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Deadline nears for US budget negotiations; sequestration could mean longer border delays, slower US economic recovery: CME

Published by Derek Lothian on February 25, 2013

Canadian Manufacturers & Exporters (CME) is closely watching whether US lawmakers will take steps to avert the March 1 sequestration deadline, and avoid $85 billion in automatic spending cuts that would have immediate and damaging implications for cross-border business interests, including longer border delays and lost business opportunities.

If a deal cannot be reached by midnight, February 28, the US federal government will be forced to slash budgets across the board. One branch, the US Customs and Border Protection agency, has already announced plans to reduce its workforce by roughly 2,750 inspectors, causing potential wait-time delays of up to five hours at larger ports of entry. The US Department of Agriculture and the US Food and Drug Administration have outlined similar reduction plans.

"This gridlock in Washington has a spill-over effect for our members," says CME President & CEO, Jayson Myers. "Canada and the United States enjoy the most integrated economic relationship of any two countries in the world. Every day that passes without an agreement brings us one step closer to an unnecessary crisis – a turning point that will not only affect Canadian companies, but our American business partners as well."

The sequestration could also jeopardize the implementation of the Beyond the Border Action Plan, now in the second year of a two-year rollout.

US economists have predicted that a probable sequestration will have longer-term economic ramifications by slowing US recovery efforts and adding millions to the US jobless ranks. In addition, the cutbacks would reduce or constrain federal contracting opportunities for the private sector – another worry for CME members, both in Canada and south of the 49th parallel.

"The United States is just beginning to climb out of the most severe economic downturn of our generation," says Myers. "We understand that US budget concerns are a domestic issue, but their ramifications stretch beyond America's own border."

Download now: The US sequestration and its impact on CME members

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