As we celebrate the North American Free Trade Agreement's tenth anniversary, it is timely to reflect on the progress that has been made in establishing a cohesive, efficient, and comprehensive cooperation between the Canadian and American economies.
     The health of what is in effect the world's largest trading relationship depends on the free flow of goods and people across the border. More than US$1 billion in goods crosses the Canada-U.S. border every day — more than U.S. trade with all the countries of the EU combined. The events of September 11, 2001, had the potential to threaten the further development of this relationship, but instead provided the impetus for more effective border cooperation and expedited proposals that have made for a more integrated relationship. The increased focus on security concerns has led both Canada and the United States to revamp their customs procedures, realign their customs administration, and implement new means to ensure that low-risk commercial goods can continue to flow unencumbered across the border.
     On Dec. 12, 2003, Canada's new Prime Minister, Paul Martin, announced the creation of a new department under the executive branch, the Department of Public Safety and Emergency Preparedness (PSEP). The purpose of PSEP is to secure the safety of Canadians by protecting against and responding to national crises and disasters, as well as ensuring that proper security arrangements are in place. This new department has many parallels to the U.S. Department of Homeland Security (DHS), including the incorporation of customs administration. Both countries now recognize the twin goals of economic and public security.
     This article reviews the steps already taken through bilateral agreements and describes the creation of PSEP in Canada and how it relates to the DHS in the United States. Both have, as a mandate, the responsibility of securing their respective nation's borders and citizens. In addition, this article reviews the various new border measures that have been implemented to ensure that these two economies continue to integrate, unfettered by the new realities of the world.

The Smart Border Declaration
On Dec. 12, 2001, Canada and the United States signed the Smart Border Declaration and the accompanying Action Plan to address the realities brought on by the terrorist acts of September 11. The declaration outlined the shared commitment of the two countries to developing a border that securely facilitates the legitimate flow of people and commerce in the face of these new threats.
     In order to achieve these objectives, the Action Plan details areas in which initiatives will be launched to strengthen border control while simultaneously facilitating trade and the free flow of people. The most recent update of the Action Plan in October 2003 indicates that many of these initiatives are well on their way to being fulfilled.

People-Friendly
The secure flow of persons across the U.S.–Canada border is the goal of the NEXUS Highway system. NEXUS is designed to simplify border crossing for pre-approved, low-risk travellers. The system allows participants to use dedicated lanes without being subjected to regular customs and immigration questioning. U.S. Secretary of Homeland Security Tom Ridge reported in late January that Nexus is now operational at "most major border crossings."
     Canada already has in place its own initiative for air travel, CANPASS Air, and is currently working with the United States on a joint NEXUS-air program for air travelers that will utilize automated kiosks with iris-recognition biometric technology, similar to the CANPASS Air program.
     Another air-related initiative is the Agreement on Air Transport and Pre-clearance between the government of Canada and the government of the United States. Signed on Jan. 18, 2003, and brought into force on May 2, 2003, the agreement replaces the 1974 Air Transport Agreement and clearly establishes the authorities of U.S. Pre-clearance officers.
     For air travelers, Canada's new passenger information system (PAXIS), implemented in July 2003, collects advance traveler information. In addition, both countries have agreed to share advance passenger information and passenger name records (API/PNR) for high-risk travelers destined to either country using a jointly developed risk-scoring mechanism. The automated Canada-U.S. API/PNR data-sharing program will be in place by spring 2004.
     Maritime security at sites such as ferry terminals is also a concern for both governments. A benchmark study to enhance Canadian and U.S. border security and contraband interception is now in the process of completion.

Securing Goods
Human cargo is not the only thing that must be protected in the new reality. The enhanced cooperation between Canada and the United States also encompasses the movement of goods. The FAST program, for instance, expedites the movement of low-risk shipments in either direction across the border, and is currently available at six high-volume border crossings. The key feature of this program is that it offers expedited clearance processes to those carriers that have enrolled in the U.S. Customs–Trade Partnership Against Terrorism (C-TPAT) or Canada's Partners in Protection (PIP) and allows for compliance verification away from the border.
     Both countries are working to align other customs processes for all commercial shipments by 2005. In April 2003, Canada announced that it would adopt the 24-hour advance notification rule for commercial goods crossing the border, currently used by the United States as part of its Container Security Initiative. The Canadian 24-hour rule will be implemented by April 2004 for marine landings. Beginning in 2005, it is expected that notification requirements will be in place for rail, air, and highway as well. Each mode of transportation will have a different notice period. Those engaged in the FAST programs will also have different notice periods, if any.
     Canadian and U.S. customs agencies are developing plans to move customs and immigration inspection activities away from the border to avoid clogging. Both customs administrations continue to work with industry partners to use detection equipment such as rail VACIS — a technology that allows for inspection of moving train cars — and to implement risk-management approaches for targeting and screening shipments. There are many legal and sovereignty issues that must be addressed before such clearance away from the border becomes commonplace.
     Canada and the United States are also working together to develop shared facilities in small or remote places — six are currently operational, with more sites under consideration.
     In December 2001 the Cooperation Arrangement for Exchange of Information for the Purposes of Inquiries Related to Customs Fraud was signed. Further to this, in April 2003 an agreement was reached between the customs agencies on the principles to be included in the exchange of information related to NAFTA rules of origin. The new agreement provides for the exchange of audit plans, audit reports, results of advance rulings, and origin determinations and re-determinations.
     In an effort to monitor container traffic between the trading partners, Canadian and U.S. customs agencies have established joint targeting teams at five marine ports. The work of the teams is to be facilitated through the transmission of advance data for incoming ships and the containers they carry. In March 2003, the Canada Customs and Revenue Agency (CCRA) and U.S. Customs and Border Protection implemented a system by which automated in-transit cargo information is shared between the two agencies and risk assessment is performed electronically using U.S. targeting systems.

