Since speaking to Mike last fall, I've been looking forward to this event to meet with the members of AAEI. Over the years, you have partnered with U.S. Customs on trade modernization and our mutual goal to facilitate the flow of commerce so important to our nation. And I hope you will play an important role in Customs' work as we take on the great challenge of security in the post-September 11th world.

Being from California, I know the importance of international trade to California's economy and, indeed, to the U.S. economy. One of my goals is to build a strong U.S. Customs Service that listens to the trade community; an agency that facilitates international trade; an agency that considers the needs of business as part of deciding how we do business.

These were my goals when President Bush selected me last May to be the Commissioner of Customs. And they remain my goals. But these goals must now be viewed against the backdrop of the terrorist threat to our nation. And that threat is continuing and it is real. It is a threat not just to harm and kill American citizens. It is a threat to harm the American economy. The Al Qaeda and its associated terrorist organizations are on the run but they are intent on striking back. We must not let down our guard.

And so, while trade facilitation remains a priority of Customs, our number one priority since September 11th and for the foreseeable future is dealing with the terrorist threat. Customs is protecting our country on the frontlines -- our land borders, airports, and seaports -- from terrorists and terrorist weapons entering the United States. Using its investigative jurisdiction, Customs is also attacking and disrupting the financing of international terrorist organizations that threaten our country, and denying them the technology and weapons needed to carry out terrorist acts here and elsewhere in the world.

While we're providing security at our borders, we do not want to choke off the flow of commerce to achieve security. We must be careful not to sacrifice our openness as a society. America's strength as a nation derives from its open society and its open economy. And these should not be allowed to fall victim to terrorism.

So our challenge is to keep America safe and secure without harming the flow of trade. And I believe we must do that in concert with the trade community, by enhancing the dialogue between Customs and the trade.

My priorities as Commissioner also include improving the way Customs interacts and does business with the trade community. Internally, I have issued several challenges to Customs departments that play a key role in our relations with the trade community. I have asked these departments to focus on, streamline and improve various processes.

First and foremost, these include our Office of Regulations and Rulings, and specifically the time it takes for Customs to issue commercial rulings. I believe the current delays are unacceptable. I want to dramatically shorten the time it takes for Customs to issue commercial rulings -- to no more than ninety days. I outlined this as a top priority to OR&R and I expect to see progress.

I have also challenged our Office of Strategic Trade and our Regulatory Audit Division to move forward with the focused assessment process.

And, I have challenged our Office of Field Operations to dramatically improve uniformity in trade processing. I want to eliminate disparate treatment of goods between different ports.

Let me say that I have been very impressed with the level of communication between Customs and the trade community on these and other major issues. There are very few other federal agencies in which this level of communication exists between government and industry.

I want to promote that communication, especially now during these challenging times. That's one reason I have revamped the Office of the Trade Ombudsman, and renamed it the Office of Trade Relations. Why? Because I wanted there to be a central point through which the trade community can convey issues it has with Customs to me, especially the broad issues of how we do business together, and how we improve the security of our country against the terrorist threat.

So, I'm not just talking about the specific complaints of a particular member of the trade community -- complaints that the Office of Trade Relations will continue to address -- but also the proposals and solutions to issues impacting our long-term relationship and the security challenges we both face. And I also wanted the office to communicate Customs issues and concerns to the trade community. In short, I wanted and I continue to want more dialogue.

Speaking of Customs' Office of Trade Relations, let me introduce the "relatively" new Director of the Office of Trade Relations, Andrew Maner. Andy is a key and influential member of my executive staff and he reports directly to me. Andy, if you could stand up for a second...

Before Andy came on board, I told him that I didn't just want him to be an "Ombudsman," someone to merely take complaints and facilitate resolutions. I wanted him to be much more -- to be one of my principal advisors on trade policy issues. We're very fortunate to have in Andy someone who is extremely well-versed both in the ways of Washington and in the world of business.

I am confident that Mr. Maner will do a great job for Customs and for Customs' relationship with the trade. He will see that I understand the concerns of the trade, and that the trade understands my policies and the concerns of Customs.

One of the top priorities that Andy and his staff are working on right now is the new Customs Trade Partnership Against Terrorism. The promotion of trade and the protection of our country should go hand-in-hand. But, I recognize that Customs can't succeed in protecting our country without the help and the participation of the business community -- without partnering with the trade.

