. 63
Challenges for the IBET program however still exist, and those
challenges - for instance, maintaining sovereignty in an integrated world is a
constant challenge for us. In some of the remote areas, for instance in the
prairies, the nearest back-up for a law enforcement officer may be a
representative from a U.S. agency, if it is in Canada, or vice-versa. 64 So those
are the kind of things that we still confront and still deal with on a regular
basis. Sometimes we do not even want to know how those are dealt with to
be quite frank with you.
Other operational issues that we deal with are radio interoperability and
technology acquisition. 65 All of these things that we are trying to build to be
2005, available at http://www.cnn.com/2005/US/07/21/border.tunnel/index.html (last visited
Oct. 12, 2008).
57
See id.
58
See generally Integrated Border Enforcement Teams (IBETs) 2006 Joint Cross-Border
Operations, http://www.rcmp-grc.gc.ca/security/ibets_success_e.htm (last visited Oct. 11,
2008).
59
See id.
60
See generally id.
61
See INTEGRATED BORDER ENFORCEMENT TEAMS (IBETS) CANADA-UNITED STATES
IBET THREAT ASSESSMENT, supra note 9.
62
See id.
63
See generally id.
64
See generally id (discussing how the U.S. and Canada agencies have worked together
and been successful and also where they need to cooperate more).
65
See generally INTEGRATED BORDER ENFORCEMENT TEAMS (IBETS) CANADA-UNITED
STATES IBET THREAT ASSESSMENT, supra note 9.

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 99
a modern integrated police entity. Whereas before we only had to worry
about the acquisition process in one agency, now we are looking at five
agencies and attempting to ensure that everything we deliver to the field is
interoperable or at least has open architecture so that sometime down the
road we will be able to integrate our technological assets. 66
Another challenge is from a policy standpoint. There are different
agencies, different mandates, and different policies on information sharing,
something which has a very big issue for both countries. 67 These issues take
time and education for each of our agencies to try and get it right. 68 And I am
not saying that we have it right yet, but I think we are moving a lot closer to
that now.
And then finally, legal challenges. I am not going to touch upon that too
much right now other than to say there are a multitude of legal and regulatory
issues. 69 If we are going to become more integrated, then perhaps legislative
changes will be required in order to make us more effective. 70
I am also pleased to report that our two countries are presently in the
negotiation stages of an agreement designed specifically to address many of
these policy and legal issues that I have alluded to here today, but only in the
marine security law enforcement operations area. 71 We are hopeful that some
of the barriers to greater integration will be resolved as we move forward
with these negotiations and have a bi-national agreement in the security
marine environment.
So when we talk of IBET successes; timely intelligence, sharing of
intelligence, leveraging of resources, these are the kind of things that we
believe we bring to the table. Law enforcement recognizes that border
integrity is crucial to ensuring economic security and the public safety of
Canada and the United States. 72 We also recognize that no one agency,
66
See CANADA-UNITED STATES BORDER DRUG THREAT ASSESSMENT, supra note 2, 1-2
(discussing the many agencies cooperating and some of the issues facing them from the perspective
of both sides of the border).
67
See generally REPORT OF THE CANADIAN PARLIAMENTARY DELEGATION OF THE
CANADA-UNITED STATES INTER-PARLIAMENTARY GROUP TO THE CANADIAN/U.S.
BORDER: AU UNIFIED FOCUS CAN/AM BORDER TRADE ALLIANCE (2006) available at
http://www.parl.gc.ca/IIAPublications/index-E.aspx?sectionpage=1149_1 (last visited Oct. 12,
2008) (discussing the different problems that need to be resolved between the United States
and Canada in order to ensure better cooperation).
68
See generally id.
69
70
71
See generally id.
See generally id.
See generally Canadian Press, Marine Security Riddled with Gaps: Whistleblower, CBC
NEWS, Jan. 23, 2008, available at
http://www.cbc.ca/canada/story/2008/01/23/transportcanada.html (last visited Oct. 12, 2008)
(Discussing issues in the Canadian Marine Security program).
72
See generally LEBEUF, supra note 20 (discussing the efforts of law enforcement agencies
to help secure the Canada United States border).

100 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
entity, or country has the wherewithal to get all of it right and to eliminate all
of the threats. 73
We need to make our limited resources more effective. We need naiveté’s
such as IBET to make our operations more interoperable so that we can share
information in real time across organizations and across borders and focus on
common goals to ensure that the four pillars of the Smart Border Declaration
are sturdy, and that the Canada-U.S. border remains open to trade and
commerce. 74
Just some final thoughts. Securing the border does not start or stop at the
physical border. 75 It requires a seamless multilayered approach. 76 And finally
we must continue the progression from mere coordination to integration,
leveraging, and maximizing intelligence, technology, and resources. 77
Thank you.
MS. MATTHIESEN: Thanks, Warren. We are going to hold the questions
until the very end if you do not mind.
And we are going to bring the focus back to the actual port of entry. IBET
teams as you probably have realized operate in between ports of entries. 78
The two border agencies at ports of entry are U.S. Customs and Border
Protection and CBSA, 79 and I am pleased now to give the mike to Mr. Todd
Owen.
73
See generally id (noting the highly collaborative efforts of many different agencies from
both Canada and the United States).
74
See generally id (discussing how the Integrated Border Enforcement Teams help achieve
the bi-national goals of integration and collaboration).
75
See id (discussing the need to collaborate at all levels because the threat exists at all
levels).
76
See id.
77
See id.
78
See INTEGRATED BORDER ENFORCEMENT TEAMS (IBETS) CANADA-UNITED STATES
IBET THREAT ASSESSMENT (2007), supra note 9 (discussing Integrated Border Enforcement
Teams and their operation localities).
79
See generally id (discussing agencies that support the Integrated Border Enforcement
Teams).

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 101
UNITED STATES SPEAKER
Todd C. Owen †
MR. OWEN: Thank you. Well, good afternoon everybody. It is a pleasure
to be here and to speak to you a little bit about some of the cargo security
programs that U.S. Customs and Border Protection has in place today to both
help secure the border as well as to facilitate legitimate trade and travel.
And I would like to pick up on a theme that Warren started with the
importance of an intelligence-driven, data-driven, multilayered seamless
approach to securing the borders. I am going to focus mostly on the cargo
aspect of this, and I think most of you are familiar with who U.S. Customs
and Border Protection is and how we came to be created after the Department
of Homeland Security was established in March of 2003. 80 We combined the
inspection resources from the former U.S. Customs Service, the Immigration
Naturalization Service, and the Department of Agriculture quarantine
inspection. 81 Their inspectors, as well as the Office of the Border Patrol, the
three previous groups, Customs, INS, and Agriculture work at the ports of
entry whereas Border Patrol worked between the ports of entry. 82
And to give you an idea on the scope of the challenges that CBP faces. On
a typical day we have over 1.1 million passengers and pedestrians that gain
entry into the country. 83 653,000 of them do so, 84 and they are foreign
†
Todd C. Owen is the Executive Director of the Cargo and Conveyance Security Office
within U.S. Customs and Border Protection’s Office of Field Operations. As the Executive
Director for the Cargo and Conveyance Security (CCS) Office since May 2006, Mr. Owen is
directly responsible for all cargo security programs and policies for CBP. Included within the
CCS Office are the Container Security Initiative Office, the Secure Freight Initiative Office,
the Non-Intrusive Inspection Technology Office (which includes radiation detection equipment
and large scale imaging equipment, policies, and programs), the Customs-Trade Partnership
Against Terrorism Program (C-TPAT) Office, the national Canine Enforcement Program,
the Cargo Verification Office which manages cargo enforcement policies and activities with
the U.S. Coast Guard and the Transportation Security Administration, the Cargo Control
Office which oversees trade security policies and programs including in-bond, manifest and
carrier compliance programs, and the National Targeting Center for Cargo, located in Northern
Virginia. Previously, Mr. Owen was the Director of the C-TPAT program.
80
See generally Customs and Border Protection Today: One Team, One Fight,
http://www.cbp.gov/xp/CustomsToday/2003/March/one.xml (last visited Sept. 30, 2008)
(providing extensive information on the creation of U.S. Customs and Border Protection).
81
See id.
82
83
See generally id.
See generally US Customs and Border Protection,
http://www.cbp.gov/xp/cgov/about/mission/cbp_is.xml (last visited Sept. 30, 2008) (describing
the activity that United States Customs and Border Control sees on a daily basis).
84
See generally id.

102 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
visitors into the country. We have over 70,000 truck, rail, and sea containers
that enter the country every day, 85 and 304,000 personally-owned vehicles. 86
On an average day we see at least 2,200 pounds of narcotics at the ports of
entry, and 5,100 pounds between the ports of entry. 87 And that is a significant
role when you look at what the IBETs are doing for that smuggling avenue
that occurs between the legitimate border crossings. 88
We also refuse entry to over 800 aliens who are attempting to enter the
United States and found inadmissible, 89 and these are the ones who presented
themselves at the official port of entries, not the individuals that are
interdicted by the border patrol trying to cross between the ports. 90 And we
deploy over 1,100 K-9 teams, 10,000 vehicles, 267 aircraft, 175 watercraft,
and 188 horse teams on the borders, so we have quite a challenge if you look
at what we are doing every single day. 91
To meet that challenge, we employ a multilayered enforcement strategy
again which starts with the advanced data that we receive. 92 Under various
pieces of the legislation, starting with the Trade Act of 2002, U.S. Customs
began to require advanced submission of electronic manifest data. 93 That
information helps us to target before the cargo either arrives in the country or
is even laid onboard a vessel in a foreign port as in the case of Maritime
cargo. 94
That advanced information is run through a complement of our automated
targeting systems, and every single shipment that is coming into the United
States is screened for risk before it even gets here. 95 That way we can direct
the limited resources that we do have into those, again, 70,000 containers,
truck and rail, every day that pose the greatest risk, and those are the ones
that we can target for inspection.
We have two national targeting centers, both in Northern Virginia - one
that focuses solely on passengers, one that focuses solely on cargo, and they
add another layer to what we are doing to again help screen all the cargo
before it arrives in the United States. 96
85
86
87
88
See generally id.
See generally id.
See generally id.
See generally INTEGRATED BORDER ENFORCEMENT TEAMS (IBETS) CANADA-UNITED
STATES IBET THREAT ASSESSMENT, supra note 9.
89
See generally US Customs and Border Protection, supra note 83.
90
See generally id.
91
See generally id.
92
See generally id.
93
See generally E-Manifest Gateway, http://www.ecustoms.com/vg/e-manifestgateway.cfm
(last visited Oct. 7, 2008) (describing the electronic manifest data system).
94
See generally id.
95
96
See generally id.
See generally id.

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 103
With that advanced manifest information, that was a good starting point
back in 2002. 97 But over the last few years, CBP has realized that in order to
enhance our targeting to better identify the high-risk shipments and facilitate
the low-risk recurring shipments, we can benefit from even greater data. 98
We have an initiative underway now that you may have heard of called the
10+2 Security Filing, and this is a move to require importers to submit 10
additional data elements prior to the loading of the foreign vessel. 99
Information is such as where is the container stuffed, who is doing that
information 100 - additional pieces of data that identify the entities involved in
each of these shipments. 101
From the sea carriers, we are requiring electronic transmission of the
stowage plans, the mapping, if you will, of all the containers that are on a
certain vessel. 102 From that we can automatically identify any cargo that has
not been declared - you know, that container that was added on at the last
minute that CBP and that the Coast Guard may not be aware of. 103 So even
though we start with the data, we realize that we further enhance that process,
and we have that move underway now known as the Security Filing 10+2.
So with that data, once we determine the shipment is high-risk, we can
either order what is called a do-not-load order, which keeps the cargo from
being loaded onboard the vessel, 104 or we can look at it overseas as part of
our container security initiative, 105 or we can look at it when the cargo arrives
here in the United States. 106
I would like to talk a little bit about our CSI program. Under the
Container Security Initiative, U.S. Customs and Border Protection officers
are deployed overseas at up to - we are at 58 seaports now around the
world. 107 The first CSI deployment occurred in February of 2002 in
97
98
See generally id.
See generally Security Filing 10+2,
http://www.cbp.gov/xp/cgov/trade/cargo_security/carriers/security_filing (follow “Security
Filing, 10+2 Regulatory Assessment and Initial Regulatory Flexibility Analysis for the Notice
of Proposed Rulemaking” hyperlink) (last visited Oct. 11, 2008) (providing information regarding
the 10+2 filing initiative which acts to facilitate trade).
99
See generally id.
100
101
102
103
104
105
See generally id.
See generally id.
See generally id.
See generally id.
See generally id.
See generally CSI in Brief,
http://www.cbp.gov/xp/cgov/trade/cargo_security/csi/csi_in_brief.xml (last visited on Oct. 7,
2008) (providing general information on the initiative).
106
See generally id.
107
See generally id.

104 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
Vancouver, 108 and that was followed by deployments in Montreal and
Halifax. 109
So now we have an opportunity in 58 countries around the world where
we have over 200 officers permanently stationed to identify the high-risk
shipments and examine them before they are even laid onboard a vessel
coming to the United States. 110 And that is not only a great security benefit,
but it is also a great trade facilitation benefit. 111 Prior to these types of
actions, if you had a very hot suspect container on a ship that caused a great
deal of concern, working with the Coast Guard, we often kept that ship
outside of the port to address that risk. 112
Here we have an opportunity to address that risk before the container's
onboard so that everybody else's containers that are on that ship are not
unnecessarily held up. So the Container Security Initiative really is an
enhancement to the security the U.S. has in place. 113 In 2006 we conducted
over 78,000 of these high-risk inspections overseas, and in 2007 that almost
doubled to 137,000. 114
So clear are the benefits of having U.S. officers overseas working with
our host countries to identify the high-risk shipments, look at them, make
sure they do not pose a threat before they get put on a cargo ship and they get
mixed in with the general trade.
Whether the inspection is conducted overseas or here in the United States,
we have a full complement of inspection technology that allows us to quickly
facilitate that examination, and if there are no concerns, move the cargo
through. 115 We have large-scale nonintrusive inspection equipments. 116 These
are the large x-ray and gamma ray systems you may have seen. 117 We have
almost 200 of those deployed at our land borders as well as at our seaports. 118
We also now have a full complement of radiation portal monitors in all of
our land border and our seaport ports of entry. 119 The first radiation portal
108
109
110
111
112
113
114
115
See generally id.
See generally id.
See generally id.
See generally id.
See generally id.
See generally id.
See generally id.
See generally Inspections and Surveillance Technology – Extended,
http://www.cbp.gov/xp/cgov/newsroom/fact_sheets/port_security/fact_sheet_cbp_securing.xm
l (last visited Sept. 23, 2008).
116
See generally id.
117
118
See generally id.
See generally Acquisition and Deployment of Radiation Detection Equipment,
http://www.gao.gov/new.items/d03235t.pdf (last visited Sept. 23, 2008).
119
See generally, Mobile Radiation Portal Monitors,
http://www.globalsecurity.org/security/systems/mobile-rpm.htm (last visited Sept. 25, 2008).

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 105
monitor was deployed in October of 2002, 120 and we have over 1,100 of them
deployed today. 121 And what that gives us is that 100 percent of the trucks
that arrived from Mexico are scanned for radiation before it leaves the
border. 122 From Canada we are at 91 percent, and we will reach 97 percent by
the end of this calendar year. 123 We have 84 more radiation portal monitors
going in over the summer. 124 We have three times as many land border
crossings with Canada as we do for Mexico, 125 so it is a greater challenge to
get a lot of those smaller crossings equipped with the technology that we
need. And in our U.S. seaports, we now scan 98 percent of the Maritime
cargo when it gets off the ship before it enters the commerce. 126
Eighteen months ago we were only scanning 37 percent. 127 So you can see
here's a great significant improvement of the security of the United States.
And since we started this program, we have now screened over 243 million
conveyances, 128 and we have resolved 1.4 million alarms. 129 And to give you
an idea on the impact of the workload on the CBP officers in the port of
Long Beach, the largest seaport in the United States, 130 we resolve 400 to 500
alarms every day. 131 We have a team of about a hundred officers over the
three shifts that all they do is resolve these radiation portal alarms. 132 So this
120
See Combating Nuclear Smuggling: Efforts to Deploy Radiation Detection Equipment
in the United States and in Other Countries, http://www.gao.gov/htext/d05840t.html (last
visited Sept. 25, 2008).
121
See Vayl Oxford, Speech at IFPA-Fletcher Conference (Sept. 26, 2007).
122
See generally Robert C. Bonner, Remarks at Kansas City Chamber of Commerce (May
16, 2005).
123
See Vayl Oxford, supra note 121.
124
See generally Mobile Radiation Portal Monitors, supra note 119.
125
See US Department of Transportation, JWC U.S./Mexico Border Transportation Planning,
(Jan./Feb. 2005) available at
http://www.borderplanning.fhwa.dot.gov/current_article1.asp (stating, “[T]ruck crossings at
the U.S.-Canada border reached 13.3 million, and truck crossings from Mexico into the United
States reached 4.2 million in 2003.).
126
See generally Ben Bain, Commerce Versus Security, FCW, July 7, 2008,
http://www.fcw.com/print/22_20/features/153046-1.html?type=pf (last visited Oct. 12, 2008).
127
See Vayl S. Oxford, Director, Domestic Nuclear Detection Office of DHS, Speech at
House Committee on Homeland Security Subcommittee on Border, Maritime and Global
Counterterrorism: SAFE Port Act: Status of Implementation One Year Later (Oct. 11, 2007).
128
See generally Preventing Nuclear Terrorism: Hearing Before the S. Comm. On Homeland
Sec. and Gov’t Affairs, 110th Cong. (Sept. 25, 2008) (Testimony by Thomas S. Winkowski,
Assist. Commissioner).
129
See generally id.
130
See generally Dan Keane, Mexico’s Seaport, WASHINGTON TIMES, Sept. 3, 2008, available
at http://www.washingtontimes.com/news/2008/sep/03/mexicos-seaport/ (last visited Oct.
12, 2008).
131
132
See generally Preventing-Nuclear Terrorism supra note 128.
See id.

106 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
is a great effort to help secure the United States, but it is a significant impact
on our resources.
So if you look at the CSI deployments where we have officers overseas,
we have the radiation equipment and we have the imaging technology. 133 The
next natural evolution of these programs is what concept that has come to be
known as 100 percent scanning. 134 You may have heard of this.
We have two recent pieces of legislation in the United States. The Safe
Port Act in October of 2006 that required CBP to go out and test the concept
of 100 percent scanning at the foreign locations. 135 Scanning according to the
legislation means the radiation read as well as the imaging to see what is
inside the container. 136
A significant amount of challenges that come with this from a technical
standpoint, an infrastructure standpoint within your ports all the way down to
the political and the diplomatic things like weather. 137 Under the Safe Port
Act where we were required to go out and pilot this on a three-location
basis, 138 we have been operational since October of 2007 in Qasim, Pakistan,
in Cortez, Honduras, and in South Hampton in the U.K. 139 And in those three
locations, a hundred percent of the containers go through a radiation scan, go
through an imaging, before they are put on a vessel destined to the United
States. 140
Those three locations are primarily gate traffic. It is easy to control this
type of activity if you have a single choke point where everything is going to
come through. The real challenge comes in the Singapores, the Hong Kongs
where you have significant trained shipment where it moves from one vessel
to another and never really comes through an entrance port at a gate.
So to test that, we have smaller scale pilots going on in Hong Kong right
now. We will be going live in Korea and in Salalah, Oman by the end of
May. 141 And then we have some work underway to get us in Singapore as
133
See generally An Overall Picture of Port Security,
http://www.cbp.gov/xp/cgov/newsroom/fact_sheets/port_security/securing_us_ports.xml (last
visited Sept. 25, 2008).
134
See generally id.
135
See generally id.
136
See generally H.R. 4954 (Enrolled-Bill),
http://thomas.loc.gov/home/gpoxmlc109/h4954_enr.xml (last visited Oct. 9, 2008).
137
See generally GlobalSecurity.org, Homeland Security: SBInet,
http://www.globalsecurity.org/security/ops/sbinet.htm (last visited Oct. 9, 2008).
138
See generally Steward Baker, Assistant Sec’y of DHS, Speech before the Committee on
Homeland Security and Governmental Affairs: One Year Later: A Progress Report on the
SAFE Port Act (Oct. 16, 2007).
139
See generally id.
140
See generally An Overall Picture of Port Security, supra note 133.
141
See generally, Report to Congress on Integrated Scanning System Pilots (Security and
Accountability for Every Port Act of 2006, Section 231),

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 107
well. 142 That is really going to give us additional data to test how well this
concept works.
It is very challenging. The IT infrastructures in many of these developing
countries do not support this type of technology, 143 so there is a cost incurred
with bringing it up-to-date all the way down to things like the weather. 144 In
Qasim, it is so hot there in the summer that the non-intrusive inspection
equipment would just shut down. 145 It was not built for those extreme heats,
so we had to build a special canopy to try to keep it cool. 146 And then you
have things like the political unrest that we experience in Pakistan quite
frequently where the cables will be cut, and there will be things like that. So
there is a lot of challenges that went into this. Again, the Safe Port Act said
go ahead and pilot this and take the lessons learned, and come back to
Congress and let us see what the path forward will be.
Then the 9/11 Commission Act that was passed a year later in August of
2007 basically trumped the Safe Port go-out-and-pilot-this and said do 100
percent of all containers by 2012. 147 So this is a huge significant challenge to
have over 700 seaports around the world that export cargo to the United
States. 148 I do not think it is feasible that we would ever been be in 700
locations for exactly the reasons we mentioned - the technical, the
infrastructure, the political, types of things like that.
So we are trying to be responsive to the 9/11 Act legislation. We are
going to further these pilots and see the lessons that can be learned, and then
figure out a way to go forth as part of risk management approach more likely
in high-risk trade corridors like the Qasim, Pakistan situation where it makes
sense to deploy that type of equipment in a very high-risk environment. Do
you need that array of technology, the costs that are incurred at every seaport
around the world? I would think not. But again, this is a big issue that is
under debate within the United States. The trade community is very opposed
to this because of the impact that it will have on the throughput of these
ports, the additional costs that will be incurred. But again, U.S. Customs
Border Protection, we have to be responsive to the legislative act that is out
http://commerce.senate.gov/public/_files/SFIReport_PublicRelease_FINAL_Consolidated.pdf
(last visited Sept. 29, 2008).
142
See generally id.
143
See generally id.
144
See generally id.
145
See generally Weather: Karachi, Pakistan,
http://www.bbc.co.uk/weather/world/city_guides/results.shtml?tt=TT002700 (last visited Oct.
11, 2008).
146
See generally id.
147
See generally The SAFE Port Act and Efforts to Secure Our Nation’s Seaports,
http://www.gao.gov/new.items/d0886t.pdf (last visited Oct. 6, 2008).
148
See generally Supply Chain Security: Challenges to Scanning 100 Percent of U.S.-
Bound Cargo Containers, http://www.gao.gov/htext/d08533t.html (last visited Oct. 6, 2008).

108 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
there so we are working towards how we can adopt 100 percent scanning in
certain high-risk trade corridors as we go forward through here.
The last program that I just want to touch upon is the Customs Trade
Partnership Against Terrorism program, C-TPAT. 149 This is the last piece of
our layered enforcement strategy, and this really is our industry partnership
program with the trade. CBP has long recognized that in order to secure the
national trade supply chains, we cannot do this alone. 150 We need the help of
other governments. That is how we, you know, started things with the
container security initiative. We need to help with industry, and that was
what we are doing within C-TPAT. 151
Under C-TPAT, we have clearly defined minimum-security criteria that
U.S. importers and service providers, such as carriers, must adopt. 152 The
adoption of these security practices makes their supply chains more secure. 153
Once we go out and conduct onsite validations to make sure that the security
measures they claimed to have adopted are in fact in place, then we can go
ahead and treat that supply chain as low-risk and afford it fewer inspections.
Today we have over 8,300 members in this program, and we have
conducted over 7,600 validations. 154 So 7,600 times, teams of U.S., CBP,
supply chain security specialists working with the partners, with the
companies that import into the United States conduct a physical onsite
evaluation from the point of stuffing a container where those goods are made
all the way through their supply chain and look for security deficiencies and
then work for ways to close the hole. 155
So then here again, here's another program that is working 7,600 times.
We have worked in partnership to identify the weaknesses and tighten those
holes. We have conducted these validations in 87 countries around the
149
See generally What is Customs-Trade Partnership Against Terrorism,
http://www.cbp.gov/xp/cgov/trade/cargo_security/ctpat/what_ctpat/ (last visited Oct. 6, 2008).
150
See generally Maritime Cargo Security In The Age Of Global Terrorism,
http://www.cbp.gov/xp/cgov/newsroom/highlights/trade_news/cargo_security.xml (last visited
Oct. 6, 2008).
151
See generally Fact Sheet: C-TPAT,
http://www.cbp.gov/xp/cgov/newsroom/fact_sheets/port_security/ctpat_sheet.xml (last visited
Oct. 6, 2008).
152
See Minimum-Security Criteria for C-TPAT Foreign Manufacturers in English,
http://www.cbp.gov/xp/cgov/trade/cargo_security/ctpat/security_criteria/sec_criteria_foreign_
mfc/foreign_mfc_security_criteria.xml (last visited Oct. 6, 2008).
153
See generally id.
154
See C-TPAT Program Addresses Exports, GAO Fixes,
http://www.americanshipper.com/fc/FLC_story.asp?news=95898 (last visited Oct. 6, 2008).
155
See generally CHARLES BROWNSTEIN ET AL., HOMELAND SECURITY INSTITUTE,REPORT
OF THE DHS NATIONAL SMALL VESSEL SECURITY SUMMIT (Oct. 19, 2007),
http://www.dhs.gov/xlibrary/assets/small_vessel_NSVSS_Report_HQ_508.pdf (last visited
Oct. 12, 2008).

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 109
world. 156 And again this is an anti-terrorism program. We are not going to the
garden spots. I mean, we are doing Bangladesh in August and some - you
know, there are no trips to Paris in the springtime under this program, so it is
a very intensive program. We have over 200 officers that are dedicated just
to this program. We have recently opened a new office in Buffalo, New York
to help greatly facilitate the interaction with the Canadian trade
environment. 157 A third of the members in C-TPAT are Canadian truckers or
Canadian importers, so that is our largest partnership group if you will. 158
That is why we have established a new office in Buffalo to quickly facilitate
that.
So what I wanted to do hopefully this afternoon is give you an idea on
some of the cargo security programs that CBP has in place, how they all are
interacted, and our approach being that any one layer can be defeated, but
through multiple layers, the likelihood of success is greatly diminished.
Thank you.
MS. MATTHIESEN: Thanks, Todd. I am really hoping there are going to
be very good questions after this panel. The last speaker, but not the least, is
Joy Aldous from the Canadian Border Services Agency. 159
CANADIAN SPEAKER
Joy Aldous ‡
MS. ALDOUS: Thank you very much. Good afternoon everyone.
I am very, very happy to be here today to talk about border security. I
have been with the agency, the Canada Border Services Agency, for about 30
156
See W. Ralph Basham, Remarks at National Customs Brokers & Forwarders Assoc. of
America (Apr. 9, 2008) (transcript available at
http://www.cbp.gov/xp/cgov/newsroom/commissioner/speeches_statements/ncbfaa.xml) (last
visited Oct. 12, 2008).
157
See generally CBP.gov, Buffalo Station,
http://www.cbp.gov/xp/cgov/border_security/border_patrol/border_patrol_sectors/buffalo_sect
or_ny/stations/buffalo.xml (last visited Oct. 6, 2004).
158
See generally C-TPAT Cost/Benefit Survey 2007,
http://www.virginia.edu/surveys/press/2007/ctpat/2007_CTPAT_Final%20Report%20Only.pd
f (last visited Oct. 6, 2008).
159
See Border Commercial Consultative Committee Record of Meeting (Feb. 26 – 27,
2008), http://www.cbsa-asfc.gc.ca/agency-agence/consult/bccc-ccacf/2008-02-26-eng.html
(last visited Oct. 6, 2008).
‡
Joy Aldous is the Director of the Licensing, Export and Accounting Policy Division in
the Admissibility Branch of the Canada Border Services Agency. She has over 30 years of
experience in the agency and has contributed to many initiatives including Customs Self Assessment,
ACROSS, Titan and the Customs Commercial System.

110 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
years under various names. 160 We were created in 2003 under the public
safety mandate to integrate almost identically to what the Americans did. 161
We are under the public safety umbrella, which not surprisingly, as it
absolutely makes sense, was aligned very, very similarly to the U.S. 162 This
facilitates many things: for example the exchange of information allows us to
talk about common problems where an organizational structure is not your
biggest issue. But we have an enormous responsibility. All of us do. Both
sides of the fence: business and government. It is a constant balancing act
between security and facilitation, and it really does require innovation,
cooperation, and flexibility. 163 And I know you guys do not think we are very
flexible, but we try to wear two hats wherever possible.
But we have to recognize the synergy between these two things, between
access and security. An accessible border can only be maintained if
Canadians and Americans are satisfied with the underlying level of security,
its costs, its respect for personal and economic freedoms. 164 We were all
raised on those. They are basic values within our system, our economies. 165
Under the Smart Border Accord that was implemented seven years ago,
we have done everything we can within our country to work with the U.S. in
an effective joint approach to the border. 166 We understand that having
different requirements increases cost for trade.
Some of the presentations this morning talked about the large percentage
of businesses where there is a Canadian corporation and an American
corporation. They trade between them. And we have to recognize that and
accept it, but we have not been able to match the U.S. with everything. As I
was listening to his impressive list of staff and equipment, I was only
dreaming that we could be even so close, we have to do a little bit less with a
160
161
See generally id.
See Memorandum of Understanding Between the Department of Citizenship and Immigration,
The Canada Border Services Agency and The Immigration and Refugee Board of
Canada, http://www.cic.gc.ca/ENGLISH/department/laws-policy/mou/mou-cbsa.asp (last
visited Oct. 6, 2008).
162
See generally id.
163
See generally Canada Border Services Agency: Overview, http://www.tbssct.gc.ca/rpp/2008-2009/inst/bsf/bsf01-eng.asp
(last visited Oct. 6, 2008).
164
See generally Joint Statement by President Bush, President Calderon, Prime Minister
Harper, The White House (April 22, 2008), available at
http://www.commerce.gov/NewsRoom/PressReleases_FactSheets/PROD01_005566?format_f
or_print=true (last visited Oct. 12, 2008).
165
See generally id.
166
See generally U.S.-Canada Smart Borders Accord,
http://www.sourcewatch.org/index.php?title=U.S.-Canada_Smart_Borders_Accord (last visited
Oct. 6, 2008).

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 111
little bit less money. We also have to dispel the myth that Canada has a
more-relaxed view on border security. 167 That is absolutely not the case.
Let me just talk a little bit about how we look at security, and surprisingly
enough, you are going to hear exactly the same words that you have heard
from everybody. We have three fundamental strategies. First is to receive
advanced information, electronic information on who and what is coming to
our country. 168 Same as the Americans. Second, turning that information into
intelligence using sophisticated risk assessment systems. 169 There was a lot of
discussion this morning about setting a score. We are there; we are doing it.
And third of course - and really also very, very important especially to you -
is building secure access programs such as NEXUS, 170 such as FAST so that
we can stop spending the time on the lower risk shipments and concentrate
on the areas of high-risk. 171 Absolutely essential.
So we have a multiple borders approach. Heard this term already. We are
trying to push out the border wherever possible. It is been mentioned already.
Our migration integrity officer network, it works overseas to intercept
improperly documented travelers before they get to Canada. 172 There has
been 45,000 already that we have stopped before they got here. 173 We also
collaborate on the U.S. perimeter security to facilitate and accelerate the
travel of people and goods across the land to their ultimate North American
destination. 174
Well, there has been no great policy or political advancement that would
differentiate between the perimeter and the 49th parallel. Many of our
policies do that. When we sit there and think where is the biggest risk, where
should we be dedicating our resources, certainly an offshore situation is
almost always higher.
We have the same systems and processes in place as you just heard from
my colleague. We have joint targeting in our national risk assessment
167
See generally 2007 Public-Private Sector Summit on National Security: Stronger Borders,
Better Trade (May 10-11, 2007), available at
http://www.conferenceboard.ca/conf/may07/security/agenda.pdf (last visited Oct. 12, 2008).
168
C-TPAT Cost/Benefit Survey 2007, supra note 159.
169
Id.
170
Id.
171
Id.
172
See Immigration Intelligence – Irregular Migration, http://www.cbsaasfc.gc.ca/media/facts-faits/030-eng.html
(last visited Oct. 6, 2008).
173
See generally Anne McLellan, Speech at 15 th Annual Summit of the Pacific NorthWest
Economic Region (July 15, 2005), available at
http://www.publicsafety.gc.ca/media/sp/2005/sp20050715-eng.aspx (last visited Oct. 12,
2008).
174
See generally Canada Border Service Agency: Analysis of Program Activities,
http://www.tbs-sct.gc.ca/rpp/0607/bsa-asf/bsa-asf02-eng.asp (last visited Oct. 6, 2008).

112 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
center. 175 We get the advance cargo information on our container ships and
the timeframes for advanced information for cargo, for marine and air mode
are harmonized with the Americans. 176 Our process for “hold for more
information” is very similar because the shippers coming to the country do
not want to have 15 different systems if they can avoid it. So wherever
possible, we do try to harmonize processes, data elements. Certainly cannot
be identical, but we do try. We try to use the same message maps, the same
standards, the same communication language.
Our multiple border philosophy also means that most of our trade
programs and revenue collection activity occurs away from the border inland,
and we have been moving more and more towards concentrating our front
line officers’ concentration on determining admissibility. 177 Is there a health,
safety, or security risk? We let the other stuff happen later. And we have
been working very hard with trade to continue to do that. Number one, not to
congest the border, and number two, to meet our financial responsibility as
we also collect significant revenue. Although the money is not secondary, it
can be managed, we believe in a different way using audit-based processes
after the fact.
And finally, multiple borders mean working in the Canadian communities
with our security partners to prevent smuggling of guns and drugs, and to
detain and remove individuals who pose a danger to the public. 178 So many
different fronts we are working on. But we have a particularly rich tradition
of cooperation with the U.S. from free trade through the smart border onto
the security and prosperity partnership (SPP). 179
But the U.S. does have more money. You are a lot bigger than we are. We
are sort of the poor cousin. But it makes us very, very careful and I think
very strategic in terms of where we invest our funds. But I do know we need
to do more to ensure that the 49th parallel accommodates an efficient, secure
two-way street for both travel and commerce.
The recent Canada-U.S. Chambers of Commerce report has been
mentioned a few times already today: reducing border costs while
strengthening security. 180 While many of the recommendations are actually
175
See generally Canada Border Services Agency: National Risk Assessment Centre,
http://www.cbsa-asfc.gc.ca/media/facts-faits/039-eng.html (last visited Oct. 6, 2008).
176
See generally id.
177
See generally Chris Thatcher, Connecting Data Points: The National Risk Assessment
Centre, http://www.vanguardcanada.com/DataSiftingThatcher (last visited Oct. 6, 2008).
178
See generally Claudette Deschenes, Vice-President, Enforcement Branch Canada Border
Services Agency, Presentation: Enforcement Branch Overview (Oct. 11, 2006), available at
http://www.cscb.ca/listinfo/EnforcementBranchBCCCOct06.ppt (last visited Oct. 12, 2008).
179
See generally Smart Border Action Plan Status Report,
http://geo.international.gc.ca/can-am/main/border/status-en.asp (last visited Oct. 6, 2008).
180
See U.S. Chamber of Commerce, Finding the Balance: Reducing Border Costs While

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 113
very consistent with the direction for SPP, we do recognize that as the report
asserts, border dependent businesses cannot wait for long-term solutions, 181
and we must work on a daily basis to further prevent that thickening of the
border. 182
The U.S. Western Hemisphere Travel Initiative, WHTI, 183 has also been
mentioned today, and that was a particular flash point for one of our bilateral
challenges over this last year. 184 We have worked very hard to ensure that
Canadians are aware of this. They are informed, and they are prepared for the
new requirements in order to facilitate the implementation. We are very
pleased that the U.S. agreed to delay that until June '09 for land and water, 185
mainly because the percentage of population that use those modes with
passports was much, much lower than the other modes. 186
But as of June, we will be required - Canadians – to present a valid
passport, a NEXUS or FAST card when we enter the U.S. 187 We are very
encouraged that negotiations have led to lowering this requirement for
children and that a birth certificate will be acceptable for children. 188 And
that we continue to discuss the possibility of the acceptance of a secure
certificate of Indian status card or Canadian enhanced driver's license. 189 Our
province of British Columbia has announced that they are implementing a
more sophisticated card with security measures, and we have signed a
memorandum of understanding with Customs Border Protection dealing with
information sharing so that we can share the information we have collected
on the driver's licenses. 190
Strengthening
Security,
http://www.uschamber.com/publications/reports/0802_finding_balance.htm (last visited Oct.
6, 2008)
181
See id.
182
See id.
183
See State.gov, Western Hemisphere Travel Initiative,
http://travel.state.gov/travel/cbpmc/cbpmc_2223.html (last visited Oct. 9, 2008).
184
See generally David H. Wilkins, U.S. Ambassador to Canada, Remarks at Tourism
Association of Nova Scotia (Dec. 4, 2006), available at
http://ottawa.usembassy.gov/content/textonly.asp?section=embconsul&document=wilkins_12
0406 (last visited Oct. 12, 2008).
185
See Documents for Travel to the United States Chronology, http://www.cbsaasfc.gc.ca/whti-ivho/chron-eng.html
(last visited Oct. 9, 2008).
186
See generally NPR.org, U.S. Passport Relief May Come Too Late for Many,
http://www.npr.org/templates/story/story.php?storyId=10876269 (last visited Oct. 9, 2008).
187
See generally Documents for Entry into the United States, http://www.cbsaasfc.gc.ca/whti-ivho/tourist-touriste-eng.html
(last visited Oct. 9, 2008).
188
See generally DHS.gov, Crossing U.S. Borders,
http://www.dhs.gov/xtrvlsec/crossingborders/ (last visited Oct. 9, 2008).
189
Documents for Entry into the United States, supra note 187.
190
See generally Privacy Impact Assessments: High-Risk Traveler Identification Initiative,
http://www.cbsa-asfc.gc.ca/agency-agence/reports-rapports/pia-efvp/hrti_ivre_20051003-

114 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
And we will continue to engage our federal partners in this project. It has
huge potential impact to our economy. 191 People were talking about families,
families who live on either side of the border. These changes are huge
cultural changes I believe, and we are hoping that we can move forward in a
common-sense way.
NEXUS. NEXUS is a wonderful example of what can be achieved
working together with the U.S. to more efficiently process low-risk
travelers. 192 And again, that frees us to spend our time looking at the stuff
that should be higher risk. NEXUS has now been implemented at all major
Canadian airports and harmonized against the modes, air, land, and
marine. 193 It verifies the low-risk status of the participant. 194 There is a really
exhaustive risk assessment done. 195 It is one application for two countries. 196
And it actually uses iris technology. 197
NEXUS uses 260 characteristics of the eyeball to identify who the
machine is talking to. 198 Great idea. Our membership is up to 185,000 now, 199
of which four and five are in this room. We recently also got another $17
million from our federal budget to further expand this program. 200
We have an initiative called e-Manifest which lines up quite closely with
ACE, 201 which is going to now mandate the pre-arrival electronic information
in the rail and marine modes, both from carriers, freight forwarders, and
importers. 202 Radiation detection as well, we talked about that. U.S. Customs
has talked about that. We as well will have our implementation completed
this year at all our major marine ports.
eng.html (last visited Oct. 9, 2008).
191
See generally Todd Hataley, Catastrophic Terrorism at the Border: The Case of the
Canada-United States Border, HOMELAND SEC. AFFAIRS J., Sept. 1, 2007,
http://www.hsaj.org/?special:fullarticle=supplement.1.2 (last visited Oct. 12, 2008).
192
See Border Access Improvement Projects: Southbound FAST and NEXUS Lanes,
http://www.wcog.org/Completed-Border-Projects/FAST-And-NEXUS-Lanes/204.aspx (last
visited Oct. 9, 2008).
193
See generally NEXUS Centre Opens in Falls, http://www.fftimes.com/node/214519 (last
visited Oct. 9, 2008).
194
See generally id.
195
196
197
See generally id.
See generally id.
See generally Iris-scan Technology,
http://www.edmontonsun.com/News/Edmonton/2007/09/14/pf-4497893.html (last visited Oct.
9, 2008).
198
See generally id.
199
Border Access Improvement Projects, supra note 192.
200
See generally Notes for an Address to the House of Commons Budget Debate (Mar. 3,
2008), http://www.gordbrown.com/EN/6850/68648.
201
See generally ECustoms.com, A Powerful Web-based E-Manifest Solution,
http://www.ecustoms.com/vg/e-manifest-gateway.cfm (last visited Oct. 9, 2008).
202
See generally id.

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 115
We have a PIP program, Partners in Protection, which as of this June will
receive mutual recognition with the United States C-TPAT program. 203 It is a
first step, it is not what we had hoped to achieve. We had dreamed of a
NEXUS-type process where there is one application, both countries do the
risk assessment, and either they are in or out. But it is defined as
compatibility or similarity between the programs. The minimum standard
requirements will be met, the validations will be met, and it is a critical first
step in moving forward. Once again trying to make it as simple as possible,
especially for businesses that use the same supply chains. They are just
located on different sides of the border.
We also have an initiative with the OGD, Other Government Department,
single window, where we are trying to address the extensive information
requirements required by trade by the very many agencies that are involved
in government. 204
We are basically going to move towards a single electronic message that
will then be shared with all the appropriate partners, the other governments’
agencies. It will eliminate some of the final barriers we have to fool
electronic commerce with paper permits. 205 The other government
departments will have to “go EDI or die.” 206 We are taking the position that
other government agencies must move to electronic processes. We cannot
manage in a paper world anymore.
We have also just recently announced some amendments to the Customs
Act to strengthen border security that will allow us to more effectively
implement our Customs control areas to designate areas such as ports or
airports. 207 Right now, for anybody coming up to Customs, we can question
and examine whatever goods they have on them, but if they are working in
the airport and walking through these zones, we do not have that authority
other than when they leave.
And we have concerns about false documents, for example, changing
hands between cleaning staff and passengers arriving in the country, and so
203
See generally U.S., Canada Sign PIP/C-TPAT Cargo Security Mutual Recognition Arrangement,
http://www.brokerpower.com/snippets/2008/08070215.html (last visited Oct. 9.
2008).
204
See generally Exporters: Other Government Departments – Requirements,
http://www.cbsa-asfc.gc.ca/export/ogdr-eam-eng.html (last visited Oct. 9, 2008).
205
See generally Program Activity: Science and Technology-based Innovation,
http://www.tbs-sct.gc.ca/rpp/0708/bsa-asf/bsa-asf-PR-eng.asp?printable=True (last visited
Oct. 9, 2008).
206
See generally Electronic Commerce, http://www.cbsa-asfc.gc.ca/eservices/menueng.html
(last visited Oct. 9, 2008).
207
See generally The Government of Canada Proposes Amendments to the Customs Act to
Strengthen Border Security, http://www.cbsa-asfc.gov.gc.ca/media/releasecommunique/2008/2008-02-15-eng.html
(last visited Oct. 9, 2008).

116 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
we have got that legislation moving forward that will now allow us to
question and search people within the areas.
Another initiative and support of Canadian competitiveness is the
Canadian government business burden reduction project. 208 We have to
reduce our “musts, shalls, and wills” by 20 percent. It is a huge job for
government because we like “musts, shalls, or wills.” We like data elements,
we like forms. And since the front end of the process, the pre-arrival process,
will see an increase in our reporting requirements, we need to drastically
reduce what has to be done after the fact.
Looking at this very, very hard, CBSA, our agency, has 8,000
requirements. 209 And we are supposed to have it done by November this year.
I am afraid we will not meet the 20 percent by November this year, but we
are taking this very, very seriously because we do see cost to business, our
government sees as an absolute key in surviving in this world. Business
simplification then - very important. We have a safe third country
agreement, 210 new bilateral issue between Canada and the U.S. on the
immigration side, under which persons seeking refugee protection must
normally make a claim in the first country they arrive in. 211 There was a legal
challenge, and the legal challenge was upheld. 212 We are appealing that
challenge. 213 And until a final decision is made - I believe it is the end of
May that the date has been set - we can still maintain the existing process.
That change will create some new challenges and flashpoints. A border
vision. The time and energy we spend on managing specific border issues
really says you always have to work ahead, to a long-term vision of where
you are going to go. We have started consultations with trade on a
commercial vision for 2017, 214 so basically 10 years down the road. It will
guide our planning and investment in the commercial program - that is goods
coming into the country - over the next 10 years. It will make sure that both
208
See generally Canada Border Services Advisory Committee Meeting Summary,
http://www.cbsa-asfc.gc.ca/agency-agence/consult/cbsac-ccsfc/2008-04-17-eng.html (last
visited Oct. 9, 2008).
209
See generally Ensuring Compliance in Your Supply Chain,
http://www.caie.ca/events/2008/emerging_issues/2008-Semi-Annual-Brochure-04-17.pdf (last
visited Oct. 9, 2008).
210
See generally Canada-U.S. Safe Third Country Agreement, http://www.cbsaasfc.gc.ca/agency-agence/stca-etps-eng.html
(last visited Oct. 9, 2008).
211
Id.
212
See generally Rabble.ca, Safe Third Country Ruling Overturned on Appeal,
http://www.rabble.ca/news_full_story.shtml?x=73439 (last visited Oct. 9, 2008).
213
See generally id.
214
See generally A New CBSA Commercial Vision for 2017,
http://www.dominiongroup.com/uploads/A_New_CBSA_Commercial_Vision_for_2017_Syn
ops(1).pdf (last visited Oct. 9, 2008).

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 117
the anticipated trade trends and border challenges can be met and that all
programs do work together synergistically to address our challenges.
We have also had internal government discussions ourselves in Canada on
the concept of a perimeter strategy, and we are working with the United
States to interdict suspect travelers or goods before they arrive. Risk
assessment has shown indeed that many of our risks are from outside the
perimeter.
So between our migration integrity officer and, container security
programs – we will be getting advanced information on who and what are
coming to our country. We are now starting to talk about a board/no-board
process for airline passengers. Right now we actually wait until they get here
even though we get electronic information on them before we decide how to
deal with them. But we want to push that back. So these are different things
that we can talk about in terms of perimeter security as we move further.
So the past several years have shown tremendous change. As I have said,
I have been with the agency 30 years, and we are running hard. I think we
have made great strides in securing the border. We have a much better idea
of who is coming across and what the goods are and where they are coming
from. And to be honest, too much is at stake if we do not get the border right.
Thank you.
MS. MATTHIESEN: Well, I do not know about you guys, but I heard
more about verification and trust and obligations and investments. Starting to
sound like my pre-nup, but thanks for that.
I know you have questions, and I will give the first question to Miss Sue
Ross. And I know to whom it is addressed, but go ahead.
DISCUSSION FOLLOWING THE REMARKS OF WARREN COONS,
TODD C. OWEN AND JOY ALDOUS
MS. ROSS: I may actually fool you with this one, Birgit. Todd, I will
address this to you, but I will ask Joy to answer it as well because what we
heard both of you talk about was a lot of stuff that for many of us would fall
in the category of enforcement, at least impediments. And one of the kinds
that we heard earlier today from more than one panelist was there is a
feeling, particularly with C-TPAT, that there are not that many benefits.
So if the two of you could please address from the C-TPAT, Todd, the
question of the benefits and what is being planned, but more generally, sort
of the issue of what are, for example, the top three or four things that your
agencies are doing in the category of pure trade facilitation as distinct from
security?
MR. OWEN: Well, I first off, we hear this often. We hear that FAST
lanes are not fast enough, those types of comments whenever we go out and
speak to the trade.

118 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
So, we commissioned the University of Virginia last year to conduct a
comprehensive analysis of all of our members to say what is in it for you,
what are the benefits that you are receiving for your participation within C-
TPAT. 215 We had about a third of our members at that time, about 1,800 of
the 6,000 or so that we had in the program that did respond. And you can see
the full results of our survey on our CBP website.
But by and large from that survey, most of the members were pleased.
They felt that the benefits either equaled or outweighed the cost of the
investment they made to join the program. When you look at it, clearly it
differs across the different types of entities that conjoin C-TPAT.
The benefit that importers receive is reduced inspections. And we have
our data that shows they do receive fewer security inspections, and they do
receive fewer trade compliance inspections than non-C-TPAT members.
What people need to remember when we often hear is I am receiving the
same amount of inspections that I did before I joined the program before
9/11, you have to look at what CBP has done since 9/11. Our rate of exam
has gone up significantly. When you look at the truck traffic today, one of
every four trucks is inspected for different causes and different concerns.
The rail environment is significantly higher. We have 100 percent
scanning imaging equipment of all the rail traffic that comes in from Mexico,
and we are at a very high percentage coming in from Canada as well. 216
When you look at the Maritime environment, the level of exams has
increased in that role, too.
So if you are only seeing an increase or a slight increase or the same
amount of exams that you saw before 9/11, then you are seeing the benefits
of being a member of C-TPAT because a non-C-TPAT member has seen that
jump. Someone is getting those exams, and if it is not a C-TPAT member -
and we have the data that is in that University of Virginia study, 217 so I would
encourage everyone to take a look at that.
The other service entities, the Customs brokers, the seat carriers, when
they say, well, what is in the program for me, the benefits that they receive
are not directly benefits that they receive from the U.S. government. The
benefit that they receive comes in terms of marketing themselves. Your
largest U.S. importers are all a member of C-TPAT because they want to do
the right thing. They want to help secure their supply chain, they want fewer
215
See generally Customs-Trade Partnership Against Terrorism: Report of Results of
Cost/Benefit Survey 2007, http://www.virginia.edu/surveys/press/2007/ctpat/text.htm (last
visited Oct. 9, 2008).
216
See generally Thomas S. Winkowski, Hearing Before the Senate Homeland Security and
Government Affairs Committee (Sept. 25, 2008), available at
http://hsgac.senate.gov/public/_files/092508Winkowski.pdf (last visited Oct. 12, 2008).
217
Customs-Trade Partnership Against Terrorism, supra note 215.

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 119
supply chain disruptions, and they will require contractually that their service
providers also join C-TPAT. So if you are a seat carrier, if you are a Customs
broker, the benefit comes in being able to attract that repeat business, those
big companies.
In the land border, the highway carriers, the benefit of C-TPAT is FAST.
You do not receive FAST unless you are in C-TPAT. 218 Again the carriers
are driven by the desire to gain that business from, you know, the big three
automakers, that recurring business who again contractually require that their
carriers be a member of C-TPAT in order to receive access to the FAST
lanes.
One thing I think you need to keep in mind - and we have not really
touched on border wait times and all those issues that we are all familiar with
- but the infrastructure at all of our land borders are significantly outdated. 219
These are very old crossings that have not been updated in many locations
for decades. 220 And you look at a three-lane bridge, like you have the Peace
Bridge in Buffalo, it is only three lanes. You know, you are going to get
backups at peak times.
So I think the infrastructure really contributes to the perception that FAST
is not fast enough. When you look to the trucker actually getting to the
primary booth, there is a time savings that they receive by being C-TPAT,
but they waited in line for an hour which is the same as every other truck
because it is only a two-lane highway to get to the bridge, they are going to
feel as though the program is not working for them. So I think those are some
of the benefits that we do see from the program, and again, we have that
comprehensive University of Virginia survey that is on our website. 221
MS. ROSS: The top three things you are doing for trade facilitation?
MR. OWEN: FAST lanes, the reduced inspections, and again,
deployment of the technology significantly. You look at the large-scale
imaging systems. Before we had that, if we wanted to look at your cargo, it
would go to the warehouse to be stripped out, and you would lose a whole
day. Now with the large-scale imaging systems, we scan your trailer, your
truck, your container in less than a minute. If there are no anomalies, if there
are no concerns, it is on down the road.
So I think the agency has taken a great step to add facilitation as well as
address our security concerns.
218
See generally Free and Secure Trade (Fast) Highway Carrier Application Process,
http://www.cbsa-asfc.gc.ca/publications/pub/rc4299-eng.pdf (last visited Oct. 9, 2008).
219
See generally Jesse Goldman & Milos Barutciski, The Challenges of A Thickening U.S.
– Canada Border, Metrocorpcounsel, Oct. 2008,
http://www.metrocorpcounsel.com/current.php?artType=view&EntryNo=8878.
220
See id.
221
Customs-Trade Partnership Against Terrorism, supra note 215.

120 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
MS. ALDOUS: Very similar answer. I do not think there is a lot more I
can add other than for our FAST participants on the importer side, we also
have a custom self-assessment program which does significantly I believe
reduce their back-end cost, the cost for the entry summary. They can selfassess
their own revenue, they manage their own books and records, and they
actually report to us from their commercial books and records rather than
from a Customs inventory control process. And I think there has been some
significant savings there.
MS. MATTHIESEN: There was another - The gentleman there, please.
MR. CRANE: David Crane from Toronto. Just as an opening comment, it
is amazing to think of the amount of resources we have had to divert to
security since 9/11 all over the world, and how this is an ongoing impact the
terrorists themselves must never have dreamed of that the amount of effort
and inconvenience and other things that have resulted from that since 9/11
going forward into the future.
I have a couple of questions. One is I wondered how effective all these
measures really are. I think it is one thing to generate statistics which can
give numbers of inspections, numbers beside the other, but we have seen this
in many instances in the past where in the Vietnam War and in other
conflicts people can give long lists of statistics, but they do not necessarily
reveal the reality of what is being accomplished.
And just to use one example in Canada-U.S., the United States continues
despite all these efforts to be very concerned about the volume of drugs
flowing into the United States from Canada, often express themselves
publicly on this. 222 The Canadians are very concerned about the level of
weapons being smuggled into Canada from the United States, and this
continues to be a concern despite all of these new measures that you have
introduced. 223 So I wondered what you can really say about the effectiveness
of these things. I think statistics are one thing, but real effectiveness?
Secondly, I wondered how you define high-risk. We are told there are
137,000 hits last year. What did those hits reveal? I mean, what triggers a
hit? Is it just any slightest kind of suspicion of somebody looking the wrong
way? And as a result of these hits, how many actual illegal activities did we
uncover as a result of those? Is it one percent, 10 percent? Do we have any
data on that? And what did they consist of? I mean, counterfeit goods or
drugs or what kinds of things?
And finally, one of the effects of this heightened border security is a lot of
what I would consider to be innocent people now being caught up in this
222
See Integrated Border Enforcement Teams (IBETs) Canada-United States IBET Threat
Assessment 2007, http://www.rcmp-grc.gc.ca/security/ibets_threat_assess_e.htm (last visited
Oct. 9, 2008).
223
See id.

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 121
traffic. If you are referring to people who did stupid things - maybe when
they were teenagers or something else - now have a criminal record, now
they are getting turned away at the border just for some silly thing they did
many, many years ago, and we now have the data that just increases
significantly the number of people who get stuck at the border for no good
purpose. And I just wondered what you could say about that and how that
interferes with privacy of individuals. And that kind of thing can jack up
statistics quite a bit without being the least bit meaningful.
MS. MATTHIESEN: There were quite a few questions in that, but I
actually welcome those questions. I thought they were very on point. I am
not sure if there is one person in particular you wanted to address your
questions to or -
MR. CRANE: Anybody who wants to, or maybe nobody wants to.
MS. MATTHIESEN: Okay. I am going to give first shot of that to
Warren.
MR. COONS: Yeah. If you do not mind, just with respect to how
successful we have been - and I agree with you on the first to a degree - and
that is one of the challenges that we have in IBET, that statistics do not
necessarily tell the story. And that is why we believe that the sharing of
intelligence that goes back and forth and within the parameters of each of our
country's laws, too, I might add, but the sharing of intelligence that allows us
to be in the right place at the right time which would not have happened
before.
So for instance, I will give you two examples. First of all, I just read in
my hotel room, I read a press release from DHS that talked about seizure of
narcotics along the border between Quebec and the state of Vermont in
which U.S. Border Patrol saw the two vehicles there, arrested two people,
seized 700 pounds of marijuana. IBET unit was called and immediately
responded on the Canadian side. We arrested three suspects that were in the
camouflage gear and two others subsequent to that and $70,000 cash. It is
merely an anecdote I understand, but what I am saying is that unless those
relationships were actually formed and people had that working relationship,
that cooperative relationship that we have now, I do not believe that we
would have seen those kind of successes previously.
Now that may be a bigger case however, on a weekly basis we get reports
of just one or two people coming across the border illegally. It does not
sound like a big deal, but it is Canada and U.S. surveillance being at the
border collaboratively because we have intelligence that says those people
are going to arrive at that point at that given time. That did not happen
before. It is not something that is going to make the news and, you know,
capture the imagination of people in both countries, but the reality is - and
not to overstate it - but we do not know who those people are until we
actually interdict them, and that is the importance of what we do - I believe -

122 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
between the ports of entry along the border because the people that we are
interdicting are people that are committing criminal acts because they are
going between the ports of entry. So these are people that for whatever
reason have ill intentions.
And as far as the rest of those, I will turn it over.
MR. OWEN: I will speak to the 137,000 statistic that I put out there. That
was the number of high-risk shipments that were inspected as part of our
container security initiative in FY07 overseas. So 137,000 containers were
stopped because there was some trigger that made us concerned enough to
work with our host country to examine it before it got put on the vessel.
The triggers why we cannot talk about them, we have that advanced data,
we know who is involved in the transaction, we have our intelligence
community feeding us that information as well. So those 137,000 containers
that we stop as part of the container security initiative are really the higher
risk for terrorism purposes. We are not looking for trade compliance
overseas. We are not looking for counterfeits, anything like that. There was
something in the manifests, something in our intelligence that drove us to
those 137,000 containers that said, you know, we have enough of a concern
to stop it and look at it before it gets put on a vessel.
And again, this is a significant improvement about where we were about
six years ago where the first time we have that opportunity would be when it
was sitting within our U.S. port of entry. And if there was something terrible
in that container, that is the wrong time to find out about it.
So you know, I think we have done a good job to do that. There is a lot of
unintended positives that come out of a lot of these security programs, too.
When you look at the radiation portal monitors that we now have deployed
all around the country, you would not believe the level of contaminated
metals that are imported into the United States or attempted to be imported,
everything from contaminated belt buckles to manhole covers, shipments
coming out of the far east, you know, some of the lesser developed countries
that will melt down, you know, different materials that are contaminated.
Prior to this ring of RPMs around the country, all of that would just come
in, and the U.S. consumer would be buying these contaminated products
unbeknown to them. So on a regular basis, we interdict and stop, and either
seize or reject this contaminated material. So there are other benefits that
come from the stronger security than we envisioned when we deployed that
technology.
MS. MATTHIESEN: I am going to give one of the last questions to this
gentleman here who has had his hand up for a bit.
MR. CONROY: Hugh Conroy with the Whatcom Council of
Governments in Washington state. I wanted to get back to Joy's mention of
an expected mutual recognition for the Partner in Protection program, PIP. At
the Blaine border crossing of Pacific Highway in Washington, Washington

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 123
state recently completed a northbound FAST lane, so now we have FAST
lanes in both directions. 224 But as we have looked to build the user base for
that new lane, we have been reacquainted with the fact that beyond the driver
FAST card, the FAST program is the assemblage of each country's various
program for the carriers and the shippers.
So I was wondering does this mutual recognition of PIP - my
understanding is that is the shipper side - but do you expect these types of
mutual recognitions to give one country's FAST enrollees better access to the
FAST lane in both directions or vice-versa, I mean, to sort of push together
these various components under the umbrella of FAST in one bi-nationally
administered way?
MS. ALDOUS: I am not actually sure I understand your question. Today
you can with - to be in FAST you have to be PIP in Canada, you have to be
C-TPAT in U.S. There are some additional requirements for Canadian
importers. 225
So the mutual recognition is simply a first step in saying that our PIP
program will now be compatible with the minimum standards of the U.S.
including the site validations. And it is the first step. Ideally one application
someday.
MR. CONROY: So a PIP enrollee would not necessarily get access to the
FAST lane southbound as a result of this mutual recognition? They would
have to separately still enroll in the C-TPAT, and the same with the carriers
in the CSA and C-TPAT program?
MS. ALDOUS: Correct.
MR. OWEN: Right. At this point as the first step, they would still be
needed to enroll in both programs. But a benefit that will come is once we
have a mutual recognition is that U.S. CBP will be able to accept the findings
of the onsite validation or review what is performed by CBSA.
We have our first mutual recognition agreement with New Zealand in
place for about a year now, and the way this works on the operational side is
that the New Zealand exporter supply for what is called the New Zealand
Secure Export scheme. New Zealand Customs goes out and verifies that it
has adopted the stronger measures, and they start affording them export
benefits on their end.
Prior to the mutual recognition agreement, U.S. officers would travel to
New Zealand, conduct very much a redundant inspection, if you will, and
224
See generally WSDOT.wa.gov, Less Congestion Expected at Nation’s Fourth Busiest
Commercial Border Crossing,
http://www.wsdot.wa.gov/News/2007/11/14_sr543newtrucklanesopen.htm (last visited Oct. 9,
2008).
225
See generally Partners in Protection, http://www.cbsa-asfc.gc.ca/security-securite/pippep/menu-eng.html
(last visited Oct. 9, 2008).

124 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, Vol. 1]
come to the same conclusion. So now that we have two comparable
programs, we can accept the findings from New Zealand Customs, and we no
longer need to go out to New Zealand to form these validations.
And on the U.S. program, you have three tiers of benefits for the
importers. The more significant trade facilitation benefits in terms of reduce
inspections come after you have had this onsite validation. So now you are
already a member of New Zealand, you are quickly already receiving Tier 2
or Tier 3 status in the United States.
We envision the same type of operation with Canadian Partners in
Protection. I mentioned before that a third of the CBP members are Canadian
non-resident importers or highway carriers. When you look at the numbers
for Canada's PIP program, very, very comparable. We have a lot of the same
companies enrolled in both programs. And while now they still need to enroll
in the two programs, they are no longer going to have to go through a
redundant review by a CBP team and then by a CBSA team. So there will be
some benefits from there.
And again, this is just an initial first step. Ideally we would like to get to a
program where you have one comparable application process, if both is
vetted against the same types of law enforcement databases. We have
agreement on the types of prior bad acts, if you will, that should not allow
you to be considered a low-risk trader. So this is a first step. This is a
significant first step, but there is more work to be done in here.
MS. MATTHIESEN: We have time for one last question, and I am going
to give it to Kim.
MS. O'NEAL: I think we are missing the 800-pound gorilla in the room.
A lot of this border protection, increased security, it has all happened because
of terrorists. I have not heard anything about how many bad guys we are
getting at the border. Is this really increasing our security in that way?
Obviously with organized crime, we have got two-way traffic that we have
always been working against that. What improvements have we done and
achieved on the terrorist side?
MR. COONS: With respect to the IBET program and national security, it
is important to understand that since 9/11, the way that the RCMP broke up
their programs and got into the national security area was to implement
Integrated National Security Enforcement Teams (INSETs). So these are the
teams that are the equivalent of the FBI in the United States who are
primarily responsible for the investigation of national security.
Our priority is national security because we are on the border, and we
may be the first responders to national security. When we interdict people,
one of the first things that we do is obviously run various checks through a
number of databases, secure databases, to try to determine whether or not
individuals have some kind of nexus to national security.

Coons, Owen & Aldous—A Safe and Secure Canada-United States Border 125
But the national security, as soon as we get some kind of hit or some kind
of indication that this is something worthy of a national security
investigation, those files are immediately transferred to our national security
enforcement teams, and IBET teams do not participate in that investigation
unless they are asked to do so by our national security people. So we are just
the pointy end of the stick, if you will, first responders for national security,
but we will refer all of our national security issues to our national security
sections.
In terms of specific numbers, to be quite frank with you, the referrals that
we make to national security I would not be prepared to discuss in this room
anyway because I am not satisfied that the data is 100 percent accurate. But it
is not a great number. I can tell you that much.
MS. O'NEAL: But is it working?
MR. COONS: Well, is it working? That is a very difficult question to
answer because ultimately, some people argue, well, it is working because
we have not had another incident since 9/11, and that we have had
investigations where we have actually been successful in preventing attacks
in Canada and the United States during the planning process. 226
So is it working from that perspective? We could make the argument that
it is. But I would be a fool to sit here before you and tell you that we are safe
against a terrorist attack because there could be something that is being
planned for tomorrow. Hopefully we know about it, but we do not
necessarily.
MS. MATTHIESEN: Thank you very much. Thanks to our panelists, and
thank you for the questions.
226
See generally Five Years After 9/11 Attacks: U.S. Ports More Secure Than Ever;
Progress Must Continue AAPA Cites Advances In Guarding America’s Seaports Against
Terrorism, http://www.aapa-ports.org/Press/PRdetail.cfm?itemnumber=1092 (last visited Oct.
9, 2008).

THE TIPPING POINT: EFFECTS OF POST 9/11 BORDER
SECURITY ON CANADA-UNITED STATES ECONOMIC
COMPETITIVENESS
Session Chair - Margaret Martin
Canadian Speaker - Paul Storer
United States Speaker - Gary Hufbauer
INTRODUCTION
Margaret Martin
MS. MARTIN: Hi. Welcome back to the last session of the day. My name
is Margaret Martin, I am an assistant professor at the University of Western
Ontario in the Faculty of Law. The topic of this afternoon's session is “The
Effects of Post-9/11 Border Security on Canada-U.S. Economic
Competitiveness.”
Now, the first question I think we have to ask is whether 9/11 has had a
negative impact on trade between our two nations. And as we will see in our
first presentation, answering this question is no easy task because there are so
many detailed variables that have to be analyzed. And after we understand
the past, only then can we begin to make recommendations for the future,
and this will be the topic of our second discussion. So at least partly we will
deal with the future policy recommendations.
Now, today's talk is particularly pressing because we cannot just sit back
and be passive about this issue. If we do not make policy recommendations
to our different governments, then we will not have healthy trade relations in
the future. So this is why I am thrilled to announce our distinguished
speakers, Paul Storer, who is our first speaker, and Gary Hufbauer.
Paul Storer is a professor and chair of the Economics Department of
Western Washington University. 1 He is a member of the board of directors of
the Pacific Northwest Regional Economic Conference. 2 And this is his latest
1
Western Washington University, Paul Storer, available at
http://www.cbe.wwu.edu/PersonProfile.asp?PersonID=47 (last visited Oct. 10, 2008).
2
Pacific Northwest Regional Economic Conference, Board of Directors, available at
http://www.pnrec.org/directors.htm (last visited Oct. 10, 2008).
127

128 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
book; I thought I would plug it for him. It is excellent. I read it recently. And
it is entitled The Impact of 9/11 on Canada-U.S. Trade, and it was co-written
by Steven Globerman, 3 and I recommend it.
And then our second speaker is Gary Hufbauer, and he has resumed his
position as Reginald Jones Senior Fellow in 1998. 4 Previously he was
Marcus Wallenberg Professor of International Financial Diplomacy at
Georgetown University, and served in the U.S. Treasury Department from
1974 to 1980. 5 And he was very prolific last year, he had two co-authored
books. The first one entitled Economic Sanctions Reconsidered, 6 third
edition, and the second entitled U.S. Taxation of Foreign Income. 7
So without further ado, Paul Storer.
CANADIAN SPEAKER
Paul Storer *
MR. STORER: Thanks, Margaret. Thank you to the organizers for
inviting me to the conference and for putting the two economists at the end
of the day.
Thank you for the plug on the book, too. The book has the same title as
my presentation, no coincidence. I felt we maybe should have renamed the
book “The Audacity of Despair” due to my despair over what is happening to
3
Paul Globerman and Paul Storer, The Impact of 9/11on U.S.-Canada Trade, Canada-
U.S. Law Institute, Apr. 2008, available at
http://cusli.org/conferences/annual/presentations_2008/Storer%209_11%20Trade.ppt (last
visited Oct. 10, 2008).
4
Middle East Policy Council, Gary Hufbauer, available at
http://www.mepc.org/resources/hufbauer.asp (last visited Oct. 10, 2008).
5
Peterson Institute for International Economics, Gary Clyde Hufbauer, available at
http://www.iie.com/staff/author_bio.cfm?author_id=27 (last visited Oct. 10, 2008).
6
Id.
7
Id.
*
Paul Storer is Professor and Chair of the Economics Department at Western Washington
University. He is a member of the board of directors of the Pacific Northwest Regional Economic
Conference (PNREC) and served as editor of the Northwest Journal of Business and
Economics from 2001 through 2005. Storer's research focuses on Canada-US business and
economic relations and cross-border integration. Among Storer's recent publications (both
joint with Steven Globerman) are: "Canada-U.S. Integration Following NAFTA" (in North
American Economic and Financial Integration, Elsevier, 2004) and The Impacts of 9/11 on
Canada-U.S. Trade (University of Toronto Press, 2008). He has previously published in such
journals as the Canadian Journal of Economics, Canadian Public Policy, the American Review
of Canadian Studies, Contemporary Economic Policy, and the Journal of Banking and
Finance. Storer is also a coauthor on the 13 th edition of the introductory economics textbook
by Lipsey, Ragan, and Storer.

