CBP Hosts First Virtual Trade Week during COVID-19 Pandemic

“In the midst of this global pandemic and the vast challenges we’re all navigating, I really believe coming together in this way shows our collective commitment to continue our persistent, ongoing dialogue and candid discussions about the most pressing issues facing CBP and you, the trade community,” said CBP Acting Commissioner Mark A. Morgan in his welcoming address.

The four-day event, which featured speakers from CBP’s top brass as well as panel discussions on current trade topics, drew over 3,000 registered attendees, more than twice as many as would have been possible in a physical venue. The virtual approach also gave CBP and those attending a chance to share thoughts and have important conversations.

In his opening remarks, Morgan noted that the last time he had addressed the trade community at large was a year ago in Chicago at CBP’s Trade Symposium. At that time, he made a commitment that CBP’s guiding principles would be transparency, communication, and collaboration. “In my experience, over  decades of public service, improving and delivering effective transparency is an essential element in enhancing trust…and trust is essential to strengthening relationships and getting things done –for your business to thrive and our mission to succeed,” said Morgan, who shared several examples of how CBP had delivered on his commitment.

The first he mentioned pertained to the U.S.-Mexico-Canada Agreement. “CBP is working extremely hard to ensure that our partners in the trade community have the information and resources they need to comply with the new USMCA,” he said. “Earlier this year, CBP established the USMCA Center to create a ’one-stop shop’ for all of your questions about the agreement. To date, the center has hosted more than 50 free webinars to provide timely and up-to-date information to more than 4,200 customs brokers, trade attorneys, freight forwarders, and producers.” Morgan added that the USMCA Center also had created a website that included a “chatbot” to quickly answer questions about the trade agreement. “This is a momentous, trilateral trade pact, and it’s critical that we all stay on the same page.”

Following the acting commissioner’s remarks, a panel discussion was held on the USMCA agreement, which entered into force on July 1, 2020, replacing the North American Free Trade Agreement or NAFTA. The discussion ranged from the implementation and enforcement of the agreement to USMCA’s compliance requirements to insights on what the agreement means for the North American economy.

 “I want to stress how important USMCA or T-MEC, as we call it in Mexico, is for the economic recovery of Mexico and North America as a region,” said panelist Jorge Arturo Alvarez Tovar, the minister representative of Mexico’s Ministry of Finance for Tax and Customs Affairs in the U.S. “That is exactly the message that our president came to convey here in Washington, D.C., a couple of months ago when he met with President Trump. In fact, a week ago, during the President of Mexico’s  second address to the people, he said that USMCA or T-MEC can be the driver for productive activities for attracting investments for job creation and ultimately for more welfare. With that in mind, you can be sure that we, as customs authorities, are fully engaged and committed to a successful implementation of the agreement.”

Panelist Patrick J. Ottensmeyer, the president and CEO of the Kansas City Southern Railway Company, one of North America’s largest railroads, offered a business perspective. “I often get asked the question, ‘What is the most significant aspect of the new USMCA that relates to our company, our customers, and the communities and nations we serve,’” said Ottensmeyer. “The most important benefit of USMCA is its existence. The fact that we have this agreement and that it was approved with overwhelming bipartisan majorities in all three countries.”

Ottensmeyer also underscored the importance of keeping USMCA relevant. “We, as the business community, need to make sure that, unlike NAFTA, this agreement doesn’t get stale, that it doesn’t sit on a shelf for 25 years,” said Ottensmeyer, suggesting that a high-level economic dialogue be reestablished between the cabinet level of the administrations in all three countries and the private sector. “We want to make sure that we don’t allow this agreement to lose its relevance as the business world changes and things happen that none of us today will be able to predict,” he said.

In terms of moving forward, panelist Doug Band, the director general of trade and anti-dumping for the Canada Border Services Agency, shared his thoughts. “As with the pandemic, we are all in this together, so let’s roll up our sleeves and do the hard work of implementation,” said Band. “Implementation is never easy, but it’s where the gains really get leveraged and maximized. And that’s something we can only do together as customs agencies and industry.”

On the second day of Virtual Trade Week, attendees were greeted by Brenda Smith, the executive assistant commissioner of CBP’s Office of Trade. Smith spoke about the current operating environment and CBP’s vision for the next five years. “When I think about the current trade landscape, two characteristics come to mind—change and complexity,” said Smith. “In a global environment of rapidly advancing technology, changing economic relationships, and new business models, it is impossible to ignore just how dynamic the world of trade is.”

Smith explained that CBP’s vision for the future is to create processes that are more streamlined, secure, and digital from end to end. “Much of our vision resides in the 21st Century Customs Framework, which has been developed over the last 24 months from input from our stakeholders—internal, other government agencies, and across the trade community,” said Smith. “Our goal is to propose a legal and operational framework that will transform the trade landscape for a generation, embracing technology and a sophisticated understanding of risk, while including new actors and business models, and being flexible enough to accommodate future change.”

