Building Barriers

New trade security measures initiatied by the US, which come into effect tomorrow, are sending ripples of concern  throughout the local manufacturing sector.

Importers and exporters from around the world, including those in Trinidad and Tobago and the Caribbean, doing business with the US who don’t comply with these new laws will find themselves being heavily fined or worse yet, being banned from doing business. “The new US emphasis is on enhancing border security and to ensure that people and goods destined for the US are properly screened,” said Professor Anthony Bryan, Director, Caribbean Studies Programme at the University of Miami.

Two days after the terrorist events in September 2001, a tanker loaded with LNG from Trinidad was denied entry into the port of Boston because city officials feared it could be a floating bomb if attacked by terrorists. Boston authorities even threatened to sue the US coast guard if it permitted the entry of the tanker into its port. According to Bryan, a professor of International relations, the lesson is that terrorism is a transnational challenge for those who are simply trying to export their goods and to move people as efficiently as possible. In 2001, some US$1.35 trillion in imports and US$1 trillion in exports were processed in the US.

In 2000, 489 million people, 127 million cars, 11.6 million maritime containers, 11.5 million trucks, 2.2 million railroad cars, 829,000 planes, and 211,000 boats passed through US border inspection systems by air, land and sea. To combat “bio-terrorism,” the US Food and Drug Administration has proposed the most sweeping overhaul of rules on food trade in US history including registry of all US and overseas facilities that process food for US sale. For companies that import or export goods, new security rules range from background checks on employees at ports to more inspections of cargo and even notification on details of all goods bound for the United States at least 24 hours before shipments leave foreign ports.

The new system will start on December 12. The legislation will impact on Caribbean exporters who trade in fresh vegetables, fruits and seafood. It requires exporters of fresh and processed foods to provide the US FDA the identities of all truckers, sidemen, packers, freight forwarders and agents accepting goods on behalf of shippers to be named in declarations within 24 hours of the movement of the goods. The new US Maritime Transportation Anti-terrorism Act also requires assessments in ports of all countries doing business with the US. This Act gives the US Coast Guard the right to deny entry to any ship that does not meet security standards or arrives from a port lacking adequate anti-terrorism procedures. “Compliance costs already are adding up for companies both in the US and elsewhere,” said Professor Bryan, one of the principals of a three-year major research project on “Adapting Border Controls to Support Caribbean Trade and Development” funded by the US-based John D and Catherine T MacArthur Foundation.

“In the two years since September 11, 2001, international businesses have faced a barrage of new security rules that have increased paperwork, lead-times and costs. “The US government in some cases has not fully funded its new mandates or worked out all the details, further boosting headaches for executives,” Professor Bryan told BusinessDay. “US and Caribbean freight carriers and manufacturers have already complained that the new transportation-security rules intended to help defend the nation’s borders against terrorist activities, threaten to slow the movement of cargo and disrupt the supply chains of businesses that rely on just-in-time delivery.” And more rules are coming. By July 2004 countries around the world must comply with another international procedure, known as the ISPS (International Ship and Port Facility Security) Code.

Among its objectives are enabling the detection and deterrence of security threats within an international framework, establishing roles and responsibilities, enabling collection and exchange of security information, providing a methodology for assessing security and ensuring that adequate security measures are in place. It also requires ship and port facility workers to gather and assess information, maintain communication protocols, restrict access, prevent the introduction of unauthorised weapons, provide the means to raise alarms, put in place vessel and port security plans and ensure training and drills are conducted. It stipulates a certain level of compliance to be in place by July 31, 2004, based on assessments by independent assessors. It recommends the implementation of mandatory technology for meeting its objectives.

In an effort to gain certification under the new ISPS CODE, Caribbean ports including Bridgetown, Port-of-Spain, Point Lisas, Kingston have undertaken “Port Facility Security Assessments,” whereby their ports are reviewed by US maritime officlals. “It is the most draconian of the measures and without compliance some countries could find that their trade will not be allowed to move to its destination,” said Professor Bryan. According to Bryan, the standing operating procedures for international sea-borne trade have changed forever. Looking at the status of Caribbean countries, he said the vast majority are out of alignment with the new procedures with the exception of Jamaica that has moved very swiftly to comply with most procedures. “For the other Caribbean countries, we risk marginalisation if we do not act quickly and in concert with each other. Regional port security is now a critical element in the design of our strategic options for the future,” he said. Jamaica is moving swiftly to implement new border control technology in early 2004 at its airports and seaports to track persons who entered and exited the country, as well as to ward off unwelcome visitors.

Jamaica’s Minister of National Security, Dr Peter Phillips said in addition his Government was in the process of installing additional x-ray machines at the ports of entry to enhance the detection of illegal drugs and guns and other contraband. Jamaica and Trinidad and Tobago because of their geographical location, are prime transshipment points for drugs — mainly cocaine — from countries in South America to destinations in North America. Estimates are that approximately 20 percent of the drugs produced by these countries pass through Jamaica, bringing illegal guns and other contraband. So lucrative is the drug trade that the street value of cocaine passing through Jamaica’s borders is said to exceed the value of the main revenue earning sectors of bauxite and tourism. Dr Phillips said government has been putting measures in place to reduce the cross border criminal activities, including utilising detection technology, building intelligence capabilities and international collaborations and implementing legislation to take the profit out of crime.

A conference on border controls in Port-of-Spain a year ago concluded that Government needs to reform the port and border control systems to bolster security without compromising the cross-border movement of people and goods, and that the issue should be placed at the top of its agenda. “The findings of this report suggest that while there is much to be done, Trinidad and Tobago has the potential to lead the Caribbean Community in building a system of security into the regional trade and travel lanes that sustain the countries and connect their people and economies with the rest of the world,” according to the recently published executive summary of the conference. “Mustering the political will to move beyond the status quo promises to bolster Trinidad and Tobago’s already enviable economic position in the region.” But the report also warned that Trinidad and Tobago runs the risk of being pushed to the margins of a global economy that seeks further integration and greater security. Government was urged to boldly commit itself to reform its existing management systems to create a smarter, leaner, more agile way of doing business that includes a high level of transparency, greater accountability and information-sharing, increased use of technology and greater public-private sector cooperation. Only time will tell whether the warnings and advice were heeded.