A New Border?

Abstract

Canada and the United States form a highly integrated economic region; indeed, since the signing of the North American Free Trade Agreement (NAFTA) in 1993, economic integration of the two countries has progressed faster than economic growth. In the 1990s scholars suggested that the primary characteristic of the Canada- US border and surrounding regions was an environment facilitating the seamless flow of goods and capital. But since 9/11, borders have hardened, and some argue that securitization has impeded trade and is now affecting all policy arenas concerned with borderlands. This article is a review of those arguments.In this article I show that since 9/11, Canada and the US have worked out a border policy that is generally harder but softer for pre-cleared goods and people. First, I give an overview of the state of cross-border relations and policies before 9/11. I then review the current status of free trade and economic integration in the context of arguments that post-9/11 policies hardened the border to suggest that Canada and the US have safeguarded and deepened their friendship since 9/11 and to make some inferences about the future of Canada-US border relations.A SEAMLESS BORDER BEFORE 9/11?Academics argued in the 1990s that the Canada-US border was increasingly transparent to trade. At the time scholars noted that for the past 25 years, the internationalization of the economy had increased the influence of market forces, and that states had increasingly been risking free trade.1The signing of NAFTA represented a turning point in North American trade relations; concurrently, states were losing the capacity to regulate effectively within national boundaries.2 Regional studies attributed this shift to economic reorganization.3 This literature assumed that the world transformation resulted from economic restructuring which, in turn, the North American free trade regime enhanced. Some argued that NAFTA leads to the development of a borderless world, as regions will be delineated only by the sharing of information and goods, rather than international borders. Kenichi Ohmae, for instance, when looking at similar policy mechanisms in Asia, suggested that the political influences of the regions in question did not match the economic influence of regional trade flows.4NAFTA AND ECONOMIC INTEGRATIONThe Canadian and US economies have become highly integrated. Since the 1990s, two-way trade between Canada and the US has more than doubled. This trade increase from US$45.6 billion in 1977 to US$818 billion (imports and exports) in 2010 - an increase of 1,800 percent - was largely the result of the signing of the Canada-US free trade agreement (FTA) in 1988 and NAFTA in 1993.5 Originally, a few Canadian manufacturing sectors, particularly primary goods and automobiles, formed a unique economic ensemble with the US. In the 1990s 81 percent of all Canadian exports were end products and semi-manufactured goods, with an additional US$42 billion worth of services.6 In 2009, total merchandise trade with Canada was down to US$429.7 billion (a 28 percent decrease from 2008), consisting of US$224.9 billion (a 33 percent decrease from 2008) in imports and US$204.7 billion (a 21.5 percent decrease from 2008) in exports. In 2009, slightly less than US$1.2 billion in goods crossed the border each day. Trade with Canada represented 16.4 percent of total US trade, with Canada purchasing 19.4 percent of US exports and supplying 14.4 percent of total US imports. Also in 2009, the US supplied 51.1 percent of Canada's imports of goods and purchased 75 percent of Canada's merchandise exports.7Trade between the US and Canada expanded rapidly following the signing of the FTA in 1988. The goal of NAFTA, which came into force on 1 January 1994, was to expand trade and investment among Canada, Mexico, and the US. NAFTA did not modify the implementation of the 1988 FTA. It organized the phasing out of tariffand non-tariff barriers on originating goods. …