Travel restrictions and trade disruptions

MARY REICHARD, HOST: Coming up next on The World and Everything in It: travel restrictions and trade.

Most people live in countries that have closed their borders to all non-essential travel to contain the spread of COVID19. That’s disrupted holiday plans, family get-togethers, weddings and long-distance relationships.

MEGAN BASHAM, HOST: But those border restrictions also have an effect on essential travel, on commerce and the flow of goods and services. WORLD’s Anna Johansen Brown explains.

ANNA JOHANSEN BROWN, REPORTER: Ogdensburg International Airport is tiny. It has one runway, surrounded by pine trees in upstate New York. You walk straight out of the terminal onto the tarmac, then up the steps onto the single-engine plane. It’s like having a personal jet. Especially since COVID hit. There’s hardly anyone else on the flight. 

SARACCO: It’s pretty dismal right now.

Stephanie Saracco is the airport manager. 

SARACCO: Percentage wise, we’re down about 84 percent.

Ogdensburg International is 4 miles from the Canadian border. The airport used to get at least half its business from Canadians driving over the bridge to catch a flight to Chicago or Washington, D.C. 

SARACCO: However, we have lost that for the time being. And I hope that comes back with a vengeance when the borders open.

People aren’t flying south for the winter, and college students aren’t coming to and fro for holiday vacations. But the airport is also suffering because commuters aren’t commuting. 

Essential workers are still free to cross the border. And trucks carrying merchandise can also pass. But people who live on one side of the border and work on the other, or people who travel for business, are out of luck.

Bill Anderson directs the Cross-Border Institute at the University of Windsor. He lives near the border of Ontario and Michigan, and studies the flow of trade crossing the Detroit River. 

ANDERSON: And there’s a lot of people to cross back and forth for business purposes. There’s a lot of interaction that goes on between companies that are located in Ontario and Michigan, Ohio, Indiana, all through that region. And those crossings are not generally possible right now.

He says the number of people crossing the border is down by about 95 percent. Trucks are still transporting goods…

ANDERSON: On the Ambassador Bridge, it’s anywhere from 6,500 to 7,000 trucks a day going back and forth.

…Because otherwise there would be empty spaces on grocery shelves. But in-person business meetings can’t happen. That has a less tangible, immediate effect. But it still has an effect.

In the Detroit River area, the auto industry is huge. Anderson says about half the traffic crossing the border is related to cars in some way.

ANDERSON: You’ve got companies to make cars and then you’ve got a whole bunch of companies that make the equipment that make the cars. And so they’re mold makers and automation specialists and whatnot.

So what happens when an automotive factory needs new machinery or new molds? 

ANDERSON: There’s a procurement process that’s quite challenging. When you make a contract, for many millions of dollars, to buy machinery to go into a new assembly line, you’re making a very big commitment. And quite often, they want you to come and visit them. And sometimes they want to come out and visit your site. 

In other words, a company wants to send someone across the border to check out the new machinery in Ontario before installing it in a plant in Detroit. But they can’t. Unless they get special approval from the government and even then, they’d have to quarantine for two weeks after returning.

ANDERSON: And they’re at a real disadvantage, because the fact that they can’t cross the border, they can’t do the face to face. And they’ve been losing contracts because of this.

So it’s not just a question of banning people and allowing goods. The two are interconnected in multiple ways. Annabelle Mourougane is an economist in Paris. She works for the Organization for Economic Cooperation and Development.

MOUROUGANE: We should not totally, totally differentiate between travel for goods and merchandise, and travel for people.

She points out that passenger planes typically double as cargo planes: They carry merchandise and goods in the belly hold, right alongside the passengers’ suitcases. Almost half of all air cargo tags along in passenger planes.

MOUROUGANE: So you have a lot of connection between the different types of transportation as well.

But since passenger planes haven’t been flying as much, the price of air cargo has gone way up. Bill Anderson says many airlines have been trying to retrofit passenger planes to become cargo planes.

ANDERSON: The airlines have been trying to make a shift to air cargo. Because that’s about the only place where decent revenue was coming from.

Many countries also rely on foreign workers to cross borders and staff hotels, work as nannies, harvest crops. That kind of travel isn’t impossible right now but Annabelle Mourougane says it is difficult.

Quarantines and testing requirements take time and money. That slows down the whole trade process of both goods and services. And many businesses may just decide it’s not worth it. 

That’s one reason Bill Anderson says it’s important to get borders right.

ANDERSON: I don’t think people don’t realize what that trade relationship looks like. It’s like, stuff is coming out of a factory in the United States, getting on a truck, going into Canada, and being installed in a car that comes down the production line that day, or the next day. It’s all, you know, sort of orchestrated in that way. And as a result, you know, the border really has to work, or, or a lot of our industrial systems get into big trouble.

Annabelle Mourougane says countries need to ease border restrictions as soon as possible…

MOUROUGANE: Because it has a detrimental effect on the economy. 

…But it only works if multiple countries are on board with lifting restrictions. At the very least, Mourougane hopes nations will clarify the rules a bit.

MOUROUGANE: Adding more clarity on the rules, and adding more coordination across countries will help facilitate the movement of these workers.

In the meantime, businesses are working around restrictions as best they can. At the Ogdensburg International Airport, manager Stephanie Saracco hopes business picks up soon.

SARACCO: We are open for business and when folks want to fly, we are here.

Reporting for WORLD, I’m Anna Johansen Brown.

(Photo/Business Wire)

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