[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
 BUILDING SECURE PARTNERSHIPS IN TRAVEL, COMMERCE, AND TRADE WITH THE 

                          ASIA-PACIFIC REGION

=======================================================================



                                HEARING

                               before the

                SUBCOMMITTEE ON TRANSPORTATION SECURITY

                                 of the

                     COMMITTEE ON HOMELAND SECURITY

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 8, 2012

                               __________

                           Serial No. 112-89

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

[GRAPHIC] [TIFF OMITTED] 


                                     

      Available via the World Wide Web: http://www.gpo.gov/fdsys/

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                     COMMITTEE ON HOMELAND SECURITY

                   Peter T. King, New York, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Daniel E. Lungren, California        Loretta Sanchez, California
Mike Rogers, Alabama                 Sheila Jackson Lee, Texas
Michael T. McCaul, Texas             Henry Cuellar, Texas
Gus M. Bilirakis, Florida            Yvette D. Clarke, New York
Paul C. Broun, Georgia               Laura Richardson, California
Candice S. Miller, Michigan          Danny K. Davis, Illinois
Tim Walberg, Michigan                Brian Higgins, New York
Chip Cravaack, Minnesota             Cedric L. Richmond, Louisiana
Joe Walsh, Illinois                  Hansen Clarke, Michigan
Patrick Meehan, Pennsylvania         William R. Keating, Massachusetts
Ben Quayle, Arizona                  Kathleen C. Hochul, New York
Scott Rigell, Virginia               Janice Hahn, California
Billy Long, Missouri                 Vacancy
Jeff Duncan, South Carolina
Tom Marino, Pennsylvania
Blake Farenthold, Texas
Robert L. Turner, New York
            Michael J. Russell, Staff Director/Chief Counsel
               Kerry Ann Watkins, Senior Policy Director
                    Michael S. Twinchek, Chief Clerk
                I. Lanier Avant, Minority Staff Director
                                 ------                                

                SUBCOMMITTEE ON TRANSPORTATION SECURITY

                     Mike Rogers, Alabama, Chairman
Daniel E. Lungren, California        Sheila Jackson Lee, Texas
Tim Walberg, Michigan                Danny K. Davis, Illinois
Chip Cravaack, Minnesota             Cedric L. Richmond, Louisiana
Joe Walsh, Illinois, Vice Chair      Vacancy
Robert L. Turner, New York           Bennie G. Thompson, Mississippi 
Peter T. King, New York (Ex              (Ex Officio)
    Officio)
                     Amanda Parikh, Staff Director
                   Natalie Nixon, Deputy Chief Clerk
                   Vacant, Minority Subcommittee Lead


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable Mike Rogers, a Representative in Congress From the 
  State of Alabama, and Chairman, Subcommittee on Transportation 
  Security.......................................................     1
The Honorable Sheila Jackson Lee, a Representative in Congress 
  From the State of Texas, and Ranking Member, Subcommittee on 
  Transportation Security........................................    17

                               WITNESSES
                                Panel I

Mr. John W. Halinski, Assistant Administrator, Office of Global 
  Strategies, Transportation Security Administration:
  Oral Statement.................................................     2
  Prepared Statement.............................................     4
Mr. Mark R. Koumans, Deputy Assistant Secretary, Office of 
  International Affairs, U.S. Department of Homeland Security:
  Oral Statement.................................................     6
  Prepared Statement.............................................     8
Mr. Hans G. Klemm, Economic Coordinator, U.S. Senior Official for 
  Asia-Pacific Economic Cooperation, Bureau of East Asian and 
  Pacific Affairs, U.S. Department of State:
  Oral Statement.................................................    12
  Prepared Statement.............................................    13

                                Panel II

Mr. Roger Dow, President and Chief Executive Officer, U.S. Travel 
  Association:
  Oral Statement.................................................    32
  Prepared Statement.............................................    33
Mr. Gary E. Wade, Vice President of Security, Atlas Air Worldwide 
  Holdings, Inc., on Behalf of the Cargo Airline Association:
  Oral Statement.................................................    37
  Prepared Statement.............................................    39
Mr. Dorothy Reimold, Assistant Director, Security and Travel 
  Facilitation, International Air Transport Association:
  Oral Statement.................................................    41
  Prepared Statement.............................................    43
Mr. Michael C. Mullen, Executive Director, Express Association of 
  America:
  Oral Statement.................................................    46
  Prepared Statement.............................................    48

                             FOR THE RECORD

The Honorable Sheila Jackson Lee, a Representative in Congress 
  From the State of Texas, and Ranking Member, Subcommittee on 
  Transportation Security:
  Statement of Richard P. Lawless, CEO, U.S.-Japan High-Speed 
    Rail, Inc. (USJHSR)..........................................    18


 BUILDING SECURE PARTNERSHIPS IN TRAVEL, COMMERCE, AND TRADE WITH THE 
                          ASIA-PACIFIC REGION

                              ----------                              


                          Tuesday, May 8, 2012

             U.S. House of Representatives,
           Subcommittee on Transportation Security,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 12:30 p.m., in 
Room 311, Cannon House Office Building, Hon. Mike Rogers 
[Chairman of the subcommittee] presiding.
    Present: Representatives Rogers, Walberg, Walsh, Jackson 
Lee, and Davis.
    Mr. Rogers. The Committee on Homeland Security, 
Subcommittee on Transportation Security will come to order. The 
committee is meeting today to hear different perspectives on 
how to build secure partnerships in travel, commerce, and trade 
in the Asia-Pacific region.
    Ranking Member Jackson Lee is in a Judiciary hearing right 
now and will be along in a few minutes, but she has urged me to 
go ahead and get started. I know we have two panels and we are 
going to be interrupted by votes, so we are going to try to 
move it along so the second panel can get their testimony in 
before a couple of them have to leave for airplanes.
    I want to thank all of our witnesses for being with us 
today. I look forward to your testimony. I know it takes a lot 
of time and effort to get ready for these things, so I do 
appreciate that commitment.
    Last month, I led a delegation of Members to China, Japan, 
and South Korea and witnessed first-hand the importance of 
building new partnerships and continuing to improve existing 
relationships with the Asia-Pacific region. Strong U.S. 
engagement with this region is vital to both our economy and 
security. With such a vast number of people and products 
transiting through Asia and the United States every day, we 
rely on these partnerships to strengthen security and to 
facilitate the movement of people and goods safely and 
efficiently.
    I look forward to today's discussion on cooperation between 
the United States and the Asia-Pacific region, particularly in 
regard to the Department of Homeland Security's footprint in 
Asia, information sharing between DHS and its private-sector 
partners, as well as the on-going work between the U.S. public- 
and private-sector entities and their Asia-Pacific 
counterparts.
    The evolving terrorist threat to both commercial and 
passenger transportation systems requires us to constantly 
reevaluate how we approach international security in an effort 
to develop common security standards with our foreign partners 
in the most critical areas. This hearing is an opportunity to 
discuss the global partnerships that currently exist as well as 
new avenues for cooperation to encourage U.S. economic growth.
    Again, I want to thank all the witnesses today. When Sheila 
Jackson Lee arrives, we will recognize her for an opening 
statement.
    Right now, we are pleased to have several distinguished 
guests before us today on this important topic. Let me remind 
the witnesses that their entire written statements will appear 
in the record.
    Our first witness is Mr. John Halinski, who currently 
serves as Assistant Administrator for the Office of Global 
Strategies at TSA.
    Welcome back, Mr. Halinski. You are now recognized for your 
testimony.

STATEMENT OF JOHN W. HALINSKI, ASSISTANT ADMINISTRATOR, OFFICE 
  OF GLOBAL STRATEGIES, TRANSPORTATION SECURITY ADMINISTRATION

