In an ideal world, trade compliance programs would help ensure that importers and exporters continue to clear their goods securely, efficiently and legally. But we do not live in an ideal world, and the current financial crisis will challenge companies’ commitment to trade compliance like never before. This year is the first extended economic downturn since trade compliance became a defining feature of good corporate governance.
Compliance and security programs are not exempt from corporate cost-cutting, so trade professionals can expect to do much more with less, despite a slew of new government requirements, such as the Consumer Product Safety Improvement Act, the Lacey Act and 10+2.
Even voluntary programs, such as C-TPAT and the Importer Self-Assessment program (which enable companies to manage their annual compliance costs) are “multiyear sustaining programs” that require constant maintenance and enhancement. In this regard, small and medium-sized enterprises will find 2009 to be an exceptionally difficult year.
While the economy may continue to deteriorate throughout 2009, it is not clear what shifts will occur in U.S. trade policy as the Obama administration takes shape. The prospects for completing free-trade agreements negotiated by the Bush administration, the Doha Round and other trade liberalization initiatives stand in stark contrast to the protectionist pressures we face and the continued calls for Congress to enact additional product safety laws and regulations.
After 9/11, the trade community responded proactively by working with the government to address security threats to the supply chain. Despite rather daunting odds, industry and the U.S. government were able to keep the global trading system relatively fluid and open. Now the trade community again must band together and demonstrate its leadership and partnership skills to work with our policymakers to maintain free trade and arrive at sensible and affordable solutions to these new regulatory burdens.