Remarks by R. Gil Kerlikowske at Council of the Americas: Transforming Trade Enforcement in the Americas

• Thank you, Chairman Negroponte, for your gracious introduction. Your leadership and vision have been extraordinary throughout your career in both the public and private sectors. Congressman Cuellar, Congressman O’Rourke, and distinguished Council members and guests—Good morning.  It is an honor to be here with you today.
• The Council of Americas’ work is critical to our region. Your ardent support of free trade agreements was instrumental in the conception of NAFTA, and CAFTA—both of which have helped the Americas achieve economic growth and prosperity.
• Even though I’ll be focusing today on our trade transformation efforts, I wanted to take a moment to say how interesting it has been for me during these past 8 months at U.S. Customs and Border Protection, dealing with the diverse set of challenges that we face. Among the most visible are the unaccompanied children at our Southwest border, the transparency of the agency’s use-of-force policies, and our recent public health efforts to safeguard travelers from the Ebola virus.
• CBP’s mission is vast, and although my background is in law enforcement, I have focused on our work with the trade community, and implementing a trade transformation strategy based on partnership, predictability, and prosperity. These three concepts are the heart of CBP’s vision for the future.

Growth Since NAFTA

• It has been 20 years since the North American Free Trade Agreement was signed to reduce trading costs, increase business investment, and increase North America’s competitiveness in the global marketplace.
• Twenty years later, the numbers tell a story of success. Since NAFTA was implemented, Canada’s exports have increased by 170 percent. U.S. exports to Mexico and Canada have grown by nearly 160 percent, and Mexico’s exports to the U.S. and Canada have grown by 390 percent and 240 percent, respectively.
• Trade in our Hemisphere is at least 265 percent larger than it was 20 years ago, and it is now worth more than one trillion dollars a year.
• Customs cooperation and border management have been pivotal to the success of NAFTA and the economies of our nations. Harmonizing our targeting, managing lanes, and initiating trusted trader and traveler programs have ensured that people and goods flow more efficiently and securely across our shared borders.

CBP’s Vision for the Future

• In fiscal year 2014, CBP cleared $2.5 trillion in imports and $1.6 trillion in exports. Of that, the U.S. imported more than $760 billion in merchandise from our entire region, including South and Central America, and exported $208 billion in return.
• Equally important to our mission is making sure that these goods are safe, and that we are protecting the public from harm.
• Over the last few years, CBP’s programs have focused on creating a whole of government approach. An approach that is more simplified, more harmonized, more electronic in nature so that we can build a more efficient, more affordable, and safer supply chain.
• When we started our transformation efforts nearly 4 years ago, our goal was to make certain that our initiatives were transparent, and that we were making our processes clear and predictable for businesses.
• We have formed partnerships with the private sector, bringing industry to the table before creating new policies or programs, so that we can better understand the impact on their business.

Single Window Implementation

• The most important element of our trade vision is having a consistent, One U.S. Government approach to our country’s imports and exports. Nearly 50 U.S. federal agencies have equities in our trade process, with hundreds of paper forms required to import and export goods.  
• Through the Automated Commercial Environment, or ACE, CBP’s cargo processing system, we are transforming this process so that it is more efficient, reduces costs, and increases predictability.
• In February, President Obama bolstered this automation effort by issuing an Executive Order to streamline the U.S. import/export process—creating a “Single Window” for businesses to electronically transmit data required by the U.S. government to ship cargo.
• When the process is fully implemented, there will be one common set of data elements used by the entire U.S. government for any import or export transaction—dramatically streamlining the process for importers and exporters.
• This will not only speed up the process for companies when they submit their information, but through the Single Window technology, all of the federal government agencies will be able to simultaneously review the submission and give a quicker response.
• ACE will be fully implemented by December 2016, but on November 1, 2015, it will become mandatory for importers to file their entries and entry summaries in ACE.

International Partnerships

• And as CBP continues to work domestically on these efforts, we are acutely aware that the United States’ economic competitiveness depends on international partnerships.
• Initiatives like the Single Window need to be harmonized throughout the region. Mexico already has a viable, active Single Window, which has saved the country an incredible amount of money. Canada is currently developing its Single Window, as are others. This is why we are looking at an interoperability model that will be compatible among all countries in our region, and with the world, simplifying this process for companies doing business on a global scale.

Centers of Excellence and Expertise

• As an agency, we understand the importance of having consistency at America’s 328 ports of entry. And we’re making great strides through another of our trade transformation initiatives—the Centers of Excellence and Expertise.
• All 10 existing Centers allow companies that participate in our trusted trader programs to have one central point of contact for all of their customs inquiries. Previously, as many of you know, a company could be importing goods at 50 or more ports, and if there was an issue at one of those ports, the only way to resolve the issue was by reaching out to the individual port to try to find a contact. It took time and it could take a lot of money.
• But now, our trusted partners have a central point of contact for their entry file processing, allowing importers to rely on quicker reviews.
• In the coming months, three centers—1) Electronics; 2) Pharmaceuticals, Health and Chemicals; and 3) Petroleum, Natural Gas, and Minerals—will be assuming trade processing for all transactions associated with their respective industries. 
• Once we are satisfied that these three Centers are running smoothly, we’ll bring all the other Centers to full operational capacity.