Storer & Hufbauer—The Tipping Point 129
the relationship that Canada and the United States have built over time. I am
concerned by the extent to which those gains may be getting eroded by a
variety of factors, some of which may be around the nexus of security. The
impact of these developments on trade and competitiveness are some of the
issues I am going to be addressing in this presentation.
The reference to audacity comes in because we needed a dose of audacity
back at the time when people in Canada took a leap of faith in negotiating the
Free Trade Agreement with the United States, and that kind of audacity of
thinking does not seem to be in abundance presently in terms of moving
forward. Whether it should or should not be I will leave Gary to talk about,
so we will move through this.
Let me just tell you again about the focus of the presentation. I am going
to try to talk about not just the evidence that Steve and I have, but other
evidence that I will mention about the actual factual quantitative evidence
related to how border security problems affected the trade between Canada
and the United States since 9/11. Now, if I was not an economist, I would
probably just show you this graph and be done and then turn it over to Gary.
Looking at a graph of Canadian exports of goods to the United States
from 1996 to 2005, the eyeball is drawn to what looks like a significant
decline after 2001. The shaded period shown in the graph on the screen is the
post-9/11 period where we see a sharp drop-off in the amount of the
Canadian surface export (rail, pipeline, and, predominantly, truck) flows to
the United States from Canada. And you can see why it seems like a
precipitous drop-off after the second quarter of 2001.
Now you would be tempted of course to just ascribe this decline in
exports to security events, but it could be other things are going on. We have
the usual suspects, which we will address more carefully later. The list of
suspects includes changes in the level of economic activity in that we know
there was a slowdown, changes in the exchange rate, or changes in other
economic factors such as tariffs on lumber.
Being economists, what Steve and I have done is to rely on a statistical
method known as linear regression to tease out the contributions of those
other “usual suspects”. Anything that is left over after looking at other things,
we ascribe to post-9/11 security effects. So I cannot stop the story with the
graph on the screen, I have to show you more analysis. But I was supposed to
be multidisciplinary, too, so I will give you a little bit of history in the next
slide.
We have already had a reference to the Smoot-Hawley tariff escalation
from the time of the Great Depression. We all want to avoid repeating the
errors of Smoot-Hawley today. For the Canadians in the audience, we should

130 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
also talk about avoiding the errors of the National Policy. 8 The last time that
Canada built a policy wall at the border was in the late nineteenth century in
response to fears that American manufacturers would take away the
prosperity of Canadian manufacturing workers and farmers. On the screen
you see an election poster from this period and we see Sir John A.
Macdonald benevolently smiling down at his protected charges – the
manufacturers and farmers sheltered behind the tariff wall of the National
Policy.
This cartoon is reproduced from Michael Hart's excellent book A Trading
Nation, a comprehensive history of Canadian trade policy. 9 Michael provides
a fascinating description of the state of the Canadian auto industry just before
the Canada-U.S. Auto Pact came into effect in the mid 1960s. 10 Michael cites
studies from the period which found car prices much higher in Canada than
in the United States 11 while at the same time wages in the Canadian auto
industry, which was a domestic protected industry, were lower. 12
So prices were high and wages were low in Canada and to make matters
worse the choice of models available in Canada was incredibly limited. 13
What happened after the Auto Pact, which moved Canada and the U.S. into
an integrated North American market for the auto industry, is that economies
of scale and the ability to specialize were realized through binational
production. The automotive sector is the poster child for a binational model
of shared production that Stephen Blank describes as “making stuff together”
As a result of the Auto Pact, Canada moved to a situation where wages went
up, profitability went up, prices of cars went down, and model choice went
up. 14 And of course those are also the types of outcomes that we were
expecting from NAFTA and Canada-U.S. Free Trade Agreement. These
broad agreements were supposed to bring all those benefits realized by the
auto industry and extend them to the all sectors of the economy.
One of my particular causes of despair is the fear that those benefits from
trade liberalization that should have spread throughout the economy have
8
See generally, Lorraine Eden & Maureen Appel Molot, Canada's National Policies:
Reflections on 125 Years, 19 Can. Pub. Pol’y 232, 237-38 (1993) (discussing the high tariff
structure established by the third National Policy and the results on the Canadian economy).
9
Hart, Michael, A Trading Nation: Canadian Trade Policy from Colonialism to Globalization
(University of British Columbia Press, 2003).
10
See id. at 240-70.
11
See id. at 241 (discussing that “Canadians often paid as much as 50 percent more than
Americans did for the same car”).
12
See id. (concluding that “Canadian workers earned about 30 percent less than their US
counterparts”).
13
See Hart, supra note 9.
14
See generally, Keeley, James F., Cast in Concrete for All Time? The Negotiation of the
Auto Pact, 16 Can. J. Pol. Sci. 281, 290 (1983) (discussing the multiple objectives of the Auto
Pact).

Storer & Hufbauer—The Tipping Point 131
failed to achieve their promise. In particular, smaller businesses are less able
to shoulder the costs of dealing with security and those businesses will find it
increasingly difficulty to exploit the benefits of NAFTA. 15 While the bigger
players will have a reasonable chance to foot the bill for increased security,
the smaller ones, for whom we were hoping to democratize free trade to a
greater extent, may be shut out of trading due to rising security costs.
I would now like to summarize some of the sources of evidence that
increased border security has affected Canada-U.S. trade. While I will mainly
focus on econometric studies. I will also talk about what is happening to the
waiting times, estimates of cost and profitability. I will also discuss findings
from surveys done by various authors, and then turn to the econometric
studies, both the one that Steve and I did and then one from the Conference
Board of Canada by Michael Burt.
The evidence related to border security and waiting times shows up in two
effects, both of which can have significant consequences. One effect is an
increase in average waiting times as measured by mean or median crossing
times. The other effect is an increase in variability of waiting times as
measured by standard deviations or variances.
We need to be concerned about the impact of security on both the average
length and variability of border delays. If you are waiting for a longer time at
the border, you are going to be burning more fuel, you will be later making
delivery, and it will cost more money for labor. 16 The increase in variability
is also an issue because predicable arrival times are needed to get the benefits
of “just-in-time” inventory management systems. 17
A study conducted by Danielle Goldfarb for the Conference Board of
Canada has expressed the concern that efficient just-in-time procedures
might be replaced by potential wasteful duplication of facilities that are
needed as a form of insurance “just-in-case” there is a border disruption. 18 In
an earlier session at this conference we heard Garland Chow describe the
interesting case of such a “just-in-case” facility in Kent, Washington which
may well have been set up in order to have inventories on both sides of the
border. You only need the insurance policy created by this redundancy if you
15
See Gary Clyde Hufbauer & Jeffery J. Schott, NAFTA Revisited: Achievements and
Challenges, Institute for International Economics (2005); see also John W. Foster & John
Dillon, NAFTA in Canada: The Era of a Supra-Constitution , in Hemispheric Social Alliance
59 (2003) (noting the Canadian business concern over U.S. security “preoccupations”).
16
Goldfarb, Danielle, Reaching a Tipping Point: Effects of Post-9/11 Border Security on
Canada’s Trade and Investment, Conf. Board Can. 16 (2007).
17
E.g., Goldfarb, Danielle, Is Just-In-Case Replacing Just-In-Time? How Cross-Border
Trading Behaviour Has Changed Since 9/11, Conf. Board Can. 7 (2007) (discussing how
firms are now stockpiling materials instead of just-in-time materials handling).
18
See id.

132 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
are worried about the possibility of significant variability in waiting times at
the border.
One observation I would like to make is that we have a lot of difficulty
getting consistent on-time serious data on waiting times. 19 It would be nice if
we had some better data over time on waiting times. What we have now
seems to be episodic and more anecdotal than scientific.
Another study that is relevant was conducted by Prem Gandhi of SUNY
Plattsburgh and Wayne Glass of Schoolcraft College in Michigan. 20 Prem
and Wayne did some very interesting work in which they took the increased
waiting times experienced at the Canada-U.S. border and converted them
into an equivalent extra distance. 21 For example, if you have to wait an extra
hour, and you could drive 60 miles an hour, the increased border waiting
time effectively “widens” the border by 60 miles.
The next step in the Gandhi-Glass study is quite clever: they fed their
calculated increased in distances into gravity-type models (gravity models
explain trade between states and provinces). 22 Gravity models have a long
history of being used to explain the volume of trade based on factors such as
distance. 23 The Gandhi and Glass method predicted declines in trade volumes
in the range of 12 to 20 percent level. 24 Interestingly enough, similar
magnitudes of drops in Canadian exports were found in the econometric
study that Steven Globerman and I conducted, despite the fact that we used a
very different methodology. 25 So we find the work of Gandhi and Glass very
interesting.
Some of the existing academic studies of border security effects have
attached dollar amounts to increased waiting times. You have already heard
discussion at this conference of costs in the millions or billions of dollars.
Similar increases in costs have been found for carriers involved in working
across the border.
One study by Lee, Martin, Ouellet and Vailancourt at the University of
Montreal looked at Quebec’s exports to the United States and began by
19
Anneliese, Vance, Strategic Responses by Canadian and U.S. Exporters to Increased
U.S. Border Security Measures: A Firm-Level Analysis, 22 Econ. Dev. Q. 239, 240 (2008); see
also Border Wait Time Figures Not Accurate: Report, Can. Press (Sept. 14, 2008) available at
http://ottawa.ctv.ca/servlet/an/local/CTVNews/20080914/OTT_border_080914/20080914/
(reporting that the average wait times given by the border agency was knowingly incorrect)
(last visited on Oct. 9, 2008).
20
See Gandhi, Prem and Wayne Glass, The Cost and Cost Incidence of Canada-U.S. Border
Security, Oct. 2007, available at http://cibs.tamu.edu/border/pages/proceedings.html (audio
proceedings of the presentation).
21
See id.
22
23
24
25
Id.
Id.
Id.
Id.

Storer & Hufbauer—The Tipping Point 133
obtaining a dollar amount for the increase in transportation costs. 26 The study
then determined how much of these higher shipping costs would be passed
onto the final customer. Finally, they determine how much exports would fall
due to these price changes. 27 A key ingredient of this last step is a measure of
how much demand falls when prices rise – something economists call the
price elasticity of demand. This procedure yields a much smaller decline in
exports from Quebec to the United States than was found by Gandhi and
Glass. 28 In fact, the number reported by Lee at al is about one percent. 29
Now, someone earlier in this conference said that lawyers will always
give you a yes-and-no answer. Well of course economists are just as
renowned for having giving answers containing the phrase “on the other
hand.” It should be little surprise, then, that here is still some debate among
economists regarding the size of these elasticity estimates. The one percent
trade reduction found by Lee and her co-authors may be a bit low because
they use a fairly low price elasticity of demand number. 30 Using higher (but
still plausible) price elasticities could give a trade effect as high as four or
five percent. But this modification still gives a number that is substantially
lower than what Gandhi and Glass or my study with Steven gets. So, I feel
obligated to provide full disclosure on some of the range of information that
is coming out about the effect of border security on trade.
There is an interesting development that has been identified from surveys
of Canadian exporters and U.S. importers. Evidence of changing export
practices has been reported by John McPherson from Export Development
Canada and by Anneliese Vance who recently finished her Ph.D. in
Geography at SUNY Buffalo. 31 One of the trends that shows up in their
conversation with businesses is that Canadian firms that used to handle
customs and cross-border logistics operations themselves are now hiring
experts to do these tasks for them. 32 For people who either are working in
trade law or in logistics, that is good news but it may be bad news for
exporters to the extent that it raises the costs of engaging in Canada-U.S.
trade.
26
Lee, L., Martin, P., Ouellet, E. and Vailancourt, F., “American Border Security Measures:
Potential Economic Impacts and Policy Responses from a Quebec Perspective”, Montreal:
University of Montreal, mimeo, 2005.
27
Id.
28
See Gandhi, supra note 20.
29
See Lee, supra note 26.
30
31
Id.
Alan D. MacPherson et al., The Impact of U.S. Government Antiterrorism Policies on
Canada-U.S. Cross-Border Commerce: An Exploratory Study from Western New York and
Southern Ontario, 58 Prof. Geographer 266 (2006).
32
See Anneliese, supra note 19.

134 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Anneliese finds that the businesses that are outsourcing their logistics
operations did so for two reasons. First, they believe that logistics firms have
the expertise to minimize border delays. A secondary reason is that Canadian
exporters felt they would be partly insulated from the consequences of
security-related border delays because exporters feel that the logistics firm
rather than the exporter will be blamed in the event of a delay at the border. 33
If the use of logistics firms gives “cover” for Canadian exporters, then U.S.
firms might choose to keep on buying from Canadian suppliers. 34 On the
other hand, if a U.S. firm needs an intermediate input to show up at their
factory they might not care whether a delay is the fault of the Canadian
manufacturer or the logistics company. 35 If a shipment is late, it is late,
regardless of the reason. I know that Annaliese will be doing some more
follow-up work on this topic and I look forward to learning the results.
Let me now tell you about the econometric studies that Stephen
Globerman and I have done. Of course, economists love to explain their
models with equations containing Greek letters and here’s ours:
Ln(Exports) = 0 + 1 ln(Y t-1 ) + 2 PFX t-j + 3 D911
Basically what this equation says is that we explain the natural logarithm
of Canadian exports to the United States based on changes in two economic
variables with a direct impact on trade: Gross Domestic Product (GDP),
abbreviated as Y in this equation, and the Canada-U.S. exchange rate,
abbreviated as PFX. The final term in the equation, the 3 times D 9/11,
captures the effect of post-9/11 border security policy. We use a so-called a
dummy variable, an on/off binary variable, to capture the effect of changes in
trade related to 9/11. So again, we explain the things that we think are the
usual suspects such as GDP and the exchange rate. Anything left over we
ascribe to the impact of border security.
And what do we find? Well, we find significant impacts. We actually look
at separate impacts for the third and fourth quarters of 2001 and then allow
the impacts for 2002, 2003, and 2004 to be different by year. Our study
ended in the middle of '05 in part because the data that we bought was very
expensive, costing thousands of dollars. And I thank the Border Policy
Research Institute for providing funding to purchase the data.
Turning to our results, we find exports shortfalls beginning at about five
billion dollars per quarter in the third quarter of 2001. This effect rises to a
33
See id. (stating that hiring third parties the burden of passing though border crossings is
now on the third party).
34
See id.
35
See id. (noting that most firms studied indicate an instance that other parties on the
supply chain assume responsibility for shipments).

Storer & Hufbauer—The Tipping Point 135
maximum of about 14 billion dollars in the fourth quarter of 2003. These
dollar figures reflect declines of roughly 10 to 20 percent of Canadian
exports to the United States. Now by the end of our sample period in mid-
2005, the effect is starting to become statistically non-significant. The effect
of security on trade could be attenuated after 2003 because of all the benefits
of programs like FAST, C-TPAT as well as the increase in personnel
working at the border. The drop in exports could also be reduced because
there is less non-commercial traffic holding up the truck traffic. For whatever
reason, by the end of our sample, the effects of security on trade are getting
smaller and starting to go away. 36
Another interesting result from our research is that we did not find any
significant effect for traffic going from the United States to Canada. 37 So
most of the security effects on trade seem to be going in one direction, which
might not be surprising because we know that the border security was
increased more for entry into the United States than for entry into Canada.
On the other hand, our finding of an asymmetric impact of security on
trade is puzzling because many items that cross the border (pistons for use in
cars, for example) travel across the border may times before they are sold to
a consumer in a final product., For products like these, if there is an increased
cost of getting into the United States, that is also going to impact trade going
to Canada. 38 So the effect of tighter U.S. border security should not be
showing up in only one direction unless the big trade impacts we are seeing
are for the firms who are the least likely to ship components that cross the
border multiple times. Instead, our security-related trade effects could be
driven by smaller businesses that are doing more one-way as opposed to twoway
trade. So that is a possible interpretation of what we are seeing here.
One piece of evidence that may support this small versus large firm
interpretation is that when we do our analysis at the level of individual ports
of entry, we see less of a trade effect for ports with a lot of automotive-sector
trade such as Detroit, Buffalo or Niagara Falls (although we do see a big
effect for Port Huron which we know is auto-related). 39 Detroit and Buffalo-
36
See generally, Anneliese, supra note 19 (“54% of all respondents indicated that in the 2
years since 2004, delays had decreased significantly and border crossings were no longer as
difficult or time consuming”).
37
See Anneliese, supra note 19.
38
See, e.g., Goldfarb, supra note 15 (indicating that “Goods often cross the border repeatedly
as value is added at each production stage. Even small increases in border barriers such as
border security costs are magnified as parts cross the border multiple times”).
39
See U.S. Department of Transportation, Fort Huron, Michigan – Land Gateway, Bureau
of Transportation Statistics (2006), available at
http://www.bts.gov/publications/americas_freight_transportation_gateways/highlights_of_top
_25_freight_gateways_by_shipment_value/port_huron/index.html (last visited Oct. 10, 2008)
(concluding that “since 1999 truck’s share of land trade crossing through Port Huron has declined
from 61 percent”).

136 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Niagara seem to recover more quickly than some of the other eastern ports
(such as Champlain-Rouses Point, Highgate Springs, or Alexandria Bay-
Lansdowne) and most of the west coast ports. 40
This is probably a good point to acknowledge that Michael Burt from the
Conference Board of Canada uses an approach similar to ours but comes up
with estimates that are somewhat smaller. 41 I will not get into details of
econometric methodology, but there are some differences in approach that
account for these different results. Burt uses a different sample period, for
example, but we do not think that is the whole story. We have ongoing
discussions about methodology, and of course we believe ours is the correct
one. But I will be modest on the fact there is some debate.
To explore the effects of a longer sample period we have extended our
sample to include an earlier time period. When we go back and look at the
results for a sample starting in 1976, we find evidence that the increased
trade prompted by formal Canada-U.S. trade agreements has been eroded.
This effect is illustrated by the graph shown on the screen which measures
the year on the horizontal axis and the volume of trade on the vertical axis.
Between the beginning of the longer sample period in 1976 and CUSFTA
in 1989, we see a steady yearly growth of trade shown by the increasing line.
What we think happened in 1989 is that with the beginning of the Canada-
U.S. Free Trade Agreement, the line gets steeper as trade grows more quickly
over time. 42 This faster growth of trade shows the positive impact of signing
a Free Trade Agreement between Canada and the United States.
Trade continues to grow at this faster rate until 2001 when border security
increases and the line shifts down. The pattern implied by this story is
exactly what our statistical results are telling us. We are finding that the
initial steepening of the line in 1989 followed by the drop in 2001 have
almost brought us back to where we would have been if trade had continued
to grow at its pre-1989 rate.
This reversal in our statistical results illustrates the concerns that Danielle
Goldfarb mentions in her study. There is a lot of anecdotal evidence that
companies are starting to revert to some of their pre-free-trade practices, 43 so
40
U.S. Department of Transportation, North American Freight Transportation: U.S. Trade
with Canada and Mexico, Bureau of Transportation Statistics (2006), available at
http://www.bts.gov/publications/north_american_freight_transportation/ (discussing the three
busiest truck crossings at the U.S.-Canadian Border; Detroit, MI; Port Huron, MI; and Niagara/Buffalo,
NY). (last viewed Oct. 10, 2008).
41
Burt, Michael, Tighter Border Security and Its Effects on Canadian Exports, The Conference
Board of Canada, June 2007, available at
http://www.internationaltransportforum.org/2009/pdf/CDN_TighterBorder.pdf
42
United States - Canada Free Trade Agreement Implementation Act of 1988, 102 Stat.
1851, U.S.-Can., Oct. 4, 1988.
43
E.g., Goldfarb, supra note 16.

Storer & Hufbauer—The Tipping Point 137
that some of the adjustments that were made to take advantage of that faster
growth are now being undone. 44 So we have a fear that the benefits of trade
liberalization are being undone by border security.
Our graph can be used to make the point that if you do not actually take
into account the increase in the pace of growth between 1989 and 2001, you
miss-measure the size of the trade effect due to border security. The size of
the trade effect that Steve and I measure is the difference between the volume
of trade after 2001 and where it would have been if it had not shifted down in
2001. If we ignore the fact that NAFTA in 1994 and CUSFTA in 1989 had
trade-enhancing benefits, we would have underestimated the growth rate of
trade between 1989 and 2001 and our estimate of the impact of security on
trade would have been too small.
To sum up, we find statistical evidence that increased security in the post-
9/11 period might have undone some of the benefits of NAFTA, at least
temporarily. I think that Gary has some ideas of how we can avoid having
those security costs and how we can start to take trade forward again.
MS. MARTIN: Thank you very much, Paul. And now I will turn the floor
over to Gary.
UNITED STATES SPEAKER
Gary Hufbauer †
DR. HUFBAUER: I really want to endorse Paul’s book. When we wrote
NAFTA Revisited, published a couple years ago, we looked for data on the
security impact, 45 and there was nothing like what you have here. And the
numbers are very sharp, $10 billion of Canadian exports lost a quarter, $40
billion lost a year. 46 That is significant. And secondly, there is probably an
44
See id. (arguing that “these new behaviours [are] reversions back to those that existed
before the Canada–U.S. free trade agreement”).
†
Gary Clyde Hufbauer resumed his position as Reginald Jones Senior Fellow in 1998.
Previously he was the Marcus Wallenberg Professor of International Financial Diplomacy at
Georgetown University, and served in the U.S. Treasury Department from 1974 to1980. Dr.
Hufbauer holds an A.B from Harvard College, a Ph.D. in Economics from King College at
Cambridge University, and a J.D. from Georgetown University Law Center. His co-authored
publications include Economic Sanctions Reconsidered, third edition (2007), US Taxation of
Foreign Income (2007), US-China Trade Disputes: Rising Tide, Rising Stakes (2006), and
NAFTA Revisited: Achievements and Challenges (2005).
45
See Hufbauer, supra note 14.
46
E.g., John C. Taylor, Douglas Robideaux & George C. Jackson, The U.S.-Canada Border:
Cost Impacts, Causes, and Short to Long Term Management Options 9, Michigan Department
of Transportation (2003)

138 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
adverse differential effect on smaller and medium-sized companies, and I
will come back to that in a moment. Paul and Steve Globerman have written
a very fine study which I think is a landmark in the field.
While everyone knows that trade and foreign direct investment are
growing across North America, the fact of the matter is that trade between
the U.S. and Canada and direct investment between the U.S. and Canada are
far, far below their potential. 47 Yes, the magnitudes are better than they
would have been thanks to the Canada-U.S. Free Trade Agreement and
NAFTA, 48 but the magnitudes are well below their potential.
The paper that I am alluding to is one where a colleague of mine and I
looked at the big reasons for the shortfall. 49 One obvious suspect is currency
fluctuations. It is a Canadian choice to have a Canadian dollar. There are
good macroeconomic reasons for that. But different currencies do kill trade
and economic integration.
Another reason for the shortfall is the array of regulatory barriers; this is
Michael Hart's great specialty. 50 Regulatory barriers are very pernicious in
reducing the extent of integration between the U.S. and Canadian markets. 51
The third reason, and the one I am going to talk about, is the security tax.
Everybody knows about the rising security tax. We are paying this rising tax
because we want to avert future adverse events. But we also want to think
about how we deal with the aftermath of the next terrorist episode.
Like many people in this room, I am persuaded there will be another
terrorist event. When it comes is hard to say. But let me focus for a moment
on an event that would be quite destructive to economic integration: that
would be a suicide vessel hitting an oil tanker on the high seas. Then all ports
would be closed, at least all U.S. ports would be closed, and then we would
have to deal with the aftermath. Today we are paying security taxes to try to
avoid such events, even though one may at some point happen. 52
Here's the interesting thing about security taxes. When we think about
security, broadly, we do not tax participants who are in the theater of battle. 53
47
See id. at 23.
48
See, Hufbauer, supra note 14.
49
Woodrow Wilson International Center for Scholars, Free Trade in Free Fall? Canada-
U.S. Nontariff Barriers, 8 ONE ISSUE, TWO VOICES — Feb 2008), available at
http://www.wilsoncenter.org/events/docs/Nontariff%20Barriers_1i2v8.pdf.
50
See Hart, supra note 8.
51
See Michael Hart & Bill Dymond, The Geography of Integration 13-16 (2005) (discussing
the impact of regulatory barriers on the two countries).
52
See generally, Lisa M. Seghetti, Jennifer E. Lake, and William H. Robinson, Border and
Transportation Security: Selected Programs and Policies, Congressional Research Service
(March 29, 2005) (describing the current border policy programs in use to attempt to avoid
terrorist attacks).
53
See 26 U.S.C. § 112 (2007) (excluding from gross income pay received while serving in
a combat zone for the armed forces).

Storer & Hufbauer—The Tipping Point 139
We generally pay for security through taxes, broadly distributed sales taxes,
income taxes, whatever. 54
So to be very specific on that point, we have a security problem in the
Middle East. 55 We are fighting a couple of wars there, partly because it is an
oil area. 56 We might not be fighting those wars if the problem were in the
Congo even though a lot of people are being killed there. 57 But do we put a
special tax on oil imported from the Middle East? We do not. 58 We support
the military through all our taxes. And most of us are happy to make those
tax payments. 59
But when we come to border security, where do we put the taxes? We put
the cost on the shippers and the producers. 60 This way of paying the security
tax does fragment markets, and I would suggest that our leaders need to think
about that.
I live in Washington and I wanted to get my NEXUS card for trips to
Canada. So I went through the website and disclosed my whole history since
the second grade, how much I drank, and on and on. I finally get to the page
where I schedule an interview. But no interviews are conducted in
Washington. Instead, I can go up to Buffalo, which I am sure would be an
interesting trip, or I can go to Toronto. While I travel often to Toronto, I do
not want to make a special trip for my interview, so I still do not have my
NEXUS card.
We talked about the 100 percent cargo scanning requirements under the
Container Security Initiative. 61 That is coming on very soon. This will make
life more difficult for a lot of smaller countries. 62 Exporters based in those
54
E.g., J. R. Hicks, U.K. Hicks & L. Rostas, The Taxation of War Wealth 29-34 (Oxford
University Press 1941).
55
See Belasco, Amy, The Cost of Iraq, Afghanistan, and Other Global War on Terror
Operations Since 9/11 at 1, Congressional Research Service, (July 14, 2008).
56
E.g., Edward Nell & Willi Semmler, The Iraq War and the World Oil Economy, 17
Constellations 557, 569-70 (2007); See also, Greenspan, Alan, The Age of Turbulence: Adventures
in a New World 463 (Penguin Press 2007) (“I am saddened that it is politically inconvenient
to acknowledge what everyone knows: the Iraq war is largely about oil”).
57
Pierre Englebert & James Ron, Primary Commodities and War: Congo-Brazzaville's
Ambivalent Resource Curse, 37 Comp. Pol. 61, 61-62 (2004) (“three main militias . . . directly
killed at least 12,000 persons . . . [and] displaced 860,000”).
58
See generally, Singer, S. Fred, How to Trim Oil Imports, Dampen Price Swings, 8 J.
Pol’y Analysis Mgmt. 116, 117 (1989) (discussing the options for taxing oil imports).
59
See Office of Management and Budget, Analytical Perspectives: Budget of the United
Stated Government Fiscal Year 2008 at 339-40 (2007) (totaling the combined spending from
the Department of Defense, Homeland Security, and Veterans Affairs Departments at 23% of
the total taxable outlays in 2007).
60
See Anneliese, supra note 19.
61
6 U.S.C. § 982(a) (2007) (listing the SAFE Port Act as requiring one hundred percent
screening of cargo containers and high-risk containers).
62
See, e.g., Stephen L. Caldwell, Dir., Homeland Security and Justice, Supply Chain Secu-

140 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
countries will first have to ship to one of the larger ports, before shipping to
the United States, and that is not going to promote development. 63
Paul talked about how you translate time delays into trade costs. The
interesting thing is that he reported results. I have seen some other gravity
model results dealing with North Africa. 64 The finding is that, if you increase
the time of shipments by a couple of days, you cut the trade a lot. 65
Within the Container Security Initiative, it should be possible to reach an
agreement that sealed containers arriving in Canadian ports and transported
south, will not be scanned a second time when they enter the United States. 66
These containers should all be radio tracked on their journey through Canada
to the U.S. border.
Everything I say here echoes one of the questions at lunch directed to
Ambassador Wilson. We are talking cultural change as a precursor to reform.
Americans need to accept the basic proposition that there is risk everyplace,
there is risk in shipping from Texas to Colorado. You can have terrorists in
Texas. 67 They might ship to Colorado to carry out their terrorism. 68 But the
risk is not higher on goods coming from Canada to the United States than
from Texas to Colorado. 69 That is the basic proposition. Before we can make
rity: Challenges to Scanning 100 Percent of U.S.-Bound Cargo Containers, Testimony Before
the Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and
Security, Committee on Commerce, Science, and Transportation, U.S. Senate (June 12, 2008),
available at http://www.gao.gov/new.items/d08533t.pdf. (discussing that some countries
consider the one hundred percent scanning requirement an unfair barrier to trade) (last visited
Oct. 10, 2008).
63
Id.
64
See, e.g., Alberto Portugal-Perez & John S. Wilson, Trade Costs in Africa: Barriers and
Opportunities for Reform, World Bank, Dev. Res. Group, Policy Research Working Paper
4619 (2008), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1269268 (last
visited on Oct. 10, 2008).
65
See generally, id. at 2 (discussing the prohibitively high cost of trade due to multiple
factors in Sub-Saharan African countries).
66
See U.S. Customs and Border Protection, Container Security Initiative, available at
http://www.cbp.gov/xp/cgov/newsroom/fact_sheets/trade_security/csi.xml (last visited Oct. 10
2008).
67
E.g., Holy Land Foundation for Relief and Development v. Ashcroft, 333 F.3d 156 (D.C.
Cir. 2003) (upholding that the Texas based Holy Land foundation, was correctly categorized a
Specially Designated Global Terrorist), cert. denied, 540 U.S. 1218 (2004).
68
Cf. Counterterrorism Threat Assessment and Warning Unit, National Security Division,
Terrorism in the United States: 1997 4-5 (Federal Bureau of Investigation 1997), available at
http://www.fbi.gov/publications/terror/terr97.pdf (last visited Oct. 10 2008)(describing a domestic
terrorist plot to attack Fort Hood, Texas and the terrorists planed return to a safe house
located in Colorado); see also Whidden, Michael J., Unequal Justice: Arabs in America and
United States Antiterrorism Legislation, 69 Fordham L. Rev. 2849, 2859-60 (2001).
69
See MacPherson, supra note 31 (“To date, no U.S.-bound commodity shipments from
Canada have been found to contain bombs, bio-chemical weapons, or other illegal substances”).

Storer & Hufbauer—The Tipping Point 141
changes, somebody at a leadership level has to get this message across. Of
course Canadians have to accept the same proposition about U.S. goods.
I will not spend much time on travelers except to say that we come back
to a security tax. Somebody showed me a credit card-type of device that has
a radio chip, and that is a good improvement for travelers. 70 But these things
cost money, and what we are doing is putting that cost on individuals, many
of whom in do not have a passport or do not have one of these smart driver's
licenses. We need to think about subsidizing this cost for the next five years.
When we think about what we are paying generally for security, this is a very
small amount of money. 71
Now let us turn to goods. Here I totally endorse this idea where we have
certified examinations at the factory in Canada or the United States prior to
shipment. 72 And we have joint rules. 73 The merchandise is put in sealed
trucks and shipped across the border. 74 The containers are not scanned a
second time at the border except for occasional random audits.
But coming back to my first principle, we ought to have the same
frequency of random audits on trucks carrying containers between California
and Illinois as for trucks carrying containers from Quebec to Michigan. For
other regulations and for product taxes, we have already accepted the
national treatment principle that we are not going to put a higher burden on
shipments between the United States and Canada than we do within our
respective countries. We should accept the same principle for shipping
goods, and use high-tech equipment to inspect containers in both cases. 75
Looking forward, we should go in the direction that security checks are
generally conducted at the North American perimeter. 76 This is slowly
happening, bit by bit, as we have heard today. All I am urging is that we
make perimeter inspection an announced goal, and go more rapidly in that
direction to reduce congestion at the border.
70
See generally, Department of Homeland Security, Fact Sheet: Western Hemisphere
Travel Initiative (WHTI) Passport Card Technology Choice: Vicinity RFID, available at
http://www.dhs.gov/xnews/releases/pr_1161115330477.shtm (last visited Oct. 10, 2008) (citing
the benefits of the WHTI card on border crossings).
71
See generally, U.S. Department of State, U.S. Passport Card, available at
http://travel.state.gov/passport/ppt_card/ppt_card_3926.html (last visited Oct. 10, 2007) (the
cost of the card for passport book holders is $20.00 USD, cost for first time applicants is
$45.00 USD).
72
See U.S. Customs and Border Protection, supra note 66.
73
Id.
74
Id.
75
See generally, General Agreement on Tariffs and Trade, Article III, 61 Stat. A-11, 55
U.N.T.S. 194 (Oct. 30, 1947) (outlining the “National Treatment on Internal Taxation and
Regulation”).
76
See U.S. Customs and Border Protection, supra note 66.

142 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
And to get here, we need a strong push from the President and the Prime
Minister. And this may happen now that NAFTA has been put into play for
the next administration in Washington. Prime Minister Harper may very well
take up the challenge as well.
Prime Minister Harper, and President Bush should agree to launch a
commission which explores what practical steps can be taken to push the
security examination back to the perimeter.
I know all these recommendations sound like pie in the sky. But as was
mentioned earlier, the United States depends on Canadian energy. 77 I would
say to officials sitting in Ottawa, there is no reason why the energy card
should not be played, in some suitable way, to move forward the agenda on
security.
Thank you.
MS. MARTIN: Given the fact that Gary has to leave promptly at the end
of the session, I will ask that questions be kept terse I guess. But let us begin
with opening the floor to questions.
DISCUSSION FOLLOWING THE REMARKS OF PAUL STORER AND
GARY HUFBAUER
MS. IRISH: Maureen Irish, University of Windsor. A quick question to
Gary concerning the security perimeter. Would this have to be namely for
goods? I have been interested in the connection between security for goods
and security for persons. As we heard in the last panel, there are lots of
differences or significant problems with the safe third country agreement. 78
But can we in fact separate out security for goods and security for persons?
DR. HUFBAUER: I think security for persons is much harder for privacy
reasons which I am sure you know better than I do. 79 Also, we have different
standards for issuing visas. I would like to see progress on persons, but I
think we are much closer to getting progress on the goods issue.
MR. CRANE: Thank you. David Crane. Now that Gary's raised the
interest in proposition of playing the energy card he says in a suitable way,
how would he suggest that be played then?
DR. HUFBAUER: David Crane is a brilliant commentator, so he
probably has better and more subtle ideas than I do. It cannot be that Canada
would threaten to join OPEC or anything like that. But the U.S. really needs
77
See Canada Energy Data, Energy Information Administration (2008), available at
http://www.eia.doe.gov/cabs/Canada/pdf.pdf (showing the single largest source of oil imports
to the United States is from Canada)(last visited Oct. 10 2008).
78
See Jacobs, Kemi, The Safe Third Country Agreement, Policy Options, at 33 (Sept.
2002).
79
See generally, Seghetti, supra note 52 (describing the Computer Aided Passenger Pre-
Screening System (CAPPS) which was discontinued due to privacy concerns).

Storer & Hufbauer—The Tipping Point 143
more energy from Canada (which is happening anyway) and Canada
probably is chaffing a bit at the provision in NAFTA which essentially says
that Canada will not try to create a two-tier energy market—cheaper energy
for Canada than shipped to the U.S.—and in an emergency energy will be
proportionately allocated. 80
So I guess the subtle way would be this. Tell the U.S. leaders that we
know you want Canada to continue going forward with the Mackenzie oil
sands development in Alberta, and we know you want more hydropower, and
so on.
We Canadian leaders will discuss these energy security issues, but
Canada also wants a serious reconsideration of how the security partnership
is handled because, if Paul Storer is right, this is having a lot of adverse
affect. Not on GM probably, not on Ford, but on numerous smaller
companies. The security tax is depressing investment in Canada.
So we have to deal with this because you, the U.S. by your policies are
basically depriving us of one of our great advantages which is assured
proximity to the U.S. market.
MS. PAWLUCH: Quick question on the continental perimeter concept.
Can it move forward with Canada and the U.S. to the exclusion of Mexico?
And if not, is that not one of the hurdles to moving forward? I see you have
identified it as a joint approach. Realistically, can you see it moving forward
that way?
DR. HUFBAUER: Whoever asks the next question should toss it to Paul,
but I will briefly try to answer this one.
I believe that the U.S. can go forward with Canada first. And if we cannot
go forward with Canada on some new concept, who can we deal with?
Beyond Canada, there is Mexico, there is Singapore, there is Hong Kong,
and others. If we want to create a larger zone of safety than we now have,
Canada is obviously the place to start.
And I honestly believe that Mexicans would understand that this issue
first has to be addressed on a pilot basis with Canada before a security
perimeter can be considered for Mexico. So I do not think Mexico would
object if the U.S. and Canada went ahead. 81
MS. FREEDMAN: Hi. Katherine Freedman from the University of
Buffalo.
At several points today there have been conversations regarding the
security perimeter and reference with respect to renegotiating NAFTA and
80
See Gordon Laxer & John Dillon, Over a Barrel: Exiting From NAFTA’s Proportionality
Clause (Parkland Institute,2008).
81
See Wallace Clement & Leah F. Vosko, Changing Canada: Political Economy as
Transformation 244 (McGill-Queen's University Press, 2003) (indicating that Mexico's position
in the [security perimeter] arrangement is ambiguous).

144 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
rebuilding NAFTA. And I am just curious if either of the panelists have any
opinion or ideas with respect to pushing the envelope regarding the
establishment of a customs union as well between Canada and the United
States?
From my perspective, the security perimeter, it is a different issue from a
customs union. And I am just wondering if there are any discussions in that
regard, if these two issues should be handled simultaneously, or if we should
move forward on one and see what can be accomplished with the other?
MR. STORER: I think that the main reason we will not have a customs
union in the short run it is one of those “third-rail” political issues in Canada.
I have been told by some industry groups that academic economists should
stop using the term "customs union" because we hurt their efforts to broaden
and deepen NAFTA. Every time a reference to customs unions gets reported
in the news, people view that it is going to be some sort of political union.
CBC has been running a miniseries on this lately about the Trojan Horse
series. 82
So a full-blown customs union is probably not going to come right out of
the sky, but one thing that is interesting, is that there is a mini-customs union
right now in the NAFTA. This sectoral customs union has been in place since
1994 for computers and computer parts. It would be very interesting do some
follow-up work on how this sectoral customs union has worked out. 83 It does
not seem like Canada's lost its sovereignty, and it has been implemented in
the current framework with Cuba still on the bad person list.
So maybe just like the Auto Pact was extended beyond that sector, maybe
that mini-customs union in computers and computer parts could be extended
into some more sectors that people do not feel are sensitive. And as people
realized that the gradual extension of the customs union happened without
disaster, maybe that would point the way to move to a full customs union
once people realize it is not the threat they think it is.
Oh, can I say something about perimeter security? The work I have seen
by the Perimeter Clearance Coalition shows several ways to implement a lot
of the benefits of perimeter security. 84 Countries can check people’s
82
See CBC Television – The Trojan Horse, available at
http://www.cbc.ca/trojanhorse/synopsis.html (last visited Oct. 10, 2008).
83
Goldfarb, Danielle, The Road to a Canada-U.S. Customs Union: Step-By-Step or in a
Single Bound?, 17 C.D. Howe Institute (2003), available at
http://www.cdhowe.org/pdf/commentary_184.pdf (last visited Oct. 10 2008)("NAFTA already
has a de facto sectoral customs union with a common external tariff in certain automatic dataprocessing
goods and their parts").
84
See generally, Perimeter Clearance Coalition, Perimeter Clearance Strategy: To Realize
a Smart Border for the 21 st Century, Canadian Tourism Commission (2003), available at
http://dsp-psd.pwgsc.gc.ca/Collection/Iu86-1-2003E.pdf (last visited Oct. 10 2008)(discussing
the advantages to both tourists and governmental authorities).

Storer & Hufbauer—The Tipping Point 145
credentials at the point of entry in North America so that we do not have to
double-check them again if the visitors to North America cross the Canada-
U.S. border. This perimeter verification can be done without giving up
sovereignty. One idea is to have a card with an embedded chip that would let
you know what kind of permissions a visitor has to enter the United States or
Canada.
So it would not be that you would be just letting people into North
America and then just waving the door open, but you would be coding
information for both Canada and the United States at the first point of entry.
And so then when the person arrived to the Canada-U.S. border, this encoded
card would already provide that information. It would just expedite crossing.
You might not just walk right through the Canada-U.S. border but you would
walk through a lot faster because you would be scrutinizing the person the
most intensively when they came from, say, Belgium to Canada or the
United States. And I think that method has a lot of the benefits of the
perimeter security without having to give up sovereignty.
MS. MARTIN: Any more questions?
MR. CRANE: Can I make another point?
MS. MARTIN: Sure.
MR. CRANE: You touch on something interesting.
These border differences do affect behavior, and Gary mentioned, for
example, investment. There is no doubt that while the Ford Motor Company
and GM want total ease-of-border access, it may be at the economic
development offices of Michigan and Ohio would prefer to see border
differences so they can say to Japanese automakers you are better off
locating in the U.S.
On the Canadian side it is very interesting because of differences and how
we handle immigrants, that Microsoft has now put a big R & D lab in
Vancouver because of Microsoft's difficulties getting those same people into
the United States. 85 So it also might also be interesting to study how these
differences also lead to these kinds of outcomes.
In fact, I was at a conference yesterday where a suggestion that other
major cities should try to follow Vancouver's example and get one of things,
and I remember after 9/11, Mike Lazaridis who runs Research in Motion
suggested that because of difficulties of foreign post-ops getting into the
U.S., that our universities who are supported by pretty big government
should just sweep up all these people from China and India and the Middle
85
See Gates, Bill, Testimony before the Committee on Science and Technology, U.S.
House of Representatives (March 12, 2008), available at
http://www.microsoft.com/Presspass/exec/billg/speeches/2008/congress.mspx (last visited
Oct. 10, 2008).

146 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
East and Russia and elsewhere at the post-op level and bring them into our
University and create our next generation of professors.
DR. HUFBAUER: Leaping in with a very brief comment on that. You are
right, David. There is a lot of unspoken protectionism going on, and
everyone here knows the current mood in the United States which is not in
favor of going ahead on the liberalization agenda. It is not necessarily going
back quickly, but it is certainly not in favor of going ahead, and certainly
there are multiple small differences of all kinds in regulatory barriers. There
is always somebody who has a small advantage or even a big advantage in
regulatory differences and is going to play it.
For the last couple of decades, national governments have been pushing in
the other direction with the assistance of companies who are on the other side
of the debate and really want to move forward on liberalization. 86 But right
now the liberalization agenda is stalled. I hope it will get going again. But
your guess is better than mine.
On the specific aspect of immigration, this is another place where the U.S.
is falling behind. 87 My colleague, Jacob Kierkegaard, wrote a paper—which
is on our website—on what is happening in terms of the high-skilled fraction
of the U.S. population, including skilled immigrants, and what is happening
in Canada. 88 The U.S. is distinctly falling behind in terms of skilled
immigrants and the general skill level of the population.
MR. HERMAN: Larry Herman from Toronto.
I agree with Gary's comments. I always agree with Gary's comments—he
knows that—about the difficulty of moving ahead on the trade liberalization
agenda currently in the United States, so that is a reality. It is a political
reality. So pushing that button is not going to get very far with the United
States.
My view is that the Canadian response particularly in light of what some
of the candidates for President have said about the trade liberalization, which
is to roll back I think the gains of the NAFTA, I think that Canada should be
pursuing another avenue, and I think the security avenue is the right one.
What we have heard today I think is that there are a myriad of
arrangements, agreements, or different sorts of programs to try to facilitate
86
See generally, Underwood, Tamara, Export Assistance Programs for Small and Medium-Sized
Enterprises Offered by the International Trade Administration, U.S. Department
of Commerce (2003), available at http://www.pi.energy.gov/documents/underwood_smes.pdf
(last visited Oct. 10 2008)(discussing the governmental support programs for small and medium
sized businesses).
87
See Kirkegaard, Jacob Funk, US High-Skilled Immigration Policy: A Self-Inflicted
Wound, Yale Global, July 1, 2008, available at
http://yaleglobal.yale.edu/display.article?id=11023(last visited Oct. 10 2008).
88
See id.

Storer & Hufbauer—The Tipping Point 147
transport of trade, but there has been no big-picture agreement. 89 I think that
is what is needed.
In fact, if you look at the—if you look at the treaties, the government-togovernment,
federal-government-to-federal-government, state-to-state treaty
between Canada and the United States, in this complex world there are very,
very few.
What is needed I think is a—and I like your comments on this—is an
approach that said okay, let us not deal with a trade liberalization issue. Let
us pursue President to Prime Minister, Canada-U.S—forget Mexico—
Canada-U.S., a treaty, a major treaty that deals with the security issue
because that I think from what I have heard both of you say would help
advance the trades liberalization agenda. It would be called a security
agenda, but it would deal away with a lot of the problems at the border.
DR. HUFBAUER: I will give a quick comment and then, Paul, you
should weigh in on this one.
Yes, I think that is a great idea, and I think there are three big issues that
conceivably could be packaged together. Energy I have spoken about, that is
a continuing issue. There is hopefully a joint U.S.-Canada approach on capand-trade
or carbon taxes to address climate change. And then there is
security.
I think there is a package there that could be put together with
imagination, which then ultimately would be widened, just as the Canada-
U.S. Free Trade Agreement was, to embrace other countries once we had
pioneered it.
MR. STORER: I feel that there is a way to package some of the trade
liberalizing initiatives, such as getting rid of nuisance procedures at the
border like rules of origin, and using these improvements to brand the
package as being security-enhancing. What you can do is reallocate people
from doing one low-value function to another high-value function that
enhances security. This might be the way to achieve both deeper integration
and greater security and I think that would probably be a good way to go
forward.
MS. MARTIN: Any final questions?
DR. KING: I wanted to ask Larry Herman and our friends on the panel,
did you favor the arbitration of disputes under that treaty?
MR. HERMAN: Sure. Absolutely.
DR. KING: How about the U.S., what do you think, Gary?
DR. HUFBAUER: Would I favor it? By all means I would favor it.
Whether it would come, I do not know. There is a pushback against legal
procedures.
89
See generally, Taylor, supra note 46 (discussing possible long-term solutions to replace
the current border measures, specifically an “external perimeter”).

148 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
DR. KING: Is that a barrier if we do not arbitrate our disputes under the
treaty?
DR. HUFBAUER: Well, yeah. As you know, Henry, better than I, there
are many ways of doing arbitration, but I think when you do not have some
kind of dispute-settlement mechanism, the words remain basically words,
and they do not have a bite.
MR. STORER: I would like to see it come in to almost the same way that
antitrust or competition law, actual precedent-making in court decisions.
MR. HERMAN: I am sorry, but on this dispute settlement, one of the
problems with the NAFTA is that there is no permanent dispute settlement
process.
DR. HUFBAUER: Right.
MR. HERMAN: It is ad hoc. You could envision institutionalizing
NAFTA dispute settlement, have a permanent NAFTA court, judges who
have tenure, they can sit in Washington. I do not even care if they sit in
Ottawa, they can sit in Washington. They can deal with all the NAFTA
disputes, Chapter 11, Chapter 9, and Chapter 20, but you could also
institutionalize that body to deal with security-related issues where there is a
dispute subject to all the national security and sovereignty issues. But there
will be things that will have to be settled by an independent arm's-length
body on some of the securities issues, and it can be part of the same process.
DR. KING: What about a court?
DR. HUFBAUER: Well, I think what Larry has outlined is very close to a
court. You may not want to give it that particular name. You may want to
call it a commission, and you can put very distinguished people on it: retired
appellate court judges and people of equivalent distinction. It would
command a lot of respect.
MS. MARTIN: Well, please join me in giving a warm round of applause
for the panelists.
(Session concluded.)

HONORING DR. HENRY T. KING, JR.
SPEAKER
Dan Ujczo
MR. UJCZO: It is now the time of the evening where we turn our
attention away from the subject matter of our conference, the intersection of
our economic security with the border—we may have heard the phrase
"border thickening" once or twice today—to celebrate a legendary figure in
both law and life. It has been my high honor, great privilege, and certainly
one of the most rewarding experiences of my life to work with Henry King
for more than the past decade. 1
Now, this weekend is a time for sharing stories about Henry, one of which
happened even last night. Those of you that joined us at dinner know that we
were sitting there after a long evening. There may have been a cocktail or
two consumed, it was about 9:30 in the evening, and we were wrapping up a
presentation after a long day of traveling and a long dinner. And at the very
end of the proceedings, I was thanking a number of our sponsors, about 21 of
the sponsors of the Canada-U.S. Law Institute. 2 I was trying to show off a
little bit and not use notes. I was going down a list and at the end, I realized I
forgot one. I knew that I was down one because I was counting on my
fingers. And I just reflexively said, “Henry, I forgot one”—and here is
someone who is turning 89 in just about a month and a little bit of change—
looks up and says, “Baker Hostetler.”
Now, I have had the privilege of working with Henry as I said for quite a
long time. And one of the most frequent questions that I get asked is “how
did you ever meet Henry,” or “how did you get involved with Henry?” And
since it is a weekend for stories, I will share my story here.
1
See generally Canada United States Law Institute – Executive Committee,
http://cusli.org/about/executive.html (last visited Sept. 19, 2008) (noting that Dr. Henry King
has served as the United States Director of the Canada-United States Law Institute since
1983); Canada United States Law Institute – CUSLI Staff, http://cusli.org/about/staff.html
(last visited Sept. 19, 2008) (listing Daniel D. Ujczo as the Managing Director of the Canada-
United States Law Institute).
2
See Canada United States Law Institute – Members and Supporters,
http://cusli.org/members/index.html (last visited Sept. 19, 2008) (list of the 21 sponsoring
members of the Institute).
149

150 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
I was a first-year law student. I did not really enjoy my first semester of
law school, but by the time that my second semester rolled around, law
school had done its job. I had absolutely no social life. It was a Thursday
night, I was attending a moot court practice where I did not know any of the
students, did not know the issue, and I basically came for the free food that
was promised afterwards. And at that time my international law professor
grabbed me as I was entering the room and said, “I would like to talk to you
after this session.” My two immediate thoughts were one, oh, God, he caught
me sleeping in class again, and two, now I cannot leave this thing early, get
the food and get out of here. But he said, “I would like you to go talk to
Henry King tomorrow morning.” Of course, I knew that Henry King was a
legendary figure on our faculty, former service at Nuremberg, and as you
will hear, just had a tremendous career. But I called a good friend of mine
who was an upperclassman and asked, “What do you know about Professor
King?” And he said, “Well, if you are 15 minutes early for any appointment
that you have with him, you are late.” So I put on the one suit I had, with
holes all over it, ready to meet Henry. I showed up at his office an hour-anda-half
early and sat outside. And every 15 minutes or so, Henry would just
give me this face of displeasure, and immediately my nerves started rattling.
So the appointed time came, I walked into Henry's office, and he was sitting
there. And he looked up and he said, "Young man, I am not sure I want
somebody to be my research assistant who thinks a good use of his time is
sitting outside of my office for an hour-and-a-half."
Now, I meant to say something to the effect of, “in light of someone of
your stature I would wait as long as it takes to meet you,” but it really came
out more to the effect of “at your age I thought I should get here early.” As I
said it, there was this look where we both looked at each other and I said,
“Oh God.” Henry looked at me, and just gave that infectious laugh that he
has. It has been that same laugh every day for the past ten years of working
with Henry!
We have had the great opportunity to work together on a number of
projects. Like so many of us in the room, Henry is involved in so many
activities. 3 I have had the great pleasure of traveling with Henry both
throughout the United States and overseas, and there is probably nothing
better than an airplane ride with Henry of telling stories from Nuremberg, 4
3
See generally Canada United States Law Institute – Conferences & Events,
http://cusli.org/conferences_events.html (last visited Sept. 19, 2008) (list of past and upcoming
conferences at the Institute).
4
See generally HENRY T. KING, JR. WITH BETTINA ELLES, THE TWO WORLDS OF ALBERT
SPEER: REFLECTIONS OF A NUREMBERG PROSECUTOR (2007) (discussing Dr. Henry King’s
account of Albert Speer based upon his encounter as the Nuremberg prosecutor).

Ujczo, King, et. al.—Honoring Dr. Henry T. King, Jr. 151
about meeting 17 Argentinean dictators, to just what he had for lunch on
March 14, 1952.
We were talking earlier, and I was reminded that Henry never forgets a
phone number. It is a little parlor trick. He will tell you your phone number.
If he has dialed it, he remembers it. But also when he wants to show off a
little bit, he will tell you what he ate on some specific date. And I was always
amazed by that until I realized I could never prove him wrong. Where is the
source for that?
But I have one other story. Henry and I were in Ottawa after he was
appointed Honorary Consul, 5 and Andrew and Dana were there as well. Of
course it was Ottawa in February, which is when they usually bring people to
Ottawa. Every flight was cancelled, but Henry and I were there, and the
Canada-U.S. Law Institute had a program that evening to be held in Toronto
so we had to get there. 6 We were doing everything that we could do to get on
the one flight that is going to Toronto and the gate attendant said, “okay,
well, we are going to board you guys, but there is a chance this plane is not
going to land in Toronto, and that you are going to turn around and come
right back.” And I looked at Henry, and he nodded, and we got on the plane.
And while we were flying, the pilot came on at the beginning of the flight
and said it was 50/50 whether we were going to land. I looked at him and I
said, “Henry, I am a little surprised that you wanted to get on the plane, we
could have just stayed in Ottawa.” And I looked at Henry, and he was
laughing hysterically. And he said, “50/50's pretty good odds at my age.”
A special theme for anyone who knows Henry knows that the central
theme of his life’s philosophy—it is a part of every speech—is that he
believes in building institutions; that his life's work is about building
institutions. We certainly know—and as we will hear this evening, Henry
continued the Nuremberg legacy through his work in creating the
International Criminal Court 7 and his work at the ABA section of
International Law as former section chair. 8 It was amazing this week at that
Greater Cleveland International Lawyers Group. One of the world's top
arbitrators was saying, “when Henry and I were the first delegation to visit
5
See generally Canada United States Law Institute – Executive Committee, supra note 1
(noting that Dr. Henry King was appointed the first Honorary Consul for Northeastern Ohio in
2004).
6
See generally Canada United States Law Institute – Conferences & Events, supra note 3
(list of past and upcoming conferences in Cleveland, Ohio and cities in Canada, including
Toronto).
7
See generally Case Western Reserve University School of Law – Faculty,
http://law.case.edu/faculty/faculty.asp (follow “King, Henry” hyperlink) (last visited Sept. 19,
2008) (noting that Dr. Henry King was a guest of the government of The Netherlands for the
inauguration of the International Criminal Court).
8
Id.

152 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
China after Nixon opened it up…”—and it was just an eye-opener to realize
as to how involved Henry has been, certainly through his work in creating
the Greater Cleveland International Lawyers Group, 9 and the best evidence
of those institutions is right here, the Canada-United States Law Institute to
which he has dedicated 25 years of his life. 10
But at the core of every institution are people. I am just one of a number
of individuals in this room in a legion, or several legions, of people
throughout this continent and beyond who have been influenced by Henry
King, not only as a law professor, not only as a mentor in a career, but
certainly as a best friend and confidant. I can tell you that every place of
employment that I have ever had, when I worked at the U.S. District Court
for the Northern District of Ohio—the first phone call every day to the court
at 6:30 a.m. was Henry. We used to have to tell the cleaning people, “do not
pick up the phone, I am just running late to work,” because it was Henry.
But throughout this evening in terms of demonstrating that legacy, we
will bring up several individuals whose lives he had influenced to share their
experiences. But it is certainly not limited to those individuals. It is reflected
by all of us in this room and certainly many more, countless more beyond.
With that in mind, it is my great pleasure to introduce our colleague from
Case Western Reserve University School of Law, Professor Michael Scharf.
SPEAKER
Michael Scharf
MR. SCHARF: Good evening, friends from both sides of the border. As
Dan was saying, Henry, Dan, and Richard, who you have seen tonight, and
Chios Carmody, from the other side of the border, make up an institute 11 that
is very important to the International Law program at Case Western. And
together in a partnership, the Cox Center and the Canada-U.S. Law Institute,
have gained great prominence, and we are now ranked among the top
9
See Canada-United States Law Institute – Executive Committee, supra note 1 (explaining
that Dr. Henry King has served as President of the Greater Cleveland International Lawyers
Group).
10
See id. (noting that Dr. Henry King has served as the United States Director of the Canada-United
States Law Institute since 1983).
11
See Canada United States Law Institute – Advisory Board,
http://cusli.org/about/advisory_board.html (last visited Sept. 19, 2008) (listing Chios C. Carmody
and Richard Gordon as National Directors, and Daniel D. Ujczo as the Managing Director
of the Canada-United States Law Institute).

Ujczo, King, et. al.—Honoring Dr. Henry T. King, Jr. 153
International Law programs in the country, tied with Stanford and Cornell, 12
and it has a lot to do with the institution building that Henry King has done.
Dan asked me to help celebrate Henry's life by going through a little bit of
the chronology of the things he did. We in this room all know everything
about Henry, and I was tempted to just say, well, ‘res ipsa loquitur,’ the
thing speaks for itself, but it is always worth going through his life because
he is such an inspiration for so many people. Henry as you know was the son
of a New England mayor, 13 went to Yale, 14 did great in law school, became
the youngest of all the Nuremberg prosecutors, 15 and went on an adventure in
Germany as a civilian to prosecute the worst criminals known to mankind.
He returned from Nuremberg and was then thrust into a new and exciting
career at the State Department as Director of the Agency for International
Development in the Eisenhower administration. 16
He later became the Chief International Counsel for TRW, 17 one of the
major multinational corporations in the world. He was elected and served
prominently as the chair of the International Law Section of the American
Bar Association, 18 an organization of 70,000 international lawyers in the
United States. 19 Later he joined our faculty, and he has been here for 25 years
this year. 20 It is his silver anniversary. And it is very exciting what he has
been able to do, and the people that he has been able to touch over those
years. Like Dan, I met Henry ten years ago at the 50th anniversary of the
Nuremberg Tribunal's decisions. There was a conference in Boston, and he
and I instantly became pals. He is the reason I came back to Cleveland. He
recruited me, and he convinced me that this was a good home for me. He has
been my mentor, and he has been my inspiration since I have been here.
12
See generally U.S. News and World Report, Law Specialty Rankings: International
Law, http://grad-schools.usnews.rankingsandreviews.com/grad/law/internationall (last visited
Sept. 20, 2008) (ranking Case Western Reserve University, Stanford University and Cornell
University as tied for #16 in International Law program).
13
See Find a Grave, http://www.findagrave.com/cgi-bin/fg.cgi?page=gr&GRid=18297035
(last visited Sept. 20, 2008) (reporting that Henry T. King, Sr. was the first full-time mayor of
Meriden, Connecticut).
14
Canada United States Law Institute – Executive Committee, supra note 1.
15
See generally id. (noting that Dr. Henry King has served as prosecutor at the Nuremberg
War Crimes Trials).
16
See id. (noting that Dr. Henry King served as Deputy General Counsel and Later Acting
General Counsel of the International Cooperation Administration).
17
Id.
18
Id.
19
But cf. ABA International – Membership,
http://www.abanet.org/intlaw/membership/whoweare.html (last visited Oct. 16, 2008) (listing
the section’s membership as consisting of over 20,000 members).
20
See generally Canada United States Law Institute – Executive Committee, supra note 1
(noting that Dr. Henry King has served as the United States Director of the Canada-United
States Law Institute since 1983).

154 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
He has done wonderful things. Over the years, we have brought amazing
speakers to the law school, including the prosecutors of the Cambodia
Tribunal, 21 the judges of the Iraqi High Tribunal, 22 the prosecutor of the
International Criminal Court, 23 the president of the International Criminal
Court, and also the judge of the International Court of Justice. 24 People say,
“How do you get these people to come to Cleveland?” And I say, “Well, my
secret is I promise them an intimate dinner with Henry King.”
Henry, you are an inspiration for us, and one thing it tells me is that I am
just halfway through my career, and if I can continue to do the things that
you have done in the second half, it will be a wonderful second half.
Henry has always wanted to write his biography, but he has not written it
yet. I always said, “let us do it, why are not you doing it,” and he said, “well,
I still have another chapter to live.” This year, however, he finally sat down
and through a series of discussions with our students—basically 35 students
came every Friday for about 12 weeks, and he went through the 12 chapters
of his life with them, and it was all transcribed, and it is going to be a book,
and I am sure it is going to be a bestseller; I know you are going to be around
to enjoy the royalties.
Let me at this point turn it over for a continuation of the celebration of
your life and times to another great friend who I have met through you, Greg
Peterson, who runs the Robert Jackson Center in Jamestown, Chautauqua,
New York. 25
21
Michael P. Scharf & Brianne M. Draffin, Foreword: To Prevent and to Punish: An
International Conference in Commemoration of the Sixtieth Anniversary of the Genocide
Convention, 40 CASE W. RES. J.INT’L L. 1, 5 (2008) (listing Robert Petit, International Co-
Prosecutor of the Cambodia Tribunal, as one of the speakers in the international symposium at
Case Western Reserve University School of Law).
22
Id. (listing Ra'id Juhi al-Saedi, Chief Investigative Judge of the Iraqi High Tribunal, as
one of the speakers in the international symposium at Case Western Reserve University
School of Law).
23
Id. at 6 (listing Luis Moreno-Ocampo, the Chief Prosecutor of the International Criminal
Court, as one of the speakers in an event commemorating the Genocide Convention’s sixtieth
birthday at Case Western University School of Law).
24
See Judge Thomas Buergenthal, Truth Commissions: Between Impunity and Prosecution
Transcript of the Frederick K. Cox International Law Center Lecture in Global Legal Reform,
38 CASE W. RES.J.INT’L L. 217 (2007) (American judge on the International Court of Justice).
25
See Robert H. Jackson Center – Our People,
http://www.roberthjackson.org/Center/thecenter3-4/ (last visited Sept. 21, 2008) (listing Gregory
L. Peterson as the Board Chairman of the Robert H. Jackson Center).

Ujczo, King, et. al.—Honoring Dr. Henry T. King, Jr. 155
SPEAKER
Greg Peterson
MR. PETERSON: You are the real deal, Henry, and I am just so delighted
to come from Jamestown, New York, the home of Robert H. Jackson, 26 who
was in fact thrilled to have within his ambit within that group of prosecutors
the likes of Henry King. A little bit about me, a little bit about Henry, a little
bit about Robert Jackson, because I want to underscore just one little
component of what Michael Scharf said. When King had an opportunity to
go to Nuremberg, and he had an opportunity to do that through a fellow
classmate at Yale, Ted Fenstermacher, who encouraged Henry, he was
encouraged to do something different. To do something to make a change for
international law as the Nuremberg trial had just commenced.
And so in 1946, he explained to his wife that he was going to do
something a little bit different, that he was on his way to enhance
international rule of law, and he was going to become a part of the staff of
Justice Robert H. Jackson and Telford Taylor. 27 Now that is a bold move for
a young guy in 1946. He did so, and had a chance through that period of time
to visualize, see, investigate, and talk to the defendants that we just often see
in black and white news reels, the Hermann Goerings, the Albert Speers, and
Rudolf Hesses. 28 One of the amazing things—talk about photographic
memories—is the fact that Henry could sit here and recite all 21 of them
right here, 29 right now—I will not test you—and tell you exactly who they
were, what happened to them, what the charges were, and ultimately the
sentences that were imposed. A remarkable individual, but also he had a
chance to interview Hermann Goering, he had a chance to interview Albert
Speer, he had a chance to write a book about Albert Speer, 30 and I hope you
all have him autograph it because he is a true, true legend.
Now our paths crossed because when we created the Robert H. Jackson
Center in Jamestown, New York, 31 which is a couple of hours north of here,
26
E.g., John Q. Barrett, A Jackson Portrait for Jamestown, 'A Magnet in the Room,’ 50
BUFF.L.REV. 809, 810 (2002).
27
See Eli M. Rosenbaum, The Nuremberg Trials: A Reappraisal and Their Legacy, 27
CARDOZO L. REV. 1667, 1671 (2006) (recognizing Henry King, Whitney Harris, and Benjamin
Ferencz for their service as prosecutors at the Nuremberg Trials).
28
See generally Willis Smith, The Nuremberg Trials, 32 A.B.A. J. 390 (1946) (naming
Hess and Goering as defendants in the Nuremberg trials).
29
See generally id. at 390 (twenty-one defendants).
30
See KING WITH ELLES, supra note 4.
31
Robert H. Jackson Center, http://www.roberthjackson.org/Center/thecenter3-0/ (last
visited Sept. 21, 2008).

