On Second Thought: Customs reauthorization finally crosses threshold

   For years, industry has been working with Congress and the Executive Branch to develop, and ultimately pass, bipartisan Customs reauthorization legislation. It is essential to codify the changes to U.S. Customs and Border Protection (CBP) that have taken place since the agency moved from Treasury to the Department of Homeland Security (DHS) following Sept. 11, 2001. In addition, reauthorization serves as a means to further modernize customs operations in the United States—to include such things as updated returns practices, increased de minimis levels, streamlined drawback provisions, roll out the U.S. Single Window and securing a strong industry partnership with CBP.
   So there was a collective sigh of relief on Feb. 11 when the Senate passed the Trade Facilitation and Trade Enforcement Act, the first true Customs modernization legislation in nearly two decades, following approval by the House of Representatives two months earlier. President Obama promptly signed the bill into law.
   Many industry groups, including the U.S. Council for International Business (USCIB), devoted much time and effort to the bill’s passage, providing insight into necessary changes to promote a healthy balance between trade and security. Our thanks go out to these industry stalwarts, to the House and Senate members—and their staffs—who spent countless hours in discussing, debating and crafting this legislation, and of course to all the CBP officials who have sought to reshape our laws to effectively address the challenges and opportunities of 21st century commerce. 
   Welcoming the bill’s approval, Homeland Security Secretary Jeh Johnson noted that the law authorizes continued funding for operations and maintenance of the Automated Commercial Environment (ACE), which is the backbone of the U.S. government’s Single Window system for imports. Johnson noted that by this December, companies will be able to use just one portal to transmit information to 47 government agencies about exports and imports, thereby eliminating over 200 different forms and streamlining the trade process. 
   This is a key step in modernizing the customs process, not just in the United States, but internationally. The Single Window concept is embedded in the objectives of the World Trade Organization’s recently agreed Trade Facilitation Agreement (TFA), and reauthorization will serve to help unlock other benefits of the TFA, which is projected to provide a trillion-dollar boost to the global economy when fully implemented. 
   Since April 22 of this year, 77 WTO members have ratified the TFA and deposited their instruments of acceptance with the WTO. In order for this landmark agreement to enter into force two-thirds of current WTO membership, or 108 members, will have to ratify it. To date, such countries as Vietnam, the United States, Singapore, Turkey, Thailand, the Russian Federation, the European Union (on behalf of its 28 member states), India, and Brazil, among others, have ratified the TFA. Our Transatlantic Trade and Investment Partnership (TTIP) negotiating partner, the European Union, as well as seven of our Trans-Pacific Partnership (TPP) partners, have ratified the TFA. As I asked in my February column: Where are our key trading partners which have already made commitments in this area? Where are the remaining TPP nations, with whom the United States recently wrapped up negotiations? And where are our other bilateral and regional FTA partners? 
   Timely entry into force of the TFA, followed by robust implementation, are key priorities of the USCIB’s Customs and Trade Facilitation Committee, which I chair. But just as we cannot let up in pursuing these goals, and business needs to continue to advocate and educate on the benefits of the TFA, we also cannot lose focus on ensuring proper implementation of what both Congress and industry have achieved through Customs reauthorization. 
   They say that the devil is in the details. As we in industry move from advocating for reforms to ensuring that hard-fought language and provisions are quickly implemented, we will need to work closely with Congress and CBP to help drive an efficient and effective implementation process. Much has been added to CBP’s plate in terms of new reporting requirements and mandates, so this will not be a slam-dunk.
   Let’s also bear in mind that those new reporting elements are key metrics for industry’s dashboard to see how well the partnership is functioning. Additionally, industry cannot just wait and see if implementation is ultimately achieved—we need to help our U.S. government partners overcome obstacles to our mutual success. We will need to provide detailed input into process changes and proposed regulations, among other things. Life can sometimes upend even the most carefully laid plans, and this certainly applies to implementing an important bill like Customs reauthorization. 
   There are many congratulations to go around as we celebrate this landmark bill’s passage. But there are also many challenges ahead. Customs modernization and trade facilitation cannot take place without a true partnership between industry, Congress, CBP and all the other U.S. partner agencies. Achieving the vision of 21st century trade can only come about as the result of high-level engagement between industry, the Executive Branch and Congress in support of commercial growth.