The Canadian Trucking Alliance has formally taken aim at a proposal from the U.S. Department of Agriculture (USDA) to substantially raise the Animal Plant and Health Inspection Service (APHIS) fees imposed on trucks crossing the border.
In comments filed today in response to the USDA’s Notice of Proposed Rulemaking (NPRM), CTA acknowledges “the Government of the United States of America has every right to protect its food supply and agricultural industries and communities from insects and pests imported with food shipments,” but “strongly objects to the way in which the APHIS program is administered, applied and funded.”
According to CTA, the APHIS program exacts a heavy toll on all U.S.-Canada trade. APHIS fees are applied to all trucks crossing the border, regardless of whether the goods being imported are food and agriculture-related or not (or whether the trailer is loaded or empty). Nor does APHIS use a risk assessment approach, thereby eroding the return on investment carriers have made to comply with binational trusted trader programs.
CTA cites the example of auto parts moving back and forth across the border on plastic pallets, which are subject to the APHIS fees. “What possible threat does that pose?” The Alliance asks. “What possible rationale can legitimize imposing APHIS fees on those shipments?”
CTA points out that advance cargo information, which is now required under e-Manifest, provides a mechanism where carriers could indicate whether the commodity is being transported on wood pallets, enabling APHIS to better target conveyances where risk is present. “Goods that present no risk should not be subject to APHIS fees.”
In fact, CTA believes the fees may be illegal under the North American Free Trade Agreement (NAFTA), which prohibits customs user fees, and the General Agreement on Tariffs and Trade (GATT), which says that all fees and charges shall not represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purposes.
According to APHIS, the fees are meant to fully fund the actual costs of running the Agricultural Quarantine Inspection (AQI) program and be borne by those using the services. It claims current revenue from fees charged has been insufficient to cover all costs. Under the plan, transponder fees would increase from US$105 to US$320 per year, per truck – a 205% increase. Including the $100 CBP portion, the total cost would be $420 per truck. Trucks without a transponder will see an increase from $10.75 to $13.50 per crossing, or 52%.
CTA says the proposed increases are excessive. And since there is no thought to gradually introducing the increases over time, it will be next to impossible for motor carriers – who operate under very tight margins – to pass any reasonable portion of the increased costs along to the customer. “The lack of consideration to the realities of the industry is shocking.”
Furthermore, there is no onus on APHIS to maximize its efficiency or effectiveness in administering or applying the program, CTA explains, arguing that if resources were applied more strategically according to risk, the associated costs to APHIS could be recovered without having to apply such an egregious increase to truckers.
Even more fundamental, CTA questions why carriers should be the ones to have to pay the fees, since they are not the actual owners of the goods, nor are they the users of APHIS services. CTA contends the fees are imposed on carriers simply because it’s easier to go after the truck and its owner than the person who owns the product.
“That is not a credible premise for imposing the APHIS fees on the trucking industry,” says the CTA submission. “Commodities that present risk are the responsibility of the importer and the application of fees should be strategically allocated to importers based on the level of risk the goods present.”
“APHIS’s approach is diametrically opposed to everything we have been told over the last decade in terms of a more efficient and secure border,” says CTA president David Bradley. “Whether they’ll listen, remains to be seen.”
For the full CTA submission to USDA click here: 140612-CTA-APHIS-NPRM-Comments Final