EU says U.S. cargo scanning would disrupt trade, violate treaties

We reported on Tuesday that the Congress-approved DHS appropriation bill allows DHS a way out from implementing the 100 percent inspection rule for in-bound freight containers: DHS secreatary can report to Congress that the technology for such comprehensive screening is not yet available, and the department would be granted a two-year extension for implementation. If the technology is not yet available after two years, then another report to Congress to that effect would give the department yet another extension, and so on. Extension or no extension, the EU is worried about the very idea of 100 percent inspection, arguing that the rules that all overseas cargo containers must be scanned would not improve security and would disrupt trans-Atlantic trade, placing the financial burden of protecting America on her trading partners, the EU’s customs chief said this morning. AP reports that EU taxation commissioner Laszlo Kovacs said the U.S. Congresss’s adoption of the new law would add costs to European exporters without making real improvements to homeland security. “Experts on both sides of the Atlantic have already considered this measure to be of no real benefit when it comes to improving security while it would disrupt trade and cost legitimate EU and U.S. businesses a lot of time and money,” he said. “By introducing the U.S. H.R. 1 legislation, the United States transfers unilaterally and without coordination with its trading partners the resource burden for protecting the United States onto them,” he said.

The new measures — to be implemented within the next five years, but subjects to the two-year extensions we referred to above — will mean a major restructuring for European ports and place “a very heavy financial burden” on EU business and European taxpayers, he said. These higher costs could see EU traders suffer in comparison with their U.S. counterparts, he warned — something that might pave the way for an EU complaint with the World Trade Organization (WTO) that the U.S. has violated the international rules of free and fair trade. Instead of scanning 100 percent of cargo containers, Kovacs advocated basing checks on containers on the risk involved, saying this struck a balance between security and making trade easier.

The U.S. rules are part of anti-terrorist legislation put forward in the wake of the 9/11 attacks that aim to tighten security. The new Democratic majority in Congress has made the legislation one of its most urgent tasks, saying it was long past time to carry out the July 2004 recommendations of the bipartisan commission formed after the 2001 attacks. Business groups on both sides of the Atlantic, however, have warned that the requirement to scan and seal all the 11-to-12 million maritime containers sent from European ports to the United States would impose considerable costs on international businesses and would lead to significant delays. BusinessEurope and the U.S. Chamber of Commerce in April wrote to U.S. Congress officials to complain that the new rules will ultimately hurt U.S. consumers by hiking prices for all imported deadlines. They also warned that other nations may retaliate with stricter rules of their own.

Note that the European Union and the United States are each other’s main trading partners, sending around $2.3 billion worth of goods, services, and investments across the Atlantic each day.