June 24,2008

Baucus Statement Regarding Oversight of Trade Functions in Customs and Other Agencies

Hearing Statement of Senator Max Baucus (D-Mont.)
Regarding Oversight of Trade Functions in Customs and Other Agencies

On July 4, 1789, President Washington signed into law what the newspapers heralded as
the Nation’s “second Declaration of Independence.” This second act of the First Congress authorized the collection of import duties to help the nearly bankrupt nation generate revenues to pay off its debts. And four weeks later, the fifth act of Congress established our first customs agency and its ports of entry.

For the next 125 years, customs revenues funded virtually the entire Federal Government.
Remember, there was no income tax then. And Customs revenues financed much of the
nation’s early growth and infrastructure. They bankrolled the Louisiana Purchase and the
Transcontinental Railroad. They built the Nation’s lighthouses, the U.S. military and
naval academies, and our capital city. And by 1835, customs revenues alone had reduced
the national debt to zero.

Import duties remain a significant source of Federal revenue today. But the mission of
our customs agencies has expanded exponentially.

In addition to collecting revenue, our customs agencies must now secure our borders.

These responsibilities are shared between two of the agencies before us today, Customs
and Border Protection — or “CBP” — and Immigration and Customs Enforcement.

They serve as our Nation’s first line of defense against illegal drugs, hazardous imports,
weapons of mass destruction, and potential terrorists.

We meet today for the second of two hearings on customs reauthorization. We heard
testimony earlier this year from the business community. We will hear testimony today
from the customs and trade agencies themselves.

At the last hearing, witnesses questioned whether our customs agencies have focused on
their new security mission at the expense of their historical trade mission.

Witnesses questioned, for example, whether proposed new security measures at
American ports could unduly delay shipments. They questioned whether those delays
could lead importers to divert their shipments to Canadian or Mexican ports, which could
damage the competitiveness of U.S. ports and the jobs that depend on them.

And the witnesses questioned whether our customs agencies have sufficient people on the
ground to ensure robust trade enforcement and facilitation.

I have questions about whether CBP has devoted sufficient resources to the northern
border. At the Port of Sweet Grass, Montana, more than 300 trucks cross the border
every day. Three hundred trucks may not sound like a lot. But hundreds of small and
medium-sized Montana businesses rely on those trucks and the cross-border trade that
they bring with them. And yet CBP has failed to fill the dozens of vacant positions at
Sweet Grass that we need to facilitate that trade.

I also have real questions about CBP’s responsiveness to this Committee, particularly
CBP’s Office of International Trade. We established this Office as part of the SAFE Port
Act in 2006 to prioritize CBP’s trade functions. But it has failed to consult its oversight
Committee before releasing significant new policy proposals. And it often fails to
address Committee inquiries in a timely manner. We have to find a better way of
working together.

And I have questions about whether two of the other agencies before us today — the
International Trade Commission and the Office of the U.S. Trade Representative — have
the resources that they need to fully enforce our trade laws and trade agreements.

I look forward to hearing answers to all of these questions.

I look forward to introducing legislation in the coming weeks to reauthorize the agencies
before us today.

And I look forward to rededicating the attention of our customs agencies to their revenue
collection and trade facilitation mission — the mission that our Founders established for
them more than 200 years ago.