Adding to the case for opening the Canada-US border

While business lobbyists and government officials huddle to trim border red tape market forces favoring more open markets continue to be resisted in both countries. In the US, of course, broad grassroots concern for security hinders quick action to open further the north-south market.  In Canada, even with a Conservative majority government, the dynamic power of the market itself is the concern.

This was vividly demonstrated by the Harper government’s swift rejection of an invitation by American law makers to lift to $1,000 the exemption for daily cross border shopping. They worry that the initiative would actually work; increasing cross-border business at the expense of some nearby Canadian retailers. 

Opposition spokesman haven’t stood up for Canadian consumers; it looks like the idea is DOA. Nevertheless, Keith Head and Ambarish Chandra at the Saunder School of Business at the University of British Columbia make a valuable case for the idea:

 “We find it disappointing, then, that Ottawa would resist the small but welcome effort by the United States to facilitate cross-border travel and trade. If common sense ever returns to the regulations governing the border, it will be due to economic forces. Therefore, we must embrace, rather than reject, the economic forces that drive the new U.S. thinking on this issue. Matching the $1,000 exemption would help Canadians realize greater gains from trade, while allowing CBSA (Canada Border Security Agency) to focus on its core mission.”

Click on: http://www.theglobeandmail.com/news/opinions/opinion/canada-should-match-us-exemptions-for-cross-border-travellers/article2033327/

Canadian policy makers who insist that Canadian shoppers pay taxes where ever they shop should relax. When Canadian consumers are in American stores they’re buying goods that include American taxes—taxes that also support Canada’s mission statement: “peace, order and good government.”

Better integrating the central and coastal regions of the North American economy—for individuals as well as multinational corporations—would help make a truly open border politically feasible, would directly increase real personal incomes in both countries, and would strengthen both economies internationally.

Obviously, that is a big (albeit time-tested) assertion. However, unless we commit to an ambitious Canada-US objective—unless our political leaders see an over-riding responsibility to reduce the border’s debilitating influence—nothing significant will likely be accomplished.