US Congress looks for help in speeding NAFTA cargo trade

Time: 2016-05-19 14:00
WASHINGTON — U.S. agencies and federal lawmakers seem bullish about expanding a program that allows local governments, private groups and shippers to kick in money toward ports of entry on the Mexican and Canadian borders so shippers can move cross-border cargo more efficiently and for less money.

But before shippers can enjoy the benefits of faster clearance of North American Free Trade Agreement trade, decisions still need to be made on how much scrutiny is needed of such donations. The Donation Acceptance Program is the latest example of how the federal government is looking for funding aimed at improving cargo movement outside of Washington D.C. Another pilot program, for example, allows shippers to pay for extra and extended gates at ports of entry during busy periods.

“Two big ideas must drive the program: a commitment to flexibility, and recognition that a demonstrable return on investment will be critical to attract private dollars,” Sam Vale, chairman of the Border Trade Alliance Public Policy Committee, told lawmakers at a House of Representatives Subcommittee on Economic Development, Public Buildings and Emergency Management hearing Wednesday.

Nevertheless, there are pitfalls that come with unrestrained flexibility and the program’s developers and leaders need to keep them in mind, said Michael Gelber, deputy commissioner of public buildings service for the U.S. General Services Administration.

“Acceptance of what appears to be a ‘cost-free’ donation could ultimately result in additional costs to the government,” Gelber said at Wednesday’s hearing.

Gelber’s agency developed the Donation Acceptance Program, or DAP, in tandem with U.S. Customs and Border Protection in 2014. Since that time, DAP has provided an alternative resource to help support border crossings between the U.S., Mexico and Canada, historically supported by congressional appropriations.

The concept has made practical sense considering infrastructure at many border crossings has failed to keep pace with the amount of trade they now see and congressional appropriations have, in turn, failed to maintain parity with increases in trade.

“Many of the nation’s land port facilities were built more than 70 years ago,” Eugene Schied, assistant commissioner in the CBP administration office pointed out. Meanwhile, he said, “trade between the United States and Mexico has expanded nearly sixfold, with similar increases with trade with Canada.”

Capital investment in land port facilities has averaged less than $90 million per year, Schied reported.

Since the first donation submission period ended in December 2014, GSA and CBP have evaluated seven donation proposals. Under the program, projects are also being further assessed and developed in the cities of Donna, El Paso and Pharr, Texas.

“In Donna and Pharr, for example, the cities seek to donate inspection booths and related infrastructure; while in El Paso, the city would like to remove medians near the inspection stations to streamline the flow of traffic,” said Gelber.

In all three of those cases, many of the requirements are complete or near completion, meaning the projects may be soon ready for construction, pending the agreement of relevant stakeholders, Gelber reported to the House subcommittee.

Close scrutiny has played, and must continue to play, an important role in vetting donations, Gelber and Schied said.

“If an alternative funding source might be available to construct a land port of entry, GSA and CBP still may need to obtain funding to address the other costs associated with the project,” Gelber said.

A “cost-free” project suddenly could incur costs. “At the same time,” he said, “if the investment is required to address critical commerce and security requirements at the border, a donation would result in lower costs to the government than if the government had to make the full investment.”

Lawmakers at Wednesday’s subcommittee hearing, like the group’s chairman Rep. Lou Barletta R-Pa., expressed interest in how the program could be expanded. While Gelber and Schied welcomed the idea, they still stressed scrutiny during the program’s vetting process.

Strict scrutiny, however, was not considered a merit for everyone at Wednesday’s hearing.

“While we applaud the Donation Acceptance Program,” the Border Trade Alliance’s Vale told lawmakers, “CBP and GSA must be flexible in their project scoping and design processes if the DAP is going to prove successful.”

Vale urged CBP and GSA to consult the Department of State on how the DAP will fit within the presidential permit process.

“Anyone who has attempted to undertake infrastructure improvements at a land border port of entry is intimately aware of the Department of State’s expensive, time consuming permit process. I can tell you from personal experience that the permitting process is not an easy one,” said Vale, who is also president of the South Texas Assets Consortium and the Starr-Camargo Bridge Company.

While Vale acknowledged that a discussion concerning the permitting process was more suitable for another forum, he was clear that potential private sector participants in a real estate donation should have a clear understanding of each department’s requirements.


Contact:  Aster Chen
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