156 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
between Erie and Buffalo, 32 and designed to advance the legacy of Justice
Robert H. Jackson who, as we know, was the chief American prosecutor at
the International Military Tribunal among other things. Our first event at the
Robert Jackson Center, was Henry King. So Henry King, Whitney Harris—
who by the way, I talked to Whitney today, Henry, and he sends his greetings
and his congratulations. He is 95 in St. Louis, and also is one of those
prosecutors… 33
DR. KING: Only 95? I thought he was 96.
MR. PETERSON: In August. Not that he is coming, but we will be
gathering together, Henry and Whitney—in August in Chautauqua. But they
came for the very first time, and they set the tone. They set the tone for
events that occurred at the Robert H. Jackson Center which lead to Chief
Justice Rehnquist, 34 which lead to Sandra Day O'Connor, 35 which led to a
variety of folks from Nuremberg, and which have led to some instant
recognition over a very short period of time. And to thank Michael Scharf,
who is my hero because I simply sit and take notes as he has developed
something extraordinary here at Case Western in the Cox Institute. And
often, you see people like Henry and Michael, and you see them on a day-today
basis at the law school, and you say, well, he is just a professor. The
reality is outside of this area, they are both extremely big deals. And to
Michael, following in the footsteps, that you have a terrific tandem.
A lot of stories can go on and on and on, but I just want to pause and tell
you what Henry did at Nuremberg. He had an opportunity to present the case
against Erhard Milch. 36 Now that name is not Goering's name, but he was
Goering's number two man. 37 And Henry was part of the subsequent
Nuremberg trials, and for those who may or may not know, there were 13 of
them in total, 38 the International Military Tribunal in Nuremberg, which was
32
See generally Robert H. Jackson Center – Visiting the Jackson Center,
http://www.roberthjackson.org/Center/thecenter3-6/ (last visited Sept. 21, 2008) (providing
driving directions to the Center).
33
See Rosenbaum, supra note 27.
34
John Whittaker, 'Supreme' Honor for Jackson: Chief Justice Presides at Dedication of
Center, THE POST-JOURNAL (Jamestown, N.Y.), May 17, 2003, at A1.
35
Luke Anderson, O'Connor: Follow Jackson's Example, THE POST-JOURNAL (Jamestown,
N.Y.), Aug. 10, 2007, at A1.
36
See Nuremberg Trials Project, Introduction to NMT Case 2 U.S.A. v. Erhard Milch,
http://nuremberg.law.harvard.edu/php/docs_swi.php?DI=1&text=milch (last visited Sept. 21,
2008) (identifying Henry T. King Jr. as a member of the Prosecution Counsel in the Milch
case).
37
See DAVID IRVING, THE RISE AND FALL OF THE LUFTWAFFE:THE LIFE OF FIELD MARSHAL
ERHARD MILCH 79 (1974) (referring to Erhard Milch's status as Göring’s deputy).
38
See Benjamin B. Ferencz, International Criminal Courts: The Legacy of Nuremberg, 10
PACE INT'L L. REV. 203, 213 (1998) (discussing the twelve subsequent trials to the main International
Military Tribunal).

Ujczo, King, et. al.—Honoring Dr. Henry T. King, Jr. 157
Jackson. 39 And then there were twelve subsequent ones. 40 Henry was there at
the first one, stayed on with Telford Taylor, 41 and was one of the prosecutors
at the Erhard Milch case, and he was convicted because of Henry, 42 and we
have pictures of Henry at Nuremberg, and we have movies we have just
found of Henry at Nuremberg. So he is the real deal, but he did not stop
there.
He is not merely somebody you go have a conference and you rolled out
who was there 60 years ago. On the contrary. If you have never seen Henry
in action at an International Criminal Law conference—which Michael
features him frequently—make a special effort. Come over the border, come
on down and see him in action because he is passionate and he has been
involved. He has most recently been intimately involved in making sure that
America's position—that he feels very strong in their participation or lack of
participation—in the International Criminal Court is advanced. He was one
of the Nuremberg prosecutors who went over to Rome to make sure that
language appeared in that Rome treaty even though the United States did not
sign, 43 and he has continued to be a strong, extreme advocate on behalf of the
United States' participation in the International Criminal Court.
I could go on, and I know there is a lot of people to talk about Henry, but
I wanted to pause—and Henry, to you specifically—to congratulate you on
25 years of this participation, but more importantly, for over 60 years in the
field of International Criminal Law, and that you have stood head above and
shoulders above everybody we have ever had a chance to work with at the
Jackson Center, and for those who are in this room, and for the International
Law Community generally. Henry, congratulations.
MR. UJCZO: Thank you. And Greg briefly mentioned Henry's book, The
Two Worlds of Albert Speer, 44 which is available outside to all of you. I saw
when you said royalties both Henry and David had snapped into being. We
also have a book provided by the Jackson Center documenting Robert
Jackson's life as well – that is available outside. Please feel free to take a
copy on your way out, and Henry, we have given him several pens to sign
autographs this evening. But, as we know, we are here as part of the Canada-
United States Law Institute Annual Conference, and there has been no
39
See id. at 211.
40
See id. at 213.
41
See Nuremberg Trials Project, supra note 36 (identifying Telford Taylor and Henry T.
King Jr. as members of the Prosecution Counsel in the Tribunal 2 case of U.S.A. v. Erhard
Milch).
42
See generally id. (reporting Erhard Milch's conviction and sentence).
43
Cf. Hans-Peter Kaul, The International Criminal Court: Current Challenges and Perspectives,
6 WASH. U.GLOBAL STUD. L.REV. 575, 581 (2007) (acknowledging three former
Nuremberg Prosecutors, including Henry King, for their work during the Rome conference).
44
See KING WITH ELLES, supra note 4.

158 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
greater advocate in the United States to Canada-U.S. relations than Henry
King as evident by the creation of the Institute itself. Now I can just speak
from my personal perspective as, again, I was a young law student. I was a
research assistant.
I wanted to get involved in the sexy issues of international criminal law
and all that—and Henry said, “you can be my research assistant, but you
have to help me out on this Canada-U.S. Law Institute.” I had just come from
Europe working for the European Union, but then I said, “okay, I will do the
Canada-U.S. thing.” And now it has become a life's work. And the same was
evident even this morning with Paul Vandevert, our speaker this morning
from Ford, 45 who again is one of our alums and is now on the front lines of
the Canada-U.S. relationship. Without further ado, I introduce you to the
Consul General of the government of Canada and Detroit, Robert Noble. 46
SPEAKER
Robert Noble
MR. NOBLE: Thank you, Dan, and I want to recognize your fine work. I
have the privilege of having Dan working on my staff at the Consulate
General of Canada and Detroit. 47 And what a fine job you do. Thank you
very much, Dan. I feel very privileged to be here tonight because a long, long
time ago—a year you will remember, Henry, 1947—my father and mother
met in Hanover in Germany where my father who was a Canadian military
intelligence officer had been recently seconded to the British Intelligence
Service, and he was made political officer in Hanover. And throughout my
life and my brother's life, we were told by my father and mother how
important the Nuremberg trials were. And very recently, I was in Toronto—
my mother is a very young 86, Henry –
DR. KING: She is young.
MR. NOBLE: Very young, and very beautiful as all ladies of 86 are. And
my mother said, “you know, I know you have that Honorary Consul in
45
See THE CENTER FOR AMERICAN AND INTERNATIONAL LAW,INTERNATIONAL CORPORATE
COMPLIANCE 3 (2008), available at http://www.cailaw.org/Brochures_2008/IICB.pdf (listing
Paul Vandevert, attorney for Ford Motor Company, as a panelist on discussion of customs
compliance).
46
Consulate General Detroit – Robert Noble, http://geo.international.gc.ca/canam/detroit/home_page/robernoble-en.asp
(last visited Sept. 21, 2008).
47
See Consulate General Detroit – Staff List, http://geo.international.gc.ca/canam/detroit/services/staff-en.asp
(last visited Sept. 21, 2008) (identifying Dan Ujczo as Public
Affairs Officer).

Ujczo, King, et. al.—Honoring Dr. Henry T. King, Jr. 159
Cleveland. You have told me about him, that he was a Prosecutor at the
Nuremberg trials.” She dug out a copy of the illustrated London Muse of
1947, the one that is four or five pages of photographs of those events.
Robert Jackson was very prominent in the photographs. And I said to my
mother at the time, “There is Henry King!”
But I am sure you are in there, Henry.
DR. KING: Thank you.
MR. NOBLE: I am going to do without it, getting my mother to part with
this document. She is a naturalized Canadian, British origin, and the
illustrated London Muse is very sort of close to heart, but I am going to make
a very definite effort, you are going to see that, and sign it. It is an illustration
I think, Henry, of—I do not know what, karma—but I knew coming here to
Detroit I was going to meet interesting people. Across my territory here in
Cleveland, I have four states, Ohio, Michigan, Indiana, and Kentucky. And
here in Cleveland it has been my very great privilege to get to know Henry
King, our Honorary Consul of Canada in Northeastern Ohio. 48 It is for that
reason I accepted with very great pleasure the Canada-United States Law
Institute's invitation to offer these few words of this evening as we honor
Henry King's 25th year of leadership of this organization as well as recognize
his lifetime contribution to the advancement of the rule of law and human
rights in our society.
Indeed I am deeply honored to have been chosen to participate in tonight's
historic occasion. Canada and Ohio have enjoyed a long and close
relationship, longer and closer than many may know. 49 In fact, as I often
mentioned to our friends from northeastern Ohio, you included, where we are
standing now was once part of upper Canada. 50 Or as those of us who come
from Toronto call it, Canada's southern shore.
The Consulate General of Canada and Detroit as well as Canada's former
consulate here in Cleveland have enjoyed a long-standing relationship with
the Canada-United States Law Institute at Case Western Reserve University
School of Law. 51 I am proud to state that our consulate has supported all of
48
See Canada United States Law Institute – Executive Committee, supra note 1 (noting
that Dr. Henry King was appointed the first Honorary Consul for Northeastern Ohio in 2004).
49
See generally Colin Robertson, Canada-US Relationship: An Example of and an Innovation
for the World, 32 CAN. -U.S. L.J. 296, 303 (2006) (listing economic statistics as they
relate to the relationship between Canada and Ohio).
50
Cf. JAMES D. KORNWOLF WITH GEORGIANA WALLIS KORNWOLF, ARCHITECTURE AND
TOWN PLANNING IN COLONIAL NORTH 1257 (noting that at one point the land west of the Ohio-
Pennsylvania line and north of the Ohio River was considered part of Canada).
51
See CANADA-UNITED STATES LAW INSTITUTE, ANNUAL REPORT (2006), available at
http://cusli.org/lawjournals/annual_20052006.pdf (identifying Consulate General of Canada
and Detroit as an Institute member and discussing former consulate’s involvement in the history
of the Institute).

160 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
the 24 institute's annual conferences, the Canada-United States Law Journal,
student and faculty exchange programs, and the Niagara International Moot
Court Tournament. 52
Through this relationship we have developed a privileged bond of
friendship with tonight's honoree, Dr. Henry T. King. While Henry certainly
was involved in Canada-U.S. relations prior to his appointment as the
Institute's U.S. director in 1983, 53 it has been his service to a countless
number of students, faculty members, and practitioners through the Institute
that marks his lasting legacy. I share in Henry's belief that Canada-United
States academic programs are the bedrock of our bilateral relationship. Sam
Slick, 54 the fictional 19th century cracker barrel philosopher had something
to say about Canada-United States relations. He claimed it was authors of
silly books, editors of silly papers that keep us apart. 55 Well, I disagree
profoundly with Sam. Understanding the themes and values of Canada to my
mind requires an understanding of Canada's special context of the reasons we
emphasize some things in ways that others might not. Academic programs
are crucial in understanding the complex relationship between our two great
countries. 56 Analyses and concepts formulated in Canada-U.S. programs
provide an invaluable wealth of information that the wisest of America's
leaders use to create informed policy. In a world where “spur of the moment”
is all too commonplace, the long view of the academy provides a foundation
for insightful and substantive decision-making.
This is precisely why the Department of Foreign Affairs and International
Trade supports Canadian studies abroad, grads to faculty, researchers and
graduate students and support for teaching, research, and conferences. 57 The
department helps to improve Canada's international relations and bilateral
relations by expanding the community that is informed and favorably
disposed towards Canada, raising awareness of Canadians’ realities overseas,
and fostering productive exchanges such as this between Canadian and
foreign universities.
52
53
See id.
See, e.g., Canada-United States Law Institute – Executive Committee, supra note 1
(noting that Dr. King served as chair of the American Bar Association/Canadian Bar Association/Barra
Mexican Joint Working Group on the Resolution of International Disputes).
54
See THOMAS CHANDLER HALIBURTON, SAM SLICK'S WISE SAWS AND MODERN
INSTANCES:OR,WHAT HE SAID,DID, OR INVENTED (Kessinger Pub’g 2007) (1853).
55
See id. at 257.
56
See Canadian Embassy, Academic Relations,
http://www.canadianembassy.org/academicrelations/csgp.asp (last visited Sept. 21, 2008)
(discussing Canadian government’s support for programs contributing to understanding of
Canada-U.S. relationship).
57
See, e.g., Department of Foreign Affairs and International Trade Act, R.S., ch. E 22
(1985) (noting that the Minister may develop programs for the promotion of Canada’s interests
abroad).

Ujczo, King, et. al.—Honoring Dr. Henry T. King, Jr. 161
The Canada-United States Law Institute has shown itself to be a world
leader in U.S.-Canada studies. This tradition of success is clearly evident
once again in this weekend during its 24th annual conference. Ladies and
gentlemen, no one—no one deserves more acclaim for orchestrating this
success than Henry King. His stewardship of the Institute has been truly a
marvel. Indeed, the government of Canada recognized Henry's great
contribution to our two countries by appointing him the Honorary Consul of
Canada to Northeastern Ohio. 58 It was my very great pleasure to recommend
to the government of Canada the extension of that appointment for a further
three years. Congratulations Henry.
Henry is quite simply a national treasure to the United States as well as to
Canada. In recognition of that contribution, it is now my high privilege and
very great pleasure to present Henry with this award. Let me read you the
text:
"In celebration of 25 years of leadership of the Canada-United States
Law Institute at Case Western Reserve University School of Law, and
the University of Western Ontario Faculty of Law, and in recognition
of a lifetime commitment in advancing the rule of law and human
rights in our global society, the Consulate General of Canada and
Detroit expresses its heart-felt congratulations and the long-standing
appreciation to Henry T. King, Jr., Chairman of the Canada-United
States Law Institute, April the 18th, 2008, Cleveland, Ohio, United
States of America."
"À l'occasion du vingt-cinquième anniversaire du Canada-United
States Law Institute, qui joue un rôle de chef defile à l'école de droit
de l'Université Case Western Reserve et à la faculté de droit de
l'Université de Western Ontario, et enreconnaissance du dévouement
de toute une vie á l'avancement de la primauté du droit et des droits de
la personne dans le monde le consulat général du Canada à Detroit
exprime ses sincères fèlicitations et sa reconnaissance de longue date à
M. Henry T. King Jr. Président du Canada-United States Law Institute
Le 18 Avril 2008 à Cleveland, en Ohio (États-Unis)."
MR. UJCZO: Now, as we have noted throughout the weekend, the
Canada-United States Law Institute exists between two institutions, Case
Western University School of Law and the University of Western Ontario
Faculty of Law. 59 It is Henry's guiding light for all of us involved with the
Institute that everything that we do must ensure that we are benefitting both
58
See Canada United States Law Institute – Executive Committee, supra note 1 (noting
that Dr. Henry King was appointed the first Honorary Consul for Northeastern Ohio in 2004).
59
See Canada United States Law Institute, http://cusli.org/ (last visited Sept. 19, 2008).

162 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
of our programs. So it is my great privilege and pleasure to introduce first the
Dean of Case Western Reserve University School of Law, Gary Simson, 60
followed by the Dean of the University of Western Ontario Faculty of Law,
Ian Holloway. 61
SPEAKER
Gary Simson
MR. SIMSON: It is an honor to speak at an event honoring Henry by any
measure. I wanted just to acknowledge two people first. First, Dan for all he
has done to make this event possible and for all his work with Henry. The
other is Sid Picker who could not be here. Sid, as you know, was the founder
of the Institute, as well as the initial U.S. director. 62 He asked me to just read
a brief statement that he could not attend because of a prior religious holiday
commitment in Florida, and that he wishes Henry and the conference every
success. He is thinking of everyone here and is looking forward to receiving
a copy of the conference proceedings. I came in as the Dean of this law
school, and I was new to the law school in Cleveland a couple of years ago.
One of the things that I was delighted to find was this Institute. I certainly
learned about it a bit as a Dean candidate, but it is truly one of the most
interesting things at the law school. It is wonderful to have something that
has real uniqueness to it, and this Institute really does. I was even more
thrilled though to find myself the Dean of a law school with Henry King on
the faculty. In fact, it always seems incongruous to walk in and have him
greet me as the Dean as if there were some power order there that in fact,
does not exist. Henry is truly a legendary figure because he earned it, and it is
a tremendous privilege to be the Dean of a faculty that includes Henry. One
thing that you know about Henry, that I have continued to admire
enormously, is that Henry speaks his mind about things and he calls things as
he sees them. He is a person of tremendous courage and conviction and
60
See Case Western Reserve University School of Law – Faculty,
http://law.case.edu/faculty/faculty.asp (follow “Simson, Gary” hyperlink) (last visited Sept.
19, 2008) (identifying Gary Simson as Dean of Case School of Law).
61
See The University of Western Ontario – Western Law,
http://www.law.uwo.ca/Faculty_Staff/Professors.html (follow “Holloway, Ian” hyperlink)
(last visited Sept. 19, 2008) (identifying Ian Holloway as Dean of University of Western Ontario
Faculty of Law).
62
See Canada United States Law Institute –History, http://cusli.org/about/history.html (last
visited Sept. 19, 2008) (noting Sidney Picker established the Canada-United States Law Institute
and served as U.S. Director).

Ujczo, King, et. al.—Honoring Dr. Henry T. King, Jr. 163
principle, and again, it is a tremendous privilege to be the Dean of a faculty
that has someone like Henry on it.
As Dean, one thing that I am committed to is honoring Henry, and I am
planning to work together with Ian on initiatives relating to this Institute, but
ones that will honor Henry because this is something that has been so dear to
him over the years. I very much welcome contact from people here who
would partner with me and Ian in moving forward with things for the longterm
benefit of this Institute and in that sense, as a real honor to Henry. So
thank you all for coming. I am honored to be able to speak here, and again,
especially honored to be the Dean of a school that has Henry as one of its
faculty. Thank you.
MR. UJCZO: It is now my pleasure and privilege to introduce Ian
Holloway of the University of Western Ontario Faculty of Law.
SPEAKER
Ian Holloway
MR. HOLLOWAY: Thank you very much, Dan. Let me echo what Gary
had to say about Dan. Dan is a prince of a guy, and there is no doubt that one
of the joys in my life as Dean has been working with Dan and Michael and
everyone else who has helped us together celebrate the work of Henry King.
It is tonight as it always is an honor to be gathered with all of you, all of you
friends, to pay tribute to Henry and to the important the vitally important
work that is done by this Institute. But I hope you forgive me if I take a
moment to go back to the beginning and say that there is something else that
makes this evening particularly meaningful for me and for my colleagues
from Western, Chios Carmody and Margaret Martin. That is to tell you that
last Sunday, our former colleague, Emeritus Professor Jack Roberts, passed
away after a battle with cancer. That is tragic because Jack was a wonderful
colleague, but it is relevant to us this evening because Jack was the founding
Canadian director of the Institute. 63 Jack worked with Sid back in the mid
1970s and established the Institute in 1976. 64 Jack came to Western after
some time in practice. In fact, he was an associate of Dick Cunningham at
the firm of Steptoe & Johnson. 65 Indeed, Jack in many ways represented
perfectly what we are all about in this Institute, what we might call the
63
See id. (noting Professor Roberts served as first Canadian director of the Institute).
64
See id. (noting Professor Roberts’ involvement with the 1976 establishment).
65
See Lancaster House, Directory of Arbitrators,
http://www.lancasterhouse.com/arbitrators/search_results2.asp?arbitratorID=88 (last visited
Sept. 22, 2008) (listing Roberts as an associate for Steptoe & Johnson, 1971-73).

164 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
human element of the Institute. Jack was born in Southern Ontario, studied
engineering at Western, moved to Detroit, and took a job with Ford. In 1962
he joined the Royal Canadian Navy, fired up because of the Cuban missile
crisis. After the Navy, he moved back to the United States, attended law
school at Georgetown, 66 and joined the Steptoe firm. 67
So in light of his own career, he seemed a natural partner to work with Sid
to found the Institute back in 1976. And yesterday, I had the honor of
representing my school at a memorial to Jack, and I took the liberty of telling
Mrs. Roberts, Jack's widow, that I intended to mention him tonight, and she
was very touched. When I told her, as tears came to her eyes, she said “thank
you, thank you very much.” But she also said, “Would you do me one
thing?” I said, “of course, Mrs. Roberts, what is that?” She said, “Would you
please, please remember Jack to Henry.” So Henry, on behalf of your former
colleague, Jack Roberts—I am passing along his reverence as well.
DR. KING: I know her very well.
MR. HOLLOWAY: As Dean of Western, it is a delight to be celebrating
Henry King's silver jubilee as the U.S. director of the Institute. As everyone
before me has said, all of us here in this room have been the beneficiaries of
Henry's vision and his drive and his ambition to make the Institute what it
has become today. This conference alone is an extraordinary thing in that it
brings together lawyers and businesspeople and politicians and civil servants,
uniformed public servants, and academics to talk about matters of mutual
interest. It is really quite an extraordinary thing that I do not think it is
replicated in many places in this continent. And to honor this, to
commemorate this, to commemorate Henry's silver jubilee as a leader of this
extraordinary institution of which we are all so proud to belong, I am proud
to be able to tell you that we at Western have received authorization from our
board of governors to make fundraising for the Institute one of our top
priorities at UWO for the next five years. The board has given me
instructions to work with Gary as he suggested, and to work with you to do
what we can to raise funds to create a living, vibrant, perpetual memorial to
the great work that Henry has done and has bequeathed to us all. So Henry,
as your Dean—is a graduate of our law school I want you all to know—as
your Dean, if I may say so, on behalf of all of us, thank you very much for
everything.
MR. UJCZO: Thank you, Dean Holloway. And thank you for the
comments. I just note in passing, "prince of a guy." I will need you on my
next first date.
66
See id. (noting Roberts earned his Juris Doctorate from Georgetown University Law
Center).
67
See id.

Ujczo, King, et. al.—Honoring Dr. Henry T. King, Jr. 165
But we have a very special moment this evening. It has taken me 12 years
to really pull one on Henry. This one was tough. But in preparation for
tonight in working with Deborah, who has basically run this conference, we
thought, what can we do to truly get Henry at this event? How can we
surprise him and truly honor him? And the answer was of course to bring
David, his son, into Cleveland as a surprise. Now Deborah had slipped a few
times. I slipped even this morning. I said, “oh, we will just talk to David
about it later.” And Henry looked at me and said, “he is not coming for
months.” But as we all know there is nothing more precious to Henry than
his family, and we are truly honored tonight to have David come in not only
as a distinguished author. 68 The Ha-Ha, as many of you know, is one of the
best-selling books out there. 69 One of my favorite Henry stories is when he
said, “David sold the script, they want Russell Crowe to take the lead, but I
just do not think he is right for the part.”
But David can provide insight that no other person in the room can
provide, as well as beyond, and that truly is great. And the picture of Henry
when David walked into the room is one that we are going to put on the
website and in every publication that we have. It was truly one of life's
rewarding moments. So it is my great privilege and pleasure to introduce
Dave King, Henry's son.
SPEAKER
David King
MR. DAVID KING: Thank you, Dan. And I particularly want to thank
you for encouraging me to come to this celebration. It was entirely Dan's idea
that I should be here, and Dan and Deborah made it their particular project,
and I am really incredibly happy to be here and very, very proud. You know,
I do go to conferences, but the conferences that I go to tend to have sessions
with titles like “The Role of the Other End Post-Joycean Urban Fiction.” I
have never come to this conference because when I come to Cleveland, I
come to hang out with my father. We go to ballgames and we drive out into
the country, and we talk and stuff like that. So in the past, I have not come to
this conference because it has just always seemed that he would be too busy,
and it is really a delight to be here with you all tonight, and I really
68
See Home of Novelist Dave King, http://www.davekingwriter.com/ (last visited Sept.
19, 2008).
69
Cf. Dave King – News & Events, http://www.davekingwriter.com/news.html (last visited
Sept. 19, 2008) (listing The Ha-Ha’s awards, including being named to The Washington
Post’s eighteen best novels of the season).

166 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
appreciate the welcome and the hospitality. I am not a lawyer obviously, and
so I think it falls to me to speak of the Henry King that some of you may not
really know so well from his professional life. My remarks will be brief, but I
thought I would just tell you a little story from my childhood.
When I was a boy, I had a bad dog. Oh, I have to interrupt myself one
moment because when Dan was talking about my father's weirdly prodigious
memory, I remembered a story that my mother used to tell, which was that
they were in Bombay, or something like that, in the mid '80s. And my father,
you know, they had this incredibly long flight. They were at the baggage
carousel, and my father looked way down in the Bombay airport. And in the
distance, he recognized the back of some guy's head, and it was someone
who had sat like three rows ahead of him in freshman English at Yale in like
the Dark Ages—I wanted to throw that in as sort of a supplement to what
Dan was talking about.
Anyway, we had this family dog who was a very beautiful little Cocker
Spaniel, but was really one of those very bad, clever dogs who liked to get
out at night, and refused to come when called, and he would go investigate
whether any of the neighbors had left anything interesting in the garbage, or
he would go call on the various houses and invite the other dogs to come out
in the wee hours. One time from an upstairs window I watched, the neighbor
had a vegetable garden, and he was moving down the row of tomatoes biting
each tomato. And our family would generally take off for the east in the
summertime. Both my parents came from New England, and my mother
would take us to visit her family. And dad would come, you know, for part of
the time, but then he would have to return to Cleveland and work, and we
usually took the dog with us. I can not remember why, but at some point the
dog did not come. So the dog and Dad were left alone together in Cleveland,
and it was around the time that I was just learning to read. I began to get a
series of letters from my father. If you are a kid, I may have been 7 years old,
and you have not received a lot of letters in your life, it is really exciting and
wonderful. But the great thing about these letters was that they came out of
the blue. I mean, we did talk on the phone and stuff. I was not really
expecting to get mail from him. And there were progress reports on the state
of the dog. But what was really wonderful about those letters, what I really
cherish about them was that Dad adopted a persona that seemed to be derived
partly from P. G. Wodehouse and partly from every nutty lawyer figure from
generations of Hollywood movies, every kind of over-the-top lawyer figure.
He would refer to himself as your humble correspondent. He might say
things like, your humble correspondent had been sawing wood for several
hours when, said canine, commenced obvious defecation down by the
mailbox. His letters went on really for several pages, and they absolutely
delighted me. I had to work to understand them because I was in second
grade or something, but they opened the door to a particular kind of

Ujczo, King, et. al.—Honoring Dr. Henry T. King, Jr. 167
sophisticated adult wit which I had not encountered before. And they
expressed certain literary possibilities in terms of humor and what could be
done. He would sign them in funny ways also. Yours sincerely, I remain
Henry T. King, keeper of the compound esquire, stuff like that.
When I became a writer myself, I realized that Dad probably had fun
writing the letters. I liked that he found something that was fun in doing that.
He gave himself over to that process. But I also thought it was an amazingly
sweet and generous parental gesture on the part of a relatively busy man,
given what we have heard tonight, a relatively busy man who had spent a
good part of his previous night running around the neighborhood in his
pajamas chasing after my bad dog.
So I do not know how many of those letters there were. I looked for them
last time I cleared out the detritus of my desk in Cleveland. I came across
four of them. There may have been half a dozen or so. I just thought I would
relate that as a way of expressing a vision of my dad which was a little bit
frivolous and silly and affectionate and generous and wonderful in a way that
probably he does not express all the time in this serious realm of the law
school. But I also want to say that when I come to Cleveland, I usually do try
to visit a class. The last time I did, it was really a bit of a production.
Deborah comes, or somebody comes and picks Dad up, and they take him to
the classroom. Then a guy comes along that fits him with a microphone, and
there were always too many kids for the classroom. Once the class gets
started, I really recognize that same level of wit and good humor and
generosity, but also that gesture of setting the bar a little bit high for the
students, which was perhaps exemplified in those letters that he wrote to me
when I was 7 years old.
So congratulations, Dad. I am very proud that you have not just affected
my life, but affected the world at large, and I am extraordinarily happy to be
here to share this moment with you, and I love you.
MR. UJCZO: Well, I asked a question that I knew the answer to before I
asked: Henry, do you want to say anything? But I will bring the microphone
down and we will conclude with Henry's comment. So without further ado,
Henry King.
SPEAKER
Dr. Henry T. King, Jr.
DR. KING: Well, I cannot match the eloquence of tonight, but I am
overwhelmed. But I can leave you with one thought that makes life worth
living outside of love and affection: it is having ideals. I think you got to
have ideals to judge your progress. You never quite fulfill the ideals, or you

168 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
get very close, but you grow in the process. It makes life worth living. I think
that you have to have hope. You have got to have dreams. And I think the
real danger in life is not to dream at all. It is dreams that force out a change,
and a better world, and you grow in the process. That is what life is all about.
And it takes hard work, and you get setbacks.
I remember the first conference I did 24 years ago. 70 I had three people
coming, including Brendan Delay, who is here tonight. He is the only one
who has been to all of our conferences. It looked as though I was heading
into a precipice. But I called Clive Allen, who is the general counsel of
Nortel, 71 and said, “I got this wonderful conference,” which incidentally was
where the initiative of the Canada-U.S. Free Trade Agreement was
announced by Donald MacDonald, the former Finance Minister of Canada. 72
And I said, “it is going to be very embarrassing if I have three people to
listen to me.” He said, “how many do you want?” I said 25. Donald replied,
“You got 'em!” And that is the way I started off the first conference. And we
achieved the building of an institution that is going to live long after I am
gone. But it takes people with initiative like Robert Jackson who created the
Nuremberg trial. People with courage daring to do what Jackson did.
And we are always accused of being dreamers, but it is dreams that make
life interesting and give it meaning. I am totally overwhelmed with what
happened tonight. I do not have the eloquence that some of you who have
spoken do, but I would leave with you that message, and I hope that the
others will follow along. I thank above all Dan Ujczo and Deborah for
arranging this, and particularly my dear, lovely son sitting next to me. He is
wonderful. I live for that relationship on a personal level. Thank you very
much. Thank you. I cannot thank you enough. It will live long in my
memory, which is quite vivid. Dave, I would remind you one correction. The
man that I saw in Bombay from a long distance was a classmate of mine at
Yale Law School.
MR. UJCZO: On that note, true to Henry's form, we will conclude the
proceedings. Thank you.
(Session concluded.)
70
See Canada United States Law Institute – Executive Committee, supra note 1 (noting
that Dr. King became Institute’s U.S. Director in 1983).
71
See Admission D’Annie MacDonald Langstaff Au Barreau, IN FOCUS (McGill, Faculty
of Law, Montreal, Quebec), Spring-Summer 2007, at 29, available at
http://www.mcgill.ca/files/law/newsletter-2007-1.pdf (noting that Clive Allen served 25 years
as Nortel’s Chief Legal Officer).
72
See Donald S. MacDonald, An Overview of the Prospects for Sectoral Integration: The
View from Canada, 10 CAN.-U.S. L.J. 3, 4-6 (1985) (discussing initiative taken by Canadian
government with its 1983 Discussion Paper).

THE WAY TO A SAFE, SECURE & EFFICIENT CANADA-
UNITED STATES BORDER
Speaker – Dan Ujczo
Speaker – Richard Gordon
Speaker – Stephen E. Flynn, Ph.D.
INTRODUCTION
Dan Ujczo
MR. UJCZO: Good evening. I am Dan Ujczo, the Managing Director of
the Canada-United States Law Institute. 1 On behalf of the Institute, our two
founding institutions, 2 Case Western Reserve University School of Law and
the University of Western Ontario Faculty of Law, I welcome you to our
24th annual conference. And of greatest significance, I welcome you to this
dinner celebrating the 25th year of leadership of our institute by our
chairman, Dr. Henry T. King.
While this evening will be a great celebration, we are faced with a very
practical reality, that tonight's distinguished speaker has to catch a flight very
soon back to New York. So Steve Flynn has graciously agreed to an
abbreviated dessert, actually to forego dessert, as well as to present his
remarks while there is the clanging and service of that fine product of
Canada. All of the wine that is served this weekend is from Canada, as well
as our soft drinks are products of our long-standing supporter, Coca-Cola.
So we will turn quickly to our presentation, but please feel free to dine on
this tremendous meal at this terrific venue. So without further ado, I now
introduce Professor Richard Gordon, our U.S. Director at Case Western
Reserve University School of Law, 3 who will in turn introduce our speaker.
Thank you.
1
See, Canada-United States Law Institute, About the Institute, CUSLI Staff,
http://www.cusli.org/about/staff.html (last visited Sept. 18, 2008).
2
Canada-United States Law Institute, About the Institute, History,
http://www.cusli.org/about/history.html (last visited Sept. 18, 2008).
3
Canada-United States Law Institute, About the Institute, Founding Institutions & National
Directors, http://www.cusli.org/about/founding_institutions.html (last visited Sept. 18,
169

170 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
SPEAKER
Richard Gordon
MR. GORDON: I am really very pleased to have everyone here this
evening. Thank you so much for coming, and thank you, Steve Flynn, for
coming here from New York. 4 I will say you are a Gene Kirkpatrick Senior
Fellow for National Security Studies at the Council on Foreign Relations, 5
and you are the author of so many wonderful books: The Edge of Disaster:
Rebuilding a Resilient Nation, and I think that was a national bestseller. 6 You
have been on TV, 7 you have been on the web, 8 and you have been quoted
repeatedly in the New York Times and in other newspapers. 9 So rather than
have me continue with this introduction, I would like you to come up here
and speak and say something quotable. Thank you very much.
2008).
4
See, Stephen E. Flynn, Council on Foreign Relations,
http://www.cfr.org/bios/3301/stephen_e_flynn.html (last visited Sept. 18, 2008).
5
Id..
6
Id.
7
Id.
8
Id.
9
See, E.g., Stephen E. Flynn & James M. Loy, A Port in the Storm Over Dubai, N.Y.
TIMES, Feb. 28, 2006; Stephen E. Flynn, Our Hair is on Fire, WALL ST. J., Dec. 16, 2004.

Flynn—The Way to a Safe, Secure & Efficient Can-US Border 171
SPEAKER
Stephen E. Flynn, Ph.D. *
DR. FLYNN: Thank you so much. It is an honor to be with all of you
tonight, and I really want you to partake in the calories, and I will try to add a
little bit of the ambience of the place by offering a few words. When I got
this invitation just to address all of you tonight in recognition in large part to
Professor King's 25th year, it was simply an offer I could not refuse. And so,
Professor King, it is just a privilege to be here with you tonight and to
celebrate this very special anniversary, and I commend you for all you have
done on behalf of Canada-U.S. relations.
Naturally the topic picked for this year's meeting was music to my
ears. Allow me to give a little bit of background. I have arrived at what I
am doing as a Coast Guard officer. I graduated from the Coast Guard
Academy back in 1982. 10 In fact, I have a classmate here, Michael Parks,
who was Chief of Staff in the Ninth District, 11 and it is been great to get
reconnected with him up here in Cleveland.
But out of that, being on the “applied side” of border management, it
led to a project in 1999 when I first arrived at the Council of Foreign
Relations, 12 which was to look at all the issues of border management in
*
Stephen Flynn is the Jeane J. Kirkpatrick senior fellow for National Security Studies at
the Council on Foreign Relations. He is the author of the critically acclaimed The Edge of
Disaster: Rebuilding a Resilient Nation (Random House, 2007), and the national bestseller,
America the Vulnerable (Harper Collins 2004). At the Council, Dr. Flynn directs an ongoing
private sector working group on homeland security. He was the Director and principal author
for the task force report America: Still Unprepared - Still in Danger, (2002) co-chaired by
former Senators Gary Hart an Warren Rudman. Dr. Flynn is a Consulting Professor at the
Center of International Security and Cooperation at Stanford University and a Senior Fellow at
the Wharton School's Risk Management and Decision Processes Center at the University of
Pennsylvania. Since 9/11 he has provided testimony on nineteen occasions on Capital Hill. He
has served as the principal advisor to the bipartisan Congressional Port Security Caucus and is
a member of the Marine Board of the National Research Council. He is a frequent media
commentator and has appeared on Meet the Press, 60 Minutes, The News Hour with Jim
Lehrer, The Today Show, Nightline, the Charlie Rose Show, CNN and on National Public
Radio. Three of his articles have been featured in the prestigious journal, Foreign Affairs.
Excerpts of his books have been featured in Time, as the cover story for U.S. News & World
Report, as the subject of two CNN documentaries.
10
Council on Foreign Relations, supra note 4.
11
See, United States Coast Guard, Atlantic Area Chief of Staff,
http://www.uscg.mil/LANTAREA/ccs.asp (last visited Sept. 18, 2008).
12
See, STEPHEN E. FLYNN,COUNCIL ON FOREIGN REL., GLOBALIZATION AND THE FUTURE OF
BORDER CONTROL (2000)
http://www.cfr.org/publication/8703/globalization_and_the_future_of_border_control.html.

172 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
the context of globalization. I thought there was sort of an interesting set
of challenges here. The reality was the nature of the globalization,
particularly with the evolutions of it, such as privatization, liberalization,
and democratization. We are seeing an explosion in the volume and
velocity of people's goods and conveyances across international corridors.
Adversely, we are still in this West-feeling and hope, ‘what goes there
kind of way,’ I would imagine, and it struck me that that was probably not
sustainable. It was unsustainable largely because of two things.
One is there was a volume of velocity issue, that is the mechanism was
not in line with what it had to control, but also because it was a broad range
of public goods increasing which we call transnational express, 13 which is
becoming more and more apparent at the border, and which would lead to
potentially, through the governance of the sale of public goods right, to a
nativist kind of backlash arguing the world's response. 14
What has animated most of my work since September 11th has not been
so much the use of a border to find bad things, but really to push the opposite
way, to get people to recognize that so many of the things that we worry
about often at our borders are really tied to a much broader global set of
challenges that need to be managed far from the border. My one takeaway
from that project, which I wrote up in a Foreign Affairs piece back in 2000
called “Beyond Border Control,” 15 was that borders are perhaps a
tremendously attractive, seductive place to go for a description of the
challenges and contradiction of globalization. They almost always are the
worst places to go for prescription for how to deal with those challenges and
contradictions. There are virtually no problems on the planet that originate at
a border. They are almost all tied to a global network that is moving things
that we want around in the global economy and, or, originate far from that
geographical line in the sand, or river, or woods, or wherever it may be that
we are looking at. And so in this context we really have to see ways in which
we manage these problems within that globalized network.
My biggest fear when 9/11 happened therefore was not essentially the act
itself, that it may have been somehow connected to our borders, which of
course it turned out not to be, 16 but was how we would react to that. And that
is what pretty much informs a bulk of my concern about how we deal with
the threat environment we are in. At its core I would make a case to
Americans as this: the biggest threat to this nation is not what terrorists can
13
14
15
Id.
Id.
Stephen E. Flynn, Beyond Border Control, FOREIGN AFF., Nov./Dec. 2000, at 57-69.
16
9/11 COMM’N, FINAL REPORT OF THE NATIONAL COMMISSION ON TERRORIST ATTACKS
UPON THE UNITED STATES 237 (2004).

Flynn—The Way to a Safe, Secure & Efficient Can-US Border 173
do to us, but what we can do to ourselves when we are spooked. 17 In that
context, we must think about how we manage the threat, but manage the
threat in such a way that we keep it into perspective of our overarching
values or overarching of goals and objectives as a nation, and not end up
throwing the baby out with the bath water.
I argue this: essentially with the benefit of hindsight, there were three core
lessons that we could draw from September 11th. The first one I would argue
has been too well-learned, and it is this: there are bad people out there intent
on killing some of us here. 18 That one we got down. And the prescription has
been we need to do whatever it takes to go there to get them first. 19 I think I
have just summarized what has been the bulk of the strategy the United
States has adopted with dealing with the terrorism threat as it appeared on
September 11th.
But arguably the second lesson, partially-learned one, is this: that their
new battle space for not just this adversary, Al Qaeda, or future adversaries,
will be in the civil economic space. 20 That is the current way which future
adversaries are likely to confront particular U.S. power, but the broad sort of
collective shared interest of the live nations about managing a world in the
kind of way that we have chosen. The way in which that would be challenged
is not the ‘no snows’ approach, and one which way I try to accentuate that
reality about why we are more likely to move into battle that takes place in
the civil economic space is by two numbers.
One is in 2004, the United States set spending more in conventional
military capability than the entire world combined. 21 And for these last four
years, we have been leaving everybody else in the rear-view mirror. Put that
in its further context, our United States Navy is larger than the next 18 navies
combined. 22 That said, that to me is in warfare, we have one of two options
17
See John Mueller, Simplicity and Spook: Terrorism and the Dynamics of Threat Exaggeration,
6 INT’L STUDIES PERSPECTIVES 208 (2005); BARRY GLASSNER, THE CULTURE OF FEAR
(Basic Books 2000).
18
See, President’s Daily Briefing, “Bin Ladin Determined to Strike in US”, available at
http://www.washingtonpost.com/ac2/wp-dyn/A2285-2004Apr10.
19
See, Dieter Janssen, Preventive Defense and Forcible Regime Change: A Normative
Assessment, 3 J. MIL.ETHICS 105 (2004).
20
See, Podcast: Stephen Flynn on Girding the Homeland, Council on Foreign Relations,
available at
http://www.cfr.org/publication/15659/stephen_flynn_on_girding_the_homeland.html.
21
World Wide Military Expenditures,
http://www.globalsecurity.org/military/world/spending.htm (last visited Sept. 20, 2008).
22
American Society of Civil Engineers Online, Resilience is Key to Resisting Terrorist
Threats and alleviating Nation Infrastructure Woes, Says Flynn, available at
http://pubs.asce.org/magazines/ascenews/2008/Issue_01-08/article2.htm (citing Stephen Flynn
author of THE EDGE OF DISASTER:REBUILDING ARESILIENT NATION (Random House 2007) for
proposition that U.S. Navy is larger than next 17 navies combined).

174 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
with adversaries. One, dumb one, take the stuff home. Two, to future
adversaries, say let us try a different way. I am voting for two, they will try a
different way.
Now the second piece, Iran is much in the news these days as a potential
adversary. 23 I would like to put this into context. Iran's gross domestic
product last year was $600 billion, 24 which is roughly 20 percent less than
what the United States is spending on its defense budget in using it in Iraq
and Afghanistan. 25 The entire economy of Iran is less than the defense budget
of the United States. So if Iran at some point in time decides it is going to
confront U.S. powers some way, it is probably not going to look like taking
that stuff on. It is unlikely to be in the civil economic space, but here we see
as I partially learned, how do I make that conclusion? There is some rhetoric
that says “yeah, we acknowledge that we have new unconventional warfare.”
But when you are going to look at what your resources are, they just do not
bear out. Here are a couple of stark numbers. The President, just this year,
has asked for $12.3 billion for ballistic missiles defense research and
development. 26 This is on top of the $120 billion the United States has spent
since 1986. 27 Now there are five countries on the planet that have
intercontinental ballistic missiles, that this technology, if it ever was
developed and operationalized and realistically tested could actually begin
that, and those are the U.K., France, us, and Russia and China. 28 The
complexities developing in the nuclear missile is substantial, not likely to be
a foreseeable one, and yet we got $12.3 billion continued research and
development there. 29
The President also this year asks for a total of $220 million for port
security grants. 30 The total amount of money that can be made available to
23
See, e.g., Noah Feldman, Buildup to The Next War, N.Y. TIMES, Aug. 10, 2008, at MM9;
Fouad Ajami, Iran Must Finally Pay a Price, WALL ST. J., May 5, 2008, at A15.
24
International Monetary Fund, World Economic Outlook Database,
http://www.imf.org/external/ns/cs.aspx?id=28 l (last visited Sept. 21, 2008) (2006 G.D.P.
based on purchasing-power-parity valuation of country GDP).
25
Budget of the United States Government, Department of Defense, 2008 (Estimated),
http://www.gpoaccess.gov/usbudget/fy09/pdf/budget/defense.pdf (last visited Sept. 21, 2008)
(the total Department of Defense discretionary budget authority for 2008 was $668.6 billion)
26
Cf., Missile Defense Agency, Historical Funding of MDA FY85-08,
http://www.mda.mil/mdalink/pdf/histfunds.pdf (last visited Oct. 26, 2008) (President requested
$8.9 billion for 2008).
27
Id. (Accumulative funding from 1986-2008 totaled $114.3 billion).
28
Arms Control Association, Worldwide Ballistic Missile Inventories,
http://www.armscontrol.org/factsheets/missiles (last visited Oct. 26, 2008).
29
See, Missile Defense Agency, supra note 26.
30
See, Dep’t of Homeland Security, Overview: FY 2008 Infrastructure Protection Activities,
http://www.dhs.gov/xlibrary/assets/fy2008_infrastructure_protection_activities.pdf ( last
visited Oct. 26, 2008).

Flynn—The Way to a Safe, Secure & Efficient Can-US Border 175
ports around the country to manage the threat which, I think most experts
would argue, is more probable, is in some other conveyance, not a missile,
where $220 million is sort of chump change.
Putting it together, drawing this even further contrast. This year the
President has asked for $198 billion in supplemental for war in Iraq and
Afghanistan. 31 Do that arithmetic; it works out to $542 million each day. So
the total amount he has asked for port security, grants, is 12 hours in Iraq.
That, I would suggest to you, is a country that is still operating on the way in
which you conduct with this new mass security paradigm is with traditional
mass security tools, and you do not reallocate the sources of strategy, you can
only have direction.
The third unlearned lesson of 9/11, which I think is the most
straightforward one, is that the only way to actually safeguard that space is to
enlist as many participants who are in it as possible to be a part of the
effort. 32 If they knew battle space was civil economic space, then you have
better get the private sector, and you better get the people who live in that
space involved with that.
Now why was that a core lesson in 9/11? I would argue it should have
been the dominant lesson of September 11 th . In fact, I would go so far as to
say we got it wrong. On September 11 th , what Washington took away, and
the rest of the country followed, was that the dominant narrative of that day
was what happened on the first three planes. The two planes that went into
The Twin Towers and took them down and then the last one that sliced open
the Pentagon. 33 But the dominant lesson of September 11th I would argue
should have been what happened on the fourth plane, United 93. 34
United 93 of course was the plane that left Newark late, 35 and as a
consequence of the fact that the terrorists were cocky enough not to prevent
the passengers on board from being able to grab the phones at the center of
the seats and call their friends and loved ones, and find out something that
the people in the first three planes did not know: that these terrorists intended
on using the planes as missiles. 36 Armed with that information, they did
something very important. They went after the cockpit and prevented that
plane from going to its ultimate destination, which almost certainly was
31
See, OFFICE OF MGMT.&BUDGET,EXEC.OFFICE OF THE PRESIDENT, FY 2008
EMERGENCY BUDGET AMENDMENTS:OPERATION IRAQI FREEDOM,OPERATION ENDURING
FREEDOM, AND SELECTED OTHER INTERNATIONAL ACTIVITIES, (Oct. 19, 2007) available at
http://www.whitehouse.gov/omb/budget/amendments/amendment_10_22_07.pdf.
32
See, Charles Boehmer, Erik Gartzke, & Quan Li, Investing in the Peace: Economic
Interdependence and International Conflict, 55 INT’L ORG. 391 (2001).
33
See, 9/11 COMM’N, supra note 16 at 4-10.
34
35
36
Id. at 10-14.
Id.
Id.

176 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
America's seat of government. 37 Think of the irony of this. Our government,
which we constitute in the United States to provide for the common defense,
that the people gathered on Capital Hill that day who had sworn their duty,
were themselves defended by one thing and one thing alone: great everyday
Americans.
The dominant lesson of September 11 th , I argue, is not that they need to
do whatever it takes, which is allow our government to do whatever it takes
to take battles to the enemy, but it is that when we are confronted with a
threat that is looking like the one that we have today, we need all of us
engaged. We are civilians who are as it turns out to be likely to be the first
preventers and first responders. We need a private sector which likely is
placed with targets most likely to happen. When you talk about that space,
you are talking about it in a transnational context on the domestic context.
This is where the border really comes in.
I had the experience here, most recently a couple years ago, to get myself
in the crosshairs of the Dubai Ports World debacle, or fiasco. 38 Dubai Ports
World, as I recall, is the company, 39 which is formed largely by American
executives formerly with SeaLand. 40 In fact, SeaLand was the company that
first set up the port in Dubai, ran it, run by Americans the first 10 years of its
life.
The Americans, who were displaced when SeaLand was bought by
Maersk and then came together and put together a company called Dubai
Ports World, 41 were interested in buying some leases owned by Pacific and
Orient Line, and had taken advantage of that commercial opportunity. It turns
out we got into a rather interesting frenzy in the U.S. about this particular
purchase. 42 What it really illustrated was three things that should concern all
of us.
The first was that Americans had no understanding how the global
Maritime transportation system worked. 43 The kinds of things that were said
about what this purchase was about, and how it was working and so forth,
people were clueless. And that was people from elected officials on down
asking and so forth. Secondly, it was very little appreciation of the value of
37
38
A19.
39
Id.
See, Stephen E. Flynn, A Port in the Storm Over Dubai, N.Y. TIMES, Feb. 28, 2006, at
See, DP World, http://www.dpa.co.ae/ (last visited Oct. 31, 2008) (corporate website).
40
See, DP World, George Dalton,
http://portal.pohub.com/portal/page?_pageid=761,252854&_dad=pogprtl&_schema=POGPRT
L (last visited Sept. 22, 2008).
41
See, DP World, supra note 39.
42
43
See, Flynn, supra note 38.
Id.

Flynn—The Way to a Safe, Secure & Efficient Can-US Border 177
what that industry played in our economy. 44 And third, it was virtually no
appreciation for the security of the system put in place. 45
Of those three things, the only one that was forgivable was the last: lack
of concern about security or the apprehension about security of the system.
But essentially people did not understand, did not value, and did not have
confidence in the security. 46 The result was a nativist backlash that led to the
legislation that goes back by one man who wanted to be President, Duncan
Hunter, 47 the Chairman of the Armed Service Committee, 48 the one who
wanted to have all critical infrastructure of the United States owned by U.S.
companies. That was the piece of legislature he touted out. 49
Now, I remember talking to staff about this and in a hearing, saying, “of
course we are going to be eyeing up heartlands and go back.” And, “we will
have to pick up those natural [gas] pipelines up in British Columbia and
Alberta.” 50 And, “ports are really on-ramps and off-ramps, so I guess we
better get deep pockets, we are going to be buying ports around the planet.”
The very nature of this challenge clearly is about a globalized network that
we have to have really good partners with. And the Dubai Ports World, the
second largest terminal [operator] in the planet, 51 have been kicked by the
United States, 52 and that is a great way I am sure to inspire their cooperation
to putting controls in place.
The reality here is that these networks, our relationships and our
economy, are tied solely independently, particularly in the North American
context, with our neighbors who have global networks. 53 The way in which
they actually manage this—these series of challenges that now we call
homeland security for border control, really need to be breasted into that
broader context. And this is something that Americans, I would argue, have
had a very difficult time understanding, and our leadership has obviously
44
45
46
47
Id.
Id.
Id.
See, Duncan Hunter for President, http://www.gohunter08.com (last visited Sept 23,
2008).
48
U.S. House of Representatives, Armed Services Committee,
http://armedservices.house.gov/ (last visited Sept 22, 2008).
49
H.R. 4881, 198th Cong. (2006).
50
See, Spectra Energy Transmission, BC and Alberta Systems Map, https://noms.weipipeline.com/CustomerContent/systems_map/Spectra_BC_AB_Systems_Map.pdf
(last visited
Sept 23, 2008).
51
Contra Tony Karon, Who's Behind the Dubai Company in U.S. Harbors?, TIME, Feb.
26, 2006.
52
See, Flynn, supra note 38.
53
See generally, Anthony DePalma, International Business; With the U.S. Economy
Slumping, Canada and Mexico Are Reeling, N.Y. TIMES, Dec. 17 2001, available at
http://query.nytimes.com/gst/fullpage.html?res=9A03E3D71F3FF934A25751C1A9679C8B63

178 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
failed in outlining that reality and providing guidance in how to move
forward.
So how do we move forward? The case I would make is that we need to
step away from a mindset that is driven around this notion of security, an
increasing embrace of a concept that I am trying to advance called
“resilience.” 54 That the way in which we deal with the current threat that we
are looking at, particularly in the area of terrorism. But I argue we need to be
more worried about threats, probably in terms of the probability and
consequence, that are coming from natural sources; 55 we need to be more
resilient as societies to manage the transnational threats that confront us, as
societies, plural, and in cooperation with one another. That is something that
I think we really need to address.
The first point that we need to set forth are things like security tax, and
that the security that we put in place after 9/11 is imposing costs on our
relationship, or commercial relationship, increasingly. In fact, they
compromise our political relationship in ways that are conflict to us. I would
argue this is nonsense. So you are not seeing a security tax, what you are
seeing is an enforcement tax. What we see is a confluence of enforcement
with security which is simply not supportable in reality. What we generally
have seen is a view that more law enforcement equals more counterterrorism,
and that is simply not the case. 56
Our army has had a heck of a time learning from Iraq, and they are
starting to learn it, and they have a counterinsurgency there that recognizes
two critical things. That in order to be successful in counterinsurgency, the
security objective is not to alienate the population and you do not do things
predictable. 57 Think about what we are doing at our borders, alienating
everybody and doing things predictably. 58 That might be a great formula for
success for security, and maybe enforcement, but it is not. It is not dealing
with the threat that we are dealing with in terms of the terrorism threat which
ultimately must be dealt with in a more nuanced and counterintuitive way. 59
54
Stephen E. Flynn, America the Resilient, FOREIGN AFF., Mar./Apr. 2008, at 2.
55
Id.
56
Compare, Jeff Breinholt, Seeking Synchronicity: Thoughts on the Role of Domestic Law
Enforcement in Counterterrorism, 21 AM. U.INT’L L. REV. 157 (2005) (contending that domestic
law enforcement and intelligence is the key to counterterrorism efforts), with National
Strategy for Fighting Terrorism, Sept. 2006, http://www.whitehouse.gov/nsc/nsct/2006 (last
visited Sept. 23, 2008) (advocating the use of military, diplomatic, financial, intelligence,
avenues in addition to law enforcement).
57
See, Eliot Cohen, Conrad Crane & Jan Horvath, Principles, Imperatives, and Paradoxes
Of Counterinsurgency, 86 MIL. REV. 49 (2006); Thomas E. Ricks, It Looked Weird and Felt
Wrong, WASH.POST, July 24, 2006 at A01.
58
See, Shirley Won, U.S. border tightening starts to hit tourism, GLOBE &MAIL, Feb. 16,
2006, at B9.
59
See, Cassandra Florio, Sean McCarthy, & Alexander Moens, Canadian American Rela-

Flynn—The Way to a Safe, Secure & Efficient Can-US Border 179
My short hand on security I have tried to advance with virtually no
success is a reality that security, when done right, is almost always nuanced;
it is always nuanced and almost always counterintuitive. 60 Tough security is
always simple, which makes it politically and bureaucratically effective and
always ineffective because it is rote, ritualistic, and also ultimately it
alienates the people who are associated with it. 61 So when we think about
how we need to move forward, one is, we need to be very clear that there is a
distinction between enforcement, the kinds of things we do at borders around
enforcement, and security. We need to basically make sure that what we are
doing is not being taken hostage by the security objective which really is
enforcement on steroids, and we are willing to think about security and how
it has accomplished a nuanced, and in some cases, in a counterintuitive way
which is usually about cooperation and engagement. 62
Now, this is where I believe resilience really works as a formula for
versus security. Let me define quickly with what I call “Four R’s.”
Resilience is first built around robustness. 63 You basically look at the things
that are truly critical by the kinds of things, bridges and tunnels that connect
our trade relationships, global supply chains, transport and so forth there,
energy, so forth, and you say, “what are foreseeable threats to those things
that are critical that we may anticipate happening which would have high
consequence?” Then based on that formula, we basically take measures upfront
to strengthen them to withstand those forces. The old world we were re
in was built around safety. What if human error or Mother Nature did this?
Now we just need to add another one. What if malicious intent went after
something that was critical? If it was consequential, we needed to put
robustness up front. Robustness in some cases is a structure, is hardening of
sorts. It is making buildings that can withstand earthquakes kind of thing. But
it also, often it is substitutability. It is the redundancy in some cases. Stability
is “something is wrong here, switch over there so the system stays alive.”
So the first element is robustness. The second R that I would put on the
list is resourcefulness. Resourcefulness is really when things start to go
wrong, you can detect it quickly and do an alert to the players who need to be
tions in 2007, FRASER INST., May 1, 2007, available at
http://www.fraserinstitute.org/commerce.web/product_files/CanadianAmericanRelations2007.
pdf.
60
See, Cohen et al., supra note 57.
61
Id.
62
See, Audrey Kurth Cronin, Behind the Curve: Globalization and International Terrorism,
27 INT’L SEC. 30 (2002).
63
See, Flynn, supra note 38.

180 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
able to respond to this incident. 64 It is a crisis management function, and it is
heavily on human capital versus technology. 65
The third R is recovery. Something's happened; you need to get it back
quickly. And the fourth R is review, learn from what is happening, and
reinvest it back into robustness, resourcefulness, and recovery.
Now, that broad resilience focus I would argue does two great things for
us in thinking about how we go forward as a North American continent
dealing with the hazard of terrorism as well as the other natural hazards that
typically we are trying to manage at our borders. One is: you cannot achieve
it unless there is an open inclusive process. 66 You have to bring in the people
who will design systems and operate the system to figure out how you build
the robustness; 67 how you engage the resourcefulness in the same kind of
way United 93 drew in where people were drawn into the problem, and often
in many cases are part of the solution. So that is a critical part you have. Also
there is a recognition with resiliency. You do not prevent everything. 68 Some
things go wrong. 69 We have to accept that reality. But thirdly, and I think this
is most important for our values shared across the North American continent,
is resiliency. At its heart, it is built on a foundation of confidence and
optimism. 70 You are saying, “whatever happens, we will bounce back and
well be just as good, if not better, the next time around.” 71 Security though is
often built around our fears, 72 and that is something that I would argue works
against our optimistic, confident character.
And so, I suggest for a future conference, we not talk about how we
secure borders or how we balance border security with commerce, but talk
about how we build resiliency in the critical infrastructures, the relationships
that are key for our shared societies, that we move out of this vernacular.
I will make a final point on this with regard to security, which is one thing
I guess I have learned most since spending time on the border. Whenever you
hear somebody say we need to balance security with efficiency of commerce,
run for cover. 73 This is not only like the people who advance on that idea are
64
See, Flynn, supra note 38.
65
Id.
66
Id.
67
Id.
68
See, Philip Shenon, Threats And Responses: Warnings; Security Chief Says Nation Must
Expect Suicide Attacks, N.Y. TIMES, Mar. 13, 2003, at A13 (warning that inevitable suicide
bombing attempts in the United States will be difficult to prevent).
69
Id.
70
See, Flynn, supra note 38.
71
Id.
72
H.L. Goodall, Jr., Twice Betrayed by the Truth: A Narrative About the Cultural Similarities
Between the Cold War and the Global War on Terror, 8 CULTURAL STUD./CRITICAL
METHOD. 353 (2008).
73
See, Maureen Appel Molot, The Trade-Security Nexus: The New Reality in Canada-U.S.

Flynn—The Way to a Safe, Secure & Efficient Can-US Border 181
not interested in balance entirely, but usually is where it fundamentally
breaks down.
I cannot achieve security in an inefficient environment. 74 If a security
measure puts in place a barrier that essentially causes an environment to
behave in a disruptive way, it becomes less policeable. 75 It becomes less
secure. 76 Any security measure that is not designed organically and
dynamically with that environment ultimately undermines security because
what you get really is increasing friction and chaos and in some cases, the
informal ways to work around it that ultimately make the environment less
secure. 77 And so the fact is we should not allow politicians or agency heads
or others to say “I am balancing.”
The requirement is, how are you integrating security into the overall
objective which is a resilient system? I think we can move to that level of
thinking. We will make sure that we sustain the kind of relationship that is
remarkable, and the prosperity is generated, and the shared values that we all
have, which is the one we have between our two nations, Canada and the
United States. Thank you so much for your attention tonight.
(Session concluded.)
Economic Integration, 33 AM.REV.CAN.STUD. 27 (2003).
74
See, Stephen E. Flynn, The New Reality in Canada/U.S. Relations: Reconciling Security
and Economic Interests and the "Smart Border Declaration", 29 CAN.-U.S. L.J. 9, 14-17
(2003).
75
Id.
76
Id.
77
Id.

CANADA-UNITED STATE LAW INSTITUTE
ANNUAL CONFERENCE
On
THE WORLD’S LONGEST UNDEFENDED BORDER:GATEWAY OR
CHECKPOINT?THE POST-9/11 “SAFE AND SECURE”CANADA-
UNITED STATES BORDER IN THE ERA OF GLOBAL SUPPLY
CHAINS
APRIL 19, 2008

MOVING PEOPLE ACROSS THE CANADA-UNITED STATES
BORDER: LEGISLATIVE AND REGULATORY
DEVELOPMENTS IN IMMIGRATION, THE WESTERN
HEMISPHERE TRAVEL INITIATIVE, AND ENHANCED
DRIVERS’ LICENSE PROGRAMS
Session Chair – Catherine A. Pawluch
United States Speaker – Praveen Goyal
Canadian Speaker – Ken Oplinger
INTRODUCTION
Catherine A. Pawluch
MS. PAWLUCH: Good morning. How are you, ladies and gentlemen?
My name is Catherine Pawluch. I am a partner with Gowling Lafleur Henderson,
1 a national law firm in Canada with offices across Canada and in
Moscow. It is my distinct privilege this morning to chair this panel which
will focus on the movement of people across the Canada-U.S. border. In our
knowledge-based economy, it is often said that human capital is the most
critical asset in the success of a business. 2 In the context of the U.S-Canada
border, yesterday we heard Canada's Ambassador to the U.S. say that more
than 400,000 people cross the Canada-U.S. border every day. 3 In this post-
9/11 security-related immigration environment, this morning we are going to
focus on policies and programs that have been introduced and are about to be
introduced which allow our governments to conduct identity and security
checks on those seeking to enter and secure legal status. How are these pro-
1
See Gowlings Lafleur Henderson, Biography of Catherine A. Pawluch,
http://www.gowlings.com/professionals/professional.asp?profid=230 (last visited Oct. 10,
2008) (“Catherine is a partner . . . .” at Gowlings).
2
See EDWARD E. GORDON, SKILL WARS, WINNING THE BATTLE FOR PRODUCTIVITY AND
PROFIT 7 (3d ed. 1999) (“[W]ell educated people are now the defining element for business
success”).
3
See The Honourable Michael Wilson, Can. Ambassador to the U.S., Address to the
Seattle Rotary Club (Dec. 12, 2007) (“And more than 400,000 people a day, on average, travel
across the [Canada-U.S.] border.”), available at http://geo.international.gc.ca/canam/washington/ambassador/071212-en.asp.
185

186 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
grams effective, and how are they likely to affect corporate movement of
employees, the tourism sector and the trade generally between our two countries?
As we listen to our presenters this morning, they are going to talk about
some new programs that are being rolled out. Let us think about and consider
whether these programs further security goals. Will they likely to accomplish
their purposes? And are they worth the cost in resources expended and opportunities
foregone?
To take us through a description of the new programs and some analysis
and thought, I am delighted to welcome two eminently qualified speakers.
Praveen Goyal, who is sitting to my right, is the director of U.S. Government
Relations for Research in Motion, RIM, a Canadian company with its headquarters
in Waterloo, Ontario. 4 RIM is the creator of the BlackBerry, which
has been ubiquitous on the North American continent and is indeed coming
to be so around the world. 5 RIM is a leading designer and manufacturer of
innovative wireless solutions for the worldwide mobile communications
market. At RIM, Praveen's responsibilities include developing and implementing
policy strategies and representing RIM before federal and state legislators
in the United States. Praveen is a graduate of Yale College and Harvard
Law School. He has served as counsel within the Federal Communications
Commission 6 and the telecommunications industry.
We also welcome this morning, to my left, Ken Oplinger, who is president
and CEO of the Bellingham/Whatcom Chamber of Commerce and Industry.
7 Ken currently serves as the co-chair of the BESTT Coalition, the
Business for Economic Security Tourism and Trade, 8 which is a bi-national
Canada-U.S. coalition of business and industry concerned about the effects
on the Canada-U.S. border of implementing the Western Hemisphere Travel
Initiative, 9 which we are going to hear about this morning. Ken is a graduate
of Willamette University in Salem, Oregon and the Institute for Organiza-
4
See Can. - U.S. Law Inst., Biography of Praveen Goyal,
http://cusli.org/conferences/annual/bios/goyal.html (last visited Oct. 10, 2008) (“Praveen
Goyal is Director of U.S. Government Relations for Research In Motion”).
5
See Research In Motion, Products, http://www.rim.com/products/index.shtml (last visited
Oct. 10, 2008) (“RIM's portfolio of award-winning products . . . include the BlackBerry.
. . .”).
6
See Can. - U.S. Law Inst., supra note 4 (“[H]is career has included various positions
serving as counsel within the Federal Communications Commission . . . .”).
7
See Bellingham Chamber of Commerce, About Ken Oplinger,
http://www.bellingham.com/content/about/ken_oplinger.asp (last visited Oct. 10, 2008)
(“Ken Oplinger currently serves as the President/CEO of the Bellingham/Whatcom Chamber
of Commerce & Industry . . . .”).
8
See id. (“Ken currently serves as the co-chair of the BESTT Coalition . . . .”).
9
See id. (“[A] bi-national coalition of business and industry concerned about the affects
of implementing the Western Hemisphere Travel Initiative (WHTI) on the Canada/US Border”).