    Mr. Halinski. Thank you. Good afternoon, Chairman Rogers 
and distinguished Members of the subcommittee. Thank you for 
the opportunity to testify before you today.
    During the next 30 years, Asia's share of world gross 
domestic product is expected to grow more than 50 percent. The 
Asia-Pacific region already accounts for 30 percent of 
passenger air traffic and 40 percent of freight movement. Such 
growth in the aviation market requires a more unified 
transportation security strategy for the region.
    Summarizing TSA efforts in the region, I will start with 
Australia. Within Asia-Pacific, Australia is a vital strategic 
partner of TSA. We regularly share information, test advance 
screening technologies, and provide capability, improving 
training in tandem. Australia has been forward-leaning in the 
deployment of liquid screening equipment in addition to 
advanced imaging technology.
    In Thailand, TSA has provided capacity development training 
and compliance support in an effort to raise baseline security 
at Bangkok's international airport. By coordinating efforts, 
TSA has successfully supported improvements that have resulted 
in positive change to the airport's threat rating.
    TSA's partnership with Singapore is of critical importance. 
Singapore influences much of the Asia-Pacific region, 
particularly as they hold the chairmanship of the ICAO Aviation 
Security Panel. TSA and Singapore are in the process to 
establish mutual cargo recognition and a variety of other 
initiatives.
    In China, sustained economic growth and increasing tourism 
are driving the need for aviation infrastructure development 
and capacity development. Boeing projects the Chinese aircraft 
fleet will increase 400 percent by 2030, making China the 
second-largest market for aircraft worldwide. Investment in 
China's aviation industry is likely to reach $230 billion in 
the next 5 years.
    TSA is seeking new ways to engage with China and its Civil 
Aviation Administration. For example, TSA recently joined the 
Aviation Cooperation Program, or ACP, a robust public-private 
partnership between our countries. Hosted by the ACP, the 2011 
U.S.-China Aviation Summit identified technical, policy, and 
commercial interests between the United States and China. 
Participants discussed topics such as international 
cooperation, airport development, air cargo infrastructure, and 
general aviation. In promoting specific commercial 
opportunities for U.S. businesses, TSA hopes to introduce U.S. 
security and safety technologies and operations to improve in 
aviation interests.
    As Korea and Japan grow as major tourist transit points, it 
is critical that threats from other countries within the region 
be mitigated by using intelligence-based security measures. 
Korea's aviation market also has grown significantly. Its 
largest airport, Incheon International, was designed to handle 
39 million passengers, but growth forecasts have rapidly 
exceeded that. Incheon is now being expanded in several phases 
to make it the largest hub in Asia, with an annual capacity of 
100 million passengers and more than 7 million tons of cargo 
per year.
    In May 2010, TSA and its Korean counterpart began 
establishing a formal bilateral cooperation group. Areas of 
mutual interest include joint airport inspections and 
collaboration on policy and technology for screening liquids, 
aerosols, and gels. I will also attend an Aviation Security 
Cooperation Group meeting in Seoul in 2 weeks.
    Korea was the first country in the Asia-Pacific to purchase 
and deploy advanced imaging technology. The rollout of this 
equipment occurred just before the 2010 summit. TSA hopes to 
continue the collaboration on technology with Korea.
    Going forward, TSA is coordinating efforts to engage with 
Japan on aviation security efforts, particularly as a regional 
partner in enhancing baseline aviation security in less capable 
countries. In addition to bilateral relationships, TSA engages 
with international partners via multilateral organizations, 
including the Asia-Pacific Economic Cooperation. The most 
important multilateral organization TSA engages with for the 
Asia-Pacific, though, is the International Civil Aviation 
Organization, or ICAO, a subsidy of the United Nations. TSA 
encourages Korea and Japan to play a more active role in ICAO 
and supports these nations as aviation security leaders in the 
region.
    One of TSA's cornerstone programs in the international air 
cargo arena is the recognition of commensurate national cargo 
security programs. This program permits operators to accept 
cargo screened and secured further back in the supply chain and 
decreases the rescreening requirements at last-points-of-
departure airports.
    TSA has engaged China, Korea, and Japan on strengthening 
supply chain security. Key initiatives include developing 
baseline technology, defining high-risk cargo, appropriate 
mitigation methods, and further development of regulated agent 
and known consignor programs.
    Thank you for the opportunity to appear today before you.
    [The prepared statement of Mr. Halinksi follows:]
                 Prepared Statement of John W. Halinski
                             April 18, 2012
    Good afternoon Chairman Rogers, Ranking Member Jackson Lee, and 
Members of the subcommittee. Thank you for the opportunity to testify 
today about the Transportation Security Administration's (TSA) 
international cooperation on transportation security, challenges we 
face, and areas for improved partnerships that will promote both 
security and commerce.
    TSA recognizes the significance of the growth in the Asia-Pacific 
region given that it is expected for the region's share of global GDP 
to increase significantly over the next 30 years. This will likely 
result in significant increases in the transportation sector as people 
and goods move to, from and within the region. With industry projecting 
that Asia-Pacific countries will account for roughly half of the 
world's air traffic growth by 2030, TSA has made a concerted effort to 
engage with the major economies of the region, including China, Korea, 
and Japan.
                     the people's republic of china
    China's civil aviation sector has undergone significant development 
in the last two decades and continues on a fast-paced upward 
trajectory. Sustained economic growth and increasingly high tourism 
rates have driven the need for infrastructure development and capacity 
building in its aviation sector. With such expansion in the aviation 
sector, China is an important partner for TSA both on a bilateral basis 
and as a player in the transportation sector. TSA actively seeks new 
ways to engage with China and, in 2011, became a member of the Aviation 
Cooperation Program (ACP) which is a public-private partnership between 
the U.S. Government, the Chinese Government, U.S. industry, and the 
Chinese aviation industry.
    In 2011, the ACP hosted the U.S.-China Aviation Summit to address 
areas of continued growth and partnership in aviation development 
between the two nations. Participants in the summit discussed airport 
development, air cargo infrastructure, airport and aircraft security, 
general aviation, air traffic management, airline operations and 
training opportunities. In promoting specific commercial opportunities 
for American businesses and expanding overall trade opportunities in 
China, TSA hopes to introduce U.S. security and safety technologies and 
operations that can improve immediate and long-term aviation interests 
globally.
    TSA also hopes to work with its Chinese counterparts, the Civil 
Aviation Administration of China (CAAC) on aviation security technology 
development and standards including collaboration on product 
capability, standards, quality control and maintenance in order to 
harmonize the capabilities and standards of Chinese manufactured 
aviation security equipment to complement screening technologies 
internationally. Chinese technology experts currently test and qualify 
U.S.-manufactured equipment as part of the tendering process for 
equipment bids in China. In concert with these activities, TSA will 
continue testing aviation security equipment from Chinese companies to 
promote greater partnership in this area.
    Going forward, TSA and its Chinese counterparts have agreed to 
exchange information and best practices regarding a number of aviation 
security programs including behavioral detection, supply chain 
security, and airport design. Additionally, both sides have committed 
to work toward harmonization in future multilateral forums. While the 
goal of ``harmonization'' is lofty, TSA will begin progress in this 
area by simply sharing positions in advance with CAAC and soliciting 
their comment/input for the upcoming International Civil Aviation 
Organization (ICAO) Assembly. To this end, Administrator Pistole 
recently met with CAAC counterparts in September 2011 and hopes to 
personally visit Beijing this year for an expanded conversation. 
Assistant Administrator Halinski also visited CAAC in Beijing in March 
2012 and will return to China in May to participate in the China Civil 
Aviation Forum.
                         the republic of korea
    As a result of rapid economic growth, high exports, and increased 
tourism, Korea's aviation market has grown significantly. In May 2010, 
TSA and its Korean counterpart, the Ministry of Land, Transport, and 
Maritime Affairs (MLTM), signed a Terms of Reference establishing a 
formal bilateral cooperation group through which the two entities could 
pursue multiple work streams for consideration and possible action. 
Areas of particular mutual interest between the two countries include 
joint airport inspections and collaboration on policy and technology 
for screening of Liquids, Aerosols, and Gels (LAGs). The next Aviation 
Security Cooperation Group meeting is scheduled to take place in May 
2012 in Seoul and will be attended by Assistant Administrator Halinski. 
Administrator Pistole met with his MLTM counterpart for bilateral 
discussions at an ICAO meeting in Malaysia during January 2012. In 
addition, Korea was the first Asia-Pacific country to have purchased 
and deployed Advanced Imaging Technology (AIT). TSA assisted its Korean 
counterparts by providing resources and information regarding the 
technology and background information regarding U.S. studies on the 
equipment particularly in Automated Target Recognition for AIT and LAGs 
screening equipment. In addition to these activities, TSA has provided 
enhanced security measures on flights to Seoul during the lead-up to 
major international events including the G20 and Nuclear Security 
summit.
                                 japan
    With its multiple international airports, eleven of which have last 
point of departure (LPD) service to the United States, Japan is 
considered a regional transportation hub and is a strong aviation 
security leader in international and multilateral fora. Following the 
March 2011 earthquake, tsunami, and subsequent Fukushima nuclear 
incident, Japan has focused its efforts inward on recovery and 
stabilization. Funding previously designated for aviation security 
infrastructure investments, particularly screening equipment such as 
AIT, has been reallocated to recovery efforts. While TSA had no direct 
role in disaster recovery, the incident highlighted the strong 
relationship shared with Japan, evident though constant communication 
and coordination.
    TSA is coordinating efforts to re-engage with Japan on aviation 
security, particularly as a regional partner in enhancing baseline 
aviation security in other Asia-Pacific countries. Japan is active 
within the Association of Southeast Asian Nations (ASEAN) and regularly 
invites TSA subject matter experts to participate in the aviation 
security working group. Japan's Civil Aviation Bureau has also 
requested that TSA work on capacity building with the Japan 
International Cooperation Agency (JICA), which conducts aviation 
security training and hosts training sessions for a wide spectrum of 
nations. TSA participated in JICA training in February 2010 and has 
been offered the opportunity to participate in extended training at the 
Yokohama facility in the future. TSA intends to harmonize capacity 
development efforts to maximize the value of both USG and Japanese 
efforts.
                        multilateral engagement
    In addition to our bilateral relationships, TSA engages with 
international partners via multilateral fora, including the Asia-
Pacific Economic Cooperation (APEC), which supports sustainable 
economic growth and prosperity in the region with the collaboration of 
21 economies. APEC also works to advance transportation security 
through the APEC Counter-Terrorism Task Force (CTTF) and the 
Transportation Working Group (TPTWG). Through key projects and 
proposals, TSA seeks to advance information sharing, capacity building, 
and public awareness in areas such as canine screening, cargo security, 
bus transportation anti-terrorism practices, and checkpoint 
optimization measures while encouraging economic development. APEC 
representatives from Japan, China, and Korea have engaged in these 
efforts by providing expert knowledge and feedback that help shape 
agendas to best address the needs of the participating economies while 
benefiting from the exchange of information and best practices on key 
transportation security issues.
    From a global perspective, the most important multilateral forum 
with which TSA engages is ICAO, a subsidiary of the United Nations and 
aviation's international governing body. As the U.S. Government's 
representative to the ICAO Aviation Security Panel of Experts (AVSECP), 
TSA works with other international representatives to shape 
international aviation security standards on important issues such as 
cargo security and coordination of capacity development.
                strengthening international cooperation
    While transportation security varies from country to country, 
China, Korea, and Japan are leaders within the Asia-Pacific region. All 
three countries are compliant with baseline ICAO requirements following 
routine TSA airport assessments and air carrier inspection and are 
considered to have a strong security posture by TSA's international 
compliance branch.
    A significant ICAO initiative to strengthen baseline aviation 
security is centered on promoting air cargo supply chain security 
practices amongst ICAO member-states. These efforts focus on defining 
high-risk cargo and appropriate mitigation measures, known consignors, 
and regulated agent security standards. Regulated agent programs are a 
widely-accepted baseline security measure implemented by many member-
states, though there is significant room for growth to expand and 
strengthen these principles in the region.
    TSA's efforts are directly aligned with the National Strategy for 
Supply Chain Security and TSA's risk-based security approach for the 
aviation sector. Developed in close coordination with industry 
stakeholders, these efforts coalesce in a consistent message from both 
the U.S. public and private sector and enhance both the security and 
facilitation of commerce. To this end, TSA works to recognize National 
Cargo Security Programs (NCSPs) around the world in order to further 
strengthen international air cargo arena security regimes. This effort 
allows operators to accept cargo screened and secured throughout the 
supply chain, decreases the re-screening requirements at last-point-of-
departure airports, limits backlogs, and facilitates commerce. TSA has 
been coordinating with Japan and is working with Korea to identify 
potential paths forward. We plan to engage China on a bilateral basis 
to evaluate their supply chain security systems, promote solutions 
which increase global security, and allow for the facilitation of 
international commerce.
                               conclusion
    TSA plans to continue strengthening supply chain security with 
China, Korea, and Japan. In addition to NCSP recognition, TSA will work 
to develop baseline technology standards and define high-risk cargo and 
appropriate mitigation methods. TSA also hopes to leverage the strength 
of China, Korea, and Japan across the Asia-Pacific region to harmonize 
training, capacity improvement, and outreach to developing countries. 
TSA will utilize multilateral fora such as APEC and ICAO, as well as 
bilateral engagement, to strengthen baseline international security 
standards while continuing to develop partnerships within the region.
    Thank you for the opportunity to appear before you today to discuss 
TSA's cooperation with international partners on transportation 
security, challenges we face, and areas for improved relationships that 
will promote the free and secure flow of travelers and commerce.

    Mr. Rogers. Thank you, Mr. Halinski, for your testimony. We 
appreciate you being here today. I know your time is valuable.
    Our second witness is Mr. Mark Koumans, who is the Deputy 
Assistant Secretary of the Office of International Affairs, the 
Office of Policy at DHS.
    The Chairman now recognizes Mr. Koumans for his testimony.

   STATEMENT OF MARK R. KOUMANS, DEPUTY ASSISTANT SECRETARY, 
 OFFICE OF INTERNATIONAL AFFAIRS, U.S. DEPARTMENT OF HOMELAND 
                            SECURITY

