American-Canadian Border Issues

June 2, 2011 By

After a long cold winter it’s with extreme excitement that we welcome the spring and the coming summer. Spring always brings with it a feeling of renewal and enthusiasm for new developments and progress forward. In light of this statement, there is an issue that needs to be brought up for discussion that, despite its consequences, receives little attention and is surely due for review and renewal.

As a regulatory consultant, Dicentra often assists its clients in meeting the regulatory requirements to ship Canadian made products to the United States and U.S. made products to Canada. I’m sure that those of you familiar with the processes involved would agree with me when I say that the paper work requirements are a nightmare, seemingly unnecessary and that they impede the ability for companies on both sides of the border to do business. In fact, it’s probably safe to say that the main impediment to greater trade and investment between Canada and the U.S. is not the presence of tariffs and quotas but rather the unnecessary differences in product regulations.

Nowhere is this more apparent than with the trade of dietary supplements between both countries. As an example, a Canadian made supplement with a gelatin capsule (or any product containing animal-derived components) bound for export to the U.S. market must be accompanied by special permits from the United States Department of Agriculture and also from the Canadian Food Inspection Agency. It’s understandable that these requirements are put in place to protect the safety of a U.S. consumer. No one wants to consume a gelatin capsule, for example, derived from BSE cattle. The issue is the time it takes to acquire some of these permits. It may take 3 to 4 months before both permits are obtained. The same goes for U.S. made dietary supplements. You may be looking at a 3 to 5 month bottleneck before the appropriate authorities at Health Canada finally review and approve a foreign manufacturer and issue the necessary licenses to export the product to Canada.

In light of these types of problems U.S. President Barack Obama and Canadian Prime Minister Stephen Harper met last February to announce a collaborative effort on reducing barriers to open trade and established the Regulatory Cooperation Council. As a follow up to this, the U.S. Department of Commerce announced in March that it was seeking public input to help identify regulatory divergences between Canada, the U.S. and Mexico in an effort to reduce or eliminate differences that hinder trade and reduce competitiveness. It was announced at the G8 meeting last week in France that following the review of these public consultations an ambitious action plan will be announced this summer. Let’s keep our fingers crossed that our industry’s frustrations were well heard and that changes are in store for us.

We would love to hear your comments and your experiences in dealing with these issues.