Goyal & Oplinger—Moving People Across the Can-US Border 187
tional Management at UCLA. I am going to ask Praveen to lead off this
morning, and Ken will follow.
UNITED STATES SPEAKER
Praveen Goyal *
MR. GOYAL: Well, thank you very much for that introduction, and thank
you very much for being here this morning. I know it is quite early on a
Saturday morning, and I appreciate the fact that you all made time to come
and hear my thoughts on high-tech immigration. Just to give you a little bit
background on RIM as was mentioned, we are a Canadian company with
operations all over the world. We are in 135 countries right now and are
working with about 300 carriers around the world. But North America has
always been sort of a home base for us obviously with being a company with
Canadian roots and also substantial operations here in the U.S. And I think
one of the things that is really interesting about RIM is that the cross-border
relationship and the economic value of that relationship is something that is
extremely significant for us given the people that we have in Canada, the
manufacturing we have in Canada as well as the market that we have in the
U.S., and the historic business that we have done with large customers such
as the U.S. government and Fortune 500 companies. 10 So to me, RIM is sort
of like the shining example of the value of that Canada-U.S relationship and
what is possible if it is a strong and vibrant one.
Today I am here to talk about high-tech immigration. And what is
interesting about that issue is that there are some really interesting contrasts
between the approach that Canada and the U.S. respectively have taken to
high-tech immigration. As a company with significant engineering and R &
D operations, the ability to attract skilled workers is something that is
incredibly important to our continued success and growth. 11 In Canada one of
*
Praveen Goyal is Director of U.S. Government Relations for Research In Motion (RIM).
Perhaps best known for its BlackBerry wireless handheld devices, RIM is a leading designer
and manufacturer of innovative wireless solutions for the worldwide mobile communications
market. At RIM, Praveen's responsibilities include developing and implementing policy strategies
and representing RIM before federal and state policymakers. Praveen is a graduate of
Yale College and Harvard Law School , and his career has included various positions serving
as counsel within the Federal Communications Commission, U.S. Congress, and the telecommunications
industry.
10
See e.g., RESEARCH IN MOTION, HISTORY 8 (2006),
http://www.rim.com/company/pdf/RIM_History.pdf (discussing RIM’s history and business it
has done with the U.S. government and Fortune 500 companies).
11
See generally Innovation Performance—British Columbia,

188 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
our co-CEOs stated in a speech he gave in America last year that we are just
sitting up there with a giant catcher's mitt catching all these great talented
engineering R & D candidates from around the world and bringing them to
Canada to come work at RIM. At our company we have about 8,000
employees, altogether world-wide 8,300, and of that number, about 2,900
people are involved in R & D. 12 So, there are a very substantial number of
employees who are doing very high-skilled, high-tech engineering and
development work for the company.
We are also adding jobs significantly in the U.S. I checked this morning,
and we have got about 100 jobs open in the U.S. More than half of those hitech
jobs are engineering positions, and that is about a quarter of our
worldwide engineering positions. So we are growing substantially in the U.S.
We just announced plans to add about 1,000 jobs from our U.S. headquarters
in Texas, and obviously our ability to grow worldwide depends greatly on
our ability to attract highly-skilled workers both in Canada and in the U.S. 13
Obviously, some of you may know there are significant challenges in
highly-skilled workers to the U.S. There is a program here called the H-1B
Visa Program, 14 and you have probably heard quite a bit about that from
companies with U.S. headquarters and U.S. bases. This program is very
important to us for our ability to attract workers here. And what happened is
in 2003, there was an overall cap of H-1B visa allotments at 195,000, and
that went down now to a level of about 65,000. 15 There was a very
substantial reduction in the amount of visas available for high-tech workers. 16
Conversely, there is no such cap in Canada. 17 The approach that Canada has
http://innovation.gc.ca/gol/innovation/site.nsf/en/in02013.html (last visited Oct. 10, 2008)
(discussing innovation and skilled workers as vital to success and growth).
12
See RESEARCH IN MOTION, ANNUAL INFORMATION FORM 27 (2008),
http://www.rim.com/investors/pdf/AIF_2008.pdf (“As of March 1, 2008, RIM had 8,387
employees: 2,910 in the advanced research . . . .”).
13
See generally CANADIAN MANUFACTURERS & EXPORTERS, THE BUSINESS CASE FOR
INNOVATION 6 (2001), http://www.cme-mec.ca/national/documents/caseforinnovation.pdf (discussing
that the ability to grow and compete worldwide depends on innovation, which is dependent
on the ability to attract and retain highly skilled workers).
14
See U.S. Citizenship and Immigration Serv., Cap Count for H-1B and H-2B Workers for
Fiscal Year 2009,
http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnex
toid=138b6138f898d010VgnVCM10000048f3d6a1RCRD (last visited Oct. 10, 2008) (“The
H-1B visa program is used … to employ foreign workers in specialty occupations that require
theoretical or technical expertise in a specialized field and a bachelor's degree or its equivalent”).
15
See Nicholas D. Kristof, Compassion That Hurts, N.Y. TIMES, Apr. 9, 2006, at 4 (“The
H1-B visa program enriches America by bringing in high-tech workers, but the nominal ceiling
on these visas has dropped to 65,000, after temporarily rising to 195,000 in the 1990’s”).
16
See id.
17
See Colin R. Singer, Canada’s Annual Immigration Levels: Quota System in Disguise,

Goyal & Oplinger—Moving People Across the Can-US Border 189
taken towards attracting high-tech workers is to implement a point system
and basically stand up there with a giant catcher's mitt to try and attract the
best and the brightest and bring them over in as many numbers as they can. 18
And so that is a very stark contrast in the approach that has been taken
between the two nations.
Now obviously we would like to see something that is much more liberal
and something that is much more open in terms of the U.S. policies to attract
high-skilled workers. And one of the things that surrounded the debate that is
taking place right now in the U.S. Congress on increasing that cap and
making it permanent is the myth that these are jobs that are taken from U.S.
workers and that these jobs reduce the ability to keep the U.S. competitive
domestically. 19 And what is interesting about the H-1B program is that when
you look at the facts and when you look at some of the numbers underlying
the program, I think the evidence is pretty clear that it is a resounding success
both in terms of companies like ours who want to come here and grow and
expand our operations here, but also for the U.S. economy as a whole. 20
There was an interesting study that showed that for every one H-1B
application that is placed, it results in the addition of five jobs in the U.S. 21
Also, if you look at smaller businesses with 5,000 or less employees, the
number is even higher: seven jobs are created. 22
And part of the way that the H-1B program is structured is that you really
cannot use it as a way to bring in cheaper labor than you would otherwise
have access to from domestic workers. 23 You have to show that you are
http://www.immigration.ca/permres-gii-disguise.asp (last visited Oct. 10, 2008) (stating that
there is no cap establishing a specific number of visas available per year, as is done in the
U.S.).
18
See Immigration.ca, Who Qualifies for Canadian Permanent Residence?,
http://www.immigration.ca/permres-independent-who_qualifies.asp (last visited Oct. 10,
2008) (explaining the points system for skilled workers).
19
See NATIONAL FOUNDATION FOR AMERICAN POLICY, H-1B VISAS AND JOB CREATION, 1
(2008), http://www.nfap.com/pdf/080311h1b.pdf (“New research shows that hiring H-1B visa
holders is associated with increases in employment at U.S. technology companies, undermining
the assertion of critics that foreign-born professionals harm the job prospects of Americans.”).
20
See Help not wanted, 387 ECONOMIST 38, Apr. 12, 2008 (arguing that bright foreigners
benefit the American economy).
21
See NATIONAL FOUNDATION FOR AMERICAN POLICY, supra note 19 (“The data show that
for every H-1B position requested, U.S. technology companies increase their employment by
5 workers”).
22
See id. (“For technology firms with fewer than 5,000 employees, each H-1B position
requested in labor condition applications was associated with an increase of employment of
7.5 workers).
23
See NATIONAL FOUNDATION FOR AMERICAN POLICY, DRIVING JOBS AND INNOVATION
OFFSHORE: THE IMPACT OF HIGH-SKILL IMMIGRATION RESTRICTIONS ON AMERICA 4 (2007),
http://www.nfap.com/pdf/071206study.pdf (“Under current law, H-1B professionals must be

190 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
paying the equivalent wage that you would pay to a U.S. worker in the same
job or the prevailing wage for that job. 24 There are a number of fees you have
to pay, and I think the overall figure comes out to about $5,000 or $6,000,
not in addition to the enforcement penalties you subject yourself to if you
misuse the program and use it in a way that is inappropriate. 25 So it actually
turns out to be that it is more expensive to hire somebody from the H-1B
program than if you could find that same worker domestically. 26
And the reason companies are doing it is because they want to bring in the
best and the brightest, they want to bring in people who are top tier
candidates that they would not otherwise have access to in the States. 27 And
another sort of interesting wrinkle in this is the degree to which - at least in
higher education institutions in the U.S. - there are not enough graduates
being produced in stem field science, technology, and engineering and
math. 28 And I saw some interesting figures showing that if you look at the
U.S. as a whole, over 50 percent of the Engineering Master's that are granted
are being granted to foreign nationals. 29 And if you look at engineering
Ph.D.'s, the number is even higher. It is in excess of 70 percent. 30 Here in
Ohio the number is actually closer to 75 percent of the number of
Engineering Ph.D.'s that are going to foreign nationals. 31 So what it shows is
paid the higher of the prevailing wage or the actual wage paid to similarly employed Americans.
In addition, companies generally pay approximately $6,000 in legal and governmentimposed
fees when hiring an H-1B visa holder . . . .”).
24
See id.
25
See id.
26
See Eilene Zimmerman, H-1B visa crunch: ‘I can’t grow my business’, CNN, Apr. 17,
2008, http://money.cnn.com/2008/04/16/smbusiness/immigrant_visa_tech.fsb/index.htm (last
visited Oct. 10, 2008) (“But federal law requires that H-1B employees be paid the prevailing
wage for their positions. And immigration lawyers say it's actually more expensive to hire a
foreigner, because of visa filing fees and legal expenses.”).
27
See id. (“Demand for H-1B visas is rising thanks to a shortage of American citizens with
training in the hard sciences, mathematics and computer science.”).
28
See id.
29
See e.g., National Science Foundation, Higher Education in Science and Engineering,
http://www.nsf.gov/statistics/seind08/c2/c2s4.htm#c2s44 (last visited Oct. 10, 2008) (“Within
engineering, students on temporary visas earned more than half of master’s degrees in chemical
engineering (51%) and in electrical engineering (55%).”).
30
See generally JAQUELINA C. FALKENHEIM, U.S.DOCTORAL AWARDS IN SCIENCE AND
ENGINEERING CONTINUE UPWARD TREND IN 2006 2 (2007),
http://www.nsf.gov/statistics/infbrief/nsf08301/nsf08301.pdf (“The proportion of [doctoral]
awards to non-U.S citizens was largest in engineering (67.7%), particularly in electrical engineering
(77.3%), civil engineering (73.5%), and industrial/manufacturing engineering (72.4%)
. . . .”).
31
See e.g., U.S. News and World Report, Graduate Schools: Engineering,
http://premium.usnews.com/grad/eng/items/02222/@@student-body.html (last visited Oct. 10,
2008) (listing Cleveland State University’s School of Engineering student body as 76.3 percent
international).

Goyal & Oplinger—Moving People Across the Can-US Border 191
that in the U.S. we are doing a great job of educating Engineering Ph.D.'s and
Master's students, but then we are sending them abroad instead of keeping
them here to help build the economy over here. 32 And I think that disparity
also shows why there is not a sufficient talent pool here for companies that
are trying to hire high-skilled workers, and why we have to look overseas to
fill those needs. 33
So what we would like to see happen - and I think there are a large course
of companies in the high-tech space that are looking to see this cap increase
made permanent - is to have some restoration of the cap back to its prior
levels and to reduce the wait time. 34 Right now if you are trying to hire
somebody, you have an immediate need, and you want to fill that as quickly
as you possibly can. And even under the H-1B program, given that in the last
two years, that 65,000 cap has been filled on the first day that the filing
window was open and was actually filled before the fiscal year even ended,
you are looking at a lead time of about 16 months right now to identify an
applicant, get their application filed, cross your fingers, and hope that they
win the H-1B lottery and actually get granted a visa before you can actually
get them working and contributing to your company and contributing to the
development of the economy as a whole. 35
So those are some of the issues that we are looking at, and some of the
kind of harmonization we like to see between immigration policies in the
high-tech space. One of the things I will also add to this is sort of the
personal story in the sense that I think there are a number of companies that
people are aware of that have been founded by immigrants with a strong
high-tech background, and the contributions they made to the economy. On
an aggregate level, there are figures showing that over that last 15 years, a
quarter of the U.S. public companies that are ventured back were actually
founded by immigrants and have resulted in a market cap of about $500
billion in the U.S. economy which is a fairly substantial number. 36 But of
32
See Anne Broache, Bill Gates to Congress: Let us hire more foreigners, CNET NEWS,
Mar. 12, 2008, http://news.cnet.com/8301-10784_3-9892046-7.html (last visited Oct. 10,
2008) (arguing that foreign students educated in the U.S. end up going abroad, which ultimately
creates jobs outside of the U.S.).
33
See id. (arguing that there is a shortage of American workers and high-tech companies
have to look to top foreign talent to fill these positions).
34
See id. (arguing that we need to increase the cap on H-1B visas and reduce delays).
35
See Quota Quickly Filled on Visas For High-Tech Guest Workers, N.Y. TIMES, Apr. 5,
2007, at C6 (discussing the lottery system and that the 2008 limit for H-1B visa petitions was
reached in one day).
36
See Stuart Anderson and Michaela Platzer, AMERICAN MADE: THE IMPACT OF
IMMIGRANT ENTREPRENEURS AND PROFESSIONALS ON U.S. COMPETITIVENESS 6 (2006),
http://www.nvca.org/pdf/AmericanMade_study.pdf (“Over the past 15 years, immigrants have
started 25 percent of U.S. public companies that were venture-backed . . .” resulting in market
capitalization that “exceeds $500 billion.”).

192 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
particular note to us at RIM is that we share part of that story from the
Canadian side. The founder of our company, Mike Lazaridis, and one of our
co-CEOs is himself a Canadian immigrant. 37 He was born in Turkey to Greek
parents actually, so he is sort of a double-level immigrant. And then came to
Canada, grew up in Canada, and founded a remarkable technology company
there that has been incredibly successful.
In addition to that commercial success that RIM has enjoyed, Mike has
also made it a point to be a strong supporter of basic science research in
Canada. And so one of the things that I know has been really important to
him is funding basic science research in the University of Waterloo region
which is where a lot of RIM employees have graduated from and where Mike
himself attended. 38 And he gave $100 million of his own money to found the
Perimeter Institute which is a basic science research institute studying
Theoretical Physics. 39 And also $50 million of his own money to support the
Institute for Quantum Computing which is looking at sort of the next
generation of computing technologies given the limitations that we are
running up against in the silicon world, and the ability to add smaller and
smaller transistors on silicon chip, to look at new innovations like optical
computing and quantum computing that can really break open the doors of
what is possible with silicon-based computing today. 40
So I like to think that RIM and Mike's personal story in particular are a
great example of why we want to keep bringing high-skilled workers over to
North America, over to Canada and in increasing numbers to the U.S. to
show what is possible. There are plenty of stories here in the U.S. as well of
companies like that. I mean, Andy Grove from Intel, 41 Sergey Brin from
Google, 42 folks in the government like the Commerce Secretary Carlos
Gutierrez, 43 there is Albert Einstein. 44 There is a long list of immigrants who
37
See Research In Motion, RIM’s Executive Team,
http://www.rim.com/newsroom/media/executive/index.shtml (last visited Oct. 10, 2008) (stating
that Mike Lazaridis is a founder and Co-CEO of Research In Motion).
38
See id. (“Mr. Lazaridis is . . . a passionate advocate for education and scientific research
. . . [he has] generated more than $100 million in additional private and public sector funding
for this world centre of excellence, based in Waterloo . . . .”).
39
See id. (“His most noted gift of $100 million established the Perimeter Institute for
Theoretical Physics.”).
40
See id. (“He has donated $50 million to the University of Waterloo to help establish the
Institute for Quantum Computing.”).
41
See Intel Corp., Executive Biography,
http://www.intel.com/pressroom/kits/bios/grove/bio2.htm (last visited Oct. 10, 2008) (stating
that Andrew Grove, a Senior Advisor at Intel, was born in Budapest, Hungary).
42
See Google, Executive Management,
http://www.google.com/corporate/execs.html#sergey (last visited Oct. 10, 2008) (stating that
Sergey Brin, a Co-Founder and President of Google, is a native of Moscow).
43
See Department of Commerce, Biography of Carlos Gutierrez,

Goyal & Oplinger—Moving People Across the Can-US Border 193
have come to the U.S. and done incredible scientific work and incredible
research that has redounded to significant gains for the country economically
and in the high-tech space. 45 So that is my message in support of high-tech
immigration and my message in support of some of the reforms that are
being looked at in Congress today to increase that cap, make it permanent,
and keep the U.S. on a competitive footing.
MS. PAWLUCH: All right. Thank you very much, Mr. Goyal. Very
interesting thoughts, and something that I am sure will promote some
discussion as we move forward. Let me now turn to our next speaker, and let
him walk us through the new initiative that will be implemented in June of
2009.
CANADIAN SPEAKER
Ken Oplinger †
MR. OPLINGER: Well good morning. Greetings from the west coast. I
want to thank you for inviting me to speak today. When I told my wife that I
was coming out to Cleveland for this conference, her first comment was it is
yet another reason why I am flying someplace to talk about WHTI. 46 But
when I showed her the materials and she looked at them and she saw that one
of the organizations that sponsors the Canada-United States Law Institute
http://www.commerce.gov/bios/Gutierrez_bio.htm (last visited Oct. 10, 2008) (stating that
Carlos Gutierrez, the U.S. Secretary of Commerce, was born in Havana, Cuba).
44
See Nobelprize.org, Biography of Albert Einstein,
http://nobelprize.org/nobel_prizes/physics/laureates/1921/einstein-bio.html (last visited Oct.
10, 2008) (stating that Albert Einstein was a native of Germany).
45
See Help not wanted, supra note 20 (“Great American companies such as Sun Microsystems,
Intel and Google had immigrants among their founders. Immigrants continue to make an
outsized contribution to the American economy.”).
†
Ken Oplinger currently serves as the President/CEO of the Bellingham/Whatcom
Chamber of Commerce & Industry, where he has been since October 2003. He has been
leading Chambers of Commerce in the Western US for over sixteen years, ten of those years
in California. As the President of the Bellingham/Whatcom Chamber of Commerce & Industry,
Ken serves as the Chief Executive Officer for a Chamber with a membership of some
1000, representing almost 175,000 people across Whatcom County, Washington. The Bellingham/Whatcom
Chamber of Commerce & Industry is the regional leader in creating a
strong local economy, promoting the community, representing the interests of business with
government, political action for the business community and providing networking opportunities.
46
See U.S. Department of State, Western Hemisphere Travel Initiative,
http://travel.state.gov/travel/cbpmc/cbpmc_2223.html (last visited Oct. 10, 2008) (discussing
the Western Hemisphere Travel Initiative).

194 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
was her alma mater of Western Ontario, she actually took some interest in it,
so I guess I am doubly thankful.
I am going to be talking a little bit about WHTI and some of the things
that our organizations and others have done to try and make it the least
impactful possible. But first by way of introduction, I am a border right. For
those of you who are not familiar with the west coast, this is the border
between Surrey, B.C. and Blaine, Washington. 47 The Peace Arch Crossing is
right there on the water, an absolutely beautiful spot to cross on Interstate 5
into Canada if you have not done that before. 48 That is the truck crossing that
some have referred to earlier, and the green arrow is my house. So I have the
joy on the Friday evening in the summer of generally having my commute
time doubled because I cannot get to my freeway exit with the backups on
the borders.
You all know a lot about the Canada border, so you probably know some
of these statistics. But just by way of refresher, it is the longest common
border that is not militarized or actively patrolled. 49 As the Ambassador from
Canada tells us, it is better called the longest secured border, and I agree with
him. 50 It is 4,000 miles from the contiguous United States, 51 5,500when you
include Alaska 52 , and that compares to about 2,000 miles on the U.S.-Mexico
border. 53 There are 12 states, 54 eight provinces, 55 and one territory that make
up the border region. 56 There are 51 million Americans live within 100 miles
47
See U.S. Can. Peace Anniversary Ass’n., The International Peace Arch,
http://www.peacearchpark.org/peacearch.htm (last visited Oct. 10, 2008) (discussing the border
between Surrey, British Columbia and Blaine, Washington).
48
See id. (discussing the Peace Arch and its location on the Pacific Ocean, off Interstate 5).
49
See id. (“Poised above the international boundary of both countries the Peace Arch
represents the longest undefended boundary in the world.”).
50
See The Honourable Michael Wilson, Can. Ambassador to the U.S., supra note 3 (“Canadians
once spoke of sharing ‘the longest undefended border in the world.’ That should now
be ‘the longest secure border in the world.’”).
51
See Blas Nuñez-Neto, BORDER SECURITY: THE ROLE OF THE U.S. BORDER PATROL 2
(2005), http://www.fas.org/sgp/crs/homesec/RL32562.pdf (“The Northern Border with Canada
. . . is over 4,000 miles long.”).
52
See Kevin Bohn, Report: Security on U.S.-Canada Border Fails Terror Test, CNN,
Sept. 28, 2007, http://www.cnn.com/2007/US/09/27/border.security/index.html (last visited
Oct. 10, 2008) (discussing the over 5,000-mile border between the U.S. and Canada).
53
See id. (discussing the nearly 2,000 mile U.S.-Mexican border).
54
See Blas Nuñez-Neto, supra note 51 (“The Northern Border with Canada touches 12
states . . . .”).
55
See Ken Oplinger, WESTERN HEMISPHERE TRAVEL INITIATIVE 2 (2006)
http://www.besttcoalition.com/files/PNWER_07-2006.ppt (stating that there are eight provinces
on the Canada-U.S. border).
56
See id. (stating that there is one territory on the Canada-U.S. border).

Goyal & Oplinger—Moving People Across the Can-US Border 195
of the border, 57 and 30 million Canadians, 58 and that is 90 percent of
Canada's population. 59
Now when I think about that, I always think about one of my very
favorite movies. Have you ever seen “Canadian Bacon?” 60 I generally get a
better laugh out of this, especially from a group that knows Canada, I would
have . . . One of my favorite scenes is when they are at the CIA building at
the Canadian desk. I always thought that was . . . But actually my very, very
favorite scene in the movie - and I have been trying to get a copy of this to
actually show the video, and I cannot get permission to do it, so I recreated it
myself - is when they have the map of Canada and the U.S., and the
voiceover from the news broadcast says how 90 percent of Canada's
population is amassed at the border ready to strike at any moment. 61 Of
course, they have maple syrup going down the screen, and I cannot do that,
so I have arrows. But I tell you this because over the last three years as we
have been advocating on this issue, it amazes us that there are a lot of
members of Congress who to some extent think that that is true. That we
have something to worry about from those evil Canadians up north. And so it
has been a very interesting couple of years lobbying on this issue.
Let us talk a little bit about the Western Hemisphere Travel Initiative. 62 It
came to us through the Intelligence Reformatory and Prevention Act of
December of 2004. 63 It covers all travel into the United States including U.S.
citizens originally by January of 2008. 64 The specific wording in the act said
that it required a passport or other document or a combination of documents,
57
See id. (stating that there are 51 million Americans living within 100 miles of the border).
58
der).
59
See id. (stating that there are 30 million Canadians living within 100 miles of the bor-
See id. (stating that 90 percent of Canada’s population lives within 100 miles of the
border).
60
See Stephen Holden, Film Review: America’s Cold War with Canada. Just Kidding!,
N.Y. TIMES, Sept. 22, 1995, at C20 (reviewing the movie, “Canadian Bacon”).
61
See KEN OPLINGER, supra note 55 (stating that 90 percent of Canada’s population lives
within 100 miles of the border).
62
See U.S. Department of State, supra note 46 (discussing the Western Hemisphere Travel
Initiative).
63
See Documents Required for Travelers Departing From or Arriving in the United States
at Air Ports-of-Entry From Within the Western Hemisphere, 71 Fed. Reg. 68,412, 68,413-14
(Nov. 24, 2006) (discussing the Intelligence Reform and Terrorism Prevention Act of 2004
which provides for the implementation of plans, known as WHTI, that require certain documentation
in order to enter the U.S.), available at
http://www.travel.state.gov/pdf/WHTI_final_rule_new.pdf.
64
See Intelligence Reform and Terrorist Prevention Act of 2004, Pub. L. No. 108-458, 118
Stat 3638, 3823 (requiring a passport or other document “for all travel into the United States
by United States citizens . . . . This plan shall be implemented not later than January 1, 2008 . .
. .”).

196 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
with final rules to come later as to exactly what those documents were going
to be. 65 Subsequent action by the Department of Homeland Security 66 divided
the implementation into two areas of travel, air travel which was
implemented a year earlier on the 23rd of January 2007, 67 and land and sea
travel which was supposed to be implemented on that January 2008 time
frame. 68 We were successful along with other organizations in lobbying to try
and get an extension, and so in the FY 2007 DHS Appropriations Bill, we
had language inserted that would have basically put the date out to June of
2009 unless DHS was able to certify that they were ready earlier than that. 69
So we thought that that was going to solve the problem, but DHS made it
clear that they were just going to certify themselves prepared. 70 So we had to
go back to the 2008 fiscal year DHS Appropriations Bill to put the hard
deadline in of June of 2009 which is where we are today. 71
DHS did end oral declarations on the 23rd of January, 2008, and so that
part has been done. 72 What it essentially meant is that many of us who lived
65
See id. (“The Secretary of Homeland Security, in consultation with the Secretary of
State, shall develop and implement a plan as expeditiously as possible to require a passport or
other document, or combination of documents, deemed by the Secretary of Homeland Security
to be sufficient to denote identity and citizenship . . . .”).
66
See Documents Required for Travelers Departing From or Arriving in the United States
at Air Ports-of-Entry From Within the Western Hemisphere, 71 Fed. Reg. at 68,414 (“DHS
and DOS have decided to defer decisions on the proposed changes to documentation requirements
for arrivals by sea. Arrivals by sea and land will be addressed in a separate, future rulemaking.”).
67
See id. (“Under this final rule, beginning January 23, 2007, United States citizens and
nonimmigrant aliens from Canada, Bermuda, and Mexico entering the United States at air
ports-of-entry will generally be required to present a valid passport.”).
68
See Intelligence Reform and Terrorist Prevention Act of 2004, Pub. L. No. 108-458, 118
Stat 3638, 3823 (The Secretary of Homeland Security . . . shall develop and implement a plan .
. . to require a passport or other document . . . for all travel into the United States [including by
land and sea]. . . This plan shall be implemented not later than January 1, 2008.”).
69
See Documents Required for Travelers Departing From or Arriving in the United States
at Air Ports-of-Entry From Within the Western Hemisphere, 72 Fed. Reg. 35,088, 35,091
(June 26, 2007) (“Section 546 of the DHS Appropriations Act of 2007 amended section 7209
of IRTPA by stressing the need for DHS and DOS to expeditiously implement the WHTI
requirements no later than the earlier of two dates, June 1, 2009, or three months after the
Secretaries of Homeland Security and State certify that certain criteria have been met.”).
70
See id. at 35,092 (“DOS and DHS believe that these certifications will be made well in
advance of the June 1, 2009 deadline for implementation.”).
71
See Consolidated Appropriations Act, 2008, Pub. L. No. 110-161, 121 Stat 1844, 2080
(2007) (amending the deadline under the Intelligence Reform and Terrorism Prevention Act of
2004 to state that "[s]uch plan may not be implemented earlier than the date that is the later of
3 months after the Secretary of State and the Secretary of Homeland Security make the certification
required in subparagraph (B) or June 1, 2009.").
72
See Department of Homeland Security, Homeland Security and State Departments Announce
WHTI Land and Sea Final Rule,
http://www.dhs.gov/xnews/releases/pr_1206634226418.shtm (last visited Oct. 10, 2008)

Goyal & Oplinger—Moving People Across the Can-US Border 197
on the border for a while, we are used to how we could actually just declare
ourselves Americans or Canadians as long as we could convince the person,
that primarily, we were who we said we were, and we can go on our way.
Now we actually have to have documentation like a birth certificate or a
passport to be able to cross. 73 Final implementation will now be June of
2009, and so what we have been doing over the past couple of years is that
we have been trying to find what some of those other documents are going to
be that people can cross the border. The concern that we have in small
communities like mine is from the tourism perspective, getting people back
and forth to come and spend money in our retail stores and of course with
that nice strong Canadian Looney, 74 we have had a very good year in the
Bellingham and Blaine area, but we want to make sure that people can
continue to do that. 75 So we have been looking at what other documents
people can use to get across. And early on we thought that we really ought to
try and see if we can continue to have the photo ID, the driver’s license that
most people already carry with them in their wallet as the primary way to
cross the border.
So that is what we were really working on. Let us cover a little bit about
some of these other documents, and then I am going to speak specifically
about the Enhanced Driver's License. About 26 percent of Americans 76 and
40 percent of Canadians have passports. 77 One of my favorite statistics that
we have done on this - we have been working this the last three years - is that
on average over the last ten years prior to getting elected into Congress, only
30 percent of the new members of Congress have a passport, which tells you
(“This announcement comes two months after January 31, 2008, when DHS ended acceptance
of oral declarations alone of identity and citizenship at the land borders.”).
73
See U.S. Customs and Border Protection, Land Travel,
http://www.cbp.gov/xp/cgov/travel/vacation/ready_set_go/land_travel/ (last visited Oct. 10,
2008) (“Beginning January 31, 2008, U.S. and Canadian citizens 19 years and older who enter
the U.S. at land and sea ports of entry from within the Western Hemisphere will need to
present government-issued photo ID, such as a driver’s license as proof of identity, along with
proof of citizenship, such as a birth certificate or naturalization certificate, or a passport.”).
74
See Rising Loonie Creates 'Perfect Storm' for Tourism, CTV.CA NEWS, Sept. 19, 2007,
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20070919/tourism_loonie_070919/20
070919/ (last visited Oct. 10, 2008) (“The rising Canadian dollar has helped to create a "perfect
storm" of problems for Canada's tourism industry.”).
75
See City of Bellingham, Washington, Council Minutes April 16, 2007,
http://www.cob.org/web/COUNCIL.nsf/59da8dfbfadd3723882566730073373b/aeb235ce2acb
a583882572c9006b1408?OpenDocument (last visited Oct. 20, 2008) (minutes show the council’s
discussion of regarding the strength of the area’s tourism industry).
76
See Galia Avramov, Myra MacIssac & Michele Polito, Post-9/11 Challenges for the
Immigration Paralegal, 86 MICH. B.J. 24, 26 (2007) (“Approximately 27 percent of U.S.
citizens have passports.”).
77
See id. at 26 (“Only 40 percent of all Canadians have passports.”).

198 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
a lot about who we are sending to Congress. 78 Passports are $97 per person. 79
I will say six to eight weeks plus. 80 We do have the time down now, but I
think we are all familiar with the issues that we had last year with the Euro.
Second, let us discuss preclearance programs. 81 We are very pleased to
see in a final rule that preclearance programs are now stand-alone
documents, so if you have a NEXUS card, that is all you need. 82 You no
longer need to have your passport to enter the U.S. 83 And here is a little tidbit
for you: The rules have not actually changed going into Canada, so if you are
a NEXUS card holder - I think there was a couple of us in the room, right - if
you are a NEXUS company, until the Canadians change the rules – which
has not happened yet, be sure to continue to carry your passport with you.
Because if you are going into Canada and you are asked for ID and you do
not have it that is still grounds for losing the card going into Canada. But
going into the U.S. the rule has changed. It is $50 U.S. for a NEXUS card. 84
Again, it is six to eight weeks or less. 85
For those who do not know, the NEXUS program was piloted a little over
five years ago in the Pacific Northwest, and we had about 20,000 people who
just went through the renewal process, so NEXUS cards were a bit delayed,
but they have come back now, and it is really still in that six to eight-week
78
See generally Discussion Following the Remarks of Mr. Graham, 29 CAN-U.S. L.J. 95
(2003) (stating that, in total, only 40 percent of Congressmen have passports).
79
See U.S. Dept. of State, Passport Fees,
http://travel.state.gov/passport/get/fees/fees_837.html (last visited Oct. 19, 2008) (listing fee
table for U.S. passports. See also Passport Canada, Fees,
http://www.ppt.gc.ca/cdn/section6.aspx?lang=eng (last visited Oct. 12, 2008) (listing fee table
for Canadian passports).
80
See generally U.S. Dept. of State, Passport Application Processing Times,
http://travel.state.gov/passport/get/processing/processing_1740.html (last visited Oct. 19,
2008) (discussing turnaround times for passport applications). See also Passport Canada,
Processing Times, http://www.ppt.gc.ca/cdn/service.aspx?lang=eng&region=Canada (last
visited Oct. 12, 2008) (listing processing times for Canadian passports).
81
See generally U.S. Embassy Canada, U.S. Canada Passport Requirements,
http://www.consular.canada.usembassy.gov/passport_requirement.asp (last visited Oct. 19,
2008) (lists valid methods of traveling between the U.S. and Canada including preclearance
programs such as NEXUS).
82
See Stuart Gilgannon, Bridging the Gap: Why the Stevens-Leahy Amendment to the
Western Hemisphere Travel Initiative May Reveal a Renewed Focus on Civil Liberties in
National Security Legislation, 7 CONN. PUB. INT. L.J. 51, 66 (2007) (explaining that the Final
Rule provides for the NEXUS card to be used in lieu of a passport at U.S. airports).
83
See id.
84
See Dept. of Homeland Security, NEXUS Eligibility and Fees,
http://www.cbp.gov/xp/cgov/travel/trusted_traveler/nexus_prog/nexus_eligibility.xml (last
visited Oct. 19, 2008) (listing NEXUS fees).
85
Canada Border Services Agency, Join NEXUS, http://www.cbsaasfc.gc.ca/prog/nexus/application-demande-eng.html
(last visited Oct. 12, 2008) (“The process
to determine eligibility takes six to eight weeks.”).

Goyal & Oplinger—Moving People Across the Can-US Border 199
time frame. 86 The issue with NEXUS is that there is no guaranteed access to
the lanes. Now, out where I live where we do not have to cross a body of
water to go over the border, when you have a long line, it is not a problem
because we have about a two-and-a-half mile long NEXUS lane. But in
Buffalo and Detroit unfortunately where you do cross the body of water, you
get the line backed up a little bit onto the bridge or into the tunnel, and you
are essentially blocked off from utilizing NEXUS, which surely defeats part
of the purpose of it.
The other issue is of course the hours are generally not 24/7, and so for
instance when my wife and I go out to dinner in Vancouver, on the way back,
oftentimes the NEXUS lane is already closed. And it is fairly low enrollment.
For a program that has been in place now for almost six years, I would say
that 180,000 people is not a lot of people. 87 After six years we should have a
lot more than that with all the folks who are crossing the border.
Third is our new friend, the pass card or what I like to call passport
light. 88 It is a card that will only be available to you by using the same
procedures that you would use to get your passport. You will submit all the
same information, you will go through all the same wait times, all the same
procedures. The only difference is that the back end, you get a credit card
that can only be used to cross land and sea borders in North America, and
that it is about half the cost of a passport. But the key issue here is it is not
for Canadians, it is only for Americans. So what we have always argued is
why are we spending so much time and resources to come up with another
document for Americans to leave and not come up with something to make
sure that our friends can come and visit us here in the States?
So this is what we have come up with, the Enhanced Driver's License. 89
This is a program that is completely approved by DHS. 90 There are a number
of states and provinces that have already said that they are going to be doing
this.
86
87
See id.
See generally U.S. Dept. of Homeland Security, NEXUS Fact Sheet,
http://www.cbp.gov/linkhandler/cgov/newsroom/fact_sheets/travel/nexus_fact.ctt/nexus_fact.p
df (last visited Oct. 19, 2008) (In Sept., 2007, NEXUS had 128,265 members.).
88
See Marc Philip Hedrich, Section 7209 of the Intelligence Reform and Terrorism Prevention
Act of 2004: Balancing the Western Hemisphere Travel Initiative with International
Tourism and Homeland Security, 28 Nw. J. Int’l L. & Bus. 341, 366 (2008) (explaining the
goals and advantages of the PASS Card).
89
See U.S. Dept. of Homeland Security, Enhanced Driver’s Licenses: What Are They?,
http://www.dhs.gov/xtrvlsec/crossingborders/gc_1197575704846.shtm (last visited Oct. 12,
2008) (describing the progress and features of enhanced driver’s licenses).
90
See Katherine Liebner, Driving Too Fast: Spitzer’s Failed Experiment at Immigration
Reformation, 26 BUFF. PUB. INT. L.J. 73, 81 (2007-2008) (describing enhanced driver’s licenses
as federal compliant).

200 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
There are three specific things that have been changed on the Enhanced
Driver's License to make it a legal document to cross the border. The first is
that on the back where there is a machine-readable zone. If you have a
passport, the little series of odd numbers, letters, and characters, the exact
same thing is on the back of the Enhanced Driver's License. So when you go
back to the primary booth, they do not have to keystroke it in. They can
simply swipe the card, all your information appears on screen. The second is
that once DHS gets the money to roll out the readers on all the lanes, there is
also an RFID chip inside the driver's license which will speed that up even
quicker. So just like with NEXUS, if you are in what I like to call the ondeck
circle, hold your card out of the window, and when you get up to the
booth, your information will already be on the screen. They do not even have
to take it. And the third, you will see the little American flag on there, the
nationality component to it, and this was always the catch on the card that
was how we were going to do nationality.
The way this has been resolved between DHS and Washington state is
that the folks at our Department of Licensing who are looking at your
documents and deciding whether you get an Enhanced Driver's License are
not, and we are going to use the legal terms that they give me - they are not
going to be adjudicating for citizenship, they are simply going to denote your
citizenship on your driver's license because what the State Department says is
it is our sovereign right to determine citizenship, and we cannot give that
right to anyone else, so this is how we have gotten around that.
The driver's license can only be used for crossing land and sea borders. It
cannot be used for any other purpose. So I could not use it for instance to
prove in Washington state I am eligible for benefits or anything like that.
And so by sort of putting all of these limits on it and only using it for that
purpose, the State Department signed off on it. And we are very pleased
because the uptake on this is amazing.
And I know there is bits of information that maybe it is not so good, but
let me share the exact numbers with you. As of April the 11th - so this is
roughly 11 weeks into the program, we just started at the end of January -
there are over 9,000 EDLs already in circulation, 91 there are close to 22,000
people who have their interviews set up to receive their EDLs in Washington
state. 92 Also, 98 percent of all of the interview slots in the month of April
have been filled. 93 And 80 percent of all the slots in the month of May were
91
See generally Cara Matthews & Matthew Daneman, More States Plan Licenses to Ease
Border Traffic, USA TODAY, July 17, 2008, at 02a (stating that as of July 2008, 21,000 Washington
state citizens have received enhanced driver’s licenses).
92
See generally id. (stating that Washington state has over 4,000 appointments scheduled
in coming a week, and has stopped advertising enhanced driver’s license).
93
See id.

Goyal & Oplinger—Moving People Across the Can-US Border 201
filled. 94 And our State legislature is so pleased with the uptake that they just
appropriated an additional $3.5 million for the program so that more people
can be trained so we can get more people through the program. 95 So the
uptake is absolutely amazing. Now by contrast to that, in the province of
British Columbia where they are only going to be doing a pilot project,
within 24 hours of announcing that that pilot was in place and the 500 slots
remained available, all 500 of those EDLs were gone as well. 96
So what we are seeing is that as our polling showed early on, and as the
uptake has been going, this is clearly the way that people who live within the
border regions want to go back and forth over the border. In Vermont,
Arizona, New York, Michigan, and Washington, the legislatures have
already approved the EDL. 97 In four of those cases, all but Michigan, the
memorandums of understanding have been signed. 98 California and Texas
have actually expressed strong interest in this. In both states they are going to
have to go into the legislature to make a small change because as with many
states, they were a little concerned about the Real ID Act, 99 and so they
passed rules within the legislature that made it difficult to put the EDL into
place, but they committed to going back and making those changes, and so
we should hopefully be seeing stuff there as well. 100 In Canada, in addition to
British Columbia, we know that Ontario, Manitoba, and Quebec have all
expressed strong interest in doing this. 101 New Brunswick and Nova Scotia
are also looking to move forward, so we are seeing states and provinces
actually move towards this as well. 102
94
95
See id.
See generally Governor Gregoire’s Accomplishments 2008 Legistlavie Session,
http://www.capaa.wa.gov/documents/2008-04-01_LegAccomplishments.pdf at 17 (last visited
Oct. 20, 2008) (one accomplishment is the continued expansion of EDL in Washington).
96
See generally Governor Chris Gregoire & Premier Gordon Campbell, The British Columbia/Washington
State Partnership on Enhanced Driver’s Licences, CAN. PARLIAMENTARY
R., Spring 2008, at 4-5 (explaining that when British Columbia’s pilot program was launched,
it was oversubscribed in 48 hours).
97
See Matthews, supra note 91 (listing New York, Vermont, Michigan and Arizona as
states that are moving towards following Washington state’s lead on enhanced driver’s licenses).
98
See id.
99
See Real ID Act of 2005, Pub. L. No. 109-13, § 202(c)(2)(B) (codified as amended at 49
U.S.C. § 30301 (2005)).
100
See Dept. of Homeland Security, supra note 89 (listing California and Texas as states
working with the DHS to implement enhanced driver’s licenses).
101
See, e.g., Ontario Ministry of Tourism, U.S. Administration Accepts Passport Proposal
Changes Advocated By McGuinty Government,
http://ogov.newswire.ca/ontario/GPOE/2007/08/26/c2206.html?lmatch=&lang=_e.html (last
visited Oct. 12, 2008) (explaining that Ontario is discussing the option of adding enhanced
driver’s licenses with New York).
102
See, e.g., Nova Scotia Canada, Nova Scotia Pursuing Enhanced Driver’s License,

202 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
So a little bit about the program then and sort of the steps that we took in
a little case study if you will: In July 2005, the BESTT Coalition supported
the Real ID solutions of WHTI. 103 Real ID for those of you who do not know
is a law that was passed roughly the same time by our Congress that put
some basic standards into IDs basically for federal ID purposes. 104 So for
instance, to board a domestic flight, the driver's license has to meet certain
requirements, or you could not use the driver's license for that purpose. In
2005, 2006 we began pushing for use of existing driver's licenses and
upgraded the Real ID standards. 105 We thought at that point that the EDL
was a much better way to go because it would be easier to get than the pass
card. 106 It was actually going to be a more secure document than the security
features that are being put in the pass card. And it is more discretionary
because people are already carrying it with them rather than having the room
to take it.
Chertoff gave his support for the Real ID solution in July of 2006 at a
meeting in Edmonton and Governor Gregoire from the State of Washington
and Premiere Campbell from British Columbia followed at their summits in
August. 107 Then it was announced that they all were supportive of moving
forward with the program. 108 Washington then became the first state to sign
the MOU with DHS, and as you know, they are already in place.
A little bit about our coalition. We are jointly run by my chamber as well
as the chambers in the Detroit Regional Chamber and Buffalo-Niagara
partnership. 109 The way this all started was that when WHTI was announced,
I reached out to the other two large border crossing areas to ask if we might
find some way to work together and the BESTT Coalition is certainly a result
of that. We have about 125 members in the United States and the five
provinces. 110 And we are really a grass roots focus group. And sort of the
difference between the BESTT Coalition and a lot of the other trade groups
http://www.gov.ns.ca/news/details.asp?id=20080828004 (last visited Oct. 12, 2008) (“Nova
Scotia is working with the other Atlantic provinces toward an enhanced driver's licence.”).
103
See BESTT, Official Position on WHTI, http://www.besttcoalition.com/Position.html
(last visited Oct. 12, 2008) (outlining BESTT’s position on the WHTI and REAL ID Act).
104
See Real ID Act of 2005, supra note 99.
105
See id.
106
See Hedrich, supra note 88 at 368 (calling the development of the PASS Card an “investment
in redundancy.”).
107
Governor Gregoire, supra note 96 at 4 (“The Edmonton PNWER summit in July 2006
included Homeland Security Secretary Michael Chertoff and Canada’s Minister of Public
Safety Stockwell Day.”).
108
See id.
109
See BESTT, About Us, http://www.besttcoalition.com/aboutus.html (last visited Oct. 12,
2008) (listing the Detroit Regional Chamber and Buffalo-Niagara Partnership as members of
BESTT).
110
See id.

Goyal & Oplinger—Moving People Across the Can-US Border 203
out there is that our entire purpose is advocacy. We do not do conferences,
we do not try and make nice people. Our whole purpose is to address the
concerns that are causing problems with the businesses that we represent,
period.
The three organizations agreed to work together then in July of 2005. We
attended our first hearings in D.C. on this in October of that year, and have
held a number of fly-in meetings since then. The largest of which was our
first in February 2006 when we had over 200 lawmakers contacted by the 50
people who came in for the fly-in. 111 And we have had an ongoing presence
in D.C. ever since, and we have been all over the country. It is not just me, it
is my colleague, Sarah Hubbard, from the Detroit Regional Chamber
speaking about her issue and raising awareness on what we think is probably
the best way to go to try and solve this. 112 Our website is
BESTTcoalition.com, and I have been asked to ensure that the slides are
available. So at the end of today, I will post them. And that is it for me.
Thanks.
MS. PAWLUCH: Thanks very much, Ken. At this point we will open it
up to questions from the floor.
DISCUSSION FOLLOWING THE REMARKS OF PRAVEEN GOYAL
AND KEN OPLINGER
MS. RUDE: Good morning. Marianne Rude, and I represent the province
of Manitoba in Washington, and I have spent many a day with Ken in D.C.
on fly-ins. It is a pleasure to hear all of this. I am still trying to work with
some of the States in particular, even though I represent Manitoba in dealing
with a lot of Manitoba's border states that are struggling to figure out how to
handle both Real ID and WHTI and the EDL solution. So I have been in
several meetings recently with Iowa, Minnesota, North Dakota, and they are
trying to figure out how they straddle that issue. And I am wondering if for
the group you can share some of the Washington experience, how you dealt
with the Real ID challenge and then used EDL to actually meet Real ID
because it is a complex issue, and I think there are some very good lessons
learned from Washington State.
MR. OPLINGER: Sure. Well to start, I should say for those who were not
familiar with Real ID, there has been a bit of a pushback from a number of
111
See BESTT, DC Fly-in: September 12-14, 2006,
http://www.besttcoalition.com/DCFlyin.html (last visited Oct. 20, 2008) (describing the 2006
DC Fly-in).
112
See generally BESTT, Homepage, http://www.besttcoalition.com/index.html (last visited
Oct. 20, 2008).

204 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
states in the U.S. 113 The driver's licenses are the purview of the states, it is
not something that the federal government has control over, 114 so they are
using the power of the purse, if you will, to try and push states into meeting
the obligations. 115 And so because of the pushback there are a lot of states
including Washington that very early on said there is absolutely no way we
are using Real ID, and you cannot make us use it. 116 And Governor Gregoire
at one point actually looked like he was going to push our legislature to being
the first state to approve legislation precluding us from ever implementing
Real ID. 117 That is how opposed to that she was.
As we began talking to her about the Enhanced Driver's License program,
I think the way that we were able to successfully make the sell to her and
cause her to change her mind on that aspect of it was that this was a means of
being able to keep the State in control of the general ID that people were
using. We were going to provide a service to not just border communities,
but to folks all over the state of Washington who generally like to go up and
recreate British Columbia. But to also ensure that we have that strong tie
between British Columbia and Washington, which generally have worked
very, very well together. The interesting issue about it though is that the
discussion has not just happened there.
Jennifer Granholm was also certainly a very strong opponent to Real
ID. 118 And we were able to convince her that this was not Real ID, this was
more of a service to the constituents of her state, and something that would
be a benefit to them now. The reason we got DHS to sign off on this bill was
because to some extent it is, it is Real ID. The difference though is that the
113
See Ragini Shah, Sharing the American Dream: Towards Formalizing the Status of
Long-Term Resident Undocumented Children in the United States, 39 COL.HUM.RTS.L.REV.
637, 685 (2008) (listing states that have passed laws at odds with the Real ID Act since its
passage).
114
See Patrick R. Thiessen, The Real ID Act and Biometric Technology: A Nightmare for
Citizens and the States that Have to Implement It, 6 J. ON TELECOMM. &HIGH TECH L. 483,
490 (2008) (explaining the opposition to the Real ID Act on the basis that it infringes on the
state right to issue driver’s licenses).
115
See id.
116
See generally Governor Chris Gregoire, Gov. Gregoire Statement on Real ID Extension,
(Jan. 24, 2008) http://www.governor.wa.gov/news/newsview.asp?pressRelease=770&newsType=1
(asking for an extension for Real ID implementation
and outlining concerns with Real ID Act).
117
See Real ID Act-Compliance, Washington Chapter 85, Laws of 2007 (2007), available
at http://www.leg.wa.gov/pub/billinfo/2007-08/Pdf/Bills/Session%20Law%202007/5087-
S.SL.pdf (stating Washington State’s intention to not comply with the Real ID Act by ordering
state agencies to not expend any funds for its implementation).
118
See Dept. of State, Granholm, Land Offer Michigan Perspective on Federal Driver License,
ID Card Requirements, (May 8, 2007) http://www.mi.gov/sos/0,1607,7-127-
1640_9150-168108-,00.html (outlining the issues that Governor Granholm relayed to the
Department of Homeland Security regarding the Real ID Act).

Goyal & Oplinger—Moving People Across the Can-US Border 205
Enhanced Driver's License is not something that is as mandatory as Real ID
would be. You have to opt yourself in. You do not have to do it if you do not
want to. That is really the way that we have been able to sort of differentiate
it in all of the states and in the provinces. 119 And so as we go forward, DHS
likes it because they are seeing some aspect of Real ID in place. The states
like it because they are maintaining control, and it is not fully implemented,
and so we are sort of walking that tight rope, but so far successfully.
MS. PAWLUCH: Let me pose a question if I may to Praveen. You
mentioned Canada's more favorable immigration environment, and indeed
we have heard that the more favorable immigration environment was cited as
one of the reasons, too, why Microsoft announced that it was going to open a
software development center in Vancouver, British Columbia, Canada. Is
there a way that U.S. employers with Canadian operations perhaps may be
able to use Canada's more facilitative work permit system to address some of
the challenges that the high-tech industry in particular is experiencing in the
U.S.?
MR. GOYAL: Absolutely. And I think the Microsoft example is one that
got a lot of attention just a few weeks ago when Bill Gates came and testified
in Congress and talked about that
very fact that in order to address its inability to add enough high-tech
workers in the U.S., that Microsoft was basically moving a substantial chunk
of their operations to Vancouver in order to facilitate their ability to continue
adding employees. 120 I think a lot of folks notice that, a lot of the folks were
unnerved by that. And I think that - absolutely, it is both an opportunity and a
risk. I mean, I think certainly it is a great thing for Canada and for Canada's
development economically to have this much more favorable environment
for high-skilled immigration, in comparison to the U.S. Also, there
absolutely are opportunities for U.S. companies to go over and build
operations in Canada. You know, from RIM's perspective, what we think
would be the best would be to have a flexibility to do both right, and clearly
we are a company with substantial Canadian operations, the vast bulk of our
operations are in Canada, and that is where we have most of our employees.
But it is important I think particularly in a global economic environment
where you have got large multinational companies doing business in
jurisdictions around the world to have the maximum flexibility to attract
employees where you want to do business. Now, absolutely, I think the
119
See DMV.org, REAL ID, http://www.dmv.org/news-alerts/real-id.php (last visited Oct.
20, 2008) (discusses Real ID, criticism by states, and how Real ID and EDL overlap.).
120
See Patrick Thibodeau, Microsoft Crosses Border on Coding, COMPUTERWORLD, July
16, 2007, at 12 (“On July 5, Microsoft announced plans to open a software development center
in Vancouver, partly to help it ‘recruit and retain highly skilled people affected by immigration
issues in the U.S.’”).

206 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
current state of affairs is a great opportunity for Canada, and I think
Canadian companies are up there with a catcher's mitt, U.S. companies are
learning how to play baseball up there. But I think the best approach would
be to have flexibility on both sides.
MR. CRANE: David Crane. Canada is attracting scientists and engineers
from those other parts of the world, one of the things I am concerned about -
which we read of periodically - is this issue of racial profiling, and even
people who possess a Canadian passport, that they come from a different
ethnic or racial background, that they are still subject or can be subject to
significant harassment at the border. And the proof of Canadian citizenship
does not seem to carry that much weight with the U.S. officials who are
faced with individuals that have got the wrong color or the wrong kind of
name. And I wondered to what extent that issue can be addressed.
MR. GOYAL: I agree.
MS. PAWLUCH: Very good question to our speakers, but also if there is
anyone from in the audience that can speak to that.
MS. PAWLUCH: Do you have any thoughts on that, Ken?
MR. OPLINGER: Well, it is certainly an issue for us, that Vancouver - I
do not think anyone would be surprised to hear - has a very large immigrant
population. We get horror stories on a fairly regular basis of people who are
mistreated by the U.S. officials at the border oftentimes for the issue that you
just described. And unfortunately, what those stories sort of end with to us is,
and we are just not ever going to cross the border again. I think that is yet
another reason why we are seeing drop-offs in people crossing the border
even though the lines are longer and the wait times are longer because people
just do not want to put up with it.
MS. IRISH: I am Maureen Irish, University of Windsor with a related
question. With the two countries having different views on security, and a
very different immigration and visa policies overall, when we look at
responsibilities of the employer, it is both a question of getting the employee
there working, but also there is a question of employees who have to travel
for their work. And there are difficulties about temporary admission, et
cetera. Do employers have problems with employees afraid to travel for their
work? And in particular here, I will mention the case of Maher Arar, who
was not traveling for work at the time but had been in the past traveling
across the Canada-U.S. border as part of his employment.
MR. GOYAL: I will be happy to take a stab at it. You know, just from the
perspective of RIM, I think some of the border crossing issues are less of a
daily issue for us because of where our operations are located, so most of our
employees in Canada would be Canadian citizens or Canadian residents.
Most of our employees in the U.S. would be U.S. residents. I think that
absolutely there are issues that Canadian employers and U.S. employers on
the border would face. With the increased difficulty of being able to cross the

Goyal & Oplinger—Moving People Across the Can-US Border 207
border, racial profiling like the last questioner mentioned, there is obviously
a risk that you deter. Employees would otherwise be very successful, very
capable in contributing to your company from being willing to put up with
that hassle and being willing to put up with that burden in order to get to
work every day. It is a very serious problem. I think it is one that has been a
substantial change in the environment as a result of heightened tensions
around security post-9/11, and it is something we need to do a better job of
addressing. I think as Ken's presentation shows, there are good and efficient
ways to do that, and then there are ways to do that that create an even greater
obstacle and a greater hassle frankly that workers do not even have access to
in terms of getting these Enhanced Driver's Licenses. So I think that
absolutely we want to make the border crossing as fluid and as dynamic as
possible because there are so many people like Ken himself in fact who work
close to the border and need access. I will turn it over to Ken for any
additional thoughts.
MR. OPLINGER: Well, the interesting thing about this is that it expands
off of just getting employees back and forth and whether they are even
willing to make some of those trips. In our area we have an interesting
phenomenon where we have a lot of folks from the Vancouver area who have
their cabins in the states in places like Birch Bay. And we are finding more
and more of those folks selling because when they get to the border - and it is
not a racial profiling issue, it is that they get to the border and they pull up
information and see they have crossed quite a bit because they are going to
their cabin. Well, the first thing that the people on the U.S. side think is, well,
they must be working down here. And then they start getting hassled about
that, they just do not want to put up with it anymore. So, I mean, it goes
across lots of different areas, but it is certainly something that needs to be
addressed. And we have - and I saw earlier you had the sheet out - we have
some categories of jobs here in the states where we can get Canadians to
come over and they can get their visas to do that. Nurses is one. You know,
in the Detroit-Windsor area you have got 5,000 nurses that are crossing from
Windsor into Detroit to work in Detroit hospitals which is why hospitals
there generally have a far less problem than the rest of the U.S. does in
getting fully-staffed with their nurses, and Bellingham is the same way. 121
I have got 500 welding jobs in the marine industry in Whatcom County
alone that have gone unfilled at this point, and I have people in Vancouver
that I could bring in to do those jobs today, all 500 of them, but we cannot
121
See The Honorable Marlene Jennings, Session 12: The Future the Evolving, Special
Canada-U.S. Relationship: New Dimensions and Possible Future Progress and Concerns.
Differing Approaches to our Common Values and Experiences, 31 CAN-U.S. L.J. 385, 388
(2005) (“We have a lot of nurses, for instance, Canadian nurses who cross that border every
day and work in hospitals in Detroit, Michigan.”).

208 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
bring any of them down because it is not an approved category. 122 So finding
some way to try and address these really arcane labor issues is certainly
important even for smaller areas like ours.
MS. PAWLUCH: On that note, let me just add we do have in Canada a
low-skill worker program which is fairly new, and it is intended to facilitate
lower-skilled workers coming in for a maximum of two years for some
specific job training. 123 So we have tried to address some concerns as
identified here. MR. BINETTE: Hi. My name is Felix Binette, I am from
Consulate General in New York.
I have a question regarding technology. One of the solutions that have
been used to fill that perceived heightened security needs at the borders has
been technology. 124 And another aspect was practicality when you look at
EDLs, something that everyone carries. One of the things that most people
carry now are mobile devices, and I know that airlines are looking at using
mobile devices as boarding passes and things like that. Is there a future for
use of mobile devices to ease crossing the border or in that area?
MR. GOYAL: Well, I can definitely talk about technology that we have
that is used for user authentication. You know, we have certainly never
positioned it as something that would work for the purposes of a border
crossing technology, and I think that that is really something that is up to
regulatory agencies in the U.S. and Canada to determine. But certainly we
have a number of customers using this product in very highly-sensitive
situations including Defense and National Security. And what it is basically
the same - it is called a CAT card that U.S. government agencies issue to
their employees at Department of Defense, at NSA, you name it. 125 And then
the card is used for identifying and authenticating a user to access electronic
terminals, whether it is a BlackBerry or whether it is a PC. So it is very
highly secure. It is something that we are selling every day and is used
exactly for that purpose of authenticating users of making sure they are who
they are supposed to be and only giving them access to resources that they
122
See The United States Embassy Consular Services Canada, Visa Categories and Requirements,
http://www.consular.canada.usembassy.gov/usa_visa.asp (last visited Oct. 12,
2008) (listing acceptable categories of U.S. visas).
123
See Citizen and Immigration Canada, Changes to the Temporary Foreign Worker Program
— Low Skill Pilot Project, http://www.cic.gc.ca/EnGLIsh/work/low-skill.asp (last visited
October 12, 2008) (explaining the Low Skill Pilot Project and recent changes made to the
program).
124
See generally The Honorable Asa Hutchinson, Holes in the Fence: Immigration Reform
and Border Security in the United States, 59 ADMIN. L.REV. 533, 540 (2007) (stating that
technology is critical to comprehensive border security).
125
See Research in Motion, BlackBerry Smart Card Reader,
http://na.blackberry.com/eng/ataglance/security/products/smartcardreader/ (last visited Oct.
20, 2008).

Goyal & Oplinger—Moving People Across the Can-US Border 209
are supposed to get access to, and it works quite well. And so certainly the
technology is there to do what you are suggesting. But in terms of whether or
not that would satisfy the needs of the agencies and countries involved, I
think that is something that is really up to them to decide.
MS. PAWLUCH: An interesting concept though. Yes, Dan.
MR. UJCZO: To continue the trend of uncomfortable questions. Praveen,
on the issue of the H-1Bs and highly skilled workers coming across the
borders, of course these issues get caught up with the general immigration
debate in the United States. But I am going to ask you to put on your
prognosticator hat on up a bit. And just in terms of the tent around the hill as
well as in our Presidential campaigns, we know Senator McCain was
certainly differentiated from his party on some of the immigration issues 126 as
well as two candidates in the Democratic party that seemed to be in favor of
at least expanding highly-skilled issues and dealing with immigration in a
sensible way. What are the prospects for the future? Ellen Yost 127 was just in
town from Fragomen, 128 a great friend of our institute, saying they just ca not
handle the volume of work that they are getting on H-1Bs. Now in our
experience anytime we have ever had to advocate, we do not use the "L"
word, lobby, but anytime you have ever had to advocate, we just use the jobs
message. You know, Senator X, Representative X, this is how many jobs this
is going to cost in your district, but we have jobs that are unfilled here in
Cleveland. Ken was just mentioning the jobs in the marine industry. How are
you differentiating between the immigration issue in terms of illegal migrants
or undocumented migrants and highly-skilled workers, and what are your
prospects for the future in terms of the campaign? We all know nothing is
going to happen this year because it is '08, but what are the prospects for the
future?
MR. GOYAL: Well, I think one thing that I take a certain amount of
solace in and optimism from is the fact as you mentioned that I think we are
looking at a situation where the three leading candidates for the U.S.
Presidential election are supporters of comprehensive immigration reform.
Senator McCain from his work on the Comprehensive Immigration Bill in
the Senate, 129 and both Senator Obama 130 and Senator Clinton 131 have said
126
See Lauren Gilbert, National Identity and Immigration Policy in the U.S. and the European
Union, 14 COLUM.J.EUR. L. 99, 108 (2007/2008) (discussing Senator McCain’s support
of an immigration bill that drew criticism from Republicans).
127
See Ellen G. Yost, http://pubweb.fdbl.com/peoplebriefs.nsf/($pub2004-peoplebriefs)/F692F5E8C88F1EF6882569FA00651867?OpenDocument
(last visited Oct. 12, 2008).
128
See Fragomen, About Us, http://www.fragomen.com/about/about.shtml (last visited Oct.
12, 2008).
129
Gilbert, supra note 126 at 108.
130
Katherine L. Vaughns, Restoring the Rule of Law: Reflections on Fixing the Immigration
System and Exploring Failed Policy Choices, 5 U. MD. L.J. RACE, RELIGION, GENDER &

210 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
that they support comprehensive immigration reform. So I think that is
encouraging that is a source of tremendous encouragement that the long-term
prospects of getting a solution to this problem and the amount of visibility
that it is received. In terms of the highly-skilled piece of it alone, I think that
as the Congress continues to move forward and frankly runs out of time,
there is a greater sense of urgency of doing something about the high-skilled
piece of it because in an election year, particularly in a Presidential election
year, the prospects of something as big as comprehensive immigration
reform moving looks less likely. I mean, I do not think anyone at this point
expects that a comprehensive immigration reform bill is going to move. And
so the question is what to do about H-1B visas? What do you do about the
high-skilled piece of it? I know there are folks that are working on trying to
get a bill to address the increase to the cap and making it permanent possibly
to move forward in this Congress. You know, I cannot tell you that I think
the chances of that are particularly great. I mean, it has not happened in the
past. And I think the good news is that immigration reform as an issue is
receiving a tremendous amount of attention in the United States, and I think
we have got a potential for all the stars to align to actually move a
comprehensive bill forward and high-tech immigration would be a part of
that.
MS. PAWLUCH: Thank you. There was a question here from Mr. Crane.
MR. CRANE: I just wanted your perspective. How effective are programs
like the Lou Dobbs program and some of the stuff that appears on the Fox
network in creating a more xenophobic kind of mentality on the part of
voters here? Do you think that these people have much significance in U.S.
debate? How do you assess that?
MR. GOYAL: You know, I do not have any statistics or figure to back
this up, but I would say anecdotally my experience is, yes, that obviously
there is a number of substantial media outlets like Mr. Dobbs who raise an
alarm about undocumented workers and undocumented immigrants. 132 I think
that the trade issue, the issue of free trade agreements is another one that I
think is sort of closely tied to a lot of those economic anxieties, and I think it
CLASS 151, fn 162 (2005) (“[O]n December 15, 2005, Senators Barack Obama (D-IL) and Mel
Martinez (R-FL) held a press conference indicating their support for a comprehensive approach
to immigration policy reform.”).
131
See Bill Ong Hing, The Case for Amnesty, 3 STAN. J.CIV. RTS. &CIV. LIBERTIES 233,
284 (2007) (discussing comprehensive immigration reform proposal sponsored by Senator
Hillary Clinton).
132
Brietta R. Clark, The Immigrant Health Care Narrative and What it Tells Us About the
U.S. Health Care System, 17 ANNALS HEALTH L. 229, 265-266 (2008) (“Popular media commentators
like Lou Dobbs, who hosts the nightly newscast “Lou Dobbs Tonight” on the cable
television station CNN, fuel a fear of immigrants that in turn generates support for harsher
immigration initiatives.”).

Goyal & Oplinger—Moving People Across the Can-US Border 211
definitely has an effect. 133 I think that one thing that is going to be critical for
this debate to move forward and reach resolution is for the concerns on both
sides to be addressed in a way that both sides feel are satisfactory. And one
of the things that is clearly coloring the political environment in the U.S.
today is that there is a tremendous amount of economic anxiety, there are
concerns about manufacturing jobs moving overseas. 134 And the way I look
at that is that is just an economic fact, and it is an inevitable economic fact,
and we need to deal with it, we need to address it, and it is going to require
national policy to do so. I think the answer is not to take a xenophobic
approach. I think the answer is to take an approach that engages with the rest
of the world, in terms of attracting highly-skilled immigrants, attracting lowskilled
immigrants, furthering trade policies and more. And I think there is a
great deal of room probably to be done in the debate on what that "more" is
to address the concerns of economic anxiety. But there is absolutely no
question that programs like the Lou Dobbs show have a significant effect in
shaping the debate and in raising the level of alarm that folks opposed to
expanding immigration programs feel. 135
MR. OPLINGER: Praveen is much, much more judicial than I would be.
Blowhards like Lou Dobbs are really those that are causing a lot of this
problem, but I think that the other half of it is that we are not doing enough to
try and counter that. You know, Jason Conley was here yesterday talking
about all the work that the U.S. Chamber has done to push the Free Trade
programs. And I like Jason, and the U.S. Chamber, most of the things they do
I appreciate. I have not seen the results of any of this work.
Someone had asked a question about why we cannot put a face on the
positive things that NAFTA's doing. And that is exactly what we have to do,
not just on NAFTA but on the ability of the low-skills and the high-skills to
get people to be able to have that intermobility, and we have done a very
poor job of doing that. And until we can counter some of that xenophobia
with some actual news of some people who have benefitted from this, have
them on TV telling their story, we are just not going to win this debate.
MR. CRANE: It is very interesting when Hillary and to a lesser extent
Obama came out against NAFTA. 136 There was not much response from the
business communities saying we disagree.
133
134
See id.
See Aaron Bernstein, Backlash: Behind the Anxiety Over Globalization, BUSINESS WEEK
ONLINE, Apr. 24, 2000, http://www.businessweek.com/2000/00_17/b3678001.htm.
135
Clark, supra note 133 at 266 (“Lou Dobbs has used his CNN program to help make
immigration one of the most discussed issues of the 2008 campaign, resulting in others labeling
him as ‘the most influential spokesperson for the anti-immigration movement,’ and accusing
him of being ‘a fearmonger who vilifies immigrants and promotes xenophobia.’”).
136
See Ruth Conniff, Pushing the Dems on Trade, PROGRESSIVE, May 2008, at 20 (“Both
Clinton and Obama have promised to renegotiate NAFTA.”).

212 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
MR. OPLINGER: Absolutely. You are absolutely right.
MS. PAWLUCH: There was a question up there, and then…
MR. VANDEVERT: Paul Vandevert, "The Guy from Ford" I am told.
How much of this could be attributed to or is in fact caused by an incomplete
use of technology? I was struck by your statement about the Canadians who
are coming to their summer homes and cottages across the border. And what
it struck me was there is partial use of technology, the Customs officer or
immigration officer calls up, oh, you have been crossing in a lot. But we
always say what we are doing when we cross. And so why do not they know
that this is the 37th time this month that Mrs. Jones from Vancouver has gone
to her cabin with the kids screaming in the car, and she is not a worker? So is
there incomplete use of technology?
MR. OPLINGER: I think to some extent that is true. I mean, they are not
putting in there that this person owns a cabin in Birch Bay and they cross a
lot, so that they have that information when it comes up. But I think the flip
side of that is also the way that the two Customs entities deal with it. On the
Canadian side, the person at primary is an employee, and they have a
supervisor, and if the person at primary does something that you think is
inappropriate or starts to hassle you about something, you can ask to see a
supervisor and have that addressed. It does not work the same way going into
the States. The person at primary that I first meet is God when I cross, and
there is no one that can make a change in the decision that they make for a
24-hour period. 137 And so to some extent that is also part of the problem
because giving that sort of ability to someone without any sort of an
oversight at all means that there is not any ability to correct these issues once
someone with a clear head sees them. That person makes the decision. And if
for some reason you have ticked them off, you are done for the day, and there
has to be some way to try and address that.
MS. ROSS: I am Sue Ross with the law firm of Mitchell, Silberbert &
Knupp. 138 I am about to do something I very seldom do because for anybody
that knows me, I am one of the first people to stand up and really give U.S.
Customs a hard time. But I think we are going to have this dialog. We also
have to incorporate the real fact that Customs is geared more towards the
southern border than they are towards the northern border. And we also have
to acknowledge the fact that there is a very real sense within the Customs
service and within the rest of the federal government that I think was best
illustrated by something that was said by someone who works for the Los
137
See generally Murthy Law Firm, An Inside View of the Port of Entry Inspection
Process, http://www.murthy.com/news/UDpoeip.html (last visited Oct. 20, 2008) (general
about filing a complaint).
138
See Mitchell Silberberg & Knupp, http://www.msk.com/home.asp (last visited Oct. 12,
2008).

