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      - page 38 / 47





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October 2008, the United States and the European Union did reach an agreement for screening air cargo on U.S.-bound passenger aircraft. 75

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In 2007, the Global Supply Chain Council in Shanghai conducted a survey of international companies there dealing with secure logistics. The respondents indicated that security in logistics had become an important element in their strategy and operations. Many of the companies surveyed had reorganized their international supply chains to comply with new international regulations, such as the Container Security Initiative. In addition, many technological initiatives had been launched that were aimed at improving the security of the supply chain. These included the use of radio frequency identification, E-seals (physical locking mechanisms with technology to detect and report tampering), satellite supported tracking of containers, electronic locks, image recognition devices, and biometric identification.

In this survey, 62% indicated that security was a critical factor for their company. The respondents considered the probability of a terrorist attack low. They were more concerned with damage due to neglect by their own employees or theft. They were the least concerned with smuggling of cargo or people. Two thirds of the respondents in the survey had been engaged in working with and certifying known suppliers and service providers, introducing security and audit procedures, using information technology for more visibility, and using dual sourcing. The number of companies that had audited their own procedures was twice as high as the number of companies that had audited their partners in their supply chain.

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The safety of imported manufactured products and food gained significant attention in 2007 when items such as lead in paint, adulterated pet food, and melamine in milk products, drew wide public attention.76 Fears of mad cow disease also have hurt U.S. beef exports.77 Until the recent rise in such cases, companies manufacturing abroad often were less likely to take measures to ensure quality in purchased inputs than they did in their own production processes. Now, however, companies are realizing that their reputation as a company and their whole supply chain can break down if even a single sub-contractor provides a defective product.

In response to cases of tainted imports from China, the United States and China have reached a number of agreements to address health and safety concerns. These agreements were negotiated by U.S. agencies such as the Consumer Product Safety Commission, the National Highway


“US, EU reach cargo-screening agreement,” The Journal of Commerce Online, October 31, 2008.

76 For information on food safety, see CRS Report RL34198, U.S. Food and Agricultural Imports: Safeguards and Selected Issues, by Geoffrey S. Becker; CRS Report RL33472, Sanitary and Phytosanitary (SPS) Concerns in Agricultural Trade, by Geoffrey S. Becker.


CRS Report RS21709, Mad Cow Disease and U.S. Beef Trade, by Charles E. Hanrahan and Geoffrey S. Becker.

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