At our meeting today, we have great representation from participating government agencies and from foreign governments. I’d like to say a special word of welcome to Caron Wilson from Canada Border Services Agency. She’s on the agenda today to speak with you about Canada’s modernization program and about their new external stakeholder forum that is being modeled after this TSN.

As I’ve said before, the TSN represents one of the strongest partnerships between a government agency and private industry counterparts. There is a lot of rhetoric about government-industry partnerships but the TSN is the real deal – it is a real partnership producing real results.

It is collaboration between the government and the private sector that is actually building a new system for managing the transactions of international trade. We aren’t designing a new process for trade and hoping you’ll like it, or worse, forcing you to use it whether you like it or not. We aren’t just programming a system and then running it by you to see if it’s OK. We don’t have a bunch of IT geeks off in an ivory tower dreaming up fancy new technology that may or may not work in the real world. And we never say “we’re the Government and we’re here to help you.”

The process of building ACE is a shared one. And the trade has been part of it from the beginning. In fact, let’s be honest, it was the trade that made sure we got the money -- not just once, but with an annual funding stream. You have been in some ways, our guardian angel. Or maybe we should drop the angel part, and think of you as a guardian. Actually, Lou sometimes uses other words to describe the trade, but we won’t go into that now.

But however we think of you, we think of you often. And not just because you won’t let us avoid you, but because we really want you part of this thing we call ACE. Not only in the guardian role, but in the trenches with us, developing requirements, testing things out, making sure they fit your business and ours, learning from our mistakes.

We know that you have a vested interest in how ACE is built and that if it is successful, ACE will provide significant benefits to your operations. And for both of us, failure is not an option.

You know, the development of ACE recently had a 5 year anniversary. In August 2001, we awarded a contract to begin the long process of replacing ACS and building ACE. There have been many changes to our approach since that time, and we have done our best to adjust our efforts accordingly.

It has been fascinating to think about the changes during this time in the way we look at ACE. At first, it was all about preventing a disaster. Major IT investments were (and continue) to collapse after millions of dollars of investments. We were Customs then, and trying to comprehend the impact of 9/11 on our lives, personally and professionally. We struggled with roles and relationships inside our agency, with the contractor, and with the trade. Money seemed to be spent without any tangible results. ACE seemed like a bunch of Power Point presentations. And it took a long time for ACE to adjust to the realities of a post 9/11 world.

But, we persevered. We made mistakes, but we learned from them. We built a new Program Plan, and while not everyone was happy with the priorities, we managed to address the modernization of trade from both a security and commercial processing perspective. We involved the trade community more and more. We also involved our own field staff more to be sure we weren’t leaving out their needs. Senior managers met and continue to meet frequently to hammer out the policy issues and to put Lou through his paces.

And, ACE began to deliver. Periodic payment. The ACE portal. Truck E-manifest. It’s really happening.

Of course, we have a lot of hard work ahead. The releases you’ve been working on and waiting for – Entry Summary, Revenue, Mutli-Modal Manifest, and Cargo Release are on track. These are the big ones. And now we have a new problem – really, I think it’s a problem of success. Because now we are concerned about getting everyone on board with ACE --- the importers, the brokers, the service providers, the carriers….everyone associated with trade needs to understand that ACE is here and they need to start getting ready.

As I said, this is actually a good problem to have, because it demonstrates that ACE is real. But it is clearly a challenge.

On several occasions, this message has been brought home to me in meetings with the leaders of the TSN – the Trade Support Network Leadership Council, or “TLC” and the Trade Ambassadors. These leaders have told me that the business practices of the trade will change dramatically in a few years in conjunction with system changes being made, particularly in the ACE Entry Summary Release.

The last time I spoke to you at the last TSN, I highlighted some of the functionality changes associated with the next drops of ACE. In particular, I talked about not “automating the cowpath” – that is, not automate a maze of rigid old procedures. I’ve been told that far from automating the cowpath, a number of TSN members are concerned about the far-reaching impact that some of the ACE functionality changes represents.

In fact, a group within the TSN has authored a white paper called “Trade Recommendations for A2 Outreach” which is currently being studied and worked through the TSN Transition Committee. (A2 is our second ACE release within Entry Summary, Accounts and Revenue.) I read this paper and it is definitely a wake up call. I’d like to quote a few lines from this white paper:

“The actual impact of ACE on the trade community can neither be overstated nor fully anticipated. The current ACS system and related components such as ABI and AMS, represent an artery through which flows the blood of the U.S. economy. Nearly every significant enterprise in the U.S. relies on imported goods, and nearly all of this traffic is time-sensitive. In addition to being the lifeline of commercial imports, the ACS/ACE realm is also the bread and butter of many other businesses. A clumsy implementation of ACE will cost money, clients, and jobs to those who are dependent on these systems to realize their work.“

As I said, this is a wake up call!

