Border protection: A lot more than a wall is already in place to protect steel trade

Donald Trump promises to build a wall along the Mexican border, but what about other ports of entry to the US market?

To listen to R. Gil Kerlikowske, Commissioner, US Customs and Border Protection (CBP), is to learn that there is so much more beyond illegal immigration when it comes to border protection — especially when it comes to keeping illegally traded goods and commodities out of the US.

Much like people looking to enter the country unlawfully, illegally exported products can evade border agents through a variety of disguises, tricks and fraud — such as transshipment, or deliberately misclassifying points of origin — in an effort to circumvent trade barriers.

Earlier this week Commissioner Kerlikowske addressed the annual meetings of the American Iron and Steel Institute and Metals Service Center Institute in Salt Lake City. His topic: “Protecting Our Borders, Protecting Our Industry.”

He noted that each year, CBP manages more than 300,000 active importers-of-record, accounting for 33 million commercial transactions. “In 2015, CBP processed more $2.4 trillion of imports, and more than $1.5 trillion worth of US exported goods,” Kerlikowske said. “We also collected approximately $46 billion in duties, taxes, and other fees — the highest amount collected in the past five years.”

The domestic steel industry is responsible for a fair share of that collection amount — having aggressively pursued antidumping and countervailing duty remedies in recent years. According to Kerlikowske, there are “approximately 270 AD/CVD orders on steel, alloy and other metal products — 150 on steel products alone.”

Critical to the CBP effort is enforcing US trade laws, and its enforcement posture has three prongs: detecting high-risk activity, deterring non-compliance and disrupting fraudulent behavior.

“To effectively carry out that mission, CBP coordinates with US industry, 47 interagency partners, and foreign governments,” Kerlikowske said, explaining that such collaboration enables CBP to detect anomalies, trends, and violations in the global supply chain, target high-risk trade, and promote compliance with US laws and regulations.

“Global overcapacity in steel and aluminum production is generating significant problems for economies worldwide — but particularly here at home,” Kerlikowske said. He added: “President Obama and his entire administration share your concerns about unfair, unequal competition from foreign imports.”

CBP cites its core statutory responsibility to detect and deter the circumvention of AD/CVD laws and to collect all revenue owed to the US government generated by these imports.

“The scope and importance of this mission are immense, which is why I am proud to announce the creation of a Trade Enforcement Task Force within CBP’s Office of Trade to focus on AD/CVD evasion, along with other core priorities like interdiction of products manufactured using forced, convict or child labor,”  Kerlikowske told the steel/metals audience.

In 2015, CBP, in coordination with other agencies, seized over $900,000 worth of steel and assessed $46 million in penalties for violations of AD/CVD orders on steel products. Just this past January, examinations by CBP port personnel resulted in the identification of more than $9 million in AD/CVD violations on steel plate imports.

“CBP is constantly enhancing AD/CVD detection and enforcement protocols, improving our targeting and analysis, and employing all available authorities to disrupt increasingly complex evasion,” Kerlikowske emphasized.

He said CBP is also increasing reviews of Chinese steel imports, and using statistical modeling to better identify and predict high risk steel shipments.

“CBP has also implemented 'live entry' on certain shipments of steel plate from China, which requires that all entry documents and duties be provided before CBP releases cargo into US commerce,” Kerlikowske said.

The commissioner pointed out that steel industry-championed Trade Facilitation and Trade Enforcement Act, which includes provisions from the Enforcing Orders and Reducing Circumvention and Evasion (ENFORCE) Act, was signed by President Obama in February.

“This law underscores CBP’s commitment to effectively enforcing US trade laws — including AD/CVD evasion, Intellectual Property Rights (IPR) protection, and imports of forced labor-derived goods,” he said.

Beyond authorizing CBP for the first time since the agency’s creation in 2003, the law provides an array of new enforcement tools and reporting mechanisms to bolster CBP’s efforts.

First, it creates a new Trade Remedy division within the CBP Office of International Trade. Second, it mandates timelines for finalizing determinations of evasion, and makes these determinations reviewable by the Court of International Trade. And third, it requires CBP to share enforcement information with “interested parties” who submit allegations of evasion.