U.S. Ambassador David Wilkins is defending his country's contentious plan requiring passports or another form of secure document to enter the country.

The Western Hemisphere Travel Initiative -- passed by the U.S. Congress in 2004 -- requires such secure documents for land travellers coming into or back into the United States as of Dec. 31, 2007.

The U.S. deadline for air travel comes into effect even sooner, by the end of 2006.

In an exclusive interview with CTV News, Wilkins said he's aware of concerns on both sides of the border about possible trade and tourism impacts; security, however, is paramount.

"There's absolutely no effort to impede legitimate travel or trade," he told CTV's Rosemary Thompson in Ottawa. "But we can have both security and legitimate tourism and trade."

The problem, however, is that a minority of Canadians (some 40 per cent) and Americans (some 20 per cent) possess passports.

At $87, Canadian passports are costly for some. For Americans, it's even pricier, at $205 US.

Wilkins maintains residents on both side of the border, however, are ready for better safety measures.

"We all admit that no system is perfect, but 9/11 had a profound impact on my country and security will continue to be important," he said of the Sept. 11, 2001 terror attacks on the U.S.

He said the U.S. is working on an identification card -- similar to a driver's licence for travellers. The card would contain passport information, but would be more accessible and cheaper.

U.S. officials announced in January that Americans returning home from Canada would have to produce new ID cards costing about $55 US.

However, critics of the U.S. plans for new identification cards at the border says the scheme will erect a wall with grave implications for commerce, because most Americans and Canadians still won't buy them.

"It's going to affect us dramatically," Mac Makenny, owner of Homeplace Ranch in Priddis, Alta., near Banff. "Forty per cent of our business at the Homeplace Ranch comes from the U.S. So if you lose even 10 per cent, that's pretty significant."

Critics also argue the passport rule won't make either country any safer.

"What we're forgetting is that the people that were on the airplanes on 9/11 all had passports," Randall Williams, president and CEO of the Tourism Industry Association of Canada, told CTV News. "So this new initiative -- will it really makes us more secure? We don't think so."

With a report from CTV's Rosemary Thompson