Security and Trade Along the Northern Border

Security and Trade Along the Northern Border:
Where Do We Go From Here
Tuesday, November 13th

On November 13^th, the Northeast-Midwest Congressional Coalitions sponsored separate Senate and House briefings to examine security and trade concerns on the U.S.-Canadian border in light of the terrorist attacks and the recently passed USA PATRIOT Act (P.L 107-56). The briefings highlighted authorizations that were included for the Northern Border in this Act, discussed the funding increases for border agencies in FY2002, touched on operational impacts at the border following September 11^th, and examined the immediate and long-term strategies for enhancing security while facilitating trade. A list of speakers, a summary of their key points, and links to related hand-outs and websites are included below. For more information, contact Fred Helmstetter or Joe Abe with the Northeast-Midwest Institute at (202) 544-5200.

Section-by-Section Analysis of the USA Patriot Act - Courtesy of Sen. Leahy

SENATE BRIEFING

Beth Stein, Counsel, Office of Senator Maria Cantwell

Senators Cantwell, Leahy, and other Members along the U.S.-Canada border worked together to include language for a northern border protection initiative in the recently passed USA-Patriot Act.
Specifically this included authorizations to triple the number of INS, Customs, and Border Patrol personnel and authorizations of $50 million each to INS and Customs for technology improvements and equipment at the northern border.
The next step is obtaining appropriations for these staffing increases and technology improvements. Although funding increases for border agencies in fiscal year 2002 appropriations were a step in the right direction, more is needed.
A bi-partisan group of Senators continues to push for funding the USA-Patriot Act authorizations (their efforts are outlined in the letters below)

Jim Phillips, President and CEO, Canadian/American Border Trade Alliance

Yancy Molnar, Government Relations Senior Specialist, DaimlerChrysler Corporation

Many of the border issues we are confronting today existed before September 11^th, however those events have magnified the problems.
DaimlerChrysler is highly dependent on an integrated U.S.-Canada supply chain and just-in-time delivery practices. It has 1,500 trucks crossing the border each day, and it typically holds only about four hours of inventory. Therefore, 12-18 hour delays such as those experienced immediately following September 11 are highly disruptive to its operations. Although the National Guard and local officers have alleviated some of the delays at various crossings, they are not a long-term solution.
DaimlerChrysler supports giving U.S. border agencies the human resources and technology they require to perform their missions. It also supports future funding for the ACE and NCAP systems as well as the NEXUS program. DaimlerChrysler welcomes further harmonization and integration of U.S. and Canadian border processes.

Bruce Shulman, Partner, Stein Shostak Shostak & O'Hara; Vice-Chair, Coalition for Customs Automation Funding (CCAF)

Selectivity is a key aspect of Customs job. It is infeasible to inspect every piece of freight entering the country, because the volumes are too large. Therefore Customs must assess the risk of various shipments from toys to agricultural goods to hazardous materials. Currently about 10% of all goods entering the country are inspected.
Customs' existing data system, the Automated Commercial System (ACS) is on its last legs. Customs is in the process of converting to a new system, the Automated Commercial Environment (ACE). ACE was part of a vision outlined in the Customs Modernization Act of 1993 that would move Customs away from processing trade on a transaction-by-transaction basis toward an account-based system.
ACE is being designed to interface with other U.S. Government agencies through the International Trade Data System (ITDS). ACE will help U.S. Customs facilitate trade while enhancing its risk assessment abilities.
It is important that ACE be funded at a level each year that keeps it on 4 to 5 year development track or it risks being obsolete by the time it is completed. ACE received $300 million in fiscal year 2002, about $100 million less than what was needed.
CCAF is opposed to new user fees or increases in existing user fees to fund ACE development.

Customs Links:

Customs Modernization Press Release
Border Wait Times

HOUSE BRIEFING

Jon Kent, Partner, Kent & O'Connor; Board Member, National Customs Brokers & Forwarders Association of America; Member, Coalition for Customs Automation Funding

Customs brokers and freight forwarders facilitate trade by assisting shippers with tariff determination, customs and other government regulations, documentation, and by assessing the best rates, routings and modes of transporting goods to or from any area in the world. Border management policies and border agency information systems are therefore of significant interest to NCBFAA.
Customs' existing data system, the Automated Commercial System (ACS) is on its last legs. Customs is in the process of converting to a new system, the Automated Commercial Environment (ACE). ACE was part of a vision outlined in the Customs Modernization Act of 1993 that would move Customs away from processing trade on a transaction-by-transaction basis toward an account-based system.
ACE is being designed to interface with other U.S. Government agencies through the International Trade Data System (ITDS). ACE will help U.S. Customs facilitate trade while enhancing its risk assessment abilities.
It is important that ACE be funded at a level each year that keeps it on 4 to 5 year development track or it risks being obsolete by the time it is completed. ACE received $300 million in fiscal year 2002, about $100 million less than what was needed.
CCAF is opposed to new user fees or increases in existing user fees to fund ACE development.

National Customs Brokers & Forwarders Association of America

Jim Phillips, Executive Director, Canadian/American Border Trade Alliance

Yancy Molnar, Government Affairs, DaimlerChrysler Corporation

Many of the border issues we are confronting today existed before September 11^th, however those events have magnified the problems.
DaimlerChrysler is highly dependent on an integrated U.S.-Canada supply chain and just-in-time delivery practices. It has 1,500 trucks crossing the border each day, and it typically holds only about four hours of inventory. Therefore, 12-18 hour delays such as those experienced immediately following September 11 are highly disruptive to its operations. Although the National Guard and local officers have alleviated some of the delays at various crossings, they are not a long-term solution.
DaimlerChrysler supports giving U.S. border agencies the human resources and technology they require to perform their missions. It also supports future funding for the ACE and NCAP systems as well as the NEXUS program. DaimlerChrysler welcomes further harmonization and integration of U.S. and Canadian border processes.

Ken Swab, Legislative Director, Office of Representative John LaFalce

The House Northern Border Caucus, a bipartisan group of representatives from northern border states, has been very active on border management policy issues. It played an important role in obtaining appropriations for the northern border in fiscal 2002 appropriations and in the USA-Patriot Act.
The caucus, chaired by Reps. John LaFalce and George Nethercutt recently hosted an information session on the Automated Commercial Environment (ACE) system and sponsored a portion of the fall 2001 Can/Am Border Trade Alliance meeting on Capitol Hill as well.
Ken outlined key provisions of the USA-Patriot Act, which are summarized in the link near the top of this page.

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