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Trade Officials See Little Immediate Shutdown Impact, Worry About Future

October 2, 2013 by Mike Feazel|Top News

Those involved in international trade were reporting relatively few impacts of the government shutdown, in its second day, but expressing concerns about the longer term. Most industry officials told us traffic continues moving through ports and airports.

In a briefing with industry Tuesday, CBP officials said the ports are open for business. Front line officers and Agriculture officers are essential personnel and are in full force, Airforwarders Association officials said they were told, and all hours of service at all ports were normal.

The briefing was closed to reporters, but industry participants said the following was said: The areas that could be impacted would be post release functions, CBP said. Technicians and mission support personnel are not working and CBP said that will likely impact post-release document processing. The broker exam scheduled for Oct. 7 is to go on, and Global Entry signup and appointments are continuing as scheduled, they said. The ten Centers of Excellence and Expertise remain staffed as normal.

Officials separately said all government/client representative offices overseeing the following have been furloughed: ACE Portal Accounts Reps.; Automated Broker Interface Reps.; Rail Manifest Reps.; Ocean Manifest Reps.; Truck Manifest Reps.; Air Manifest Reps.; ACE Reports Reps.

As most travel is on hold, foreign validations for Customs-Trade Partnership Against Terrorism (C-TPAT) will not be done during the hiatus; C-TPAT certifications will continue. CBP is monitoring the ACE development and deployment schedule and hopes to keep to the Oct. 5 release. Overtime is still available for use by individual ports of entry. APHIS field staffing is currently staffed at pre-hiatus levels. And all indications so far are that FDA is operating at pre-hiatus level. There were reports that FDA in Chicago area has 45% of their people furloughed. New York reports that FDA advises they have staff in place at the moment to handle releases, officials said.

However, a letter to Los Angeles trade officials from the FDA Los Angeles District Import Operations Branch said the branch will remain open, but with "limited resources to continue to perform its critical functions. ... The uncertainty of the current situation puts us all in a difficult position, and we truly appreciate your patience through this challenging time."

Cargo Flows Uninterrupted So Far; Impact Felt by Other Government Agencies

"The impact thus far has not been with CBP front-line people but rather with other government agencies such as FDA, USTR, FMC, BIS, Fish and Wildlife and others," said Darrell Sekin of DJS International Services, president of the National Customs Brokers and Forwarders Association of America. "CBP releases are moving normally insofar as the CBP end of things goes. Also, CBP entry specialists, CEE offices, FP&F and most revenue functions remain operational. We understand that some of the CBP back office operations, such as the bond processing center are being affected and this will cause delays in processing of bonds."

"Some of the government agencies who have on-line services have had to go to manual operation as apparently their support staff for the on-line functions were furloughed," Sekin told us. "This has caused these functions, such as the Fish & Wildlife forms to have to go manual which has caused delays to such shipments."

AfA Executive Director Brandon Fried said TSA cargo inspectors will be on the job conducting cargo inspection activity as usual. "What's interesting is CBP has, by comparison, been remarkably unaffected by this," Fried told us. Asked whether he thinks cargo movement will be hurt by the shutdown after conference calls with several agencies, Fried said: "Not at this point in time, based on what we've been told. Now obviously, the proof will be in the practice, so we'll see what happens over time. But as it stands today, having gone through these calls, I can tell you that we're not anticipating any significant delays to occur."

Pedro Juan Millan Garcia of the Florida Customs Brokers and Forwarders Association told that group's members that the Plant Inspection Stations in Miami, and PEV office will remain fully staffed and operational, he said: "Nothing to worry about so far ..."

"At this point, we do not expect airline operations to be impacted as we have been advised by the FAA, TSA and CBP that front-line employees would not be subject to shutdown-related furloughs that would affect the traveling and shipping public, a spokeswoman for Airlines for America told us. But she said "a governmental shutdown harms our economy and all businesses, including the airline industry."

"We have not heard of any disruptions in air cargo screening or other processing -- or in flight schedules," an AfA spokesman told us Oct. 2: "Our understanding is that the DHS agencies are fully staffed in the screening and security areas and that the air traffic controllers are on duty, so it's pretty much business as usual for us.

Anne Kappel, vice president of the World Shipping Council, told us that group has seen "very little impact to date." Bruce Carlton, president of the National Industrial Transport League, told us "we’re not aware of any complaints so far."

"Transportation Security Administration and Customs and Border Protection staffing levels will likely remain unchanged, so no immediate impact is foreseen on air cargo clearance operations in the U.S.," agreed a spokesman for The International Air Carrier Association. "We are also finding that the CBP impact will vary depending on the location and staffing," said a notice to customers from Rogers and Brown.

Minimal Impact on Ports, Say AAPA and Coast Guard

The American Association of Port Authorities told its members that the U.S. Army Corps of Engineers navigation program "should be minimally impacted by a short term FY 2014 funding hiatus through designation of essential employees and the ability to use unspent FY 2013 funds to pay employee salaries." It said Corps' District Office navigation support staff would continue to work as long as carryover funds are available, and Corps' minimum fleet dredges could be activated for emergencies.