Goyal & Oplinger—Moving People Across the Can-US Border 213
Angeles Airport where I live. And the comment was: If there is an alarm that
goes off at one of the terminals, I will get a certain degree of criticism if I
evacuate the terminal and nothing happens. But if I do not evacuate the
terminal and something happens, I can never live with myself. And so there
is a certain degree of that going on. Now you obviously have to overlay that
with things that we know about B.C. Gold, 139 we know about all the other
irregular things that occur in the transits back and forth. But I think the last
point I want to make is I want to take exception to your comment that there is
not something that you can do. There actually is. I mean, you have to be
willing to put up with all the garbage that goes along with ticking off the guy
who is the primary inspector. But you can and you should collect the badge
number and write to the port director. If there are enough complaints about
what somebody is doing, they will do something. You are right, it does not
do you any good to do it on the spot and demand the supervisor because
when we do that, the cargo area which is where I deal, you very often get,
well, this was the inspector's discretion, and he had good reason, and all this
other silliness. But enough complaints about rude behavior and other
irregularities, and we will get the desired result.
MR. OPLINGER: One of the things that we have been arguing for the last
three years is that we actually believe that - maybe not more discretion in this
sense because I really do believe there should be a supervisor on spot that
can do some of these things. But empowering these people to do things is
something that we are very supportive of. The example is that the one person
we have caught coming into the U.S. trying to do us harm was caught in my
neck of the woods on a ferry from Victoria to Port Angeles. 140 And DHS
loves to use that story as a means of saying why we have to have WHTI, but
if you look at that story, it is a great example of why documentation means
absolutely nothing. This is a person who had two valid passports from two
countries that were both visa-waiver countries, so he had every right to enter
the U.S. 141 The reason we caught him had nothing to do with documentation,
it was because the person at primary who interviewed him said he was
sweating a lot, he seemed very nervous, maybe we should have a look in his
139
See Quebec Gold: the other Canadian marijuana, CUSTOMS AND BORDER PROTECTION
TODAY, May 2003, http://www.cbp.gov/xp/CustomsToday/2003/May/other/quebecgold.xml
(discussing Quebec and BC Gold smuggling).
140
See Donald Kerwin & Margaret D. Stock, The Role of Immigration in a Coordinated
National Security Policy, 21 GEO.IMMIGR. L.J. 383, 392 (2007) (“In December 1999, an astute
inspector on the Canadian border stopped Ahmed Ressam, a member of the Armed Islamic
Group, who planned to use explosives in his car to bomb Los Angeles International Airport on
New Year's Day in 2000.”).
141
See U.S. Dept. of State, Visas, http://travel.state.gov/visa/visa_1750.html (last visited
Oct. 12, 2008) (explaining requirements for entering U.S. on a visa).

214 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
car. 142 They pulled him over and found over 100 pounds of explosives in the
back of his car. 143 So, having good, well-trained people staffed at the border
is really the way to go. And so in that sense, please, empower them. I think it
is probably the best way to try and ensure our security.
MR. CHERRIN: My name is Dan Cherrin, and I am with Northcoast
Strategies 144 . I also represent the University of Windsor and the Detroit-
Windsor Tunnel. My question to you, Ken specifically, is what is your
coalition doing for when a new administration does take effect? It will be the
first time that the Department of Homeland Security will likely be in
transition. And they are already going through a lot of difficult transition
periods.
MR. OPLINGER: Well, we believe at this point that any of the three new
folks coming in to form the new administration will be supportive of this and
will continue to sign the MOUs. Now that being said, we have certainly
reached out to all three campaigns to try and share with them the process that
we have gone through, where we are, and why we think this ought to
continue. We have not got any feedback from any of the three campaigns that
they think otherwise, and in fact there is some thought that they may be even
a little bit looser on some of this. And if we get towards June, 2009, and we
do not have what I think we all feel is enough appropriate documents in
circulation, we might even be able to bump it back a little bit more. But at
this point we are really concentrating more on making sure that we can
continue this process of getting the MOUs signed. And at this point we think
we can.
MS. RUDE: This is just more of a comment following on that because I
am sometimes a little bit afraid that ever since the June 2009 delay was
announced, that everyone sort of breathed this collective sigh of relief that
okay, now everything is okay. And I think there were several things that are
still not okay. And to the extent that people are able to continue to work on
things in this room, I think it is really important that people are aware of
some of those things. In particular, on the technology front, the final rule that
would have just recently came out is that there is an intention to have RFID
readers at 39 ports of entry across the Canada-U.S. border. 145 This is not even
half of the ports of entry. Now they justified that by saying that those ports
are where the majority of crossings occur, but that is not a sufficient
142
See United States v. Ressam, 474 F.3d 597, 600 (9th Cir. 2008) (“Dean asked Ressam
about his travel plans. His answers indicated that he was nervous and agitated.”).
143
See Kerwin & Stock, supra note 141 at 392.
144
See North Coast Strategies, http://www.northcoaststrategies.com/ (last visited October
12, 2008).
145
See generally Laura M. Ulatowski, Recent Developments in RFID Technology: Weighing
Utility Against Potential Privacy Concerns, 3 I/S/: J.L.& POL’Y FOR INFO.SOC’Y 623, 642
(2007-2008) (Discussing importance of RFID readers at all U.S. ports).

Goyal & Oplinger—Moving People Across the Can-US Border 215
justification if you are dealing with huge slots of the border where an entire
state or an entire province may not have a crossing with an RFID reader. If
you are trying to get to those jurisdictions on the side of producing an EDL,
it is hard to promote an EDL with an RFID capacity when the person knows
that they are crossing over than half that capacity. There needs to be a
continued push for that technology. And I was looking around the room and
hoping that the presenter from CBSA was still here - I do not believe she is -
because I was hoping that she could also expand on the 17 million pledge for
NEXUS because I am completely in Ken's court, that the level of enrollment
is ridiculously small for how long the program has been in effect. 146 And I
am curious how that 17 million is going to be spent, if it is in promotions, if
it is in incentives, if it is in as well expanding NEXUS lanes, NEXUS
readers. Because exactly like the RFID, we still have huge slots of the border
without NEXUS reading capacity. If there is going to be a genuine option for
people other than the passport, all of that technology and application needs to
be pushed and promoted. I was recently at an event in Washington where the
person from the State Department that gives the regular updates on passport
enrollment portrayed this very rosy picture of how well-prepared State
Department was for an influx of passport applications. Meanwhile we all
know that the vast majority of border crossings between Canada and the U.S.
occur at the land border. The uptake in passports in the U.S. in particular
increased pretty small. I would say the increase was quite small from when it
was pre-air implementation to post-air implementation. And the vast majority
of those travelers already had passports because they used them for travel
elsewhere. So I am not quite convinced that there will not be another crush of
passport applications as the land gate looms. But I think as Ken said,
watching to see if there is a critical mass of documents pushing for
alternatives to be promoted and offered is crucial. And the onus is really on
everyone in this room to continue to push those buttons and make sure that
we are vigilant as we are coming up to 2009.
MR. OPLINGER: And I did not even pay her to say all that, so that is
great. The only other thing I would add to that is also marketing, and I really
want to lend my congratulations to CBSA who spent a considerable amount
of money leading up to the end of oral declarations, paying for radio
advertising across Canada, and mailers into homes across Canada to let
people know that the end of oral declarations was coming. Do you know how
much CBP spent? (Indicating zero). 147 We put the rule into place, and we did
146
See U.S. Dept. Homeland Security, supra note 87.
147
See generally Government Accounting Office, Observations on Implementing the Western
Hemisphere Travel Initiative, http://www.gao.gov/htext/d08274r.html (last visited Oct. 20,
2008) (“According to CBP officials at the ports of entry we visited, they do not expect the end
of oral declaration to represent a significant operational change for them, because the majority

216 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
absolutely nothing to market, with the exception of printing cards that we
handed out to people when they crossed the border to let them know that the
rule is going into place. So the fact that we were passing this rule without
consulting the Canadians, and yet they did a great job of making sure that
their citizens knew about the rule change I thought was outstanding.
MR. ROBINSON: Michael Robinson from Toronto. Just a very short
comment, not a question. I tell all my clients and lawyer colleagues that there
is one thing you must never say at the border, NAFTA. If you ever mention
the word like, I am a business visitor under NAFTA, I am a foreign legal
consultant under NAFTA, the experience that I have enjoyed is as follows:
They take your ticket and your passport, they put you in a little room. They
check your flight time, they tell you of course you can go back to Canada if
you want, but otherwise you have to sit here until we decide to question you.
Five minutes after your flight has left, they give you back your ticket and
passport with a big smile.
MS. PAWLUCH: Well, on that cheery note, I am seeing no other
questions in the room. Please join me in thanking our speakers this morning,
Praveen Goyal and Ken Oplinger, for a very, very interesting presentation.
(Session concluded.)
of people crossing at their ports already present documents rather than attempt entry by oral
declaration alone.”).

MOVING YOUR GOODS AND SERVICES ACROSS THE
CANADA-UNITED STATES BORDER: COMPLIANCE,
EFFICIENCY, AND CHALLENGES
Session Chair – Silvana Alzetta-Reali
Canadian Speaker – Cyndee Todgham Cherniak
United States Speaker – Susan Kohn Ross
INTRODUCTION
Silvana Alzetta-Reali
MS. ALZETTA-REALI: This session is about compliance, efficiency,
and challenges in regard to moving goods and services across the border.
Obviously the events of September 11 have shifted the paradigm through
which we view security. 1 As we have heard, resources have been focused on
security-based initiatives in which trade liberalization and facilitation are
secondary goals. 2 And many of the specific features north and south of the
border have the potential to indeed impede trade. 3
This session's speakers will discuss a portion of the security-based
initiatives from both the U.S. and Canadian perspective, they will discuss
some challenges and hopefully provoke quite a bit of thought. Susan Kohn
Ross 4 has been with Mitchell, Silberberg & Knupp 5 as international trade
1
JOHN TIRMAN, MIT CENTER FOR INTERNATIONAL STUDIES, IMMIGRATION AND
INSECURITY: POST-9/11 FEAR IN THE UNITED STATES (2006), available at
http://web.mit.edu/cis/pdf/Audit_Tirman_Immigration_6.06.pdf.
2
Steve Globerman & Paul Storer, The Impacts of 9/11 on Canada-U.S. Trade, 1THE
BORDER POLICY RESEARCH INSTITUTE AT WESTERN WASHINGTON UNIVERSITY (2006), available
at http://www.ac.wwu.edu/~bpri/files/2006_July_Research_Report_No_1_Impacts_of_9-
11.pdf.
3
Id.
4
See Susan Kohn Ross, http://www.msk.com/attorneys.asp?id=1615 (last visited Sep. 16,
2008) (Ms. Ross has practiced for more than 30 years in the areas of customs, international
trade, transportation and import/export law. She is a graduate of Southwestern University Law
School).
5
Mitchell Silberbrerg & Knupp LLP, http://www.msk.com/overview.asp (last visited Sep.
17, 2008) (Mitchell Silberberg & Knupp LLP is a premiere Los Angeles-based law firm concentrating
on complex business litigation, intellectual property and technology, entertainment,
217

218 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
counsel since the beginning of this year. She has practiced in the area of
customs, international trade, transportation, and import and export law for
more than 20 years. She is currently a member of two subcommittees formed
by Homeland Security's Departmental Advisory Committee on Commercial
Operations, 6 one in which she deals with 10+2 7 and advances in trade data
elements, the other involving expansion of C-TPAT 8 and CSI. 9 She is also a
co-founder with Cyndee Todgham Cherniak 10 of the Trade Lawyers Blog. 11
Cyndee has been with Lang Michener 12 since October 2007 practicing
international trade, business law, and tax law. She has reviewed over a
hundred regional trade agreements as a consultant to the Asian Development
Bank 13 and written an extensive report on these. There is a great deal written
about Cyndee, as well as Susan, in the biographies in your program. Cyndee
is very proud of the Trade Lawyers Blog, so I also urge you to visit it at
www.tradelawyersblog.com. It is chock full of interesting information and
items. So I will now without further delay begin our session and pass it over
to Cyndee.
labor and employment, and business transactions).
6
See Departmental Advisory Committee on Commercial Operations of Customs and
Border Protection (COAC), http://www.cbp.gov/xp/cgov/trade/trade_outreach/coac/ (last
visited Sep. 17, 2008).
7
Importer Security Filing and Additional Carrier Requirements, 73 Fed. Reg. 90 (proposed
Jan. 2, 2008) (notice of proposed rule requiring both importers and carriers to submit
additional information pertaining to cargo before the cargo is brought into the United States by
vessel).
8
See C-TPAT: Customs-Trade Partnership Against Terrorism,
http://www.cbp.gov/xp/cgov/trade/cargo_security/ctpat/ (last visited Sep. 18, 2008) (C-TPAT
was launched by the U.S. in 2001 to strengthen overall supply chain and border security by
encouraging companies to enhance their security programs).
9
Container Security Initiative, http://www.cbp.gov/xp/cgov/trade/cargo_security/csi/ (last
visited Sep. 18, 2008) (this is a program intended to help increase security for containerized
cargo shipped to the United States from around the world).
10
Cyndee Todgham Cherniak,
http://www.langmichener.ca/index.cfm?fuseaction=people.persondetail&id=9939 (last visited
Sep. 17, 2008) (Ms. Cherniak is renowned international trade lawyer practicing at Lang
Michener LLP in Toronto).
11
Trade Lawyers’ Blog, http://tradelawyersblog.com/ (last visited Sep. 26, 2008).
12
Lang Michener,
http://www.langmichener.ca/index.cfm?fuseaction=content.contentDetail&id=7637 (last visited
Sep. 17, 2008) (a full service law firm, serving clients out of Toronto, Vancouver, and
Ottawa).
13
Headquartered in Manila, and established in 1966, ADB is an international development
finance institution whose mission is to help its developing member countries reduce poverty
and improve the quality of life of their people. Asian Development Bank, http://www.adb.org/
(last visited Sep. 17, 2008).

Cherniak & Ross—Moving Your Goods and Services Across the Border 219
CANADIAN SPEAKER
Cyndee Todgham Cherniak *
MS. CHERNIAK: We are going to go back and forth between various
topics from a Canadian perspective and a U.S. perspective, but before we do
this, I would like to kind of set the stage for everyone. Customs trade, export
controls, import controls, practitioners -- though that is lawyers, accountants,
consultants, et cetera--Canada and the United States generally accept that the
safety and welfare of the citizens of North America is an important goal. 14
That is a given. We also recognize there is a thickening of the border that is
occurring. 15 As practitioners, we have a role to play sometimes in promoting
and speaking in support of the security initiatives and communicating and
educating about why they are taking place. However, we have another more
unpopular role to a certain extent, especially in the eyes of the Canada
Border Services Agency 16 and the Department of Homeland Security. 17
Sometimes we must speak out against the new laws and regulations, policies,
procedures, practices because that either affects a particular client or it
affects the collective. We have a wonderful opportunity to speak out on
behalf of particular individuals, but also to point out where a particular law
has not been thought through thoroughly, or if there is a business perspective
that someone within government has not taken into consideration. So there is
a great opportunity. So at times we are advocating on behalf of a client, and
*
Cyndee Todgham Cherniak joined the International Trade Law Group, the Business
Law Group and Tax Group as counsel in Lang Michener’s Toronto office in October 2007.
She is known for her expertise in the area of free trade agreements, regional trade agreements
and preferential trading arrangements (collectively, PTAs). She appears before regulatory
bodies and tribunals such as the Canadian International Trade Tribunal, and makes representations
to the Canada Revenue Agency, the Canada Border Services Agency, the Export and
Import Controls Bureau, the Department of Foreign Affairs and International Trade, the Canadian
Food Inspection Agency the Department of Finance and the Ontario Ministry of Revenue.
14
See generally Canadian Security Intelligence Service, http://www.csis-scrs.gc.ca/indexeng.asp
(last visited Sep. 17, 2008). See also Department of Homeland Security: The Secretary’s
Five Goals, http://www.dhs.gov/xabout/gc_1207339653379.shtm (last visited Sep. 17,
2008).
15
Susan Delacourt, Reopen NAFTA at your own Peril, Harper Says, THESTAR.COM, Apr.
22, 2008, http://www.thestar.com/News/Canada/article/417066.
16
The Canada Border Services Agency (CBSA) ensures the security and prosperity of
Canada by managing the access of people and goods to and from Canada. About the CBSA,
http://www.cbsa-asfc.gc.ca/agency-agence/menu-eng.html (last visited Sep. 17, 2008).
17
This Department of Homeland Security’s overriding and urgent mission is to lead the
unified national effort to secure the country and preserve our freedoms. DHS – About the
Department of Homeland Security, http://www.dhs.gov/xabout/ (last visited Sep. 17, 2008).

220 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
at times we are sounding a warning bell. And so we are kind of transitioning
from some of the discussion from yesterday into the positive initiatives that
are taking place. And hopefully we will have more of a positive discussion
on where changes can be made to improve security even more within the
framework of economics.
UNITED STATES SPEAKER
Susan Kohn Ross †
MS. ROSS: That having been said – I am usually the first one to tweak
Customs when I think they have -- shall we say politely -- misbehaved. But I
think we need collectively to do a better job of saying that it is perhaps more
palatable. When we say "yes but," that does not mean we are being
unpatriotic. It does not mean we are questioning the need for the security
measures. But we do need to be willing to stand up and say this is a good
idea, or this is not a good idea, and here is why. We are going to move a little
bit later on to 10+2. And as Cyndee and Silvy said, we are going to take a
series of issues and we are going to sort of bounce back and forth between
the U.S. view and the Canadian view. And the first one we picked sort of
tags nicely off of the WHTI— Deemed Export Rule. 18 Now, for those of you
who are not familiar with it, basically the U.S. has a rule where if you have
goods that are subject to an export license, then the technological documents
that have to do with it–whether it is blueprints or anything else–are
themselves then subject to a license. 19 Now that in and of itself may not be as
controversial as some of the other things that have happened. And to tie back
to the immigration issue, our Commerce Department controls those things
which are not military and therefore controlled by the Department of State. 20
†
Ms. Ross joined Mitchell Silberberg & Knupp LLP as International Trade Counsel on
January 1, 2008. Prior to that she was affiliated with Rodriguez O'Donnell Ross Gonzalez &
Williams, P.C. having joined it in June 2002 as the Los Angeles resident partner. She was
previously the founder of S.K. Ross & Assoc., P.C. She is a graduate of the University of
California at Los Angeles and Southwestern University School of Law and has practiced for
more than twenty years in the areas of Customs, international trade, transportation and import/export
law. She is a co-founder of Trade Lawyers Log and Women Lawyers Blog. She is
also the co-creator of CTPAT Made Easy, Inc., an on-line application program which facilitates
companies becoming members of the Customs-Trade Partnership Against Terrorism.
18
15 C.F.R. § 734.2 (b)(2)(ii) (2008) (stating that a transfer of technology or source code
(except encryption source code) is "deemed" to be "an export to the home country or countries
of the foreign national.").
19
Id.
20
15 C.F.R § 730.3 (2008).

Cherniak & Ross—Moving Your Goods and Services Across the Border 221
The Department of State's view is that they want to know the country of your
citizenship. 21 But I have a greater concern because this is military in nature,
or potentially military in nature. So I also want to know where you have
lived, and I certainly want to know your country of birth. 22 And as with any
large organization, there is a real problem within the agency when these
decisions are made distinguishing between somebody who was born in Libya
45 years ago and left 43 years ago versus somebody who was born in Cuba
within the last 20 years. Now, we can leave to one side how they got out of
Cuba, and pick any other country that is considered high-risk as far as the
U.S. is concerned. But that is the view of the State Department, rightly or
wrongly. 23 I prefer to think about our Commerce Department as being
somewhat more enlightened. Their view is if you have managed to become a
U.S. citizen, you are a U.S. citizen. Now that having been said, because it is
often times military goods and because the Department of State takes the
view that it cannot only control the goods as I said but also the technical
information, I am going to pitch it to Cyndee, and she is going to talk a little
bit about the implications of the ITAR, which is the International Traffic and
Arms Regulations. 24 In terms of that, the Department of State,–not only seeks
to regulate the license of goods, but also what Canadian companies can do in
terms of the staffing that they need to make the goods for the U.S. military. 25
MS. CHERNIAK: And I do have one of the Lang Michener 26 articles on
the table on this particular subject. So you know, please feel free to pick it
up. But we have a couple situations in Canada where as a result of our human
rights legislation; we have got cases going to provincial Ontario human rights
commissions. Complaints are being brought by employees and potential
employees on the basis that they are being discriminated against on the basis
of nationality. 27 You can have a dual citizen in Canada who is of Haitian
descent or Canadian descent. My uncle actually was born in Cuba. My
grandparents just happened to have been living there at the time he arrived,
and, you know, Cuban-Canadian citizens would not be looked at under the
ITARs, and the problem that is faced by Canadian companies is the
21
Amendment to the International Traffic in Arms Regulations: Regarding Dual and Third
Country Nationals, 72 Fed Reg. 243, 71786 (Dec. 19, 2007) (to be codified at 22 C.F.R. pt.
124).
22
Id.
23
Id.
24
25
15 C.F.R. § 120.1 (2007).
Cliff Sosnow & Elysia Van Zeyl, Impact of the International Traffic In Arms Regulations
on Canadian Dual Nationals, BLAKES CASSELS & GRAYDON LLP,
http://www.blakes.com/english/view.asp?ID=883.
26
See Lang Michener, supra note 12.
27
See Sosnow & Van Zeyl, supra note 25.

222 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
extraterritorial reach of the U.S. law. 28 And we have got a catch-22 situation
that is evolving in Canada with no real solution at the current time. Because
you have got the ITAR under U.S. law, where you are not allowed to have
the dual citizenship with 25 countries working on particular projects. 29 Under
Canadian law, our human rights commissions have come out quite strongly
saying we think that this is discrimination on the basis of nationality, and we
will not accept this. 30 And as a result, existing employees at Canadian
companies run into difficulties that they are being shifted into other parts of
the corporation or organization or there is the potential that they would lose
their jobs because the Canadian company wants to continue to sell to the U.S.
government or to a subsidiary of a U.S. company. 31 And as a result if they
lose their jobs, then there is employment rights that kick into play. 32 And if
they have been shifted, it can be considered to be constructive dismissal. 33
But we also had cases at the human rights commissions where a corporation
acts inappropriately as against a particular individual. And while there has
not been a case that has come out saying here's what we think per se, there
have been settlements and some comments have been made about the
settlements by the commissions. And so the Quebec Human Rights
Commission 34 in the recent Bell Helicopter case 35 came out and said we
believe this is discriminatory. 36 They were actually suggesting that other
28
29
Id.
Evelyn Ackah, An Examination of ITAR: The Impact on Canadian Dual National Employees,
FRASER MILNER CASGRAIN, Jun. 1, 2007, http://www.fmc-
law.com/upload/en/publications/2007/z_AckahE_An_Examination_of_ITAR_July2007.pdf.
30
See supra note 25.
31
See John Black, Canadian Human Rights Commission Says ITAR Compliance Violates
Canadian Human Rights Code, EXPORT CONTROL NEWS & ALERTS, Jan. 10, 2007,
http://learnexportcompliance.com/news/2007/01/10/canadian-human-rights-commission-itarcompliance-violates-code/
(discussing the dismissal of 172 employees from General Motors
defense in violation of IATR).
32
Id.
33
See Constructive Dismissal, Canada Labour Code, Part III, Divisions X, XI and XIV,
http://www.hrsdc.gc.ca/en/lp/lo/opd-ipg/ipg/033.shtml (last visited Sep. 19, 2008) (using
“constructive dismissal” to describe situations where the employer has not directly fired the
employee, but has rather failed to comply with the contract of employment in a major respect,
unilaterally changed the terms of employment or expressed a settled intention to do either thus
forcing the employee to quit).
34
Commission des droits de la personne et des droits de la jeunesse,
http://www.cdpdj.qc.ca/en/home.asp?noeud1=0&noeud2=0&cle=0 (last visited Sep. 20, 2008)
(The Commission is responsible for promoting and upholding the principles as enunciated by
the Quebec Charter of Human Rights and Freedoms).
35
Jasmin Legatos, Settlement Reached in Bell Helicopter Discrimination Case, THE
GAZETTE, Jan. 18, 2008, available at
http://www.canada.com/montrealgazette/news/story.html?id=50ace18d-df4f-44cc-83feb52723ac4919.
36
Id.

Cherniak & Ross—Moving Your Goods and Services Across the Border 223
people come forward. And the interesting thing in the Bell Helicopter case
was that the individual at issue was not an existing employee of the
corporation. 37 The individual who brought the complaint was someone who
was trying to obtain a job at that company, and had gotten into the training
program and then did not get the job as a result of the fact he was a dual
Canadian-Haitian citizen. 38 He had been in Canada for 30 years or a
significant period of time, but then again we have had the recent cases in the
United States where there was a Chinese individual who was sending secrets
back to China. 39
MS. ROSS: The MAD case. 40
MS. CHERNIAK: In the MAD case, the individuals had been in the
country for a significant number of years as well. 41 So that is not the telling
piece. I look at this, and I respect the need to respect -- to protect human
rights. But you know, I also take the position that well, we are talking about
individuals that have the right to earn a living at a particular job in an area
where they are skilled. And I respect the reaction of the provincial human
rights commissions and their disagreement with the extraterritorial
application of the laws of the United States. 42 However, there are companies
that are being penalized and caught up in the process, and those companies,
the Canadian companies, the Canadian subsidiaries of the U.S. companies do
not have the power to change the U.S. ITARs. 43 So what the human rights
commissions are doing is they are saying yes, there is a problem, we do not
like it. Well, it is not like they would have a little bit more sway with the
Canadian government if they had to change the law as opposed to the U.S.
government. Now that being said, the Canadian government at the highest
levels is talking to the U.S. government about, some relieving provisions to
solve this problem, but in the meantime we have got this problem in
Canada. 44 There is a catch-22 situation, there is a disconnect, and it is
resulting in problems. There is a call for more cases to be brought forward so
that this issue becomes even more heightened than it is already.
37
38
39
Id.
Id.
See generally Scott Shane, A Spy’s Motivation: For Love of Another Country, NY
TIMES, Apr. 20, 2008 available at
http://www.nytimes.com/2008/04/20/weekinreview/20shane.html?ref=weekinreview.
40
Id.
41
42
Id.
See Sosnow & Van Zeyl, supra note 25.
43
See Ackah, supra note 29 (discussing General Motors’ settlement with U.S. Department
of State for $20 million after a series of alleged ITAR violations related to dual citizen employees
having access to technical data).
44
DND/CF: Backgrounder: International Traffic in Arms Regulation (ITAR),
http://www.dnd.ca/site/newsroom/view_news_e.asp?id=2290 (last visited Sep. 20, 2008).

224 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
MS. ROSS: Now in the states we have privacy rights as of course you do
in Canada. And those privacy rights typically limit what an employer is
allowed to ask an employee on a job application or during the interview
process. 45 However there are questions that you are allowed to add to the
situation if you have specific needs. So for example, it is now not uncommon
if you are going to go to work for anyone who has anything to do with the
movement of goods that will ask for example, if the applicant has a felony
conviction, and if so, what are the details? If you go to work for one of the
military contractors, you are allowed to ask a series of questions that would
otherwise be of interest to the Department of State. So that if you are going
to be given access to any of these protected or controlled areas, that your
employer will know is part of the vetting process whether or not you are
qualified because getting through that process as the ITAR controls would
require would be part of that vetting process. So Cyndee, the question to you:
If I am a Canadian subsidiary of an American company or I am a Canadian,
military contractor or defense contractor, and I know the person that I am
hiring is going to be working in an area where there are ITAR controls in
play, am I allowed to ask the necessary questions to determine whether that
person is qualified to hold that position?
MS. CHERNIAK: That is a very good question. And you know, one of
my criticisms of the commissions in Canada who are making these decisions
on discrimination, is that they just make a bold statements that this is
discriminatory under Canadian law. 46 What we do not get and what we need
is transparency and some guidance. What guidance can you give to Canadian
companies as to what you would like them to do so that they do not get
caught up in the situation where you have got someone trolling for litigation?
Also what do you do with the existing employees, you know, making the
application to the U.S. government and actively pursuing those applications
so that you can get the clearance? Is that satisfactory? And when someone
has an application form, would you be considered to be discriminating on the
basis of nationality by asking some of these questions so that you know if
this person has dual-citizenship? We do not have that guidance and we also
do not like the extraterritorial application of U.S. law. It would be really,
really helpful if there was some guidance. And then, you know, the
companies can act in a duly diligent manner, and they can follow a clear set
of rules so that they are complying with the laws and the positions on both
sides of the border. It should be a friendly relationship, it should be friendly.
When you have this disconnect, you definitely have a problem.
45
46
See Ontario Human Rights Code, R.S.O., ch. 19, (1990) 23(3) (Can.).
See Legatos, supra note 35.

Cherniak & Ross—Moving Your Goods and Services Across the Border 225
MS. ROSS: We are going to turn next to the topic of 10+2, and I have to
admit that I was not here when it was raised the first time, but I am quite sure
they did not go into a high level of detail. I do not plan to bore you with my
typical 163-slide presentation. That having been said, there was an adorable
cartoon in the local paper yesterday of a fellow who is obviously either a
parent or a coach looking down on a little boy that looks like he is probably
not more than about 5 or 6. And the caption on it is: And remember, Timmy,
along with the status of being a star athlete comes a responsibility to act as if
the law does not apply to you. Now I raise that as a tribute to 10+2 because
frankly, the attitude of a law does not apply to you, it sort of translates in
some sense very loosely to the experience that we had in dealing with the
Customs service as 10+2 was being developed.
And to their credit–and as I said earlier, I will be the first one to tease
them–but to their credit, what the Customs service has learned to do very
well is to reach out to the private sector to get input. 47 Now they got a lot of
input. The problem from our perspective is they did not necessarily take a lot
of it. But that having been said, let me give you first the background on
10+2. You heard mention of the Safe Port Act, 48 and it was one of a number
of laws—the Trade Act of 2002 49 being another where our Congress
mandated that our government find another way through advanced data
information to do a better job of risk management. And although risk
management seems to be a topic that has been relatively well-integrated into
the cargo arena, it clearly has not been integrated into the movement of
people. 50 10+2 according to Customs–and you can all make your own
independent determinations–builds on a series of existing programs, one is
their automated targeting system (ATS), 51 another one of which is CSI, the
Container Security Initiative, 52 the 24-hour rule, 53 C-TPAT, which we will
47
Importer Security Filing and Additional Carrier Requirements, 73 Fed Reg. 22, 6061
(Feb. 1, 2008) (extending the public comment period for the proposed 10+2 rule).
48
Security and Accountability for Every Port Act of 2006, Pub. L. No. 109-347, 120 Stat.
1884 (2006).
49
Trade Act of 2002, Pub. L. No. 107-210, 116 Stat. 933 (2002).
50
U.S. Customs and Border Protection, Managing Trade Risk,
http://www.cbp.gov/xp/cgov/trade/trade_programs/trade_compliance/managing_risk.xml (last
visited Sep. 22, 2008).
51
See Phil Landfried, PRIVACY IMPACT ASSESSMENT FOR THE AUTOMATED TARGETING
SYSTEM (2006), http://www.dhs.gov/xlibrary/assets/privacy/privacy_pia_cbp_ats.pdf.
52
See Container Security Initiative, supra note 9.
53
See News Release, U.S. Customs and Border Protection, Enforcement of 24-Hour Rule
Begins February 2 (Jan. 30, 2003),
http://www.cbp.gov/xp/cgov/newsroom/news_releases/archives/cbp_press_releases/012003/0
1302003.xml (“The 24-hour rule requires sea carriers and NVOCCs (Non-Vessel Operating
Common Carriers) to provide U.S. Customs with detailed descriptions of the contents of sea
containers bound for the United States--24 hours before the container is loaded on board a
vessel.”).

226 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
return to later, the attempts at a tamper-proof or smart seal, 54 and Operation
Safe Commerce. 55 Now the quote from Customs as the elements were laid
out says: “The following ten data elements were selected because of their
probative value and because of their ready availability in the current logistics
process.” 56
Now on the topic of the probative value, I will tell you that the people that
were involved in finally getting to the ten data elements said that they did the
first run-through, and they came up with 200-plus data elements, and they
went to Customs management and said, that is it, we figured it out. And
fortunately the people at Customs management said, no, that is too long a
list. So this is the list that they have given us, and they swear that by having
these ten data elements from the importer and the two that we are getting
from the carrier, it either raises or lowers the risk score for every shipment
that they scored. 57 Here are the data elements: Manufacturer name and
address, seller name and address, container stuffing location, consolidator
name and address, buyer name and address, ship-to name and address,
importer of record number which is IRS number, consignee number which is
again IRS number, country of origin, and the six-digit harmonized tariff
number. 58
Now the first question we all had was where is the bill of lading number?
As you will notice, I did not mention that at all. And the answer from
Customs was, well, we are going to be tying this all together based on a
variety of things that we are getting. Bear in mind that as I read off this list,
that there is one very important fact. Besides the fact that this is supposed to
be lodged 24 hours prior to loading, there are a number of people that can tell
54
See Remarks of U.S. Customs Commissioner Robert C. Bonner: U.S. Customs and
Border Protection C-TPAT Conference, San Francisco, California, (Oct. 30, 2003),
http://www.cbp.gov/xp/cgov/newsroom/commissioner/speeches_statements/archives/2003/oct
302003.xml (last visited Sep. 22, 2008) (discussing the use of so-called "smart" containers that
are better secured against intrusion and are capable of telling the U.S. Customs Border Protection
and the end user whether the container has been tampered en route to the United States).
55
See Press Release, U.S. Department of Transportation, DOT and Customs Launch ‘Operation
Safe Commerce’ Program (Nov. 20, 2002), http://www.dot.gov/affairs/dot10302.htm
(This is a collaborative federal grant program that is administered by the Department of Homeland
Security (DHS), Office for Domestic Preparedness (ODP), and includes participation
by the three largest domestic container load centers, cargo and supply chain security solution
providers, and various supply chain “owners” (importers, carriers, terminal operators, etc.).
The goal of this partnership is to develop, test, and share best practices in order to improve the
security of containerized cargo movements).
56
U.S. CUSTOMS &BORDER PROTECTION, CBP PROPOSAL FOR ADVANCE TRADE DATA
ELEMENTS, U.S, DEPARTMENT OF TRANSPORTATION MARITIME ADMINISTRATION,
www.marad.dot.gov/compliance/Marad%20Security%20Documents/CBP%2010+2/10+2%20
draft%20proposal.doc.
57
58
Importer Security Filing and Additional Carrier Requirements, 73 Fed. Reg. at 1, 90.
Importer Security Filing and Additional Carrier Requirements, 73 Fed. Reg. at 1, 94.

Cherniak & Ross—Moving Your Goods and Services Across the Border 227
you if it has to be done 24 hours prior to loading. That means you may just
pushback the point in time where the supply chain has to finalize the
shipment. So we are back either one, two, or three days depending on who
you talk to about it. And there is a mantra that we have all used from
experience which says cargo at rest is cargo at risk. So you have all of these
programs designed to minimize the risk of the cargo, and now you are
putting companies in a position where they are going to have to have that
cargo intact for a period of time.
Here is the other fact you need to understand and appreciate. The name of
the manufacturer, the origin of the goods, and the tariff number of the item
need to be tied together as a part of the report. So if you have three
manufacturers and six kinds of goods, you potentially have 18 lines of a
notice. This does not even get into the issue of if you are the party that has
the responsibility, which is either the importer or his agent, who has this data.
How are you going to get it from them? How does this impact the little guys?
How does this impact the medium-sized companies, and what about the large
companies that do not control the export? Now the two data elements from
the carriers are kind of the easy part. They are what you heard Todd mention
yesterday which is the container stow plan which is nothing more than the
address book. Where on the vessel is the container? And what are called the
container status messages, these are the messages that the carriers normally
generate to tell them where one container has gone and where it is moved
around. For the carriers, they are basically doing a data dump. They are
giving Customs all of the status messages that they have got, they do not care
whether it has to do with goods coming into the U.S. or not. For the
importers, this is a sea change in how business is going to be done. And as
has often been the case, and while I am only half-kiddingly teasing Customs
about acting as though local law does not apply to them, they are really
acting as though the supply chain does not apply to them. Let us start with
something as basic as IT, which was a very fundamental part of the
discussion under the WHTI. 59
Most companies' IT systems do not capture most of the data that is being
requested. Most companies do not care that they have got three
manufacturers and six tariff numbers. They are looking to give this
information at the aggregate level. Many companies do not care what the
origin of the particular goods is, they are going to do it at the aggregate level
unless and until they get to filing the entry.
59
See Western Hemisphere Travel Initiative,
http://travel.state.gov/travel/cbpmc/cbpmc_2223.html (last visited Sep. 25, 2008) (”The goal
of the initiative is to strengthen U.S. border security while facilitating entry for U.S. citizens
and legitimate foreign visitors by providing standardized documentation that enables the Department
of Homeland Security to quickly and reliably identify a traveler.”).

228 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
And at this point at least, in the NPRM 60 the Customs published on
January at the 2nd, Happy New Year, they denied using the entry in lieu of
the security filing. 61 So one of the issues for us is going to be the NPRM
when the comment period has closed. 62 We have heard enough rumblings
about this that we expect if everything goes smoothly by this summer, the
final regulations will be published. Now bear in mind I have not said one
word about any of the IT requirements for this, and the reason for that simply
is they have not been published. We do not know how long the data field is
going to be. We do not know if it is going to be alpha-numeric, is it going to
be alpha, is it going to be just numeric. These are all issues that have yet to
be worked out. So far the only testing of this program that has been done is
through something called ATDI which is the Advance Trade Data
Initiative, 63 which is a series of large companies that have been dumping data
with the government. 64 It is not on the platforms that are going to be used. It
is not in the format that is going to be required, and it is certainly not 24
hours prior to loading. So we do not really know how this is going to play
out, but please bear in mind we have talked about importers.
This also applies to not just the cargo that you are bringing in to enter into
the U.S., but it also applies to fraud, which is to freight remaining on board.
So the Canadian carrier leaving Vancouver who is going to touch in Seattle is
going to have to provide certain data. Now fortunately it is not all of the ten
data elements, but there are a series of data elements that that Canadian or
even U.S. carrier is going to have to provide. If your goods move either on an
IE which is an immediate exporter or a T & E, which is transportation and
export, they are moving in bond from one port to another. The typical
situation being from that they are coming in from Asia going in bond to the
southern port or the northern port for that matter. Some of these data
elements are also going to have to be provided, but interestingly enough in
those instances, the carrier is considered to be the importer.
MS. CHERNIAK: I would like to just point out at this point in time, this
is where I get to raise the red flag.
MS. ROSS: Well, I want to add one more point before you do that
because I definitely want to throw it to you. And the one more point I want to
add is as I said earlier, Customs was very good about consulting with the
trade, and there was a lot of consultation to their credit. But when we looked
60
61
62
Importer Security Filing and Additional Carrier Requirements, 73 Fed Reg. at 22, 6061.
Id.
See id. (the comment period was extended to March 3, 2008).
63
See U.S. Customs and Border Protections Today, Trade symposium assesses global
partnership to prevent terrorism,
http://www.customs.gov/xp/CustomsToday/2005/nov_dec/trade_symp.xml (last visited Sept.
30, 2008).
64
Id.

Cherniak & Ross—Moving Your Goods and Services Across the Border 229
at the notice of proposed rule making, there was one thing that jumped out at
all of us, and that was Customs threw in provisions for liquidated damages.
Now philosophically you have to ask the following question: If in deed this
program is intended for national security purposes, then how does assessing
liquidated damages after the fact protect national security? So with that, let
me throw it to Cyndee, and let us get the Canadian perspective.
MS. CHERNIAK: Well, the Canadian perspective is under development.
Recently, February 15th, we had Bill C-43 tabled in the House of
Commons. 65 I have another news brief on this, and it is an act to amend the
Customs Act. 66 The representative from the Canada Border Services Agency
spoke about this act yesterday, but the only thing she mentioned about this
act was it was expanding so the ability to stop individuals within the airport
who may be on the cleaning staff to see whether they are passing documents
to one another. Also in this act, Section 6 says that the governor and consul
may make regulations respecting the information that must be given. 67 And
so that is all we have in Canada at this moment in time that a Customs lawyer
would be able to say, oh, we are getting some advanced data element rules
coming through the pipeline, but there was not any discussion at the same
time about what the intentions were, that consultations were about to begin,
or anything like that. Even as of today I have no notice of consultations that
will take place, and I have no notice about the plan. And so this should be a
concern to everyone in the audience because you have no way of knowing
what information needs to be provided outbound from the U.S. into Canada
and inbound from the U.S. into Canada. And there is not a dialog currently
underway, and so I am raising a red flag saying we need to get to the table
and engage in the exact same process that the United States is engaging in.
We need the cooperation of the stakeholders in this process, we need
transparency, we need to make sure that the rules are balanced, which I am
heartened that in the United States it looks as though there is an attempt to
balance. There may not be all the listening that is required, but it is a process
hopefully underway and it will continue. But the other big concern that I
have is that a lot of the business between Canada and the United States is
between related parties. Well, if they have to update the IT requirements so
that this information can be captured in the computer system and
communicated to the governmental authorities, we need to be talking about
harmonization of the data elements. It should not be that Canada has different
data elements, and if you started out with 100-and-some odd elements and
narrowed it down to 10+2, Canada should not start with 100 data elements
65
Bill C-43, An Act to establish the Canada Customs and Revenue Agency and to amend
and repeal other acts as a consequence, 2nd Sess, 39 th Parl., 2008, (Can.).
66
Id.
67
Bill C-43, cl. 6.

230 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
and keep it at 100, there needs to be the harmonization between the two so
that it is one computer system that is bought for the parent and the subsidiary
on both sides of the border.
Hopefully, there can be some agreement or some method to agree that
these are the data elements that we need in order to assess the risk. But I am
concerned because we are talking in Ohio and we are talking in Ontario and
many other states and provinces about manufacturing jobs and the lack of
competitiveness of manufacturing in today's society and in today's business
economy environment. And if we create these rules that require companies to
go out and purchase two separate computer programs and hire a number of
people in order to monitor this information, you have got to provide it within
the right time frames, and it has to be correct. And if it is not correct, then
there will be, AMPS penalties, which is the Administrative Monetary Penalty
System in Canada, 68 there are similar penalties for incorrect information. So
incorrect six-digit HS classifications, incorrect origin declarations that we
need to somehow make sure that this does not lead to a lack of
competitiveness. That we focus not only on security but on the
competitiveness of the businesses that operate on both sides of the border,
and even inbound into both jurisdictions.
MS. ROSS: I do want to make clear that for the moment at least this 10+2
proposal, because it is not yet final, is focused on the OSHA 69 environment.
And I can tell you from the conversations we have had with Customs, there is
no doubt they are intending to roll it out in the other modes of transportation.
And if we are lucky, that means air next and land either shortly thereafter or
sometime thereafter. And for anybody that deals in the movement of goods,
we need look no further than the joys of what has been going on with the e-
Manifest to get a sense of just how disruptive any of these new programs can
be. And particularly bearing in mind as you were talking about data
elements, that depending on who you have do the analysis on this,
somewhere between four and eight of the data elements are not part of the
World Customs Organization 70 (WCO) say framework. The U.S. is
committed to getting the changes made, but of course the odds are that those
changes will occur in time after 10+2 has been rolled out. So that having
been said, I know we have C-TPAT next on our list, but I am not sure there is
a whole lot more we want to say. So why not talk about the First Sale Rule 71
68
Administrative Monetary Penalty System, http://www.cbsa-asfc.gc.ca/tradecommerce/amps/menu-eng.html
(last visited Sept. 30, 2008).
69
Occupational Safety and Health Administration, http://www.osha.gov (last visited Sept.
30, 2008).
70
See World Customs Organization, http://www.wcoomd.org/home_about_us.htm (last
visited Sep. 30, 2008) (“The World Customs Organization (WCO) is the only intergovernmental
organisation exclusively focused on Customs matters.”).
71
17 U.S.C. § 109 (2008) (the first-sale rule states that copyright holders may not control

Cherniak & Ross—Moving Your Goods and Services Across the Border 231
or the Purchaser in Canada Rule, 72 and then I will talk about what is going on
in the U.S. on that topic.
MS. CHERNIAK: When we talk about border issues which are the
overarching topic for goods, we look at two sides of the equation. One is the
security initiatives, and we have spent a lot of time talking about security
initiatives, but the Canada Border Services Agency has a second role, and
that is enforcement of revenue-generating laws, the collection of Customs
duties at the border and the calculation, whether or not the duties are
calculated on the correct transaction value for Customs duties purposes. 73
And we now have another cross-border issue that is coming through the
pipeline, and that is the First Sale Rule in United States. 74 But in Canada we
have had a Purchaser in Canada issue for a number of years in a position that
has been put forward by the Canada Border Services Agency at the WCO as
well, but it is whether or not the transaction value is the value between an
earlier stage transaction or the last sale before when the goods are brought
into Canada. 75 And so, you know, we had the harbor sales decision more than
15 years ago, and since then we have had legislation passed and a regulation
on what is a Purchaser in Canada. 76 And a Purchaser in Canada is defined in
our legislation–and I will not bore you with the details of the Canadian
legislation, because even though we have got rules, it is more of a matter of
the case law that is coming through the pipeline. The Canada Border Services
Agency does not like the decisions. There is still a lot of confusion. And the
case law is not necessarily resolving the issue, it may be throwing a little bit
more fuel on the fire, and it may be that more issues are coming out of the
woodwork than what has been expected. And we have got a number of cases;
I will just name a few of them. AAI Foster Grant, 77 there is a Faren Gonmo
case, Cherry Stix, 78 and the most recent one is the Pampered Chef 79 case that
distribution of their work beyond the first sale).
72
See COMMISSIONER OF CUSTOMS AND REVENUE, CUSTOMS VALUATION PURCHASER IN
CANADA REGULATIONS (CUSTOMS ACT, SECTION 48) (2001), http://www.cbsaasfc.gc.ca/publications/dm-md/d13/d13-1-3-eng.pdf.
73
About the CBSA, http://www.cbsa-asfc.gc.ca/agency-agence/what-quoi-eng.html (last
visited Oct. 1, 2008).
74
See 17 U.S.C. § 109, supra note 71.
75
Ronald C. Cheng & Peter Jarosz, Doing Business in Canada Customs Trade, OSLER,
Mar.14, 2008, http://www.osler.com/resources.aspx?id=8701.
76
Valuation for Duty Regulations, S.O.R./86-792 (Can.).
77
AAI.Fostergrant of Canada Co. v. Canada (Commissioner of Customs and Revenue
Agency), 2004 FCA 259, (2004), [2005] 3 F.C.R. D-13 (Can.).
78
Cherry Stix Ltd. v. President of the Canada Border Services Agency, 2007 FCA 274
(Can.).
79
The Pampered Chef v. President of the Canada Border Services Agency (13 February
2008), CITT Appeal No. AP-2006-048, online: CITT, http://www.citttcce.gc.ca/appeals/decision/ap2g048_e.asp.

232 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
came out this past year. And with the Pampered Chef, I will give you a little
bit of details for that case.
The company conducts home sales of cutlery and cooking utensils at the
home, and so you have the consultants who come into the home and have the
home party. Then the consultants place the orders, and there is a Canadian
Pampered Chef 80 and there is a U.S. Pampered Chef. 81 And the question was
for the Canadian International Trade Tribunal 82 to decide is whether or not
the transaction value for Customs duties' purposes was the value that
Pampered Chef U.S. and Pampered Chef Canada for that transaction, or was
it the transaction value between the Pampered Chef Canada consultant and
the final consumer. Because if it is between the Canadian company and the
final consumer, that includes the profit margin in Canada, so it is a higher
value. So when you apply a duty rate to the higher value, there are more
duties that are collected at the border. 83 And so when you look at the reason
why we are raising this in connection with this secure border issue is, one, it
is an area where disputes are occurring, but it also is where we kind of–I
believe–step back sometimes and say, well, wait a second. We are buying
into some of the security initiatives, the security taxes that are associated
with this and the cost of doing business is increasing. 84
But then on the other side, you have the exact same bodies raising
revenue, and there is a greater question as well, for fairness and transparency
on the revenue generation side because we bought into the security side of
the equation even though these two issues are not linked. And I should be
clear that the Purchaser in Canada issue is not a security-based issue, but it is
because the Canada Border Services Agency has both jobs, that we start to
question the motives, and maybe we do not feel as kindly sometimes towards
the positions that are being taken because it is a revenue generation issue. 85
But one of the important things for now is that Canada has this experience
with Purchaser in Canada. It is a mixed experience. U.S. is now getting into
the exact same issue, maybe not realizing the experience that we have had in
Canada. Maybe this is an opportunity for Canada to collaborate with the U.S.
and say, let us look at how you are proposing to go down this particular road
80
See The Pampered Chef, Ltd.,
http://www.pamperedchef.com/index.jsp?localeString=en_ca (last visited Oct. 1, 2008).
81
See id.
82
Canadian International Trade Tribunal – Mandate, http://www.citttcce.gc.ca/mandate/index_e.asp
(last visited Oct. 1, 2008).
83
Customs Act, R.S.C. 1985 (2d Supp.), c. 1 s. 48 (Can.).
84
See Steve Globerman & Paul Storer, supra note 2.
85
SENATE COMMITTEE ON NATIONAL SECURITY AND DEFENSE, BORDERLINE INSECURE
(2005), http://www.parl.gc.ca/38/1/parlbus/commbus/senate/com-e/defe-e/rep-e/repintjun05-
e.htm.

Cherniak & Ross—Moving Your Goods and Services Across the Border 233
because it has not been the best experience in Canada, and maybe you should
learn from our experiences.
MS. ROSS: Well, we have actually had a better experience with it though
the case law is fairly well-settled, but we will tell you that the reason that we
put this issue on the agenda is that on January 24th the Customs service
issued a federal register notice in which it has stated that it intends to revoke
the First Sale Rule. It is relying on the Technical Committee on Customs
Valuation Commentary 22.1 entitled Meaning of the Expression "Sold for
Export to the Country of Importation in a Series of Sales.” 86 And the holding
of the technical committee is that the last sale price governs. Now, the
Customs service in its philosophical explanation for why it wanted to make
this change said it is concerned about the collection of selling commissions,
or I should say the duty on selling commissions, royalties, and assists. That
having been said, we have case law going all the way back to 1967 in which
the courts have consistently held that as long as you can establish the first
sale was a legitimate sale to the U.S., that that is a valid basis upon which to
pay the duty. 87 Now most everybody knows this principle from the Nissho
Iwai case 88 which occurred in 1992, but the basic law is very clear about the
experience. We have not been all over the board. That having been said, you
made a very important point, Cyndee, which is that in the environment where
the rates of duty are dropping dramatically and where the average rate of
duty at least in the U.S. tariff remains somewhere around 4 or 5 percent, what
we are beginning to see and have seen for a number of years is that the
volume of dollars collected as duty have gone up dramatically. 89
And so there is a perception I think it is fair to say at least in the Customs
bar, if not the trade community as a whole, that this is not really an issue of
compliance, this is not really an issue of, oh, we think we should be more in
line with the rest of the world. We think this is really more an issue of raising
yet more revenue. 90 And I think we have to be honest. We are going to–If we
have time at the end–return to the question of globalization guiding
compliance, but I think part of this issue is also recognizing the politics of the
hill and how responses are received favorably or less favorably related at
least in part to how much money did you make for the government this year.
So what is our next topic?
86
Proposed Interpretation of the Expression “Sold for Exportation to the United States” for
Purposes of Applying the Transaction Value Method of Valuation in a Series of Sale, 73 Fed
Reg. 16, 4260 (Jan. 24, 2008).
87
United States v. Getz Bros. & Co., 55 C.C.P.A. 11, C.A.D. 927 (1967).
88
89
Nissho Iwai American Corp. v. United States, 982 F.2d 505 (Fed. Cir. 1992).
World Trade Organization – Trade Profiles,
http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Language=E&Country=US
(last visited Oct. 3, 2008).
90
See SENATE COMMITTEE, supra note 85.

234 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
MS. CHERNIAK: Next topic is Product Trade Safety.
MS. ROSS: We are going to turn to product safety.
As many of you know at the end of last year, we had a number of
instances in the U.S. of product safety issues, some of them food, some of
them pet food. 91 Obviously if you followed this at all, you saw Mattel do a
huge mea culpa relative to lead in toys from China. 92 I thought it was
interesting that in yesterday's USA Today 93 there was an announcement that
there are–the last time I looked on Thomas, which is the place that you go to
look at what is going on in Congress, there were something like 400 bills that
had been introduced that had something or other to do with reforming food
safety. 94 And so yesterday, the Congressman Dingell, 95 who is the head of the
relevant congressional committee, introduced a bill called the Food & Drug
Administration Globalization Act of 2008. 96
Now if you follow the issues at all with what is going on with our Food &
Drug Administration, you know that one of the huge criticisms against the
agency besides the fact that it has been wholly ineffectual for a variety of the
reasons that we can discuss probably best done over drinks because it is a
very philosophical discussion, but nonetheless one of the more objective
criticisms of the agency has been that much of its budget comes from user
fees that are paid to it by those that it regulates. 97 And yet a very large part of
this bill that has just been introduced is a $2,000 per facility per year fee for
food facilities overseas to be registered with the Food & Drug Administration
in part, the presumption is because the FDA needs the funding to be able to
go and inspect these facilities. 98
The statistic that has been handed out is that it is able at best to review or
inspect a facility once every ten years. And if you follow at all the pet food
91
See, e.g., Press Release, U.S. Food and Drug Administration, Mars Petcare US Issues
Voluntary Recall of Everson, PA Plant Dry Pet Food Product due to Potential Salmonella
Contamination (Sep. 17, 2008),
http://www.fda.gov/oc/po/firmrecalls/marspetcare09_08_rev.html.
92
See Louise Storey, Lead Paint Prompts Mattel to Recall 967,000 Toys, N.Y. TIMES,
Aug. 2, 2007,
93
See USA Today, http://www.usatoday.com/ (last visited Oct. 3, 2008).
94
Julie Schmit, FDA Fees Eyed to Boost Safety, USA TODAY, Apr. 2, 2008, at B6.
95
See Congressman John D. Dingell – Representing Michigan’s 15 th District,
http://www.house.gov/dingell/bio.shtml (last visited Oct.7, 2008) (Congressman John D.
Dingell represents Michigan’s 15th Congressional District and is the Chairman of the Committee
on Energy and Commerce).
96
FOOD &DRUG ADMINISTRATION GLOBALIZATION ACT OF 2008 (2008), available at
http://energycommerce.house.gov/FDAglobalact-08/dingel_60AXML.pdf.
97
Richard A. Deyo, Gaps, Tensions, and Conflicts in the FDA Approval Process: Implications
for Clinical Practice, 17 THE JOURNAL OF THE AMERICAN BOARD OF FAMILY PRACTICE 142
(2004).
98
See Julie Schmit, supra note 94.

Cherniak & Ross—Moving Your Goods and Services Across the Border 235
melamine issue 99 and so on, you know that a lot of the question came down
to what exactly was the facility that was making the melamine, which is the
wheat gluten ingredient. And frankly you have to ask the question whether
any of this would have made any difference. But that having been said,
because of the very natural and understandable and frankly quite correct
concern on the part of most average Americans, President Bush formulated
an interagency working group on import safety. 100 It was established July 18,
2007, and its action plan came forth in November 6, 2007.
I think perhaps one of the most startling things that came out of the report
was a set of statistics that I think are very short but worth mentioning, and
that is that more than half of all imports come from one of five countries,
Canada, China, Mexico, Japan, or Germany. 101 Now that is a pretty
staggering statistic in and of itself, but here's the one that for most of us that
are in the trade, we kind of went, huh? Customs has a database of
approximately 825,000 importers. 102 45 percent of them were one-time
importers. 103 35 percent of them import two or ten times a year. 104 So picking
on Ford because they are in the room or RIM because they were in the room,
they are probably amongst the remaining 20 percent which are the frequent
importers. Now I have to admit there was a lot of skepticism about what the
interagency working group was going to be able to accomplish because one
of its mandates was to do more with no additional funding. 105 So do more
with what currently exists. And frankly whether you look at the Western
Hemisphere Travel Initiative or some of these other actions, what you find is
that Congress mandates more and more for the agencies to do and does not
fund it. 106 And at this point at least the last count I saw was that U.S.
Customs is enforcing the law on behalf of something like 40 different
agencies. 107
99
Press Release, U.S. Food & Drug Administration, Pet Food Recall (Melamine)/Tainted
Animal Feed (Feb. 6, 2008), http://www.fda.gov/oc/opacom/hottopics/petfood.html.
100
See Import Safety, http://www.importsafety.gov (last visited Oct. 3, 2008) (The Interagency
Working Group on Import Safety conducts a comprehensive review of current import
safety practices and determines where improvements can be made).
101
INTERAGENCY WORKING GROUP ON IMPORT SAFETY, ACTION PLAN FOR IMPORT SAFETY
(2007), http://www.importsafety.gov/report/actionplan.pdf.
102
Id.
103
104
105
Id.
Id.
See Import Safety, supra note 100.
106
See Clark G. Radatz, WISCONSIN STATE LEGISLATURE, FUNDING STATE AND FEDERAL
MANDATES (1996), http://www.legis.state.wi.us/LRB/pubs/ib/96ib3.pdf.
107
U.S. Customs and Border Protection, Prohibited and Restricted Items,
http://www.cbp.gov/xp/cgov/travel/vacation/kbyg/prohibited_restricted.xml (last visited Oct.
7, 2008).

236 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
So that having been said, what came out of the working group was a
series of recommendations. There are some hopeful things in the report. One
of the difficulties of dealing with the Food & Drug Administration has been
that it only will take information from its laboratories. And there are at least
intelligent discussions going on now about third-party certification. There are
discussions in terms of making the so-to-speak civilians; the American public
feels more comfortable, so there are discussions about making available
information about who are certified firms who are certified importers. 108
There are questions about the wisdom of that because any time you associate
yourself with being on the good guy list because of all these extra steps that
you have taken–as we have heard at least one comment yesterday–there are
those who feel that they have become a bigger target. But certainly there are
some things that will be done and can be done,–we are going to talk later
about reasonable care, but I think it is worth when we get to that subject to
return to the pet melamine case. But what I do want to also talk about in the
import safety context is what we are hearing from both Customs and the
Food & Drug Administration in terms of their short-term goals. They want to
move forward on this particular presidential initiative. 109 From the Customs
perspective, we are hearing that they want to develop a "good guy list."
Now exactly what that means, we do not know, and there are lots of
possibilities in that arena, but they are at least talking about that. They are
certainly talking about enhancing the automated targeting system, and what
that is simply is the Customs computer into which they feed all of the
information they have from an intelligence perspective, and then match that
to an individual's shipment, and from that you get a targeting score. 110 Now I
cannot tell you that these numbers are accurate. These are certainly numbers
that when they first started talking publicly about the ATS, these were
numbers that they used. If you get to 150, you are automatically going to be
inspected. If you are between 100 and 150, it kind of depends, and that is
where C-TPAT comes in.
One of the things you heard me say when I talked about 10+2 was that the
importer would provide his IRS number. C-TPAT benefits are tied to the IRS
number. One of the reasons Customs has said they have not been able to give
more C-TPAT credits in the targeting systems is you do not report your IRS
number until you file your entry. So if you are getting the 25 or 50-point
credit for C-TPAT membership, you are not getting it in the targeting system
unless they are targeting off the entry which does not typically happen.
108
Third-Party Certification Programs for Foods and Feeds; Request for Comments, 73
Fed. Reg. 64, 17990 (Apr. 2, 2008).
109
Id.
110
See Phil Landfried, supra note 52,

Cherniak & Ross—Moving Your Goods and Services Across the Border 237
Customs is also looking at data needs. 111 They are looking at doing audits.
They developed something called the Quick Response Audit where they
were going in on IP and Ag and a couple of other issues to just go into a very
abbreviated audit and very quickly determine whether or not an importer was
compliant. 112
So they are talking now about expanding those quick audits into the
import safety arena. They are talking about joint operations; they are also
talking about good importer practices. They are also doing what we would
hope that they would do, which is they were looking at incentives, they are
looking at sharing information with the trade, and there is a special program
made available to importers called the importer self-assessment, and they are
looking at making import safety a portion of that. Our Food & Drug
Administration has sort of been in the impossible situation of not really being
able to move forward. And that came because they had a number of
proposals about reforming out, and they just got completely stomped on with
the plethora of bad press that followed all of these food contamination
problems. But we do know at this point at least that their agenda includes that
they want to have more joint efforts among all of the agencies, which I think
we would all welcome. They are looking to seek solutions although we do
not know exactly whether they have posed the right questions. They are
certainly still looking at transforming their Office of Regulatory Affairs, 113
which is the part of the agency that deals with their import operations. 114 But
a lot of what they are going to be able to do is going to depend entirely on
what happens on the hill. So what is going on in Canada on that topic,
Cyndee?
MS. CHERNIAK: Well, we actually just recently had two bills that were
tabled in the House of Commons, 115 one is Bill C-51 116 which is our
equivalent Food & Drug Act amendments. 117 And we also have the Bill C-
111
U.S. Customs and Border Protection, Audits (Regulatory Audits),
http://www.cbp.gov/xp/cgov/trade/trade_programs/audits/ (last visited Oct. 7, 2008).
112
See U.S. Customs and Border Protection, Quick Response Audits,
http://www.cbp.gov/xp/cgov/trade/trade_programs/audits/quick_response.xml (last visited
Oct. 7, 2008).
113
See Office of Regulatory Affairs, http://www.fda.gov/ora/hier/hfc1.html (last visited
Oct. 7, 2008).
114
See ORA Imports: FDA Import Program System Information,
http://www.fda.gov/ora/import/ora_import_system.html (last visited Oct. 7, 2008).
115
Parliament of Canada, http://www.parl.gc.ca (last visited Oct. 27, 2008) (The House of
Commons is the elected lower house of the Canadian Parliament responsible for originating
bills giving rise to statutes).
116
Bill C-51, An Act to Amend the Food and Drugs Act and to make consequential amendments
to other acts, 2 nd Sess., 39 th Parl., 2008 (Can.).
117
Id.

238 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
52 118 which is for product safety. So we have got Food & Drug safety in one
statute, and consumer protection in a different statute.
And what we have is it is not the Canada Border Services Agency at this
point in time that is contemplated as administering. It is the Minister of
Health 119 and the Ministry of Health. 120 So we run the risk if we do not plan
this out properly of having a disconnect between the main department at the
border and the agencies that are enforcing this legislation, and the
communication between the departments, and the sharing of information. But
a number of new prohibitions show up in these statutes and go on for a
number of pages, but it states no person shall import unsafe food or food that
has been prepared in unsanitary conditions. 121 We also have in the food and
drug statute an anti-counterfeiting provision. 122 However, how do you
counterfeit food? I do not know.
MS. ROSS: I can tell you how you do that.
MS. CHERNIAK: But that being said, that same provision is not showing
up in our consumer protection statute which, you know, raises a red flag to
me. 123 You know, is not a counterfeit toy or a counterfeit baby stroller more
dangerous than the possibility of counterfeit dog food? It is a question, but
why is it in one and why is it not in the other?
So that is, you know–and there are many other negatives within the
prohibitions, but I will switch to the positive. What we do have in each of
these new statutes is a due diligence defense. 124 And typically we have a due
diligence defense that has evolved under common law in Canada. It typically
is not put within the statute because it exists as a matter of right.
However, I am heartened to see that the due diligence defense is clearly
stated to exist in the offense provisions and under Canadian law, especially in
the GST context, 125 we actually have significant volume of case law on what
it means to act in a duly diligent manner. 126 But it makes complete sense in
118
Bill C-52, An Act respecting the Safety of Consumer Products, 2 nd Sess., 39 th Parl., 2008
(Can.).
119
See Minister of Health and Minister for the Federal Economic Development Initiative
for Northern Ontario, http://www.hc-sc.gc.ca/ahc-asc/minist/index-eng.php (last visited Oct. 7
2008) (The Minister of Health is responsible to Parliament for some 20 health-related laws and
associated regulations that govern the overall programs and policies of the Department).
120
See About Health Canada, http://www.hc-sc.gc.ca/ahc-asc/index-eng.php (last visited
Oct. 7, 2008) (Health Canada is the Federal department responsible for helping Canadians
maintain and improve their health, while respecting individual choices and circumstances).
121
Bill C-51 § 4.
122
See id. § 15.
123
Consumer Protection Act, 2002, S.O. 2002, c. 30, Sch. A, (Can.).
124
See, e.g., Consumer Protection Act, S.S. 1996, c. C-30.1 § 26(1)(Can.).
125
See James Warnock, GST Due Diligence, CANADIAN TAX HIGHLIGHTS, Apr. 27, 1997,
http://www.ctf.ca/articles/News.asp?article_ID=231.
126
See e.g., R. v. Sault Ste. Marie (City) [1978] 2 S.C.R. 1299 (Can.).

Cherniak & Ross—Moving Your Goods and Services Across the Border 239
my point of view to actually highlight due diligence and a due diligence
defense because these two pieces of legislation carry significant, significant
penalties for failure to meet the obligations or to breach the statute because of
the significant penalties. 127 For some unlimited amount of penalties, there is
no cap. 128 For some the cap is in the millions of dollars. 129 It requires
companies, importers, manufacturers, retailers, and advertisers to act in a
duly diligent manner and pay attention. And this is a top-down mentality now
from the government hopefully into the heads of corporations because of the
amount of money that is at stake flowing down through the chain of
command within organizations that you have up front. Maybe we should not
be offshoring some of our production, or when we do offshore, quality
assurance is important. We need to ask the questions, we need to have checks
and balances in place so that we do not end up being prosecuted at a later
point in time. So the more actions that are in a duly diligent manner, the less
likely there is going to be a problem that will arise because it will be caught
earlier on in the process. This just goes to say that there is a real need now
for corporations to reconsider their own internal codes of conduct, their own
internal policies and procedures and their own internal training. 130
Their own internal accountability so that even the people at the lowest
levels of the organization all the way up to the highest levels take the
ownership of this issue and do act in a duly diligent manner and to look out
for the safety and welfare of the people at large. 131 So that is, you know, a
real benefit that flows out of the legislation, but there needs to be dialog.
There needs to be reasonableness even on the behavior. And we have to
balance compliance with revenue generation. And as soon as it turns to a
view, perceived view that this is more a revenue-generating opportunity
through license fees because you have to get licensed or the penalties are
getting too high on an administrative basis, and then we are not going to have
the buy-in on the compliance. It will look to be that, you know, it is the
legislation itself or the behavior of the enforcement officials are not for the
proper purpose, so there needs to be some coordination and discussion of this
now so that everyone can buy in because they see it is going in the right
direction.
127
See generally N.J. Strantz, Beyond R v. Sault Ste. Marie: The Creation and Expansion of
Strict Liability and the “Due Diligence” Defence, 30 ALTA.L.REV. 1233 (1992).
128
Id.
129
Id.
130
See generally Jim Miller, The Need for Due Diligence, PHARMACEUTICAL TECHNOLOGY,
May 2004,
http://pharmtech.findpharma.com/pharmtech/data/articlestandard//pharmtech/192004/94551/ar
ticle.pdf.
131
Id.