To be able to realize CBP’s vision, Smith noted that the agency recognized the need “to invest in our people. We have proposed a dedicated Trade and Cargo Academy at the Federal Law Enforcement Training Center in Charleston, South Carolina, to grow our trade personnel, keep them up to date on 21st century business practices, and to ensure that we are as expert as you are around the rules and tools with which we ‘do’ trade,” she said. “We hope that we can entice some of you to come and teach at our Academy or in our virtual classrooms.”

The agenda featured two other CBP officials who gave keynote remarks on the event’s subsequent days.  William Ferrara, a 31-year veteran who began his federal career with the U.S. Customs Service, was introduced as the new executive assistant commissioner of CBP’s Office of Field Operations.  CBP Deputy Commissioner Robert Perez spoke to the audience on the final day of the Virtual Trade Week, which culminated on the 19th anniversary of September 11. “When we reflect on the past 19 years, there’s no doubt that we’ve seen an incredible transformation in many aspects of global trade and in how we all work together,” said Perez. “A spirit of collaboration guides our ongoing efforts between government and industry—between CBP and all of you, our trade stakeholders.”

Among the various panel discussions presented throughout the week was a session on forced labor, which shared perspectives on the pervasive scale and scope of the highly complex issue, its indicators, practices, and ways to combat the crime. “Traffickers can be individuals, small groups, gangs, companies, recruitment agencies, employers in any industry, or they can even be governments,” said panelist John C. Richmond, the U.S. ambassador-at-large who oversees the State Department’s Office to Monitor and Combat Trafficking in Persons. “This year, the Trafficking in Persons Report identified 10 countries where the government itself was acting as the trafficker. Those governments include China, North Korea, Russia, and Cuba, where the governments were engaged in state sanctioned forced labor. This can affect global supply chains.”

Richmond also spoke about sanctions, trade checks, visa restrictions, and other methods the federal government uses to help businesses and governments identify and stop forced labor. “Everyone here understands Customs and Border Protection’s civil trade authority to detain and seize goods produced with forced labor at ports of entry,” said Richmond. “These withhold and release orders increase the risk for companies, forcing them to identify if there is forced labor in their supply chains.  We are very encouraged about the increased use of withhold release orders over the last several years and the leadership it represents.”

In addition to the withhold release orders, CBP recently imposed a $575,000 civil penalty on a company for importing Stevia sweetener products from China produced with prison labor. “This is the first penalty CBP issued for imports made with forced labor, but we hope it won’t be the last,” said panelist Sarah Bessell, the deputy director of the Human Trafficking Legal Center, a non-governmental organization dedicated to combatting forced labor worldwide. “You cannot hide behind your supply chains anymore. There is a duty to investigate, to ensure you are not bringing in goods made with forced labor into the United Sates because NGOs are doing investigations, and now CBP is investigating as well.”

Panelist Brian White, the director of global compliance, trade, and responsible sourcing for the J.M. Smucker Company, spoke on behalf of industry. “The trade community is committed to eliminating forced labor in supply chains. It acknowledges our collective responsibility to ensure our supply chains and our business partners are free from any form of human rights abuses,” said White. “Forced labor is a crime and most manifestations of forced labor are at the hands of criminals,” he said. “This is a humanitarian issue.  We are talking about people in supply chains and their livelihoods in the communities where they’re living. These enforcement actions are raising awareness to the seriousness and the scale of human rights abuses that are occurring throughout the world.”

Other panel discussions focused on CBP’s 21st Century Customs Framework, the Customs Trade Partnership Against Terrorism, CTPAT, supply chain security program, and E-Commerce, which had an explosive growth over the last few months.

“The COVID-19 pandemic has propelled e-commerce into the future. We are now three to five years ahead of where we thought we would be as a result of COVID-19,” said Thomas Overacker, the executive director of CBP’s Cargo and Conveyance Security Division, who moderated the E-Commerce panel.

Overacker shared a number of startling statistics. “Last month, the Census Bureau announced that the estimate of U.S. retailer e-commerce sales for the second quarter of 2020 was $211.5 billion. That was an increase of 31.8 percent from the first quarter, and a whopping 44.5 percent from the same quarter last year,” said Overacker. “The Census Bureau also reported what they call the ‘penetration level’ of e-commerce, which they estimate is now 20.8 percent. What does that mean?” he asked. “That means that today one out of every five dollars spent is spent online.”

Cross-border e-commerce shipments are typically small packages, Overacker explained. “We see those in the express environment, the air cargo environment, the truck environment, and even in international mail. That is the sort of revolution that we are trying to grapple with,” he said. “What we are seeing now in e-commerce is the biggest change in shipping that we have ever seen since the development of the intermodal container in the 1950s. So what does this mean for us here at CBP?” asked Overacker. “It means we have to be agile. We have to be able to adapt to this constant change. And we have to be able to adapt to this accelerated growth.  As an agency, we have to position ourselves for where we are going next and what the future will be. We have to be on the side of the curve where we are the innovators and the creators, the people who are leaning forward as we go into this brave new world of e-commerce.”