January 15, 2021

Transportation, Trade and CBP: Looking Ahead to the Biden Era

Holland & Knight Transportation Blog
Seth M.M. Stodder
Election Impacts on Transportation & Infrastructure with Transportation themes

Few U.S. government agencies spent more time in the spotlight during the four years of the Trump Administration than U.S. Customs and Border Protection (CBP) – the component of the U.S. Department of Homeland Security (DHS) chiefly responsible for securing America's borders. CBP was involved in so many of President Trump's most controversial policies – from the ban on travel from several predominantly Muslim countries to the separation of migrant children from their parents and the border "wall" – that the agency seemingly became a permanent fixture on the nation's front pages.

President-Elect Joe Biden has promised to reverse many of the Trump-era policies, especially those concerning immigration enforcement and the rights of asylum seekers, so starting on Jan. 20, 2021, CBP's priorities will likely make an abrupt turn. But make no mistake, CBP will remain front and center in the public debate, with many aspects of its complex multifaceted global mission continuing to spark political controversy. While this is particularly true in the immigration and national security arena, CBP's role in enforcing U.S. laws and ensuring public safety while managing the cross-border flow of people and commerce through U.S. Ports of Entry (POEs) will have a high profile during the Biden Administration – particularly in the transportation and international trade arena, where we will likely see several shifts in policy, as well as several areas of continuity. Four in particular stand out:

1. COVID-19, Borders and International Travel

In the opening days of the COVID-19 pandemic, the Trump Administration imposed a series of restrictions on the entry of foreign nationals into the United States. Many countries imposed similar restrictions and some, including much of the European Union, banned the entry of most Americans.

Obviously, these travel bans failed to control the global pandemic – and they have not prevented the still-surging outbreak in the United States. But they have largely cut Americans off from much of the world, damaged the U.S. economy and pushed airlines to the brink of bankruptcy. Even if some of the travel restrictions might have made sense in early 2020, they seem to make little sense now – and bear little relationship to the pandemic's current realities. For example, the U.S. severely restricts travel from China,1 which until recently (with an outbreak and lockdown in provinces near Beijing)2 has largely had the virus under control, but does not restrict travel from places such as India, Russia and Turkey – which are still suffering from major COVID-19 outbreaks and reporting thousands of new infections every day.3 Additionally, the current country-based travel restrictions apply only to certain foreign nationals and not to U.S. citizens, lawful permanent residents, and air and sea crew members, among other exceptions.4 It's an undisputed fact that the SARS-CoV-2 virus does not care about a person's citizenship, immigration status or the purpose of travel.

This probably won't continue. As the Biden Administration takes office, look for the new leadership of DHS and CBP to rethink the Trump-era border and travel restrictions. Working closely with foreign governments and the global private sector, including the airlines, DHS and CBP will likely work to develop a new "smart border" strategy – much as it did in the immediate aftermath of the 9/11 attacks – that moves away from wholesale country-by-country restrictions on travel and, instead, uses screening tests, vaccination verification and contact tracing to assess and manage the public health risks presented by individual travelers. Indeed, this shift is already beginning – as the Centers for Disease Control and Prevention (CDC) recently announced that, starting on Jan. 26, 2021, all air passengers seeking to travel to the United States will be required to obtain a negative COVID-19 test result within 72 hours before their flight to the U.S. departs.5 Written documentation of this test result – or evidence of recovery from COVID-19 – will need to be shown to and confirmed by the airline prior to the passenger boarding.

Obviously, there may be short-fuse situations in which the imposition of wholesale country-wide border restrictions might make sense, especially where there is a quickly emergent threat that is not fully understood – such as the wholesale restrictions that were briefly imposed on travel from the United Kingdom to slow the spread of what appears to be a new, highly contagious strain of the SARS-CoV-2 virus.6 But even in such a high-threat situation, the ultimate objective will likely be to shift quickly to a "smart borders" approach that avoids wholesale restrictions and instead uses information and technology to assess the risks presented by individual travelers.

