Customs reauthorization bill picking up support

Senate Finance Committee has been working on a measure since 2006.

An effort to elevate trade facilitation as a top priority alongside security and enforcement within U.S. customs agencies for the first time since the Sept. 11, 2001, terrorist attacks, has a good shot at being enacted in the 111th Congress, stakeholders say.

A customs reauthorization bill introduced late last week by Senate Finance Committee Chairman Max Baucus, D-Mont., and ranking member Charles Grassley, R-Iowa, could move in committee this fall, sources said. Finance has been working on a bill since 2006, and lobbyists said the staff work and resources devoted to it are unprecedented.

The measure has drawn support from industries including drug-makers, retailers and video-game developers, as well as cargo carriers, customs brokers and others involved in the global supply chain. Introduction comes "at a time when the United States desperately needs to promote free trade as an engine of economic growth," said American Association of Exporters and Importers President and CEO Marianne Rowden.

The measure would establish Customs and Border Protection and Immigration and Customs Enforcement within the Homeland Security Department as separate agencies with their budgets. It would also create a office to consolidate trade facilitation duties within CBP as well as a liaison between the agency and the private sector, while requiring consultations with other agencies and industry stakeholders before proposing regulations impacting trade.

The bill would require CBP to identify benefits for voluntary industry participants in programs such as the Customs-Trade Partnership Against Terrorism. "CBP has promised more trade benefits to participating importers, but those benefits have not come to fruition," said Stephanie Lester, vice president for international trade at the Retail Industry Leaders Association. "We welcome Congress' guidance that more should be done to encourage public-private partnerships."

The measure includes new trade enforcement provisions, including creation of an interagency working group on import safety and new training requirements for CBP port personnel. It would create an office within ICE to coordinate federal efforts to enforce intellectual property violations, while requiring CBP to dedicate port staff solely to inspections and, if necessary, seizure of counterfeit drugs, software and other products.

The measure will help the agencies "better respond to imports that put American patients at a higher risk by failing to meet U.S. health and safety requirements," said Pharmaceutical Research and Manufacturers of America senior vice president Ken Johnson.

Industry officials have generally backed the bill. But one potential sticking point is a provision that import data required under a cargo security rule scheduled to take effect Jan. 26 could also be used for commercial enforcement, such as compliance with applicable tariffs and regulations.

One fear is that commercial data could be leaked to trading partners, said Peter Friedmann, an attorney with Lindsay Hart Neil & Weigler. "If that information falls into the hands of our international competitors, it could provide them with proprietary information," he said, adding it could also be used in dumping cases against the United States. However, Friedmann said Finance aides have expressed willingness to work with the private sector on their concerns.

Timing will depend on Finance's deliberations on the healthcare bill. Senate floor time in the fall is scarce, and the customs bill could attract numerous trade-related amendments that could slow progress. But with pending free-trade agreements on hold, "there's a lot of pent-up demand" for trade legislation, an industry lobbyist said.

Some observers said elements of the customs overhaul could move as part of a broader package extending expiring duty-free benefits for developing countries and perhaps miscellaneous tariff reductions for U.S. firms. Others said movement was more likely next year, perhaps as part of a larger bill authorizing the Homeland Security Department.