What CBP Is
I'd like to start today by telling you a little bit about this new agency, U.S. Customs and Border Protection, which has been up and running as part of the new Department of Homeland Security for about four and a half months, for 138 days, but who's counting?

Customs and Border Protection is the largest and most profound actual merger of personnel and functions taking place within the Department of Homeland Security. Some agencies in the new Department were transferred intact, such as the Coast Guard, TSA and the Secret Service. Other parts of the Department are start-ups, such as IAIP and Science & Technology. But Customs and Border Protection (CBP) -- is an actual merger.

Because to create CBP, we took almost all of U.S. Customs and merged with it all of the immigration inspectors from the former INS, the agriculture border inspectors from the Department of Agriculture's APHIS, and the entire Border Patrol. The total number of employees in the Customs and Border Protection agency is approximately 40,000.

But it's not just the size of the merger that makes the creation of CBP profound. This merger is historic, because for the first time in our country's history, all agencies of the United States Government with significant border responsibilities have been unified into one agency of our government, one agency to manage and secure our borders.

This is a good government reform that has been advocated by seven independent studies since the Nixon Administration. I was discussing this with someone not long after 9-11, and he said to me, "Well, if there were seven studies saying it should be done and it wasn't done, it must not have been a good idea." And I said to him, "How long have you been in Washington?"

I can assure you -- it was and is a good idea. One of the best ideas of the President's reorganization of government. But unfortunately the reorganization of our border agencies into one agency was not possible without 9-11, the worst terrorist attack anywhere in the history of the world. And it was not possible without creating a new Department of government. Before 9-11, the debate was: would the border agency be in Justice or in Treasury? Which congressional committees would lose power and jurisdiction?

Before March 1 of this year, before the reorganization, our border agencies were fragmented into 4 different agencies in 3 different departments of government. This fragmentation was not just terribly inefficient; it made America more vulnerable to the threat of international terrorism.

Now, we are one agency, within one department. And, as U.S. Customs and Border Protection, we are creating, as Secretary Ridge has called it, "One Face at the Border," by forming one agency for our nation's borders.

And we are making America safer!

What CBP Does
What does this unified border agency do? All people, vehicles, cargo, luggage, mail, and air express parcels, indeed, every person and thing from outside the United States must come through and be cleared by Customs and Border Protection.

On a typical day, CBP processes over 1.1 million arriving people, over 300,000 cars, over 57,000 commercial trucks and cargo containers.

With 40,000 employees, Customs and Border Protection makes up over one-fifth of the personnel of the Department of Homeland Security. And that is not surprising when you realize how important the security of our borders is to the security of our homeland.

CBP's Priority Mission / Twin Goals
The priority mission of this new agency is the homeland security mission.

And for the border agency, that means preventing terrorists and terrorist weapons from entering our country.

In addition to its antiterrorism mission, Customs and Border Protection must carry out the traditional missions of its predecessor agencies, such as

• seizing illegal drugs and other contraband at the U.S. border;
• apprehending people who attempt to enter the United States illegally; and
• protecting our agricultural interests from harmful pests and diseases.

And to make it even more difficult, CBP must, to the maximum extent possible, carry out its priority and traditional missions without choking off the flow of legitimate trade and travel, so important to our nation's economy and openness.

So, that's why we have twin goals: (1) increasing security and (2) facilitating legitimate trade and travel. Security is paramount, but these goals don’t have to be mutually exclusive.

As many of you know, after 9-11, U.S. Customs developed and implemented initiatives, such as CSI and C-TPAT, to make our borders more secure, without stifling the flow of legitimate trade. And that remains our objective as the unified border agency of our federal government, except now we have the opportunity to expand these initiatives beyond the movement of goods to the movement of people.

Safety vs. Security
This conference concerns the safety and security of North American trade. Let me distinguish safety from security issues.

Safety issues respecting that trade, particularly, let's say, pharmaceuticals or food products, are the primary responsibility -- regulatory and otherwise -- of the FDA and other agencies. As the border agency, we work with and carry out the directions we receive from these agencies, e.g., if the USDA says that, for safety reasons, all beef products from Canada are to be denied entry, that is the U.S. Department of Agriculture's call, and we -- CBP -- carry it out. And we did regarding mad cow. The same is true, say, for pharmaceuticals manufactured in Canada or Mexico or anywhere else in the world, for that matter. We take our policy direction on matters of safety of these drugs from the FDA, and we enforce the FDA rules at the borders.

Even before March 1, Customs inspected, seized and denied entry, that is enforced U.S. laws and regulations for 40 different federal agencies. We still do.