Essential to the proposed "smart borders" approach will be the growing availability of quick, cheap and accurate COVID-19 screening tests that can be taken by travelers immediately prior to boarding planes, in transit or prior to crossing borders – along with developing a capability for airlines, border and air safety agencies to receive and easily verify the results. The recently announced CDC requirement, while an important step, hinges on a negative COVID-19 test result obtained within 72 hours prior to travel – leaving a window of time during which a traveler could still become infected. Additionally, the United States and many other countries are plagued with shortages of polymerase chain reaction (PCR) testing resources and laboratory analysis capabilities, so the CDC testing requirement could present an obstacle to last-minute travel needs, especially for those traveling from the developing world. Lastly, the CDC testing requirement does not apply to the thousands of travelers who cross the land borders within North America every day. But it's a first step toward a "smart borders" approach, and the good news is that a variety of new, quick and accurate COVID-19 screening tests have been recently approved by the U.S. Food and Drug Administration (FDA), and others are on the way. In addition, many airlines have already been using some of these COVID-19 screening tests and working with CBP and foreign government agencies to try to establish travel "bubbles" or "corridors" in order to open up particular routes for travel.

These efforts will likely gain a further push during the Biden Administration. Indeed, a new "smart borders" approach by CBP is especially urgent, given the unfolding distribution of vaccines both in the United States and worldwide. CBP will need to work with international partners and the private sector to develop protocols for identifying who has been vaccinated, determining whether such inoculations are effective enough to warrant a "COVID-19 passport" of sorts to permit international travel, and better systems for verifying the results of screening tests – which will still be vital, given that it may take several years for most of the world's population to be vaccinated.7

2. North America, USMCA and Shifting Supply Chains

Another important area of focus for CBP in the Biden Administration will be North America – building from the implementation of the United States-Mexico-Canada Agreement (USMCA), which entered into force in 2020.

In a big picture sense, and with the finalization of the USMCA being an important exception, the Trump Administration's dealings with Canada and Mexico, as well as other North American nations in Central America and the Caribbean, have been fraught with tension – over trade, the border "wall" and Central American migration, among many other things. Personality conflicts, especially between President Donald Trump and Canadian Prime Minister Justin Trudeau, have further complicated matters. Indeed, whatever good feeling that arose from the finalization of the USMCA last year was arguably dampened by the U.S. reimposition of 10 percent tariffs on Canadian aluminum imports under Section 232 of the Trade Expansion Act in August, asserting national security concerns.8 The tariffs were subsequently lifted, but Canada, a longtime U.S. ally, took great offense at being called a national security threat. And, as noted above, the shared land borders with Mexico and Canada remain closed to all but "essential" travel and trade because of the pandemic-related border restrictions that have divided binational communities.

As the Biden Administration takes office, look for CBP – and DHS more generally – to play a significant role in the new administration's effort to mend fences, so to speak, with the United States' North American partners. Of course, the first step will be to take another look at the land border restrictions, and whether there is a better way to protect the public from the cross-border spread of COVID-19. Indeed, many think it's particularly odd for the U.S. to feel the need to protect against Canadians or Mexicans carrying the virus across our land borders, given that the U.S. is suffering through the world's worst outbreak. So, under the Biden Administration, expect CBP to apply some of the "smart border" ideas discussed above to the land borders.

Indeed, the concept of "smart borders" was initially developed by the U.S., Canada and Mexico in the immediate aftermath of 9/11. Together, the three North American partners forged a North American "smart border" strategy focused on: 1) securing the North American perimeter from terrorists and other external threats; 2) working together to address internal North American security, enforcement and humanitarian challenges, such as combating transnational organized crime and managing the flows of migrants and asylum seekers; and 3) reducing unnecessary barriers to lawful cross-border travel and trade. During the Biden Administration, anticipate that CBP – and DHS more broadly – will work with Canada and Mexico to do this again for the era of COVID-19 – developing protocols for using screening tests, vaccination verification and contact tracing to assess and manage COVID-19 risks presented by individual travelers, and moving away from the wholesale travel bans that have counterproductively divided the North American nations and binational communities.