That is why I proposed the Customs Trade Partnership Against Terrorism at the Customs Trade Symposium last November. Our goal under this Partnership is nothing less than to work with importers, transporters, brokers and others in the trade community to protect every aspect of the supply chain against the terrorist threat -- from the foreign loading dock, to the port of entry into the U.S. Because no one knows those systems better than you, and what it will take to safeguard those systems against potential terrorist use; against the concealment of terrorist weapon of mass destruction at some point along the supply chain.

As many of you know, Customs has developed successful partnership models with industry in the past to protect commercial trade from exploitation by international drug trafficking organizations. The Business Anti-Smuggling Coalition, or BASC, and the Carrier Initiative have proven that we can team together to prevent the use of legitimate trade by drug traffickers. We are drawing on that experience, and those models, to strengthen our defenses against the use of our trading system by international terrorist organizations.

Although American companies are offering their assistance without any condition -- and recognize a strong self-interest in improving security -- I intend to reward those companies that adopt new security measures against terrorists. They will be given the "fast lane" across the border. We're not looking to put in some new audit system to do this. But we are intent on reducing the security threat through the Customs-Trade Partnership Against Terrorism. At the same time, I am aware that some of the delays at the border are not caused by Customs processing, but by infrastructure limitations. That is also one of the areas we should work on together.

And the Partnership Against Terrorism is a key part of our campaign to "push the border outward" -- that is, to do more prescreening of goods and people away from our ports of entry, to do it at the ports of origin, rather than our ports of arrival. Doing so will allow us to expedite cargo once it arrives at our land borders and seaports, and to deal with potential threats before they reach our country.

We are also developing this concept with our NAFTA partners, Canada and Mexico.

Last December 12, I traveled to Ottawa with Governor Tom Ridge for the signing of the Smart Border Declaration between the U.S. and Canada. That declaration calls for new initiatives to bolster security across our northern border without impacting the flow of trade.

It includes such measures as building new shared border facilities and exchanging an unprecedented amount of advance information. We're looking at ways to prescreen goods and cargo before it reaches our borders.

U.S. Customs, for example, will have advance information on cargo coming into the ports of Halifax, Montreal and Vancouver that is in transit to the U.S. I expect that very shortly we will assign U.S. Customs personnel to prescreen those containers in Canada, at the Canadian ports. Canada Customs will be able to do the same in the U.S. for containers that arrive at Newark or Seattle that are in transit to Canada.

We are also engaged in important bilateral discussions with Mexico to take similar steps to protect our southern border against the terrorist threat. We are working on agreements with Mexico that will allow us unprecedented access to information on trade and people coming in from that country.

But that's still not enough. We must go even further in our efforts to protect both American lives, and American livelihoods.

Recently, I proposed a new strategy to better secure oceangoing sea containers against the terrorist threat -- to better secure the primary and absolutely containerized cargo, which is vital to our global economy.

The vast majority of trade -- about 90% -- moves in containers, much of it carried on oceangoing container ships. Nearly half of all incoming trade to the United States by value -- about 46% --arrives by ship, and most of that is in containers. Anyone who needs to be reminded of the strategic significance of sea container transport need only pay a visit to the ports of Los Angeles and Long Beach, where I was on Friday touring Customs operations. It is truly an impressive and overwhelming sight.

Combined, L.A./Long Beach is the largest seaport in the United States, receiving an average of about 7,400 containers a day. As an Angeleno, I have to confess that I never understood why the two ports are counted separately, since they sit cheek by jowl, right next door to each other. I maintain it's a conspiracy by New York to hold the top spot as the largest port in the U.S., despite the fact that the port of New York is actually the ports of Newark and Elizabeth, New Jersey, as well as Brooklyn!

As significant as sea container traffic is in the U.S., we are less dependent on it than many other nations -- say, Japan, South Korea, Singapore, and the Netherlands.

Unfortunately, oceangoing sea containers are vulnerable to the terrorist threat. Some of you may have heard about the discovery by Italian authorities last October of a suspected Al Qaeda operative, an Egyptian national, living inside a sea container. He was headed for the Canadian port of Halifax, with airport maps, security badges, and an airport mechanic's credentials. He was ensconced in a container replete with a bed, bathroom facilities, and all the basics he needed for the journey. Fortunately, that journey was cut short by police before it wound up in disaster.

