CAIE Report
New Trade Security Within the International Supply Chain
The terrorist attacks of September 11 have reshaped our country, the United States and the world. Security concerns have been pushed to the forefront of the agenda for both Canadians and Americans. Clearly, we must all do our part to address the security issues posed by the terrorist threat.
Canadian importers and exporters must ensure the security of their international supply chain. To this end, they must know that all of their supply chain partners emphasize the security of goods and information. Customs authorities in both Canada and the United States moved quickly to tighten the border following the September 11 terrorist attacks. This action caused lengthy delays, forcing some Canadian plants to temporarily reduce or halt production. While border conditions have improved, both federal governments must act quickly to ensure that such paralysis at the border never happens again. Thousands of jobs on both sides of the border are at stake. Canada also risks losing future foreign direct investment and the employment opportunities that flow from this investment.
It is important to recognize that Canada needs to guarantee security at other points of entry in order to avoid such devastating effects on the Canadian economy in the future. We must ensure that Canada is not a conduit for high-risk goods and travelers entering the United States. Our challenge is clear: How do we maintain secure national borders while ensuring that low risk goods and travelers can move efficiently between Canada and the United States?(1)
It is important to consider the role that industry must play in this new era of customs administration. Politicians and senior bureaucrats on both sides of the border are beginning to “sing from the same songbook.” Customs authorities want to work with industry to reduce the costs and limit the hassles faced by traders when they move goods across the border, while simultaneously addressing security concerns.
U.S. Customs Commissioner Robert C. Bonner held a Trade Symposium in Washington on November 27. At the symposium he stated, “the new number one priority of U.S. Customs is to keep terrorists and weapons of terrorism out of the United States and we are aware that commercial traffic can be used by terrorists.” Bonner’s statement serves as a clear signal to logistics professionals that trade security has moved ahead of trade compliance in terms of government priorities. Customs is enhancing security by implementing new procedures powered by advanced technology. Bonner hopes that the World Customs Organization (WCO) and the World Trade Organization (WTO) will implement security standards worldwide. U.S. Treasury Secretary Paul O’Neill also spoke at the U.S. Customs Trade Symposium. O’Neill echoed the comments of Commissioner Bonner. He believes that the reduction of logistics barriers is not incompatible with increased security to eliminate terrorist threats. It should be possible to create electronic bonding of containers, truck trailers and inventory moving from one country to another. According to O’Neill, this measure would offer “an unequivocal assurance that the goods are not tampered with so they don’t have to be inspected at the border.”
| "Companies that want to speed up customs clearance and avoid physical inspections must develop and implement new security standards for their exports and imports to ensure cargo is left untampered.” | ||
Industry players on both sides of the border are advocating programs designed to pre-clear cargo before it leaves the country, using technology as a key tool. Companies that want to speed up customs clearance and avoid physical inspections must develop and implement new security standards for their exports and imports to ensure cargo is left untampered. These new standards could result in increased security at the factory, heightened security by carriers and all supply chain partners, advanced electronic transmission of manifest information to customs, and the use of electronic seals for container shipments and trailers.
If you want your company and its cargo to be deemed low-risk, you must know your supply chain partners and their security measures. It is also important that you partner with Canada and/or U.S. Customs to develop acceptable security standards. Logistics professionals must ensure that the development and implementation of security standards are a priority in the movement of goods across borders. For further information, please consult our website at http://www.caie.ca and the Canada and U.S. Customs web sites.
1. Please refer to the web site of the Canadian Coalition for a Secure and Trade Efficient Border (http//www.cme-mec.ca/coalition) for the statement of principles and the action plan. Released on December 3, 2001.