Luncheon Keynote: The Evolution of Trade

Introduction

Thank you, Cindy, for that kind introduction.

I also want to thank the association in general for its continued support of the Border Interagency Executive Council (BIEC), established by Executive Order in February 2014.

Today, I am happy to share CBP’s perspective about the evolution of trade – and, as we all know, evolution is all about change.

Winston Churchill said, “To improve is to change; but to be perfect is to change often.” Nevertheless, we know that change must be managed carefully in order for it to be effective.

Certainly, the trade environment for both importers and exporters has been marked by dramatic changes during the past few years. The increasing globalization of our economy, coupled with the revolution in communications technology, as made the pace unrelentingly fast. And as a result, stakeholder expectations have never been higher.     

So today I would like to highlight CBP’s trade vision and, specifically, our commitment to all of you – the importers and exporters who drive the nation’s economic strength and vitality.

Overview: CBP’s Trade Vision

CBP’s mission is broad. In 2014, CBP processed more than $2.4 trillion in trade and almost 375 million passengers. We also collected nearly $44 billion in revenue, making CBP the second largest revenue-collection agency in the U.S. government. As we continue to meet these demands, CBP is preparing to meet the growth predicted for the coming years.

The duality of our mission – protecting both national security and economic security – means that our commitment to you and to our nation is twofold:

• First, to ensure the integrity and security of our borders and of the global supply chain through effective enforcement; and

• Second, to facilitate the flow of lawful goods and people in and out of the country.

  I want to emphasize that CBP’s trade vision clearly recognizes the evolutionary nature of your business – which is really also our business. We have taken – and continue to take – meaningful steps to improve the way we do business in order to help you achieve your goals.

  This vision encompasses four key themes:

• Transforming trade processes by adopting innovative technologies and programs to increase transparency and predictability;

• Protecting economic and national security by managing risk and enforcing trade laws; and

• Expanding international partnerships to enhance security and efficiency within the global supply chain;

Partnering with our trade stakeholders to constantly evaluate and improve our policies and practices.

ACE and Single Window

As most of you know, building and implementing the Single Window is one of our highest priorities, and you’ll get a more detailed look at Single Window development and implementation later this morning.

The Single Window will streamline the entire U.S. government export/import process for American businesses, while improving security and the speed of the global supply chain.

Dozens of agencies are working together to make this a reality.

Which is why CBP is focused on automating core capabilities to reduce redundancy of effort and increase predictability.

The whole push toward Single Window requires a significant amount of “up front” effort by both the Federal government and the private sector.

But let me assure you that there will be an even greater return on investment for that effort. Enabling all Federal agencies to simultaneously review and respond to cargo movement will reduce costs for both industry and government. This will expedite the cargo process – getting goods into the commerce stream faster.

We’re also working closely with key industry groups and individual companies, forming partnerships that really help us facilitate lawful trade while securing our borders.

One important partnership mechanism is the Commercial Operations Advisory Committee, or “COAC.” COAC comprises a broad array of private sector representatives, each bringing an incredible depth of experience and expertise in the global supply chain. That expertise has been key in the development of the Single Window.

Finalizing the Single Window is positioning us to think more about the next steps – which is the connection of our U.S. Single Window to the rest of the world. That step will dramatically impact the supply chain.

Debbie Augustin will be talking more about ACE later  – but I want to encourage all of you to work with us now to test ACE capabilities well in advance of the mandatory use dates.

And, as Cynthia Whittenburg emphasized this morning, the International Trade Data System (ITDS) is absolutely critical to the integration of reporting and regulatory requirements across the participating government agencies into the Single Window.

Centers of Excellence and Expertise

Another priority under CBP’s trade transformation effort is the transition to Centers of Excellence and Expertise, which takes us from transactional processing to account-based management within industries.

I am proud to say that three of our Centers – Electronics, Pharmaceuticals, and Petroleum – have achieved or are nearing full industry adoption. You will hear more on this and the remaining centers later today, but we know this transition will simplify communication and create significant savings in time and cost for all of you.

C-TPAT Exporter Entity

Turning now from imports to exports, I’d like to say a few things about our C-TPAT program. As you know, this voluntary partnership between the private sector and CBP is a key part of the CBP layered cargo enforcement strategy put in place following 9/11. 

Yesterday, C-TPAT began accepting applications from U.S. exporters – a key sector that, until now, was not eligible to participate in the program.

This is an important milestone in the program’s history. For one, the inclusion of exporters to the program will most likely grow program membership to new levels. Moreover, this supports President Obama’s National Export Initiative, a government-wide effort that aims to double U.S. exports and create and support two million U.S. jobs.

The C-TPAT exporter entity was co-created with our partners on COAC, and is a perfect example of our collaboration with all of you.

As of early this month, C-TPAT has registered 435 importers who also export into the C-TPAT program.

By expanding the program to include U.S. exporters, the value of C-TPAT includes:

• Front-of-the-line priority, which lets C-TPAT members be examined ahead of non-members if selected for an intensive examination;

• Ability to speak directly to a C-TPAT Supply Chain Security Specialist, who will advise on security matters to help resolve issues with your:

  • Access to the C-TPAT web portal, its training material, and the ability to monitor those business partners already in C-TPAT.

  • Recognition by the U.S. Government as a trusted participant; and;

Mutual Recognition Arrangement benefits, which give U.S. exporters cargo facilitation and priority benefits in partnering countries. 

Option 4

Finally, I’d like to address Option 4.  Since late last year, at my request, CBP’s Office of Trade Relations, in conjunction with CBP’s Office of Field Operations, Office of International Trade, and the U.S. Census Bureau, has hosted meetings with industry members that were concerned about any changes to the post-departure filing of exports (Option 4). 

As a result of the meetings, and understanding how important this topic is for all of you, we have created an Option 4 Working Group under the COAC Export Subcommittee.  This working group includes representatives from all export entities impacted by this program, freight forwarders, and carriers.  It also has representatives from Census and all our operational offices that have oversight of this program.

Automation today is allowing us to look at other solutions that can help us enhance the Option 4 program, so it reflects the realities of a post 9/11 environment.  

The COAC working group is also reviewing the Advance Export Information pilot, considering a trusted trader approach, and discussing any potential alternatives with respect to mode of shipment and commodity. Your input is vital to this process, and we look forward to continue working together to find a solution.

Conclusion

In closing, let me say that we at CBP know that change is a good thing. It’s the foundation of evolution in every sense of that word. We know that even bureaucracies – or should I say especially bureaucracies – need to evolve in order to earn and keep the public’s trust.

I’m confident that our ongoing collaboration with you – our trade stakeholders – will make the process smooth, seamless, and successful.

Thank you.  Now, I’d be happy to take your questions.