- The Washington Times - Tuesday, June 11, 2002

Business groups will push to ensure that President Bush's plan to move the Customs Service into the proposed Department of Homeland Security does not stifle international trade with an overemphasis on security.
Some industry lobbyists fear that incorporating Customs into a security agency will slow the modernization of the agency and interfere with the creation of smoother procedures for clearing the billions of dollars in cargo that crosses the border each day.
"There are alarm bells going off all over town about this," said Robin Lanier, president of Alliance Management Group in Washington, a consulting firm that has worked with importers to modernize customs procedures.
Congressional approval of Mr. Bush's proposal, made last week, would mark the most significant change to the U.S. Customs Service since it was created in 1789 as part of the Treasury Department to collect tariffs imposed on imports. Until the creation of the income tax in the 20th century, tariffs were the main source of federal revenue.
On a typical day, Customs, whose proposed budget for fiscal 2003 is $3.8 billion, clears more than 50,000 trucks and containers and more than 500 oceangoing ships into the United States, making it the crucial government agency for international commerce.
The September 11 terrorist attacks vividly demonstrated how certain industries rely on open borders to allow a regular, uninterrupted flow of goods from other countries. Several U.S. automobile production lines that keep small inventories of components on hand had to shut down when the closure of the border prevented just-in-time deliveries.
But turning Customs into a homeland security agency, as some business lobbyists see it, could lead government officials to neglect the agency's work in easing trade. Already, Customs has to balance its efforts to intercept narcotics and stop terrorism with the need to encourage smooth trade flows.
At the same time, business is leery about opposing Mr. Bush's plan outright, lest it be accused of putting financial interests ahead of measures aimed at preventing another terrorist attack, lobbyists said.
"You can be as patriotic as you want about this it's still going to get messy," said one lobbyist, who asked not to be identified.
Bill Reinsch, president of the National Foreign Trade Council, a business group, predicted that once the White House fleshes out the reorganization plan, some companies and business groups, as well as their allies in Congress, will try to alter Mr. Bush's proposal.
"We're going to see a lot more controversy on the details than we have so far," he said.
One option for assuaging business complaints about the reorganization would be to detach Customs' trade role from its duty to stop terrorists and drugs. But Rep. Ernest Istook, the Oklahoma Republican who heads the House Appropriations Treasury subcommittee, said the two functions are too closely intertwined to separate them.
Customs officers who move cargo, he pointed out, inspect the same shipments for contraband.
"You cannot split the border security from the trade mission," Mr. Istook said. "They have to be kept together."
Another priority will be preserving funding for the construction of a new computer system that will allow importers to pay duties and clear the border faster and more efficiently, said Mr. Istook, who added that he is withholding judgment on Mr. Bush's plan until he sees the details.
Creating the computer system, which has been under way for some time, is expected to cost $300 million this year and will be completed in four years, he said.
Importers hope the new system will eliminate many of the inefficiencies in customs procedures. For example, all cargo is subject to potentially time-consuming searches. But with the computer system, importers will be able to certify large amounts of cargo as having met U.S. regulations before it lands on American soil, allowing it to pass through much more quickly.
Dave McCurdy, president of the Electronic Industries Alliance, said his organization supports Mr. Bush's reorganization but cautioned that Customs will need adequate funding for the trade side of its mission for business to support the move.
"They should not simply shift the burden for trade facilitation onto the exporting community," Mr. McCurdy said. "We cannot turn the border into an expensive choke point."

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