Strategic Responses by Canadian and U.S. Exporters to Increased U.S. Border Security Measures

Abstract

After September 11, 2001, the U.S. and Canadian federal governments increased restrictions on materials and people crossing the border. Antiterrorism regulations have introduced costly compliance requirements, clearance delays, and unpredictable border wait times for companies conducting business across the international border. A recent study suggests that many Canadian and U.S.-based exporters intend to counteract these costs by implementing strategies including geographic supply chain reconfiguration. Strategic adjustments of this nature could have profound effects on the geography of North American supply chains, the structure and volume of bilateral trade, and the management of just-in-time delivery systems. This project follows up on the previous study via personal interviews with 35 businesses that had indicated an interest in geographic strategies. Preliminary findings suggest that firms are quickly adjusting to new security requirements and are improving communication channels throughout their cross-border supply chains to stay abreast of new developments.