Home • ThinkDifferentStore • MacBoards • Advertising • RSS Syndication • Newsletter • Contact

My Cube arrived safely yesterday. It took a week to get here from Grand Rapids, Michigan. FedEx nailed us for $117.44 freight charges from Grand Rapids to Nova Scotia, which I think is more than a bit steep, but at least they didn't ding me at the door for a "brokerage fee" payable on delivery, the way UPS does.

Instead they phoned me from Montreal, and requested that I sign a one-time power of attorney form that they faxed to me, and had me fax back to them, at which point they cleared the Cube through customs, charged me the Goods and Services Tax to my credit card, and sent to Cube on. Free trade? Yeah, right.

The distance from Grand Rapids to here is 1,489.9 miles, according to Yahoo's cool map and travel planning Website. In the interest of journalistic research, I decided to see what the freight charges would have been over a similar distance within the U.S.. The Yahoo site determined that Billings, Montana, was just about the same distance from Grand Rapids as I am (1,433.5 miles), so I phoned up FedEx and asked them what it would cost to ship a 28 lb package from Grand Rapids to Billings. The answer was $71.90. Or just a little more than half what it cost to ship the Cube here.

Why the yawning disparity in charges for shipping the same distance? I'm assuming that it amounts to mainly two factors:

1. Relative lack of competition among cross-border carriers, allowing the few players to stick it to Canadians.

2. Extra costs on cross-border routes largely attributable to the bureaucratic hoops that the Canadian government customs and tax bureaucrats make carriers jump through. Once you get bureaucrats involved in anything, efficiency plummets like a falling rock and costs escalate astronomically.

It's fairly obvious that the Canadian government is not at all interested in facilitating cross-border free trade at the consumer level. They like free trade in the context of allowing Canadian manufacturers to ship goods into the big U.S. market tariff-free -- for example, about 80 percent of automobiles produced in Canada are exported to the U.S. -- but are quite happy to keep non-tariff barriers to consumer level cross-border shopping in place.

Consequently, North American free trade is considerably less free than what obtains in the European Community, where borders are essentially transparent for trade purposes. That to some degree satisfies leftist elements in Canada, particularly trade unions and die-hard nationalists, who think that free-trade in general is a bad idea, and who would prefer reestablishing and amplifying isolationist trade policies that would relieve them of the burden of free market competition.

On the other hand, a growing proportion of the Canadian public, as well as many Canadian companies in the enterprise sector, think that expanding provisions of the existing free trade pact to include customs and currency union would be the way to go.

According to a 2000/2001 year-end poll conducted by Maclean's magazine and Global Television, 45% of Canadians believe that Canada should share a common currency with the United States, up from 37% in an Angus Reid poll two years ago, and I believe that this conviction will continue to gain adherents.

The shift to a common hemispheric currency is already well underway. On New Year's Day, El Salvador became the latest country to adopt a US dollar-based economy, bestowing the U,S, greenback equal status with the national currency, the colon. Panama, with Central America's strongest economy, has long been a dollar zone. Ecuador adopted the U.S dollar in September, and Argentina has also pegged its peso to the American buck. Guatemala planned to adopt the dollar alongside its quetzal on May 1. I don't believe that Canada will be able to resist these trends forever.

A report released last month by two leading U.S. economists, Jeffrey Frankel, a professor at Harvard University's Kennedy School of Government and a former economic advisor to the White House during Bill Clinton's presidency. and Andrew Rose, a professor of international trade at the University of California at Berkeley, found that Canada's economy could grow by as much as 37% if it abandoned the Canadian dollar and adopted the U.S. dollar.

Based on an analysis of trade among 186 countries, the study found belonging to a currency union more than triples trade with the other members of the zone. And for every 1% increase in trade as a portion of the economy, per capita income climbs by at least one third of 1% over 20 years.

Mr. Rose, who holds dual Canadian and U.S. citizenship, also said that the United States would benefit to a smaller degree from a currency union with Canada.

Don Drummond, the Toronto-Dominion Bank's chief economist recently commented that: "In a decade or so, it may well be clear that the Canadian and U.S. economic structures have converged sufficiently that there is little advantage to preserving the floating rate. If so, we would have to give very serious thought to dollarization."

Can't happen soon enough to suit me.

Charles W. Moore

.