Earlier today, the Senate Finance Committee held a hearing on the Trade Facilitation and Trade Enforcement Act of 2013 (S. 662). The bill was introduced by Chairman Max Baucus and Ranking Member Orrin Hatch in March to help reduce costs and delays at the border by modernizing U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE), two key trade-related agencies. CBP is charged with facilitating imported cargo through U.S. ports of entry, enforcing trade and customs laws at the border, collecting customs revenue and enforcing import security laws to prevent illicit shipments from entering the United States.
As Chairman Baucus noted in his opening statement, about 365,000 entries move through U.S. ports – including more than 3,000 express entries – on a typical day. These goods arrive in more than 66,000 truck, rail and sea containers as well as hundreds of aircraft. “American businesses, ranchers, farmers and consumers depend on the timely movement of all these goods across borders to remain competitive. In business, time is money. So CBP and ICE must facilitate trade expeditiously,” Chairman Baucus said. In his opening statement, Ranking Member Hatch reiterated the importance of international trade to the U.S. economy and highlighted the need to protect intellectual property rights.
Manufacturers were represented at the hearing by Chrysler, Procter & Gamble and the National Electrical Manufacturers Association (NEMA). William Cook, Director of Worldwide Logistics and Customs for Chrysler, described the impact of delays at the border on Chrysler’s bottom line in his testimony.
“Even minimal delays can have serious consequences for the company – if a shipment of parts destined for a manufacturing plant gets delayed at a border, operations may have to shut down until the shipment arrives. And now more than ever, with demand sky high for Chrysler products and fierce competition in the auto sector, we cannot afford any production delays.”
Mr. Cook also called on CBP to fully implement the Beyond the Border (BTB) Action Plan. Earlier this year, the NAM sent a letter to CBP encouraging the agency to prioritize the implementation of the several recommendations from the Businesses for a Better Border (B3) Coalition. Mr. Cook noted that Chrysler was pleased to see language in S.662 requiring a pilot program to designate more 24-hour commercial ports of entry. Like many manufacturers, Chrysler relies on just-in-time inventory management practices.
David Cooper, Global Customs Compliance Manager for Procter & Gamble, noted that timely processing of imported materials and other inputs helps companies like P&G ensure reliable U.S. manufacturing operations. In his testimony, Mr. Cooper pointed to key imported materials for P&G products – like Cascade dishwasher detergent and Pampers diapers – that are not manufactured in the United States. Further, CBP plays an important role in protecting consumers and companies from counterfeit goods.
“Our ability to grow as a company and meet consumer needs depends on successful product and operations innovation. This includes the successful development, introduction and marketing of new products and improvements to our equipment and manufacturing processes. The IP generated from these innovations is sometimes copied and imported into the U.S. by counterfeiters, making a strong intellectual property rights (IPR) enforcement regime at CBP critical to P&G’s innovation efforts.”
Clark Silcox, General Counsel for NEMA, also highlighted in his testimony the importance of efficient communication with CBP regarding suspected counterfeit imports and other intellectual property concerns – as provided for in Section 241 of S. 662.
Predictable, efficient and transparent customs procedures help U.S. manufacturers compete effectively around the world. The NAM has long advocated for legislation to help expedite the ever-increasing volume of legitimate trade while also more effectively helping to halt illicit trade. The NAM sent a letter to the Senate Finance Committee earlier in the month, urging the Committee to act on a Customs reauthorization bill.
Lauren Airey is director of trade facilitation policy, National Association of Manufacturers.