Developing a CollaborativeResearch Agenda

June 7, 2006David Davidson, Project Director

• Mission—provide high quality research on policy issues related to Canada-US border

• Multidisciplinary research institute, w/ emphasis on trade, transportation, security, environment, energy, immigration

What is the BPRI?

• Supports 108,000 jobs in Washington

• Daily: 3,100 trucks, $41 million of goods

• Daily: 19,500 cars

• Tourists, commuters, business travelers

Canadian Trade w/ Washington

• Economic policy has intentional effects– Softwood tariff– Monetary policy (exchange rate)

• Security policy has unintentional effects– Mandates for new screening or IDs– Visa regulations – Alert levels

Trade Linked to Policy

Cascade Gateway

Canada Dep’t. of Energy, Mines & Resources Victoria – Vancouver B.C. [map].6th ed. 1:500,000. N.T.S. No. 92 S.E. 1973

Collaborative Approaches

• External Advisory Board

• Participation in transportation community

• Consultation with agencies

• Academic partners

External Advisory Board

• Todd Harrison, WSDOT, Asst. Regional Administrator

• Jim Miller, WCOG, Executive Director

• Ken Casavant, Washington State University, Professor • Alicia Nolan, FHWA, Northern Border Transportation

Program Coordinator

• Chris Lawless, B.C. Investment Management Corporation, Chief Economist

• Pat Jacobsen, TransLink, Chief Executive Officer

• Greg Boos, Chang & Boos Attorneys at Law

Consultation Process

• Pre-RFP meetings– WSDOT (freight, policy, and rail offices),

USDOT, WCOG, TRAC @ U.W., Pipeline Safety Trust, Whatcom Transp. Authority

• RFP circulated

• Internal project review

• External board review

First Round Research

The Effect of Post-9/11 Security Measures on Commodity Trade Flows at Major Canada/U.S. Ports of Entry. Steve Globerman, Ph.D., WWU

Explaining Border Crossings at U.S.-Canada Border Stations in Whatcom County: An Econometric Investigation. Hart Hodges, Ph.D., WWU

First Round Research (cont.)The Impact of Tariff Harmonization and

Perimeter Security Measures on Whatcom County's Industrial Structure and Transportation Patterns. Paul Storer, Ph.D., WWU

Cross-Border Port Competitiveness and the Environment in the Puget Sound and Georgia Basin. Jean Melious, J.D., WWU

Second Round Research

Projections of Washington – British Columbia Trade and Traffic by Commodity, Route, and Border Crossing. Ken Casavant, Ph.D. & Eric Jessup, Ph.D., WSU

Understanding the Impact of Variability in Border Crossing Times on Regional Supply Chains. Anne Goodchild, Ph.D., UW, with added economic analysis by Steve Globerman, Ph.D., WWU

Second Round Research (cont.)

An Investigation of Congestion Pricing Options for Southbound Freight at the Pacific Highway Crossing. Mark Springer, Ph.D., & Matt Roelofs, Ph.D., WWU

Risk Evaluation of Invasive Species Transport Across the U.S. – Canada Border in Washington State. Wayne Landis, Ph.D., WWU

In-House Staff Products

• Border Policy Brief– WHTI’s Effects on WA State– Canadian Natural Gas & WA State– Immigration Near the B.C. – WA Border

• Cross-border transit

David Davidson, Project DirectorBorder Policy Research InstituteWestern Washington University516 High StreetBellingham, WA 98225-9110(360)650-2642david.davidson@wwu.edu

BPRI web site: www.ac.wwu.edu/~bpri

Canadian Same Day Travelers

Western Washington UniversityCenter for Economic and Business

Research

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

Jan-90

Jan-91

Jan-92

Jan-93

Jan-94

Jan-95

Jan-96

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Month - Year

Per

son

s

2005:July - Jan = 400,000

2004:July - Jan = 107,000

Hodges: Explaining Border Crossings

Canadian Same Day Travelers

Western Washington UniversityCenter for Economic and Business

Research

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

Jan-90

Jan-91

Jan-92

Jan-93

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Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Month - Year

Per

son

s

0.5

0.55

0.6

0.65

0.7

0.75

0.8

0.85

0.9

0.95

$US

/ $

CA

Exchange Rate

Variables Considered• Exchange Rates• Relative Prices

– Gasoline– Cigarettes– Clothing– Health Care– Electronics

• Wages• Store Openings• “History”

Western Washington UniversityCenter for Economic and Business

Research

Variables that Really Matter• Exchange Rates YES• Relative Prices

– Gasoline YES– Cigarettes– Clothing– Health Care YES (weakly)– Electronics

• Wages• Store Openings• “History” YES

Western Washington UniversityCenter for Economic and Business

Research

Predicting 2002-2005

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

Month - Year

Per

son

s

Western Washington UniversityCenter for Economic and Business

Research

Forecast

David Davidson, Project DirectorBorder Policy Research InstituteWestern Washington University516 High StreetBellingham, WA 98225-9110(360)650-2642david.davidson@wwu.edu

BPRI web site: www.ac.wwu.edu/~bpri

Storer: Tariff harmonization & perimeter security

• Perimeter security.

• Customs Union.

• Rules of Origin.

General Methodology

• Predict the effects of deeper integration on sector-level trade-flows.

• Construct sector-level freight flow benchmarks.

• Apply sectoral trade flow growth rates to freight flows.

The Effect of a Customs Union

• Computable General Equilibrium (CGE) models predict trade effects.

• The Strategic Freight Transportation Analysis database was used for freight benchmarks.

• Transportation impacts rival those of NAFTA (example: 25% increase in trade).

Ghosh and Rao (Journal of Policy Modeling, 2005)• Impact on Canadian Exports:

Agriculture: + 20%, Resources: +1%..

• Impact on Canadian Imports:Food: + 171.2%, Resources: +2.5%.

• The impact of the customs union is mainly due to elimination of rules of origin rather than to the common external tariff.

Sector Shares for Canada-Related Freight(Source: SFTA)

SCTG Group To Canada From Canada

Trucks Pounds Trucks Pounds

Agriculture (0-9) 34.6% 30.1% 15.3% 14.1%

Minerals (10-19) 4.0% 3.0% 2.1% 2.3%

Chemicals & Wood Products

(20-29) 27.0% 24.4% 47.8% 51.7%

Metals &Machinery

30-39 17.7% 21.2% 18.9% 17.2%

Miscellaneous(40-49) 8.1% 10.0% 11.0% 10.1%

Empty / Unknown90-99 8.6% 11.2% 4.9% 4.5%

2003 Rules of Origin Liberalization

Value of U.S. Imports(Billions of U.S. $)

Share of

Total Import Value

Number OfHTS-6 Codes

Liberalized Not Liberalized

Liberalized Not Liberalized

2002 $17.96 $192.56 8.5% 75 5,210

2005 $39.33 $248.21 13.7%

Growth 118.9% 28.9%