US Customs and Border Protection (CBP) signed the MRA with the Customs Administrations of Guatemala and Colombia at the Trade Facilitation and Cargo Security Summit on Monday (17 April).
“By cooperating with our regional partners through MRAs and other bilateral arrangements, we are able to create a unified and sustainable security posture,” said Pete Flores, Executive Assistant Commissioner for CBP Field Operations. “As a result, we are furthering our efforts to facilitate trade and enhance our economic security mission.”
Hosted by Debbie Seguin, assistant commissioner for International Affairs, guests included Marco Livio Diaz Reyes, Superintendent of Guatemala’s Superintendencia de Administracion Tributaria, and Ingrid Magnolia Diaz Rincon, director for the Direccion de Impuestos y Aduanas Nacionales de Colombia.
MRAs are bilateral understandings between two customs administrations providing a platform for the exchange of membership information and recognise the compatibility of the respective supply chain security programme.
CBP reached this MRA after the customs administrations of Guatemala and Colombia had agreed on a Joint Work Plan (JWP) during the 2022 Trade Facilitation and Cargo Security Summit, held in Anaheim, California. The JWP is a document that lays out the path towards MRAs between the two customs administrations’ Authorized Economic Operator (AEO) programs. A JWP shows commitment from both programmes, requires high level support, and lays out detailed steps towards MRA.
The document, referred to as an “arrangement”, indicates the security requirements or standards of the foreign industry partnership programme, as well as its verification procedures, are the same or like those of the Customs Trade Partnership Against Terrorism (CTPAT) programme.
The essential concept of Mutual Recognition is that CTPAT and the foreign Customs Administration programme have established a standard set of security requirements that allows one business partnership programme to recognise the validation findings of the other programme and benefits both customs administrations and the private sector participants.
CTPAT is a voluntary public-private sector partnership programme that recognises CBP can provide the highest level of cargo security only through close cooperation with the principle stakeholders of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers.
When an entity joins CTPAT, an agreement is made to work with CBP to protect the supply chain, identify security gaps, and implement specific security measures and best practices. Applicants must address a broad range of security topics and present security profiles that list action plans to align security throughout the supply chain.
CTPAT continues efforts with international partners to consistently provide tangible benefits while not compromising security and ensuring trade facilitation. CTPAT is committed to international cooperation and coordination to consistently strengthen and secure global supply chains and to further global standardisation of AEO programmes.
The Covid pandemic and the ensuing global supply chain crisis has turned the long-standing global sourcing paradigm on its head, forcing retailers and brands to diversify out of China and move production closer to home.
This is certainly true in the US where there has been historic investment in the US textile production chain in recent years, as well as in Central American countries including Honduras, Guatemala, and El Salvador.
“We expect over $1bn of new investment to go into Central America this year alone for textiles. That’s an indication the world’s changed,” said National Council of Textile Organizations (NCTO) president and CEO Kim Glas, recently.
Like other DR–CAFTA countries, Guatemala enjoys tariff-free bilateral trade in apparel and textiles with its largest export market—the US, the destination of nearly 77% of its apparel exports. The country has focused on speed to market as its competitive advantage, and has short lead times, which average from 24 to 40 days.