240 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
MS. ROSS: Well, we have a standard in the states called reasonable
care. 132 It has been enacted in the statute since the end of 1993. 133 It was the
second half of the NAFTA bill. And there are a number of cases that deal
with it, one being Heartland, another one being Pan Pacific, 134 and the third
one being Goldenship, but I think it is worth talking instead about that
melamine case again. In simplest terms, what our reasonable care standard
says is that as an importer you are expected to know enough about what you
are doing, and how its documented that at the time your entry is filed, you
have the right classification, the correct value, and any admissibility issues
that are necessary have been properly addressed, and the product is legal to
import. 135 Now against that backdrop, the company that imported the wheat
gluten that went into the pet food that was contaminated is a company called
ChemNutra. 136 They are located in Las Vegas. They are currently under
indictment in Kansas City. Now there are two parts to this indictment. The
first part frankly was expected and is sort of a no-brainer, and that is the part
of it that has to do with the FDA violations. If you import a product that is
misbranded, if you import a product that is adulterated, it is a strict liability
misdemeanor. 137 Well, that was 13 counts, and the reason it is in Kansas City
is that is where the entries were filed. What makes the case interesting and
what I think really has sent a shiver through some people's spines, at least
mine included, is the other count which is the wire fraud count.
Basically the Prosecutor, the U.S. attorney in Kansas City 138 has said–I
know I will give you the facts on which he was basing it, and you can make
your own decision–that the American importer and the Chinese exporter
colluded to conceal the true nature of the product from the consumers, and as
a result of the e-mail traffic and the money that was wired back and forth,
there is wire fraud. 139 Now, if I told you nothing else, you would say, oh,
well, they must have exchanged these ideas about, well, let us conceal what it
is and let us not declare it correctly, and let us make sure that nobody knows
that this is bad product, and that is not at all what happened. Remember I said
reasonable care under the American statute says you know what you are
132
See Cohen & Grigsby P.C., What Importers must know to comply with the Reasonable
Care Standards Apr. 24, 2002, http://www.cohenlaw.com/news-articles-100.html.
133
North American Free Trade Agreement Implementation Act (NAFTA), Pub. L. No. 103-
182 tit. VI, 107 Stat. 2057 (1993).
134
United States v. Pan Pacific Textile Group Inc., 395 F. Supp. 2d 1244.
135
See Cohen & Grigsby, supra note 132.
136
See ChemNutra, http://www.chemnutra.com/ (last visited Oct. 14, 2008) (ChemNutra
imports quality ingredients from China to the U.S. for the feed, food and pharmacy industries).
137
Federal Food, Drug, Cosmetic Act, 21 U.S.C. § 343(a) (1) (2007).
138
United States Attorney for the Western District of Missouri, John F. Wood,
http://www.usdoj.gov/usao/mow/aboutus/usattorney.html.
139
See http://i.usatoday.net/money/pdfs/miller_indictment.pdf

Cherniak & Ross—Moving Your Goods and Services Across the Border 241
importing. Or at least you make a reasonable effort to get it right. Well, here's
what happened. And bear in mind that the husband and wife that owned
ChemNutra, she is a Chinese woman, and she holds herself out–and keep this
in mind as well–as an expert on Chinese management. 140 Notice I did not say
Chinese export laws. Here's what happened. The Chinese exporter classified
the goods on the export documents under a provision in the tariff under
Chapter 35. 141
The information arrives at that American importer, and the American
importer goes back and says hang on a minute, that is not the right
classification. I think it belongs under Chapter 19. And so there is that back
and forth over what is the right classification. That dialog in that e-mail is the
primary basis upon which the Prosecutor in Kansas City is proceeding. Now
in fairness, to give you a little bit bigger picture, there is also an allegation
that the seller in China was not the manufacturer, which as we all know, if
you do anything with China is not uncommon. And because the American
company represented to its buyers that it was dealing with its manufacturer
and was actually dealing with an intermediary–which is an authorized export
company–that added to it. But the fundamental point to be made is that the
importer did exactly what the importer was supposed to do in exercising
reasonable care, and is now being prosecuted for that action. Now, I say that
having been given the two-minute sign about 30 seconds ago that I think it is
fair to say that this is a good example of a political prosecution. Somebody
needed to pay the price, could not get after the Chinese exporter, and so we
end up with an American company. I think in the end, they will win the battle
and lose the war, meaning that they will defeat the wire fraud count, but the
company will have been put out of business in the process.
MS. CHERNIAK: We had three topics that we wanted to cover, and one's
counterfeit goods, trans-shipped goods, and circumvention, which all kind of
tie together, and it kind of goes towards breach of security measures that we
have been talking about by these sorts of activities, so it makes perfect sense
that there are penalties associated with it. 142
DR. KING: Well, we need some time for questions.
MS. CHERNIAK: Absolutely, Henry. But the one thing that we wanted to
raise is on the counterfeit goods. There is a discrepancy between Canada and
the United States because we do not have the same laws as the United States,
and I am going to bounce this off to our moderator to talk about that for a
moment.
140
See Chem Nutra – Principals, http://www.chemnutra.com/pricipals.htm (last visited Oct.
15, 2008) (describing Sally Miller’s experience in China).
141
Id.
142
See N.J. Strantz, supra note 127.

242 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
MS. ALZETTA-REALI: Well, what we do is on the U.S. side of things,
the Coca-Cola Company relies on Customs because what we do is we record
our trademark ownership and our copyright ownership, and they do actually
frankly a very good job, and calls come through. What I have noticed, there
is just a lack of any sort of equivalent in Canada, and I hope that they start
working towards something like recordation to assist us. And so it is very
haphazard, and I may get a call either from the RCMP or sometimes from
Customs because shipments have come through, and they have noticed that
there are trays that have Coca-Cola plastered on them and they do not know
whether or not they are counterfeit. And it is just quite haphazard as to
whether or not we can do anything effectively to stop them from coming in
because I have no idea unless I have gotten the call or unless somebody else
brings it to my attention where it is in the U.S. because of the recordation on
the Customs controls. It is more effective, and we work very well in ensuring
that those things do not come through. I know that we need to go to question
and answers, and so I am going to put it out to the floor to raise any questions
they have for our speakers.
DISCUSSION FOLLOWING THE REMARKS OF CYNDEE TODGHAM
CHERNIAK AND SUSAN KOHN ROSS
MR. VANDEVERT: Susan, you said that the 10+2 rule builds on past
security initiatives?
MS. ROSS: Well, that is Customs climbing their way up.
MR. VANDEVERT: Okay. Well, that is the difference. What is your
explanation of how it builds?
MS. ROSS: I do not think it does. In fact, I was one of the authors and
editors of a number of the papers that went in which basically said to
Customs this is not the way to do it.
MR. VANDEVERT: Okay. Because my presentation had actually said
this is a nondiscriminatory assessment method, it does not–it neither has the
ability to make any kind of security risk assessment simply because it treats
all shippers, all importers, and all shipments exactly the same, it requires
exactly the same amount of information no matter how many times it made a
shipment.
MS. ROSS: Right.
MR. VANDEVERT: So there is no intelligence in the method. I mean
there is no way for this process to develop intelligence and knowledge about
all of the shipments coming in. Every single shipment is analyzed exactly in
the same way every single time.
MS. ROSS: And one of the things that was done by a number of the trade
associations– and Paul, I know you are aware of this–Customs is forever
looking for benefits for C-TPAT. And so the trade community through a

Cherniak & Ross—Moving Your Goods and Services Across the Border 243
number of organizations said, okay, here's a chance for you, Customs, to give
a benefit. Allow C-TPAT importers who for the most part deal with the same
parties all the time to give you their information at the aggregate level, and
then tell you what is unique about a given shipment. C-TPAT companies
should be exempt, but Customs' answer to that was we are not exempting
anybody. Of course then they turned around and invented Balcarta. So there
is a real dichotomy here, the trade associations were actually willing to have
enough guts to stand up and say hang on, this is not the way to do this.
MR. VANDEVERT: The other thing I wanted to kind of more or less
comment on is that we they expect the final rule to be implemented this
summer. I believe that through NAM, the National Association of
Manufacturers, OMB has stepped in and has said that they have enough
evidence to regard this and that there was a procedural status of the rule that
Customs said it was not a significant rule because it did not have…
MS. ROSS: Not a significant economic impact, right.
MR. VANDEVERT: And it was well-known that OMB had questioned
them on that, that they had concerns, but that they had stood down because
Customs insisted that it was not a significant rule, and that they had done
sufficient economic impact analysis. OMB apparently now has said we have
enough evidence that it is a significant rule, and that even if the Customs did
not do anything about the rule, that the implementation will be delayed
because the significant rule economic analysis is…
MS. ROSS: Significant economic impact.
MR. VANDEVERT: Much more extensive than what Customs has done?
MS. ROSS: Let me lead up to the answer to the question. Just so you are
all aware, what happened is that when you do opposed rule making, part of
the process is that you have to do an economic impact study. And in its
infinite wisdom, Customs went to an outside group that gave them back a
report in which they said–and I quote–that the impact would be somewhere
between 28 and $38 a shipment. And on that basis, it was not a significant
impact. And we all kind of looked at it and varying companies gave varying
scenarios. But it seemed pretty clear, number one, that there had been
absolutely no concession or consideration given for what it was going to cost
the private industry, the private sector to reprogram its computers. And that
there was absolutely no consideration given to the disjointing that was going
to occur in the supply chain. And we were not frankly convinced–and I used
"we" advisably–collectively, I did not see any–studies, where anybody really
felt that there was a proper economic impact on Customs alone because they
are talking about having this work off their old computer system. And you
know, I kiddingly say that there are five people in the country that know how
to program in COBOL, and they are all locked under the Reagan Building
because we cannot let them go because they are the only ones that know how
to program the computer. So if indeed–and I have heard very conflicting

244 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
issues about just how serious OMB is about this. But if as you suggest, Paul,
OMB has finally stepped in and said, you know what, we are just not going
to write–we are not going to sign off on this until we are satisfied this
economic study is done correctly, absolutely, it is going nowhere.
Somewhere it is going to happen only if DHS and OMB sign off, and if
OMB will not sign off, it is going nowhere.
MS. CHERNIAK: And I am going to raise the red flag. From the
Canadian perspective, we have got a statement that is in a law that is going to
be passed just saying that the regulations can be generated by the Governor
in Council. 143 The Governor in Council in Canada is the Canadian Cabinet. 144
The Canadian Cabinet does not need legislative approval in order to pass
these laws nor is there a requirement such as rule making requirements that
Sue just spoke about, so we run a risk. I am not saying that it is going to
happen. I have no knowledge what will or will not happen, but it is entirely
possible that the regulations might get published with a date in the future, but
there is not a consultation process prior to all of this. And if we look to what
Susan's been talking about, it is much more of an issue in the United States
than–you know, envisioned when they started this process, and as the process
has gone down the road, it is becoming a bigger and bigger issue. I am
hoping that we will learn from that experience, and, not act too hastily.
MS. ROSS: Well, I can tell you in fact that as we sat with the folks from
the governments, and they started–again, to their credit, they put out a straw
man proposal in which they basically describe what they wanted to do and
the data elements and how they wanted to do it, and they consulted with this
public private partnership that they are obligated under law to consult with.
And I cannot tell you how many phone calls we had, but we ended up in a
two-day session in Houston, and essentially we told them they were crazy.
Now, I will admit we did it tactfully. We did it nicely. But we told them they
were crazy. And the committee ended up giving them–I think it was 37
recommendations. And again depending on exactly who you get the story
from, there is only somewhere between five and 15 that were even
considered or commented upon, so where is this all going to go? Who
knows?
MS. IRISH: Maureen Irish from Windsor. Just a brief comment on the
Sell For Export issue, Purchaser in Canada issue. I wonder if there are some
aspects of this related to discussions at the World Customs Organization
concerning with how to deal with multinationals' related party sales. This has
been a major concern of developing countries and some of their criticisms of
143
See GOVERNMENT OF CANADA, PRIVY COUNCIL OFFICE, GUIDE TO MAKING FEDERAL
ACTS AND REGULATIONS, http://dsp-psd.pwgsc.gc.ca/Collection/J2-8-2001E.pdf (last visited
Oct. 27, 2008).
144
Id.

Cherniak & Ross—Moving Your Goods and Services Across the Border 245
the Customs valuation agreement. I am wondering if the slide between
transaction value sale for export and what should have been productive value
in fact relates to a fear of price manipulation by related parties.
I know I am using too much vocabulary that will need to be explained to
other members of the audience, but I will leave that to the trade law experts
on the panel.
MS. CHERNIAK: I have not been at the meetings at the WCO. I was at a
meeting with the Canada Bar Association and the Canada Border Services
Agency a couple weeks ago or a week ago, and we do not usually report
what takes place in that room. However, I think that it is fair to say that
Canada has put the proposition forward to the WCO because Canada in
harbor sales continues to take the position that it should be a higher value
sale because you cannot necessarily accept or deem as reliable the transaction
value that is selected by related parties. But it is something that Canada has
been pushing forward in. I think that Canada's in full support of it being at
the higher value with trying to get other countries to agree with that
particular position. But beyond that, I do not have any information, and I
would be misleading the audience here today if I was to suggest that I know
something more.
MS. ROSS: Let me answer the question a little bit differently, and I will
sort of divide it into two. First of all, if you take what the Customs service
and the U.S. said in the federal register notice, the WCO has spoken. Bearing
in mind that for most countries, the duty that they collect is the major part, if
not almost all of the revenue that the country has. It is not surprising that the
WCO came down on the side of saying it is the value of the last sale. Your
question, however, really turns the discussion to this whole question of
related-party transactions, and you are right. This has been an issue that has
been a thorn in everybody's side. Not helped by the fact that at one point, a
couple of professors did a study for a tax analysis on whether or not the price
used between related parties– which is called the transfer price–was in fact
fairly close or at least reasonably close to an arms-length price. And they–
surprise, surprise–came to the conclusion that it did not. And it was off by a
rather significant number. Now, what was interesting about all of that was
not that the study came out the way it did because that was pretty much what
everybody expected, but that the IRS, our Internal Revenue Service, did
something fairly interesting, they hired the two guys as consultants. So if you
work for or you represent a large company that has multiple offices in
multiple countries, do not be surprised why they are looking at your transfer
price yet again.
MR. VANDEVERT: I would call into question the providence of the
WCO commentary precisely because it is actually not an issue. The first sale
issue has never been a major issue for most of the countries of Customs
because under the valuation code it is completely appropriate simply to

246 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
require that the dutiable value be the invoice presented by the importer at the
time of the importation in the respective country.
MS. ROSS: But that is not the first sale invoice, that is the last invoice.
MR. VANDEVERT: That is correct.
MS. ROSS: Yeah.
MR. VANDEVERT: But a commentary we need to consider, the
commentary is usually issued when a legitimate question–when more than
one custom service have a question as to what the correct interpretation of
the provisions of the valuation code are. In this case, the first sale has been
raised by four countries, and interestingly enough, the four countries were
only in those countries in which you can judicially challenge–receive judicial
review of Customs Administration's decisions. The custom services
throughout the world have uniformly determined that they do not even
recognize first sale, it is not a good idea, and it is not going to happen. The
four countries with the one exception of the EU, I do not know the entire
history, but there are only four jurisdictions that have addressed first sale,
and in each one, the courts expound that the first sale principle applies.
Canada effectively repealed it with the resident importer statute. The EU has
implemented first sale by regulation. The United States and New Zealand are
the other two countries that we have judicial decisions holding that first sale
applies.
The question I have, I regard it as extremely serious. People should be
questioning CBP as to exactly how it came to be the 22.1. I will put it into
the category of maybe grant conspiracy period. I believe that CBP went to–
that they obtained 22.1 for the express purpose of bringing it back to the
United States to propose the repeal. And it would not be the first time. They
have actually been caught doing this on tariff classification. I do not know
the case. I know there were articles, that they had gone and obtained
explanatory notes on classification to turn around and come back and attempt
to tell the U.S. courts that the explanatory notion should supersede their longstringed
decisions on tariff classification.
MS. ROSS: I will not necessarily feed into your grand conspiracy theory,
but I will tell you that there is at least a rumbling in the trade bar that all of
this is the doing of one particular individual who will go nameless…although
I will tell you who it is later.
MS. ROSS: And that the reason that this may succeed is because nobody
in Customs understands value except maybe the auditors. And so you may
just have a whole bunch of people sign off on it because they really do not
understand the significance of it, and this is yet another area where it is really
important that the private sector weigh in.
MS. CHERNIAK: And they mention what has been going on in Canada
for a number of years, that it is not so simple, and it is not necessarily going
to lead you to the result where you want to end up.

Cherniak & Ross—Moving Your Goods and Services Across the Border 247
MS. PAWLUCH: Catherine Pawluch, Toronto. Just a point of
clarification on the 10+2 when it is implemented. I think you suggested that
first implementation or roll out will be in respect to ocean shipment.
MS. ROSS: Correct.
MS. PAWLUCH: To the extent that the containers arrive at the port, the
Canadian ports, Vancouver, Prince Rupert, Halifax, and then the Canadians
are destined for the U.S. by way of truck, is this 10+2 rule going to be
applicable?
MS. ROSS: At this point the answer to that probably would be no because
it has ocean cargo arriving in Canada. However, because I know about a lot
of the ships, Vancouver's the last port on the rotation rather than the first. So
to the extent that it is fraud or freight remaining onboard, there are some data
elements that the steamship line will have to transmit that will allow the
cargo to stay onboard, but the full complement of 10+2 would not in that
scenario kick in until it applied to the land or the…
MS. PAWLUCH: The rail.
MS. ROSS: Right.
MS. CHERNIAK: But again, I raise the red flag that there is a concern
that if there are different elements that are required, if a vessel came into
Vancouver, whose law are they supposed to apply? You know, which law is
applicable in this situation, or do you just combine the two?
MS. ROSS: Well, I have got a better question. Why cannot we get to the
point where there is just one transmission?
MS. CHERNIAK: Harmonization.
MS. ROSS: Harmonization, exactly. You got me with a Canadian accent
now.
MS. ALZETTA-REALI: Okay. I think we can adjourn.
DR. KING: Good session.
(Session concluded)

BALANCING CANADA-UNITED STATES SECURITY AND
ECONOMIC COMPETITIVENESS: THE GREAT LAKES AND ST.
LAWRENCE RIVER
Session Chair – Douglas McCreery
Speaker – Rear Admiral John E. Crowley, Jr.
INTRODUCTION
Douglas McCreery
MR. MCCREERY: My name is Douglas McCreery, and fortunately my
only role here is to introduce Admiral John E. Crowley, Jr. It is a
distinguished career; it is a career that one could easily fill this hour
discussing the Admiral's progress to this point.
He is the Commander, Ninth Coast Guard District, and the Operational
Commander for the Great Lakes region. He leads over 7,700 regular reserve,
auxiliary and civilian men and women in the field. And I could go on. There
is that excerpt there in your materials.
Something that is not in the materials is that his career began as a J.A.G.
attorney, and it is an example to the young lawyers in this room, or of those
who are about to be lawyers, that there are alternatives to practicing law in a
law firm.
And much of the materials that you heard yesterday and the first half of
today go to the thickening of the border, but in the field, there is an actual
thinning of the border as we go through the process of dealing with both
regulated activity and unregulated activity.
I caught an article in the Globe in February, and I thought as a way of
giving the Admiral a place to start from, I would just read briefly from it:
“A tangle of conflicting laws on both sides of the border is tying the
hands of joint Canada-U.S. border squads undermining the efforts to
nab international criminals, says a newly-released report. Team
members cannot radio one another. They have to surrender their side
arms when crossing into the other country. And there are forbidden
249

250 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
from crossing the Canadian-U.S. border except at official stations even
though criminals prefer the isolated points in between.” 1
Admiral, how goes it?
SPEAKER
Rear Admiral John E. Crowley, Jr. *
ADM. CROWLEY: Well, that is a great introduction, but I really cannot
go further without taking the opportunity here at the podium, at the
microphone, to offer my congratulations to Dr. Henry King and his great
work here, and that we celebrated his time last night. And it is a true honor
and privilege to be invited here to speak. And so congratulations again, and
thank you, Dan, and everybody that had a part to play in that.
That is a great introduction. I will get a little bit to the punch line of three
lessons learned, or recommendations, and then I will conclude with some
remarks on those lessons, and really look forward to some questions and
dialogue.
One of them has to do with getting people together and breaking down
those borders, and one of them has to do with everybody being here today.
And so, my second thank you really is to everybody who is here and
participating in the Canada-United States Law Institute today, and
throughout the year, because this is part of the way in my view that we break
down the border.
And just as the article indicated - thank you for this leveraging point - my
view is, the border is not a very helpful concept for the operational
commander in getting the job done, the job being making the Great Lakes
safer and more secure.
1
See generally Dean Beeby, Border Teams Handcuffed, Report Says Canadian, U.S.
Officers Can’t Even Talk By Radio, TORONTO STAR, Feb. 11, 2008, available at
http://www.thestar.com/article/302358 (last visited Oct. 12, 2008).
*
Admiral John E. Crowley, Jr. assumed his current position as the Commander, Ninth
Coast Guard District on April 18, 2006. As the operational commander for the Great Lakes
region, he leads over 7,700 regular, reserve, auxiliary and civilian men and women, two air
stations, two air facilities, four sectors, one sector field office, four marine safety units, eleven
cutters, forty-six small boat stations, and five aids to navigation teams. Under his direction,
Coast Guard personnel provide maritime security over 6,500 miles of shoreline and 1,500
miles of international border and provide the world’s premiere search and rescue, marine
safety and environmental protection, maritime law enforcement, aids to navigation and icebreaking
services to the region’s citizens.

Crowley—Balancing Canada-United States 251
My area is the Great Lakes. That is water, and that is a U.S.-Canadian
shared jurisdiction, shared concerns, shared interest, and shared solutions.
With that in mind, I would like to walk through a few other issues here, and
then look forward to more dialogue.
Because my colleague has convinced me that I should not use what I
wanted to do as a tool after lunch, and show a video clip of a monoautomatic
weapon rat-a-tatting through the water, I will try to keep you on
your toes for a moment anyway, given the lunch hour here and have a little
bit of audience participation. I am going to ask you to try to put yourself into
a March 2009 scenario, and I am going to have an informal test as to what
your read of the situation is after I get through the brief explanation here.
Early March 2009, there is intelligence and a threat received against the
Sault locks, between Sault Ste. Marie, Ontario and Sault Ste. Marie,
Michigan. And of course the locks is an area where a great deal of shipping,
some Canada to Canada, some U.S. to U.S., some Canada to U.S., and vice
versa, and some simply foreign to Canada and U.S., all transits. 2 So early
March, the threat is made. Mid March, Canadian Steel is stalled north of the
locks. U.S. Ore is stalled in White Fish Bay. Ocean born wind turbines
destined for Duluth and the interior of the nation are stalled in the Straits of
Mackinaw waiting for outbound transit.
Late March, 15 days of closure thereafter, amounting to $41 million
worth of accumulated costs, commerce has not concluded. Let me ask you to
informally poll yourselves, what happened?
Who thought the locks were closed by a security zone established by the
Coast Guard? Anybody? Who thought ICE impeded the transit of all the
commercial ships trying to make the trip, as might have happened this last
year?
Who thought that a terrorist attack on the fuel tanks of an up-bound ship
closed the St. Mary's River, and therefore the locks, because of the extreme
environmental damage done to both sides of the river and the precious fresh
water system of the Great Lakes? Who thought that it was a terrorist attack
on the lock gate itself that actually closed the gate, closed the locks?
I guess my point being, that without actually asking for some show of
hands that there are - there is a rough scatter diagram as to who might have
thought what the answer was. And when we start talking about the balance of
commerce and security, I come up with some different definitions of balance
quite frankly. I come up with a definition of balance saying that we have
taken the steps necessary to equally protect commerce as we have to protect
the infrastructure, and that we protect the life as we know it. I do not see it as
much as security versus commerce.
2
See generally NationMaster.com, Encyclopedia: Soo Locks,
http://www.nationmaster.com/encyclopedia/Soo-Locks (last visited Oct. 9, 2008).

252 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
As a little turn on Steve Flynn's comment from last night on balance
versus integration, I would like to follow a couple of things that my esteemed
former colleague, Professor Dr. Flynn, has shared with us. To stimulate a
little more about some of the context of the dynamics here before I get into
the more operational, how do we get things done, what works, and
ultimately, what are the challenges that we are facing?
By and all, Steve talked about balance versus integration. Integration in
my mind is the integration of strategies. There are commercial strategies, and
we spent some of the time over the last day-and-a-half talking about some of
those commercial strategies. And, there are commercial strategies to ensure
that the product that is shipped actually gets to the destination without theft,
without damage, and that has to be a commercial strategy. So why cannot we
be talking about integration of that which is motivated well by commerce,
like the motivation to protect from ICE is still a protection? And it has the
same sort of impact on the closure, and so why cannot we look at integration
in a slightly different way? And that balance maybe does not have to be a
balance between security and commerce. It only gets that way because you
ultimately end up making some choices I suggest, and ultimately the operator
and the federal governments on both sides of the border make significant
choices based upon resources available, and there are balances created by
those choices, but the choices themselves are not necessarily balancing
choices, and in that matter I agree with Dr. Flynn
Now, he also talked a little bit about compliance versus security. Well, I
am seeing two columns develop. I look at compliance as being those things
that develop most often out of the balance of individual measures. There are
actual things. There are in compliance with accomplishing the things that are
sent out. A master of the ship may choose not to do everything because the
voyage was rough, but he must make mooring time and make the dockage
where the stevedores are ready, and so there is a tradeoff.
So compliance becomes a victim, sometimes, of time and the examination
of the things we need to do, whereas security is the system, it is the strategy;
it is the overall fabric of how we hold security together. 3 And let us think for
a second that we really did not have a fabric of security to speak of before
2001.
In fact, I would suggest that we did not have much of a fabric of security
even from a theft law standpoint from a Maritime Waterborne Commerce
perspective prior to 9/11. 4 And when you look back at Dr. Flynn's early
3
See generally Five Years After 9/11 Attacks: U.S. Ports More Secure Than Ever;
Progress Must Continue AAPA Cites Advances In Guarding America’s Seaports Against
Terrorism, http://www.aapa-ports.org/Press/PRdetail.cfm?itemnumber=1092 (last visited Oct.
9, 2008).
4
See generally id.

Crowley—Balancing Canada-United States 253
work, that is exactly what it was in - trying to develop a strategy and a
philosophy of security a la theft loss.
Let us get down to the proof which we ultimately as federal agencies get
held to, and questions were asked earlier yesterday how can you prove that
these measures show results in security attained? And it drives us I suggest as
we go down the column of balance to compliance to establishing and
discussing proof to very zero tolerance sorts of tensions which are almost
impossible to deal with. There are impossible philosophically, and there are
certainly impossible from a real-life sailor perspective.
If I come down on the other side, I start looking at and examining
comparative strategies, and I look at the system as a whole. And as Dr. Flynn
suggested at the end of his talk, is the system robust and resilient enough to
respond and recover following something that might happen? And have we
instilled a system and a strategy that at least is protective enough to ensure
that be accomplished? So, those are some of the idea struggles that I want to
seed with you a little bit. Well, I got a little bit more real-life, and first talk
about the strategy that we have for maritime security.
First developed in an international forum – first developed internationally,
not at the home front - at the IMO, the International Ship and Port Facility
Code, ISPS, later coordinated with the government in Canada, Transport
Canada, and the Coast Guard and the compliance enforcement working
group as we develop MTSA, Maritime Transportation Security Act in the
United States, and now as formulated, a system wherein we have ships and
port facilities that are required to establish security plans and require to have
security managers. 5 Now that is really pretty simple. But that is an earthshatteringly
new idea after 9/11. 6 And so it began at an international level
because we are talking about international commerce. We are talking about
commerce coming from all over the world as such a large part of our GNPs
throughout; both countries are dependent upon global commerce.
What that amounts to, and later articulated in the national strategy for
maritime security, is called a layered-strategy approach. 7 I say this because I
think as we look and talk about pushing out the borders; it is often viewed as
the layered strategy. And if we look at it from a naval warfare standpoint, we
have historically thought geographically as being the layers, drawing rings
around whatever we are protecting. I argue that the international strategy as
founded in ISPS and then later put forth in MTSA is a layered strategy of a
different version. It is a means of establishing a mesh - and as a sailor, I think
5
See Steven D. Emerson & John Nadeau, A Coastal Perspective On Security, 104 J.
Hazardous Materials 1-13 (Nov. 2003).
6
Id.
7
See generally The National Strategy for Maritime Security,
http://www.whitehouse.gov/homeland/maritime-security.html (last visited Sept. 19, 2008).

254 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
of fiberglass sheets, cross-patterned and bonded together wherein it becomes
lightweight, agile, flexible, but much stronger than the individual sheets as a
whole, and it is that layering of different functional security measures on this
shipper at the port facility with the response vessel that we have that bonded,
kind of fiberglass mesh sheet that is the new version of layered security. That
is what I would like to kind of put forth a little bit as the way ahead.
Referring back to what I said about the Great Lakes, unique to the
Canada-U.S. relationship, we have got to recognize some things are very
special with them. We have to recognize that it is a fresh water system. 8 We
have to recognize that there is a whole other kind of evolution of economics
within the Great Lakes that is in addition to all the great figures and facts that
were shared amongst us over the last day-and-a-half. And over half of
Canada's 20 largest ports are actually within the Great Lakes system. 9
And we have ten percent of all U.S. waterborne domestic commerce in
the Great Lakes. 10 We have on the recreational side a quarter of the
recreational vessels in the U.S. registered, which amount to about four-plus
million recreational vessels in the Great Lakes. Add another million on the
Canadian side, and that is all amongst the commercial vessels and all the
other people and cargo that are being sorted from an intelligence or
information perspective. Very, very unique.
We have within the Great Lakes an inter-lake system with lakes - with
both Canadian-U.S. flags sharing only each other's ports - but we also have
an ocean system that demands some different attributes to ensure that it
remains secure, as well as our nations. 11 Within our area we have threats, and
they may start with the weather, whether they are the gales of November, the
ice storms of February, or the thunderstorms of the mid-summer months. But
looking at terrorism, for example, we have specific threats that I cannot tell
you about, that we have confronted over the last couple years, and that give
me pause to following that column I talked to you about that starts up at the
top as a balance, as compliance, as kind of very fact-specific, zero-tolerance
proof to me why that insured security, that being a specific action.
But on the nonspecific side, look at all the dimensions that we have,
whether it is the lack of infrastructure improvements on the locks, 12 whether
8
See generally Great Lakes: Basic Information, http://www.epa.gov/cgibin/epaprintonly.cgi
(last visited Sept. 19, 2008).
9
See generally WorldPortSource.com, Ports in Canada,
http://www.worldportsource.com/ports/CAN.php (last visited Oct. 6, 2008).
10
See generally Waterborne Commerce of the United States,
www.iwr.usace.army.mil/ndc/wcsc/pdf/wcusnatl04.pdf (last visited Oct. 6, 2008).
11
See generally Gao.gov, Border Security: Agencies Need to Better Coordinate Their
Strategies and Operations on Federal Lands, http://www.gao.gov/new.items/d04590.pdf (last
visited Oct. 9, 2008).
12
See generally Lakers Hampered by Cargo Declines, Aging Locks and Harsh Weather,

Crowley—Balancing Canada-United States 255
it is that a mistake or intentional act can really release a quantity of pollution
that makes some of the Exxon Valdez, 13 some of the Oakland San Francisco
Bay, 14 Buzzards Bay 15 incidents almost pale in comparison given the fresh
water system that both nations enjoy. 16
The threats for a country are the point of origins for the vessels and the
ocean shipping. We do a good job of identifying where ships come from, and
those vessels that come from places that are deemed to be more vulnerable
from their own security perspective are cranked into our calculus as to
whether or not they need greater attention by our forces on both sides of our
border.
Ask hypothetically, ask whether or not we give the same credit in reverse
to the vessels that come from not only our own ports, U.S. to U.S., but
Canadian to U.S. and vice versa? Are we able to give any credit in
establishing a strategy of layered security for that kind of system view? And
the challenges then ultimately end up being, when I look at our area, when I
look at our threats, exactly the article that was read when we started this
session, and that is the border. The border is my challenge. The border is the
challenge of our RCMP and Coast Guard, of people that are trying to keep
our communities and our commerce safe and secure.
In Search and Rescue, if we have got a boater lost on Lake Ontario, I
would imagine within 15 minutes we have got a Coast Guard on the U.S.
side, boat under way, and we have got a Canadian aircraft under way from
the Canadian side, and nobody is asked where the border is. And nobody
asked where the border is when we have to put a line and tow someone in, or
when we have to pick someone out of the water. It is irrelevant. It is a
functionally efficient and effective system. 17
In our mission of icebreaking, we are just wrapping up now. Mention that
in the hypothetical in the scenario I offered at the outset. We have an
operation center in Sarnia that is one of the most effective operation centers
http://www.professionalmariner.com/ME2/Audiences/dirmod.asp?sid=&nm=&type=Publishin
g&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=
4&id=9FB4C98CE411452890CE61C0E622762D&AudID=3D903BF30CAB4FBD94D0D7A
42077D181 (last visited Sept. 19, 2008).
13
See generally Exxon Valdez Oil Spill,
http://www.eoearth.org/article/Exxon_Valdez_oil_spill (last visited Sept. 21, 2008).
14
See generally Our Poisoned Bay, http://www.sfgate.com/cgibin/article.cgi?file=/chronicle/archive/1999/08/02/MN14115.DTL
(last visited Sept. 21, 2008).
15
See generally The Coalition For Buzzards Bay,
http://www.savebuzzardsbay.org/bayinfo/2007/state-of-the-bay-07/pollution.htm (last visited
Sept. 21, 2008).
16
See generally KEITH G. BANTING, ET AL., DEGREE OF FREEDOM: CANADA AND THE
UNITED STATES IN ACHANGING WORLD, ch. 9, 341-42 (McGill-Queen’s 1997).
17
See generally Marie-Christine Therrien, The Canada-U.S. Border: Achieving an Efficient
Inter-Organizational Policy Coordination, 54 CAN.-AM.PUB.POL’Y. - (2003).

256 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
that I have seen amongst any kind of joint military set of forces and operated
by the U.S. and Canadian Coast Guard. 18 Of course, honed out of Sarnia, the
regional operational center of the Central Antarctic Canadian Coast Guard
office, but deploying icebreakers on both sides of the border without regard
to the flag of vessel that needs icebreaking assistance, without regard to the
placement of the border, but with regard to the effectiveness of the available
asset, the right asset at the right time in the right place. It is one of the most
effective operations that I have seen in my 30-some years of Coast Guard
experience including many overseas operating in NATO and other joint and
combined military operations. 19 I am absolutely straightforward with that
comment.
It is navigation, taking care of it on both sides of the border. But now we
get to oil pollution. Still pretty good. We have got a Canada-U.S. exercise
that went off last year in the St. Lawrence Seaway region planning for one
coming up in the Detroit-Windsor corridor, Canuslak exercise. 20 We have
some challenges because we have some authorities we have to scrub, not
because the desire's not there, and we have to scrub them through. But, for
example, to get a U.S. response vessel over the Canadian side and back, in
the Jones Act sort of situation, we have to scrub it with customs. 21 So we pregrease
those things to make those happen and not be impediments. But I
point them out to say the will, the experience, the connection between our
forces allows us to be successful, we have identified the impediments, we
have tried to make our systems consistent, and we have overcome them at
least in, I think, our exercise fashion.
Now, security. The article that was written. 22 Absolutely accurate. In fact,
a couple years ago my predecessor and the Coast Guard men and women and
the RCMP men and women got together, in anticipation of the All Star game
in Detroit, later the World Series in Detroit, the Super Bowl, and established
a prototype called Shiprider, where we put RCMP officers on Coast Guard
boats and Coast Guard officers on Canadian vessels and were able to operate
regardless of the border in that Detroit-St. Clair corridor river and really
operate pretty effectively. 23
18
See generally U.S. Coast Guard Completes Another Successful Ice Breaking Season,
https://www.piersystem.com/go/doc/443/36095/ (last visited Sept. 21, 2008).
19
See generally id.
20
See generally Report On Spills In The Great Lakes Basin,
http://www.ijc.org/php/publications/pdf/ID1594.pdf (last visited Sept. 23, 2008).
21
See generally Jones Act Proponents Sue Coast Guard,
http://www.marinelog.com/DOCS/NEWSMMVII/2007jul00123.html (last visited Sept. 23,
2008).
22
Beeby, supra note 1.
23
See generally The Great Lakes,
http://www.lakestclair.net/forums/index.php?showtopic=46997&mode=threaded (last visited

Crowley—Balancing Canada-United States 257
We had issues remaining with respect to communications, with respect to
arms carriage. 24 Okay, we have to take off our arms and stow them when we
go on this side of the border. Okay. We are over here. RCMP shift. Does not
make any sense.
We have this last year had a great experience up in the Cornwall-Messina
region, a two-month evolution with our colleagues that was absolutely
fantastic. I visited the joint team at the end of the two-month experience. You
could tell as they sat intermingled amongst each other they were shipmates.
And when a sailor calls someone else a shipmate that is the highest form of
flattery, of recognition of their value and the trustworthiness as a partner. 25
They were shipmates. They trusted each other, and law enforcement, they
trusted each other and the knowledge of the laws. They trusted each other in
understanding that they each had something to bring to the table in
recognizing the dynamics of the communities that they were serving on each
side of the border, remembering that we are serving communities and our
people and not just ourselves. What a fantastic team.
Do you know how that started—I mean that evolution started? It started
with a training program down in Charleston at the Coast Guard's Maritime
Law Enforcement School, and it started with them getting to know each
other. It started with them reviewing each other's laws. It started with them
practicing each other's self and weapons defense practices, and it ended with
them exercising those things that they became comfortable with each other
about. And so I will come back to that in a moment.
Some of the things that we have done across the range of activities is
information sharing. Important, I think we have talked about, eluded to in a
couple different presentations. IBET was a subject of one of the earlier
sessions. 26 IBET, a great mechanism for sharing information that the Coast
Guard is absolutely committed to making work better, and as Superintendent
Kuhn alluded to, we are still grappling with the numbers and being able to do
that, but it is absolutely important. 27
Sept. 23, 2008).
24
See generally Unnati Gandhi, Officers Could Carry Their Guns Across Border, THE
GLOBE AND MAIL, available at
http://www.theglobeandmail.com/servlet/story/RTGAM.20070626.wguns26/BNStory/Nationa
l/home (last visited Oct. 10, 2008).
25
See generally Nayv.mil, HSM-41 Sailor Saves Shipmate’s Life,
http://www.navy.mil/search/display.asp?story_id=30353 (last visited Oct. 10, 2008).
26
See generally National Security Implications of Border Security Along the Northern
Border Hearing Before the Armed Services Committee, 109th Cong. 3-4 (2006) (statement of
Patrick W. Brennan, Captain, U.S. Coast Guard), available at
http://www.globalsecurity.org/military/library/congress/2006_hr/060801-brennan.pdf (last
visited Oct. 12, 2008) (providing an overview of the United States Coast Guard’s involvement
in and support of Integrated Border Enforcement Teams (IBET)).
27
See id. at 5 (providing information on the United States Coast Guard implementation of

258 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Maritime security operation centers. There are two versions that Canada
is supporting. One in Halifax, more Naval-orientated, owned as - designated
by the Canadian government where we have sent up and began the partnering
and learning what is going on and sharing information where we can. One on
the lakes designated to be operated and run by the RCMP. We are committed
to work with both of those in order to understand how to gain the information
that we need within the system.
There are two very important maritime security operation centers tracking
ships because it really is a system in the Great Lakes. And that is part of that
unique character of our region. It is a system, and Halifax is an entry point as
vessels start coming in through the St. Lawrence into the Great Lakes
system—they interlock within the Great Lakes, run by our RCMP and it is a
great asset to recognize the intra-system traffic. 28 These are two very unique
components where a geographically-layered strategy just does not work. We
have to team this out together.
New partnerships are unfolding this year as we look to the joint seaways.
Canadian development and U.S. management corporations help us get more
advanced notice of arrival, information from ships coming inbound. 29 I know
some shippers have complained that is now earlier, and it is to somebody
they have not given it to. But, it is what the purpose of having information
earlier and at one time so that we are not getting information sequentially as
a vessel pulls into Cleveland, as they pull into Windsor, as they pull into
Saginaw Bay, into Thunder Bay, Duluth, Indiana Harbor, each ports. And if
we looked at those individually, as we look at maritime security otherwise in
our nations, we would have industry and commerce with individual arrival
information that we gained no efficiency at all, but a great partnership
between the two seaway corporations, and a great partnership with Transport
Canada and the U.S. Coast Guard to do that.
And that moves into some initial coordination as we start inspecting ships
coming into the system to make sure that when they pass Windsor and
Detroit, a stones throw from either side of the border, with population, a
chemical industry, lots of vulnerable infrastructure bound for Thunder Bay or
Duluth, that we already have a degree of assurance that there are secure. And
we do so through the joint inter-ship inspection team in Montreal. We have
Coast Guard inspectors teamed with Transport Canada inspectors without
U.S. authority per se, but a team that begins working together, and I visit
them also, to see them looking for eye contact and the kind of information
intelligence sharing with Canadian agencies as well as United States agencies).
28
See generally id. (Discussing interagency planning and coordination concerning issues
and challenges along the northern maritime border).
29
See generally id. at 6 (discussing the use of technology and interagency cooperation to
transmit information regarding incoming ship traffic).

Crowley—Balancing Canada-United States 259
exchange that only great shipmates can offer a great reflection of the
partnership between the two countries on an operational and agency level.
Regarding compliance, I talked about Shiprider. I also talked about that
within the Great Lakes, within the U.S.; there is the Great Lakes securityworking
group that is co-chaired with me and Todd Owen, who spoke to you
yesterday from Customs. We begin to continue a partnership intra-DHS
offering partnered solutions, teaming out, dissecting our various laws and
regulations, and providing a layered strategy at the operational level.
I started by saying I was going to offer three lessons learned or
recommendations. The first one was the importance of having consistency of
laws on both sides. 30 We know on an operational level we need to have
communication devices, radios that talk to each other that have the same
frequencies. We know that we need to have use-of-force policies that
recognize each other so that when we are working together, we do so in a
mutually supportive way. But we also need the laws as established by our
respective legislative branches and political branches to be consistent so we
are not getting in each other's way or not being put in a position where we
cannot work together. Both countries through the cross-border crime forum
and the ministry and the department of justices have gone a long way in my
view to help over the last couple years in support of Shiprider, our
operational-level entity. So we have got to at least have a consistency of law
so we are not in each other's way
My next lesson learned, or observation, is what about a bi-national
solution? Pause for a second. Is that so far and hard to believe – a bi-national
system? 31 It is in some ways, but take a look at treaties such as the Treaty of
Washington 32 and the Boundary Waters Agreement formed from the late
1700s through the 1900s, 33 and you see treaties and agreements between our
30
See id. (Discussing the necessity of reform on both sides of the borders in order to create
greater cooperation).
31
See generally Gregory W. Carman, Resolution of Trade Disputes by Chapter 19 Panels:
A Long-Term Solution or Interim Procedure of Dubious Constitutionality, 21 FORDHAM INT’L
L.J. 1 (1997) (Discussing the establishment of binational panels to resolve trade issues between
Canada and the United States and the problems associated with the creation of binational
systems); Thomas W. Bark, The Binational Panel Mechanism for Reviewing United State-
Canadian Antidumping and Countervailing Duty Determinations: A Constitutional Dilemma?
29 681 (1989) (analyzing the survival of a binational system constitutionally).
32
See generally Heidi K. Hubbard, Separation of Powers within the United Nations: A
Revised Role for the International Court of Justice, 38 STAN. L.REV. 165 (1985) (Discussing
briefly the Treaty of Washington signed in 1871 and how this treaty serves as an example
where Canada and the United States were able to resolve their issues and cooperating on the
basis of law).
33
See generally Richard Kyle Paisley, Cuauhtemoc Leon, Boris Graizbord & Eugene C.
Bricklemyer, Jr., Transboundary Water Management: An Institutional Comparison Among
Canada, the United States and Mexico, 9 OCEAN &COASTAL L.J. 177, at 182 (2004) (providing
background on the Boundary Waters Treaty and discussing the handling of water boun-

260 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
two countries that really formed an aversion of partnership that recognize the
similarities of our interests and our peoples more than they recognize the
differences, 34 and I would at least offer that we are a lot closer to being able
to look to some bi-national solutions within the boundaries at least of the
Great Lakes than we are in some other areas. 35
Now the third lesson learned, the third recommendation is that which I
referred to at the very beginning, and that is the partnership. It is continuing
to learn to work with each other as to becoming comfortable and familiar
with the views on each side, getting them on the table whether we agree or
not, it is what this institute does at this level. 36 It is great to see
representatives of the industry in commerce as well as academic and
government lawyers and non-lawyer representatives. Are the jurists
involved? Are the legislators involved? They have a part to play in the law as
well.
At lunch, Dan remarked on the groups of Great Lakes mayors and the
Great Lakes provincial and state governors, 37 and I have to remark that I am
very impressed with those groups as entities that are able to talk and work
and identify common interests and common concerns. And a group that I was
able to interact with on an operational level over my tenure through the Great
Lakes in being better able to understand the communities that we serve on
both sides of the border, an entree very quickly to Canadian mayors to hear
what was on their minds and for them to understand my operational concerns
that influence, that effected, that got to their citizens, to the people in their
communities. It is a great group, organized and founded to share information
and become comfortable with each other. The governors, provincial and
state, are the same way. You can agree or disagree with some of the
priorities, but a great entree for me again at a different level of government.
Now I know at the federal level there is an inter-parliamentary group that
I have unfortunately not taken the step to reach out to at this point. 38 I am
dary disputes between Canada and the United States); Leonard B. Dworsky & Albert E. Utton,
Assessing North America’s Management of its Transboundary Waters, 33 NAT. RESOURCES J.
413 (1993) (discussing the Boundary Waters Treaty and the institutional changes that is required
for agreements concerning shared water sources and water boundaries to work appropriately).
34
See generally id.
35
See, e.g., The Council of Great Lakes Governors, http://www.cglg.org/ (last visited Oct.
8, 2008) (official website of the Council of Great Lakes Governors); Great Lakes and St. Lawrence
Cities Initiative, http://www.glslcities.org/ (last visited Oct. 8, 2008) (official website of
Great Lakes and St. Lawrence Cities Initiative).
36
See Canada United States Law Institute, http://cusli.org/ (last visited Oct. 6, 2008) (official
website for the Canada United States Law Institute).
37
See The Council of Great Lakes Governors, supra note 34.
38
See Canada-United States Inter-Parliamentary Group,
http://www.parl.gc.ca/iia/?Lang=E (follow “Associations” hyperlink; then follow “List of

Crowley—Balancing Canada-United States 261
remiss. In a parliamentary group, people get together with members of
parliament and representatives and senators on the U.S. side. I happened to
talk to Senator Klobuchar from Minnesota while we are on the dais over this
last year one time, and it brought to her attention a lot of the cooperation that
we have with our peers and our colleagues on the Canadian side that she had
not recognized before. And it was a great discussion. And how does that get
leveraged as our legislators begin to understand what the needs of their
people and the needs of their operating agencies really tend to be?
Citizens are the last group of people who team up, and I know within this
group that we heard this morning, and that we represent often as lawyers are
people who cross the border in business or to their vacation homes, but I am
here to tell you in my public meetings that I have attended throughout the
Great Lakes and the interaction I have had with the mayors on both sides of
the border, that there are citizens in our communities on both sides who do
not share that cross-border mentality. And that is a group, too, that needs to
greater appreciate the cross-border nature of the water that knows no bounds,
that does not recognize a border on the lakes. 39
Doctor, all yours.
MR. McCREERY: Admiral, thank you. That was most illuminating.
There must be some questions out there.
DISCUSSION FOLLOWING THE REMARKS OF REAR ADMIRAL
JOHN E. CROWLEY, JR.
DR. KING: Are there any examples, Admiral, throughout the world that
you follow? Are there any other areas in the world that you look at to
determine the approach to be taken on the Great Lakes? Are there any
parallels? Are there any formula?
ADM. CROWLEY: That is a great question, and I think it is one as I
look, a couple members of my staff out here that I pressed for early in my
tenure, as we might have looked towards the EU, as we might have looked at
least to the Baltic countries. So we look to the Indonesian Archipelago. What
I tell you, sir, is that I do not think there is a better region in effect. There are
different ways of operating together, and there are different issues that people
have grappled with. I think the Great Lakes region is further ahead in the
Associations and Interparliamentary Groups” hyperlink; then follow “Canada-United States
Inter-Parliamentary Group” link) (last visited Oct. 8, 2008) (official website for the Canada-
United States Inter-Parliamentary Group).
39
See generally Official Comment of the Government of Canada: Advance Notice of
Proposed Rulemaking Western Hemisphere Travel Initiative,
http://geo.international.gc.ca/can-am/main/right_nav/whti_comment-en.asp (last visited Oct.
11, 2008) (discussing issues that will affect citizens and issues that they should be aware of at
the United States Canada Border).

262 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
U.S.-Canadian partnership than the other regions. The Baltic may be the
closest. 40 And I think the commonality and the lessons learned there is the
frequency with which the Baltic nations in the maritime world meet. And
they meet within the commercial sector, and they meet within the
governmental sector, and they meet in scheduling ferries, and their people
cross the Baltic in the ferries whether it was between Finland and even the
former Soviet Union. The border there was less a border than it is today in
our Great Lakes. That would be one of my observations.
MR. CHERRIN: I was just wondering, sir, if you can comment on various
initiatives bringing back short sea shipping to the Great Lakes, and where we
are at with that as a way to crossing that border as well as bring back
commerce to the Great Lakes?
ADM. CROWLEY: I would be happy to make a brief comment. Of
course short sea shipping is an initiative that is primarily managed out of the
maritime administration. 41 I have talked and shared a podium with Shawn
Connaughton on that subject, 42 so what I am going to share with you is really
only what I know and not what I own per se.
I think it is an option. I think many of the challenges that we have seen on
the Great Lakes for short sea shipping seasons -add another "S" to the
already challenging alliteration.
MR. McCREERY: Say that again quickly.
ADM. CROWLEY: No. You only get one time. - is the weather. It is the
ice season which interrupts an otherwise more dependable path. 43 I am not
suggesting it cannot be overtaken, but that is been the challenge and will
continue to be a little bit of a challenge.
From a security standpoint, I think it offers us some great opportunities. It
offers us an opportunity to establish ports and processes from the bottom up,
40
See generally The Great Lakes/Baltic Sea Partnership Program,
http://www.epa.gov/glnpo/baltic (last visited Oct. 11, 2008) (discussing the Canada-U.S. partnership
in the Great Lakes region and Baltic Sea).
41
See MARAD Short Sea Shipping Initiative,
http//www.marad.dot.gov/Programs/shortseashipping.html (last visited Oct. 6, 2008). See
generally The Development of Short Sea Shipping in the United States: A National Short Sea
Shipping Initiative Hearing Before the House Committee on Coast Guard and Maritime
Transportation, 109th Cong.(2007) (Testimony of Anatassis Margaronis, President Santa
Maria Shipowning & Trading, Inc.), available at
http://www.santamariashipping.com/short_shipping_initiative_02-07.html (last visited Oct. 6,
2008) (arguing for a short sea shipping initiative).
42
See generally Biography: Sean T. Connaughton Maritime Administrator,
http://www.marad.dot.gov/offices/administrator.html (last visited Oct. 6, 2008) (biographical
information regarding Sean Connaughton).
43
See generally National Security Implications of Border Security Along the Northern
Border Hearing Before the Armed Services Committee, supra note 25 (providing information
regarding the problems that the Coast Guard encounters with icing on the water ways).

Crowley—Balancing Canada-United States 263
and those limited opportunities where we have started new business on the
Great Lakes where we have got communities and we have got Transport
Canada and U.S. Coast Guard, CBSA, U.S. Coast Guard working issues on
both sides, we have been able to formulate some innovative solutions that if
we begin and not have to recreate the wheel with a given infrastructure, we
can make more headway. 44
So I would offer from a manager of security strategy, and responsibilities
that that is a unique opportunity to get better at what we do. Not without
challenges, but it is really I would offer is a great opportunity and should not
be shied away from.
MR. VANDEVERT: Putting aside the laws of Antonian physics, can you
take your philosophy on the water to the land, or is there a difference? I
mean, is somehow the land different and present different challenges or
different issues than the water as you have explained it?
ADM. CROWLEY: Well, I think you can, but I think it is different at the
same time. That is an interesting question. Let me answer it by saying what I
have used, the differences, and then what I think might be similarities that
could be leveraged.
What is different is that the water moves. You cannot put a fence in the
middle of the water. You are not going to put one in the middle of Lake Erie;
it is not going to happen. You are not going to put a fence down 730 feet in
Lake Superior; it is not going to happen. And so that whole concept just is
not one, and you are not going to have a checkpoint because the boat moves
quite frankly, even if you put a boat out there to do a checkpoint.
We have vessels ocean-going that cross the border 26 times going from
Montreal to Duluth. 26 times we ignore those crossings. We do not ignore
them, we track them. We understand where the vessel is, but we are not
going through a checkpoint process each time. It never has happened, and I
do not really expect it will. That is the primary difference where it has just
always been different.
I think we recognize that in some way in those early treaties that I
mentioned in a spirited partnership, and maybe that is where we get into the
similarities is that the spirit of partnering I do not think should be different.
When we look at the people in this room, when we look at our colleagues in
all the agencies, the issues create different tensions, and crossing the land
border with a weapon as opposed to, okay, I am on this side now, I am on
that side of the water border, creates a little bit different of a tension, you
potentially put someone in the urban area of Detroit with an RCMP officer or
in the urban area of Windsor with a U.S. law enforcement officer with a lot
of different dynamics and as well as the legal systems that will follow on,
44
See generally id. (Discussing the United States Coast Guard’s many successes and plans
for maritime security collaboration).

264 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
and I think that becomes a challenge. But that only is a challenge to describe
how we formulate that common border, land border area may be in a way
that makes more sense and is more effective and efficient.
The other similarity is that this is part of the value I would offer in the
Department of Homeland Security on the U.S. side and in having CBP and
ICE all working with the Coast Guard under the same secretary. So that
when we start having boarding differences on the water, I have called ahead
Jay Ahearn has asked Todd Owen, Todd go to Cleveland, sit with Admiral
Crowley, bring all the respective sector commanders, the OFOs all together,
and talk about your respective issues. And so you have that opportunity to
share some of the values of the partnership and the lessons learned, and there
is part of the department, there are part of the negotiations that are ongoing
between both governments and the Department of Justice, Ministry on the
Canadian side, to deal with the arms carriage issues.
And so I think that there is a different future in the future for the land
side. But it is not quite the same, and it is not quite as easy.
MR. McCREERY: I think we have time for about one more.
MS. PRIGGE: Hi. I am Amy Prigge. I have a question about invasive
species. I am interested in your thoughts on the proposed legislation on
ballast water in the U.S. Congress, and not to speak of the legislative activity
in U.S. states on the ballast water?
ADM. CROWLEY: Can I ask you to put a finer point on your question? I
mean, I am certainly aware of the issue.
MS. PRIGGE: I would really like you to concentrate on what is going on
in Congress, especially in the Senate in terms of some legislation that they
put forward which could really potentially really hurt Canadian shippers as
well as the difficulties in pertaining these proposed measures into practice
from a operational standpoint. 45
ADM. CROWLEY: Okay. I think I know well where your question is
going then. Let me say at the outset that the Coast Guard is proceeding with
regulations through the proposed rule-making process, 46 and we talked about
that a little bit this morning. There are the same sort of challenges with
economically significant rule-makings and things of that nature. And I own
the regulatory process for three years in Washington, so that is a challenge. 47
But the Coast Guard is pressing ahead. Unfortunately from my operator
45
See generally Edward Alden, The Great Wall of the United States, THE GLOBE AND
MAIL, Oct. 4, 2008 available at http://www.cfr.org/publication/17452 )last visited Oct. 12,
2008) (discussing how much United States legislation can positively or negatively affect Canada).
46
See generally United States Coast Guard, http://www.uscg.mil (last visited Oct. 11,
2008) (providing links to various resources which indicate the Coast Guards policies and
procedures).
47
See generally Biography: Sean T. Connaughton Maritime Administrator, supra note 41.

Crowley—Balancing Canada-United States 265
standpoint, we do not have regulations yet in place, and a lot of the challenge
in getting regulations is the standard.
The solution in a short matter for legislation is to cut to the quick on a
policy level and provide us a level through the legislature as to what the right
standard is, and then we will still complete that with the regulations to
enforce it. There will still be regulations required to enforce the law.
What you address specifically is the legislation that had been put forth in
draft, and I quite frankly and honestly do not know the current status of what
is being considered and when it might or might not get to the floor of the
Congress, but what you have addressed is a provision within the evasive
species, the ballast water discharge law that would consider Canadian vessels
that transit between the river system and the lake system, though not outside
the system as I described it from a security standpoint, but outside the pure
fresh water kind of lake system to be subjected to the ballast water
requirements.
There is dialogue and discussion. I had a discussion with your embassy
officials in Washington earlier in the year on this matter in helping
understand a little bit the process for our legislative process so that all voices
and ramifications might be heard.
And so beyond that I am not sure what happens out of the Congress.
Depending what Congress provides, then we would take a look at the
regulatory project and undoubtedly work with our colleagues on the
Canadian side to formulate an enforcement solution.
MR. McCREERY: Admiral, I think we are out of time. Thank you so
much.
(Session concluded.)

ENHANCING THE CANADA-UNITED STATES GATEWAYS
AND CORRIDORS: EAST, WEST AND WITHIN
Session Chair – Chios Carmody
Canadian Speaker – Sean O'Dell
Canadian Speaker – David Oxner
United States Speaker – Hugh Conroy
INTRODUCTION
Chios Carmody
MR. CARMODY: Ladies and gentlemen, we would like to get underway
with this ultimate panel in the conference, “Enhancing the Canada-United
States Gateways and Corridors: East to West and Within.”
I am Chios Carmody for those of you I have not already met. I am
actually filling in for John Terry who was newly appointed to our advisory
board. John is a Toronto lawyer with the law firm of Torys LLP. John was
unable to make this particular session and therefore sends his regrets, but he
would like to extend on his behalf and on behalf of his firm a very warm
welcome to all of you, and a very great thanks to Henry for having invited
him to this particular session and the chairing duties in it.
This session is, as entitled, about gateways and corridors. And it might
sound a little odd, and perhaps, fanciful, to think that in a North American
environment, there are such things that exist. After all, as the Admiral said
last session, thinking about trying to build a fence across Lake Erie is
impossible, so how is it that we are going to build gateways and corridors
along -- at least as long a distance? But in fact such infrastructure is being
built in a way to channel traffic between our countries in many different
ways.
And we have three extremely experienced and knowledgeable individuals
who are joining us today to speak on this topic. To my immediate right is
Hugh Conroy. Hugh is a project manager with the Whatcom Council of
Governments, also known colloquially and affectionately in Washington
State as WCOG. Hugh is with WCOG. WCOG is a metropolitan planning
267

268 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
organization in Bellingham, 1 and Hugh will be speaking to us on a number of
matters related to gateways and corridors.
Hugh has a Public Policy and Management degree from Carnegie Mellon
University and a received his undergraduate degree from the University of
California Berkeley.
Seated next to Hugh is David Oxner. David Oxner was appointed as the
Executive Director of the Gateway Initiative with the Province of Nova
Scotia in 2006. He has held a number of important positions with a number
of varied and distinguished entities, including the Departments of Tourism,
Culture, and Heritage, and Economic Development in Nova Scotia. And he
has also worked with the City of Dartmouth, the Halifax Board of Trade, Day
& Ross Transport Group, and the Toronto-Dominion Bank.
Finally, and certainly not least, we have with us today Sean O'Dell. Sean
is the executive director of the Windsor Gateway Project with Transport
Canada. Sean has more than 25 years of experience working with
governments, international organizations, and multinational companies. He
has occupied positions with the government of Alberta, with the Economics
Department of the University of Western Ontario where I am now employed,
and he has also been with Natural Resources Canada and as the chief
economist of the International Energy Agency in Paris, France. And one
could well imagine that working as the chief economist with the International
Energy Agency in Paris, France, one might not have a lot of energy for one's
work, but apparently Sean did.
So without any further ado, we will proceed in order. Sean, please go
ahead.
1
See Whatcom Council of Governments, http://www.wcog.org/ (last visited Oct. 18,
2008) (WCOG is primarily responsible for meeting transportation planning requirements
specified in the Washington State Growth Management Act (GMA) and by the U.S. Department
of Transportation’s Federal Highway Administration (FHWA) and Federal Transit Administration
(FTA)).

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 269
CANADIAN SPEAKER
Sean O’Dell *
MR. O'DELL: Thank you. I just want to give a bit of an update overview
of the Windsor-Detroit Crossing project or the Detroit River International
Crossing, DRIC, one of the worst acronyms I have ever encountered but we
seem to be stuck with at the moment. That is with an I, not an E.
And anyway, I guess we are going to have time for questions at the end of
this as well, so I will sort of move through and try to bring you up to date as
to where we are in our project.
The Bi-national Transportation Partnership is a four-party organization
made up of the federal governments of Canada and the United States, and the
state of Michigan and the province of Ontario, all represented by the various
transportation departments; 2 in the case of the United States federal
government through federal highways, which is a part of USDOT. 3
The purpose of our study was to establish additional capacity crossing the
border in Windsor-Detroit area, across the Detroit River. Certainly following
September 11th, 2001, but even before then, it became increasingly obvious
that capacity constraints were going to start to bite on the Detroit River
crossing.
At the moment, there is one bridge. 4 It is about 80 years old, a four-lane
bridge, and there is a tunnel which was only two lanes which is also of a
similar vintage, around 80 years old. 5 The tunnel is not able to handle large
*
Sean O'Dell is currently the Executive Director of the Windsor Gateway Project with
Transport Canada. Mr. O'Dell has more than 25 years of experience working with governments,
international organizations and multi-national companies. In addition, he has considerable
experience in developing broad strategic assessments and recommendations in a wide
variety of financial, economic and policy areas. Over the past 25 years, Mr. O'Dell has occupied
positions with the Government of Alberta Treasury in Edmonton, Alberta; in the Economics
Department of the University of Western Ontario in London, Ontario; with Natural
Resources Canada in Ottawa; as Chief Economist of the International Energy Agency (OECD)
in Paris, France; and as a private consultant based in Paris, France and Toronto, Canada.
2
Detroit River International Crossing Homepage,
http://www.partnershipborderstudy.com (last visited Oct. 18, 2008) (“The Canada-U.S.-
Ontario-Michigan Border Transportation Partnership (the Partnership) consists of the U.S.
Federal Highway Administration, Transport Canada, the Ontario Ministry of Transportation
and the Michigan Department of Transportation.”).
3
Id.
4
See Monica Davey, A Detroit Bridge's Private Ownership Raises Security Concerns,
N.Y. TIMES, Oct. 12, 2007, at A18 (discussing the volume of goods and traffic that cross the
Ambassador Bridge).
5
See generally Patricia Zacharias, The Building of the Ambassador Bridge, DETROIT

270 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
modern trucks so some 99 percent of the truck traffic going across the Detroit
River uses the Ambassador Bridge. 6
The purpose of the DRIC study then is to address the long-term regional
transportation mobility needs. We need new border crossing capacity as I
have said, and we need to integrate this whole system into the existing
infrastructure. Now we run into some particular difficulties in Windsor,
which I will talk about in a couple of minutes.
In terms of the importance of this crossing, some 28 percent of Canada-
U.S. trade goes across the Detroit River, 7 and as I said, it uses almost entirely
the existing Ambassador Bridge; over 80 percent of the goods that are
shipped go by truck. 8 There is also a truck ferry, but the use of that is
essentially restricted to hazardous materials transportation. 9
We have in the neighborhood of three-and-a-half million trucks or some
10,000 trucks a day crossing the bridge, and about 10 million cars, which is a
combination of tourists, but also commuter traffic. 10 There are a fair number
of people that live in Windsor and Detroit but work on the other side of the
border. 11 So there is a steady kind of morning and afternoon rush hour traffic
as well. That is more equally shared between the tunnel and the existing
bridge. 12
I cannot overstress the importance of this crossing to the economies in
both of our countries. And this is not just a Windsor-Detroit or even a
NEWS, Jan. 21, 2002 http://info.detnews.com/redesign/history/story/historytemplate.cfm?id=13
(discussing the construction of the Ambassador Bridge in the late 1920’s).
6
See New Border Crossing Planned for Detroit, WASH. TIMES, Dec. 27, 2005,
http://www.washingtontimes.com/news/2005/dec/27/20051227-120941-3773r (“An average
of 10,000 trucks per day now cross the Ambassador Bridge, and another 1,400 trucks daily
pass through the Detroit-Windsor Tunnel.”).
7
Why is a New Border Crossing Needed? Detroit River International Crossing Study
Draft Environmental Impact Statement, http://www.partnershipborderstudy.com/pdf/usreports/Section%201.pdf
(last visited Oct. 18, 2008).
8
Id. (Seventy percent of U.S.-Canada trade is conducted via trucks).
9
Id. at 1-3.
10
See Keeping the Border Secure: Hearing on Examining Potential Threats Posed by
Cross Border Trucking Before the Subcomm. on Transportation Security and Infrastructure
Protection of the H. Comm. on Homeland Security, 110 th Cong. 3 (2007) (statement of Gregg
M. Ward, Vice President, Detroit-Windsor Truck Ferry) (testifying that the Ambassador
Bridge has “over 9,000 trucks and 15,000 passenger cars crossing it each day.”).
11
See Why is a New Border Crossing Needed?, supra note 7, at 1-9 (“Seventy-nine percent
of the people crossing the border in cars are making ‘local’ trips between Detroit and
Windsor.”).
12
See DRAFT Level 2 Traffic Operations Analysis of Practical Alternatives, Detroit River
International Crossing Environmental Assessment Study (Nov. 2006),
http://www.partnershipborderstudy.com/pdf/DRIC-Level%202%20Report%20(Draft).pdf, at
14-15 (illustrating the amount of passenger cars that used the Ambassador Bridge or the Detroit-Windsor
Tunnel each day in 2004).

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 271
Michigan-Ontario issue, and it is certainly not restricted just to the auto
industry as you might think, given where it is located. In fact, if you rank the
U.S. states by the volume and value of trade going across the Ambassador
Bridge, you get the usual suspects at the top of the list - Michigan, Ohio,
Indiana, and Illinois. 13 But coming in fifth is actually Texas 14 and coming in
sixth is California. 15 So we are in fact shipping goods from all of Eastern and
Central Canada, across the Ambassador Bridge at the moment, across the
Detroit River, and they are going to all parts of the United States. 16
I think as Ambassador Wilson pointed out at the lunch, some 35 states see
Canada as their largest export market. 17 Not only in terms of value of goods,
but also through the employment impacts associated with that trade.
In terms of Ohio, since I am in Ohio, we focus a little bit more. Ohio
exported about $18 billion in goods to Canada in 2006 and imported about
15.3. 18 It is the second. 19 Canada is Ohio's largest export market, 20 and the
trade is almost equivalent to the state's export sales to all other countries
combined. 21 Some 275,000 jobs -- it is a very precise number, 276,500 --
about 275,000 jobs in Ohio are supported by Canada-U.S. trade. 22
In addition, more than half a million Canadians visited Ohio in 2006,
spending over a hundred million dollars here, and in turn, Ohio residents
made 700,000-plus visits to Canada spending about $280 million. 23
The approach we have taken is a coordinated bi-national environmental
assessment. It has been thorough, open, and transparent. We have had well
over 200 meetings and public sessions over the past three years dealing with
all issues of the environmental file. So certainly air pollution, noise pollution,
13
See generally EASTERN BORDER TRANSPORTATION COALITION, TRUCK FREIGHT
CROSSING THE CANADA-US BORDER (Sept. 23, 2002),
http://www.ebtc.info/PDF/Executive%20summary.pdf, at 7 (illustrating the balance of trade
between Canada and individual states).
14
See generally id.
15
See generally id.
16
See id. at 4 (illustrating the movement of trucks carrying goods between Canada and the
United States).
17
Michael Wilson, Can. Ambassador to the U.S., Address at the Canada–United States
Law Institute Annual Conference: The Longest Secure Border in the World—Canada and the
United States (Apr. 18 2008) (transcript available at http://geo.international.gc.ca/canam/washington/ambassador/080418-en.asp).
18
State Trade Fact Sheets 2007: Ohio, Government of Canada,
http://geo.international.gc.ca/can-am/washington/state_trade_2007/ohio-en.asp (last visited
Oct. 18, 2008).
19
See EASTERN BORDER, supra note 13 (stating that, as of 1999, Ohio is the fourth largest
importer of Canadian goods).
20
State Trade Fact Sheets, supra note 18.
21
22
23
See id. (“Ohio sent more than half its exports to Canada in 2006”).
Id.
Id.