And this is as it should be. We ought not to have a proliferation of federal agencies at the border inspecting goods being imported into the U.S. for safety or other purposes. There should be one agency, whose inspection officers are adequately trained to do it all.

"Security" of North American Trade
But I want to spend the remainder of my time addressing the issue of the security of North American trade, and I specifically use the word "security" to mean security against terrorists, terrorist weapons or the implements of terrorism being brought across our borders or through our ports of entry.

This includes increasing security in ways that prevents terrorists themselves from crossing our border and entering our country to carry out terrorist attacks. It includes preventing terrorists from concealing or smuggling a terrorist weapon, e.g., a weapon of mass destruction, a car or truck bomb, a dirty bomb, chemical weapons and the like. And it most definitely includes the use of a shipment as a weapon itself, be that the intentional introduction of a disease, or biological or chemical contamination of food products, acts of bio- and agro-terrorism.

That takes me back to those twin goals. How do we meaningfully improve "security" without stifling legitimate trade, generally, and with our NAFTA partners, in particular?

* * * * *

The world changed on 9-11. In terms of loss of life, the largest attack on U.S. soil. But as vivid as those images will always be, many of us also remember what happened on 9-12 and 9-13 and 9-14.

U.S. Customs went to its highest level security alert on 9-11, and by 9-12 our border with Canada virtually shut down. The wait times for commercial trucks attempting to cross at the Ambassador Bridge jumped from 20 minutes to 12 hours. By 9-13, the wait times at the White Water Bridge at Port Huron went from 10 minutes before 9-11 to 10 hours. There were similar wait times at the major bridges into New York State.

Our border was shutting down, and automobile plants on just-in-time inventories were beginning to shut down. Wait times also increased dramatically at our border with Mexico.

To preserve the U.S. and North American economy, we needed to reinvent the border.

I am sure you have all heard the term "smart border." Do you know what it means?

Well, let's think about it's opposite. What's a not-so-smart border? It's one where you search, inspect and question everyone and everything that presents itself at the border. That approach is certain to shut down the border. Mere random inspections aren't very smart either. But not inspecting or scrutinizing anything is unthinkable, given the continuing terrorist threat.

A smart border means, first of all, at the physical border, adding personnel, detection equipment and getting advance information in automated form to risk manage who you question and what you inspect.

Second, it means working cooperatively with our neighbors, Canada, Mexico and other nations so that much, much more security is being done, away from the actual, physical border itself, before people or goods even reach the U.S. border ports of entry.

Let me briefly discuss what we've done to create the smart border:

We've added security and reduced pressure on our mutual border with Canada by adding staffing, by adding to the number of inspectors -- in order to keep more lanes open longer. We've increased the number of inspectors from about 1,600 before 9-11 to over 3,000 today. We have added detection technology, such as large scale x-ray type machines that can scan an entire tractor trailer trunk in minutes. There are 23 such machines deployed at all the significant commercial crossings between Canada and the U.S. There were exactly zero before 9-11. And we're adding sophisticated radiation detection equipment.

I recently directed the Border Patrol, now part of CBP, to increase the number of Border Patrol agents patrolling the northern border to 1,000. There were just 365 assigned to the northern border on 9-11.

Soon, we will be issuing regulations to require that we be provided electronically with advance information, regarding commercial trucks, so that we can better risk manage for the terrorist threat. As many of you know, we have already required, since October 2002, advance information regarding oceangoing cargo containers under the 24-Hour rule. And since November 2001, we've been obtaining advance information on all passengers flying into the U.S. from abroad. Air carriers are required to provide this information to us.

All of these steps are making our border smarter, and are increasing our security. But a very important step is the Smart Border Accord process with the Canadian government, and a similar process with the Mexican government.

Secretary Ridge signed the Smart Border Declaration with Canada with Deputy Prime Minister Manley on December 11, 2001. The Declaration is an action plan that has led to tangible improvements in mutual security.

The essence of the Smart Border Accord is that we ought not add all of our security at the actual, physical borders, because this will inevitably tend to choke the border entry points, especially when the threat level is increased. Rather, the Smart Border Accord recognizes that we can and should add security away from our mutual border wherever possible, in order to keep our mutual border as fluid and efficient as possible, even at times of high risk.

Let me describe some of the Smart Border initiatives with Canada that do this, and touch on where we are with Mexico, then suggest where we need to go if we are to truly create Smart Borders, ones that do not shut down in times of increased threat.

