Three quick impressions:

1. Constructive example of “stovepipes” being brought together around a supposedly stovepipe-busting strategy.

2. The tension between security and resilience is real, persistent, and difficult to effectively engage.   Security is tough enough.  Resilience requires even more creativity.

3. It is striking to have a hearing on this topic without hearing directly from the private sector as well.

This is an early step in rolling-out the new strategy.  Much more to come.

The intelligence chief’s comments regarding the Iranian threat were considerably more circumspect, “We assess Iran is keeping open the option to develop nuclear weapons, in part by developing various nuclear capabilities that better position it to produce such weapons, should it choose to do so.  We do not know, however, if Iran will eventually decide to build nuclear weapons.”

Yet Senators, the media, and perhaps General Clapper himself gave much more attention to the possible Iranian threat than the probable threat of natural catastrophe and pandemic.  The front page headline in the Washington Post was “U.S. spy agencies see new Iran risk.”

The same day the DNI was testifying on Capitol Hill, Mike Dunaway was making a presentation to a FEMA-hosted audience in Harrisburg, Pennsylvania.   In late 2008 and early 2009 a reasonable sample of  respondents answered a series of questions regarding their perceptions of relative threats to continuity of private sector operations, profitability or survival.

A couple of the survey findings stood out for me: Among 19 threats identified, the lowest perceived threat was “geologic disaster (earthquake, mudslide, volcanic action)”.  The survey was conducted prior to the earthquake-and-tsunami in Japan and none of the respondents were in California.   Perceptions will vary by time and place.

Also low on the list of threats was “interruption in supply or delivery chain.”   Several firms reeling from the loss of Japanese and Thai suppliers might answer differently.  But I don’t doubt the survey findings reflect general attitudes.  (Dr. Dunaway’s dissertation is chock-full of interesting findings.)

As addressed in two posts last Thursday and Friday, the President has signed-out a National Strategy for Global Supply Chain Security.  I appreciate Alan Wolfe and Bill Cumming commenting here on the posts.  Most friends, colleagues, and perhaps an adversary or two, decided to communicate more privately.  Below are a sample of the comments received.

“Just words on paper, very unlikely to really influence supply chain policy.”

“Despite a bow to resilience, this is a security strategy.”

“Lots of cargo and logistics talk, not much recognition of how the supply chain is really something new and different.”

“Though better than the earlier draft, it still seems to be mostly focused on security and less on resilience. However, I know from direct experience it is not easy to write about resiliency, and perhaps being secure is one of the first parts of being resilient.”

“Stalking horse for new (costly) regulations.”

“While it is a national strategy, it feels quite federal/global to me. I’m not sure if many state and/or local folks could conceive how they could contribute to helping realize the goals outlined. It is my belief that a resilient supply chain, like many things, starts and ends in localities around the world.

“C-suites will ignore and deploy their minions to be sure “efficiency” always trumps “resilience,” no matter how inefficient it may be to have a catastrophic collapse of supply chains.”

“The private sector is paramount. It seems to me that much, though certainly not all, of the role of government will be to encourage, support, oversee and in some instances force the private sector to do things. Left to themselves, I think other forces will drive the private sector to not do some of what has to be done to reduce risk and enhance resiliency.”

“To give this the status of a presidential strategy is sort of amazing. It’s made me stop to think. But I feel a bit like a Catholic must feel when it’s announced the Pope has convened a major meeting on an aspect of doctrine I had really never thought of before.”

“What am I supposed to do? I don’t know enough about supply chains to even start a conversation with private sector peers. Besides which private sector peers? These are not the security and EM guys I usually work with.”

“(The strategy is) better than I would have bet. But while behind closed-doors the operators agree it is a real issue, how do you convince CEOs, CFOs, and Boards of Directors? Japan didn’t persuade. Thailand didn’t persuade. White House stationary is easy to ignore. The only things these masters-of-the-universe understand is a swift kick in you know where… and by then it will be too late.”

Perceptions will vary by time and place.  But there is a strong tendency to give more attention to external threats than internal vulnerabilities.  There is more concern regarding possible evil intent elsewhere than accident, neglect, and denial close at hand. We see the splinter in the eye of the other much more quickly than we recognize the log in our own eye.