Here are some other quotes from the paper. “The functionality being built for A2 has direct impact to many in the trade community. It represents substantive changes both in practice and in programming. The functionality in A2 and beyond will spur the need for a coherent, comprehensive plan to ensure the content specific messages are delivered in a timely manner to the trade community regarding ACE.”

The group that prepared this paper went on to make some excellent recommendations. Some of the messages that they suggest are:

1. If you are an importer, broker, or carrier, SIGN UP FOR ACE NOW!
2. The transition to ACE from ACS will be no worse, but potentially as challenging, as the earlier transition to ABI; and
3. Partnership between all parties (importers, brokers, CBP, Participating Government Agencies (PGAs), and transportation providers) is necessary.”

Perhaps my favorite line was this: “While the transition to ACE will be difficult and costly in some areas, it is as necessary and helpful as the transition from kerosene lanterns to electricity.”

We are listening to you. We also know from talking to other Customs organizations that these types of system changes, if not properly coordinated and tested with the trade community, can wreak havoc on international trade operations.

We see your participation in the TSN as forcing us if you will - to properly communicate, test and debug the program with you in advance. You are our conscience. And we also see you as leaders in the trade community who will go out and help educate the broader trade community you represent. CBP’s job is to listen to you, to communicate with you and give you the tools you need to advise us and also provide information out to the larger trade community.

We also know that the success of this program also hinges on the right government team in place. We believe that team is in place. Together, the way we plan and manage the changes associated with ACE will determine our success.

And while we have challenges with ACE, we also have many other challenges in the coming year for our partnership with the trade. The SAFE Port Act, recently passed by Congress and signed by the President, contains a series of mandates that we can only meet with your help. But despite the number of requirements in this Act, we are confident we will be able to meet these requirements. Confident for two reasons – the Act actually puts into law many of the initiatives we have undertaken over the past several years – initiatives such as C-TPAT, CSI, advance information. The SAFE Port Act reflects the success of our programs and our plans for the future. And secondly, we have confidence that our strong partnership will continue to be the engine to get the job done. We recognize that success in these areas can only be attained by consulting and cooperating with the entities that make the supply chain work.

And there is one other very important provision of the Safe Port Act that I would like to highlight, and that is the establishment of the new CBP Office of International Trade. However, once again, the Act is totally consistent with where we want. In fact, because of his own conviction, and in anticipation of the passage of the law, the Commissioner announced the creation of the Office of International Trade in October.

The creation of this office will strengthen our ability to carry out our important mission of facilitating the flow of legitimate trade across U.S. borders while securing our borders and protecting the American economy from unfair trade practices and illicit commercial enterprises.

The Office of International Trade will provide uniformity and clarity for the development of CBP’s national strategy to facilitate legitimate trade and will manage the design and implementation of results-driven measurements of trade compliance and enforcement.

The new office unifies critical responsibilities for trade policy and program development that previously were split among three offices: the Office of Strategic Trade, the Office of Field Operations, and the Office of Regulations and Rulings.

I believe you will soon see the benefits of this reorganization. The new Office of Trade will provide a streamlined capability to fulfill our missions of facilitation, enforcement, revenue collection, and protection of U.S. industry from unfair trade practices. It will also improve our interface with members of industry by providing one consolidated focal point for trade issues, bringing you more consistency and priority treatment.

The Commissioner has named Dan Baldwin to head this new office. Many of you know Dan. He has served as Assistant Commissioner of CBP’s Office of Strategic Trade for over two years and he has an extensive background in all trade matters. He’s here today to speak with you immediately following me and will give you more details on the new Office of International Trade.

Closing

Each year I continue to be more amazed by the successes of our partnership. Working with you on getting ACE up and running - and running right - has been and will continue to be one of the more challenging, but rewarding aspects of my job.

Thank you for being here. I look forward to tackling our next round of challenges together this coming year.

Acting Commissioner Spero reserves the right to edit her written remarks during her oral presentation and to speak extemporaneously. Her actual remarks, as given, therefore, may vary somewhat from the written text.