    Mr. Koumans. Good afternoon, Mr. Chairman and distinguished 
Members of the subcommittee. Thank you for the opportunity to 
discuss the Department's engagement in the Asia-Pacific region.
    It is a pleasure to testify next to John Halinski, with 
whom I am in touch weekly, if not daily, as well as Ambassador 
Klemm, with whom I worked closely while he was coordinator for 
rule of law and law enforcement at the U.S. Embassy in 
Afghanistan.
    Four of the top 10 U.S. trading partners--China, Japan, 
South Korea, and Taiwan--are in the Asia-Pacific region. Japan, 
Australia, and South Korea represent three of the top nine 
participants in the Visa Waiver Program, accounting for some 
4.5 million visitors to the United States a year. Security 
treaties tie us to five allies in the region, and so DHS must 
work closely with partners in the region to safeguard our 
transportation networks, interdict threats, and facilitate 
trade and travel.
    Today's interconnected world means that seemingly isolated 
events often have transnational origins and global 
consequences. Although the flow of goods, ideas, and people 
sustains our economy and promotes our interests, it also 
creates borderless security challenges. We share a vested 
interest in the region's stability, security, and prosperity.
    We work with our partners to identify, detect, prevent, and 
respond to threats which endanger the United States and our 
allies. We are deepening and broadening our relationships with 
partners like Australia, Japan, and South Korea. We are 
building new partnerships with countries like China, Indonesia, 
and Malaysia. We are leveraging the momentum of APEC. Last 
week, Secretary Napolitano traveled to Australia and New 
Zealand, where she concluded several texts to cooperate more 
closely. In April, Deputy Secretary Jane Holl Lute traveled to 
Japan and India, and Assistant Secretary Bersin also visited 
Singapore and Malaysia.
    I would like to highlight just a few of our regional 
efforts.
    Trusted Traveler and Trusted Trader programs facilitate the 
secure movement of people and goods and help address the 
exploitation of the global supply chain. We are expanding the 
Global Entry program, as the Secretary said, in Canberra and 
Wellington. Global Entry allows expedited clearance for pre-
approved low-risk air travelers upon arrival.
    Customs and Border Protection's Customs-Trade Partnership 
Against Terrorism, or C-TPAT, is a major incentive for 
enhancing security for manufacturers and shippers. CBP conducts 
on-site validation of their facilities to help defeat supply 
chain disruptions. Companies benefit from expedited customs 
clearance. Mutual recognition agreements exist with Japan, New 
Zealand, and South Korea, and we have pilot programs in China.
    As DHS builds our security programs, we find that we have 
ready partners in Asia-Pacific to address our law enforcement 
challenges. Our ICE and Secret Service officers stationed in 
the region work with their counterparts to disrupt criminal 
organizations, including those that present potential terrorist 
threats. DHS focuses its efforts on human smuggling, child sex 
tourism, smuggling, and counterfeiting, including 
counterproliferation, and intellectual property rights 
violations. Our efforts to disrupt and deter these security 
threats also strengthen the disruption and deterrence of 
transnational terrorists. In partnership with DOD and State, 
DHS shares knowledge and expertise with its Asia-Pacific 
partners via training programs.
    I would also like to highlight the importance of 
information-sharing arrangements, such as our Preventing and 
Combating Serious Crime, or PCSC, agreements. PCSC agreements 
are part of the Visa Waiver Program's information-sharing 
requirements. We have signed agreements with Australia, South 
Korea, and Taiwan, and we have a substantially agreed text with 
New Zealand. We are seeking agreements with Brunei, Japan, and 
Singapore.
    By building cooperative relationships and promoting 
capacity building, DHS is helping to raise the standard for 
regional transnational security and advancing our own security. 
We are committed to a DHS presence and support for partners in 
the region. DHS and United States leadership and engagement in 
the Asia-Pacific region is essential to our long-term security. 
The growth in Asia-Pacific will inevitably present both 
challenges and opportunities for the United States. DHS is 
committed to seizing opportunities and meeting those 
challenges.
    Chairman Rogers and distinguished Members of the 
subcommittee, thank you again for the opportunity to testify. I 
have submitted a written statement that I am grateful you 
indicated would be included in the record. I would be happy to 
answer your questions.
    [The prepared statement of Mr. Koumans follows:]
                 Prepared Statement of Mark R. Koumans
                             April 18, 2012
                              introduction
    Good afternoon, Chairman Rogers, Ranking Member Jackson Lee and 
distinguished Members of the committee. Thank you for the opportunity 
to discuss the Department of Homeland Security's engagement in Asia-
Pacific, a dynamic region of integral importance to the Department's 
mission abroad.
    As a diverse region, encompassing a broad range of cultures, 
societies, and economies, Asia-Pacific shares many common interests 
with the United States. The Department of Homeland Security (DHS) 
engagement in the region is predicated on a belief that we must work 
closely with regional counterparts to safeguard our shared 
transportation networks, interdict threats before they reach America's 
shores, and facilitate legitimate trade and travel.
    The interconnected nature of world economies and international 
infrastructure means that seemingly isolated events often have 
transnational origins and global consequences. The increased flow of 
goods, ideas, and people around the world and across U.S. borders helps 
sustain our economy and promote our interests, but also creates 
security challenges that are increasingly borderless and 
unconventional. These trends are particularly evident in Asia-Pacific, 
where rapid economic growth is coupled with an array of non-traditional 
security threats. The attempted bombing of Northwest Flight No. 253 on 
December 25, 2009, and the subsequent air cargo plot that was exposed 
in October 2010, demonstrated that U.S. homeland security is 
interdependent with the security of other nations, and these threats 
can come from a variety of sources.
                   overarching engagement priorities
    Before delving into the specifics of the Department's activities in 
Asia-Pacific, I would like to address the overarching guidance that 
drives our engagement abroad. The Department's first Quadrennial 
Homeland Security Review (QHSR), released on February 1, 2010, clearly 
states our five priority missions. Mission No. 1 is preventing 
terrorist attacks against the United States and the American people. 
DHS also integrates preventing terrorism into its four other primary 
missions--securing and managing our borders, enforcing and 
administering our immigration laws, safeguarding and securing our 
cyberspace, and ensuring resilience to disasters of all kinds.
    Internationally, DHS accomplishes these five missions by:
   Working with international organizations to adopt common 
        security standards;
   Developing agreements with key partner states to implement 
        high security standards; and
   Enabling or encouraging partners to enhance security through 
        concrete steps.
    In order to prevent threats from reaching the homeland from abroad, 
we work with our international partners to try to identify, detect, 
prevent, and respond to threats. Many of them threaten not only the 
United States but also our allies, with whom we have made common cause 
in the struggle against the threat of terrorism. To this end, we work 
with foreign partners to respond operationally to security threats and 
to share knowledge and expertise that will ultimately improve our 
respective capabilities.
                   importance of asia-pacific to dhs
    As an Asia-Pacific country, the United States shares a vested 
interest in the region's stability, security, and prosperity. This 
interest is amplified by Asia's growing role as an engine for global 
economic growth, and its increasing engagement in transnational 
security issues. Today, the United States enjoys extensive trade and 
travel linkages with a number of countries in the region, including 
four of our top ten trading partners--China, Japan, South Korea, and 
Taiwan--and counts five treaty allies: Australia, Japan, the 
Philippines, South Korea, and Thailand.
    This degree of economic interdependence makes securing and 
facilitating the legitimate movement of goods and people between the 
United States and Asia a matter of paramount importance. Our shared 
interests in protecting and promoting global prosperity have enabled 
DHS to forge strong working relationships with many regional 
counterparts, and create opportunities for expanded engagement across 
the entire homeland security mission set.
    Despite the Asia-Pacific region's tremendous growth, the region 
still faces some of the most pressing security challenges of the 21st 
Century, including many non-traditional threats such as terrorism, 
cyber attacks, violent extremism, piracy, arms trafficking, and 
transnational crime. These challenges are compounded in some parts of 
the region by lack of effective border and immigration controls. Recent 
terrorist activity in Southeast Asia, including the disrupted plot in 
Bangkok in February 2012, indicate that, despite significant progress 
since 9/11, the region still faces serious threats. This, in turn, 
demands proactive and sustained engagement to build capacity, elevate 
security standards, and develop collaborative solutions for 
transnational challenges.
dhs engagement in asia-pacific: significant partners, myriad challenges
    DHS engagement in Asia-Pacific is nested within the 
administration's broader strategy to increase American strategic 
engagement in, and focus on, Asia. In particular, the Department seeks 
to deepen and broaden relationships with its counterparts in Japan, 
South Korea, and Australia; build new partnerships with its 
counterparts in China, Indonesia, and Malaysia; and develop robust 
operational cooperation to address transnational threats.
    Working bilaterally, and through multilateral fora such as the 
Asia-Pacific Economic Cooperation forum (APEC), DHS pursues a series of 
objectives within the region:
   Deny physical, ideological, or virtual safe havens to 
        terrorists, violent extremists, and transnational criminals;
   Establish secure travel corridors that identify and 
        criminals or terrorists while facilitating legitimate travel;
   Develop a safe, secure, efficient, and resilient supply 
        chain;
   Promote robust information sharing arrangements that 
        facilitate law enforcement cooperation while ensuring the 
        protection of privacy in accordance with U.S. law and DHS 
        policy;
   Develop mature bilateral dialogues on cybersecurity; and
   Enhance regional disaster response and emergency management 
        capabilities.
    DHS prioritizes its regional engagement based on a dynamic threat 
environment, vulnerabilities, and U.S. National security and foreign 
policy objectives.
                dhs programs in the asia-pacific region
    DHS works with our partners in the region to build a framework that 
shares security costs and responsibilities. Regional cooperation in the 
areas of port and border security capacity, combined with a general 
regional commitment to more enhanced cooperation, allows DHS to utilize 
a wide range of programs to address the rapidly evolving challenges of 
Asia-Pacific. I would like to highlight a few of our regional efforts.
Port Environment
    The United States Coast Guard (USCG), working within the framework 
of the International Ship and Port Facility Security (ISPS) Code 
encourages bilateral and multilateral discussions throughout the region 
in an effort to exchange information and share best practices that 
align implementation and enforcement requirements to international 
maritime security standards. The USCG works closely with all of our 
regional trading partners including its partners in China, Japan, and 
South Korea, to promote reasonable and consistent implementation and 
enforcement of the ISPS code for enhanced maritime security in 
countries (and ports) that participate in global trade. The USCG also 
leads multilateral efforts to promote maritime safety and law 
enforcement through participation in and promotion of the North Pacific 
Coast Guard's Forum.
Air Environment
    As we look at the geography of Asia-Pacific, it becomes immediately 
apparent that secure travel means aviation security. Passenger and air 
cargo movements are growing rapidly--the region surpassed North America 
as the largest aviation market in 2009, and in 2011, 10 of the top 30 
airports, measured in terms of passenger travel, are in Asia-Pacific. 
The security of this travel requires the same standards for vigilance 
and due attention to security that we work to develop with our European 
partners. The Transportation Security Administration (TSA) has 
developed an effective series of programs such as the intelligence-
driven, risk-based screening methods Foreign Airport Assessment 
program, which Mr. Halinski will address, and DHS components deploy 
effective personnel, port and border security efforts, multiple layers 
of security structure.
    The Immigration Advisory Program (IAP) is a partnership between 
DHS's U.S. Customs and Border Protection (CBP), foreign governments, 
and commercial air carriers to identify and prevent high-risk travelers 
who are likely to be inadmissible into the United States from boarding 
U.S.-bound flights. CBP officer teams are stationed or deployed on a 
temporary basis to work with foreign law enforcement and air carriers 
at key airports in host countries. The Immigration Advisory Program 
(IAP) teams in Asia-Pacific assess passengers and their documentation 
with targeting support from the CBP National Targeting Center to 
identify high-risk passengers. The CBP officers provide the on-site 
capability to question and assess travelers and serve as a direct 
liaison with foreign authorities. The IAP has been in operation at 
Tokyo-Narita since January 2007 and deployed to Seoul-Incheon from 
January 2008 and June 2011. From 2007, the IAP has provided 1,945 no-
board recommendations to air carriers on flights from those locations. 
Identifying these high-risk travelers before they made it to the United 
States addressed potential threats before they reached our borders.
    DHS programs also include Trusted Traveler and Trusted Trader 
programs that are essential for our international engagement in the 
region. These programs facilitate the secure movement of goods and 
people wherever they have been applied and represent essential steps 
forward in broader international security. These programs are the core 
elements that enable DHS to secure the Nation against the direct threat 
of transnational crime against the homeland--including the movement of 
terrorists--and secure the Nation against the exploitation of the 
global supply chain for illicit purpose. Global Entry is a U.S. program 
for U.S. citizens, lawful permanent residents, and growing number of 
foreign citizens that allows expedited clearance for pre-approved, low-
risk air travelers upon arrival. The President's January Executive 
Order Establishing Visa and Foreign Visitor Processing Goals and the 
Task Force on Travel and Competitiveness supports development of 
similar partner nation programs and the potential for mutual 
recognition arrangements. These mutual recognition arrangements greatly 
facilitate movement through immigration control for pre-vetted 
international travelers. More importantly, these arrangements will 
allow the United States and our Asia-Pacific partners to focus our 
security efforts on those individuals about whom we know the least. CBP 
is in the process of establishing a mutual recognition arrangement with 
South Korea, and we see additional opportunities for expanding these 
arrangements with Australia, New Zealand, Japan, and Singapore. We are 
also working on providing Asia-Pacific Economic Community (APEC) 
Business Travel Cards to eligible U.S. citizens participating in CBP's 
trusted traveler programs. This will enable them to use dedicated entry 
lines at participating APEC economies and speed up our mutual private 
sector exchange. In addition, as my colleague Mr. Halinski will 
testify, TSA has efforts underway to achieve mutual recognition of air 
cargo security programs with foreign partners, effectively according 
them Trusted Trader status.
Supply Chain Security
    In line with the recently released National Strategy for Global 
Supply Chain Security, DHS is working with key partners to develop 
regional commitment to efficient, secure, and resilient global supply 
chains Secretary Napolitano signed joint statements with New Zealand in 
2011 and just recently with Singapore on April 11, with the intent of 
expanding on our already solid bilateral cooperative relationships by 
facilitating legitimate trade and travel, while preventing terrorists 
from exploiting supply chains; protecting transportation systems from 
attacks and disruptions; and increasing the resilience of global supply 
chains.
    For example, through CBP's Customs Trade Partnership Against 
Terrorism (C-TPAT), DHS participates in on-site validations of 
manufacturing and logistics facilities to enhance cargo security in 97 
countries. Mutual recognition between C-TPAT and the Authorized 
Economic Operators programs of our Asia-Pacific partners is a sharp 
incentive for enhancing security for the manufacturers and shippers 
that voluntarily participate in the program. Over the last 4 years, DHS 
has established mutual recognition of these programs with Japan, New 
Zealand, and South Korea. Pilot programs in China and other states are 
also promoting higher standards of security within the private sector 
with the objective of preventing costly disruption to international 
trade and commerce.
    The Container Security Initiative (CSI) continues to be a highly 
successful program in partnership with foreign authorities to identify 
and inspect high-risk cargo containers originating at ports throughout 
the world before they are loaded on vessels destined for the United 
States. Key Asia-Pacific partners include high-volume ports in China, 
Japan, Sri Lanka, the Philippines, South Korea, Malaysia, and 
Singapore.
    As DHS continues to build upon cooperative security programs, we 
find that we have ready partners in Asia-Pacific to address cross-
cutting challenges to our law enforcement activities. Our U.S. 
Immigration and Customs Enforcement (ICE) and U.S. Secret Service 
officers stationed in the region develop relationships and work with 
their local counterparts to disrupt criminal organizations, including 
potential terrorist threats. We focus our investigatory efforts on many 
forms of smuggling and counterfeiting including counter-proliferation, 
child sex tourism, intellectual property rights violations, and human 
smuggling. These criminal efforts would use many of the same gaps and 
weaknesses that violent extremists seek to exploit. Our efforts to 
disrupt and deter these non-traditional security threats also 
strengthen disruption and deterrence of the transnational terrorist.
Information Sharing Collaboration
    I would also like to highlight the importance of information 
sharing arrangements such as our Preventing and Combating Serious Crime 
(PCSC) agreements with Asia-Pacific countries that are members of or 
seeking designation in the U.S. Visa Waiver Program. PCSC agreements 
establish the framework for a new method of law enforcement cooperation 
by providing each party electronic access to their fingerprint 
databases on a query (hit/no hit) basis. The agreement exemplifies the 
type of cooperative law enforcement partnership that enhances both 
sides' ability to more quickly and efficiently prevent and investigate 
crime and prevent the entry of criminals and terrorists into our 
respective countries. We have signed PCSC agreements with Australia, 
South Korea, and Taiwan, and are seeking similar such agreements with 
Brunei, Japan, New Zealand, and Singapore.
    States in Asia-Pacific as disparate as Australia, Indonesia, 
Malaysia, and Japan are increasingly adopting sophisticated standards 
for positively identifying individuals, particularly criminals. DHS has 
worked with the Department of State, Department of Justice, and our 
partners in the region to develop collaborative programs, including 
assistance efforts where appropriate, to prevent the free movement of 
bad actors across international borders. The Philippines biometric 
initiative is a great example of cooperative sustained efforts to 
prevent potential criminal or terrorist travel. As part of this effort, 
an ICE Visa Security Unit worked directly with Philippine law 
enforcement units to catalogue biometric data on individuals convicted 
of terrorist acts.
    By building cooperative relationships and promoting capacity 
building, DHS is helping to raise the standard for regional 
transnational security and, more importantly, concretely advancing the 
security of the United States. But, there is still important work to be 
done. Our aim in Asia-Pacific is to facilitate the development of a 
model for secure trade and travel. We applaud the Malaysian passage of 
their 2010 Strategic Trade Act, aimed at counter-proliferation and 
smuggling of strategic goods, but we must also work with our Malaysian 
customs counterparts in sharing best practices and practical solutions 
to the challenges that they face based on our experience in 
implementing export control legislation. We must also continue to 
develop and contribute to information-sharing arrangements, including 
PCSC agreements, in order to prevent the free movement of known threats 
and risks while ensuring the protection of privacy and civil rights. 
And we must remain committed to DHS presence and support for partners 
in the region.
                               conclusion
    United States leadership in the Asia-Pacific region is essential to 
our long-term security and DHS will continue to play an important role. 
The dramatic growth of Asian economies and our many linkages with the 
region require a proactive cooperative approach that anticipates 
sustained long-term growth while minimizing transnational threats. The 
growth in Asia-Pacific will inevitably present both significant 
challenges and opportunities for the United States. DHS is committed to 
meeting these challenges and seizing opportunities through 
comprehensive international engagement.
    Chairman Rogers, Ranking Member Jackson Lee, and distinguished 
Members of the House Committee, let me conclude by reiterating that I 
look forward to exploring opportunities to advance our cooperation with 
Asia-Pacific partners. Thank you again for this opportunity to testify. 
I would be happy to answer your questions.