The strategy offers two goals:

Goal 1: Promote the Efficient and Secure Movement of Goods – The first goal of the Strategy is topromote the timely, efficient flow of legitimate commerce while protecting and securing the supply chain from exploitation, and reducing its vulnerability to disruption. To achieve this goal we will enhance the integrity of goods as they move through the global supply chain. We will also understand and resolve threats early in the process, and strengthen the security of physical infrastructures, conveyances and information assets, while seeking to maximize trade through modernizing supply chain infrastructures and processes.

Goal 2: Foster a Resilient Supply Chain – The second goal of the Strategy is to foster a global supply chain system that is prepared for, and can withstand, evolving threats and hazards and can recover rapidly from disruptions. To achieve this we will prioritize efforts to mitigate systemic vulnerabilities and refine plans to reconstitute the flow of commerce after disruptions.

In my judgment we are much closer to achieving “efficient and secure movement” than we are to a “resilient supply chain”.  The new strategy could help with each, but the tougher task will be the effort “to mitigate systemic vulnerabilities.”

On January 11 the Wall Street Journal reported,

After a decade of streamlining their supply chains to make them less costly, the natural disasters and political upheavals that marked 2011 showed many multinational companies just how vulnerable those links have become.

A senior supply chain executive recently told me (clearly depending on me to protect his name and the name of his firm), “We have several known choke-points. I’m sure there are many more we don’t know about.  It won’t take a major disaster to disrupt supply, just a couple of unusual, probably simultaneous accidents.  I think — hope — there would be a similar impact on our competitors.  But that doesn’t help our consumers.”

“There are ways to mitigate our risk, but they’re all expensive,” another executive explains.  ”And for the last decade and the foreseeable future the lower cost of US supply chain management has been our principal economic advantage.  We’re much better than the Europeans, tons more efficient than the Chinese.  Increase supply chain costs and we lose just about the only advantage the US has left on most commodity trading and even a broad range of high-end specialty goods.”

Again from the Wall Street Journal:

Justifying redundancies is one of the toughest aspects of managing a supply chain, because backstopping doesn’t pay off unless there is a disaster. When CFOs ask about the return on such investments, the answer is, “If we’re lucky, absolutely zero return,” says Sean Cumbie, vice president in charge of global supply-chain management at genetics-testing company Qiagen NV, based in Germany.

The new strategy makes a glancing reference to “appropriate redundancy” which, for most supply chain executives, is like discussing the practical difference between manslaughter and murder.   Whatever you call it, the outcome ain’t pretty.

The senior supply chain guys (and a few gals) are the pioneers of the field.  In the last twenty years they have transformed the known world.  Not just the supply chain world, but the everyday world of billions of consumers.  Today the supply chain is faster, cheaper,  delivers much higher quality with much more assurance and transparency than a quarter century ago.

On most days the supply chain is also stronger, more flexible, and better at handling a range of emergencies and disasters.

But what we saw in Northeast Japan and Thailand has exposed a parallel reality.  Like all networked systems, risk tends to pool in unexpected ways and often unexpected places.  What if the earthquake-and-tsunami had hit the economic heartland of Tokyo and Osaka, instead of the Tohoku periphery?  What’s would the outcome be if  instead of Thai flooding it was an earthquake in San Francisco and down the east side of Santa Clara County?  What happens if the Port of Long Beach is seriously disrupted for an extended period?  What if cyber-vandals — or economic or national or terrorist adversaries –seriously target the digital systems on which the modern supply chain absolutely depends?

In a report — “New Models Addressing Supply Chain and Transport Risk” (7 megabyte PDF) —  released Tuesday, the World Economic Forum found:

Supply chain and transport networks have continuously evolved to deliver capacity, speed, efficiency and customer service through organizational trends such as globalization, specialization, volume consolidation and information availability. The focus on cost optimization has highlighted the tension between cost elimination and network robustness – with the removal of traditional buffers such as safety stock and excess capacity. These developments have shifted risk distributions…(while) their effects have often included sharing risk more broadly around the world, reducing high-frequency risks and focusing risk within sectors, common technologies or nodes. Another common feature has been to disassociate risk from responsibility, misaligning incentives and creating moral hazards – the notion that a party that is insulated from risk will behave differently from how it would behave if it had full exposure to risk.

Most supply chain managers I know tend to discount low frequency, high consequence risks (see related post).  They discount this kind of risk because over the last twenty years they have become true masters of risk management.   They also discount high impact risks because their CEO’s, Boards of Directors, and shareholders reward them for squeezing every possible penny out of supply chain costs.  They discount catastrophic risk because their creation — the modern supply chain — has never experienced a fundamental systemic failure.