Mexico—“21^st Century Border Management Initiative”

• Now, let’s focus on Mexico, our neighbor to the south.  Last summer, I was in Mexico City to participate in a joint roundtable discussion with Mexico’s head of customs and some of the country’s industry leaders who represent roughly 95 percent of Mexico’s exports.  We agreed to continue CBP’s outreach to Mexican industry and to continue discussing ways of working more closely with Mexico customs to harmonize trade.
• Mexico has made some significant structural changes in their economy recently and we are looking forward to working with the government of Mexico and the Mexico trade community as they implement the significant changes brought about by the passage of new tax and customs legislation last December.  
• We’ve worked closely with Mexico on these issues for a number of years.  In 2010, the U.S. and Mexico issued a Joint Declaration on 21^st Century Border Management, which acknowledged a shared interest in promoting economic competitiveness and enhanced security. Again, this is a very comprehensive plan, so I will touch on only a few accomplishments. 
• Infrastructure: We have several projects underway to modernize the infrastructure at and between our ports of entry. These include the modernization of the San Ysidro-El Chaparral port, the world’s busiest crossing, which connects San Diego and Tijuana, Mexico. At Nogales-Mariposa port of entry, where more than half of the Mexican winter produce enters the U.S., four new lanes have doubled the port’s cargo capacity. And at the nearby Tijuana Airport, we are working on a reimbursable project to expand the terminal facility.
• Enforcement and Security Cooperation: Another key focus is law enforcement cooperation and security along the U.S.-Mexico border. We have enhanced communication, expanded coordinated patrols, developed border violence prevention protocols, and established binational port operating committees that address security issues at the local level.
• MRA Signing: In October, the U.S. and Mexico signed a mutual recognition arrangement between C-TPAT and NEEC {Neck}, Mexico’s supply chain security program. This represents one of the largest mutual recognition arrangements in the world between two border countries, which are among the top 5 economies globally. The MRA will be fully implemented in 2015, and allows for reciprocity between the U.S. and Mexico, as C-TPAT members and NEEC members will receive incentives and benefits from both programs.
• The United States has signed 9 mutual recognition arrangements with Canada, New Zealand, Jordan, Japan, South Korea, the European Union, Taiwan, Israel—and now Mexico.
• Mexican Trusted Traveler Program: In 2013, Mexico implemented its own trusted traveler program, which speeds processing for previously authorized travelers at designated Mexican airports. This program, in conjunction with our SENTRI and Global Entry trusted traveler programs, allows law enforcement to expedite legitimate travelers while concentrating resources on potential threats.

More Projects / North American Leaders Summit

• Additionally, we’ve been working on projects that focus on wait-time measurements, and border planning efforts with the U.S. Department of Transportation, and the active management of Ready Lane installations. And we are continuing to work with Mexico on developing new initiatives, especially in light of the high-level economic dialogue that took place at the North American Leaders Summit in Mexico last February. President Obama met with his two North American counterparts and discussed economic competitiveness, security, and job creation at these trilateral talks.

Our Work with Canada – “Beyond the Border Action Plan”

• I’d like to focus on our partnerships with Canada and Mexico—partnerships that are stronger than even before.
• As most of you know, we have been working diligently on the Beyond the Border Action Plan since 2012. Beyond the Border is a tremendous commitment by the U.S. and Canadian governments to expedite trade and travel to make our border more seamless.
• Our shared border hosts more than 100 ports of entry—where efficient movement of people and goods is crucial to the daily lives of our citizens, the health of our communities, and the competitiveness of our economies.
• Beyond the Border also allows our officers, both U.S. and Canadian, to better share information to focus on those who intend us harm.
• We’re making significant progress under Beyond the Border, but I just want to mention a few of the most significant accomplishments we’ve achieved with our Canadian partners:
• Privacy Principles: We jointly developed a Statement of Privacy Principles, which reflect the countries’ commitment to protecting each other’s privacy while underscoring the importance of information sharing for the security of both nations.
• Entry/Exit Programs: We’ve also had success with our trusted traveler entry-exit programs—NEXUS and Global Entry.  I am delighted to be able to say that we have reached a milestone with NEXUS, with now over a million travelers between Canada and the U.S. who have signed on with NEXUS.
• C-TPAT and PIP:  Our supply chain security programs, “Customs-Trade Partnership Against Terrorism,” or C-TPAT, and “Partners in Protection,” or PIP, are harmonized to the fullest extent possible. Our programs both include advanced manifest, risk-based targeting, inspection processes, joint onsite visits, and a single application for both programs.
• Integrated Cargo Strategy: We have also developed an integrated cargo security strategy to mitigate security risks when cargo first lands in either the U.S. or Canada, regardless of its final destination. To accomplish this goal, we harmonized a set of security screening data elements. And this was no small feat. We started the project with 1300 data elements and whittled it down to about 70.
• Cargo Pre-inspection Pilots: And we have our cargo pre-inspection pilots. We started the first phase of the pilot near Seattle and the second phase is taking place in Buffalo. With these pilots, we are testing the waters to see if CBP officers can operate with U.S. authorities on Canadian soil to pre-inspect cargo.
• The good news is we are learning from this experience. For example, in Buffalo, we found that some of the delays are caused by handling cash fees. In response, we’re looking to automate that process—not just in Buffalo, but at all of our land ports of entry.
• Preclearance Agreements:  And finally, we are actively negotiating preclearance agreements with Canada for land, rail, marine, and air and we’re very anxious to finalize those.

Conclusion / Next Steps

• As we continue to modernize our trade processes, we are constantly engaging industry. We consult industry through our COAC trade advisory committee, through working groups, and we are constantly asking industry to help us engage with other government agencies so that we can really facilitate the One U.S. Government approach for the import/export process.
• It is also important for us to participate in events like this where we can engage with all of you who have an impact on trade facilitation. Later today, members of my team will be participating on two panels that will cover various trade issues. We look forward to sharing more with you about where we are going and what we are doing. We also look forward to hearing your input. It is through this kind of dialogue that our region will remain economically strong. Thank you.