272 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
you would expect at long, busy corridors like this, but also analyzing any
cultural impacts we might have depending on where we actually choose to
locate the bridge.
We have met with government groups and other government agencies.
We have met with the private sector, we have met with special interest
groups in terms of community impacts, and we have met with a large number
of environmental organizations who have concerns about making sure that
the impact of this new crossing is adequately mitigated so that the impacts,
while there will be some, will not be severe.
It is necessary of course that we choose the same bridge location on the
Canadian and U.S. sides. It would not be at all appropriate for us to have half
a bridge going one way and half another and not meeting in the middle, and
so we have had a very detailed coordinated process throughout.
We are approaching the end of the environmental assessment phase of the
project and should be announcing the final location of the new crossing
sometime mid June to mid July time period. We are just trying to finalize the
last few things that are necessary to make that announcement.
On the U.S. side, the draft environmental impact statement, or the DEIS,
was published in the Federal Register on February 29. 24 That started a 60-day
comment period, which will wrap up at the end of April. There is a
possibility for that comment period to be extended, but we will not know that
until the end of April as to whether or not anybody has petitioned to be
allowed some more time to provide additional comments. Barring that, then,
I say we would be in a position to announce the new crossing location by the
middle of June. 25
This is just a very busy little schematic that shows all of the kinds of
agencies and cross-reference work that we have been doing over the three
years. You will see all sorts of U.S. and Canadian regulatory agencies as well
as first nation groups or Aboriginal groups, the Indian tribes on the U.S. side
as well as all sorts of -- as I said -- environmental and other local interest
groups that have an interest in the file. More than 200 meetings have been
held in the past three years. All public, all open to anybody who was
interested.
Our evaluation factors include protection of community and
neighborhood characteristics, consistency with existing and planned land use,
protection of cultural resources, protection of the natural environment - the
24
Environmental Impact Statements—Notice of Availability, 73 Fed. Reg. 11112 (Feb. 29,
2008).
25
See News Release, Transport Canada, Binational Effort One Step Closer to a New Border
Crossing Between Windsor and Detroit (June 18, 2008),
http://www.tc.gc.ca/mediaroom/releases/nat/2008/08-h146e.htm (discussing the proposed new
bridge location).

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 273
air and the noise and so on, improvements to regional mobility and then,
finally, cost and constructability. So we have not put cost at the top of our
equation, but we certainly do take it into consideration in choosing where the
ultimate bridge location will be.
The assessment has gone through developing initially a set of crossing
alternatives, which I can show on this next spaghetti slide here. What you can
see if you can take a look at it is this green line over on this right-hand side
from you is the 401 Highway in Windsor, and you can see that it ends just
outside the city limits there. That was a decision that was made more than 40
years ago -- in fact, going on 50 now -- not to put the highway right through
into the downtown part or down to the river itself. 26
So from that point, what we need to do on the U.S. side is to connect into
the interstate system so this whole spaghetti map sort of showed all of the
road possibilities on the Canadian side to get us from the 401 to a new
crossing, the various crossing alternatives, and we looked at some 15 of those
to start, and then the connections that would get you from the bottom of the
bridge into the U.S. interstate system. The current situation with the
Ambassador Bridge – which I will try to point out here, it is a little fuzzy -- is
here. And it does not connect. There are about nine kilometers - so it is
somewhere over six miles - between the end of the 401 and the Ambassador
Bridge, so some 10,000 trucks a day are going down essentially city streets.
Anecdotally, you can drive from Montreal to Texas and hit exactly 17
stop lights, 16 of them on this road. Now as you can imagine from a local
pollution point of view, that is fairly serious because all of these 10,000
trucks a day are starting, stopping, starting, stopping. In other words, they are
running at their least efficient method. So the local air pollution and noise
pollution and so on has really become an increasing burden for the
communities that surround that corridor.
After two years or so of work, we managed to eliminate most of the
crossing alternatives and focus down onto this little sunspot area in here. So
again you can see with this option the 401 Highway ending. The yellow
section will be a new six-lane limited-access freeway that will connect the
401 directly into the new customs plazas.
It is hard to tell because, of course, the width of this is highly exaggerated
in terms of scale, but it will actually parallel the city streets, and it will be
essentially a below-grade highway with some 10 or 12 short bridges you
might call them, or sometimes they are called land bridges and some of them
are found in national parks.
So whereas, at the moment, the 10,000 trucks a day have effectively cut
the communities on one side away from or off from the communities on the
26
See generally The King’s Highway 401,
http://www.thekingshighway.ca/Highway401.htm (last visited Oct. 18, 2008).

274 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
other side, we are also hoping to try to reestablish those connections which
have not really existed, well, in more than 20 years.
As we approach the border, you can see that we have three lines left as
our possible options. The northern one, which gets close to a community
called Sandwich in Windsor, which was the oldest permanently-inhabited
community in Canada west of Montreal. 27 There is a central location through
here and then a southerly location with a longer-skewed bridge that you can
see.
The reason we have these three options left is that historically there was a
lot of salt mining activity in this area, and they used to mine it before they
got into the sort of normal kind of mines that you would think about, the
pillar and post approach. 28 They actually used to get the salt out through
solution mining. 29 So you drill a hole, you pump in water, dissolve the salt,
and pump it out again. 100 years ago and even up to about 50 years ago when
we stopped this practice, nobody seemed to think it was terribly interesting to
put a map as to where they had drilled these holes. And there are of course
from these a lot of salt caverns that have opened up underneath. 30 So we have
had to spend about $20 million drilling holes to determine the nature and the
extent of those caverns because you do not want to locate a bridge pier on top
of a cavern.
The reason for the southern root then along the skewed one is not just that
bureaucrats like to choose the least obvious option. It is that we knew that
was far enough south to be out of all of the area where any solution mining
took place. The result of our geotechnical analysis has shown in fact that we
can build either of these two structures, the two northern ones although the
most northern one has some -- as the geotechnical experts say -- anomalies
under the approach ramp which would increase cost fairly significantly. We
will be able to make the final determination of that route -- as I mentioned
before -- somewhere in the mid June to mid July, time period.
This is sort of another schematic of how this crossing could work. You
can see that the three orange areas or yellowy areas down here. And I
apologize for the fuzziness of some of this, it is actually better on my copy.
27
See History of Windsor, http://www.windsorkiosk.com/history.php (last visited Oct. 18,
2008).
28
See Wes Porter, The Salt of the Earth, CAN. FREE PRESS, Oct. 15, 2007,
http://www.canadafreepress.com/index.php/article/961 (discussing the abundance of salt in
Windsor).
29
See Foundations Investigations Information Sheet, Detroit River International Crossing
Study,
http://www.partnershipborderstudy.com/pdf/Foundations%20Investigations%20Fact%20Sheet
.pdf (last visited Oct. 18, 2008) (explaining the process and effects of solution mining in the
Detroit-Windsor area).
30
See id.

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 275
Three custom plaza possible locations and the choice of that largely
dependent on which bridge crossing we choose. On the U.S. side there is a
very large footprint here for a Customs facility, but we will only be taking
about half of that depending on which of the bridge options we take. So if we
take the center one or the southerly one, we will just be using this part of it.
The Customs plazas will be in the neighborhood of 80 acres each. Both
CBP and CBSA on the Canadian side, say that they need about 40 acres to
handle their requirements for Customs processing, primary, secondary
inspection, and so on. The buffer will provide a security buffer, and it will
also provide the possibility for locating related businesses such as Customs
brokers or duty-free shops for that matter in there.
You can see as well on the U.S. side that depending on where you put this
plaza, we will have to build new interchanges to get us onto the Interstate I-
75. But when the project is done, we will essentially be able to maintain
highway speed right into the Canadian Customs plaza. If you are a FAST or
one of the other program members to get you through the Customs relatively
quickly, then you will be able to shoot across the bridge and connect directly
into the interstate system or of course vice versa coming from the states into
Canada.
On the U.S. side, the community where the Customs plaza will locate is
called Del Rey. It is a community that has certainly seen better days. It is
quite down on its luck. 31 A lot of abandoned houses and some brown field
sites in there. 32 So this is actually going to provide an opportunity for a
rejuvenation of brown field sites on the U.S. side.
And also with the part of Del Rey that remains after the Customs facility
is built, there will be money put in for rehabilitating and renovating that
community to turning it back into a more vibrant community as it once was.
This is after all only about a mile-and-a-half from Downtown Detroit, so it is
relatively central. 33 At the moment you can buy a house in this area for about
$15,000 or so. 34 You know, in a mile-and-a-half from downtown of a large
city, which is I think indicative of the problems the community has come
into.
Our objective overall is an end-to-end solution, so we do not want to find
ourselves in a situation that exists currently that there are no direct or
adequate access into the highway system or into the 400 series or to the
31
See id. (stating that Delray is one of Detroit’s “most hard-scrabble and economically
ravished corners.”).
32
See Environmental Justice Case Study: Delray Neighborhood Lawsuits Against Local
Polluters, http://www.umich.edu/~snre492/Jones/delray.htm (last visited Oct. 18, 2008) (stating
that Delray has suffered from mass pollution and that many residents left this area when
industrial jobs left southeast Michigan).
33
See generally id.
34
See id. (stating that homes are assessed for approximately $3,000-$4,000).

276 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
interstate system. So there are in a sense really five main components of the
project: the highway extension in Canada, the Canadian Customs facility, the
bridge itself across the river, the U.S. Customs facility, and then the
interchange into the I-75.
Also conveniently, of course, jurisdictions are different for each one of
those components. The Canadian Access Road is the responsibility of the
province of Ontario, although the federal government will pay for half of it. 35
The Customs facility is a Canadian federal responsibility only. 36 The bridge
will be jointly owned by the Canadian government and the government of the
state of Michigan. The U.S. Customs facility is U.S. federal, 37 and the
interchange is a Michigan state responsibility, but with FHWA covering
about 80 percent of the costs of that. 38 With overlapping jurisdictions, a
whole series of cross-guarantees will be necessary so that we can make sure
all of the components can be brought into service at essentially the same
date.
In terms of our approach to financing this, the road will be paid for by
governments as will the interchange on the U.S. side. The two Customs
facilities are most likely to be paid for directly by the respective federal
governments. But for the crossing itself, we are going to seek a public private
partnership as they are now called or P-3 or PPP, whichever terminology you
want, or as they say in Ontario, alternative financing vehicles.
And we believe that the total revenues generated by traffic crossing this
bridge will be sufficient to more than recover the initial capital cost and to
return a reasonable profit to a private sector participant over say a 35 to 40-
year concession period. So once we have completed the next phase of the
35
See News Release, Transport Canada, The Government of Canada Welcomes the Design
Proposal for the Windsor-Essex Parkway (May 1, 2008),
http://www.tc.gc.ca/mediaroom/releases/nat/2008/08-h118e.htm (“The Let's Get Windsor-
Essex Moving strategy is a $300-million joint investment by the Government of Canada and
the Province of Ontario to improve traffic flow and reduce congestion at the Windsor-
Detroit Gateway.”).
36
See Canada Border Services Agency About Us, http://www.cbsa-asfc.gc.ca/agencyagence/what-quoi-eng.html
(last visited Oct. 23, 2008) (“The CBSA manages 119 land-border
crossings and operates at 13 international airports…administers more than 90 acts, regulations
and international agreements, many on behalf of other federal departments and agencies, the
provinces and the territories.”).
37
See Customs.gov, History, http://www.customs.gov/xp/cgov/about/history/history2.xml
(last visited Oct. 23, 2008) (discussing the U.S. Customs Service as the federal organization
responsible for ensuring that imports and exports comply with federal laws).
38
See Federal Grants Wire, Highway Planning and Construction,
http://www.federalgrantswire.com/highway-planning-and-construction.html (last visited Sept.
25, 2008) (stating that the FHWA usually contributes 90% of the funding for interstate work,
and 80% of the funding for all other projects).

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 277
environmental assessment and we have chosen which route it is, then we will
be preparing ourselves to take this project to market.
On the Canadian side, the road, which is a much bigger deal than on the
U.S. side where it is essentially an interchange that has to be built, it is about
a nine-kilometer road -the parkway option as it is now being called. We will
try to build a six-lane highway while minimizing community impacts. Of
course, it is impossible to absolutely eliminate community impacts, but I
think by putting this essentially below grade by building some 10 or 12 of
these 200 to 300-meter-wide land bridges and with appropriate landscaping,
we can probably not only minimize the community impact but actually in
some ways enhance that part of Windsor through the creation of about 200
acres of new park land, some 20-odd kilometers of bike paths and walking
paths and so on.
Just one typical view of what that parkway might look like. You can see
in the center portion of that the green section, which is one of these land
bridges or short tunnels, and there will be some as I say 10 or 12 of these
along the route.
Another option showing the below-grade road taking a swing, and you
can see beside this that the existing road here remains, and that last would be
turned back into a city street. All the truck traffic will be taken off and put
onto the new highway extension. And with that, the next steps. Continue to
consult with the public as we have been doing, complete our technical and
environmental analysis -- it is nearing a conclusion now - prepare for the
announcement of the crossing location later on this spring, and then move
ourselves forward into the financing stage of our project.
With that, I will wrap up. And here are our contact points, or in fact you
can visit our website which contains all of the documentation on the DRIC
process, and that is partnershipborderstudy.com. With that, thank you.
MR. CARMODY: Just one question. I wanted to ask what we are looking
at in terms of a completion date for the project.
MR. O'DELL: That is a bit hard to tell. We have about a six or seven-year
process once we get the contractual arrangements in place between Canada
and Michigan on the joint venture arrangement that we propose to manage
the marketing of this.
So how much time it takes to get to that point is really a bit of an
uncertainty at the moment. Michigan does not at present have the legislative
authority to enter into public private partnerships nor do they have the
authority at the moment to enter into contractual arrangements with foreign
governments. 39 So two pieces of legislation or perhaps a combined piece will
39
See generally MICH.COMPL.LAWS §124.504 (1967) (“A public agency of this state may
exercise jointly with any other public agency of this state, with a public agency of any other
state of the United States, with a public agency of Canada, or with any public agency of the

278 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
have to be introduced in the Michigan legislature. That has not yet been
done.
So while we are awaiting that, we cannot sign our formal agreements with
Michigan, which means we cannot initiate the marketing process for
financing. 40 It will actually take about a year, year-and-a-half to design the
bridge, and about four-and-a-half to five years to build it.
MR. CARMODY: So just a ballpark then, and to be completely clear, we
are looking at a date probably around 2015?
MR. O'DELL: Yes, 2014, 2015 I think is probably a reasonable time. We
are looking always at possibilities of trying to shorten that schedule if it is at
all possible, and we will take advantage of whatever opportunities present
themselves to do that.
MR. CARMODY: Okay. Well, thank you very much. Our next speaker,
David Oxner.
CANADIAN SPEAKER
David Oxner †
MR. OXNER: So finally I get to present. It is been a long time. I want to
bring greetings from the east coast of North America -- or from actually the
east coast of Canada. One of the things I just want to mention. In one of the
earlier sessions from RIM, a gentleman was talking about the various RIM
outlets in North America. He failed to mention the second largest RIM
facility, which is actually located in Halifax, and it has been there now for
over a year-and-a-half and employs well over I think 1,300 employees. 41 So I
want to just point that out because if I did not and I went home, I would
regret that I did not bring it up.
United States government any power, privilege, or authority that the agencies share in common
and that each might exercise separately.’).
40
See generally id.
†
David Oxner is the Director of the Gateway Initiative for the Department of Transportation
and Public Works and the Province. His executive portfolio includes the following senior
assignments: Department of Transportation and Public Works; Department of Tourism, Culture
and Heritage; the Office of Economic Development; the former City of Dartmouth; Halifax
Board of Trade; McCain Foods Transportation Group; and the Toronto Dominion Bank.
41
See News Release, Government of Nova Scotia, Research In Motion Officially Opens
for Business in Nova Scotia (April, 20, 2006), available at
http://www.gov.ns.ca/news/details.asp?id=20060420003 (“RIM is creating 1,200 new jobs
over a five-year period at its technical support operations centre in Halifax”).

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 279
But I am really honored to be here to present here today talking about the
Atlantic Gateway, and hopefully I will not go over my time, and I do intend
to show a short video at the end with your indulgence, so let us begin.
Here is an outline of what I am going to cover in terms of what is the
Atlantic Gateway. It is kind of the new gateway on the radar screen in
Canada. I will talk about the Atlantic Gateway assets and about our
advantage.
So let us start out with some basic geography about what is Atlantic
Canada. Well, Atlantic Canada includes the four provinces: New Brunswick,
Prince Edward Island, Newfoundland and Labrador, and Nova Scotia. 42 We
are situated on the east coast of North America on the Atlantic Ocean. 43
So what is the Atlantic Gateway? Well, the Atlantic Gateway is a
partnership with the four Atlantic Provinces, the Atlantic Canada's
Opportunities Agency, Transport Canada, and the private sector. 44 We signed
an MOU that commits the governments to work together to develop an
Atlantic Gateway strategy. 45 And while the public sector is involved in gaterelated
activities, the Atlantic Gateway is really a private sector-driven
opportunity. 46 It is really the private sector (shipping lines, shippers, and
cargo owners) who will decide to use the Atlantic Gateway. 47
So one example of private sector leadership is the Halifax Gateway
Council, which draws its membership from key transportation providers in
the Halifax area. 48 Their strategic focus is on four key areas. To grow air
42
Atlantic Canada Opportunities Agency, About Atlantic Canada, http://www2.acoaapeca.gc.ca/NR/exeres/ADC7B37D-E82D-494A-9B3E-97DD13B7F477.htm?lang=en
(last
visited Sept. 26, 2008).
43
See id. (stating that “Atlantic Canada is the closest ports to Europe along the North
American seaboard.”).
44
Melanie Patten, Ottawa, Atlantic Provinces Agree on Gateway Strategy, THE CANADIAN
PRESS, Oct. 14, 2007, available at
http://www.redorbit.com/news/technology/1101796/ottawa_atlantic_provinces_agree_to_deve
lop_gateway_strategy/index.html.
45
Id.
46
See Location Canada, Gateways to Canada & North America,
http://www.locationcanada.com/gatewaysToCanada.htm (last visited Sept. 26, 2008) (stating
that the Atlantic Gateway needs to be fueled by the private-sector).
47
See Mary R. Brooks & Peter Vuillemot, Commentary, Developing the Atlantic Gateway:
A Discussion of the Key Issues, Atlantic Provinces Economic Council (2007), available
at
http://www.apec-econ.ca/pubs/%7B3A30BBAB-5531-45A8-BC17-
E0434EDEB417%7D.pdf (“The development of the Atlantic gateway should be led by the
primary stakeholders: the Port of Halifax, terminal operators and transportation service providers
that have a direct involvement in the movement of import/export container traffic
through the gateway.”).
48
See Halifax Gateway Council Homepage, http://www.halifaxgateway.com/index.htm
(last visited Sept. 26, 2008) (The HGC was established by various transportation organizations
to “promote growth in the transportation sector and related industries in the Halifax region.”).

280 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
passengers and air cargo, cruise f home porting, and also marine containers.
Their membership is made up of the Halifax Port Authority, the Halifax
International Airport Authority, CN, Armor Transport Group, and many
others.
So let us look at a definition of the Atlantic Gateway. Well, Transport
Canada as part of their national gateway strategy defines a gateway as a
system or marine, rail, road, and air transportation infrastructure of national
significance for international trade. 49 So that is the federal model that is being
used. 50
So now let us look at some of the key Atlantic Gateway assets from a
Nova Scotia perspective. And the first one is obviously the Port of Halifax,
and it has been mentioned several times over the last couple of days. We are
strategically located as a first-in and last-out port on the North American
continent for Suez Canal routings. 51 It is the deepest container port on the
east coast of North America. 52 It is uncongested with capacity to grow, and it
offers a time and cost advantage due to its strategic location. If you
remember earlier on Friday, Garland Chow talked about Prince Rupert and
its time advantage. Well we have a similar scenario in the Port of Halifax. It
has on-dock rail and twice-daily double-stack service into Montreal, Toronto,
and Chicago. 53
75 percent of all inbound cargo is transported via rail to Quebec, Ontario,
and the U.S. marketplace. 54 The U.S. cargo represents about 17 percent of
volumes of the Port of Halifax. 55 So the port has worldwide connections. And
speaking of connectivity, here's a trade profile for the Port of Halifax. And
you can see by the slide it has a very diverse market mix in terms of its trade
profile.
49
See generally Transport Canada, National Framework Policy Foreword,
http://www.tc.gc.ca/GatewayConnects/NationalPolicyFramework/nationalpolicy2.html (last
visited Sept. 26, 2008) (discussing the purpose of the National Framework Policy for Strategic
Gateways and Trade Corridors).
50
Transport Canada, Canada’s Atlantic Gateway,
http://www.tc.gc.ca/GatewayConnects/Atlantic/AtlanticGateway.html (last visited Sept. 26,
2008).
51
See Greater Halifax Partnership, Port of Halifax,
http://www.greaterhalifax.com/en/home/businessresources/other_resources/transportation_infr
astructure/port_of_halifax.aspx (last visited Sept. 26, 2008) (stating that the Port of Halifax is
the first destination traveling down the Suez Canal).
52
Id.
53
Port of Halifax Media Fact Sheet, http://www.portofhalifax.ca/english/news-andevents/media-fact-sheet/index.html
(last visited Oct. 20, 2008).
54
See generally id.
55
See id. (stating that the Port of Halifax trades 12% of its containers with North America).

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 281
Halifax has two container facilities, the first one, which was built back in
1969 and is now owned by Macquarie infrastructure Partner of New Zealand,
is located on a 72-acre facility, and features 3 deep berths up to 16 meters,
and is capable of handling the world's largest ships. 56
It currently has capacity around 750,000 TEUs or 20 foot equivalence and
with the potential increase to 1.5 million TEUs. 57 It has six ship-to-shore
cranes, and current container storage capacity on site, of about 17,000 TEUs,
and it has 8,000 feet of double-stacked on-dock rail. 58 And also right now it
has 300 in-ground reefer outlets, and they are planning to expand to 500 over
this summer. 59
The next container terminal is Cerescorp Container Terminal that is built
on 70 acres and has six cranes and two berths at 55-feet depth. 60 It has ondock
rail, which has recently been doubled to 12,000 feet, and a new state-ofthe-art
truck handling facility. 61 Its throughput is about 250,000 TEUs, with
the capacity to expand to 700,000 TEU units. 62 It is able to store about 9,000
TEUs on dock, and it has 500 in-ground reefer outlets. 63
So one of the questions around this session was are we a gateway or are
we a checkpoint? And I would argue that to some degree the Atlantic
Gateway's a little bit of both. U.S. and Canadian federal agencies work in
cooperation to ensure checks and balances are in place
Ship manifests are shared ahead of time, and targeting of specific
containers is completed as well. Both container terminals have on-dock
scanning equipment. U.S. Customs agents are on-site, and as a result, U.S.
containers are cleared through Halifax on-site before they actually leave the
56
Port of Halifax, South End Container Terminal,
http://www.portofhalifax.ca/english/port-at-a-glance/facilities/sounth-end-containerterminal.html
(last visited Sept. 28, 2008).
57
See generally id. (stating overview of the South End Container Terminal).
58
See id. (stating that the South End Container Terminal has a container storage capacity
of 12,500 TEU’s and the terminal has about 9,000 feet of trackage).
59
Id.
60
Port of Halifax, Fairview Cove Container Terminal,
http://www.portofhalifax.ca/english/port-at-a-glance/facilities/fairview-cove.html (last visited
Sept. 9, 2008).
61
Tom Peters, Terminal Operators, Port Authority Pump Millions of Dollars into Box
Facilities, CANADIAN SAILINGS, Sept. 17, 2007, available at
http://www.accessmylibrary.com/coms2/summary_0286-32902236_ITM.
62
Press Release, Cerescorp Company, Cerescorp Purchase Two New Super Post Panamax
Cranes for Halifax Facility (Mar. 20, 2006), available at
http://www.seaportspr.com/viewtechnews.cgi?newsletter_id=48&article_id=2187.
63
Fairview Cove, supra note 60 (“500 in-ground outlets”); See Andrea MacDonald, Executive
Overview: Atlantic Maritime, WORLD TRADE MAGAZINE, Apr. 6, 2006, available at
http://www.worldtrademag.com/Articles/Feature_Article/b458ab331207a010VgnVCM100000
f932a8c0 (“The 70-acre Fairview Cove Container Terminal, operated by Cerescorp Company,
provides on-site storage for 9,000 TEUs.”).

282 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
terminal dock. So that is important not only for the Atlantic Gateway and
U.S. shippers to have a smooth transition at the U.S. border. And I think
Friday night at the dinner there was a couple of banners that said something
about meet us at the border. Well, in our case, you can meet us at the border,
but we can get your containers directly to your door so there is no need to
meet us at the border. As well, Public Safety Canada provides policy
leadership and delivers programs in areas of national security for emergency
management and law enforcement. 64
I mentioned that we have a very diverse market mix, but our focus in the
Atlantic Gateway is really growing traffic through the Suez Canal because
that is where we see a lot of opportunity for Suez Canal-based traffic that is
destined for the North American marketplace.
So we are focusing most of our marketing and sales efforts in and around
the break-even line which is shown here which hopefully is dissecting
Thailand properly, but anything to the left of that break-even line, it is
actually faster and shorter to go through the Suez Canal to get to the North
American marketplace. Halifax is actually 1,500 nautical miles closer to
India than any other North American port, 65 so that fact gives us a strategic
geographic advantage.
There are also two private sector initiatives underway that are in different
stages of development within Nova Scotia. One is at the Strait of Canso in a
community called Melford. And the other one is located at the former
military base in Sydney, and these are two green field sites that are looking at
being developed. I would say currently right now the Melford one is much
further ahead to open a new facility or start digging in the ground actually
sometime later this year.
The other asset that we have is CN rail. It is the best connected of any
railway in North America. 66 It is the only North American railway that
touches all three coasts: the Atlantic, the Pacific, and the Gulf. 67 They have
an extensive intermodal network with inland terminals in all major Canadian
cities and U.S. Midwest cities. 68 We have daily service for dry and
refrigerated cargo to all inland terminals. 69 And we have the fastest overall
64
Public Safety Canada, Who We Are, http://www.publicsafety.gc.ca/abt/wwa/indexeng.aspx
(last visited Sept. 26, 2008).
65
See Port of Halifax, India Connections, http://www.portofhalifax.ca/english/portbusiness/cargo/india-connections/index.html
(last visited Sept. 9, 2008) (“Via the Suez Canal,
Halifax is 1,840 nautical miles closer to India than any ports on North America's west coast.”).
66
Canadian National Railway, Where You Can Ship, http://www.cn.ca/en/shipping-whereyou-can-ship.htm
(last visited Oct. 23, 2008).
67
Id.
68
See id. (stating the CN Rail reaches all of Canada and 14 states).
69
See Canadian National Railway, Consumer Goods, http://www.cn.ca/en/shippingconsumer-goods.htm
(last visited Oct. 23, 2008) (CN fleet consists of 8-foot dry containers,

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 283
transit time to U.S. Midwest market. 70 So consider this, CN rail transit time
to Chicago, which is the third-largest city in the United States, is just 71
hours. 71
So a presentation on the Atlantic Gateway would not be complete without
mentioning the Robert L. Stanfield International Airport. It is the closest
major continental North American link to the EU, 72 and it offers overnight
trucking to the eastern seaboard of United States and also to Central
Canada. 73
And speaking of 9/11, part of the topic of this session around border
security, this is a picture of Halifax International Airport during 9/11. Halifax
received more than 40 diverted aircraft during 9/11, more than any other
Canadian airport, and we were the first to have planes back in the air,
proving we can handle challenges and demands. The other area in the
Atlantic Gateway that is growing as well is the trans-loading sector, and we
have some of Canada's largest retailers using the Atlantic Gateway
Consolidated Fast-freight , an international company, has just built a 65,000-
square foot trans-loading warehousing facility in Halifax with the additional
capacity to expand that by another 60,000 square feet. 74 And they are
processing about 500 marine containers per week for their client Canadian
Tire , a Canadian retail shopping chain 75 and as well the Armor Transport
Group runs a similar facility for the Canadian Retail Shippers Association,
which is a conglomerate of companies that includes Sears, Eddie Bauer,
Roots Canada, 76 that form together to carry out their logistics.
53-foot containers, and temperature-controlled protective equipment).
70
See generally CN Does It Agains-Chops 24 Hours Off Chicago-Vancouver Inter-Modal
Service, BUSINESS WIRE (Jan. 24, 2001),
http://findarticles.com/p/articles/mi_m0EIN/is_/ai_69434882 (discussing the Canadian National
Railroad’s increase in speed between Canada in Chicago).
71
Port of Halifax and CN Brochure,
http://www.portofhalifax.ca/downloads/HalifaxCNBrochure.pdf.
72
Airports Council International-North America, Weekly E-Newsletter (May 14, 2008),
http://www.naylornetwork.com/aci-nwl/update-v2.asp?projid=1378.
73
See generally Halifax Stanfield International Airport, About the Airport,
http://hiaa.ca/default.asp?mn=70.1.11&id=190&pagesize=1&sfield=MenuId&search=11 (last
visited Oct. 3, 2008) (discussing the airport’s access to United States markets).
74
Kevin Beaudry, Steven Caldwell & Erik Charton, Industrial Report,
http://www.dtzbarnicke.com/client/JJB/JJB_LP4W_LND_WebStation.nsf/resources/GV+200
7+-+Sector/.../Industrial+Report.pdf (last visited Oct. 1, 2008) (“Consolidated Fast Freight is
building a 90,000 square foot state-of-the-art transload, distribution and warehouse centre in
the Burnside Industrial Park in Halifax and its twin just outside Edmonton in the Acheson
Industrial Park.”).
75
See generally id.
76
Canadian Retail Shippers Association, Members,
http://www.crsalog.com/ship_members.htm (last visited Oct. 1, 2008).

284 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
So the Atlantic Gateway has a geographic advantage. We are well
connected to the North American marketplace by road, rail, air, and water.
Out of Halifax there is a fair amount of short sea shipping that occurs
between Halifax, St. Pierre, Miquelon into Newfoundland into Cuba and the
Caribbean. 77 And as well there are ongoing discussions with the ports in
Hamilton and Thunder Bay regarding short sea shipping service into the
Great Lakes. 78
So in closing, I want just to point out some of the advantages that the port
has. Again it is a geographic advantage of its distance. It is ice-free, deep,
and offers a competitive route to North America. We have had labor stability
in the port for over 30 years, no business disruption. There is a seamless
border connection with the United States.
Thank you.
UNITED STATES SPEAKER
Hugh Conroy ‡
MR. CONROY: Well, thank you, and noting that the name of the panel is
“East, West, and Within,” I guess I am West. And given the group I work
with, maybe I am more on than within. But we will get into that.
As Chios said, my organization, the Whatcom Council of Governments, is
located in Bellingham, Washington, about 25 miles south of the border. We
are, as he also mentioned, a metropolitan planning organization (MPO), and
it is as an MPO that, since 1997, we have been lead agency of the
International Mobility and Trade Corridor Project (IMTC).
77
See Canadian High Commission, Shipping Options From Canada - Barbados and the
Eastern Caribbean, http://www.infoexport.gc.ca/ie-en/DisplayDocument.jsp?did=24144 (last
visited Oct. 2, 2008) (discussing the companies that ship from Canada to the Caribbean).
78
See TRANSPORT CANADA, SHORT SEA SHIPPING: AN ONTARIO PERSPECTIVE 9 (2003),
available at http://www.tc.gc.ca/pol/en/acf/shortseaS/workshop/Report3WSRodTaylor.pdf
(discussing the possibility of creating cross-lake ferries at the Port of Hamilton and the Port of
Thunder Bay).
‡
Hugh Conroy is a project manager at the Whatcom Council of Governments (WCOG), a
U.S. metropolitan planning organization in Bellingham, Washington. For 11 years, his work
has centered on the WCOG’s leadership of the International Mobility and Trade Corridor
Project (IMTC)–a binational and cross-border transportation planning coalition. Ongoing
regional coordination and multi-agency project delivery through the IMTC Project have covered
a variety of United States-Canada cross-border trade and travel issues. Public and private
entities, working through the IMTC, continue to identify priorities for the regional border
gateway, plan improvements, assemble project funding partnerships, and cooperatively oversee
implementation of several initiatives.

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 285
The prospective source of core financial support at the outset of IMTC
was the Coordinated Border Infrastructure Program (CBI), a U.S. federal
program out of the U.S. Federal Highway Administration. Luckily for us,
that bill passed in 1998 and IMTC was subsequently selected for funding
through a competitive application process. 79
It is from a lot of the policy work that went into forming the CBI that
IMTC gets its notion of gateway. I think it has been evident, as we have all
been talking here, that our notions of gateway differ a bit. In IMTC’s case,
we adopted a definition presented in a 1994 report to Congress which
evaluated the transportation needs expected along the U.S.-Canada and U.S.-
Mexico borders resulting from NAFTA induced increases in freight and
transportation demand. In this context, a gateway was seen as a regional set
of border-crossings which serve a “binational economic region.”
So in our case, our gateway that we focus on is four ports of entry. On the
west there, the Peace Arch Douglas Port of Entry which is actually limited to
passenger vehicles, but serves the main interstate corridor between I-5 and
BC Highway 99. Pacific Highway Port of Entry, which while a full-service
crossing is also the main commercial port of entry in our region. And then 10
miles -- and 10 miles again to the east, Lynden-Aldergrove and Huntingdon-
Sumas.
So what I am presenting for this conference is, I think, an example of
how, at a regional gateway level, U.S. and Canadian border stakeholders and
managers can coordinate and partner to more effectively manage operations
and even financing of our cross-border connections.
We heard a lot yesterday and as well today about several of these
programs, FAST, NEXUS, C-TPAT, et cetera, at a very U.S.-Canada borderwide
level. Hopefully some of my comments will describe how at a regional
level how those are supported and hopefully enhanced when you have
regional players sitting down at the table and coordinating these things.
Just to briefly go through some characteristics of IMTC without getting
too much into the formation. It is not a formally-structured organization. It is
a voluntary coalition established for the purposes of identifying mutuallydesired
improvements to cross-border transportation and inspection systems.
It is balanced between U.S. and Canadian participants from all levels of
government, industry and non-governmental sectors, and has a three-tiered
organizational structure; I will just briefly go through some of the
membership.
On a monthly basis we convene our steering committee, which typically
looks like about 25 to 30 folks around the table. It includes the state and
provincial transportation agencies; both country's regional, federal inspection
79
David Smalllen, TEA-21: An Historic Piece of Legislation, Federal Highway Administration,
http://www.tfhrc.gov/pubrds/septoct98/tea21.htm.

286 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
service representatives, CBP and CBSA; Transport Canada and U.S. Federal
Highway Administration from their regional offices; both Consulates
General, out of Vancouver and Seattle participate. And then other agencies as
well like the GSA, Government Services Administration, in the U.S. and
several of the Washington and B.C. at border municipalities such as Surrey,
Blaine, Sumas, Abbotsford, et cetera, and then several regional nongovernmental
organizations as well.
Our IMTC core group is where we bring in our industry representatives;
also legislative staff from both countries at the various levels of government,
primarily our federal folks is the core group is our decision-making body. On
an annual basis we revise and update a project priority list and come up with
revisions to our objectives. This is the tier that signs off on that. But again, it
is a voluntary and informal organization, so this is very much a process built
around consensus and relationships.
Other participants I did not mention here are duty-free stores, chambers of
commerce, and then other state offices. Earlier comments were made about
work between provincial premieres and state governors. That is certainly
been going on in Washington state, and has driven some newer contacts with
those offices.
Then our third tier is our General Assembly. This is basically an annual
meeting. /we have a mailing list of about 600 or so folk-- businesses and
individuals who depend on a functional cross-border system. This is a chance
for them to hear sort of an annual report from the inspection agencies and
transportation agencies about progress on projects and also provides a chance
for these agency managers to hear back from stakeholders about what current
concerns.
At the top of the slide there you see a typical steering committee meeting,
a big surprise there. And then out in the field, just an example of some of our
agency representatives coordinating. I think that was regarding the FAST
lane installation on southbound 543 of Pacific Highway.
I wanted to put this slide up again just to go back to the concept of
gateway and emphasize that by organizing around these four ports of entry
and going off of some of the objectives set out, again in that policy piece and
subsequent coordinating border infrastructure legislation, we try to focus on
these four ports of entry as a regional border crossing system, really moving
beyond just looking at a project-by-project basis from one crossing to one
crossing.
IMTC looks at it as an interrelated system serving a mixture of travel and
trade serving multiple modes and co-existent with other transportation
options. Rail, marine, pipeline, and even the Internet come up a lot when
looking at impacts on traveler flow.
And I, too will pause on the question of whether this is a gateway or a
checkpoint. Sort of seemed obligatory coming to this conference. I think

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 287
from the perspective of this IMTC coalition I also need to give the answer
that: it is a little of both. And the reason I need to say that is because as we
look to identify needs for improving this gateway, we identify projects that
are of common interest across the coalition. All of our agencies have their
own specific missions, but we need to find improvements that are mutually
supportable and universally beneficial.
And I will just throw this slide up there. It is one I show folks just to put
agency names on all the different pieces and functions operating at the port
of entry. It gets to some of the things you are talking about, this question of
gateway or checkpoint. . Our border is functioning as a gateway on a day-today
basis. Around our IMTC table participants probably see it as trending
more towards a checkpoint. And I will touch on some of the data we have
that supports that conclusion.
I was transitioning to a review of projects, so instead of going through the
multitude of projects that IMTC has advanced since 1997 -- and I do not
mean to say we, IMTC, or WCOG have necessarily implemented these
projects although my office has been involved directly in some of them -- the
individual agency participants are the ones that actually will implement a
project like a FAST lane extension or something of that nature.
So from the beginning there has been very strong support for data
collection and management. Early on in 1999, 2000 we did the region’s first
cross-border origin-destination and commodity-flow study. This project was
the first comprehensive vehicle intercept survey of both travelers and freight,
getting very valuable baseline data on all sorts of traffic forecasting metrics.
We have also done market research and outreach for preclearance
programs like NEXUS and FAST as well as installations of in-lane vehicle
detectors used for advanced traveler information systems and data collection.
We have also advanced infrastructure improvements. Some of those
projects include extension of the FAST and NEXUS lanes as congestion
worsened as uptake of those programs continued to rise. Access to the lanes
or the booths themselves was failing, and so both -- or all the agencies
around the border did a great job coordinating on ways to extend those. With
all the various businesses that you see on the screen there, there were lots of
access issues to deal with as well.
We have also just completed -- took about a little over a year -- an
incident response communications protocol. This gave a framework for both
the inspection agencies on both sides of the border, the State DOT or the
Ministry of Transportation, the Washington State Patrol, the RCMP, to come
up with a very organized way to communicate amongst each other in the
incident of a border closure either initiated by one of the inspection agencies
or one of the law enforcement or transportation agencies. Behind this face
sheet, there are a few pages of different schematics depending on how such
an event would initiate, and then the follow-up response on that.

288 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
This was something that we got a lot of uptake on by the governor
premiere work, and so we are happy to get that wrapped up, a lot of back
room checking on who could sign and what it was. And then I figured this
would be a good slide to bring to a conference at a law school since it has a
little blue corner on the top and the signature by the attorney.
Lastly, I just want to mention that, in looking at the border as a system,
we take into account multiple modes. I mean, we have a consistent
understandable attention paid to the road mode and trucks, but in trying to
ensure continued capacity at this port of entry, we want to make sure as we
plan for the future we are taking full advantage of the rail mode which is
there on Burlington Northern Santa Fe and the obvious marine options that
are in our area.
So in 2002 we did a feasibility study of what market there was for
expanding our current car-load bulk rail services to double stack, intermodal-
-at least between Vancouver and Seattle and then markets beyond. We also
did a short-sea-shipping study that we wrapped up in 2005, very much
compatible with the trilateral initiative between Canada, U.S., and Mexico on
that front. But ours was a much focused look at, again, the corridor between
Vancouver and Seattle and points beyond. And a lot of interesting issues
came up there which people have spoken to through the conference, but that
is a whole other presentation I suppose.
The coalition make-up of IMTC really gets to how these projects have
been advanced. The slide up on the screen now shows the financial side, that
cumulative project expenditures, at least between 1999 and 2006. As the
profile of our gateway has risen over time and different federal programs
have become available, especially in Canada.
With several border infrastructure improvements undertaken in the last
several years, IMTC has proven valuable in helping implement those
programs and coordinating things like construction schedules and travel
information plans that serve both sides of the border. But, overall, on the
screen there you see very strong leverage of funds and contributions on
projects between Federal Highway Administration, Transport Canada, B.C.
province, Washington state, and even local municipalities and other agencies
like TransLink in British Columbia.
I want to touch on a couple projects we have started recently. One is what
we are calling our cross-border circulation analysis. This is a close-up view
so you can get a sense of the east-west connector roads that exist between the
four Cascade Gateway ports of entry. There are some upcoming events if you
read the U.S. Chamber, Canadian Chamber report. One of their concerns is
construction of Peace Arch and resulting capacity issues at the Lynden-
Aldergrove border crossing. There is a lot of attention on expanding
operations at the Lynden-Aldergrove crossing--which is the one right there in
the center--along with traveler information systems and the flexible routing

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 289
options that become available for freight when e-manifests get more fully
adopted in both directions. So we want to make sure that the east-west
connector roads are up to that type of demand, so we are going to be
advancing a set of recommendations for infrastructure and ITS improvements
to affect that.
One of the data collection efforts that we were fortunate enough to do
recently was a redo of our year 2000 traveler intercept survey in conjunction
with the Western Washington University Border Policy Research Institute.
We were able to put student teams of surveyors out again, with great
cooperation from the inspection agencies, getting out in the vehicle queues
on the bottom of the slide there, even in the NEXUS lane this time around.
So we had the PACE and Canadian CANPASS program when we did this
before in 2000 but were not able to survey those lanes. But this time we also
got great information about the demographics and the trip patterns of
NEXUS lane travelers. Again this data will feed into lots of things, but
especially that circulation analysis that I mentioned.
I mentioned yesterday in the Q and A after a panel that we had, in
addition to the southbound FAST lane -- and this (on-screen picture) is again
Pacific Highway looking north. In addition to the southbound FAST lane, we
also have a northbound FAST lane now. One of the IMTC projects that we
got federal highway funding for was outreach and marketing of the FAST
program. We wanted to make sure that once infrastructure was available, it
was getting taken advantage of as much as it could.
Washington State Department of Transportation recently finished a
northbound FAST lane, and so with the remaining funding in that project, we
are trying to do another push to identify the carriers and shippers who should
be taking advantage of this program northbound. In our area though -- I do
not think we have -- as I also mentioned in the question the other day -- the
same kind of integrated manufacturing processes driving the freight as much.
And so it is been very difficult to get uptake in the FAST program from the
shipper community. And so the bulk of registrations with FAST tend to be in
the driver and career realm. So, most of the FAST traffic is empty traffic.
So we want to, at least at the front end of our marketing push, really make
sure that empty trucks are taking advantage of this infrastructure. And those
percentages of empty trucks moves can be high, so we hope to have an
impact. The southbound lane is doing okay. The northbound lane needs some
more uptake so we hope we can affect that.
Just to touch briefly again on the gateway vs. checkpoint question, I
mentioned I would turn to some data to illustrate some of our findings. With
the support of various agencies and for a couple different reasons, we have
had two opportunities to do a pretty detailed assessment of commercial
vehicle throughput time, both southbound and northbound, through the
Pacific Highway Port of Entry.

290 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
The first such study was done in the year 2002 out of the U.S. Department
of Transportation Office of Intermodalism. They contracted SAIC, and it was
really just a very large-scale cost-benefit analysis of expected ITS
improvements. And by the time they got around to doing the observations on
the ground, it was the FAST program that had been announced as the
upcoming pre-clearance program. We had plans to do something similar, but
I am sure the FAST program got on the ground and running faster than our
program would have, thanks to the obvious focus on security.
So, in 2002 -- and I am going to focus here just on the processing rate
portion of the field survey – the average processing rate of trucks at the
primary commercial booth southbound was 57 seconds a truck, and that is in
2002. When we did this in 2006 four years later -- and again both of these
years are post-9/11 -- processing for general trucks had increased more than
double to 120 seconds per truck and the FAST trucks, which we expected
would have a much easier time getting through at the booth, the inspection
time was 87 seconds per truck. So still significantly higher than regular truck
traffic inspection times had been just four years earlier and also after 9/11.
I guess sort of taking that to Todd's comments, the only positive response
that we are left with is, well, at least FAST is still faster than general today.
But it is not -- you know, it did not move us forward if we were comparing
ourselves to pre-9/11 or even 2002.
And the answer we have gotten from our Customs partners who are very
open about these results is that “we are just doing more now.” And so to
some extent, gateway or checkpoint, we work all these coordination issues,
but sometimes we are just getting as much optimization as we can along the
way. So, it is kind of hard to compare results from year to year with some of
these dynamics changing the way they do.
That is where I will wrap up for now. Thanks.
MR. CARMODY: Before I open the floor to questions and comments on
our wonderful presentation that we have had, I wanted to ask each of our
speakers this afternoon if there is perhaps one lesson that each of them might
want to focus on that we might learn from in trying to create gateways and
not checkpoints?
MR. O'DELL: One lesson, I am not sure. I think the way we have
approached it at least at the Detroit River International Crossing Project has
been very systematic, and I think that is a good thing. These are very, very
complicated files, and then certainly in our case we are dealing with four
governments, and there are international aspects of which laws are going to
apply, and where they are going to apply are all important. Given as well
heightened security interests from the last time anybody build this kind of
international crossing. We have paid a lot more attention to CBP, CBSA
requirements, and other parts of Homeland Security and Canadian security
organizations as well. I think one thing that we have done well was to bring

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 291
in all of the community, industry, and other groups very early in the process
so that there is really no opportunity for people to complain that their voices
have not at least been listened to. Not that we have taken all of the
recommendations that have come, but we can certainly I think point
successfully to having involved all of those necessary groups and
stakeholders from all across the spectrum early in the process and
continuously throughout the process.
MR. CARMODY: David, any observations?
MR. OXNER: Yes. I think what is different about the Atlantic Gateway
versus the Asia-Pacific Gateway or the Windsor Trade Corridor is we are not
congested. We would love to have that congestion, but we do not have it. So
we are pursuing an economic opportunity, the emergence of the Suez Canal
as the third all-water route to the North American marketplace.
And I think in our case what has worked well is the partnership with
Transport Canada and the partnership with the private sector. I mean, at the
end of the day, it is going to be the private sector that is going to decide, as I
said earlier. Whether or not they are going to move a box over Halifax or
whether they are going to move air cargo out of the airport.
So we have had a very strong working relationship with the four
provincial governments: the federal government, Transport Canada, and the
private sector working together to the point where Minister MacKay who is
the Minister of National Offense and also the Minister of the Atlantic Canada
Opportunities Agency led a mission to India in February 2008. There was
representation from each one of the provincial governments, Transport
Canada, and we had 14 industry people on with us.
The spirit of cooperation and the unity that sometimes the four Atlantic
Provinces do not exhibit on a regular basis was to the point where the Indian
business people who we meet with, it was very transparent to them. So I
think, in terms of going forward in our particular case, I think the key piece
has been working in cooperation with the four Atlantic Provinces, the federal
government, and the private sector.
MR. CARMODY: Hugh, any thoughts?
MR. CONROY: Looking back at some of the projects I touched on at the
beginning of our coalition, I do not think a lot of those things could have
been done. It really took a couple years of having meetings, Federal
inspection agencies and transportation agencies on both sides of the border,
to really just get to know each other and get some comfort and trust there.
So I guess one of the most important ingredients – and this is not about
creating the transportation system itself, but certainly about making it hook
up to the highest optimal outcome. So it boils down to -- and I know it
sounds corny -- but relationships in this regional context. When we got to a
point where we wanted to install in-road vehicle detectors for both
northbound, southbound with the lead agency being the Ministry of

292 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
Transportation and Washington State Department of Transportation, we
needed those loop detectors to be pretty much on the periphery and to some
extent inside of the footprint of the inspection agency's lanes and up into their
booth.
No way could we have had that discussion without a few years of
consultations and meetings under our belt. And like the slide with the
students working right next to the PIL booths, we had a meeting with both
port directors. They have been in the process long enough to know that any
data that IMTC or our office collects is going to be a shared product, and
they have used the results already of previous work. So the history of those
relationships and discussions just keeps sustaining the momentum and the
ability to move things ahead that we have. So that has been the critical
ingredient I think.
MR. CARMODY: Okay. Well, we have some time now for our questions
and comment from the floor. Catherine, go ahead.
DISCUSSION FOLLOWING THE REMARKS OF SEAN O’DELL,
DAVID OXNER AND HUGH CONROY
MS. PAWLUCH: Catherine Pawluch from Toronto. My question relates
to the crossing. Thanks very much for your presentation, Sean O'Dell. It was
very interesting. And the fact that the crossing itself as I understand will be a
3-P, a public private partnership.
The tolls that will be charged at the crossing - is it contemplated yet or
has any decision been made as to whether the presumably private sector
operator that will operate that crossing will have complete discretion and
control over the rates that are charged?
And I ask that question in the context of, I mean, I was really taken aback
by the fact -- and I learned this actually a couple days ago -- that 30 percent
of the trade that Canada has with the U.S. crosses at the Detroit River. 80 I
mean, this is a very significant infrastructure asset that we are talking about. I
am actually kind of surprised that the private sector is being brought in
because I think it is going to be a great investment for somebody.
But I am very interested in hearing whether any thought has been given
yet to who is going to control the charges, and if the answer, Sean, is that it
has not been determined yet, I would be very interested in hearing from the
three panelists, you know, from a public policy perspective who should
control the toll rates on that very significant infrastructure asset.
80
See The Detroit-Windsor Border,
http://www.detroitchamber.com/detroiter/articles.asp?cid=103&detcid=233 (last visited Oct.
15, 2008) (“In 2001, 23 percent of the total surface trade between Canada and the United
States ($347 billion) crossed the border between Detroit and Windsor.”).

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 293
MR. O'DELL: Okay. Well, we have not of course finalized all of our
undertakings yet. We are certainly inclined toward providing greater freedom
than less freedom to the private sector.
We have, I think, a potentially unique opportunity on the Detroit River.
The existing bridge is privately owned, 81 and at the moment, as I mentioned,
it takes some 99 percent of the commercial traffic crosses the bridge. 82
There is not any really good competition for that bridge at the moment.
You would have to go up to Port Huron, Sarnia to find an alternative. And
while that might be convenient for companies that are either shipping from or
to London, Ontario and north of that, it does not really provide an alternative
effectively.
The result of that I think has been that the owner of the existing bridge
has been able to exercise a certain regional monopoly control, and the tariffs
at the Ambassador Bridge are the highest of any crossing between Canada
and the United States. 83
By allowing the private sector to operate and set the tolls for a new
crossing, the competitive environment that that creates should in fact lead
overall to a reduction in those tolls. So our inclination is not to get involved
in toll setting. You know, if you get into that kind of a regime, you run into is
a lot of difficulties in terms of trying to attract private sector participation.
You know, we find ourselves -- we would find ourselves in the situation
where the private sector has no effective control over the demand for their
service. It will be what it will be. And if you take away any ability to set their
own toll rates, you effectively eliminated control over the entire revenue side
of the equation there.
So we are leaning toward that, but I would caution again that the final
agreements have not been signed, and I suppose there is a possibility for
some modification of that policy position that Transport Canada's policy
position is that the private sector should set the tolls.
MR. CARMODY: Any other responses to Catherine's question?
MR. OXNER: In the province of Nova Scotia, we have one toll
highway, 84 and I agree with what Sean said. It is the private sector who built
and operated their highway. My understanding is the Province receives
revenue if traffic hits a certain target level. You know when you are doing
private public partnering; you cannot tie the private sector's hands. You have
81
Davey, supra note 4.
82
See New Border Crossing Planned for Detroit, supra note 6 (“An average of 10,000
trucks per day now cross the Ambassador Bridge, and another 1,400 trucks daily pass through
the Detroit-Windsor Tunnel.”).
83
Ben Lefebvre, The Battle of the Bridge, DETROIT METRO TIMES, May 24, 2006, available
at http://metrotimes.com/editorial/story.asp?id=9236.
84
Toll Roads News, Nova Scotia Cobequid Pass-Toll 104 Opens,
http://www.tollroadsnews.com/node/2950 (last visited Oct. 15, 2008).

294 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
to leave it fairly open. And as Sean said in his answer, in the competitive
environment, that should work itself out.
The previous premiere was against toll highways; so we had a
moratorium. The existing toll highway was built under the liberal
government and was initially not well received. Now I think people have
come to accept it -- it is there. People appreciate the highway. It is a very
good highway. And the Province is investigating the possibility of
developing other toll highways within the province.
We have hired a company from Vancouver that is coming in and looking
at assessing a whole number of toll opportunities or public-private
opportunities I should say within the province in terms of moving forward
because the Build Canada fund, which is a fund that is administered by
Sean's department, contains an area devoted tp P-3 programs, and so we are
looking at a number of opportunities for building potentially hospitals, toll
highways, and the like.
MR. CONROY: We do not have any tolls in our area. As one of our port
directors is fond of saying, we build our roads on the dirt. That always strikes
me as funny. But I guess the closest thing we have is the NEXUS program,
which is to an extent a fee-based crossing alternative. And then there are
processing fees on the commercial side that I am sure you have, too.
But you know, thinking of ways to dream about such things, I guess it
would be nice if we could get to a point where the price of things like
NEXUS and the setting of those prices, are equally considerate of benefits to
the transportation system, the same way we do a business case for adding a
lane somewhere so that if there are throughput capacity benefits from a
program like NEXUS, perhaps the price could be lower to achieve that
system-wide transportation benefit.
MR. CARMODY: David.
MR. CRANE: David Crane. I had a couple of questions if I may. The first
has to do with the Windsor project. It was sort of a depressing message in
this respect would be talking about doing something since the 1990s. Here
we are saying we may have something by 2015. That underlines the fact that
our whole process of planning projects and things of this nature is hopelessly
out of date, and I hope that we would learn something in that respect. It
should not have had to take this long to come to this fruition. And we see the
same thing with the Peace Bridge and the Port of Erie-Buffalo area again.
We have been talking about that for over a decade now. We seem to be no
closer to getting that one settled. So there is something wrong with the way
we approach the projects, and I hope that we can get something out of that.
My question on the Windsor project would be to ask what kind of future
traffic event underlies the planning for the size of the bridge, and the
expressway lane access into Highway 401. The assumption should be that
this will be the only bridge that will probably come into service before 2015.

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 295
So the planning has to look 20, 30, 40 years beyond the opening of the
bridge.
We already have a very congested Highway 401 with limited
opportunities for widening that highway in many sectors, so it would be
interesting to know what kind of traffic planning is anticipated for this
project whether or not despite this bridge being built we will have to have
other forms of access. You know, why cannot we move automotive parts or
automobiles from the GM plant in Ottawa down into the Great Lakes states
by barges or ferries instead of having to go onto the system? And I do not
know whether this project takes into account the other modal possibilities in
terms of the bigger picture of how we move all kinds of vehicles in a
growing economy.
And secondly, just on the Windsor thing, if we are going to have so-called
competition, and we are bit skeptical of the light handed approach that is
planned, I think the public will want to be assured that government has some
recourse to prevent excessive profiteering on a project of this sort. But does
this mean because we have got ever sizing competition that the investors in
the Ambassador Bridge will not be allowed to have any participation in this
other bridge? Otherwise, we are not going to have competition, as the same
people would be involved in both.
And my other question is for David on the Atlantic Gateway project. And
that is since you have got four provinces involved and a limited amount of
money, how do you avoid the trap of having to spread your efforts too thinly
among all the different projects or vocations, each of which want a bit of that
federal money. How do you maintain a discipline to focus basically on the
Port of Halifax because we are already hearing stories that Dartmouth wants
this and other people want that?
MR. CARMODY: Well, maybe Sean, if you wanted to --
MR. O'DELL: I hope I remember all of the subparts of your questions.
Certainly there have been discussions since the early '90s about bringing in a
new crossing across the Detroit River. 85 In fact, I can remember as a child in
the '60s that there were discussions then about whether or not additional
capacity should be done. And I suppose it raises the interesting question -
what kind of planning went into building this Ambassador Bridge in the first
place 80 years ago? They certainly could not have been forecasting the level
of traffic that they have today.
We did undertake a fairly-detailed planning needs and feasibility study
before we embarked on the environmental assessment component, and that
demonstrated that under I think quite plausible assumptions about the
85
See French Company Ponders Possibility of 2 nd Bridge Over the Detroit River, THE
RECORD, Aug. 9, 1991, at A3 (discussing in 1991 the possibility of a second bridge being
built).

296 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
ongoing growth in the U.S. and Canadian economies and the increasing
integration of our two economies that the traffic would certainly be there.
That study is looking at the long-term, and quite frankly, I have almost zero
interest on whether short term traffic is up, down, or sideways. We are
worried already about 30, 40, 50 years into the future and that is where we
see that kind of capacity constraints really biting.
The biggest capacity constraint in Windsor right now is, to be honest, not
the Ambassador Bridge. It is the road connection that forces trucks to stop at
all these stop lights and throws everything down there. And because of the
way the city has grown up since the Ambassador Bridge was first built, it is
actually almost -- well, I would not say it is impossible to turn that existing
road into a highway on one side of the Ambassador Bridge the University of
Windsor has built up all around that, on the other side, the historic
community of Sandwich prevents us from expanding on that side.
The congestion is such that the secondary inspection on the Canadian side
of the Ambassador Bridge cannot be located on the Customs plaza. It is
located some three kilometers off site, which leads to all sorts of security
concerns when trucks are referred to secondary.
In terms of getting things done faster, I know there has been a lot of
discussion, but we really started our project about three years ago. I think a
lot of people might comment three years seems a long time to undertake an
environmental assessment, but we are dealing with three separate laws, all of
which have to be adhered to: the NIPA process in the U.S., the Ontario
Provincial Environmental Assessment Act, and the Canadian Federal
Environmental Assessment Act. So all three of those have to be satisfied.
And taking your point on the discussions that have gone on around twinning
the Peace Bridge, I think one of the reasons that is more than 10 years behind
schedule is that they did not adequately follow all of the required steps in the
environmental assessment process and they were forced to start over again.
There is a big problem there, and we do not want to find ourselves in that
condition with this bridge.
As to the other things, well, I am not the engineer, but the engineers tell
me it is four-and-a-half or five years to build a bridge in the year or a yearand-a-half
to design it, 86 so even once we get the company on board, there is
a six to seven-year process that we still have to go through. Our projections
show that the capacity on the Huron Church Road, Talbot Road corridor that
86
See News Release, Oakland County Michigan, Patterson and Francis Announce Support
for DRIC Downriver Border Crossing Project (July 9, 2008), available at
http://www.partnershipborderstudy.com/pdf/2008-07-
09_Patterson_Francis_Announce_Support_for_DRIC.pdf (“The timeline for the project calls
for property acquisition in 2009, construction starting in 2010 and the opening of the border
crossing in 2014.”).

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 297
currently takes traffic from the Ambassador Bridge, is going to get very
problematic by about 2015, and if the road network collapses, then the border
effectively collapses as well. Was there another --
MR. CARMODY: There was on the competition.
MR. O'DELL: On the competition, yes. We are not planning to restrict
anybody from bidding on the P-3 option, but the enhancement of competition
on the border will be one of the selection criteria. Now I have heard that law
firms and accounting firms have a concept of Chinese walls by which one
part of the company can be doing things that the other is kept unaware of if
you will. 87 I suppose the owner of the existing bridge could make a case that
they are able to do that, and we would have to assess whether or not we
believe those kind of checks and controls would be in place. But I have to
say we are still away from that bidding process, and so far the owner of the
existing bridge has not displayed any particular interest in participating in our
project, and rather they are putting forward a proposal to close their existing
bridge and replace it with a six-lane bridge there.
Our projections would indicate that what we want to do, we have always
assumed the Ambassador Bridge will stay there, so we are going from four
lanes to 10 lanes crossing the Detroit River. Our numbers I think are robust
enough that if we went from four lanes to 12 lanes, i.e., we had two six-lane
bridges, that would not pose a particular problem over the longer run
although initially it would be a bit thin from the revenue side.
MR. CARMODY: David.
MR. OXNER: Yes. Thank you for that question, it is a good one. And we
had a study that was commissioned by the Atlantic Canada Opportunities
Agency looking at the different modes, and it came out and clearly and said
the biggest opportunity for the Atlantic Gateway was around marine
containers. And in terms of the container business, Halifax definitely serves
as a gateway now because a gateway definition is really an entry and exit
point where the goods move beyond the point of origin to a destination.
Halifax is the third-largest container terminal in Canada, 88 and the Port of
St. John realizes that they are not directly competing with the Port of Halifax.
Captain, Al Soppitt, who is the head of the Port Authority in St. John, New
Brunswick works very closely with Karen Oldfield, who is the CEO of the
Port of Halifax. And Newfoundland really relies on short sea shipping on a
service called Oceanex which has its home operations in Montreal. Oceanex
87
See Chinese Walls, http://www.ing.com/group/showdoc.jsp?docid=074106_
EN&menopt=cog%7Cgpc%7Cchw (last visited Oct. 15, 2008) ("‘Chinese Walls’ are the
invisible ‘walls’ between business units within a single company to prevent conflicts of interest
when employees of two or more business units serve the same client.”).
88
Halifax Gateway, http://www.greaterhalifax.com/en/home/halifaxprofile/growthsectors/
halifaxgateway.aspx (last visited Oct. 15, 2008).

298 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
ship container to and from Newfoundland and Labrador via the ports of
Montreal and Halifax.
So in terms of the container piece, there is a well-recognized
understanding that is really basically about the Port of Halifax, and that our
competition is really the New York and our U.S. ports southwest, it is not
really the Atlantic-Canada ports. So any improvements that we make to the
Port of Halifax have a positive impact on the region because the region uses
the port
And what is interesting about the Port of Halifax, I show the inbound
market mix. We have an export surplus in that 55 percent of our cargo right
now are actually exports, and that could be much higher, but the problem is
that it is hard to get an empty container and hard to book slots on ships. So
part of the remedy is to bring more ships in so we can gain access to more
empties and more slots. The Port of Halifax handles a lot of Atlantic and
Central Canada cargo.
Back to your question whether there is recognition about the value and the
role that the Port of Halifax plays both in the region and in terms of the
country - I think that is the piece that strategically keeps us all glued together.
We have sat down with the other provinces and identified from a Nova
Scotia perspective what we see as some gateway initiatives that we have put
forward and talked to our colleagues at Transport Canada. We have shared
that list with the other Atlantic Provinces, and they have been supportive of
our interests because again as the Port of Halifax becomes more efficient and
more effective and has more access to more markets, that helps businesses
both in the region and nationally.
Thank you for the question.
MR. CARMODY: Now there were some questions up in the middle.
MS. FREEDMAN: Catherine Freedman from the University of Buffalo. I
have a question for David. Your presentation suggests that a critical element
in leveraging the strategic position of the Port of Halifax is the Suez Canal,
and I am just interested in hearing about your thoughts on how the political
realities in the Middle East and the volatility and actually even, you know,
something like the pirating off the coast of Somalia, figures into the calculus?
MR. OXNER: The instability in the Middle East has traditionally
occurred in the northern part of the Middle East, and there has not been any
disruption around the Suez Canal for quite some time. 89 It is a fairly stable
environment there. We have met with the vice chair of the Suez Canal
89
See generally MSN Encarta, Suez Canal,
http://encarta.msn.com/encnet/refpages/RefArticle.aspx?refid=761578705 (last visited Oct.
15, 2008) (stating that the canal was last closed during the Six Day War of 1969 and was
reopened in 1975).

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 299
Authority. They actually have their own police and military forces. 90 That
canal is not only delivering goods to the North America marketplace, but also
a lot of European cargo, the largest container vessel afloat actually sails
through the Suez Canal , the Emma Maersk, which can carry 14,000 TEUs
transverses through the Suez Canal on its way to Hamburg, Rotterdam, and
the European marketplace.
The Suez Canal is a vital link in the water route trade for both Europe and
North America, and while a tragedy can strike anywhere, but from a stability
point of view, that area of the world is very stable. When is the last time you
heard of a disruption on the Suez Canal?
Right now roughly about 69 percent of containers coming into North
America currently come in through the west coast ports of North America. 91
About 20 percent come through the Panama Canal, and a remaining balance,
around 11 percent, is coming through Suez Canal. Anyways the stability
thing is not an issue, but like I said, something can always happen,
somewhere that can have an impact.
MR. CARMODY: Yes.
MR. ANDERSON: Hi. Bill Anderson, soon to be in Windsor, but my
question is for David actually about Halifax.
You are saying it is about 17 percent of your business was service to the
United States?
MR. OXNER: Yes.
MR. ANDERSON: And is that mostly by rail going into the Great Lakes
states?
MR. OXNER: It is pretty well -- a high majority of its rail, yes. We are a
rail port. We have on-dock rail and about 75 percent of our volume in and
out goes on rail.
MR. ANDERSON: But in service into the northeastern half would be
truck, right?
MR. OXNER: Yes. Or short sea shipping.
MR. ANDERSON: That was my question.
MR. OXNER: There have been numerous attempts to establish what we
call a feeder service traditionally, between Halifax, Saint John, NB,
Portsmouth, New Hampshire, Portland, Maine, and Boston. The most recent
one was one that was started up by a Icelandic company called Einskip,
90
See generally Egypt State Information Service, Performance of Suez Canal Authority
discussed (Feb. 20, 2008), available at
http://www.sis.gov.eg/En/EgyptOnline/Economy/000009/0202000000000000008338.htm
(last visited Oct. 15, 2008).
91
See Third Party Logistics, U.S. West Coast Ports Face Dilemma,
http://www.3plwire.com/2007/03/20/us-west-coast-ports-face-dilemma (last visited Oct. 15,
2008) (“The port complex of Los Angeles-Long Beach is the gateway for 70 percent of US
imports”).

