As Peter mentioned, I've been with U.S. Customs my entire career, beginning as an inspector. I've spent the vast majority of my time in management working directly with the trade community. I know many of you. I know your industry. And I know the issues that matter to you.

Over the years I've also seen this Association grow in size and importance, strengthening the partnership between the Brokers and Forwarders and Customs. That partnership has fueled a great deal of positive change over the last decade in our drive to modernize our commercial systems. We're counting on your continued support as we prepare U.S. Customs for the challenges of the next decade and beyond.

I can assure you that our progress together will not be hindered by the current transition going on at Customs. Transition is not an excuse for inaction. Transition is energizing. It is an opportunity to keep our momentum going, and to promote further progress. Our challenge remains the same -- together, we must continue to facilitate America's prosperity, while contending with the array of forces reshaping our industry and our world.

With that central challenge in mind, I find it very appropriate that your conference theme highlights the two trends that figure most prominently in any discussion of our future together: Technology and Partnership. The rapid spread of mergers and alliances, the growth of "just in time" delivery and distribution, the revolutionary power of the Internet -- these and other dynamic changes are transforming the way commerce moves around the globe. Survival in this business means staying one step ahead of those changes. And prospering in this business requires a relentless challenge of the status quo.

One thing we know for certain: we're all in this together. And that's why it is so important for Customs and the members of this association to keep our sights fixed on the future. It is crucial for us to take our partnership to the next level, and complete the agenda that will equip us to meet the challenges ahead.

As many of you know, we've looked at the future in a very formal way at the Customs Service. Last year, as part of our Millennium Project, we invited academics and other experts to Washington to talk with us about the world we'll face 10 or 15 years from now. We want to begin to plan immediately for the problems and opportunities of the coming decades; the same problems and opportunities that may be arising slowly right now, but which might pass unnoticed unless we examine emerging trends.

We heard from a leading Harvard economist about a world that appears to growing wealthier, even in the underdeveloped nations. And from a terrorist expert about the growing "globalization" of crime. And from a professor at Northwestern University's Transportation Center about the increasing capacity of cargo ships and planes, the boom in air travel and air-freight, and a huge demand for new, less congested ports of entry around the world.

That same professor pointed to profound shifts in the way products move around the world -- many entering and exiting the country multiple times between their manufacture and final sale. In fact, an executive from a leading telecom company also attending that panel confirmed the trend.

She observed that a typical cell phone made by her company crosses U.S. borders nine times before final assembly.

Of course, that sort of trend has major implications for your business as well. Instead of moving goods simply from production point to sale, you might be dealing with several, even dozens of intermediate, "value added" stops in between.

Buyers and sellers will increasingly look to logistics providers who can span the full range of their production and distribution chains. We're already seeing how the need for speedy, tailored delivery is linking the players in your industry in a much more seamless way. The distinction between domestic and international carriers is becoming blurred more and more as global economies mesh. Links between brokers, forwarders, truckers and airlines will likely become even tighter and more formal as the complexity of trade increases.

Given the evolution in your business, your importance to Customs will only grow. You'll have an increasing presence throughout the import chain. That's why your cooperation in helping us design today the systems that will serve tomorrow's needs is so important. Who better to consult with than those who will rely on those same systems to meet their changing needs.

As you know, our agenda received a big boost recently with start-up funding for the Automated Commercial Environment, or ACE. We received 130 million dollars from the Congress for new automation in our 2001 budget. Plus another 123 million to keep our current ACS system up and running. As encouraged as we are by the funding for ACE, it's only the first step. We need resources for the next four to five years in order to finalize what amounts to a $1 billion dollar plus project for the Customs Service. That's why your continued advocacy is so important.

What is our current status with ACE? With resources in hand, we're ready to select a prime contractor from the private sector to help us build the new system. Some of the world's leading technology firms are taking part in the bidding process. Their proposals are in, and we're reviewing them now. We expect to make a selection by the end of April.

Once that decision is made, we'll begin work to finish our NCAP prototypes, which have already run successfully at select locations around the country. Then we'll move forward with the first stages of software development.

We're eager to move ahead with ACE but there's another key ingredient in the mix, and that is entry revision. Together with a new automated system, Entry Revision forms the second strong pillar of our modernization platform. The Entry Revision Proposal, or E.R.P, is a wholesale review of the basic steps involved in the entry process. The aim is to simplify that process -- to streamline payments through account management and periodic billing; to be more flexible with the period granted for corrections; to separate out high-volume, low-risk importers from those more prone to violations of our laws.

E.R.P. is a vital companion piece for ACE. Why? Because we do not want our new system of automation to automate old business practices. We will not be able to fully leverage the power of ACE if it is constrained by outdated rules. It would be like running a Ferrari on a go-cart track.