In-Transit Container Targeting
One of the early and most important initiatives with Canada was "in-transit container targeting." We agreed on this November 2001 and implemented it in March 2002. We began to target, and with CCRA, inspect containers arriving at Canadian ports that were in-transit, via truck or rail, to the United States. There are a half million such containers that arrive at Halifax, Montreal and Vancouver every year. In March 2002, we stationed small teams of U.S. Customs expert targeters at these 3 Canadian ports to identify high risk containers bound for the U.S. And Canadian Customs screens and inspects these high-risk containers there before they are sent on to cross the land border. This initiative is and will continue to relieve pressure on the land border between our two countries.

The In-Transit Container Targeting initiative is the precursor and prototype for the Container Security Initiative (CSI), a program in which we have entered into agreements to target and inspect high-risk cargo containers headed for the U.S. with fourteen nations, covering 19 of the top 20 foreign ports in terms of volume of containers shipped to the U.S.

FAST
Another initiative with Canada is the Free and Secure Trade, or FAST program. FAST is designed to expedite processing at the northern border for companies that increase security in their supply chain. The way the FAST program works is that importers, commercial carriers (i.e., trucking companies), and truck drivers enroll in the program and, if they meet our stringent mutually agreed to security criteria, they are entitled to expedited clearance at the border.

FAST draws upon the Customs-Trade Partnership Against Terrorism, or C-TPAT and a similar Canadian private sector partnership. Under C-TPAT, companies have committed to improving the security of their supply chains, from the loading docks in Canada to the border.

Participation in C-TPAT is required for those who want to bring goods from Canada into the U.S. through the FAST lane and for the trucking company also. Indeed, the truck drivers themselves must be vetted as well for security.

FAST is already operational in 27 lanes at six major crossings along the northern border, including Detroit-Windsor, Port Huron-Sarnia, Niagara-Buffalo and Blaine, Washington.

The more companies participating in FAST the better. It allows us to expedite them across the border in 17 seconds or less, and concentrate our inspectional activity on the trucks that may pose a risk or which we don't know anything about before they reach the border. FAST is making a smarter, more secure border and a more efficient border.

One limitation to FAST is infrastructure. In other words to get more trade into the FAST lanes, we need more lanes and bridges and roads to those bridges. Infrastructure improvements should be a priority of both Canada and the U.S. if we are going to truly achieve a Smart Border.

NEXUS
We are doing the same thing with people coming across our shared border, that we are doing with cargo -- finding ways to better focus our resources and efforts on high-risk individuals, while letting travelers who pose no risk for terrorism or smuggling, and who are otherwise legally entitled to enter, to move across our borders more quickly, freely, and with less hassle.

With our Canadian counterparts, CCRA and Citizenship and Immigration Canada, we have implemented and expanded the NEXUS program. NEXUS is a program to enroll trusted people who frequently cross the land border between the United States and Canada. These are Americans and Canadians who apply, who provide background information and biometrics, who are run against crime and terrorist indices of both countries, and who are personally interviewed by U.S. and Canadian officials.

If accepted into NEXUS -- and only those judged to pose no risk are accepted -- they are issued a proximity card, or SMART card. When they approach a border port of entry in their car, they wave their card and their information and photo shows up at the entry booth. They get waved right through. Ordinarily, no stop for Customs or immigration purposes. And it works both ways.

NEXUS is operational at seven crossings on the northern border, including the ports of entry at Blaine, Buffalo, Detroit, and Port Huron.

* * * * *

So, these are some of the Smart Border initiatives that we're not just talking about: We've implemented them, and we're working to expand them.

Mexico
On our southern border, we are also working closely with the Mexican government to improve security in ways that facilitate the flow of legitimate trade. In fact, over the past year and a half, the level of cooperation we've had with Mexico regarding border management and security issues has been unprecedented.

Of course, our northern and southern land borders present somewhat different challenges, and we have to tailor our efforts to address those challenges. For the border with Mexico, the flow of illegal drugs remains a major concern. Last year, U.S. Customs and the Border Patrol seized a combined total of over 2.1 million pounds of illegal drugs coming across the Mexican border. This year the seizures by Customs and Border Protection are even greater.

Indeed, one of my concerns with the potential decriminalization of marijuana possession in Canada is that it may lead to an increase in production in Canada of high potency marijuana and increased export of illegal drugs to the U.S. If this occurs, which I believe is likely, it will invariably lead to increases in security and inspections to interdict drugs that will make our mutual border with Canada slower and less efficient.

But given the issues with illegal drugs coming from and through Mexico, our southern border must have tight security against concealment, not just of terrorist weapons or terrorists, but against concealment of drugs and illegal migrants.