Yet.

Many supply chain executives have become what economists sometimes call “risk preferers”, they have learned to maximize their return by skating with great style, grace, and confidence along the edge of chaos.   Each day they become more adept at mastering the chaos.   Is the experienced supply chain executive a sorcerer or  sorcerer’s apprentice?

The new National Strategy is the starting point for a collaborative process of discussion, analysis, and policy development.  It seeks to “develop a culture of mutual interest and shared responsibility” across government and the private sector.  It’s the right goal.  It’s the right way to pursue the goal.

It is a very ambitious goal.

Page 1:

The demise of Osama bin Laden and the capturing or killing of many other senior al-Qa?’ida  leaders have rendered the group far less capable. However, al-Qa?’ida and its affiliates remain active in Pakistan, Afghanistan, Yemen, Somalia, and elsewhere. More broadly,violent extremists will continue to threaten U.S. interests, allies, partners, and the homeland.The primary loci of these threats are South Asia and the Middle East. With the diffusion of destructive technology, these extremists have the potential to pose catastrophic threats thatcould directly affect our security and prosperity. For the foreseeable future, the UnitedStates will continue to take an active approach to countering these threats by monitoring theactivities of non-state threats worldwide, working with allies and partners to establishcontrol over ungoverned territories, and directly striking the most dangerous groups and individuals when necessary.

Page 2:

In the Middle East, the Arab Awakening presents both strategic opportunities and challenges. Regime changes, as well as tensions within and among states under pressure toreform, introduce uncertainty for the future. But they also may result in governments that,over the long term, are more responsive to the legitimate aspirations of their people, and aremore stable and reliable partners of the United States.Our defense efforts in the Middle East will be aimed at countering violent extremists anddestabilizing threats, as well as upholding our commitment to allies and partner states.

Page 3:

To enable economic growth and commerce, America, working in conjunction with allies and partners around the world, will seek to protect freedom of access throughout the globalcommons ?– those areas beyond national jurisdiction that constitute the vital connective tissue of the international system. Global security and prosperity are increasingly dependent on the free flow of goods shipped by air or sea. State and non-state actors pose potential threats to access in the global commons, whether through opposition to existing norms orother anti-access approaches. Both state and non-state actors possess the capability and intent to conduct cyber espionage and, potentially, cyber attacks on the United States, with possible severe effects on both our military operations and our homeland. Growth in the number of space-faring nations is also leading to an increasingly congested and contested space environment, threatening safety and security. The United States will continue to lead global efforts with capable allies and partners to assure access to and use of the global commons, both by strengthening international norms of responsible behavior and by maintaining relevant and interoperable military capabilities.

Page 4:

Acting in concert with other means of national power, U.S. military forces must continue to hold al-Qa?’ida and its affiliates and adherents under constant pressure, wherever they may be. Achieving our core goal of disrupting, dismantling, and defeating al-Qa?’ida and preventing Afghanistan from everbeing a safe haven again will be central to this effort. As U.S. forces draw down in Afghanistan, our global counter terrorism efforts will become more widely distributedand will be characterized by a mix of direct action and security force assistance. Reflecting lessons learned of the past decade, we will continue to build and sustain tailored capabilities appropriate for counter terrorism and irregular warfare. We will also remain vigilant to threats posed by other designated terrorist organizations, such as Hezbollah.

Page 5:

Accordingly, DoD will continue to work with domestic and international allies and partners and invest in advanced capabilities to defend its networks, operational capability, and resiliency in cyberspace and space….

U.S. forces willcontinue to defend U.S. territory from direct attack by state and non-state actors. We willalso come to the assistance of domestic civil authorities in the event such defense fails or in case of natural disasters, potentially in response to a very significant or even catastrophic event. Homeland defense and support to civil authorities require strong,steady?–state force readiness, to include a robust missile defense capability. Threats to the homeland may be highest when U.S. forces are engaged in conflict with an adversary abroad.

Page 6:

The nation has frequently called upon its Armed Forces to respond to a range of situations that threaten the safety and well-being of its citizens and those of other countries. U.S. forces possess rapidly deployable capabilities, including airlift and sealift, surveillance, medical evacuation and care, and communications that can be invaluable in supplementing lead relief agencies, by extending aid to victims of natural or man-made disasters, both at home and abroad. DoD will continue to develop joint doctrine and military response options to prevent and, if necessary, respond to mass atrocities. U.S. forces will also remain capable of conducting non-combatant evacuation operations for American citizens overseas on an emergency basis.

