A good use of money

A good use of money

Robert C. Bonner probably wishes he could wave a magic wand and produce airtight supply-chain security while maintaining the smooth flow of trade. But the commissioner of Customs and Border Protection is a realist. He knows it's not that simple.

Since the Sept. 11 attacks, Customs has taken what Bonner describes as a "layered" approach. Its elements are the Customs-Trade Partnership Against Terrorism, which enlists private-sector cooperation; the Container Security Initiative, allowing overseas screening of containers; the 24-hour rule and regulations under the Trade Act of 2002 that require advance filing of cargo manifests; the Automated Targeting System for evaluating cargo risks; and the development of smart-box technology for containers.

C-TPAT, the subject of this week's cover story by Bob Edmonson, offers faster cargo clearance to companies that comply with supply-chain security standards. With more than 9,000 participating companies, the program allows Customs to use private-sector supply chains to extend the agency's reach beyond U.S. jurisdiction. C-TPAT isn't perfect but it's a start.

Because the United States is the preferred target of al Qaeda, this country has no choice but to lead the efforts to secure international shipments from terrorists. Other governments also have a stake. That's why Bonner has called for the international customs and trade community to adopt common principles and standards.

After three years of work, the World Customs Organization has developed a proposed "framework" of universal standards for customs agencies to apply to supply-chain security. The WCO foresees stronger ties among national customs agencies, and between the customs agencies and businesses. The WCO's 164 members will vote on the framework later this month.

That may be only half the battle. Even if the WCO members have the will to endorse the global standards, many nations lack the capacity to fully implement them. In dozens of countries, paper customs documents are still the norm. And many developing nations still rely on customs revenue as a main source of government funding, much as the United States did during its first century of existence.

Bringing all nations into the security loop will encourage trade as well as peace. However, most of the money to build capacity for supply-chain security will have to come from richer nations.

The United States and the European Union have programs that could help. Another potential source is the World Bank. In recent years, the bank has assisted several countries with customs reform and trade facilitation. The most notable example is Russia, which two years ago launched an overhaul of its corrupt, inefficient customs system with help from a $140 million loan from the bank.

Former Deputy Defense Secretary Paul Wolfowitz is the new head of the World Bank. If he's ready to strike a real blow on terrorism, now is his chance.

Joseph Bonney is editor of The Journal of Commerce. He can be contacted at (973) 848-7139, or at jbonney@joc.com.