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Brady Opening Statement: Hearing on Customs Trade Modernization, Facilitation and Enforcement

May 17, 2012

Our hearing today will focus on three critical aspects of the Customs mission:  modernization, streamlining and facilitation, and enforcement – as well as the accurate, timely measurement of improvement in all three.  I want to welcome everyone and extend a special welcome to our guests.  

Just 100 years ago, the main function of Customs was revenue collection revenue.  For over 125 years, customs duties were our main source of funds.  At that time, America’s imports were a mere $153 billion a year, and duties collected totaled about $310 million.

Today, the value of imported goods is approximately $2.3 trillion a year, and duties, taxes, and fees collected on these goods bring in almost $37 billion.  The value of imports in 2011 has grown to over four times what it was just twenty years ago.  

Trade is vital to our economic engine, creating jobs and lifting wages here at home.  Today, more than 50 million U.S. workers are employed by companies that engage in international trade, and U.S. trade represents over 30 percent of U.S. GDP.  

In the 21st century, lowering tariff barriers and increasing quotas is not enough. Time is a trade barrier and streamlining legal trade is an essential component to our competitiveness in the global marketplace.  

This hearing will explore how to allocate resources, develop models and measure progress so that we can move the ever-increasing volume of legitimate trade more efficiently – and halt trade that doesn’t comply with our laws.  Customs is the “air filter” to our economic engine, allowing good or clean inputs flow through, while the harmful elements are screened out before they cause damage.

To develop better tools and measurements, I intend to move forward on a bipartisan basis to pass Customs reauthorization legislation this year.  The last time this Committee last passed a Customs bill was in 2004, and it is long overdue.  

CBP and ICE play pivotal roles to ensure that our trade agreements, preference programs, and U.S. trade laws are enforced.
The Treasury Department also plays an important role in furthering CBP’s trade mission, and we depend on it to oversee CBP’s important customs revenue functions.

I strongly believe that for the United States to remain competitive, we must have the most modern and automated Customs structure we can realistically develop – the first component of a sound customs policy.  I support the modernization of CBP’s Automated Commercial Environment, which is vital to supporting increasing imports and pre-screening of cargo.  I hope that CBP has turned over a new leaf in making ACE a reality and will quickly operationalize the cargo release module that we’ve been awaiting for some time.  I understand that ACE will soon be expanded to accommodate export processing, which today is partially an archaic paper process.  

Complementing ACE is the International Trade Data System.  In working with Treasury, CBP has been leading 48 agencies in developing ITDS so that our companies deal with an electronic and seamless “one stop government” at the border and instead of a morass of multiple clearance processes.  These programs will allow CBP and other agencies to more quickly and cost-effectively process imported goods and to more efficiently collect and use trade data.  

Second, in addition to automation, the sophisticated nature of trade demands better streamlining of Customs processes, particularly for low-risk importers.  CBP’s advance cargo data initiatives and industry partnership programs must work together to better facilitate legitimate trade.  Companies that partner with CBP to improve trade compliance should realize the benefits of a more efficient system that create incentives for cooperation above the norm.

CBP has the potential to develop new models to facilitate legitimate trade in a risk-based manner, such as through pooling expertise in Centers of Excellence and Expertise as well as the Importer Self Assessment program, instead of shipment-by-shipment approaches.  These models would enable CBP to focus on high-risk imports and expedite low-risk shipments while leveraging limited government resources.  I would like to maximize the role of the Office of Trade in carrying out these functions.

The third component of sound customs policy is collecting revenue and enforcing our laws without jeopardizing legitimate trade.  While the great majority of incoming trade is materially compliant, CBP and ICE face increasing challenges as the sophistication of those who wish to evade our laws increases.

CBP and ICE have designated eight critical sectors as Priority Trade Issues to focus their enforcement resources, such as intellectual property rights enforcement, textiles, and antidumping/countervailing duties.  

I also want to congratulate fellow Ways & Means Committee member Dr. Charles Boustany on his bipartisan legislation to address evasion and underpayment of antidumping and countervailing duties, and I look forward to considering it.

We also can’t forget that our trade agreements beneficially create new obligations on our trading partners that increase compliance.  The TPP negotiations are taking this several steps further.  

In conclusion, I want to emphasize that CBP and ICE consultations with this Committee, other agencies, and the private sector on its rulemakings and other major actions must be systematic and meaningful.  This hasn’t always been the case. There have been some bumps in the road in the past, and I think that consultation helps achieve a better product.  
Today, we’ll have a comprehensive discussion on efforts to enhance economic growth and job creation by facilitating legitimate trade, modernizing customs procedures, and enforcing U.S. Customs and trade laws, in preparation for moving Customs reauthorization legislation.