You may see more.   The document includes considerable attention to WMD and cyber threats not excerpted above.

The Washington State ferry system carries almost 23 million people per year.  It is the third largest ferry system in the world.  (I think British Columbia has the second largest system, and Sydney, Australia the first.)

While I was waiting at one of the terminals, I noticed a sign that said the facility was at Maritime Security (MARSEC) level 1: “the level for which minimum appropriate security measures shall be maintained at all times.”

I saw maybe five Washington State Troopers walking outside the terminal.  Two of the troopers had dogs with them as they walked between the vehicles waiting for the ferry.

I saw several signs inside the terminal reminding passengers to be alert for things that looked out of place.

I saw another sign that read “Bags without people don’t make sense.”

That sign was a little difficult to read.  It was hidden behind a vending machine that sold lottery tickets.

I would like to think some of the money the state makes from selling lottery tickets goes to pay – in part –  for the security at the terminal.

Blocking the “See Something – Say Something” poster with a tax revenue generating activity may be the homeland security equivalent of the self-licking ice cream cone.

–+–

Your Grandpa sounds like a wonderful man. I imagine that he too would be overwhelmed and even frustrated by the levels of bureaucracy and particularly the federal government’s grant strategy (get the locals to do what you want by footing some or the entire bill). “All politics are local and most times federal too” might be the old “all politics are local.”

That being said, it sounds like your grandfather would have found a way. Bennet’s axiom “People are discouraged, encourage them,” should be a homeland security and preparedness mantra.  The obvious – helping people – seems within our grasp, but eludes us all too often.

Homeland security and preparedness are a Pandora’s box of sorts (privacy intrusions, challenges to rights & privileges, economic costs, and others things that are not so nice). But, we need to remind ourselves that the original Pandora’s Box also offered hope.

Today, I heard a Coast Guard Commander refer to Deepwater Horizon as the Coast Guard’s Afghanistan.

The “long spill,” Deepwater Horizon, like the long wars in Afghanistan and Iraq require fortitude, patience, understanding, and hope. Somebody said “hope is not a plan.” Just the same I will keep on hoping and praying for the best whilst I prepare for the worst.

The emotional toll to Gulf residents, government workers, and cleanup volunteers warrants consideration and is bound to be high. The days ahead present three overarching challenges: stopping the spill, extracting the maximum amount of oil feasible, and mitigating the damage. The current forecast of 23+ storms with a 50% chance of a significant storm make that challenge all the more challenging –or might clean most of the mess up -mother nature is most resilient.

I have come to know some of the people of NOLA and have found them to be concerned but going about their business best they can. They talk a lot of football. LSU and the Saints are dear to their hearts. Last year’s super bowl celebration has continued with the team’s preseason visit to Louisiana communities weary of oil: http://www.npr.org/templates/story/story.php?storyId=127561660

If I remain in NOLA past September, I will likely attend a game. For the record I am a Jets fan. Football players and fans are resilient.

My new colleagues in NOLA poke fun at my New York accent. In turn, I enjoy their nawlins’ colloquialisms. They seem to appreciate my reviews of their restaurants and haunts. So far Acme Oyster House, Tujajues, and Café du Monde top the list. Nothing like football and food to bind people.

I have found that Katrina has left the people of NOLA with doubts in the efficacy of the federal government and particularly FEMA. NOLA’s celebrated relationship with the Coast Guard seems uneasy at best. I am told too little is being done too slowly. That phenomena might be a study in a relationship earned in one disaster (Katrina) only to be lost in another (DWH). Social capital is easier lost than earned.

The USCG is most resilient. It is and always has been a multi-mission organization. Today that mission is clear: ensure and facilitate the RP’s (responsible party) response – in this case BP. That mission will not make the Coast Guard popular.

From my view BP is doing all that it can and is most instances more than that. The American people need to know that without the media hype. BP too is resilient. I imagine someone or some people high in the organization deliberated as to their course of action –cut and run or invest in their enterprise. BP chose the latter. I can’t and won’t speak to BP’s alleged wrongdoing because I don’t know if they were negligent or had a catastrophic industrial accident. I know that matter is being investigated and await the final analysis.

