Category Archives: Posts

Troubles along the U.S-Canada Border

Posted on by

It was all smiles on Feb. 4, 2011, when President Barack Obama and Canada’s prime minister, Stephen Harper, met at the White House. We have a “shared vision” to ensure that important border-security and trade issues receive top-level attention at the highest levels in both Washington, D.C. and Ottawa, the two leaders announced in a joint statement. The United States and Canada are “woven together like perhaps no other two countries in the world,” Obama enthused to reporters.

What a contrast with the rampant narcotics- and people smuggling along the the southern U.S.-Mexican border, which has become an open sore. More than $1 billion in goods crosses the 4,000-plus mile border every day. Canada is America’s number one export market. The United States exported more than $204 billion in U.S. goods were exported to Canada in 2009 (compared to $69 billion in U.S. goods exported to China that year), according to the most recent figures released by the Office of the U.S. Trade Representative. And the U.S. is Canada’s top destination, with 2009 exports of manufactured goods to the United States reaching $225 billion. That amounted to nearly three-quarters of all Canadian goods’ exports. As Harper stressed at the Feb. White House press conference, “We are true friends.”

But my, how the closest of friends can sometimes treat each other. Behind the smiles, there are awkward tensions over trade, and also very troublesome security issues along the U.S.-Canada border that Obama and Harper prefer to gloss over. This article focuses on three otherwise unrelated controversies that go beyond the normal tit-for-tat spats that inevitably crop up between even between the closest friendly nations. First, even though the U.S. enjoys its own preferential trade agreement with Canada (the North American Free Trade Agreement), the Obama White House has worked behind the scenes in the ongoing Trans-Pacific Partnership negotiations to exclude the Canadians from preferential access to other lucrative markets in Asia — a game that Ottawa also knows how play. Second, since 9/11 there have been increasing complaints from American importers and Canadian exporters over overly-stringent U.S. border controls that threaten jobs on both sides of the border. While the complaints began when George W. Bush sat in the Oval Office, they are intensifying in this third year of the Obama presidency.

But by far the most serious concerns involve organized criminal activities along one particular 12-mile stretch of the U.S.-Canada border that runs through 28,000 acres of the sovereign Akwesasne Mohawk Indian Territory. On the New York side, the Mohawks are in the United States; the northern part of the reservation is in parts of Ontario and Quebec. To evade high Canadian taxes on cigarettes, contraband cancer sticks are smuggled into Canada through this 12-mile hole in the border. Some come up from U.S. tobacco states like the Carolinas, but mostly the illegal smokes seem to come from factories right on the reservation itself. Beyond cigarettes, much of the ecstasy that floods the streets of New York and other East Coast cities also flows through the same smuggling routes. So much, that Canada has become the number one U.S. supplier of ecstasy, according to official reports. In return, American gangs such as Hell’s Angels have become Canada’s top supplier of cocaine, along with assault weapons. Asian triads and Eastern European mafias also look to this border hole to smuggle in drugs, prostitutes and other illegal aliens. While this is bad enough, it gets even worse. Terrorist organizations like Al-Qaeda and Hezbollah are also known to be familiar with the Akwesasne smuggling routes. The risk of terrorist activities is “high,” as a recent investigation by the Government Accountability Office noted.

To be sure, U.S.-and Canadian law enforcement and intelligence officials are trying as best they can to manage the mess. But evidence of strong leadership at the highest political levels is scanty at best. Despite their glowing assurances to the contrary that were uttered at the White House two months ago, it does not appear that either Obama or Harper is really focused on what it would take to plug the 12-mile hole in the border. Their biggest mutual failure: Neither leader has thought to reach out to help empower the sovereign Indian communities themselves to come up with a realistic plan to shut down the illegal activities, and replace them with viable economic alternatives.

Here’s what’s going on — and not going on.

Continue reading →

Barack Obama and the Ironies of “Economic Patriotism”

Posted on by

One way to better understand what’s really going on with U.S. trade politics — as opposed to what politicians and their backers say is happening at any given moment — is to appreciate the many ironies. Especially the ironies of Buy American trade policies that have failed to deliver as promised by President Barack Obama and two top union leaders who worked overtime in 2008 to put their man in the Oval Office, AFL-CIO President Rich Trumka and Leo Gerard, the president of the United Steelworkers. These are perhaps the three most ardent advocates of economic nationalism in America. Aiming to please the pro-tariff labor wing of his Democratic Party, Obama has put the AFL-CIO’s trade agenda front-and-center. This is the first irony. A president who promised to change lobby-driven business as usual in Washington has basically turned over his international trade policies (and much else) to the labor lobby.

