More Investment From Government, Industry Required as Trade Transformation Moves Ahead, Say Officials

BALTIMORE -- As efforts to facilitate trade and enhance border security continue into the future, a key factor in their success will be the trade industry’s and the government’s willingness to invest resources, said government and industry officials during a panel discussion at CBP’s East Coast Trade Symposium on Nov. 4. Continued automation and international harmonization will require a commitment from industry and the government to change business practices and educate stakeholders, they said.

Ongoing implementation of the Automated Commercial Environment demonstrates the costs and benefits of the change that trade transformation requires, said CBP Assistant Commissioner Brenda Smith. Smith has talked to “many brokers that have large entry departments” where employees are still keying in data, she said. “How do we convince people that there is a return on investment to automate, to go paperless throughout the supply chain, so we’re not doing duplicative work?”

The same goes for international harmonization and facilitation, a “pretty big lift,” according to Smith. “One of the big questions we need to ask ourselves is, what level of investment are we willing to make, not only as the government but also from the private sector, to support international harmonization," she said. “We have to have expertise, we have to have ideas, we have to have a lot of education on costs and benefits of proposals,” Smith said.

On the government side, trade transformation and the one U.S. government at the border approach “takes a lot of commitment to the ultimate goal, making trade work for the economy,” said Smith. That requires work not only on new technology, but also to change business processes, she said. The government needs “to be able to back off a little from traditional missions, traditional cultures,” and “regulatory frameworks that may need adjusting to allow flexibility,” she said. “We have same challenge in international environment.” CBP also needs to make sure it has articulated opportunities for investment by the trade, whether through ACE development, smartphone apps that assist truck drivers obtain release of merchandise, fingerprint technologies or improved customs seals.

For its part, the “trade needs to do more,” said Norm Schenk, vice president-customs policy at UPS. Internationally, CBP is “far ahead,” but given CBP’s leadership in the global customs community, the trade needs to work with CBP on “making these investments and building on best practices,” showing other customs administrations that it works, he said.

Domestically, it’s “not CBP’s responsibility” to teach other government agencies how to facilitate trade,” said Schenk. The trade needs “to take a greater role with these agencies to educate them” and “encourage them,” he said. Internally, companies need to update their own internal processes to facilitate trade in goods regulated by partner government agencies (PGAs), said John Morley, director-corporate customs at Intel Corporation. As Intel has shifted to more goods regulated by PGAs, like wearable electronics, tablets and smartphones, it has faced issues with employees that are familiar with the product, but not with customs, he said. As a result, Intel is spending a lot of time and money trying to improve processes not just from a customs perspective, but also from a PGA perspective,” said Morley.