Recovery requires everyone to look past their factions, fights, frustrations, and everything else.

I’m rooting for the people of the Gulf and the United States of America.

It seems as though IBM and CISCO are the only private sector companies participating in this symposium. Global supply chain security is a concern for military in terms of supply and logistics for their own operations, but also in terms of their obligation to possibly protect private sector supply chains as an attractive target by terrorists or other adversaries. The private sector already deals with numerous risks to our supply chains, which is one reason why IBM sought to be involved in this discussion. I’ll present on GMM this afternoon and my colleague Colm Leonard, Executive Program Manager, Import Compliance & Supply Chain Security, IBM, will present on a panel discussion to review solutions for greater supply chain visibility and security.

We heard yesterday from a number of experts. Most interesting was a presentation by the DHS attaché at the European Union. She is technically a CBP employee and gave a detailed run-down of C-TPAT, Secure Freight Initiative, Container Security Initiative, and other targeting measures to reduce risk in global supply chains in which the U.S. is a major link.

Her counterpart at the EU also presented and described a number of similar programs. Like C-TPAT, the EU grants special status to “Authorized Economic Operators.” Here in Europe, companies can provide greater transparency into their supply chains so that EU authorities can better identify risks to shared links in the global supply chain. The trust shared between the EU and these AEOs is similar to that which is extended between DHS and C-TPAT members.

Wouldn’t it be great if we could merge the membership? That is a goal, but the companies participating in C-TPAT or as AEOs remain concerned about the privacy protections for themselves if proprietary information about their supply chains – arguably major components in their competitive advantages – is shared with other governments that may favor domestic businesses.

Alas, we have a long way to go in this regard. But merely getting the stakeholders in the room is a valuable first step. I’ll post again later with an update on today’s exchange. The more interesting dimensions of this is a working group of which I’m a part. All symposium participants are broken into groups to dive deeper into such challenges as AEO/C-TPAT integration. In my group, I have the CISCO guy, another IBMer who deals with NATO, and military reps from Azerbaijan, Ukraine, Poland, Hungary, Czech Republic, and the U.S.

The Importer Security Filing and Additional Carrier Requirements requires that importers submit an Importer Security Filing (ISF) with the so-called “10+2” data set no later than 24 hours before the cargo is loaded onto a ship destined for the U.S.

Last month, The White House held a meeting with representatives from the private sector and relevant government agencies, including CBP, to discuss the proposed regulation. The meeting, which seems to have been hosted by the White House Office of Management and Budget, was entitled “”10+2″ Importer Security Filing and Additional Carrier Requirements” and took place on October 6. In attendance either by phone or in person were the following:

• Kristy Daphnis OMB/OIRA
• Nelson Garcia Motor & Equipment Manufacturers Assoc.
• Tom Sullivan SBA/Office of Advocacy
• Bruce Lundegren SBA Office of Advocacy
• Peter Friedmann Pac. Coast Council & CONECT
• Ray Bucheger Pac. Coast Council & CONECT
• Bryan Zumwalt National Marine Manufacturers Association
• Shannon Richter OMB
• Bruce Hirsh USTR
• Ted Posner NSC
• Elena Ryan USCBP
• Lorrie Rodbart USCBP
• Chris Pappas USCBP
• Jerry Coleman, Porta-Nails in North Carolina;
• Bill Gullickson, McLaughlin Gormiey King Co in Minnesota;
• Maggie Smith, Coppersmith, Inc. in California;
• Linda Wood, Bennett and Company in Massachusetts;
• Roger Clarke, Williams Clarke Company, Inc. in California;
• Robin Grove, Masterpiece International in California;
• Anne Marie Bush, Veritrade International in Washington;
• Karen Kenney, Liberty Internationai in Massachusetts;
• Silvia Scherer, Trade Tech Inc. in Washington; and
• Patricia Hainline, George S. Bush Co. in Oregon.

Congresswoman Valezquiez, Chairwoman of the Committee on Small Business, wrote a letter to OMB Director Jim Nussle explaining that CBP has failed to meet its obligations under the Regulatory Flexibility Act (“RegFlex”) to “properly analyze the economic impact of the 10 + 2 Rule on small entities.” RegFlex was enacted to limit disproportionate burdens on small businesses and entrepreneurs facing industry-wide regulations.