FAST
Regarding cargo crossing into the U.S. from Mexico, our goal is to implement a pilot Free and Secure Trade program at El Paso, Texas this September. This program will be similar to the FAST program on the northern border with Canada, but given differences in the border environment, I expect that the FAST program on the land border with Mexico will be a model of security best practices.

First, participation in our Customs-Trade Partnership Against Terrorism program will be a requirement for participation in FAST on the southern border. In this regard, we are expanding C-TPAT -- which is open to importers, carriers and brokers -- to make foreign manufacturers and foreign shippers eligible. One of the places where manufacturers will soon be eligible to join C-TPAT is Mexico.

So, I envision for FAST Mexico that we'll have companies that are C-TPAT manufacturers who assure the security of their shipments from the loading of shipments in Mexico, using a tamper proof seal on the container or trailer, using a C-TPAT carrier, with vetted drivers, to be transported to the U.S. border port of entry. And one of the things we're potentially looking at is attaching GPS transponder technology, so that shipments can be tracked.

SENTRI
For people crossing the border from Mexico into the United States, we have the SENTRI program. SENTRI is similar to the NEXUS program on the northern border in that, like NEXUS, it allows low-risk travelers to be processed quickly with minimal delay. SENTRI is currently operational in El Paso, San Ysidro, and Otay Mesa. And we continue to discuss expansion of the SENTRI program with our Mexican counterparts.

Advance Passenger Information
A revolutionary development in our efforts with Mexico has been the agreement with the Government of Mexico to provide us with Advance Passenger Information for all inbound flights to Mexico. This enables us to mutually target high-risk travelers coming into Mexico, who may then be seeking to enter the United States.

Other Efforts
With Mexico, we also have high-level working groups looking at coordinating hours of operation at ports, ways to alleviate traffic congestion at certain ports, and overall ways to make the border work more efficiently. We have made good progress. Very recently, we made Otay Mesa a 24-hour port, and already it has lowered wait times at nearby San Ysidro.

Where We Go From Here
Where do we need to go from here to realize the promise of Smart Borders?

I have mentioned the infrastructure issues. They need to be addressed at both borders.

More fundamentally, we need to move toward a system where we are exchanging watch lists and benchmarking for security cargo shipments and non-immigrant aliens that are entering our respective nations.

The first step, of course, is each country must gather the necessary information in advance. In that respect the Canadian government's commitment to adopt an advance manifest rule similar to the U.S. 24-Hour rule regarding sea cargo containers, and its decision to obtain advance passenger information regarding travelers arriving in Canada from abroad are encouraging. And we are working closely to coordinate with Canada regarding advance information requirements relating to other transport modes, such as air cargo and cargo shipped by trucks and rail.

The next step is: In order to increase mutual security and relieve pressure at the physical borders, to benchmark how each of us risk manages for the terrorist threat.

I also believe that we should give serious consideration to so-called "reverse inspection." This would mean placing U.S. Customs and Border Protection inspectors on the Canadian side of the border and Canadian inspectors on the U.S. side. This would be especially important at the four or five major bridges that connect Canada and the U.S., such as the Ambassador Bridge and the Peace Bridge. Nearly two-thirds of all Canadian exports moving by truck to the United States move across just five bridges -- roughly $77 billion out of about $121 billion. That's U.S. dollars, not Canadian dollars!

To implement reverse inspection would require that U.S. Customs and Border Protection personnel be able to operate with full legal authority as if they were in the U.S. And conversely, the same would be true of CCRA inspectors on the U.S. side. This authority would only be exercised in relatively small areas -- a few acres -- Integrated Border Inspection Areas; in other words, in small areas on each side of the port of entry and posted notice would be given to travelers. There is little question that these bridges are critical infrastructure, and that reverse inspections would help protect that infrastructure by having the people asking the questions and inspecting and having the authority to search, doing their job before the cars and trucks go onto these bridges, not just after they exit the bridges.

I recognize there are potential sovereignty issues at stake, but the British and the French have managed to institute reverse inspection at each end of the Chunnel. And if terrorists took out even one of those bridges, and they are vulnerable, I suspect the U.S. and Canada would find a way to do reverse inspections in a nano-second. So far, though, reverse inspection is a concept that is languishing.

Conclusion
I hope that I have been able to shed some light on what a Smart Border is, on what CBP and the Department of Homeland Security are doing to make trade in North America not just free, but secure -- as secure as possible against the terrorist threat.

But we are determined to achieve the necessary security by building smarter, more efficient borders.

Our goal is to provide the security needed, but to do so in a way that our mutual borders are actually more efficient and less of a barrier to trade than they were before 9-11. We can and should do this.

Thank you.