    Mr. Rogers. Thank you, Mr. Koumans, for your testimony.
    Our third witness is Ambassador Hans Klemm. He is the 
economic coordinator and senior U.S. official for Asia-Pacific 
economic cooperation at the U.S. State Department.
    The Chairman now recognizes Ambassador Klemm for his 
testimony.

 STATEMENT OF HANS G. KLEMM, ECONOMIC COORDINATOR, U.S. SENIOR 
OFFICIAL FOR ASIA-PACIFIC ECONOMIC COOPERATION, BUREAU OF EAST 
      ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF STATE

    Mr. Klemm. Good afternoon. Thank you, Chairman Rogers and 
distinguished Members of the subcommittee. I am grateful to 
have this opportunity to testify before you today on building 
secure partnerships in travel, commerce, and trade with the 
Asia-Pacific region.
    As President Obama and Secretary Clinton have underscored, 
much of the history of the 21st Century will be written in 
Asia. Secretary Clinton, in recognition of this, took her first 
overseas trip as Secretary of State to Asia in 2009 and has 
returned to the region 10 times since. I was pleased to hear 
and learn, Mr. Chairman, that you were also able to lead a 
fact-finding delegation to China, the Republic of Korea, and 
Japan just last month.
    We are constantly striving to strengthen our economic and 
security partnerships in Asia. For example, last week the U.S.-
China Strategic and Economic Dialogue took place. This is an 
important bilateral forum that allows the United States to 
address a wide range of issues with China. Also, the United 
States-Korea Free Trade Agreement recently entered into force, 
which will create substantial new opportunities for U.S. 
exporters to sell more American goods, services, and 
agricultural products to Korean consumers and support tens of 
thousands of new export-related jobs here at home.
    In addition, the United States and Japan recently issued a 
Joint Statement on Global Supply Chain Security, which outlines 
ways to cooperate more closely to strengthen the security and 
resiliency of the global supply chain and promote the timely, 
efficient flow of legitimate commerce. Together, our two 
countries seek to ensure that regional and global supply chains 
are prepared for and can withstand evolving threats and hazards 
and can recover rapidly from possible disruptions from acts of 
terrorism or natural disasters.
    These are just a few ways in which we engage bilaterally in 
this region.
    Another vital component of our strategic pivot toward Asia 
has been the United States' elevated engagement with regional 
institutions, including the Association for Southeast Asian 
Nations and the forum for Asia-Pacific Economic Cooperation, or 
APEC. ASEAN sits at the center of many of the region's 
multilateral institutions, and we are taking steps to broaden 
and deepen our already strong partnership with this 
organization.
    APEC, on the other hand, is also particularly important to 
the United States because it is our primary platform for 
multilateral engagement with the Asia-Pacific on economic 
interests. APEC works to secure the region's transportation 
networks, enhance the security and resilience of supply chains, 
and help protect the region's economic and financial 
infrastructure from attack or misuse. Because of its economic 
focus, APEC seeks ways to strengthen security while also 
facilitating the flow of legitimate travelers and commerce.
    Today we face a challenge of continuing to promote both the 
prosperity and security of the United States as well as of the 
Asia-Pacific region. We are looking for new ways to collaborate 
and form partnerships, both bilaterally and multilaterally, 
with the international community. In the global society in 
which we live, America's future success now intrinsically is 
linked to the success of others.
    Thank you, Mr. Chairman, for the opportunity to appear 
before you and the subcommittee today to discuss building 
secure partnerships in travel, commerce, and trade with the 
Asia-Pacific region. I am happy to answer any questions.
    [The prepared statement of Mr. Klemm follows:]
                  Prepared Statement of Hans G. Klemm
                              May 8, 2012
    Good afternoon Chairman Rogers, Ms. Jackson Lee, and distinguished 
Members of the subcommittee. Thank you for the opportunity to testify 
before you today on building secure partnerships in travel, commerce, 
and trade with the Asia-Pacific region.
    It is my pleasure to be here with my colleagues, Deputy Assistant 
Secretary Mark Koumans from the Department of Homeland Security and 
Assistant Administrator for Global Strategies John Halinski from the 
Transportation Security Administration.
    As President Obama and Secretary Clinton have underscored, much of 
the history of the 21st Century will be written in Asia. Secretary 
Clinton took her first overseas trip as Secretary of State to Asia in 
2009 and has returned to the region ten times since. I was pleased to 
hear that Chairman Rogers led a fact-finding Congressional delegation 
to China, the Republic of Korea, and Japan just last month. The United 
States is committed to building mature and effective partnerships in 
the Asia-Pacific region that can mobilize common action and settle 
disputes peacefully, so that we can work toward fostering rules and 
norms that help manage relations between peoples, markets, and nations, 
and establish security arrangements that provide stability and build 
trust. We believe that now is the time to make the necessary 
investments towards ensuring a robust and coherent cooperative 
environment in the Asia-Pacific and that America's future success will 
be dependent on the success of the region as a whole.
    The world of the 21st Century is increasingly linked by new 
technologies, rapid increases in international trade and financial 
flows, global supply chain networks, and the rapid proliferation of 
competitive companies. It poses both tremendous opportunities for trade 
and investment--and job creation--as well as new challenges. The United 
States is working to build a seamless economy in the Asia-Pacific by 
finding practical and concrete ways to strengthen regional economic 
integration, expand trade, and advance regulatory cooperation and 
convergence. Participating in Asia's growth is central to our economic 
prosperity, as it is one of the fastest growing regions and withstood 
the 2008 economic crisis better than the rest of the world.
    We are constantly striving to strengthen our bilateral relations, 
which form the basis for many of our economic and security partnerships 
in Asia. Last week, the U.S.-China Strategic and Economic Dialogue 
convened. This is an important bilateral forum that allows the United 
States to address a wide range of issues with China. Also, the U.S.-
Korea Free Trade Agreement recently entered into force, which will 
create substantial new opportunities for U.S. exporters to sell more 
American goods, services, and agricultural products to Korean customers 
and support tens of thousands of new export-related jobs here at home. 
In addition, the United States and Japan recently issued the U.S.-Japan 
Joint Statement on Global Supply Chain Security, which outlines ways to 
cooperate more closely to strengthen the security and resiliency of the 
global supply chain and promote the timely, efficient flow of 
legitimate commerce. Together, our two countries seek to ensure that 
regional and global supply chains are prepared for, and can withstand, 
evolving threats and hazards, and can recover rapidly from possible 
disruptions such as terrorism and natural disasters. These are just a 
few ways in which we engage bilaterally in this region.
    I also want to highlight a vital component of our strategic pivot 
toward Asia, the United States' elevated engagement with regional 
institutions, including the Association for Southeast Asian Nations 
(ASEAN), the East Asia Summit (EAS), the ASEAN Regional Forum (ARF), 
the ASEAN Defense Ministers Meeting Plus, the Secretary's Lower Mekong 
Initiative, and the Asia-Pacific Economic Cooperation (APEC) forum.
    ASEAN sits at the center of many of the region's multilateral 
institutions, and we are taking steps to broaden and deepen our already 
strong partnership with ASEAN. In 2010, we were the first non-ASEAN 
country to open a dedicated Mission to ASEAN in Jakarta, and in 2011, 
President Obama appointed our first resident Ambassador to ASEAN, David 
Carden. We maintain communications on a range of issues, including 
policy, security, economics, standards, and energy, as part of our 
comprehensive engagement with ASEAN. We have also committed to support 
ASEAN's Strategic Transport Plan in our U.S.-ASEAN Plan of Action 2011-
2015. Additionally, the ARF has proven itself to be an important body 
to address the region's pressing security concerns, including maritime 
security. We are working closely with the Coast Guard to co-host with 
Korea and Indonesia an ARF meeting to discuss civil maritime law 
enforcement cooperation and how we can build stronger partnerships in 
the region on issues like port security and environmental disaster 
response. The USTR-led Trade and Investment Framework Arrangement 
(TIFA) also represents our expanding engagement with ASEAN. This year, 
we are increasing our focus on U.S. export opportunities and commercial 
engagement with ASEAN, through the TIFA, as whole-of-government, and 
with a focus on concrete sectors that ASEAN is supporting through the 
ASEAN Master Plan on Connectivity. We are putting an infrastructure in 
place to sustain our increased engagement and help these institutions 
continue to develop into results-oriented and effective bodies capable 
of mustering collective action to address pressing transnational 
challenges.
    In addition to ASEAN, APEC is particularly important to the United 
States because it is our primary organization for multilateral 
engagement with the Asia-Pacific on economic interests. The 21 APEC 
members account for 55 percent of the world's GDP, 45 percent of global 
trade, and 40 percent of the world's population. Sixty percent of U.S. 
export goods go to APEC economies and five of America's top seven trade 
partners are APEC members.
    APEC is unique in that it already has the tools and focus to ensure 
regional economic prosperity by promoting policies that will spur long-
term economic growth and ensure all citizens have the opportunity to 
thrive in the global economy. It promotes free and open trade and 
investment and initiatives to build healthy and resilient economies. 
APEC also maintains a unique partnership with the private sector--
including many of the region's leading companies--which ensures that 
its initiatives are focused, constructive, and of tangible benefit to 
all economic stakeholders. It is a prime example of how we can leverage 
the interconnectedness of our economies to benefit the region.
    APEC brings together officials at every level of government--from 
leaders to technical experts--to tackle a multiplicity of important 
issues in practical and concrete ways. While APEC's main focus is on 
strengthening regional economic integration by addressing barriers to 
trade and investment, its members recognize that security plays a vital 
role in a healthy and growing economy. APEC works to secure the 
region's transportation networks, enhance the security and resilience 
of the supply chains, and help protect the region's economic and 
financial infrastructure from attack or misuse.
    APEC's commitment to securing the transportation of people and 
goods is reflected in the APEC Consolidated Counter-Terrorism and 
Secure Trade Strategy, endorsed by APEC Ministers last year. The 
Strategy highlights secure travel and secure supply chains as two of 
its priority areas of work over the next 5 years. In recent years, APEC 
committees have undertaken projects designed to protect aviation, land, 
and maritime transportation from terrorist attacks and other 
disruptions. Because of its economic focus, APEC seeks ways to 
strengthen security while also facilitating the flow of legitimate 
travelers and commerce. For this reason, APEC has taken a particular 
interest in fostering layered, risk-based approaches to security, which 
allows authorities to expedite legitimate trade and travel, while 
focusing on a small percentage of goods and travelers that may pose a 
greater risk.
    One example of this approach is the Travel Facilitation Initiative 
(TFI). The TFI is a multi-year initiative that was introduced by the 
United States and was endorsed at the 2011 APEC Leaders Meeting. The 
TFI is meant to expedite the movement of travelers across the Asia-
Pacific region, with the goal of enabling more efficient, more secure, 
and less stressful travel. It benefits business and non-business 
travelers, the private sector and governments. The TFI includes a range 
of programs including: an APEC Airport Partnership Program envisioned 
to showcase best practices and build capacity on the efficient and 
secure processing of travelers for international departures and 
arrivals at airports; the APEC Business Travel Card which allows 
frequent business and government travelers expedited immigration 
processing; a Network of Trusted Traveler Programs for Ports of Entry 
which is still under development, but ultimately could dramatically 
reduce processing times for travelers while enabling high levels of 
security throughout the region. I would note that a bilateral Trusted 
Traveler program was agreed to last year and is currently under 
development between the Republic of Korea and the United States, and 
last week the United States and Japan announced they would work to 
establish a bilateral program as well. The TFI also includes the 
Facilitation of Air Passenger Security Screening which has the goal of 
fostering technologies and approaches that will increase travel 
efficiency and security in the region--APEC already supports capacity-
building workshops to implement low-cost ways to screen passengers and 
baggage as well as canine security programs--and the Advance Passenger 
Information Program. By receiving passenger information in advance of 
travel, APEC economies can identify and mitigate risks and expedite the 
processing of legitimate travelers through ports of entry and focus 
resources on those requiring additional scrutiny. APEC as a whole seeks 
to enhance the resiliency of regional trade, travel, finance, and 
infrastructure against attacks and other disruptions, as this is 
critical to the health of our economic systems.
                               conclusion
    Today we face the challenge of continuing to promote the prosperity 
and security of the United States, as well as the Asia-Pacific region. 
We are looking for new ways to collaborate and form partnerships both 
bilaterally and multilaterally with the international community, 
because in the global society in which we live, America's future 
success is now intrinsically linked to the success of others.
    Thank you for the opportunity to appear before you today to discuss 
building secure partnerships in travel, commerce, and trade with the 
Asia-Pacific region, I am happy to answer any questions you may have.