300 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
which unfortunately bought a North American company called Atlas Cold
Storage that they intended to flip as an investment vehicle, but they bought it
at a time when the Canadian dollar surged, and so all of a sudden that service
disappeared again. But there is another group that is actually looking now at
doing a short sea shipping piece back into New England because there is
traffic volume there and there is a lot of truck traffic that currently carries
various commodities into the New England marketplace.
So short sea shipping is something that the Maritime Provinces kind of
grew up on before the advent of the rail service, commodities moved freely
between the Atlantic Provinces, New England, and the Caribbean. When the
rail came on, it switched to on rail from water. When the rail disappeared to
some extent, it went back to trucks.
But I think that we are seeing, for environmental and cost reasons, there is
a lot of opportunity to go back and look at short sea shipping as a way to
move cargo, we have a fair bit of short sea shipping that goes from Halifax,
Newfoundland, Saint Pierre, Miquelon, into the Great Lakes and into the
Caribbean as well.
MS. IRISH: A question for Sean, whose probably expecting this from the
city of Windsor.
Given the likely increase in traffic along the Huron Church, Talbot Street
entrance, would it not be a good idea to tunnel that as the city of Windsor is
requesting?
MR. O'DELL: Even the city of Windsor has backed off from their initial
demand that the entire nine kilometers be tunneled, and they have come up in
their proposal with a series of land or bridges really. I think when we reveal
the details of our road you will find that we have moved a lot toward that
direction. It is not exactly that kind of a proposal, but many of the concepts
have been incorporated. The problem with building the entire thing tunneled
- there are actually a couple of major problems. One, the water table in
Windsor is very high, 92 and it would be awfully expensive from a permanent
drainage point of view. There are issues associated with safety and security
in long tunnels, and most emergency measures organizations, fire and so on,
tell you fairly bluntly that if you have a tunnel that long and there is a major
accident in the middle of that tunnel, do not bother calling them until the fire
has gone out because they will not send their people into that kind of
dangerous zone. 93
92
See Detroit River International Crossing Study, Tunneling,
http://www.partnershipborderstudy.com/pdf/PIOH%205%20Tunnelling.pd (last visited Oct.
15, 2008) (stating that a high water table is one obstacle to building tunnel from Detroit to
Windsor).
93
See generally Frances Kennedy, Death Toll in Tunnel Fire May Not be Clear for Weeks,
INDEP., October 27, 2001, available at

O’Dell, Oxner & Conroy—Enhancing the Can.-U.S. Gateways and Corridors 301
About seven, eight years ago there was a major fire in one of the tunnels
under the Alps going from Switzerland into Italy, and it took them almost
three weeks before they could send people in until the heat had diminished
enough to be able to handle that. 94 We are looking for a permanent solution
here, and we do not want to create some additional problems.
I think you will find there is one reason why on a lot of the infrastructure
deals you have seen recently, nobody is particularly interested in getting
involved in tunnels. The security risks are viewed as -- safety concerns are
viewed as just too significant.
MR. CARMODY: Last question from Michael Robinson.
MR. ROBINSON: I apologize. It is not a question. But late on Saturday
afternoon when we were talking about the Ambassador Bridge, I thought this
audience might enjoy an interesting historical vignette.
The government of Canada was violently opposed to Matty Moroun
buying the other side, 95 which was the Canadian side, 96 which happened to be
owned by the American. 97 But they just did not want Matty to own the whole
bridge.
That was in the days of the foreign investment review act, when that kind
of thing could be fairly easily blocked. 98 Matty refused to pay any attention
to the Foreign Investment Review Agency, which said no, you cannot do
that, it is not good for Canada. So the government of Canada obtained an
injunction in the Michigan court prohibiting him from closing the sale. 99 He
closed the sale in Ohio by driving down the interstate.
Then the Ontario government -- the government of Canada did an
amazing thing which you legal scholars will get a get big kick out of. They
obtained in the Federal Court in Toronto a writ of sequestration, 100 which is
http://www.independent.co.uk/news/world/europe/death-toll-in-tunnel-fire-may-not-be-clearfor-weeks-632836.html
(discussing the difficulties of fighting a fire that engulfs a tunnel).
94
See id. (stating it took several days to fight fire within Gotthard tunnel).
95
See Stephanie Fitch & Joann Muller, The Troll Under the Bridge, FORBES, Nov. 15,
2004, available at http://www.forbes.com/forbes/2004/1115/134.html (stating that in the
1980’s Canada sued Moroun seeking 50% interest in the Ambassador Bridge).
96
See generally id.
97
See generally id.
98
CYNTHIA DAY WALLACE, THE MULTINATIONAL ENTERPRISE AND LEGAL CONTROL:HOST
STATE SOVEREIGNTY IN AN ERA OF ECONOMIC GLOBALIZATION 235-239 (2002) (discussing the
restrictions the Federal Investment Review Act put on foreign investments).
99
See Canada Eyes Tougher Standards, THE MULTINATIONAL MONITOR, April 1980,
available at http://www.multinationalmonitor.com/hyper/issues/1980/04/canada.html (stating
that the FIRA succeeded in obtaining an injunction against the transfer of bridge assets from
Detroit International to Central Cartage).
100
See United States Marshalls Service, Writ of Sequestration,
http://www.usmarshals.gov/process/sequestration.htm (last visited Oct. 15, 2008) (“A writ of
sequestration is a prejudgment process which orders the seizure or attachment of property to
be maintained in the custody of the U.S. Marshal or other designated official, under court

302 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
something we all learn about when we do insolvency law in law school, but
we have never seen.
Well, a writ of sequestration is a writ to punish someone for disobeying
the law. 101 It goes back to Edward III. 102 The court issued the writ, and the
government of Canada said we are going to stand at the other end and collect
the tolls, and we are going to keep them all to punish you. This is not a fine,
we are sequestering the tolls. Does anybody know how Matty solved the
problem? He moved his son to Ontario, and transferred all the shares to his
son and then he became a Canadian resident, and he got around the Foreign
Investment Review Act, and the government's been mad at him ever since.
And it is all true, I worked on that.
MR. O'DELL: If I can add to that, it was resolved finally with an
agreement in 1992. 103
MR. ROBINSON: That was a long time after.
MR. O'DELL: It was a long time passing. And George Costaris will know
this, but that agreement was signed by a person who is now the Canadian
Ambassador to the United States in an earlier capacity as the minister for
foreign trade. 104
MR. CARMODY: Well, on that note, I wanted to thank all of our
panelists for this fascinating, fascinating session.
(Session concluded)
order and supervision, until the court determines otherwise.”).
101
See id.
102
See OLIVER JOSEPH BURKE, THE HISTORY OF THE LORD CHANCELLORS OF IRELAND 11
(1879) (stating that Edward III issued a writ of sequestration against the Lord Treasurer).
103
See Fitch, supra note 95 (Canadian “government settled, getting no stake but exacting
improvements to the bridge and the Canadian customs plaza.”).
104
See generally id.

THE INTERSECTION OF BORDER SECURITY AND FREE
TRADE AGREEMENTS
Session Chair – Maureen Irish
Canadian Speaker – Greg Kanargelidis
United States Speaker – David R. Hamill
Canadian Speaker – Cyndee Todgham Cherniak
INTRODUCTION
Maureen Irish
MS. IRISH: I am Maureen Irish from the University of Windsor. 1 I am
pleased to welcome everyone back to the final panel of this afternoon in what
has been an extremely interesting conference. Since the biographical
information of our three speakers today is in your materials, I am not going
to go through it. I just will mention to you that these are three very
experienced and extremely knowledgeable trade lawyers. Our first speaker
will be Greg Kanargelidis from Blakes in Toronto 2 who will be speaking on
Canada's Partners in Protection program, WTO, and NAFTA consistency.
Our second speaker is David R. Hamill from Arent Fox in Washington. 3 He
will be speaking on cross border fees. And our third speaker is Cyndee
Todgham Cherniak from Lang Michener in Toronto 4 who will be speaking
on ITAR's International Traffic in Arms Regulations.
So I will ask Greg to start.
1
See Maureen Irish, http://www.uwindsor.ca/law/irish (last visited Sept. 26, 2008).
2
See Greg Kanargelidis, http://www.blakes.com/english/people/lawyers2.asp?LAS=GK
(last visited Sept. 26, 2008).
3
See David R. Hamill, http://www.arentfox.com/people/index.cfm?fa=profile&id=118
(last visited Sept. 26, 2008).
4
See Cyndee Todgham Cherniak,
http://www.langmichener.ca/index.cfm?fuseaction=people.personDetail&id=9939 (last visited
Sept. 26, 2008).
303

304 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
CANADIAN SPEAKER
Greg Kanargelidis *
MR. KANARGELIDIS: Thanks very much for that introduction, and
thank you to the Canada-U.S. Law Institute for inviting me. It is a great
pleasure to be able to participate in this last panel of the Canada-U.S. Law
Institute annual conference. Over the last two days we heard repeatedly from
speakers about the security programs of both Canada and the United States
and about the impact that these security programs have on businesses that
rely on cross border trade. It seems pretty clear that these security programs
are here to stay. They are permanent fixtures of the business landscape, and
participation in the voluntarily programs is likely to grow. 5
The topic we have not discussed so far at this conference and that we are
dealing with in this panel is consideration of whether these security programs
are consistent with Canada's trade obligations. As a Canadian customs and
trade lawyer, I will focus on Canadian security programs and given the
limited time available, I have chosen to focus my presentation on Canada's
Partnership in Protection initiative. This is an appropriate time to consider
Partners in Protection because it is being overhauled as we speak. 6 A new
and improved PIP is expected to be announced by the end of June of this
year. 7
*
Greg Kanargelidis is a Partner practicing in the International Trade Group and the
Commodity Tax and Customs Group. His practice involves all areas of international trade,
customs and commodity tax. Greg’s international trade law practice involves representing
clients with respect to cross-border trade issues arising from the Canada – U.S. Free Trade
Agreement, the North American Free Trade Agreement, the World Trade Organization and its
various agreements, and other bilateral and regional trade agreements. He has considerable
experience in representing Canadian and foreign clients in trade remedy matters, such as antidumping
and subsidy investigations as well as advising clients on the consistency of existing
or planned measures with international trade rules. In the area of customs law, he has extensive
experience advising Canadian and foreign companies on such matters as: tariff classification;
customs valuation; rules of origin; export and import controls; marking rules; seizures
and ascertained forfeitures; administrative monetary penalties; and voluntary disclosures.
Greg also assists clients with respect to planning, compliance and appeals involving commodity
taxes such as the goods and services tax, the harmonized sales tax, the Quebec sales tax, the
provincial sales tax, and commodity-specific excise taxes and excise duties.
5
See Julie Kuzelijevich, Border Breakthrough? CANADIAN TRANSPORTATION &
LOGISTICS, May 2008, at 34 (outlining the changes implemented to deal with expected growth
of the programs).
6
See Laurie Turnbull, The New PIP, CANADIAN TRANSPORTATION &LOGISTICS, Mar.
2008, at 38 (discussing changes being made to Partners in Protection).
7
See id.

Kanargelidis, Hamill & Cherniak—The Intersection of Border Security 305
I am presently sitting on a working group formed by the Canadian
Association of Importers and Exporters, and we are currently consulting with
the Canada Border Services Agency on their plans for this new and improved
PIP program. 8
In my presentation I will briefly describe what PIP is and its intended
benefits. Then I will consider Canada's international trade obligations under
the WTO/GATT and NAFTA. It seems that some characteristics of PIP are
potentially vulnerable to challenge under these trade agreements. Today, we
will comment on these possible inconsistencies. The conclusion I will make
is that, on balance, PIP is likely consistent with the GATT and the NAFTA.
Moreover, even if PIP were inconsistent with international obligations, it
seems that there is a potential justification for any discriminatory effects
under the national security exception that is found under both agreements.
OVERVIEW OF THE PIP PROGRAM
So what is PIP? The objective of Partners in Protection is to strengthen
the security of supply chains and to engage the private sector in a proactive
approach to assist with the detection and prevention of terrorism. 9 It is a
voluntary program. 10 It is the equivalent of C-TPAT. It is clear that it is
necessary to have a presence in Canada in order for an entity to register for
PIP, 11 but what is not clear is, what sort of presence? What minimum
presence is necessary? That has not yet been addressed by the CBSA, and
that, in fact, is the essence of the potential violation with the trade
agreements.
Under the PIP, very similar to C-TPAT I understand, applicants are
required to complete a Memorandum of Understanding with the CBSA. They
fill out a security questionnaire that discusses physical security, personnel
security, and security of service providers, and then a joint plan of action is
put together with the CBSA to which the applicant is expected to adhere to
ensure that the trade chain is secure. 12
8
See Kanargelidis, supra note 2; see also Proposed PIP Process Documentation, available
at http://www.caie.ca/assoc_news/08/LTR_StDenis_05_06_08.pdf (May 6, 2006) (commenting
on PIP Process Documentation and suggesting modification).
9
Joseph L. Parks, The United States-Canada Smart Border Action Plan: Life in the Fast
Lane, 10 L. & BUS.REV.AM. 395, 407 (2004).
10
See Eric J. Lobsinger, Post-9/11 Security in a Post-WWII World: The Question of Compatibility
of Maritime Security Efforts with Trade Rules and International Law, 32 TUL.MAR.
L.J. 61, 113 (2007) (stating that Partners in Protection is strictly a voluntary program).
11
See generally Special ABA Committee Report, The Canada-U.S. Border: Balancing
Trade, Security and Migrant Rights in the Post-9/11 Era, 11 GEO. IMMIGR. L.J. 199, 241
(2005) (commenting that programs like the PIP takes a “trust, but verify” approach to address
concerns).
12
See Parks, supra note 9, at 407 (outlining the steps that applicants must take to gain

306 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
BENEFITS OF PIP MEMBERSHIP
What are the benefits of PIP? When I speak with some of my clients, they
will say they see nothing yet out of PIP, so why bother? And in fact, it is
quite difficult for many of my clients to get upper management to even agree
to spend the money that is required to meet all of the criteria for security and
so forth. But these are the advertised benefits if you will. The applicants are
identified as trusted traders to Customs inspectors. 13 Theoretically, there are
fewer examinations because they are given a lower risk score being in the
PIP program. 14 There is also front of the line privileges when selected for
examination. 15 Also if the border happens to be shut down in case of a
security threat, then theoretically again PIP registrants will be able to
continue to import their goods under the business resumption plan. 16 Finally,
PIP is also a prerequisite for participation in the Free and Secure Trade
(FAST) program, although not the only prerequisite. Another prerequisite for
FAST is participation in Customs Self Assessment or CSA. FAST is again,
theoretically, a beneficial program to be in and therefore that is an attraction
for membership as well. 17
CHANGES TO THE PIP PROGRAM
Now, I mentioned that PIP is in the midst of being changed. And what the
CBSA is planning -- and really the reason for the change is PIP is intended to
now become more consistent with the C-TPAT, 18 so many changes are
planned. All registrants must reapply after June 30th of this year. 19 There is a
transition period but this will expire at the end of December. 20 None of the
existing registrants will be grandfathered into the new program. All
membership to Partners in Protection).
13
See id. (explaining that entering the PIP is a declaration that the carrier or importer is
acting as a partner to protect Canadian society and to facilitate trade).
14
See Kuzelijevich, supra note 5, at 34 (discussing the advantage of lower risk scores for
PIP members).
15
See Turnbull, supra note 6, at 38 (stating membership in PIP will result in fewer shipment
inspections and delays).
16
See The Honourable Stockwell Day, Minister of Public Safety, Remarks at the Security
and Prosperity Initiatives for Smart, Secure Borders (Jan. 12, 2007) (transcript at
http://www.publicsafety.gc.ca/media/sp/2007/sp20070112-eng.aspx) (discussing the results of
a border shutdown for members of PIP).
17
See Lobsinger, supra note 10, at 113 (commenting that membership in the PIP is required
for inclusion in the FAST program).
18
See Turnbull, supra note 6, at 38 (stating the presence of a transition period for PIP).
19
12.
20
See Canada, U.S. Sign Mutual Recognition Agreement, WORLD TRADE, Aug. 2008, at
See Turnbull, supra note 6, at 38.

Kanargelidis, Hamill & Cherniak—The Intersection of Border Security 307
participants must reapply as if they are applying for the first time. There will
be stricter minimum security criteria that have to be met. 21 There will be
introduction of site visits and a new form of MOU, 22 - that is what we are
essentially consulting with the CBSA about right now. 23
CANADA’S INTERNATIONAL TRADE OBLIGATIONS
Given the perceived benefits of participation in PIP and the money that
potential participants in the program and the government spends on the
program, any non-compliance with international obligations that may lead to
the program being challenged or terminated is a significant cause for
concern. 24 This is the issue that we are dealing with today. Now, let us turn to
Canada's principle trade obligations and talk about whether the PIP is
consistent with those obligations. The obligations are, as it is apparent on the
slide, reflected in the General Agreement on Tariffs and Trade, in the North
American Free Trade Agreement, and in interpretation of those agreements.
The key issues that I will consider in my presentation are whether the PIP
and FAST are consistent with the most favored nation obligations, with the
national treatment obligations and with the investment rules under Chapter
11 of the NAFTA.
There are number of concerns related to the PIP program. One aspect of
PIP that is a particular concern is the restriction on participation in it. As I
mentioned earlier, in order to participate in PIP, entities must generally have
a presence in Canada. 25 This means that nonresident importers are not able to
register for PIP. 26 And, again, because PIP is a requirement to participate in
FAST, 27 nonresidents are also excluded from FAST participation. Similarly,
Customs Self Assessment is something that is not available to nonresidents. 28
21
See Kuzelijevich, supra note 5, at 34 (explaining recommendations will make up new
security measures that must be met).
22
See Canada Border Services Agency, Partners in Protection Application,
http://www.cbsa-asfc.gc.ca/security-securite/pip-pep/app-demande-eng.html.
23
See Proposed PIP Process Documentation, supra note 8.
24
See generally Parks, supra note 9, at 412 (explaining causes of concern for the program
as fear of bureaucratic application, costs involved, and compatibility of technology).
25
See Partners in Protection Eligibility Requirements, http://www.cbsa-asfc.gc.ca/securitysecurite/pip-pep/app-demande-eng.html
(last visited Sept. 26, 2008) (stating PIP members
must “own or operate facilities in Canada that are directly involved in the importation and
exportation of commercial goods or the applicant is a U.S. highway carrier company applying
for a FAST (Canada) membership”).
26
See id.
27
See id.
28
See Canada Border Service Agency, The Customs Self Assessment Program, http://cbsa
asfc.gc.ca/ publications/dm-md/d17/d17-1-7-eng.html (last visited Sept. 26, 2008).

308 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
The bottom line is no matter how secure their supply chain, nonresident
importers simply cannot attain the basket of benefits of PIP participation
currently. With this state of affairs, one might argue that, on the face of it, the
fact that nonresidents cannot benefit from PIP membership denies them a
trade benefit that they are entitled to under the free trade agreement whether
it be WTO or the NAFTA.
In the balance of the presentation, we will take a closer look at
compliance with these obligations. Let us turn first to the Most Favored
Nation (MFN) principle that is reflected in GATT Article I. 29 I will just read
the relevant parts. GATT Article I applies in addition to tariffs and so forth.
It applies to all rules and formalities in connection with importation and
exportation 30 and to any advantage, favor, privilege, or immunity granted by
any contracting party to any product originating in any other country. Any
such rule or advantage is required to be accorded immediately and
unconditionally to the like product originating in territories of all other
contracted parties. 31 To demonstrate an MFN violation under GATT, three
elements must be satisfied. First, a member country must provide an
advantage of a type covered by Article I. 32 Second, the advantage must be
one that is not extended to the like product of all WTO members. 33 Third,
that advantage must not be granted to members immediately and
unconditionally. 34 MFN VIOLATION – “ADVANTAGE”
In the WTO context, the term "advantage" is broadly defined. 35 Here the
advantage that is associated with PIP is the expectation that shipments will
not be stopped or unduly delayed at the border. Also, if the border is shut
down, that the PIP registrants will continue to be able to import their goods
into Canada. 36 You might say that PIP registration provides a competitive
advantage over those entities that are not registered. 37
29
See The General Agreement on Tariffs and Trade, art. 1, Apr. 1994, 61 Stat. A3, 55
U.N.T.S. 308.
30
See id.
31
See id.
32
See Won-Mog Choi, Legal Problems of Making Regional Trade Agreements with Non-
WTO-Member States, 8 J. INT’L ECON. L. 825, 830-831 (2005) (commenting on the first element
that must be satisfied under GATT).
33
See id.
34
See id.
35
See Marjorie Florestal, Terror on the High Seas: The Trade and Development Implications
of U.S. National Security Measures, 72 Brook. L. Rev. 385, 401 (2007) (commenting on
the differing definition of “advantage” in the WTO).
36
See Day, supra note 16.
37
See Canada Border Services Agency, http://www.cbsa-asfc.gc.ca/security-securite/pip-

Kanargelidis, Hamill & Cherniak—The Intersection of Border Security 309
The GATT panel decision in Belgian Family Allowances may be relevant
to the issue of whether the PIP program represents a violation of GATT
Article I. 38 That decision has been interpreted to stand for the principle that
treatment can be different if the characteristics of the goods themselves are
different. 39 But there is no justification for different treatment if based on
differences in the characteristics of the exporting country rather than the
goods. 40 In that case, Belgium imposed a tax on certain imports in order to
support its family allowances program, and exempted from the tax goods
from countries that offered a similar family allowances program. 41 Denmark
and Norway sought an exemption because they felt that they had such a
program and were entitled to the exemption. 42 It was found that that kind of
scheme is not one that is permissible under the GATT. 43 The principles of
that decision might be applicable here because PIP is really something that is
more relational than simply being a set of rules applicable to imported goods.
MFN VIOLATION – “LIKE PRODUCT”
The second element required to establish an MFN violation is the failure
of an advantage to be accorded to “like product” of all WTO members. Let
us look at an example of a potential violation, using two identical goods.
Where two identical goods – say, tomatoes – are shipped across the Canada-
U.S. border, one by an entity that is PIP registered and one by the kind of
entity that cannot be registered – say, a supplier in Mexico that has no
presence in Canada - the goods of the registered entity will, of course, benefit
from PIP from the lack of delays at the border or from market access in the
case of a border shutdown. But the tomatoes from Mexico will not have the
pep/ben-avan-eng.html (last visited Sept. 25, 2008) (listing several benefits to PIP members
who “can gain a competitive advantage”).
38
See Report of the Panel, Belgian Family Allowances, G/32 (Nov. 7, 1952), GATT 1S/59
(stating that a country could not impose discriminatory internal taxes), available at
http://www.worldtradelaw.net/reports/gattpanels/belgianfamilyallowances.pdf.
39
See M. J. Trebilcock & Robert Howse, THE REGULATION OF INTERNATIONAL TRADE 60
(3d ed. 2005) (“[T]reatment can differ if the characteristics of goods themselves are different.”).
40
See id. (“[D]ifferences in treatment of imports cannot be based on differences in characteristics
of the exporting country that do not result in differences in the goods themselves.”).
41
See Robert Howse & Petrus van Bork, THE WORLD TRADING SYSTEM 27 (1998) (“The
law contained a further provision which declared that products from certain countries would
be exempt from the tax if employers in that country paid a family allowances tax similar to the
local Belgian tax.”).
42
See id. at 28 (stating that Norway and Denmark submitted memoranda to the GATT
Contracting Parties arguing that they were entitled to the exemption under the Belgian law).
43
See Trebilcock & Howse, supra note 41, at 59 (“The panel ruled that Article I:1 prohibits
the imposition of discriminatory internal taxes.”).

310 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
same benefit. So, there is an indication of differential treatment in the case of
like goods that would be a violation of Article I.
Notwithstanding the foregoing, it does not necessarily follow in my view
that there is a clear violation of GATT Article I. That is because PIP is
available to any applicant “in similar circumstances”, namely, so long as they
have a presence in Canada. Furthermore it is not clear that there is a clear
discrimination against “goods” of another country. The discrimination, if it
occurs, results from voluntarily actions by the importer in Canada who
decides whether or not to voluntarily participate in the PIP program and
whether or not its suppliers in the foreign country will participate also in the
program.
There is a potential argument that GATT Article III:4 might be violated
even though this is the provision that tends to deal with post importation
taxes and duties, based on certain GATT jurisprudence that the words
“treatment no less favorable” require there be “effective equality of
opportunities” in respect of laws, regulations, and requirements. If there is no
equality of opportunities, this provision might also apply. There is also an
equivalent NAFTA provision.
NAFTA CHAPTER 11
Now, I want to quickly address NAFTA Chapter 11. I think there is a
potential argument to be made that there could be a claim under NAFTA
Chapter 11 in very specific circumstances. For example, a U.S. company
may incorporate a subsidiary in Canada but not establish any physical
presence and conduct its business with Canada by importing goods into a
public warehouse until they are sold. If such an investor is not allowed to
register for PIP because it has no presence in Canada or an insufficient
degree of presence, then perhaps that might be a basis to argue there has been
a violation of NAFTA Chapter 11.
INVOKING THE NATIONAL SECURITY EXCEPTION
Turning to the final portion of my presentation, I will address whether any
violation of a free trade agreement by PIP is nevertheless immune from
challenge on the basis of the “national security” exception provision found in
both the GATT and NAFTA. The provisions of GATT Article XXI are quite
broad, and provide in part that
Nothing in this Agreement shall be construed … to prevent any
contracting party from taking any action which it considers necessary

Kanargelidis, Hamill & Cherniak—The Intersection of Border Security 311
for the protection of its essential security interest … taken in time of
war or other emergency in international relations … 44
Sometimes GATT Article XXI(c) is relied upon, namely, that nothing can
prevent the contracting party from taking any action in pursuance of its
obligations under the United Nations Charter for the maintenance of the
international peace and security. 45
There have been several cases where member countries have relied on
GATT Article XXI. Unfortunately, none of the GATT panel decisions
provide any useful guidance on how to interpret Article XXI, but what the
practice and the existing jurisprudence suggests is that this is a self-judging
provision, so countries who decide to rely on Article XXI have the right to
rely on it, and the GATT panels cannot really make a decision for those
countries on whether it was valid or not.
And therefore, I think that is really the bottom line here; that any
violations - alleged violations- in the PIP program can be justified under
GATT Article XXI or under the equivalent NAFTA provision.
UNITED STATES SPEAKER
David R. Hamill †
MR. HAMILL: Just a couple of observations before I start. When I was in
the airport this morning looking at my presentation, I realized that I forgot
when the agriculture quarantine inspection fee exemption was removed for
Canada in 2007, 46 so I did what any good lawyer would do, I Googled and
44
See General Agreement on Tariffs and Trade art. 21, 1947 (stating that the Agreement
does not prevent any party from taking actions necessary to protect essential security interests),
available at http://www.wto.org/english/docs_e/legal_e/gatt47_02_e.htm.
45
See id.
†
Dave Hamill focuses on international, customs trade policy and disputes, and export
controls and sanctions issues. Dave has represented Fortune 500 companies whose imports
and exports are regulated by the Department of Homeland Security (DHS) and the Bureau of
Customs and Border Protection (CBP). His experience includes assisting companies with
customs audits, including focused assessments, importer self-assessments and NAFTA verifications.
His client work covers the wide range of commercial enforcement laws and policies
that DHS ad CBP administer, which include the following: duty preference programs such as
NAFTA; tariff classification; valuation; entry procedures; custom brokerage; country of origin
marking; bind rulings; anti-terrorism and border protection (e.g. the Customs- Trade Partnership
Against Terrorism (C-TPAT), the Bioterrorism Act (BTA) regulations, and the new advance
manifest requirements); export controls and sanctions; voluntary disclosures; seizures
and forfeitures, fraud and strategic investigations; and civil and criminal penalties.
46
See Agriculture Inspection, User Fee Requirements Begin June 1 for Commercial

312 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
found that answer out. But also what I found out was that the CUSLI moot
court that had actually addressed the legality of removing that exemption I
believe in 2007, and I did not have enough time to look at it, but just for folks
who are interested, you know, these talks about this topic is very timely in
terms of your involvement.
The other thing I thought I would mention, too, I am glad that we did not
go into a long exhaustive discussion of our backgrounds, but I did work at
the U.S. Department of the Treasury for ten years and had worked on a lot of
these fee issues, merchandise processing fee extensions, the U.S. Supreme
Court constitutional case involving harbor maintenance fees, 47 and now I
have been in the private sector, so hopefully I bring a balance to this, and I
like to think I see both sides although the government side is becoming a
little more faded as I move along. Anyway let us start.
Basically I am going to talk about U.S. cross-border fees from a Canadian
perspective. And what was surprising to me -- and I guess to start off, and I
did talk with Bridget Matthiesen who was here earlier in this session is that
our firm was commissioned to do a study on these border fees by the
Embassy of Canada. And I felt, boy that is going to be pretty easy. We just
have to call up the government agencies and get this data, and it was
anything but. Not the agency's fault, but it is the laws that are on our books
that require agencies to collect and in certain cases not mandate collections. 48
So the analysis that we did which I will present summarily later on in this
presentation makes certain assumptions, and some of those assumptions
could be criticized or could be faulted, but we tried to do the best we could to
try to get the magnitude of how these fees affect Canada vis-a-vis other
countries because as I will explain, these fees are not organized and collected
by country in a lot of situations. And then lastly we will talk about a recent
government accounting office study that looked at air and sea fees and how
that might relate to land fees 49 and some other recommendations I have on
this topic.
Trucks, Railroad Cars Entering U.S. From Canada,
http://www.cbp.gov/xp/cgov/newsroom/news_releases/archives/2007_news_releases/052007/
05302007.xml (last visited Sept. 25, 2008) (“Effective March 1 [2007], APHIS removed the
inspection exemption for Canadian-grown fruits and vegetables . . . .”).
47
See U.S. v. U.S. Shoe Corp., 523 U.S. 360 (1998).
48
See, e.g., 13 U.S.C.A. §301 (West 2008) (collection and publication of foreign commerce
and trade statistics).
49
See generally U.S. GEN. ACCOUNTING OFFICE, U.S. CUSTOMS SERVICE:
REASONABLENESS OF COSTS FOR PROCESSING AIR AND SEA PASSENGERS CANNOT BE
DETERMINED (Feb. 29, 2000) (discussing air and sea fees), available at
http://archive.gao.gov/f0302/163356.pdf.

Kanargelidis, Hamill & Cherniak—The Intersection of Border Security 313
I presented to you here in one page the fees that we looked at. The
COBRA fee which is essentially a conveyance fee, 50 the merchandise
processing fee which is essentially a fee assessed on importations 51 , and the
importer of record pays for that. 52 And from a GATT/WTO perspective,
there was a 1987 case which the U.S. was challenged on this, 53 and as a result
we had to -- or our solution was to cap that fee at $485 per entry, 54 and that
has not been challenged yet. The harbor maintenance fee which now is only
paid by the importer, not the exporter, and that funds harbor dredging, 55 and
the AQI fee, the agricultural quarantine inspection fee which is administered
by APHIS which that part of APHIS is now part of the Customs and Border
Protection Agency. 56 And then some special agriculture fees which I am not
going to mention here, but know that there are a lot of them, and they can
really nickel and dime you.
You know, I am here because it is the CUSLI, and how do these fees
affect Canada? And you know, historically I think there has been a special
relationship between Canada and the U.S., and this has extended to fees.
Article 310 of the NAFTA says no increases in Customs users’ fees. 57
Canadian shipments are exempt from merchandise processing fees in certain
cases, and Canada historically had been exempt from the APHIS fees, 58 but it
is not as good or as easy as it sounds.
In order for Canadian merchandise to be exempt from the merchandise
processing fee, you have actually got to claim NAFTA on your entry
summary form. 59 And even in cases where the duty would be zero, and as
50
See id. (stating that COBRA authorizes Customs to charge user fees for conveyances).
51
See generally 19 C.F.R. § 191 (2008) (explaining that merchandise processing fees are
fees on imports), available at http://edocket.access.gpo.gov/2004/04-22599.htm.
52
See id. (stating that merchandise processing fees are paid by the importer of record).
53
See Report of the Panel, U.S. Customs User Fee, L/6264 (Feb. 2, 1988), GATT 35S/245
(GATT panel challenging U.S. Customs User Fee), available at
http://www.worldtradelaw.net/reports/gattpanels/uscususerfee.pdf.
54
See EUROPEAN COMMISSION, U.S. BARRIERS TO TRADE AND INV. 22 (Apr. 2008) (stating
that the U.S. capped its merchandise processing fee at $485 following a 1987 GATT Panel
decision), available at http://trade.ec.europa.eu/doclib/docs/2008/april/tradoc_138559.pdf.pdf.
55
See U.S. Shoe Corp. v. U.S. 114 F.3d 1564, 1567 (1997) (“The [harbor maintenance]
fees were designed to finance the cost of harbor dredging.”).
56
See Agriculture Inspection, supra note 46 (stating that Customs and Border Protection
conducts all inspections on the U.S.-Canada border).
57
See North American Free Trade Agreement, art. 310, Dec. 17, 1992 (discussing limitations
on the use of customs user fees), available at
http://www.wto.org/english/docs_e/legal_e/gatt47_02_e.htm.
58
See Agriculture Inspection, supra note 46 (explaining that Canada was previously exempt
from APHIS fees).
59
See 19 C.F.R. §181.21 (2008) (“[F]or the exemption from the merchandise processing
fee, for a good under the NAFTA, the U.S. importer must make a formal declaration that the
good qualifies for such treatment. The declaration may be made by including on the entry

314 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
many folks here I am sure are familiar with NAFTA and the paperwork
associated with that. From a business standpoint, some companies just do not
feel that it makes some business sense to make that claim because of all the
paperwork and the potential audits that may be associated with it. So we have
determined that in about 45 percent of the shipments from Canada it is not
claimed. 60 That is pretty high, and that in essence guts a lot of the NAFTA
exemption if you will for Canada. The APHIS exemption for Canada was
removed in 2007. My Google research said that it was June 1, 2007. There
was some phase-out in March 1, but the final removal was in 2007. 61 And
then based on our studies, we determined that Canada pays a
disproportionate amount of COBRA in harbor maintenance fees, 62 so much
for that special trading status.
I want to talk a little bit about what we found when we tackled this. As I
mentioned before, I thought that this was going to be a pretty easy
assignment, maybe the embassy knew better than we did when they asked us
to do this. First of all, the U.S. law does not require Customs and census to
maintain data on user fees by specific country, 63 which just astounded me.
But the law does not require that, so as a former government employee, do
not do anything that you are not told to or not required to do. Customs is not
required to maintain information regarding the number of border crossings
by transportation mode. 64 In the panel before us, we saw how the mode of
transportation is quite important to some of these decisions, and to not have
that data I think is problematic in terms of figuring out how these fees impact
stakeholders. However, census which is under the Department of Commerce
-- and I think I read somewhere someone from the Department of Commerce
was here, I do not know whether they are from census or not -- but anyway,
they maintain import values for Canada for air and vessel conveyances, but
not for truck and not for rail, 65 and that is obviously what we were interested
summary, or equivalent documentation . . . .”).
60
See ROBERT KUNIMOTO &GARY SAWCHUK, NAFTA RULES OF ORIGIN 19 (2005),
http://www.policyresearch.gc.ca/doclib/DP_NAL_NAFTA_200506_e.pdf (“From 1998 to
2003, approximately [only] 54% of all imports into the United States from Canada used
NAFTA status.”).
61
See Agriculture Inspection, supra note 46 (stating that as of June 1, 2007, APHIS would
remove the inspection exemption).
62
See KUNIMOTO &SAWCHUK, supra note 60 (finding that Canada only used NAFTA
status 54% of the time, meaning they paid more fees than necessary).
63
See generally 19 C.F.R. § 163 (2008) (record keeping requirements).
64
See id. (record keeping requirements).
65
See North American Transportation Statistics Database,
http://nats.sct.gob.mx/nats/sys/techdoc.jsp?i=3&id=19 (last visited Sept. 25, 2008) (stating
that the U.S. Department of Commerce handles statistics for air and vessel, while the U.S.
Department of Transportation handles statistics for truck and rail).

Kanargelidis, Hamill & Cherniak—The Intersection of Border Security 315
in. And that was -- that is the last point. So you can see that collecting this
data in and of itself was problematic.
These next few slides are some of the figures that we determined based on
some assumptions that we thought how Canada played with respect to other
countries including China. First of all, with respect to harbor maintenance
fee, there is a $3.3 billion surplus. 66 The Army Corps of Engineers is the
agency that is responsible for spending that money. So right now, HMF is
being collected and it is going into this till, but it offsets our budget deficit,
so there are some politics I believe that are involved in that. But as that
gentleman is laughing, I guess he agrees with me. But harbor maintenance
fee is just essentially going into a big pot, and we could have a whole session
on that.
Again, these will be in your materials, but these are some of the
determinations that we made based on essentially getting data from sort off
isolated source from Customs, from census, again, making some
assumptions, and our general finding was that we thought Canada was
paying a disproportionate amount of these fees, which anecdotally I think it
was. We thought it was the case, but at least our study suggested this. And it
is interesting. I gave a presentation on this at the embassy, and there was
somebody I believe from the Department of Transportation there who did not
like my presentation. And essentially what I told him was, you know, this
could be flawed, but, you know, we would like you to do a study to sort of
challenge this. And you know that is one of our recommendations is either
through what we call a section 332 investigation or getting some sort of law
changed where they would have to collect this information.
The GAO study was the first part of it, but it only covered air and sea, but
interestingly when I got to the end, some of their recommendations and
findings I think dovetailed with some of the findings that we made here.
Again COBRA fees. Surprise, surprise. They went it by 10 percent. 67 That is
another point, too. Some of these fees are statutory; some of these fees are
regulatory. The statutory fee, sometimes they prescribe a specific fee. 68
Sometimes the statute says that the agency has the discretion. 69 And in this
66
See Ambassador Wilson, The Canada-U.S. Border: Free Trade in a time of Enhanced
Security (Mar. 29, 2007), http://geo.international.gc.ca/canam/washington/ambassador/070329-en.asp
(last visited Sept. 25, 2008) (stating that the Harbor
Maintenance Fee fund has a $3.3 billion surplus).
67
See U.S. GEN. ACCOUNTING OFFICE, CUSTOMS SERVICE: INFORMATION ON USER FEES
(June 1994) (“[I]ncreased the air and sea passenger processing user fee from $5.00 to $6.50 . .
. .”), available at http://archive.gao.gov/t2pbat3/152022.pdf.
68
See id. (discussing the NAFTA Implementation Act of 1993 which prescribed a specific
COBRA user fee).
69
See, e.g., QUESTIONS AND ANSWERS: AGRICULTURE INSPECTION AND AGRICULTURAL
QUARANTINE INSPECTION USER FEE REQUIREMENTS FOR CANADA (2007)

316 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
case, Customs exercised that discretion. APHIS fees are what we call
agriculture quarantine inspection fees. 70 They are the most controversial I
believe right now as many of you may have read or feel, and food security,
import safety is a growing issue within U.S. Customs. There is a lot of
pressure on Customs inspectors to keep out tainted food. And one of the
areas where the U.S. government has been focusing on is transshipments
through Canada. And I do not even know if it actually talked about it in the
notice of proposed rule making on these fees. But there was a sense that
some of the agricultural food was being transshipped from Asia to Canada to
the United States, and that was a justification for removing the exemption for
Canada. 71 And there was a big lobbying effort frankly to keep that exemption
and a lot of people worked very, very hard to try to keep that from
happening, and the U.S. government still removed the exemption. 72 So just
shows you how important fees are for the government.
And I think I probably should have said this in the beginning when we
talk about certain challenges to the fee. You know, a user fee is a cost that is
assessed for a service, and the legal test is it has got to be a fair
approximation. 73 It has got to cover the fair approximation of that cost. That
is why the MPF was challenged in the GATT because it was an ad valorem
fee and the commensurate cost associated with that fee was not necessarily
related to value, and that is why it was capped. 74 So there are ways to
challenge these fees, but they are very, very popular within the U.S.
government because within the U.S. government a fee is not a tax, 75 and that
is really, really important.
These are some other findings. I think we covered these first four. Let us
see if anything else here -- this second bullet is very, very important, and it
relates to the findings, is that fees go in like the merchandise processing fee,
http://www.aphis.usda.gov/publications/plant_health/content/printable_version/faq_canadian_
user_fees.pdf (“The Food, Agriculture, Conservation, and Trade Act of 1990, authorizes the
U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) to
collect agricultural quarantine inspection (AQI) user fees.”).
70
See id. (stating that APHIS collects Agricultural Quarantine Inspection (AQI) fees).
71
See Agriculture Inspection, supra note 46 (“Recent inspections . . . resulted in numerous
interceptions of prohibited fruits and vegetables, originating from regions other than Canada.”).
72
See id. (discussing the removal of the exemption).
73
See Bolt v. City of Lansing, 459 Mich. 152, 162 (1998) (“Such a measure will be upheld
by the courts when . . . the revenue derived there from is not disproportionate to the cost of
issuing the license . . . .”).
74
See EUROPEAN COMMISSION, supra note 54 (“The Panel ruled that customs user fees
should reflect the approximate cost of customs processing for the individual entry in question.
This principle was not met by an ad valorem system such as that used by the U.S.”).
75
See U.S. Shoe Corp., 523 U.S. at 361 (“Although the Export Clause categorically bars
Congress from imposing any tax on exports . . . it does not rule out a ‘user fee’ . . . .”).

Kanargelidis, Hamill & Cherniak—The Intersection of Border Security 317
the COBRA fee, and there is no way that Customs can measure at this point
whether that fee is going for payments for services that that fee was
intended. 76 The GAO study noted this too, and you know, that was our view
when we were looking at this. And how you can measure whether a fee can
go up or down, or in all cases it is either going to be frozen or gone up, go
up. Unless you can measure what it is being used for, and I think there really
has to be some further work done in terms of providing Customs the legal
authority, and providing census legal authority. I am not here to criticize the
agencies. In fact I am probably here criticizing the way the law is structured,
and think the agencies if they are given the tools to do this can better measure
how these fees are being used.
And then this last point, too. Congress again, some of these fees have to
be authorized by Congress even though they are sitting in a pool ready to go.
My last point -- and I think I am on time here which is great and amazing
-- is that as I mentioned before, the GAO study only covered air and sea
Customs fees. There is still no comprehensive study on land border crossing
fees. I believe it is essential, there is so much trade going on between Canada
and the U.S. by rail and by truck that I think that has to be studied. That can
either be done through what we call the section 332 investigation conducted
by the International Trade Commission 77 or any sort of special study that is
authorized by Congress. Point that I just made that U.S. Customs cannot fully
account for the fees. Reinvigoration of a user fee advisory committee. There
was a user fee advisory committee. I cannot remember whether it was
restricted to air fees or air processing fees or whether it was more
comprehensive, but knowing a couple people that were on the committee, it
was a little bit of a rubber stamp. There is some advisory committees in
Washington that are very effective such as Co-Op and some other
committees, and this committee I think whether they did not know their
mandate or whether there was not really high traction in Customs, but I think
something needs -- I think that would be a good recommendation.
And the last point is, you know, without reviews we are not going to
know how these fees are going to affect the payers of the fees and the
projects for which they are supposed to fund. So that is my concluding
comment, and I turn it over to Cyndee.
76
See generally U.S. GEN. ACCOUNTING OFFICE, FEDERAL USER FEES: SUBSTANTIVE
REVIEWS NEEDED TO ALIGN PORT-RELATED FEES WITH THE PROGRAMS THEY SUPPORT 24 (Feb.
2008) (“All of the fees we reviewed suffer from some misalignment—although the nature of
that misalignment varies—which affects how the fees are used.”), available at
http://www.gao.gov/new.items/d08321.pdf.
77
See 19 U.S.C.A. §1677 (West 2008) (authorizing investigation by the International
Trade Commission).

318 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
CANADIAN SPEAKER
Cyndee Todgham Cherniak ‡
MS. CHERNIAK: Thank you very much, David.
And I have kind of changed the focus of my presentation having spoken
about ITARs earlier today. And as you are aware, it has been mentioned
twice over the course of the weekend. I was the author of the Niagara
International Moot bench brief, 78 and one of the issues in that bench brief
was the national security exception.
The other thing that I have done over the last year was looking at the 100
free trade agreements, so I am going to focus in on the national security
exception and give some -- my points of view from looking at 100 free trade
agreements, what can be done on a going-forward basis.
And while I usually agree with everything Greg says, in the course of my
research into the national security exception, I did come across a case that I
brought to the attention of all of the judges in the moot. It is a concerning
military and paramilitary activities in and against Nicaragua, and it is an ICJ
report, 1986, and I focused in on paragraphs 221 to 224. 79 So you can look at
it at your own leisure. But in this case, the ICJ basically said we look at to
see whether or not there has been a breach, and then we can look to see
whether or not a national security exception applies. 80 They were looking at a
treaty that was long before NAFTA and long before some of the more recent
GATT jurisprudence, but that particular treaty has similar language to what
we are using today. And in paragraph 225, they said since the national
security exception contains a power for each of the parties to derogate from
‡
Cyndee Todgham Cherniak joined the International Trade Law Group, the Business
Law Group and Tax Group as counsel in Lang Michener’s Toronto office in October 2007.
She is known for her expertise in the area of free trade agreements, regional trade agreements
and preferential trading arrangements (collectively, PTAs). She appears before regulatory
bodies and tribunals such as the Canadian International Trade Tribunal, and makes representations
to the Canada Revenue Agency, the Canada Border Services Agency, the Export and
Import Controls Bureau, the Department of Foreign Affairs and International Trade, the Canadian
Food Inspection Agency the Department of Finance and the Ontario Ministry of Revenue.
78
See 2007-08 NIAGARA INTERNATIONAL MOOT COURT
COMPETITION: BENCH BRIEF 1 (2007),
http://cusli.org/niagara/documents/2008%20Niagara%20Bench%20Brief%20Final.pdf.
79
See Military and Paramilitary Activities (Nicar. v. U.S.). 1986 I.C.J. 14, 115-17 (June
27), available at http://www.icj-cij.org/docket/files/70/6503.pdf.
80
See id. at 136 (“The Court will first proceed to examine [the breach] . . . and then determine
whether they are nevertheless justifiable by reference to Article XXI [security exceptions].”)

Kanargelidis, Hamill & Cherniak—The Intersection of Border Security 319
the other provisions of the treaty, 81 the possibility of invoking the clauses of
that article must be considered once it is apparent that certain forms of
conduct by the United States in this particular case would otherwise be in
conflict with the relevant provisions of the treaty. The appraisal of the
conduct of the United States in light of these relevant provisions of the treaty
pertains to the application of the law rather than to its interpretation. And the
court will therefore undertake this in the general context of its general
evaluation of the facts established in relation to the applicable law.
So in my point of view and what I have put out in the bench brief is it is
not that self-determining by a country. They cannot just go ahead and invoke
the national security exception. It is possible for a dispute settlement body at
a later point in time to come and assess whether or not they were using their
power appropriately. Another thing that I would like to give to you from the
bench brief is I looked at a couple definitions for the term of national security
and some of them struck me, and this is why I am sharing it with you today,
is because it left a lasting impression in my mind, some of these statements.
The statements I am going to read for you are from a book called "The Law
in Times of Crisis: Emergency Powers in Theory, in Practice." And I am
picking two of many definitions. One is national security is an inherently
vague concept that is hard to define. Existing definitions include many
variables, vague terms, uncertainty, greater leeway for discretion, and
flexibility of interpretation. So this is on one side of the equation. On the
same side of the equation, we have got national security is not a term apart
with precise analytic meaning. At its core, the phrase refers to the
government's capacity to defend itself from violent overthrow by domestic
subversion or external aggression. But it also encompasses the ability of the
government to function effectively so as to serve our interests at home and
abroad. Virtually any government program from military procurement to
highway construction and education can be justified in part as protecting the
national security.
So that is on one side of the equation. Where I send up the warning side is
the other side, and it is the us versus them mentality that can be created as a
result of looking at national security interests or phrasing something in terms
of national security interests. And the quote that I have given you also comes
from that same book. In times of crisis when emotions run high, the dialectic
of us versus them serves several functions. It allows the people to vent fear
and anger in the face of actual or perceived danger and direct negative
emotional energies towards groups of individuals clearly identified as
different. This same theme also accounts for the greater willingness to confer
emergency powers of the government when the other is defined and clearly
81
See id. at 117 (“Article XXI of the 1956 Treaty contains a power for each of the parties
to derogate from the other provisions of the Treaty.”).

320 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
separable from the members of the community. The clearer the distinction
between us and them and the greater the threat they pose to us, the greater the
scope the powers assumed by the government and are tolerated by the public
become. And I want to avoid the ‘us’ versus ‘them’ mentality.
And when I look at that Canada-U.S. relationship, we are friends. We are
neighbors. We are brothers and sisters. You know, we were often described
as being family, and so it should not be an us versus them mentality. When I
look at the words of the national security exceptions, I see a requirement that
we be at war or have an international problem with each other. We do not.
Nothing is so serious in our relationship with each other in my opinion to
allow the national security exception to override provisions agreed upon in
the NAFTA or at a multilateral level in the WTO.
Maybe, you know, United States versus Iraq right now, you would be able
to invoke the national security exception, but not in respect of the
relationship between Canada and the United States. So in my view -- and I
believe that we have to exercise caution not only in you invoking the national
security exception or suggesting that something may be justified, but even
when I look at the most recent discussion in the Canadian newspapers about
the MDA Aliant deal, there, you know, was a question raised by the NDP
party in Canada whether or not this was against Canada's national security
interest. 82 In my personal view, we just should not throw around the word
"national security" as if it has no meaning. We have to use the phrase very
cautiously, especially when we are talking about our closest trading partner,
the United States.
So that is the mentality that I come from and the position that I come
from. And I believe that if you use the national security exception too often
or in the wrong circumstances, it gives to ability to water down the
obligations under the NAFTA, so we have agreed not to impose new
Customs user fees in the NAFTA. If you can say, oh, we will we are going to
oppose the APHIS fee, but it is on the basis of national security, well, the
bargain has just been ripped up with respect to that particular right that has
been provided.
Also when you look at PIP -- now, you know, I am not as concerned with
the PIP program, but if it turns out that it does violate, you know, the GATT
or the national security -- I mean national treatment or MFN, then, you know,
just saying, well, it is okay because it is national security, well, then
everything -- and, you know, if it is a government gets to decide what is in
the name of national security and does not have to justify it, then every single
82
See Generally Prentice Defends Decision to Block MDA Sale, CTV.CA NEWS, Apr. 10,
2008 (discussing the pros and cons of the MDA Alliant deal), available at
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20080410/radarsat_sale_080410?s_na
me=&no_ads=.

Kanargelidis, Hamill & Cherniak—The Intersection of Border Security 321
obligation that you have agreed to can just be watered down and no longer
exist. I do think that in free trade agreements on a going-forward basis, we
have to consider this more. And I was heartened yesterday to hear that there
is actually a negotiation going on between Canada-United States on national
security principles and maybe even a side agreement is being negotiated at
this point in time. 83 And there is a question, do you enter into a free trade
agreement and include the national security provisions if the free trade
agreement, or would it be better to have it in a side agreement so that it can
evolve?
We all learned a valuable lesson from 9/11, many, many valuable lessons,
but one of the valuable lessons is sometimes things evolve you did not
foresee something to happen, and you need to be able to adjust behavior, you
need to be able to sit down and discuss things as trading partners and evolve
your trading relationship and your trading agreement with each other. So
maybe, you know, it would be better to have this in a side agreement as
opposed to in the body of a free trade agreement so you do not have to
reopen the free trade agreement in order to further discuss and evolve one's
thinking on certain measures that have a national security aspect to them.
But I do have a couple provisions that I am sharing with everyone who
has come, so if you do not have this paper, there are a few more here. But I
have attached at the back of my provisions from my matrix a provision from
the closer economic partnership agreement between Thailand and New
Zealand. 84 This is one of the few examples that is out there where two trading
partners during the course of their negotiations thought about this issue, and
they included an article 311, a provision on security. 85 It is not quite as
evolved as where I think we should be if Canada is going to add this to some
new free trade agreements, and if United States gets back in the free trade
agreement game, I am not really sure whether or not it is stalled right now.
But in the future, I think that this sort of provision may start as a basis for a
side agreement. It says in the event either party desires to adopt procedures to
ensure the security of trade and goods and/or the movement of craft between
the parties, the Customs administration shall consult with a view to agreeing
to procedures to secure such trade and/or such movement of craft. 86 And I am
83
See SECURITY AND PROSPERITY PARTNERSHIP OF NORTH AMERICA: KEY
ACCOMPLISHMENTS SINCE AUGUST 2007 (Apr. 22, 2008),
http://www.spp.gov/pdf/key_accomplishments_since_august_2007.pdf (discussing collaboration
between the United States and Canada for smart and secure borders).
84
See generally Thailand-New Zealand Closer Economic Partnership Agreement, Apr. 19,
2005 (economic agreement between Thailand and New Zealand), available at
http://www.mfat.govt.nz/downloads/trade-agreement/thailand/thainzcep-december2004.pdf.
85
See id. at art. 3.11 (detailing an agreement on the security of trade and repression of
terrorist activity).
86
Id.

322 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
amazed. This is one of the few places that I have actually seen a provision on
security like this.
In 3.12 of the same Thailand-New Zealand Closer Economic Partnership
Agreement, they got provisions on paperless trading and the use of
automated systems. 87 This sort of clause is also showing up in the more
recent U.S. free trade agreements, but right now is not in the Canada
agreement, so that is why I am going to raise it with the audience today is
this provision says the Customs administrations of both parties in
implementing initiatives that provide for the use of paperless trading shall
take into account certain methods of APEC and the world Customs
organization. 88 There is also a provision that says that the parties shall adopt
electronic procedures and reporting requirements. 89 There is also another
provision on risk management, that they will cooperate with each other to
develop risk management techniques in the performance of their Customs
procedures. 90
And so these are nice precedents that exist currently within free trade
agreements that Canada and the U.S. can look at for their future discussions,
but also future discussions with other countries, especially developing
countries where we might have a greater concern about some security issues,
and maybe in the future will want to evolve that.
In the United States-Australia free trade agreement, there are provisions
on anti-corruption 91 and a few free trade agreements outside the U.S. free
trade agreements also deal with this particular issue. 92 Canada's free trade
agreements do not at this point in time, but I believe that corruption is an
issue that actually should be within the free trade agreements in some shape
or form, and the reason for this is when you are dealing with the developing
countries, there is a degree of poverty and there is a degree of underpayment
of the public officials. And corruption is a problem in a number of
87
See id. at art. 3.12 (detailing an agreement on paperless trading and the use of automated
systems).
88
Id.
89
See id. (“The customs administrations of the Parties shall, as soon as practicable, adopt
electronic procedures for all reporting requirements, consistent with the provisions of Chapter
10 of this Agreement.”).
90
See id. at art. 3.13 (detailing an agreement on risk management).
91
See U.S. – Australia Free Trade Agreement, art. 22.5, May 18, 2004 (detailing an
agreement for cooperation on anti-corruption efforts), available at
http://www.ustr.gov/assets/Trade_Agreements/Bilateral/Australia_FTA/Final_Text/asset_uplo
ad_file148_5168.pdf.
92
See, e.g., APEC.org, Anti-Corruption and Transparency Experts Task Force,
http://www.apec.org/apec/apec_groups/som_committee_on_economic/som_special_task_grou
ps/anti-corruption.html (last visited Sept. 25, 2008) (describing the Asia-Pacific Economic
Cooperation task force committed to fighting corruption).

Kanargelidis, Hamill & Cherniak—The Intersection of Border Security 323
jurisdictions where we want to trade. And so I see a potential breach to
security is the whole corruption issue.
And also if we want to communicate clearly that Canadian companies or
American companies will not do business with people and will not engage in
such behavior, having it in the free trade agreements I think is a great please
to put it as well as having it at the multilateral level of the OECD. But in
article 22.5 of the U.S.-Australia free trade agreement, it says the parties
shall cooperate in seeking to eliminate bribery and corruption, and to
promote transparency in international trade. 93 They are committed to seeking
avenues in relevant international fora to address bribery, corruption, and
transparency, and to build on anti-corruption efforts in these fora.
In the United States-Singapore free trade agreement – and I will not go
through the provisions -- but article 5 .2 deals with anti-circumvention. 94
Article 5.3 deals with monitoring and other such issues. 95 And these sorts of
ideals can also be included in Canada's free trade agreements on a going
forward basis. In the EU-Morocco Euro-Mediterranean agreement, there is a
very interesting provision on cooperation in Customs matters, 96 but it is
similar but different to what you see in the NAFTA and some of the U.S.
agreements. They also have provisions, article 61, on money laundering 97
and article 62 on combating drug use and trafficking, 98 which we do not see
in North American free trade agreements at this point in time. So some real
great precedents are out there.
And the last precedent that I would like to bring to everyone's attention is
in the Japan -- all of Japan's free trade agreements, but the example that I
have given to you is from the Japan-Indonesia economic partnership
agreement, which is one of the most recent agreements, and in that
agreement I am focusing in on certificates of origin at this point in time. And
the involvement of the exporting government in the issuance of certificates of
origin, but I also say, you know, in the whole compliance in where we get
into PIP and C-TPAT in this whole process of verifying before the goods
leave the country, and right now it is the importer that is responsible for
communicating in Canada and in the United States with respect to any
93
U.S. – Australia Free Trade Agreement, supra note 97.
94
See U.S. – Singapore Free Trade Agreement, art. 5.2, May 6, 2003 (detailing agreement
on anti-circumvention), available at
http://www.ustr.gov/assets/Trade_Agreements/Bilateral/Singapore_FTA/Final_Texts/asset_up
load_file708_4036.pdf.
95
See id. at art. 5.3 (detailing an agreement on monitoring).
96
See EURO MEDITERRANEAN AGREEMENT, OFFICIAL JOURNAL OF THE EUROPEAN
COMMUNITIES, Mar. 18, 2000 at 15 (detailing an agreement on cooperation in customs matters),
available at http://www.maec.gov.ma/en/accord_en.pdf.
97
See id. (detailing an agreement to cooperate in the prevention of money laundering).
98
See id. (detailing an agreement to combat drug use and trafficking).

324 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
importations. And if there is a problem with the certificate of origin,
generally speaking it is the importer that is on the hook.
The system that Japan has in place is that the exporter goes to the
Japanese government or Indonesia goes to the Indonesian government and
says “please certify that these goods are originating for the purposes of our
free trade agreement.” 99 And they get a certificate that is issued by the
government or by a chamber, and then they are able to issue certificates of
origin, but it is all pre-cleared by the exporting government and the exporting
government has a role to play in the compliance with respect to are these
goods originating and entitled to preferential treatment. 100 I think that we can
go beyond this and use these provisions as a precedent for some of the
security measures that we have talked about earlier today.
So I will wrap up and just say that we do have precedents. We are seeing
things evolved. We have more evolution that can take place, but I see it as a
positive future as opposed to negative one.
Thank you.
MS. IRISH: Okay. Before I open the floor for questions, I am going to
ask our two previous speakers if they wish to comment and reply or add
anything to Cyndee's comments. Greg first.
MR. KANARGELIDIS: I can make a few brief comments in response to
the points Cyndee has raised. It is not always an “us versus them” situation as
Cyndee describes it. The U.S. trade embargo against Nicaragua was clearly
“us versus them”, 101 but PIP is not of this type, it is really more of an “us
versus the rest of the world” issue. So in that sense, if there is discrimination
at all, it is against the world at large ensuring that the goods - wherever they
are - are secured. So I would say in response to Cyndee that her argument
should not be applicable to PIP since PIP cannot be characterized as an “us
versus them” measure.
The experience that we have seen in GATT is that there is strong pressure
to exclude from a panel’s terms of reference the question whether there was
justification for relying on Article XXI, with the result that a panel has no
jurisdiction to come to any conclusion one way or the other on whether the
GATT contracting party had violated the GATT. In other words, at least as
far as GATT jurisprudence is concerned, GATT panels will not make a
99
See Agreement between the Republic of Indonesia and Japan for an Economic Partnership,
Part 2, Sec. 1, Aug. 20, 2007, http://www.mofa.go.jp/region/asiapaci/indonesia/agree0807.pdf
(describing the process for acquiring a certificate of origin).
100
See id.
101
See Generally U.S. Extends Embargo On Nicaraguan Trade, NY TIMES, Apr. 26, 1988
(discussing the trade embargo against Nicaragua), available at
http://query.nytimes.com/gst/fullpage.html?res=940DE2DD113DF935A15757C0A96E94826
0.

Kanargelidis, Hamill & Cherniak—The Intersection of Border Security 325
determination on this point at all. They will leave it to the government in
question that imposed the measure.
On a related point, there is a question of whether national security
provisions should be included in trade agreements at all, on the basis that
“national security” is the inherent right of a contracting party, and that this is
reflected in the text of Article XXI. In other words, the argument goes, even
if Article XXI did not exist a contracting party would still have an inherent
right to do what is necessary for the national security. These GATT members
argue that Article XXI is superfluous.
MR. HAMILL: Yeah. I am going to comment on the last portion of
Cyndee's presentation which resonated with me in that I think historically we
have looked to the importer or the importing country for a lot of these
obligations, you know, whether it is regulatory compliance or providing data
which was the focus on my presentation. And I think you see in free trade
agreements, but in other proposals as well that we are trying to get
information from the exporting country or from the carrier before it hits the
border so that, you know, not only are we getting true and accurate
information, but security-related decisions can be made with respect to
inspections and the like. I am sure everyone may be aware of the 10+2
proposal which is geared towards getting this information from the carrier in
most cases prior to arrival. 102 So I think that is a common theme that extends
to a lot of other areas in addition to free trade agreements.
MS. IRISH: And now I will open the floor to questions.
DISCUSSION FOLLOWING THE REMARKS OF GREG
KANARGELIDIS, DAVID R. HAMILL AND CYNDEE TODGHAM
CHERNIAK
MR. VANDEVERT: On the last point about getting export certification, I
make a connection with the prior comment that we had with the panel on the
border crossings, and instances where it appears that CBP -- and it is not to
single out CBP, but that a Customs authority sort of questioning the validity
of a passport issue by another country.
I have had direct experience with export certificates in the Oseon AFTA
provisions, 103 and it is a big problem. It sounds like a great idea, well, the
102
See CBP Issues Proposed Rule Requiring Additional Cargo Information, Jan. 2, 2008,
http://www.cbp.gov/xp/cgov/newsroom/news_releases/archives/2008_news_releases/jan_200
8/01022008.xml (last visited Sept. 25, 2008) (“The Security Filing, also known as ‘10+2,’ is
another step in the Department of Homeland Security’s (DHS) strategy to better assess and
identify high-risk shipments to prevent terrorist weapons and materials from entering the
United States.”).
103
See generally Association of Southeast Nations Free Trade Area, 1992 (discussing certificates
of origin under the AFTA agreement), available at

326 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
government certified this qualified that this good qualifies. Even with those
government certifications, the Customs authorities on the importing countries
continually doubt validity of the certificate of origin. And they have an
instinctive either request or concern, we need to see more, we need to
understand and validate this. We are not going to take just the declaration of
an exporter or even if certified by the exporter's government.
MS. CHERNIAK: You are absolutely right. It is just another method to be
put into place, but I mean the importing country always will have the right to
question whatever information that they are being given. These are just
precedents for how they can evolve relationships at this point in time. And I
found this to be a very interested idea looking at Japan when I am used to the
North American experience.
MR. HAMILL: I also think part of the issue is that origin can mean
different things depending on the law. I mean, something that is NAFTA
originating does not necessarily extend to what is considered origin for other
purposes. So, you know, does the foreign government really understand or
the exporting government really understands what that definition is? And I
think as, you know, if I were a CBP officer, unless it was like wholly
originating, I might question it myself. But I agree with Cyndee, it is sort of a
step one to maybe further steps.
MS. IRISH: I have two questioners. First Michael.
MR. ROBINSON: Michael Robinson. There have been some recent
cases, arbitral decisions on the self-assessing thing that are quite important
that bear on this whole idea of whether a country can decide what is its
national security interest. And they arose out of the case against Argentina at
ICSID, International Center for the Settlement of Investment Disputes. 104
There is the CMS case, the Azerex case, the Genavaldesol. 105 I have to read
all these things because I teach in this area of investment law. They are all
found in a wonderful service called Transnational Dispute Management
which is expensive. But fortunately my library pays for it at the law firm.
And it was very clear there that the panel said, I am sorry, Argentina, you
cannot decide what is a national emergency; we will decide. And they looked
towards the opinion of the international law commission of the United
Nations that spells out quite clearly in what circumstances there is a national
emergency which I think is directly comparable to the national security
exemptions, so I think all these cases will bear on -- you do not have to go
http://www.aseansec.org/10148.htm.
104
See Jürgen T. Kurtz, ICSID Annulment Comm. Rules on the Relationship between Customary
and Treaty Exceptions on Necessity in Situations of Financial Crisis, ASIL INSIGHTS,
Dec. 20, 2007, http://www.asil.org/insights071220.cfm (discussing Argentina’s use of the
national security exception).
105
See id. (discussing CMS Gas Transmission Co. v Argentina).

Kanargelidis, Hamill & Cherniak—The Intersection of Border Security 327
back to when the U.S. -- that Nicaragua case at the ICJK -- very current stuff
now coming out of ICSID.
MS. CHERNIAK: Well, I agree, Michael. The reason why we have the
ICJK send the bench brief was because the ICJ was the one who was judging
the Niagara international moot, so that is why I had that particular paragraph
that I was able to read out to everybody today.
MS. IRISH: Questioner here at the front.
MR. PIERSON: I got to work on your problem.
MS. CHERNIAK: Now you know some of the answers.
MR. PIERSON: I do something about this, and I would just note that the
Nicaragua panel at the end had sounded all the fire alarms for the back of the
national security, et cetera, to swallow up the entire treaty by calling
something national security and basically having this subjective analysis on
that country's view of it. My analysis, I actually avoided the time of
emergency and looked more so to the subjective -- or impugning an objective
necessity analysis within the national security exception even though the
plain text reading of the section is subjective. And I was wondering if there is
anything to that I guess if the argument went okay at the moot, but I did not
know if having a group of trade lawyers, that they could see a reading that
would incorporate some level of objectivity and whether the measure is
necessary to enhance security.
MS. CHERNIAK: A number of people took that position and took that
read, and from my own purposes, I believe that that is the correct
interpretation. As I said, I believe the national security exception should be
used cautiously and in the rarest of circumstances, so that is my personal
point of view with respect to the national security exception. I am sure the
Canadian government will take a different position than that if it served their
interest at a particular point in time.
MS. IRISH: One question in the back row, and then Henry.
MS. O'NEAL: The question's for Greg.
You mentioned about -- you talked about PIP being against international
trade obligations. If PIP is the same as C-TPAT, is therefore C-TPAT also
against international trade obligations?
MR. KANARGELIDIS: My ultimate conclusion is that the PIP likely is
not in violation of the GATT and/or NAFTA. I did raise some characteristics
that suggest one could make the argument for a violation of GATT or
NAFTA. On balance, however, I do not think there is a violation in fact. To
respond to your question, if we make the assumption that PIP violates the
GATT and NAFTA, then I would agree that it is arguable C-TPAT would
also be in violation of the GATT and NAFTA also.
MS. IRISH: Now Henry.
DR. KING: Well, I am going to adjourn the conference. If there are any
other questions, they have priority.

328 CANADA-UNITED STATES LAW JOURNAL [Vol. 34, No. 1]
MS. IRISH: Henry, you have priority. There are no further questions.
DR. KING: Well, thank you very much for a wonderful panel.
And I am not going to take a lot of time. I am just going to thank Dan
Ujczo and Deborah Turner for all the work they did on the panel.
(Applause.)
DR. KING: They deserve every clap that you gave them. And so I believe
we should stand adjourned except that if anybody has any suggestions for a
topic next year, we certainly consider them. I have certain ideas and others
that I have heard over the week.
MR. CRANE: Well, do you think Obama and Hillary will give us an
opening?
(Laughter.)
DR. KING: Oh, boy. Well, we are looking for your input in the Toronto
Star, David. And, you know, you are a great writer and a good listener, too,
and I am sure you heard every token, every special word that was uttered
here today. So thank you very much, and I want to adjourn the conference on
a happy note. I think it is been one of our best or perhaps the best with
attendance at a very high level and also with great participation by the group.
The questions were wonderful. I did not prod as much this year as I do.
Usually I did not have to because the moderators and the participants in the
audience were very great in bringing out points.
So thank you, and let us end on a happy note. There is dinner tonight, at
least I am told of that, so let us engage in some conversation between us
which is one of the objectives of the Institute.
Thank you very much!
(Session concluded.)
(Conference adjourned.)

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