Legislation Seeks Customs Reform

The Senate Finance Committee is moving forward with legislation designed to beef up the policing of
international trade by the Customs and Border Protection (CBP), something US textile manufacturers
have long sought.

At a hearing last week on the Customs Facilitation and Trade Enforcement Reauthorization Act,
Finance Committee Chairman Max Baucus, D-Mont., expressed his concern that CBP has neglected its
responsibilities in the trade area as it has waged a war on terrorism and illegal drug traffic.

Pointing out that CBP has a dual responsibility of policing international trade as well as
protecting borders, Baucus said: “These two missions are not mutually exclusive. CBP must do a
better job of balancing them. The agency’s security mission is vitally important, but I am
concerned that CBP has badly neglected its trade mission.”

To address this problem, Baucus and the ranking committee minority member, Charles Grassley,
R-Iowa, are sponsoring legislation that would create a new high-level position within CBP to focus
solely on trade facilitation and enforcement. That office would be directed to create new
enforcement practices to target imports that are most likely to violate US laws, but it also would
provide speedy customs clearance for importers with a strong history of complying with US laws. The
bill directs CBP to do a better job of consulting businesses affected by its policies as well at
the Finance Committee and Congress as a whole.

The National Retail Federation (NRF) strongly endorsed the legislation, saying it will
restore balance between the CBP’s international trade and homeland security duties. In a written
statement submitted to the committee, Jonathan Gold, NRF’s vice president for supply chain and
customs policy, said: “While we agree national security is an extremely  important objective
and strongly support CBP’s current efforts, there are many within the trade community who feel as
if trade facilitation has fallen by the wayside as a core element of CBP’s mission.” The statement
added that NRF believes the pending legislation is intended to strike a balance between the
agency’s trade duties and homeland security by declaring trade facilitation is a priority.

US textile manufacturers have long been concerned that Customs has neglected illegal
international trade in recent years as it focused its efforts and resources on combating illegal
drug traffic and border protection. While they generally support the goals of the Baucus-Grassley
bill, they would like to see legislation that is more textile-specific granting more authority to
seize illegal goods, a better electronic system to track the source of textile and apparel imports,
hiring more textile and apparel specialists and providing Customs agents with better training.

October 27, 2009