Halifax – The latest paper from the Atlantic Institute for Market Studies (AIMS) points out there’s still a lot of work to be done to achieve free trade within Atlantica, let alone between Canada and the United States.
Unfinished Business: A NAFTA Status Report analyzes the impact of non-tariff barriers and inequalities in the transportation sector on trade. Authors Dr. Mary Brooks and Stephen Kymlicka offer several recommendations, most notably increased regional cooperation, enhanced focus on existing opportunities for value-added production and export, and border infrastructure improvements within Atlantica. They also recommend that Canada pursue policies to level the transportation environment with the US, which includes leveling corporate and fuel taxation, removal of the 25 percent tariff on purchased ships, adjustments to coast guard rates, and easier access to private capital within the port system.
Unfinished Business shows that there has been little progress recently on the non-tariff barriers to trade. These include the discrepancies in regulations, standards or rules that favour one jurisdiction over the other. As an example, Brooks and Kymlicka point out that there are significant differences in opportunity between Canadian and American transportation players.
Other examples include dredging, access to capital and cabotage restrictions. In the United States, dredging of ports is financed through the Harbor Maintenance Fee which is collected from all imports and domestic cargo arriving in US ports. In Canada, ports that require dredging must provide the capital themselves. In the US, port authorities can raise necessary funds through non-investment rate bonds or tax-free municipal bonds. In Canada, ports can only raise those funds that can be financed by available revenue.
“While not barriers to trade, per se,” write Brooks and Kymlicka, “[they] often create a less than level playing field.”
Unfinished Business concludes there exists an opportunity for trade growth in Atlantica, but further efficiencies need to be negotiated.
“This paper shows that regional standards act as trade barriers,” says AIMS acting President Charles Cirtwill. “The NAFTA has proven its ability to generate economic growth and there is no debate that we are far better off as a country and as a region than we were when it was signed. But this paper shows there are still protectionist policies, which stifle economic growth, and are not helping anybody.”
“A concrete example of this would be cross-border standardization of truck weights and dimensions,” says Kymlicka. “Harmonization would allow local and national companies to optimize their supply chains and reduce costs.”
Unfinished Business is the first paper in the AIMS Atlantica Ports Series. Atlantica is a region broadly composed of the Atlantic provinces, south shore Quebec, the northern tier of New England and upstate New York. These territories have a number of characteristics in common – similar demographics, diversity, and migration; a shared history; and interrelated transport issues. The Atlantica Ports Series takes a comprehensive look at the existing flows, industries, and services that surround Atlantica and asks: What opportunities exist for Atlantica ports to increase volumes?
To read the complete paper, Unfinished Business, click here.
For more information, contact:
Dr. Mary R. Brooks, William A. Black Chair of Commerce, Dalhousie University
Stephen Kymlicka, AIMS Senior Policy Analyst
Charles Cirtwill, AIMS President (acting)
Barbara Pike, AIMS Director of Communications
902-429-1143 ext. 227 / 902-452-1172