Less than two months after Prime Minister Stephen Harper and U.S. President Barack Obama announced plans for stronger bilateral co-operation on border security and trade, Canadian ports are defending themselves against a protectionist push from south of the border.
The debate, most aggressive in the U.S. Pacific Northwest, has alleged that Canadian ports have been luring business for U.S.-bound imports through unfair competitive advantages. (See “Port dispute heats up” – issue 1140; August 30-September 5.)
The U.S. rumblings have alleged lax Canadian security and rail system advantages, but chiefly focused on whether a harbour maintenance tax (HMT) applied at U.S. ports but not in Canada gives Canadian ports an advantage over their U.S. counterparts. U.S. interests are therefore lobbying to have the HMT slapped on to U.S.-bound goods transiting through Canadian ports when they hit the border.
In November, the debate heated up further when the U.S. Federal Maritime Commission (FMC) published a notice of inquiry in the U.S. Federal Register inviting public comment on factors shifting containerized cargo from the U.S. to Canadian and Mexican ports.
In response, Port Metro Vancouver (PMV), the Prince Rupert Port Authority (PRPA) and two Eastern Canadian ports have filed a joint submission rebutting the allegations of unfair competitive advantages at Canadian ports.
PMV spokesman Duncan Wilson said the submission’s research found that market share of U.S.-bound cargo at Canadian ports has slid to 2.5% in 2010 from 3.2% in 2000.
Andrew Mayer, vice-president of commercial and regulatory affairs for the Prince Rupert Port Authority, added that other key arguments Canadian ports have submitted include that:
•the presence of Canadian ports gives U.S. shippers more options and might reduce their shipping time and costs, and thus costs of U.S. goods;
•the HMT is a minor factor in shippers’ choice of Canadian ports, relative to geography and efficiency of Canadian transportation systems;
•adding HMT on U.S.-bound goods travelling through Canada runs counter to the countries’ long trade relationship and the vision for improved co-operation outlined in the Beyond the Border action plan announced in December.
Because of the efficiencies shippers gain by using Vancouver and Prince Rupert, Mayer said that an HMT applied to cargo moving through Canadian ports wouldn’t steer them away from B.C. ports.
He added that he doesn’t foresee the U.S. implementing the tax at the border. “I don’t think that the submissions [to the inquiry] would justify that type of action, and I think there’s a question as to whether they even have the legal ability to do it, in light of [the General Agreement on Tariffs and Trade] and [the North American Free Trade Agreement].”
But Wilson cautioned that Canadian ports are still taking the inquiry process very seriously.
“We’ve seen what can happen in the U.S., particularly in the midst of election time, with these kinds of issues – where facts and reason sometimes get lost for what makes good politics,” he said, citing the softwood lumber dispute. “This obviously has the potential to be good politics in the Pacific Northwest and Washington state, so we’re quite concerned about it.”
Wilson said it’s unclear what the inquiry’s timetable is, whether it will include public hearings and when a final report will be produced for U.S. Congress.
The FMC did not respond to an interview request by press deadline. •
