You would think that with the steady flow of pessimistic reports news about the struggling economy that sooner or later you’d encounter a headline that proclaimed, “New Government Regs to Hamper Economy, Hurt Consumers.”

But the regulatory burden keeps building, the economic harm keeps mounting, and still no headline, no “Added Rules to Slow Growth, Benefits Unclear.” It’s an aspect of the regulatory world that sure needs to be reported.

To our friends in the media, we offer the latest proposal from U.S. Customs as a prime example of a well-intentioned but economy-damaging proposal. It’s the “10+2 proposal” – called that because it requires U.S. importers to collect 10 new categories of data on U.S. bound shipments 24 hours before loading in foreign ports. That’s a lot of information requiring a lot of time to collect, and the plan has caused great concern among U.S. companies that rely on imported products, parts and components.

Forty trade associations this week, including the NAM, sent a letter to the Hill questioning the Customs’ plan. We contend that the new regulations will cost U.S. manufacturers and companies more than $20 billion annually, not even taking into account the millions of dollars each company will be forced to invest in new business operations. (The letter is available here.)

Motivated by legitimate homeland security concerns, Customs seems intent on imposing this untested program in one fell swoop. Yet importers have serious doubts that the move will in fact improve port security. Indeed, the proposed rule creates new security threats by lengthening the time containers are kept at foreign ports before being exported, a two- to five-day period that provides more opportunity for tampering. Freight at rest is freight at risk.

Business is not just complaining, offering no positive contributions to the discussion. We suggest Customs test its assertions – and ours, as well – by implementing a prototype program. A trial application will allow Customs to evaluate the impact and identify potential improvements before government and industry invest billions of dollars. A test run also provides a chance to review security practices in a real-world setting.

10+2 is no different from the myriad of other programs that Customs routinely conducts prototype or pilot programs on before implementing. And given the current economic situation, doesn’t it make sense to go slow on adding more and more costs and regulatory burdens to the economy?

To return to the first point, yes, it would be nice if the media now and then reported on new regulations with an eye to their economic impact. But then again, ultimately, we’re not really anxious for a headline that proclaims, “New Customs Regs to Damage Economy.”

We’d be much happier with one that says, “Citing Costs, Economic Impact, Customs Scales Back Import Program.”

This entry was posted on Saturday, July 19th, 2008 at 10:00 am and is filed under Politics, Economy/Budget, Labor .