The timing for the North American rapprochement is particularly important, given the vital importance of Canada and Mexico – two of the United States' top three trading partners – to the U.S. economy,9 as well as the rising challenge presented by China. Indeed, President-Elect Biden has emphasized the need to reduce U.S. dependence on Chinese manufacturing, especially of goods vital to U.S. national security and public health – a need demonstrated vividly in the early days of the pandemic, when the U.S. was suffering from major shortages of Personal Protective Equipment (PPE). With the implementation of the USMCA, North America may become a more attractive alternative for manufacturing and key supply chains – and one can anticipate the Biden Administration working to make North America even more attractive to global businesses, thereby providing stiffer competition to China-based supply chains.10

CBP will play a key role in this, not only in the implementation of the USMCA, but more broadly in working with Canada, Mexico and the private sector to reduce unnecessary barriers to lawful travel and commerce across the land borders. Additionally, look to CBP to work with Canada and Mexico – as well as the private sector and state, local and tribal governments – to facilitate the construction of the modern cross-border infrastructure needed to expand lawful trade and travel. This could include developing public-private partnerships to fund infrastructure, drawing from such models as the Cross-Border Xpress at Tijuana International Airport or the Otay Mesa East Port of Entry between San Diego and Baja California.

3. Trade Enforcement: China Tariffs, Forced Labor Concerns and E-Commerce

During the Biden Administration, expect one key area of continuity with the Trump Administration – at least in the near term – namely, in the U.S. posture toward China, including with regard to the increased tariffs imposed by the Trump Administration. President-Elect Biden has said that these tariffs are not going away anytime soon.11 As the border and customs agency, CBP is charged with enforcing these tariffs and collecting required duties.

In addition, during the Trump Administration, CBP has stepped up its enforcement of U.S. laws prohibiting the importation of goods made from forced or indentured labor, including forced child labor.12 It has imposed a number of Withhold Release Orders on importers, and worked closely with U.S. Immigration and Customs Enforcement (ICE) on investigations of forced labor practices. These issues arise around the world, but recently the spotlight has been on China – and, specifically, on the wide use of forced labor in the Xinjiang Region. As noted by outgoing Acting CBP Commissioner Mark Morgan, "China's systemic abuse of forced labor in the Xinjiang Region should disturb every American. Forced labor is a human rights violation that hurts vulnerable workers and introduces unfair competition into global supply chains. CBP will continue taking decisive action to prevent goods made with forced labor from entering the United States."13

Given President-Elect Biden's signaling of continuity in the U.S. posture toward China, one should anticipate increased CBP enforcement of forced labor laws, especially with regard to goods manufactured in Xinjiang and others parts of China. This will provide even further incentive for importers and other supply chain players to increase their visibility deeper into supply chains. Further, one might anticipate CBP broadening the Customs-Trade Partnership Against Terrorism's (C-TPAT) push toward ever greater supply chain security and visibility, as the agency continues to evolve the Minimum Security Criteria for participation in the program – as it most recently did in 2020.

Additionally, another key area of evolving focus in the trade enforcement arena is in e-commerce, which – in the view of CBP – has not only revolutionized the global economy but also provided new avenues for criminality, including the importation of counterfeit and pirated goods, as well as other contraband shipped in smaller packages often directly to consumers. In 2018, CBP announced an "E-Commerce Strategy," providing a roadmap for how CBP will work to address this evolving challenge – and it continues to be an area of significant focus and policy development for the agency.14

4. Continued Innovation: Processes and Technology

Finally, and briefly, another key area to watch within CBP during the Biden Administration is a further push for next-generation technologies and improved processes – in particular to facilitate the flow of lawful travel and trade, as well as to strengthen supply chain security, visibility and resilience. Among other things, one should anticipate a continued push by CBP to work with airports and airlines on its "seamless travel" initiative – using biometrics, including facial recognition, for travel document checks, as well as further innovation in the use of Global Entry for international travelers. The era of "secure, touchless travel," aided by biometrics, data analytics and machine learning, is coming fast – and CBP will likely continue to push this during the Biden Administration, albeit with greater scrutiny of the privacy and civil liberties implications of these technologies and innovative processes.