Secure Infrastructure
The task of securing any border is made more difficult when its crossings are not in optimal physical condition. That is why the government of Canada has committed to provide $600 million under the new Border Infrastructure Fund and an additional $600 million for the Strategic Highway Infrastructure Program for physical and technological improvements at key border crossings. New funding will support both the FAST and NEXUS programs.
     All of these border initiatives, as well as the other initiatives outlined in the Action Plan, are now administered by a single department in each country, both of which have as their raison d'etre the safety and security of their citizens and their borders. Although the respective departments are focused on security, rather than revenue collection at the border, the effect has been the implementation of creative and efficient programs and mechanisms to ensure that trade between the two neighbors continues unencumbered.

Canada Border Services Agency
Exactly two years after signing the Smart Border Declaration, Canada created the Canada Border Services Agency (CBSA) in December 2003 to build on the important progress that has been made in expediting low-risk trade and travel and to provide a cohesive response to terrorist concerns.
     The CBSA was created as one of six agencies incorporated into the Department of PSEP. The CBSA maintains control and supervision of a broad range of services previously provided by the Canada Customs and Revenue Agency (CCRA). Thus, aside from the strict collection functions, Canada transferred customs administration from the tax-collection agency, the CCRA, to the security-focused Department of the PSEP.
     The CBSA will not only amalgamate customs administration, however. It will also absorb the intelligence, interdiction, and enforcement functions formerly under the mandate of Citizenship and Immigration Canada (CIC), and the passenger and initial import inspection services at ports of entry formerly performed by the Canadian Food Inspection Agency.
     From the perspective of the user of these services, the transition will appear seamless. The efficiency initiatives discussed herein, which were previously under the direction of the various departments and agencies amalgamated into the CBSA, will now occur under the direction of the Minister responsible for the CBSA — the Minister of the new Department of Public Safety and Emergency Preparedness (PSEP).
     The amalgamation of border-control functions under the direction of the Minister of PSEP ensures that safety and security from terrorist threats can be achieved in a unified and logical approach. The goals, objectives, and processes by which both the Department of PSEP and its agency, the CBSA, were created are similar to the creation of Customs and Border Protection in the United States under the mandate of the DHS.
     The U.S. DHS, activated in January 2003, consolidated 22 previously separate agencies under one department in an effort to prevent terrorist attacks on American soil. The agencies incorporated into the DHS are housed in four major directorates. One of these is the Border and Transportation Security Directorate (BTSD). Previously, border security and inspections were performed by three separate agencies, each housed in separate departments. Now these functions are all performed under the BTSD through two separate agencies — the Bureau of Customs and Border Protection, which focuses on the movement of goods and people across borders, and the Bureau of Immigration and Customs Enforcement, which focuses on investigation and enforcement.
     The streamlining of border functions by both countries signifies a shift from revenue generation to establishing a common frontier to protect against threats of terrorism and, in the process, establishing safety mechanisms to protect the North American frontier. Both departments, and the agencies that they house, focus on a strategy of improving security while simultaneously facilitating the flow of legitimate trade and travel.

Continued Mutual Benefit
NAFTA finalized a process that had begun on its own — the integration of the economies of two neighbors, Canada and the United States. The events of September 11, 2001, and the new realities that it ushered in could easily have threatened the progress that had been achieved. Instead, the result has been not only streamlined border administration in each country, but also a cooperative effort by both countries to ensure that legitimate trade and travel continue in an atmosphere where protection of one's sovereign territory is paramount.
     Investors, manufacturers, and importers can be assured that each government is working within its own means, and with one another, to ensure that free trade continues to flourish. The result of this cooperation is the establishment of new, efficient programs to ensure that the world's largest trading relationship continues to prosper.