“I don’t want to buy stuff from someplace else,” Obama declared in a Sept. 6, 2010 Labor Day appearance in Milwaukee that set the tone as the Democrats prepared for the Nov. 2 midterm elections. “I want to grow our exports so that we’re selling to someplace else — products that say ‘Made in the U.S.A.'” Sharing the stage, the AFL-CIO’s Trumka agreed, railing against unpatriotic corporations that ship jobs overseas, offering that the elections would be about “economic patriotism.” Elsewhere on Labor Day, USW President Gerard — a man who last year accused Washington international trade lawyers whose clients import tires from China of being “traitors” to their country — called for “punishing predator countries” like China that “subvert fair trade.”

The unions pulled out all the usual stops to influence the Nov. 2 voting. “USW activists distributed 1.6 million leaflets at work sites, while making 745,240 phone calls in union halls across America to active and retired members,” Gerard boasted in a statement on election day. “In addition, local union volunteers knocked on more than 350,000 doors in the final weeks of the campaign where our members live.”(Here is another irony. Gerard is a Canadian citizen, a native of Ontario. Last year the USW chief told reporter Ann Belser of the Pittsburgh Post-Gazette that he refuses to become an American, for fear of losing his Canadian health care. Gerard declines further comment for this article.) Continue reading →

Charlie the Tuna’s Troubles in Pago Pago

Posted on by

As if Thailand didn’t already have enough troubles, now comes an influential U.S. congressman who wants to attack one of the bright spots in the Southeast Asian nation’s economy: its thriving seafood-exports. Last year, Thai exports of canned tuna to the U.S. reached $360 million, a 19 percent increase from 2008, according to the UN’s Food and Agriculture Organization. In the view of Rep. Eni Faleomavaega, this is “unfair” trade that deserves to be rolled back with stiff U.S. anti-dumping tariffs. Faleomavaega is a Democrat who represents the U.S. territory of American Samoa. While he doesn’t get a vote, the lawmaker is nevertheless a force to be reckoned with. Known for his gregariousness, Faleomavaega once told the Comedy Channel’s Stephen Colbert that “I tattoo my butt,” explaining with a grin that he was only conforming to Samoan cultural traditions. More importantly, Faleomavaega chairs the House Foreign Affairs Committee’s subcommittee for Asia and the Pacific. Educated at Brigham Young University, Faleomavaega earned a law degree from the University of Houston. He has important friends on the Hill, including fellow Mormons like Sen. Majority Leader Harry Reid (D-NV) and Utah Republican Orrin Hatch, a senior member of the powerful Finance Committee which has jurisdiction over trade.

It’s not that the gentleman from Pago Pago has evidence that the Thais are guilty of anything other than being very good in competing in the global tuna trade. Far from it. But Faleomavaega does have ample evidence that the tuna industry in his American Samoa — a dot in the South Pacific, about half-way between Hawaii and New Zealand — is collapsing and has no viable future. Canned tuna has long been the backbone of American Samoa’s economy. The other half of the territory’s economy is comprised of various forms of federal welfare dispensed by the U.S. government, the largest employer in Pago Pago. The federal largesse includes generous tax breaks, hurricane disaster-relief monies, Medicaid, Nutrition Assistance Block Grants, and so on. “[T]he tuna canneries and federal financial aid accounted for virtually all of the economic growth in American Samoa between 1975 and 2005,” according to a 2008 report submitted to the American Samoa government by U.S. consultant Malcolm McPhee. The territory’s annual per-capita income of about $8,000 is “about one-fifth the US average,” McPhee noted. “American Samoa has the lowest per capita income in the entire US system including 3141 counties, 50 states and the other US territories.”

American Samoa’s poor performance illustrates that bad economic policies — in this case, so obviously bad that they would be quickly understood and discredited in any Econ 101 classroom — have consequences. Beyond the basic economics lessons, American Samoa’s unfortunate economic plight has ramifications that go far beyond remote South Pacific fishing grounds. The fight over tuna tariffs and access to U.S. markets is being closely watched by other important U.S. trading partners from Asia to Latin America. For those who study tuna tariffs, national security issues are never far from the surface. Muslim tuna workers in the southern Philippines, for instance, have long protested that they have been disadvantaged because Uncle Sam gives preferences to otherwise uncompetitive American Samoans that are withheld from Filipinos. And diplomats from Ecuador have stressed to U.S. officials in recent years that the tuna trade is an important national security priority for them — one alternative to narco-trafficking. Charlie the Tuna is a political fish — swimming in seas where economic favors granted or withheld can affect bottom lines, not to mention real lives in global tuna canneries.

*** Continue reading →