New Cargo Screening Requirement Could Import High Costs To Fashion And Apparel Industry
Congress gave final approval to legislation that requires stricter screening of sea cargo containers bound for the U.S. at foreign ports. The bill will implement many of the recommendations of the 9/11 Commission to strengthen national security and help to prevent terrorist attacks (click here for full text of this bill). The bill has been opposed by large U.S. importers, the U.S. Chamber of Commerce and the American Apparel and Footwear Association, which pointed out that the cargo screening requirement will do little to increase security, is impractical and could have negative impacts on global trade and the U.S. economy.
The new legislation mandates foreign port authorities to inspect all U.S.-bound cargo containers for nuclear devices by radiation detectors and X-ray machines before loading. The bill sets deadlines for small and large ports to be in compliance with the new regulation. Specifically, the bill includes a phased-in application of the radiation scanning technology at large foreign ports within three years and at small foreign ports within five years. The Department of Homeland Security is authorized to extend the deadline for two years at a time, if a port has difficulty complying because the port does not have room to install the equipment.
Supporters argue that the measure was important to prevent the catastrophe of a ship entering a U.S. port with a nuclear device. Speaker of the House Nancy Pelosi pointed out that implementing the recommendations will make the U.S. more unified and effective because “the bill closes loopholes and weakens terrorists seeking to exploit and leave Americans vulnerable”.
However, retailers and vendors in the fashion and apparel industry, who imported $89.5 billion worth of apparel and textiles last year, strongly opposed the one hundred percent scanning requirement. They argue that one hundred percent scanning is probably not feasible from a technological point of view. Therefore, the impact on the flow of commerce could be enormous for retailers and vendors as even the slightest delay in clearing customs in a foreign or U.S. port could interrupt the entire supply chain. Consequently, the bill could result in lower profits and higher transportation cost for U.S. importers in the fashion and apparel industry. Furthermore, opponents say that the current bill does not explain how the screening will be done, who will pay for the necessary equipment and what kind of data will be collected. Further complicating matters, it might be difficult to make foreign governments comply with the scanning requirements and doing so could cause trading partners to impose similar requirements on U.S. exports. Fashion and apparel industry representatives supported an alternative model, that would require increased inspection of cargo only at high-risk foreign ports.
Even though the bill provides for flexibility in delaying the implementation of the screening requirement in certain cases, Stephen Lamar, executive vice president of the American Apparel and Footwear Association, concluded that the bill “still creates a hard date” for compliance at foreign ports which could result in a “big dose of uncertainty” for the fashion industry.
