Electronics trade group worried by Proposed Import/Export Changes

Industry Worried by Proposed Import/Export Changes

Online Staff -- Electronic News, 9/3/2003

New import/export regulations for cargo and cargo containers being considered by the U.S. Department of Homeland Security (DHS) could hinder the electronic industry's just-in-time manufacturing principals, the Electronics Industry Alliance said today.

The DHS' U.S. Customs and Border Protection (CBP) agency unveiled in late July proposed regulations that would require advance notice of cargo container manifests prior to the cargo's arrival here in the United States or their export. That advance notice would also have to be in electronic format. Currently import cargo manifests are primarily required as hardcopy upon arrival of a shipment.

The CBP will run the cargo data through an automated targeting system that is linked to various law enforcement databases, in order to identify shipments that pose a potential terrorist risk, according to the agency. The Trade Act of 2002, passed by Congress and signed by President Bush into law in August of last year, provided the DHS with the authority to update the international cargo manifest system.

The Customs and Border Protection agency developed the proposed regulations with what it termed significant input from the trade community and the Canada Customs and Revenue Agency, saying that it many cases it adopted recommendations from the trade community.

"These regulations will permit us to risk manage far more effectively for the terrorist threat. That's what building smart borders is all about," Robert C. Bonner, CBP commissioner, said in a statement last July when the proposal was unveiled. "The proposed regulations are the result of a careful and considered effort to strike the appropriate balance between security and trade facilitation."

But the Electronics Industry Alliance (EIA) isn't so sure. Under the proposal from the customs and border agency, cargo arriving via air and courier in the United States would require four hours notice electronically prior to its arrival from certain nearby areas. Cargo arriving via rail would require 2 hours notice; by vessel, 24 hours notice prior to lading at a foreign port; and via truck 30 minutes or 1 hour notice, depending on the type of shipment.

There are similar proposed regulations for cargo exports as well.

"The EIA strongly recommends that CBP further consider its proposed advance notice requirements and their potential impact on the flow of trade," the trade group said in a statement today. "The current proposals will cost businesses time, money and productivity, as most high-tech manufacturers rely heavily on a just-in-time supply-chain system for optimum efficiency," the EIA concluded.

The electronics trade group is also worried that terrorist attack or another catastrophe, such as the blackout that recently hit the Midwest and East Coast, could hamper the electronic delivery of cargo manifests and disrupt trade. The EIA recommended that the customs and border agency develop a contingency plan to keep commerce flowing in the event of a crisis.

"A customs system that processes 25 million commercial trade entries a year cannot afford to come to a halt," the EIA said.