Canada, U.S. Sign ‘Pre-Clearance’ Agreement - Global Trade Magazine
  March 20th, 2015 | Written by

Canada, U.S. Sign ‘Pre-Clearance’ Agreement

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U.S. Customs agents will be able to perform their duties in Canada—and vice versa—under a landmark border “pre-clearance” agreement signed by the two nations that will ease the movement of cargo and people by land, sea and air between the two countries. The new pact expands the existing one enacted in 2011 and resolves a longtime Canadian objection to armed U.S. agents working on the Canadian side of the border.

But, before the agreement can be activated, the results of a pilot project—in which cargo bound for the U.S. was inspected at Fort Erie, Ontario—has to be released before legislation can wind its way through Washington, D.C. and Ottawa, the Department of Homeland Security (DHS) says.

Complete details on the new and expanded Beyond the Border Agreement haven’t been forthcoming. But what is known is that it will allow agents to hold suspects in the other country—but not arrest them, as an agent from the host country would have to be present for an arrest. The agreement also establishes criminal liability for on-duty customs officers who commit criminal acts (off-duty officers are punished by the host country) and requires foreign agents to respect the host country’s laws.

The U.S. is currently the destination for nearly 80 percent of Canada’s exports, virtually all of which move by land; similarly, Canada is the single largest U.S. trade partner and the largest export market for U.S goods.

One of the major cross-border points affected by the agreement is the Peace Bridge between the state of New York and southern Ontario, which alone serves as the conduit for the movement of $131 billion in goods annually between the U.S. and Canada. At the Peace Bridge, several issues would have to be resolved before the pre-clearance of U.S.-bound cargo could be shifted to the less-congested Canadian end of the bridge. U.S. Customs and Border Protection (CBP) would have to agree to the move, and then infrastructure improvements would be needed on the Canadian end of the bridge over the Niagara River.

“Implementing a pre-clearance model for movement of goods including ground and marine transport recognizes the importance of trade through all modes of delivery,” says Atlanta, Georgia-based express giant UPS, which accounts for the highest volume of daily cross-border goods activity between the U.S. and Canada.

The agreement, the company says, “will help to reduce congestion at key Canada-U.S. border crossings; and the use of improved border processes, such as the pre-clearance system, establishes greater efficiency for Canadian businesses and U.S. Customs authorities. It supports improved competitiveness for businesses engaged in trade, as it helps ensure speed to market for export goods.”

The new agreement comes as the latest legal hurdle to the construction of the new Detroit River International Crossing (DRIC) has been bested. The planned DRIC is a $4-billion, six-lane bridge that will connect Detroit, Michigan, and Windsor, Ontario, and replace the existing privately owned Ambassador Bridge.

Last July, a joint, non-profit U.S.-Canadian authority was created to oversee the construction, operation and maintenance of the DRIC, which “is needed for growing trade and for growing traffic at Canada’s busiest U.S. commercial border crossing,” says Canadian Transport Minister Lisa Raitt.