WASHINGTON, DC: An American federal agency is suggesting Canadian ports taking in US-bound cargo, in particular Prince Rupert, BC, lack the tight security measures in place in the United States for cargo shipped directly to its ports.
The report by the five-member Federal Maritime Commission points out that Prince Rupert isn’t a “CSI” port. CSI is an acronym for the Container Security Initiative, a program implemented by US Customs and Border Control to pre-screen more than 86 per cent of US-bound container cargo. The report, to be delivered to US Congress soon, divided the panel’s members down party lines. The two Republicans on the commission voted against its release, finding it too negative toward Canadian port authorities, and the three Democrats voted to sanction it.
“Vancouver, Montreal and Halifax are CSI ports; Prince Rupert is not,” reads the report obtained by The Canadian Press on the eve of its official release.
Neither does Canada implement the so-called “10-plus-two” program imposed on importers by US Customs and Border Control since 2009, the report points out.
That rule requires information about cargo to be transmitted to the agency at least 48 hours before goods are loaded onto ships destined for the United States.
Ten pieces of information about the shipment must be provided to the agency by the importer, and two additional pieces of information from the shipping company.
“The 10+2 does impose a burden on importers to the United States that is not currently imposed on importers to Canada; it is anticipated that Canada will implement a similar program soon,” the report read.
It added: “By using a US seaport, importers and steamship lines can have greater certainty as to the applicability of US law for the entire movement.”
The suggestions about lighter security in Prince Rupert have mystified Canadian port officials.
Prince Rupert is the West Coast pilot site for streamlining security measures under the much-heralded Beyond The Border initiative between Canada and the US.
Robin Silvester, chairman and CEO of the Vancouver port authority, argued earlier this week that containers entering the US from Canada ports are, in fact, more secure than cargo shipped directly to American ports.
“Every container that comes into Canada undergoes radiation screening, and then when they cross into the United States, they’re screened again as a further security measure. That doesn’t happen with containers entering the US from other countries,” he said.
Even though the commission has no authority over Congress, it could shape the opinions of lawmakers who could pounce on the security concerns raised in the report with just four months before the presidential election.
As reported earlier by MM&D, the report also takes aim at the US Harbor Maintenance Tax.
Canadian ports charge importers a user fee, not a tax, to help maintain their harbours. Prince Rupert and Vancouver, however, have deep channels and don’t require the routine dredging that must be performed in several American West Coast ports.
The commission advises Congress to consider reforming or doing away with the harbour tax, suggesting it’s the best way to fight against Canadian competitors that are successfully diverting cargo away from their American counterparts.
“US ports are competitive internationally; however it would appear that the HMT makes the challenge more difficult,” the report reads.
“While a user fee is necessary for US ports to grow, the number of proposals in both the House and Senate, as well as from other sources, suggest that amendment to the current HMT structure should be given consideration.”
The commission’s suggestions could also cause tension in the Canada-US relationship just as officials are co-operating like never before on border security and trade issues under Beyond The Border.
Canadian officials are particularly sensitive to suggestions that Canada is lax on security. Prime Minister Stephen Harper has said repeatedly that any security threat to the United States is a threat to Canada.
Congress asked the non-partisan agency last year to probe allegations about Canada’s port practices after complaints by two Washington state senators, Patty Murray and Maria Cantwell.
Commissioners received 76 responses after asking interested parties if Canada was diverting cargo away from US ports. The bulk of them, mostly from American stakeholders, suggested Canada was doing nothing underhanded, said Silvester, who read the submissions.
The matter has been a simmering trade irritant between the U.S. and Canada ever since the senators urged the commission to launch the inquiry last fall. They soon had the support of several lawmakers in the House of Representatives.
In their letter to the agency, the senators pointed out that the Harbor Maintenance Tax is not collected at border crossings when cargo enters the country on trains from Canada after arriving in North America via Canadian ports. They suggested it should be.
But the report doesn’t endorse that position, suggesting instead that the tax is the problem, not the solution.
It also makes clear repeatedly that no laws or regulations are being violated by importers who opt for Canadian ports instead of American.
[UPDATE: The full FMC report is available at http://1.usa.gov/NMEdFv]