    Mr. Rogers. Thank you, Mr. Klemm, for that testimony.
    The Chairman now recognizes himself for questions.
    Mr. Halinski, you mentioned commensurate cargo screening. 
Tell me more about that. That is the first time I have heard 
that term. I know we have talked about the concept, but I 
didn't know you all had a program in place.
    Mr. Halinski. Yes, sir. What I mean by that is the 
recognition of a country's national cargo security program. The 
way we look at that is a process where we do initial outreach 
to the government, we analyze the information that we obtain 
from them on their national cargo program. During that 
analysis, we look for compatibility so that they are 
commensurate so that we ensure that they are meeting the 
requirements for 100 percent screening of inbound cargo on 
passenger aircraft. Then, at that point, we visit and we ensure 
compliance to those measures. Then, at that point, we recognize 
them formally as having a program which is commensurate with 
the U.S. program for inbound cargo, sir.
    Mr. Rogers. So that is inbound cargo on passenger planes. 
You are not talking about just cargo planes, are you?
    Mr. Halinski. Right now, sir, it is inbound cargo on 
passenger aircraft, sir.
    Mr. Rogers. Okay. That makes sense then. I was hoping that 
you had some program I didn't know about that dealt with cargo 
planes as well. As you know, that is a bigger problem.
    But, anyway, I want to talk to you a little bit about TSA's 
national cargo security recognition program. How extensive is 
that being used, what you just described? Now, you said it was 
with countries, not companies?
    Mr. Halinski. It is with countries, sir. What we have done 
is we have done an analysis of what we consider--what we have 
found after an analysis is that approximately 20 countries 
account for 85 percent of the inbound cargo on passenger 
aircraft. So what we have done is we are approaching those top 
20 countries to recognize their programs first, and then the 
other countries that are involved, with the idea that we will 
be able by the end of this year to ensure compliance to the 
regulation of 100 percent screening of inbound cargo, sir.
    Mr. Rogers. Of those 20 countries, how many have you been 
able to achieve agreements with?
    Mr. Halinski. Right now, sir, we have accomplished nine. We 
are in the process of another four. I think by the end of this 
year we will have the top 20 complete, sir, plus a couple of 
the others.
    Mr. Rogers. Excellent.
    Well, you know I am a big fan of the explosive-detection 
canines. My view is they provide a flexible, scaleable measure 
of screening that other technologies cannot. TSA currently does 
not certify private-sector canines for screening cargo, whether 
within the United States or in other countries. Does TSA have a 
plan to help develop these standards for canine screening 
outside the United States?
    Mr. Halinski. Yes, sir, we do. In fact, we have worked--for 
example, we have what is called the ``Quad Group,'' which is 
Australia, Europe, Canada, and the United States. We have a 
working group within there. The idea behind this group is to 
push forward advanced technologies and other policies 
throughout the world. We have a working group on canine. 
Additionally, we have----
    Mr. Rogers. On canine certification?
    Mr. Halinski. Canine certification, yes, sir. We have also 
worked very closely with Europe for canine certification.
    We are in the preliminary stages in the Asia-Pacific area, 
sir. Last year at the Asia-Pacific Economic Cooperation group 
meeting, we had a 2-day conference on canine for Asian 
countries. We have a lot of interest from Australia, New 
Zealand, Japan, Taiwan on canine programs sir. We also plan to 
have another 2-day seminar on canine programs for the Asia-
Pacific this fall, sir.
    Mr. Rogers. Are you aware of any Asian country that is not 
utilizing canines to assist in baggage and cargo screening?
    Mr. Halinski. Yes, sir. I would tell you that most of the 
countries in Asia-Pacific do not use canines currently.
    It is something that we are trying to get out there to 
them. We believe that canines are a significant answer in that 
layered effect for cargo screening and passenger screening. We 
are trying to push that forward and, for lack of a better term, 
we are trying to market it to them, sir, so that they get on 
board.
    Mr. Rogers. Well, that was one of the things I found in all 
three countries that I visited. They were very interested. They 
look to us as the gold standard. So I think the more that they 
see those assets incorporated into our layered system, the more 
they are going to want to emulate that. As you know, I am a big 
proponent of vapor wake canines for the passenger screening as 
well as for the cargo, and I think there is a lot of interest.
    But it is going to be very important that we reach some 
certification standards pretty soon. Do you have any kind of an 
idea about a time line as to when those certification standards 
may be achieved?
    Mr. Halinski. Sir, I don't right now, but I can get back 
with you on a follow-up on when we think that will be 
achievable, sir.
    Mr. Rogers. I would appreciate that.
    The Chairman is now happy to recognize the Ranking Member, 
who has graced us with her presence, my friend and colleague 
from Texas, Ms. Jackson Lee, for an opening statement and any 
questions she may have.
    Ms. Jackson Lee. Thank you very much, first of all, for 
this follow-up meeting, and to the witnesses that are here for 
their graciousness for being here today. Mr. Chairman, thank 
you again.
    I would like to first join the administration in 
recognizing all the men and women in our intelligence and 
counterterrorism agencies for their role in yesterday's events 
that led to the disruption and capture of a suicide bomber from 
Yemen who intended to detonate an explosive aboard a U.S.-bound 
flight.
    It is noted that the events that unfolded yesterday, and 
compounded by the events surrounded the failed attack aboard 
Flight 253 on December 25, 2009, display that we must address 
vulnerabilities of foreign airports with direct flights to the 
United States. The security at these last-point-of-departure 
airports is as critical to our aviation security as the 
security of our domestic flights.
    Just as an aside, Mr. Chairman, and just putting it on the 
record, I think it is appropriate that we have, particularly 
our Transportation Security Committee--I imagine it will be 
something for the entire committee--but a full briefing on the 
incident that was at least announced yesterday.
    I would also ask that we collaborate together in another 
hearing on aviation security. One of the issues that I raised 
early on was cabin security, but I think we are familiar with a 
new climate dealing with these items or these particular assets 
that detonate. What is in the public domain is how they are 
detonating, who is using them, the physical aspect of it, and 
who is at the genesis of it. So I would hope that we would be 
able to have that hearing.
    But I look forward to hearing from Mr. Halinski today and 
continue the discussion on our efforts to strengthen 
international screening processes that yield sustainable 
detection capabilities for inbound flights. Recently, the 
subcommittee traveled on a CODEL to the Asia-Pacific region, 
and I must applaud its structure and its benefits. With a 
slight bit of humor, I had to let the Chairman proceed in one 
place. I was stuck in an airport for a period of time. But I 
gleaned what we were reviewing and reached there shortly 
thereafter.
    So, Mr. Chairman, thank you very much for allowing me to 
join that delegation and be part of co-leading, co-sponsoring 
in joining you. We must continue to take critical steps to 
strengthen international cooperation on transportation security 
with the Asia-Pacific region.
    One of the most interesting aspects of the trip was the 
opportunity to learn more about Japan's bullet train, also 
known as high-speed rail. It is imperative to note that we are 
currently in a unique position with regards to ground 
transportation security policy. Unlike with aviation, we have 
the opportunity to build a brand-new mass transit system and 
develop superior security standards at the design level as 
opposed to retrofitting an existing system in response to an 
attack.
    I look forward to continuing this dialogue with the 
Department and learning more about best practices gleaned from 
other countries on mass transit security.
    With that, Mr. Chairman, I would like to submit for the 
record a statement by the U.S. High-Speed Rail Association 
which articulates significant findings concerning this matter.
    Mr. Rogers. Without objection, so ordered.
    [The information follows:]
Statement of Richard P. Lawless, CEO, U.S.-Japan High-Speed Rail, Inc. 
                                (USJHSR)
                             April 18, 2012
    Good Morning, Chairman Rogers, Ranking Member Jackson Lee, and 
other Members of the Subcommittee on Transportation Security. My name 
is Richard Lawless, and I am the CEO for United States Japan High-Speed 
Rail (USJHSR), LLC.
    It is my pleasure to provide a Statement for the Record for the 
committee today following the subcommittee's recent visits to Japan, 
South Korea, and China, during which Members and staff had the 
opportunity to ride high-speed trains in Japan and observe first-hand 
the safety and security systems supporting these important national 
transportation services.
    Since beginning in Japan in 1964, high-speed passenger rail 
services have been embraced and further developed by Asian and European 
nations. The United States has been noticeably absent. It is long 
overdue for the United States to become more serious about how we can 
deploy true high-speed rail in the right markets in the United States, 
and how we can deliver these services reliably, safely, and securely.
    In my statement today, I want to provide the committee with some 
additional information regarding Japan's high-speed rail safety and 
security programs to complement your trip experiences. I want also to 
touch briefly on our plans to deploy high-speed rail service in Texas, 
using Japan's considerable high-speed rail expertise and safety/
security experiences.
           central japan railway's ``total system'' approach
    Given the complexity of high-speed rail operations, high-speed 
railways must be conceived from the very beginning as a closely 
integrated system.
    One of the world's best examples of a ``total system'' approach for 
high-speed rail is Central Japan Railway Company (JRC)'s Tokaido 
Shinkansen system. Since 1964, with the inauguration of the first high-
speed train service in the world, what we still refer to today as the 
``bullet'' train, the Tokaido Shinkansen has maintained a superlative 
performance record and a perfect safety record of no passenger 
fatalities or injuries due to train accidents, including derailments or 
collisions.
    In addition, Japan's rail system is designed to withstand major 
natural disasters with sophisticated sensors and automated train-stop 
systems. The major 9.0 earthquake that struck Japan in March 2011 was a 
tragic event, but it proved the safety and effectiveness of Japan's 
high-speed rail system--by both alerting train operators to the event 
and braking automatically to prevent derailments and safeguard 
passengers.
    A total system design for high-speed rail considers the physical 
and operational dynamics among all the major railway sub-systems 
(track, right-of-way, bridges and structures, tunnels, communications 
and signals, rolling stock, automated train control systems, operations 
centers, power and electrification, stations, support facilities). The 
challenge is to optimize and align these components to deliver service 
safely, securely, and efficiently.
    We know there is much to be learned about the success of Japan's 
rail operations, including their approach to rail security.
           japan's high-speed rail safety & security systems
    High-speed rail safety and high-speed rail security are closely 
linked, and the nexus between these system attributes is important to 
understand and appreciate.
    Japan designed and constructed its Shinkansen system on what is 
known as a ``sealed'' corridor. This means that the high-speed rail 
system mainline tracks are grade-separated, solely dedicated to 
Shinkansen trains, and are specifically designed to restrict and 
prevent access by unauthorized vehicles or persons. The security 
provided by the sealed corridor of the Shinkansen system is further 
complemented by an integrated and layered perimeter of safety and 
security measures.
    The majority of Japan's high-speed rail system is protected by 
barriers (including fences and walls), right-of-way monitoring, CCTV, 
and physical access control for key operations centers.
    Without compromising security measures and protocols in use in 
Japan, here are some examples of Tokaido Shinkansen's security 
approach: 




