Business fights new rules for imports

Automakers say the rule could upset the delicate 'just in time' shipping of parts to arrive at auto factories as they are needed for vehicle production, which saves the companies the cost of stockpiling parts. They also could be required to declare their shipments up to five days in advance because of cumbersome reporting requirements. The automakers argue the rules would do little to make the country safer.

If finalized, the regulation could affect the Detroit Symphony Orchestra, Great Lakes shipping companies and others.

The government estimates the rules would apply to 11 million cargo containers shipped by 1,200 different carrier companies that make 50,000 trips annually.

In July, a coalition led by the National Association of Manufacturers sent a letter to Congress urging them to stop the new regulation, saying the proposal 'will cost U.S. companies over $20 billion annually -- costs that will be passed down to the consumer at a time when hardworking families can least afford it.'

The letter was signed by more than 40 trade associations, including the Alliance of Automobile Manufacturers and the Association of International Automobile Manufacturers -- the two main auto trade groups.

The alliance, which represents Detroit's Big Three, Toyota Motor Corp., Daimler AG and five other automakers, and the international association, which represents major foreign makers including Honda Motor Co. and Nissan Motor Co., sent a joint letter to the CBP urging officials to make changes to the regulations. They noted auto companies have 'spent millions of dollars in developing and implementing supply chain security.'

The automakers say the proposal would require 'the submission (and resubmission) of hundreds of millions of data elements at a tremendous cost to the government and trade community without offsetting benefits to security,' the joint letter said. The reality, the letter says, is 'that millions of containers enter the United States annually without causing any harm, but it would result in assigning excessive resources to low-risk threats at the expense of high-risk ones.'

CBP said its proposal 'is an incremental step' and that it 'will consider additional steps including expanding the advance data requirements for other transportation modes.'

Automakers, which import billions of dollars in vehicles and parts from oversees annually, and the Detroit Regional Chamber of Commerce, worry that the agency will use the proposed regulation as a template to create similar rules governing imports by land from Canada and Mexico.

'They want to do this on the land side,' Sarah Hubbard, vice president for government relations at the chamber said Tuesday. If this regulation were adopted to govern land shipment, 'it destroys any advantage related to manufacturing in Michigan,' she said. 'It's critical we talk to people right now.'

Late Tuesday, a CBP spokeswoman said the agency wouldn't seek to extend the rule to shipments by land, air or rail, though automakers and others still worry that the next administration could chose to extend it to land shipments.

'CBP is working with the trade community to facilitate trade while ensuring supply chain security requirements are met,' said Lynn Hollinger, a spokeswoman for U.S. Customs and Border Protection.

Automakers argue in their letter that 'there is a better way,' saying that CBP should focus 'on importers, exporters and countries that pose a risk.'

The Great Lakes Shipping Association also raised concerns about the proposal, noting that cargo delivered on the Great Lakes isn't typically in shipping containers, but rather bulk items like iron ore, coal and limestone for use in manufacturing in the Midwest. The same ships often export grains.

Freight often remains on board during some shipments and shipments on the Great Lakes operate 'under a number of exemptions,' Dennis Mahoney, president of the U.S. Great Lakes Shipping Association said on Tuesday. 'We have a far lower security risk. Our cargo is pretty obvious.'

Mahoney said the proposal 'is not the kiss of death for our industry but another burr under the saddle that makes trading that much more difficult.' Shippers agree that security standards are needed, but want to make sure they don't disrupt trading, he said.

When it proposed the new regulation, the government said it would cost businesses up to $690 million. It weighed the costs of a terrorist attack over the next 10 years against the yearly costs to businesses.

But automakers say that grossly underestimates the cost. The amount of information to be collected 'will require most importers to add several days of inventory, which will create significant additional costs,' the automaker associations said in their letter.

Catherine Robinson, associate director for trade policy at the National Association of Manufacturers, noted that the United States imported $1.6 trillion in goods in 2007, which accounted for 76 percent of U.S. imports.

Businesses that would be affected by the regulation have suggested starting with a pilot program, with a lead time of at least 14 months before any new requirements take effect. The 1,000-member League of American Orchestras, which includes two dozen Michigan orchestras, said its members on foreign tours could be classified as 'importers' under the regulation.

'For instance, in the case of an orchestra touring with musical instruments, it could be extremely difficult to identify the address of the manufacturer of historically significant objects,' if required by the regulation, said Jesse Rosen, the league's managing director.

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