To accomplish this, RegFlex mandates that federal agencies conduct an analysis with a “description of any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the proposed rule on small entities.” CBP has stated that it “does not identify any significant alternatives to the proposed rule that specifically address small entities.”

To be fair, the interim final rule includes a delayed compliance date of one year after the interim final rule takes effect. If CBP perceives a “good faith effort and satisfactory progress toward compliance” among the noncompliant during the first year, CBP “will show restraint in enforcing the rule.”

According to Scott Gudes, Vice President, Government Relations, of the National Marine Manufacturers Association (NMMA), CBP will see a number of such cases because Small businesses, including small brokers, do not have:

1. The resources, i.e., customs experts, to help collect and compile the information being required

2. The 10+2 management system needed to allow their clients to collect 10+2 data from all involved parties

3. The integrated computer systems needed to process the information and communicate with suppliers abroad

CBP will conduct a review to determine any specific compliance difficulties that importers and shippers may experience in complying. Both the Congresswoman and the NMMA believe that the unintended consequences likely to be found include increased inventories, additional charges for dwell time, and costly infrastructure and IT system upgrades that larger firms can more easily absorb.

CBP’s review is intended to address just these types of impacts. It will examine compliance costs, the barriers to submitting the data 24 hours prior to lading, and the benefits of collecting the data. CBP states that “based upon the analysis, DHS will determine whether to eliminate, modify or maintain these requirements.”

The Importer Security Filing and Additional Carrier Requirements interim final rule will take effect 60 days from today.

The Hill reports today that business groups oppose the rule, warning that it would “disrupt supply chains without improving security at a time when the U.S. economy is in the doldrums.” The National Association of Manufacturers (NAM) is been leading the effort to oppose, or at least modify, the proposed rule. NAM is joined by the U.S. Chamber of Commerce, the European-American Business Council, the Association of International Automobile Manufacturers, the American Petroleum Institute, and the Consumer Electronics Association.

DHS suggests the new rule could at first delay shipments by as much as 24 hours, and will eventually drop to 12 hours. Businesses, however, suggest that security would be actually reduced because cargo would sit unguarded while it awaited permission to be loaded and that today’s already fragile global economy can’t handle further strains like those they believe the new rule would impose. The new rule would prohibit a shipment from leaving its foreign port until DHS has the required data for each container. NAM argues that other hidden costs of compliance, longer delays in the supply chain, software needs, and added personnel for the new requirements would cost U.S. businesses about $20 billion a year.

These firms also argue it is more realistic to expect a two-to-five-day delay, depending on the complexity of the supply chain. As a compromise, opponents in the private sector are calling for a pilot program to be set up to test the new rule on a small scale first before full deployment.

While OMB and DHS are inundated with complaints from constituents in the manufacturing districts of Michigan and hard-hitting lobbying efforts by the U.S. Chamber of Commerce, a CBP spokeswoman told The Hill that OMB “is currently leading an interagency review of the rule, but would not comment on … why the agency wants to proceed without a pilot program.”

Oceangoing cargo containers serve as the lifeblood of global trade. Yet they also pose a risk of terrorist exploitation, according to the GAO and numerous other studies. CBP is the main government entity in the U.S. responsible for overseeing security of the global supply chain.

The adoption of uniform international customs security standards is the foundation for governance frameworks that can support greater security through mutual recognition of customs security-related practices and programs. Ultimately, such governance frameworks enable partnering nations to recognize and accept security measures taken by another administration. This leads to less porous security networks, greater efficiencies, and a more resilient global economy.

CBP collaborated with eleven other members of the WCO to develop the Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework), which draws upon familiar concepts of the Container Security Initiative (CSI) and the Customs-Trade Partnership Against Terrorism (C-TPAT). While these two programs have their flaws, the SAFE Framework provides standards for collaboration among numerous national customs organizations participating in the global supply chain. As of July 2008, 154 WCO members had signed letters of intent to implement the SAFE Framework standards.

While the SAFE Framework establishes a system of mutual recognition for smoother global trade among interdependent countries, it is by no means the only effort underway to harmonize global supply chain security initiatives. GAO reports that in June 2007, “CBP signed a mutual recognition arrangement with New Zealand – the first such arrangement in the world – to recognize each other’s customs-to-business partnership programs.” Just this summer, CBP signed mutual recognition agreements with Jordan and Canada, and by early 2009, CBP anticipates establishing a mutual recognition agreement with the European Commission, representing 27 nations of the European Union.