    Security cameras are positioned in key locations of the station:
    (1) ticket gates (entering and exiting),
    (2) stairs/escalators/elevators, and,
    (3) station waiting areas/platform.
    Cameras will continuously record a passenger entering and leaving 
the gates of any Shinkansen station, making it extremely difficult for 
a suspicious person to trespass onto the premises unnoticed. Cameras on 
the platform are set in a position where they can monitor the track for 
the purposes of confirming safe boarding/de-boarding of passengers and 
for quickly identifying trespassing or persons entering onto the 
tracks. On-board cameras and random patrols by police and security 
personnel further serve as detection and deterrent procedures to 
safeguard the 140 million and more annual Tokaido Shinkansen passengers 
(in fiscal year 2010).


    On board JRC's Tokaido Shinkansen, which several of you experienced 
en route from Kyoto to Tokyo, train conductors are encouraged to 
communicate with passengers during their ticket checking. This kind of 
customer contact is a proven security measure. In addition to on-board 
staff, security guards board the train and patrol randomly.
    Security personnel also monitor and patrol the Shinkansen right-of-
way to ensure the integrity of the railroad. On the Tokaido Shinkansen 
line, there are 60-90 patrol teams dedicated to maintaining 24/7 
coverage of the vital high-speed rail line.


    The security approaches to protecting the Tokaido Shinkansen are an 
integral part of JRC's ``total system'' approach. All assets of the 
high-speed service are examined for vulnerability, hardening, 
monitoring, loss consequence, recovery, and redundancy. Over several 
decades of practice, Japan has demonstrated the effectiveness of using 
technology, railway staff, and design to provide a safe and secure 
high-speed service.
                international rail security cooperation
    The first international rail security conference was held in 
February 2005, 11 months after the March 2004 Madrid attacks, and 5 
months before the attacks in London. This conference was sponsored by 
the Association of American Railroads (AAR) and the Amtrak Office of 
Inspector General and served as the beginning of on-going dialogs about 
rail security among international rail carriers, including mass 
transit, conventional rail, and high-speed rail.
    Japan Railway companies continue to participate in these 
international discussions. In September 2011, the TSA sponsored a 
security conference in Baltimore, attended by railway security experts 
from the United States, United Kingdom, France, Germany, Belgium, 
Israel, Russia, Thailand, and Japan. Japan was also represented by 
representatives of its Ministry of Land, Infrastructure, Transportation 
and Tourism (MLIT).
    The conferee working groups were solicited for describing both 
``current practice'' and ``best practice'' for security measures on 
their systems. Information was shared as to roles and responsibilities 
of security personnel, training and exercises, alert systems, 
infrastructure monitoring, employee background checks, cooperation with 
responding agencies, and a myriad of related concerns. Conferees also 
discussed collective past experiences and lessons learned from their 
activities.
    Future meetings for these international security events are 
planned, and Japan and USJHSR will continue to participate to garner as 
much knowledge as possible to further improve on safety and security 
design and practice.
         our approach to high-speed rail in the state of texas
    The United States is a relative neophyte in true high-speed 
passenger rail operations (180-220 MPH), based on current generation 
steel-wheel technology, with some limited experiences in the Northeast 
Corridor Acela services, but with no real experiences outside that 
shared, congested corridor. International carriers have told us that 
true high-speed rail operations presents special challenges to secure 
and safeguard.
    We know the best time to ``design in'' and ``build in'' security 
components is at start-up and with our eyes wide open. We have formed a 
new company, Texas Central High Speed Railway, LLC (TCR). TCR is a 
Texas-based company dedicated to promoting high-speed intercity 
passenger rail within the Dallas/Fort Worth-to-Houston corridor.
    Strongly supported by JRC, TCR and its partner USJHSR are uniquely 
organized to bring world-class high-speed intercity passenger rail to 
Texas. Working with community and industry stakeholders to market and 
deploy JRC's 5th generation ``N700-I Bullet'' train system and 
technology, TCR will offer to the State of Texas the world's safest, 
most efficient, most environmentally friendly, and most reliable 
intercity transportation solution.
    One of our foremost concerns is the safety and security of our new 
railroad. In addition to working with DHS and TSA in their security 
conferences, we plan to work with the new national High-Speed Rail 
Policy Center at the Mineta Transportation Institute (MTI) at San Jose 
State University. They have already begun work on high-speed rail 
safety and security international benchmarking and best practices for 
the design, construction, and operation of new systems, and we will 
exchange information with them to ensure we capture all available 
technology and experience in our design.
    We are very appreciative of the subcommittee's efforts to establish 
on-going dialogs with international transportation service groups, 
including Central Japan Railway Company, as their considerable 
experiences in operating safe and secure high-speed rail systems can be 
the foundation on which we build America's first generation high-speed 
rail system in Texas.