In addition, one can anticipate CBP continuing to work with the trade community and technology vendors to develop better processes and capabilities aimed at more effectively facilitating, securing and reducing costs relating to the movement of cargo – as outlined in its 21st Century Customs Framework (21CCF).15 Among other things, CBP will continue to push to fully implement its "Single Window" initiative for the collection and analysis of trade data, as well as use it to facilitate information sharing with foreign partners – such as with the recent agreement with Singapore.16 In addition, one should anticipate that CBP will continue to pilot the use of blockchain technology for more secure communication of trade data, payments and other information.

Conclusion

The above discussion highlights just four broad areas – of course, there are others one could highlight – that provide a snapshot of where CBP is likely headed in relation to transportation and trade as the agency enters the Biden era.

For specific questions or more information on how CBP's policies, regulations or processes might change after the Biden Administration takes office, or how the incoming administration's transportation or trade policies could affect your organization, please contact the author or another member of Holland & Knight's International Trade Group.

20 Posts in 20 Days Leading to Inauguration Day on Jan. 20

Holland & Knight's Transportation & Infrastructure Industry Sector Group is prepared to assist industry clients in adapting to the anticipated changes by the new administration. Our team is writing new blog posts each day leading up to President-Elect Joe Biden's inauguration, with insights as to likely impacts on the various segments of the industry, including Aviation, Construction, Maritime, Freight Rail, Motor Carriers, Transit and Autonomous Transportation. Bookmark our Election Impacts on Transportation & Infrastructure resource page to follow along.

Notes

1 Centers for Disease Control and Prevention (CDC), Travelers Prohibited from Entry to the United States.

2 Steven Lee Myers, "Facing New Outbreaks, China Places Over 22 Million on Lockdown," The New York Times (Jan. 13, 2021).

3 Worldometer, COVID-19 Coronavirus Pandemic, Reported Cases and Deaths by Country, Territory, or Conveyance.

4 U.S. Department of State, Bureau of Consular Affairs, Presidential Proclamations on Novel Coronavirus.

5 CDC Media Statement, CDC Expands Negative COVID-19 Test Requirement to All Air Passengers Entering the United States (Jan. 12, 2021).

6 "Covid: Nations impose UK travel bans over new variant," BBC (Dec. 20, 2020).

7 Launch and Scale Speedometer, COVID-19 Weekly Vaccine Research Update (Jan. 11, 2021).

8 Office of the U.S. Trade Representative, Statement on Presidential Proclamation (Aug. 6, 2020).

9 U.S. Census Bureau, Top Trading Partners.

10 See generally Roberta Jacobson and Tom Wyler, "To Counter China, Look to Canada and Mexico," Foreign Affairs (July 2020).

11 Thomas L. Friedman, "Biden Made Sure 'Trump Is Not Going to Be President for Four More Years'," The New York Times (Dec. 2, 2020).

12 19 U.S.C. § 1307.

13 CBP Press Release, CBP Issues Detention Order on Cotton Products Made By Xinjiang Production and Construction Corps Using Prison Labor (Dec. 2, 2020).

14 CBP E-Commerce Strategy.

15 CBP, 21st Century Customs Framework Overview.

16 "CBP and Singapore Customs Sign Historic Letter of Intent to Explore Single Window Connectivity," Homeland Security Today (Nov. 10, 2020).

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