COAC Trade Advisory Committee Keeps an Eye on the Future at D.C. Meeting
In the face of a rapidly changing trade environment, members of the Commercial Customs Operations Advisory Committee, known as COAC, moved full speed ahead with an eye on the future, when they met in Washington, D.C., on Wednesday, December 4. The meeting, which was held at the Ronald Reagan Building and International Trade Center, was co-chaired for the first time by U.S. Customs and Border Protection Deputy Commissioner Robert E. Perez, who acknowledged that 2019 was a challenging year.
“It has been uniquely challenging over the course of the last 12 to 16 months in many different ways,” said Perez. “But make no mistake, the expanding challenges and demands of the trade mission are a critical part of everything we do. While the humanitarian and national security crises along our Southwest border endure, we have not lost sight of the importance of economic security and our national security.”
Perez shared a quick snapshot of the abundant trade that flowed through the U.S. borders during fiscal year 2019. “We processed over $2.6 trillion—trillion with a “t” dollars in imports,” he said. “We screened and/or processed nearly 29 million cargo containers, which is a 3.4 percent increase from last year. And we collected nearly $81 billion in duties, taxes, and fees, all the while, still guarding against fraud, gross negligence, and our other enforcement activities of concern, whether that be theft of intellectual property or narcotics interdiction.” Perez added that CBP also collected nearly $19 billion of antidumping and countervailing duties during fiscal year 2019. “Again, all of this was done in the interest of protecting our stakeholders, protecting trade,” he said. “This continues to be a growing, ever-expanding, and ever-more complicated challenge for CBP, but I will tell you ever so respectfully and humbly, we are up to the task.”
Perez explained that CBP is able to find mutually beneficial solutions to the challenges it faces because of its partnership with the COAC and the industries the members represent “There is a lot on our collective plate right now, and all of us at CBP can’t thank you enough for the dialogue and all of the work that the subcommittees have engaged in with us and others,” said Perez. “We are unquestionably in a period of time, albeit challenging, that is wrought with opportunity. So I share with you all a sense of urgency to continue to get things done.
Speaking on behalf of the COAC, Lenny Feldman, a senior member of the Sandler, Travis & Rosenberg law firm and an advisory committee co-chair, agreed that this is a critical time to remain focused. “We’re up to 12 working groups right now. I think that shows the importance of these issues that are emerging, the changes that we’re facing. And we want to send a message to the trade community that we hear you. We are listening to you. We are trying to advocate for you and ensure that the government hears you as well,” said Feldman.
“We’re now dealing with what a lot of us in the trade community would call ‘the trade war crisis,’ continued Feldman. “We’re asking the government to see it in that lens. It’s a war, and with any war, we want to win it. The question is how do we address these issues so that we can win and still prosper here in the U.S.? “
The meeting, which also was co-chaired by Timothy Skud, the U.S. Department of Treasury’s deputy assistant secretary of tax, trade, and tariff policy, included updates on trade programs and COAC subcommittee work. One area that was discussed was establishing a Global Business Identifier, a modern identifier to help identify key entities within the supply chain. “We’ve been using a manufacturer’s identification number for almost two decades now and we’re looking to find a better, more reliable identifier,” said John Leonard, CBP’s executive director of trade, policy, and programs. “About two years ago, CBP really dove into the concept of the Global Business Identifier, and we knew that we had to get COAC’s close involvement to bring this into any kind of reality.”
A working group was formed to study the concept. “We gathered a lot of feedback, a lot of real-world reflection on what the trade community is seeing to understand how the new identifier could work,” said Leonard. “It’s something that we’re taking very seriously. It’s something we would eventually like to share with the World Customs Organization to see if we could get more worldwide acceptance of this.”
Finding ways for CBP to more effectively enforce export laws and regulations to facilitate trade and benefit the U.S. economy was another area of focus. An export modernization working group was formed in February 2019 to study CBP’s export strategy. “We brought this issue to the CBP Trade Symposium last July and had an open discussion with about 400 people who attended two breakout sessions,” said James Swanson, CBP’s director of cargo security and controls. “The biggest pain point that was identified repeatedly was what we call ‘a parking ticket type penalty,’” which costs more to collect than what it generates. “If we are going to do enforcement, we want to make sure that we are effective in our enforcement,” said Swanson, who explained that CBP has started to address the situation by writing some discretionary guidelines. “We’re also working with the Census Bureau and other agencies that issue these regulations to identify areas where we can have clearer guidelines and processes going forward,” he said. “If we can take out even one impediment to export, we can facilitate the process.”
Autonomous conveyances were also a discussion topic. “I work for a car company and I see all of the autonomous work that’s going on within our own organization,” said COAC member Heidi Bray, the manager of U.S. and global customs compliance for Fiat Chrysler Automobiles. As part of one of the newest COAC working groups, Bray and others started exploring the possibility of using different modes of autonomous vehicles such as drones, driverless trucks or captainless ships to increase efficiency in a trade environment. “We’ll do an analysis on the impacts, risks, and benefits of each of these vehicles as well as the timeliness of adaptation. How quickly will this come to market and what is actually the impact of the implementation of these different technologies in terms of entry and conveyance processes?” said COAC member Jody Swentik, the director of global logistics and trade compliance at Briggs & Stratton, a manufacturer of gasoline engines.
Dealing with the uncertainties of planning for the future was also part of the discussion. “The Next Generation and Facilitation Subcommittee is tasked along with CBP and other participating government agencies to understand what both the trade and government need to do to be successful in the future,” explained COAC member Cindy Allen, the vice president of regulatory affairs and compliance at FedEx Trade Networks. “What is the future of trade? What technology is needed? What policies are needed? What programs need to be established to effectively move CBP and trade forward in automating and transforming our processes?” Allen asked. “This is really a daunting task in the normal trade environment, and what we’re finding in this rapidly changing and challenging trade landscape is that it’s even more challenging for us to remain focused on the future.” Allen also noted that the government has had a tough situation too. “We want to commend CBP, the Department of Homeland Security, and the Department of the Treasury in continuing to look forward.”
A number of other issues were discussed including continuing education for customs brokers, emerging technologies such as blockchain, unified entry processing, e-commerce, CBP’s Trusted Trader program, in-bond, intellectual property rights, antidumping and countervailing duty enforcement, and forced labor.
At the meeting, 21 recommendations were presented and unanimously passed. Seventeen of the recommendations pertained to the Global Business Identifier. The remaining four focused on export modernization.
COAC is a 20-member advisory committee that was established by Congress in 1987. The committee provides advice and recommendations to CBP and the Department of the Treasury on the commercial operations of CBP and trade-related interdepartmental functions. Some of the issues that COAC focuses on include enhanced border and supply chain security, international efforts to harmonize customs practices and procedures, import safety, compliance, and modernization and automation processes used to facilitate trade.
Announcements were made regarding the next COAC meeting, which will be held on April 15, 2020, in Washington, D.C., and the next CBP Trade Symposium, scheduled for March 10-11, 2020 in Anaheim, California.
U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of our nation's borders at and between official ports of entry. CBP is charged with securing the borders of the United States while enforcing hundreds of laws and facilitating lawful trade and travel.