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The Honolulu Advertiser
Posted on: Monday, October 8, 2001

The September 11th attack | America strikes back
Tight security slows movement of goods

Associated Press

SAN FRANCISCO — In the days following the jetliner terror attacks, the normally smooth flow of trade was practically paralyzed.

The Coast Guard escorts a fuel barge and tugboat on the Potomac River amid heightened security by the government at points of entry to the United States.

Associated Press

Now that global commerce is back near normal, businesses have a new worry.

With wartime-type security at American points of entry still in place, some businesses are concerned that protracted anti-terrorism efforts will complicate — and slow — the movement of goods that anchor the world economy.

"At this point, companies are reluctant to say much about this because they don't want to seem unpatriotic, but privately they are concerned," said Roger Majak, a former assistant U.S. commerce secretary under the Clinton administration.

"Ultimately, it will affect their bottom lines," said Majak, an adviser at Open Harbor, which helps companies automate import-export procedures.

The cost could amount to one-half of 1 percent of the U.S. gross domestic product — the total output of goods and services, estimates Peter Morici, a senior fellow at the Economic Strategy Institute in Washington D.C. Based on second-quarter GDP results, that loss would have been $51 billion.

Whether the reason is stricter scrutiny, fewer flights, costlier logistics, or companies acting more conservatively amid uncertainty, "the world is slowing down," Morici said. "And the government seems to be instituting more and more (security) measures."

The U.S. Customs Service is now inspecting more goods than ever before.

Cargo allowed on passenger flights is being subjected to closer scrutiny. The U.S. Coast Guard now requires ocean shippers to give detailed information about crew members — and not just the cargo.

"We are going a lot further today in examinations and inspections because of Alert Level One," Jim Michie, a Customs Service spokesman said. The Customs commissioner, Robert Bonner, says the highest level of security will remain into the "foreseeable future."

Some inspections "won't take very long at all, and some may go on for days, depending on the cargo," said Michie, adding that "our primary mission is to make sure people are safe and to protect our borders from any illegal traffic and traffic contributing to terrorism."

At U.S. ports, shipping companies and port officials say Customs and Coast Guard inspectors have worked hard to keep the delays minimal — usually under an hour — even with the more intense scrutiny both onboard and ashore.

At several of the nation's larger ports, including New York and San Francisco, the Coast Guard is boarding each ship, said Coast Guard spokesman Dan Dewell.

Freighters can make up for lost time by speeding up at sea, but traveling faster burns more fuel, said Dan Westerlin, a Port of Oakland spokesman.

Industry observers say the security-related costs will add up and potentially slow down the international flow of goods at a time when economies are weak worldwide.

And while industry groups support the government's prerogative to protect America, some are also preparing for a renewed struggle in the long-standing debate to balance national security against trade interests.

"We understand the need for security at the border, but it's important for plants to continue their business, too," said Frank Vargo, vice president of international economic policy for the National Association of Manufacturers.