    Ms. Jackson Lee. However, our discussion on international 
cooperation does not end there. In October 2010, international 
cooperation and public-private interaction successfully 
intercepted explosive devices shipped on passenger and all 
cargo aircraft from Yemen. Today I look forward to hearing from 
the Department and Express Association of America about the 
most recent developments in private-public partnerships across 
all cargo and supply chain security.
    This hearing offers an opportunity to continue a critical 
security dialogue on securing our skies while allowing for the 
flow of the passengers and goods between the United States and 
the Asia-Pacific region. Domestically, we try to ensure that 
commerce is not impeded by security requirements. However, our 
concerns about these important issues are magnified when the 
supply chain involves the international aviation arena.
    Secretary Napolitano and Administrator Pistole have put 
forward this important issue of raising and harmonizing 
security standards before the governments of the world. In the 
last 2 years, the administration worked diligently to take 
significant steps to harmonize security standards and establish 
a stronger working relationship with the Asia-Pacific region. 
Agreements have been signed, and accords have been reached.
    Today we must ask the question: How can the United States 
leverage these developments to secure aviation from terrorist 
attacks and ensure that terrorists do not sabotage our cargo 
supply chain? I remember speaking to those who pilot cargo 
planes and committing to them that we will not leave them out 
of this circle of security.
    I welcome our witnesses today and look forward to your 
perspective and insight on the feasibility of increasing 
security at international airports and throughout the global 
supply chain.
    This administration has taken significant steps to 
establish stronger relationships with countries across the 
Asia-Pacific region. Now, more than ever, we must collaborate 
with our partners abroad in government, at airports, with air 
carriers, and throughout industry to reach solutions to the 
complex issues associated with aviation and the global supply 
security chain.
    Let me say that America is embarking on high-speed rail, 
which is a complement to what we are doing here today. That was 
one of the items that we were able to see first-hand when we 
were in the Asia-Pacific area. Texas--Houston, Dallas, and 
other cities are excited about the opportunity for high-speed 
rail. We realize that on the West Coast they are eagerly 
waiting to begin. Texas is waiting to begin, and as I came back 
and reported on our efforts to my community, the excitement is 
without boundary.
    We will be meeting and organizing to talk about not only 
high-speed rail but security. We learned best practices and 
learned what legislative initiatives we need to have in place. 
We also learned how to work internationally, again, on the 
transportation security circle. That certainly includes, in 
light of the last 24 hours, making sure that no one--no one--
believes or ever can penetrate our aviation circle of travel 
and cargo on behalf of the American people and people around 
the world.
    Mr. Chairman, I thank you for your extended courtesy. Just 
to offer, Mr. Chairman, I am in a markup right at this moment, 
and so I will likely be in and out. My staff will be here to 
take diligent notes, and hope that in the course of the 
hearing, before it is completed, I will be able to join you. 
But I will sit for a moment. But I wanted to thank you for your 
courtesies. I yield back my time.
    Mr. Rogers. I thank the gentlelady.
    The Chairman now recognizes Mr. Walberg for any questions 
he may have.
    Mr. Walberg. Thank you, Mr. Chairman.
    Thanks to the panel for being here today and sharing your 
experience and expertise.
    Mr. Koumans, in your opinion, what are the biggest 
challenges to the security in the Asia-Pacific region?
    Mr. Koumans. That is a very broad question, sir.
    Mr. Walberg. It is a broad question, but you can detail it 
as closely as you want.
    Mr. Koumans. Yes. As I tried to say in my statement, the 
growth in trade and travel in the region presents one series of 
challenges, because as the size of the haystack increases when 
you are looking for those needles, that complicates the effort. 
So that is one that I would cite, is just the volume that we 
are contending with, the growth.
    Second is, I would mention the not-insignificant terrorist 
threats that exist, particularly in Southeast Asia. We have 
seen some of the attacks, some of the arrests in recent months 
and years in Thailand, in the Philippines, and Indonesia. We 
all do what we can to work with those partners and to 
strengthen their ability to combat those threats.
    Then, third, I would highlight organized crime. Organized 
criminality from many of the countries in the region takes 
different shapes, whether it be in the maritime environment, 
working with the Coast Guard in terms of the piracy threat that 
exists in certain parts of Asia-Pacific, mainly in Southeast 
Asia, or to other kinds of organized criminality that is 
involved in people smuggling, child sex exploitation. It takes 
many different shapes, but I would characterize that as perhaps 
the third.
    Mr. Walberg. Thank you.
    Ambassador Klemm, since the signing of the free trade 
agreement in 2007, what have been the economic implications for 
both the United States and South Korea since that signing?
    Mr. Klemm. Thank you, Mr. Representative.
    Although initially signed in 2007, as you are aware, the 
legislation enabling the implementation of the Korea-U.S. Free 
Trade Agreement was not passed by Congress until the fall of 
last year and then signed into law by President Obama I believe 
it was October or November of last year. The agreement went 
into effect, finally, on March 15. Both governments have been 
working very hard since that date to ensure its implementation 
goes as smoothly and fully as possible.
    To support the implementation and report on its progress, 
the two governments will be holding bilateral consultations 
during the course of next week here in Washington at the vice 
ministerial level, and also will be working to establish 
necessary oversight bodies, again, to ensure that the agreement 
smoothly and fully goes into effect as intended.
    Because it has only been implemented essentially less than 
60 days, it is probably too early to tell exactly the 
consequences of either----
    Mr. Walberg. We have not seen any trade increase in the 
short period of time?
    Mr. Klemm. I don't think we have the data yet, sir.
    Mr. Walberg. Okay.
    Mr. Klemm. But the anticipation, both from our business 
community as well as the Korean business community, is that 
they were intending to take full advantage of the agreement's 
benefits as quickly as possible.
    Mr. Walberg. Thank you.
    Mr. Halinski, let me ask you, U.S. carriers depend upon 
foreign contract repair stations to perform necessary 
maintenance and repairs of aircraft. In 2008, the FAA since 
then has been unable to certify new foreign repair stations. 
Rulemaking has been taking place. February 2010 ended the 
public comment rulemaking period.
    What impact would a finalized rule have on economic 
opportunity in Asia-Pacific?
    Mr. Halinski. Sir, I think that when we look at the number 
of foreign repair stations in Asia-Pacific, there are 
approximately about 160 foreign repair stations in there. When 
there is a final rule, it would seem that the number of foreign 
repair stations would probably increase overall when there is a 
final rule.
    We are looking at the matter. We understand that the rule 
has taken time. We are----
    Mr. Walberg. Significant time.
    Mr. Halinski. Absolutely, sir. We are trying to work with 
both industry, conducting outreach while the rule is in process 
so that we are validating the rule--let me say, validating the 
rule by these outreach and visits--to ensure that there is 
security there. So we are trying to ensure that we are doing 
the due diligence from a security standpoint while the rule is 
being moved forward.
    We have done a significant amount of outreach to industry 
in this case, sir. There is a total of approximately 750 
foreign repair stations. About 458 of those are in Europe; as I 
said, about 160-some in Asia. We believe that number will 
increase when the final rule is there.
    We also think that, until the rule is complete, one 
possible solution is to take that on a case-by-case basis, 
working with FAA to review the security at that particular site 
that is under application, do an analysis of the criticality of 
that and the threat, and possibly be able to give a temporary 
certificate as part of that----
    Mr. Walberg. Is that to be decided soon?
    Mr. Halinski. I believe, sir, that is--we are working on 
that right now, sir. We are looking at a case-by-case basis to 
move forward on this while the rule is being made, sir.
    Mr. Walberg. Okay.
    Thank you, Mr. Chairman.
    Mr. Rogers. I thank the gentleman.
    The Chairman now recognizes the Ranking Member for any 
questions she may have.
    Ms. Jackson Lee. Thank you very much, Mr. Chairman.
    Mr. Halinski, do you believe it is crucial for there to be 
a security matrix and a rule regarding the foreign repair 
stations from the TSA?
    Mr. Halinski. Yes, ma'am, I do. I believe that there has to 
be a rule for security. We think that that is--we have reviewed 
this; we have done detailed intelligence analysis and also 
analysis of the criticality of some of the parts. We look 
forward to the rule when it is complete.
    As I just stated, we have moved out and conducted a 
significant amount of outreach on the rule. What do I mean by 
outreach? We are trying to verify, are there security programs 
present in these locations? What we have found is, by and 
large, they do have security programs. Part of that is 
because----
    Ms. Jackson Lee. Let me just intrude because the time is 
short. What do you think the impact would be for FAA to certify 
without having the new security rules? Why is it important for 
them not to certify while you are reviewing and handling this 
rule?
    Mr. Halinski. Ma'am, based on the analysis we have done, we 
know that there is some threat there, there is in vulnerability 
there. We would prefer that we would work closely with FAA on a 
case-by-case basis. Instead of opening it up for temporary 
certifications, we would prefer to work on a case-by-case basis 
with them on specific repair stations to ensure that they have 
a security program in place and that we have done an analysis 
on the criticality of that station.
    Ms. Jackson Lee. I am going to come back to you, Mr. 
Halinski.
    Mr. Koumans, was it your testimony to say how many foreign 
repair stations we had in Asia-Pacific? Was that your 
testimony?
    Mr. Koumans. No, that was not.
    Ms. Jackson Lee. All right. Who was the one that gave the 
number? How many do we have----
    Mr. Halinski. That was mine, ma'am.
    Ms. Jackson Lee. Go ahead.
    Mr. Halinski. It is roughly about 160 foreign repair 
stations in Asia-Pacific.
    Ms. Jackson Lee. All right. I assume all of them have not 
been assessed regarding security?
    Mr. Halinski. No, ma'am. We have conducted outreach at 
approximately 58. That number we have based that outreach on is 
the criticality of the station and the threat posed, so that we 
are trying to get repair stations with the highest threat and 
the criticality based on what they repair in the station.
    Ms. Jackson Lee. All right, so----
    Mr. Halinski. In other words, it is something that could 
affect the flight of the aircraft.
    Ms. Jackson Lee. Mr. Koumans, did you testify to the level 
of concern with security in that region? Was that your 
testimony?
    Mr. Koumans. In general, yes. Now----
    Ms. Jackson Lee. Can you repeat it? What is the level of 
concern?
    Mr. Koumans. Our level of concern in Asia-Pacific, I 
wouldn't say it is any higher or any lower than any other part 
of the world. We are at a constant state of vigilance, where we 
are working closely with our partners to address any threats 
that arise.
    Ms. Jackson Lee. But terrorists move around, right? Are you 
saying that it is equal to the Mideast? I mean, the Mideast is 
obviously diverse, but it is equal to what has been a concern 
coming out of the Mideast?
    Mr. Koumans. Right. My intention, ma'am, was not to say 
that Asia-Pacific was any higher or any lower. We are at a 
constant state of vigilance. We are looking at threats wherever 
they might arise.
    But you are absolutely right. In terms of where terrorists 
are currently active, where the U.S. military is engaged, 
clearly there are----
    Ms. Jackson Lee. South Asia would be a concern.
    Mr. Koumans. The Asia-Pacific region is certainly a 
concern, as I mentioned a couple of minutes ago, particularly 
the Philippines, Indonesia, Thailand, some of the particular 
areas of concern.
    Ms. Jackson Lee. Let me just go--and thank you very much 
for that.
    I wanted to frame the question, because I think again--let 
me just pose this again so that you can restate it, Mr. 
Halinski, of the importance of the FAA not certifying 
additional foreign repair stations until the final rule is 
issued. But as you do that--we have been working on this issue 
for a very long time, and I have great respect for the agency. 
But can I, in light of the last 24 hours--and I certainly know 
that the last 24 hours does not point to a foreign repair 
station. But what it does point to is that aviation 
infrastructure is still a target. That means that, without 
giving new ideas, you know that the foreign repair stations 
deal with flights or deal with aircraft at their vulnerability. 
I mean, they are trying to make them better or make sure that 
they are able to fly.
    So, Mr. Halinski, can we raise the level of, if you will, 
crises for this rulemaking process to move on?
    In working with DHS, in working with the leadership of the 
Secretary, let me put on the record, Mr. Chairman, this is 
absolutely too long. It is absolutely imperative that we move 
forward. It is absolutely imperative that DHS and TSA move 
forward. It is absolutely imperative that it is a rule rather 
than any other approach, because as long as you continue to 
delay, you are going to find yourself entrapped with efforts, 
if you will, to move forward. That is understandable. So I am 
somewhat disappointed of how slow we have been moving.
    Can you give me a best guess of when you expect to produce 
this rule so that the degree of threat that has been speculated 
on here today, in the last 24 hours, when we know that the 
aviation industry is a target, can have some relief as it 
relates to foreign repair stations, which this particular 
committee has been discussing for at least 6 years?
    Mr. Halinski. You are at TSA.
    Mr. Halinski. Yes, ma'am. I don't know that I can give you 
right off the top of my head, ma'am, a best guess on when the 
rule will be complete. I would tell you that we will put an 
emphasis on the rule; we will continue to push the rule. I 
don't know that I can give you a date or a best guess at this 
point, ma'am. I can get back on a follow-up with you or your 
staff, ma'am.
    Ms. Jackson Lee. I would appreciate if you would do that 
for the committee. But, more importantly, is it that you are 
limited in your best guess because it is winding its way 
somewhere and you can't put your hands on where it is?
    Mr. Halinski. No, ma'am. We know where it is. The rule 
right now is under economic analysis at TSA. We are trying to 
finalize that economic analysis and get it up to DHS to 
continue the rulemaking process, ma'am.
    Ms. Jackson Lee. Well, let me close, Mr. Chairman, by 
