The U.S. Customs Service, under fire from the trade and transport community along the northern and southern borders, is backing away from a controversial proposal that would allow the diversion of certain freight through specific border crossings.

In January, the agency issued a notice of proposed rule-making that would have given Customs officials at the border with Canada or Mexico the discretionary right to funnel specific cargo to designated crossings.But after a stormy reaction for Canadian, Mexican and U.S. trade and transport groups, and complaints from governments, Customs is now saying that it is willing to revisit the proposal.

''Customs has not really backed off on the notice to make the change . . . Because there seems to be concern from the trade community, we are willing to hear what concerns the trade community has,'' said James Hynes, a program officer in Customs' anti-smuggling division, echoing the comments made to industry by senior officials in the agency.

However, a notice of proposed rule-making, or NPRM, is in fact a notice to discuss matters because it seeks industry written comment on contemplated changes. Customs agreeing to sit down and talk with the industry suggests that at minimum, the agency may be planning to scrap the current proposal and craft a new notice.

''They issued the NPRM, they got an enormous amount of negative feedback, so they are exploring other options,'' said Linda Bauer-Darr, vice president of international affairs for the American Trucking Associations, which is part of the trinational North American Transportation Alliance that has strongly opposed the proposed change.

Transporters in the three North American Free Trade Agreement countries, as well as the trade advocacy group Border Trade Alliance, have been upset about the lack of detail in the Customs proposal.

''A lot of what we were objecting to were the unknowns. How much advance notice is there, what is a good cause basis, how much time will they allow for notification of the trade community, what's the extent to which they will notify the trade community?'' said Ms. Bauer-Darr.


While trade and transport groups fear the changes could jeopardize investments made in warehouses, distribution centers, terminals and other infrastructure at border ports along the northern and southern frontier, Customs insists it is simply attempting to make the best use of its resources.

''We're not really backing away from the issue, but we're willing to hear what the other side has to say. We realize what we do has ramifications, but there are reasons for safety and enforcement,'' said Mr. Hynes. ''We're not in the business of closing people down.''


Opponents of the proposed rule also view the Customs plan as covering tracks. Customs already has taken actions to divert cargo. For example, the agency has ordered frozen strawberries that had moved through Rio Grande City, Texas, to move to the Pharr Bridge, where it has better inspection facilities.

The most high-profile diversion move came in 1996 at the busiest border crossing for long-haul trucking to and from Mexico. The agency determined that hazardous materials should not move across the downtown bridge in Laredo, and instead should go through the Colombia-Solidarity International Bridge west of town, where there are containment facilities in the event of a spill.

However, the move infuriated local transfer companies, which accuse the agency of taking away business because they now have to add more than 30 miles to their cross-border transfer.


In Canada, some have voiced concerns that the discretion for cargo diversion could be used to put that country's trade and transport community at a disadvantage to U.S. competitors in the important business of hauling auto parts and other high-volume goods.

There was no fixed date for when Customs would meet with concerned industry groups. Ms. Bauer-Darr hoped the agency would meet with trucking associations from the three countries at a early April meeting in Toronto.