The consequences would be far worse were terrorists to succeed in concealing a weapon of mass destruction, even a crude nuclear device, among the tens of thousands of containers that enter U.S. ports every day. The physical devastation and mass murder that would be caused by such an attack are horrible to contemplate. You can add to that the effect on the global trading system, which would stop cold. And the impact on our global economy would be severe. Much of world trade would simply grind to a halt as we struggled to develop and implement a security system that would provide assurance against another such attack.

Let's not wait. Let's do something to prevent that scenario from happening. For that reason, I have proposed that we work with nations with the world's major seaports -- the "mega-container ports" -- to develop a standard for targeting and screening cargo before it is shipped to the U.S. or other countries.

For example, I want U.S. Customs to know everything there is to know about a container headed for this country before it leaves Rotterdam or Singapore for the Port of Newark or the Port of Los Angeles. I want it prescreened there, not here.

Just ten of the world's largest seaports, - the container "mega-ports," are responsible for nearly half of all seagoing containers bound for the United States (49%). These mega-ports include Hong Kong, Singapore, and Rotterdam.

Beginning with the mega ports that export to the U.S., We should establish a new international security standard for containers in order to protect this vital system of global trade. What are the core elements of a sea container security strategy?

1. Establish security criteria for identifying high-risk containers; those containers that potentially pose a risk.
2. Pre-screen the high-risk containers before they are shipped to the U.S.
3. Customs targets and inspects high-risk containers after they arrive. Unfortunately, that may be too late.
4. Use technology to prescreen high-risk containers.

   The good news is that the technology exists and this allows a lot more containers to be inspected for WMDs. Customs uses sophisticated x-ray and gamma ray equipment and radiation detectors now at the arrival ports in the U.S. In fact, 4000 sensitive radiation detection pagers and dozens of large-scale non-intrusive inspection devices are currently in use at ports across the country.

5. Develop smart boxes, smart and secure containers with e-seals and light sensors that will indicate to Customs if the container has been tampered with, particularly after it has been pre-screened.

Implementing this system will no doubt be difficult, but this task pales in comparison to what is at stake here. That is nothing less than the security of global trading system, and ultimately the world economy upon which it depends.

This "Mega-port" or Container Security Strategy adds another important layer to our defenses against the real and continued threat of further terrorist attacks on our country. We have to remember that one of Osama Bin Laden's express goals has been not only to target American lives, but to target the American economy. He said just this in one of his last diatribes from his cave in Afghanistan. We must not allow him or his terrorist associates to succeed.

By working with industry in the Partnership Against Terrorism, with our allies, Canada and Mexico, and with other foreign governments to advance a Container Security Strategy, I believe we can build a strong bulwark against terrorism and expand our perimeter of security outwards.

We can advance that goal with the use of technology for inspections, with more advanced information, with smarter risk targeting and with powerful tools such as the Automated Commercial Environment.

Let me just say that ACE is an important project for Customs and it's an important project for the business community. It's an important project for our country and for the future of global trade. It should -- if done right -- reform the way Customs does business with the trade. It should even assist Customs in the advance collection of information for targeting of high-risk cargo to better address the terrorist threat.

The successful and timely design, implementation and funding of ACE is a priority of the U.S. Customs Service. It is one of my priorities. We are moving forward with the next phase of ACE development, in concert with our prime contractor, the e-Customs partnership, led by IBM. And I want to see ACE to be completed within four years.

Of course, Customs cannot achieve this alone. We need the guidance and input of the business community to meet our goals, and to build the best system of automation possible. We will need the funding to do this. And we need the continuing support of the trade community, including AAEI.

I believe we have an opportunity here not only to protect America, but to build a better system for the movement of global trade. And wouldn't that be a great achievement -- if, from the devastation of 9-11, we actually constructed a system that thwarts the terrorists, but at the same time, facilitates and improves the movement of legitimate business and trade -- faster and more efficiently than before September 11.

We can make this happen. And I look forward to working with you to make sure that it does happen.

Thank you.