Coast Guard services to maritime commerce, such as the issuance of licenses, will be delayed, AAPA said, but port, waterways and coastal security/safety functions will continue. DOT operations that will continue during the shutdown include maintenance and operation of navigational aids and other facilities and hazardous materials safety inspections, it said, but TIGER and other grants programs within the Federal Transit Administration will be suspended.

APHIS Still Processing Some Permits Electronically

The Animal and Plant Health Inspection Service will still process certain types of permits during the shutdown, the agency said in an emailed bulletin (here). “The PPQ ePermits System remains operational to all users to submit permit applications, receive notifications, and access other data,” APHIS said. The agency will continue to process permit applications for the following permit types: 525 (soil); 526 (live plant pest); 546 (post-entry quarantine); 585 (timber and timber products); 586 (transit); 587 (fruits and vegetables, plants for planting, and other miscellaneous and processed products); 588 (controlled import permit); and 621 (protected plant permit).

Because APHIS isn’t receiving mail, it will only accept plant applications that are sent either through the PPQ ePermits System or by fax to the following numbers:

Payment for PPQ Form 621 applications should be submitted through pay.gov, APHIS said. The agency directed additional questions to its customer support line at (301) 851-2046 or (877) 770-5990 for plants and plant products or (866) 524-5421 for soil and pest permits.

ITC Postpones AD/CVD, Section 337 Deadlines

With its website down and its staff unavailable for either email or phone communication, the International Trade Commission unsurprisingly postponed all deadlines in its investigations, including Section 337 and antidumping and countervailing duty injury proceedings. The deadlines will be tolled, as were the Commerce Department’s deadlines in AD/CVD cases, said the expanded message that replaces the ITC website (here). Just as with the Commerce deadlines, the ITC deadlines will be postponed by the length of the shutdown: if the shutdown lasts 10 days, then all ITC investigation deadlines will be postponed by 10 days. The ITC also postponed all hearings and conferences.

Trade Negotiations to Continue For Now

The on-going government shutdown could hamper progress in Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership (TTIP) negotiations, said National Foreign Trade Council President Bill Reinsch. But for now, “the larger problem is whether the shutdown will prevent President Obama for going to Bali for the APEC meeting,” said Reinsch referring to the Asia-Pacific Economic Cooperation summit Oct. 4-8. “There will be a meeting of all the leaders there. We see this as potentially a big step forward. If he can’t go, that’s a rather significant issue.”

U.S. trade officials are also slated to attend the next round of TTIP negotiations Oct. 7-11 in Brussels (see 13092523). “The next TTIP round is expected to be next week. That would be a significant question,” said Reinsch. “Have the U.S. negotiations already left? Probably not. Will they be able to go? I don’t know.” The U.S. Trade Representative Michael Froman departed for Europe and Asia this week (see 13100120).

The USTR contingency plan says the agency will retain roughly a quarter of its staff, but the plan does not identify which operations are deemed essential (see 13100120). A USTR spokeswoman said on Sept. 30 Froman’s schedule will remain intact this week despite the shutdown. USTR will likely send delegates to APEC because officials are already abroad, said Reinsch. “The shutdown question is whether they can be back. They might end up being stranded over there,” said Reinsch. USTR will exempt from furlough personnel required to address international trade negotiation and enforcement obligations, said Senior Advisor to the U.S. Trade Representative Carol Guthrie. Plans may change in the event of a continued lapse in funding, she cautioned. “As of today, in hopes that the lapse will be brief, USTR plans to participate in the upcoming meeting of Trans-Pacific Partnership (TPP) Trade Ministers as well as the APEC meetings taking place in Indonesia, and in the upcoming 2nd round negotiation of the Transatlantic Trade and Investment Partnership (T-TIP) taking place in Brussels,” said Guthrie.

Treasury Continues SDN Work

The Treasury Department will continue to administer the Specially Designated Nationals (SDN) list during the shutdown, according to a Sept. 27 contingency plan document. The Office of Financial Stability, the Office of Financial Research, the Small Business Lending Fund, the Financial Stability Oversight Council, the State Small Business Credit Initiative program, the DC Pensions Office, and the Treasury Executive Office of Asset Forfeiture will also continue to function because these operations are not reliant on annual appropriations. The State Department will operate largely on residual balances, said a similar contingency plan. No new travel may be arranged, nor should official make new arrangements to attend conferences, said the plan.

Political Impasse Continues

The House pushed separate pieces of legislation on Oct. 1 that would have funded national parks, veterans affairs and the District of Columbia, among other areas of government. The Obama Administration flatly rejected the legislation, indicating both sides are hunkering down for a prolonged appropriations fight. “The Administration strongly opposes House passage of H.J. Res. 70, H.J. Res. 71, H.J. Res. 72, H.J. Res. 73, and H.R. 3230, making fiscal year 2014 appropriations for very limited activities,” said an Office of Management and Budget Oct. 2 statement. “Consideration of appropriations bills in a piecemeal fashion is not a serious or responsible way to run the United States Government. Instead of opening up a few Government functions, the House of Representatives should re-open all of the Government.”