We know we can do better than that. We have often stated that Customs' goal is to "do business the way business does business." That couldn't be summed up better than by the Entry Revision Proposal.

While we may agree on the need for reform, we don't yet agree on all the details. I know - we all know -- that big ideas are often accompanied by debate. It's a measure of the worth of our efforts. But I've also seen good communication and partnership bridge wider divides than this in the past.

Many of you heard John Durant and Anne Lombardi talk about the nuts and bolts of our ERP discussions in an earlier panel. I don't want to rehash their presentation again. But I would like to offer a few basic thoughts as we work towards a consensus.

The Mod Act ushered in a new era of cooperation between us. It mandated that Customs think like business in designing a new system of trade. Entry Revision is an earnest attempt to live up to the spirit and the letter of that law - to address the basic requirements of the Mod Act that we and the trade believed had yet to be fulfilled.

A few think the current E.R.P. proposal goes too far. Many more believe it doesn't go far enough. Do we have a perfect proposal? Probably not. But we know we have to start somewhere.

Sure, we'd like to put everything the trade wants into entry revision, or as much of it as possible. But that's not our decision alone to make. We have to balance expectations with reality. And the reality is that Customs isn't the only agency on the regulatory side that has a vested interest in this process. Others, including the Census Bureau, have a big stake in it also.

The information that gets collected in an entry form serves a variety of purposes. While we would like to make the requirements on importers for that data as minimal as possible, we're bound by law to gather certain elements for others who need it. Some of the data is used to compile national trade statistics -- of great concern to our political leaders and those who help determine economic policy. It's also used to ensure that American companies -- your clients among them -- are protected from threats like dumping and fraud.

Customs is currently conducting a data study at the request of Congress to review the processes and rules governing the collection of trade data -- to see in part if it's being done in the most timely and efficient way. Our findings are due back to the Congress in May.

Despite the legal constraints we have with entry revision, we still believe we have an opportunity here for real, substantial reform. And we're willing to do whatever we can within those boundaries to make improvements. If we can't get 100 percent of what we and the trade believe we need, there's nothing wrong with getting a solid 70 percent or more for now. This isn't an all or nothing proposal. It's a chance to make fundamental changes in the entry process before we program ACE.

We're still looking for the trade's official position on the third version of E.R.P. This Association is working in partnership with three other major industry groups to build a consensus. The formation of this alliance was a big step in the right direction, and I want to commend your leadership for working together with others across such a wide segment of the trade.

Given the success of our partnership on other fronts, including ACE funding, I remain optimistic about the prospects for entry revision. We all agree that this is a much-needed step. We must continue to work together to see it through.

We of course have been working on other ways to streamline our activities and improve our relations with you. Last year we presented the Broker Regulations together. The regulations were specifically designed to meet the changing needs of your business. We built in greater flexibility through the granting of national permits. We implemented a simpler examination and license process. We gave wider access to Customs special programs, such as drawback and NCAP, just to mention a few of the improved benefits.

Broker Account Management was another successful product of our joint efforts. We asked for and received your input for a sensible program, one that would take into account both business and regulatory needs. We implemented a prototype in which eleven brokers are now participating. Feedback so far has been very positive, from both sides. Before we consider expanding the program, we have to evaluate it. We'll be doing that this summer. But I think it's clear that we're headed down the right track. Broker Account Management is proof that better communication leads to better compliance. That's the essence of the program. By looking at your data in the aggregate -- by sharing that data with you -- we can more effectively address minor issues before they mutate into bigger problems.

Training has also contributed to the success of this program. This conference will include the last in a series of broker seminars that began last September. Representatives from Customs have participated in each one. The seminars have focused mainly on Broker Account Management, but have also served as a forum for discussion on the full range of issues between us. I want to encourage the brokers to continue your efforts to educate and professionalize your industry through training. It is a critical means of improving your business and your compliance rates. We will continue to support that training in whatever way we can.

Our Office of Strategic Trade, or OST, is spearheading other innovations at Customs, especially in the area of compliance. You'll be hearing more about that Office's newest programs in a panel later today. I strongly urge you to attend that meeting, as it contains important information that pertains directly to your business.

OST's more visible role in our trade operations is just part of a major focus on enhancing our risk management approach. We are busy refining our risk management strategies across the board at Customs to generate meaningful benefits for the trade. Through better analysis of the information we collect, we can lessen the focus on you, the compliant broker or forwarder, while devoting more resources to those who willfully violate our laws.

Today there really is no other choice. The demand for speed, the demand for faster, less encumbered movement of people and goods around the world -- the era in which we live has created enormous challenges and opportunities for us all. Our joint responsibility is not only to meet, but to exceed the challenges, and not squander the opportunities. If we succeed -- if we keep our partnership focused on the future -- we will safeguard America, while securing its prosperity for generations to come.