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

Abstract

This article examines the extant and potential impact of U.S. antiterrorism policies on Canada‐U.S. cross‐border commerce. Particular attention is focused on the cross‐border trade that takes place between southern Ontario (Canada) and western New York (United States). Evidence from a survey of Canadian and U.S. exporters suggests that U.S. antiterrorism measures have inflated the business costs of exporters on both sides of the border. These measures have also created shipment delays that ultimately imply lost revenues for producers, as well as higher prices for consumers. Security‐related initiatives motivated by a genuine concern for the well‐being of U.S. citizens may nevertheless act as nontariff barriers to bilateral trade. We argue that a potential long‐run consequence of these additional costs is trade diversion. The article concludes with a brief discussion of the implications of the empirical findings for the geography of Canada‐U.S. bilateral trade.

Disruptions in Spatial Networks: a Comparative Study of Major Shocks Affecting Ports and Shipping Patterns

“…However, these shocks have not been compared with each other yet, especially from a quantitative and network perspective. Scholarly studies looked at law and economic issues such as the implementation of antiterrorism policies for general freight in the case of New York (Bradbury, 2010;MacPherson et al, 2006;Rose et al, 2010) and in wider maritime-related terrorism studies (Michels et al, 2013;Richardson, 2004), and the geographical and urban dimensions of terrorism (Cowen and Bunce, 2006;Cutter et al, 2014). These works provide a lot of precise information on each disruption that enrich our comparative perspective.…”

Freight transportation costs and the thickening of the US–Mexico border

“…If the goods being shipped are perishable, then excessive wait times can result in spoilage. MacPherson et al (2006) note that an increase in bordercrossing costs may also lead to inefficiency by diverting trade away from low-cost producers in neighboring countries to higher-cost producers in home countries. Finally, if wait times are volatile, truckers may build more border-crossing time than is ultimately necessary into route planning, which inhibits taking advantage of shorter-than-expected waits (Taylor et al, 2004).…”

“…Vance (2008) documents that, given the new bureaucratic hurdles erected at border crossings, some exporters chose to outsource shipping and customs responsibilities to third parties with expertise in those areas. A survey of companies engaged in trade across the United States-Canada border reveals that some firms are considering switching from foreign to domestic suppliers in response to more intensive border security (MacPherson et al, 2006). Firms that practice justin-time (JIT) inventory management are especially vulnerable to increased border wait times (Vance, 2008;Georges and Mérette, 2012).…”

Sharing the Burden of the Border: Layered Security Co-operation and the Canada–US Frontier

“…One side effect of the increased costs of doing business post-9/11 has been the effort by some Canadian businesses to move away from the US market (MacPherson et al, 2006). More recent studies suggest that there have been significant adverse effects on Canadian exports.…”