saying I appreciate the detailed work in which Mr. Halinski is 
involved in, which Administrative Pistole is involved in. I 
would like a definitive answer.
    I only say this with a sense of humor and not with any 
disrespect: Economics has never killed anybody, and so I think 
we can move it on out of economics at this point. I do think it 
is important that we don't undermine the economic structure of 
the industry, which I assume is what you are looking at. But I 
am very disappointed that we are still here talking about a 
rule when we need it greatly.
    Can I acknowledge Mr. Danny Davis of Illinois, who is a 
Member of the committee, who is here? I thank him for being 
here today.
    Thank you, Mr. Chairman. I yield back.
    Mr. Rogers. I thank the gentlelady. I know I can say with 
confidence that she speaks for all of us on this committee with 
expressing her frustration over this issue. I know Mr. Walberg 
has touched on it, but all of us are frustrated and feel like 
it should be moved along.
    Mr. Klemm, in your testimony you stated that the United 
States introduced a multi-year initiative titled Travel 
Facilitation Initiative, TFI, that was endorsed by Asia-Pacific 
Economic Cooperation. The TFI is meant to expedite the movement 
of travelers across the Asia-Pacific region while also making 
it more secure and efficient.
    Is APEC promoting a risk-based approach to both passenger 
and our cargo screening?
    Mr. Klemm. Yes, sir, it is.
    I would like to spend a moment to perhaps discuss the 
Travel Facilitation Initiative but then also to point to the 
work that APEC has done on the nexus of security and travel 
facilitation.
    As you mentioned, the leaders of APEC in November of last 
year endorsed a multiyear Travel Facilitation Initiative. That 
initiative has five main objectives: One, to support an airport 
partnership program so that best practices on passenger 
screening, for example, can be shared across international 
airports in the APEC region. The initiative also supports the 
further development of the APEC Business Travel Card.
    In support of the Department of Homeland Security, the 
initiative is also supporting the further development of 
Trusted Traveler programs in the APEC region. Right now, as my 
colleague Mr. Koumans mentioned, there are very extensive 
consultations occurring between the United States and Korea on 
establishing a Trusted Traveler program, but similar 
consultations have also been done between Singapore and the 
United States, as well as Japan and the United States.
    Mr. Rogers. When do you expect full implementation of TFI 
in the Asia-Pacific?
    Mr. Klemm. It has a 5-year time frame, sir.
    Mr. Rogers. Great.
    Mr. Klemm. Two other, quickly, initiatives contained within 
them. One, as I mentioned earlier, is an air passenger security 
screening program and, also, work to support advanced passenger 
information sharing across economies within the APEC.
    On the broader issue of does APEC support a risk-based 
approach to aviation security--yes, it does. There is a 
comprehensive counterterrorism and security program that was 
also agreed to by the organization in November of last year. 
Then in the past year, under United States leadership, a number 
of initiatives have been supported within APEC to support a 
risk-based approach to aviation security. There was a workshop, 
for example, held in Australia in June of last year and then 
also a workshop on low-cost/no-cost measures to strengthen 
aviation security that was held--or it will be held in early 
2013.
    Thank you, sir.
    Mr. Rogers. Thank you.
    In your testimony, you also highlighted that President 
Obama appointed our first resident ambassador to the 
Association for Southeast Asia Nations. What are the 
responsibilities of this new resident ambassador?
    Mr. Klemm. Yes, Ambassador David Carden became--the United 
States has had an ambassador representing the United States to 
the Association for Southeast Asia Nations for quite some time. 
But up until Ambassador Carden, that individual has been 
resident here in Washington, simultaneously having other duties 
at the Department of State.
    Mr. Carden took up his post I believe at the beginning of 
last year. Essentially, he represents the United States to that 
organization. It is a 10-nation association which has the goals 
of forming an economic community, much like the European Union, 
by 2015. The United States, as a consequence, has great 
interest in the economic potential of ASEAN, but we also have 
an active engagement with them to work on issues such as 
maritime security, nonproliferation, education, and others.
    Mr. Rogers. Has he made any progress on enhancing our 
security agreements with any of these ASEAN nations?
    Mr. Klemm. I believe he has. Or perhaps it might be better 
said that the United States has. One objective that the 
administration pursued during the course of 2011 was to support 
a nonproliferation initiative that ASEAN has been pursuing for 
quite some time to make that region a non-nuclear zone. That is 
just one example, sir.
    Mr. Rogers. Great. Thank you. My time has expired.
    The Chairman now recognizes the gentleman from Illinois, 
Mr. Davis, for any questions he may have.
    Mr. Davis. Thank you very much, Mr. Chairman.
    Mr. Halinski, in your testimony, you point to significant 
recent progress in U.S.-China relations. Particularly, you 
mention China's involvement with the Aviation Cooperation 
Program. Could you elaborate on how China's program 
participation supports our own aviation security relationship 
with China?
    Mr. Halinski. Yes, sir. I think the best example that I 
think would illustrate this is, we have been working with China 
very closely. I have an office there; we have a TSA 
representative there. We have been working along with the FAA 
representative there to try to encourage the Chinese in the 
area of technology.
    They are producers of aviation security technology. We are 
producers. What we have found is that there is a lot of 
Chinese-made aviation technology throughout the world. What we 
are trying to do is encourage joint standards because we think 
it is very, very important that there is a bar there where you 
have significant like standards, so that passing through 
different countries, if you are going through a walk-through 
metal detector or an X-ray machine, there is one standard for 
the world instead of standards that are very country-dependent.
    We are working with China. We have invited the Chinese here 
this summer, the director-general of civil aviation, to talk 
about technology and where we can go with technology. We have 
also tried to increase the dialogue across the board in the 
area of capacity development, because we know that the Chinese 
do significant capacity development in areas in Africa and 
other parts of the world. We want to ensure that we work with 
them and are consistent on our approach in aviation security, 
sir.
    Mr. Davis. Does the Aviation Cooperation Program offer 
benefits to the United States by affording increased visibility 
regarding Chinese transportation and cargo security packages?
    Mr. Halinski. Yes, sir, I believe it does. We know that the 
FAA has probably made much further progress with us in this 
particular initiative, as have some U.S. stakeholders in 
working with the Chinese on the sale of aircraft, for example.
    I would say that in the area of cargo we have had 
discussions with the Chinese. We regularly visit their 
airports. We view their cargo facilities. Coincidentally, China 
is also now on the Aviation Security Panel of the International 
Civil Aviation Organization. We have worked together as of at 
the annual meeting in March to ensure that we are working 
toward common cargo security standards world-wide.
    Mr. Davis. Mr. Koumans and Mr. Halinski, under TSA's 
National Cargo Security Program, TSA verifies foreign cargo 
screening programs are commensurate with the level of security 
in the United States. To date, TSA has contacted 
representatives of all of the top 20 high-volume countries, 
which account for 84 percent of the cargo volume on passenger 
aircraft.
    To what extent has DHS's Office of Policy and TSA's Office 
of Global Strategies been involved in working with foreign 
governments to facilitate their participation in the National 
Cargo Security Program?
    Mr. Halinski. Sir, I will start out with that answer.
    I would say that we work very closely with our partners in 
DHS, particularly in the area of cargo. For example, with DHS, 
in the Office of Policy, they have taken on board the global 
supply chain problem. We have had significant movement on that. 
The Secretary herself has been involved and gone to ICAO 
several times.
    I think what is really pushing it forward, quite frankly, 
is the recognition that cargo is a global problem. It is 
involves not just ICAO, but we also are involving the World 
Customs Organization. So there are other components than DHS 
which are moving forward to push out and try to resolve the 
issue of cargo security.
    So I think it is a two-pronged approach: One at a very 
international level, multilateral level, with ICAO, World 
Customs Organization; and then bilaterally, with the amount of 
push both DHS and TSA has put bilaterally in countries on cargo 
recognition as well as trying to come up with same standards.
    I would say the third prong would absolutely be what we are 
trying to do with our stakeholders, the private sector, on 
cargo, trying to ensure that we are moving forward on cargo 
security without killing industry, sir.
    Mr. Davis. Would you say that these efforts are being 
successful?
    Mr. Halinski. Yes, sir, I would say they are, sir. I would 
say that since the cargo incident in Yemen significant progress 
has been made. It will continue. There is a very large push. In 
fact, in September of this year, there is an extraordinary 
meeting in Montreal of the International Civil Aviation 
Organization, where it is a ministerial level meeting of 
countries worldwide to discuss just security. That is 
unprecedented. Some of the things that they will be discussing 
and approving are international cargo standards.
    Mr. Davis. Thank you very much.
    Thank you, Mr. Chairman. I yield back.
    Mr. Rogers. I thank the gentleman.
    Mr. Walberg, do you have any additional questions?
    Mr. Walberg. Yes, I do.
    Mr. Rogers. The Chairman recognizes the gentleman.
    Mr. Walberg. I don't want to belabor the point, Mr. 
Halinski. Well, I guess, in all honesty, I do want to belabor 
the point, just to make sure I understand.
    You indicated that while the rule isn't finalized yet and 
public comment was completed in 2010, you indicated a case-by-
case basis for foreign repair stations was being considered. Is 
it being considered or being implemented?
    Mr. Halinski. Sir, I would say at this point it is being 
considered. We have talked about this. We want to try to move 
forward, but make sure that when we move forward we are using 
due diligence in this case. So it hasn't been finally decided, 
but we are moving forward to try to do this on a case-by-case 
basis, sir.
    Mr. Walberg. If you could, what would be some of the 
criteria on a case-by-case basis?
    Mr. Halinski. Well, first off, sir, we would work very 
closely with FAA. Second, we would look at the criticality of 
the repair station that is there. Is it a high-critical repair 
station, or is it a low-critical repair station? What I mean by 
that is: Does that repair station deal with avionics that would 
take the bird out of the sky or does it fix the wheel on the 
catering cart?
    Then we would look at the overall aviation security program 
that they have in place itself. Then we would turn to our intel 
section and look at the threat analysis that has been done for 
foreign repair stations. At that point, we would take that 
information, put it together. In TSA, sir, we use a risk-based 
approach to everything. I would say that we would make a 
decision based on those factors, sir.
    Mr. Walberg. Well, it sounds like you have some robust 
thinking on how you would do that, at this point. I would just 
encourage, along with my other colleagues, that we get this 
rule in place. It seems like a case-by-case basis--the criteria 
that you are considering certainly goes with the rule, 
certainly indicates a concern about the security and the 
necessity of dealing with that, but economically as well, to 
continue belaboring with the minutia, putting in place 
something that is not only in security terms protective but 
also economically helpful and protective. I just want to appeal 
as strongly as possible that we get this thing going here.
    Let me go over to Ambassador Klemm on the same issue, 
coming from the Department of State. Do you have any security 
concerns about foreign repair stations in the Asia-Pacific?
    Mr. Klemm. Mr. Representative, this is an issue that the 
Department of Homeland Security and the Transportation Security 
Administration have the lead on, but----
    Mr. Walberg. But you certainly have concerns in that area.
    Mr. Klemm. We do have concerns, and we certainly are eager 
at any time to work closely with my colleagues as well as their 
departments to move this issue forward as appropriate.
    Mr. Walberg. Thank you, Mr. Chairman. I yield back.
    Mr. Rogers. I thank the gentleman.
    As you all heard the beepers going off for the bells, we 
have been called for votes. I want to thank this panel for the 
preparation that you have made for this hearing and offering 
yourself for testimony. There may be some additional questions 
that Members have that they will submit to you, and I would ask 
that you get your answers back in writing within 10 days.
    But, with that, this panel is dismissed. The second panel 
we will call up when we come back from votes, which will be 
between 2 o'clock and 2:10.
    With that, this panel is dismissed, and this subcommittee 
is in recess.
    [Recess.]
    Mr. Rogers. The subcommittee will come back to order from 
its recess. I appreciate your patience. I apologize for that 
interruption, but they don't ask me when they are going to call 
us for votes.
    We are very happy to have our second panel with us now. Let 
me remind the witnesses that their entire statements will 
appear in the record.
    Our first witness is Mr. Dow, who is the chief executive 
officer and president of the U.S. Travel Association.
    Mr. Dow, you are recognized for your opening statement.

STATEMENT OF ROGER DOW, PRESIDENT AND CHIEF EXECUTIVE OFFICER, 
                    U.S. TRAVEL ASSOCIATION

    Mr. Dow. Thank you, Mr. Chairman. Thank you for allowing me 
to speak first. I appreciate your courtesy. Thanks for holding 
this hearing, and also thanks for all the work that you and 
your subcommittee members do when it comes to travel security, 
especially with TSA.
    When you look at international travel, it is a huge 
opportunity for increasing U.S. revenue, jobs, and at no cost 
to the American taxpayer, and especially in this Asia-Pacific 
area, whether it is hotels, restaurants, et cetera, small 
businesses, but even more important, the people that come to 
conventions and buy American products and services. If you look 
at exports from international travel, it is $153 billion for 
our economy.
    The travel industry is truly a jobs generator these days 
when we need them. We have added 142,000 jobs in the past year, 
adding jobs about 34 percent faster than other industries 
because the industry is built and it is just a matter of 
turning on the faucet, which is an opportunity in Asia-Pacific. 
When you look at the Asia-Pacific, it is extremely critical. 
The growth in the past year in international travel, 24 percent 
of it came from four countries, and that was Australia, China, 
Japan, and South Korea. That growth stimulated some 233,000 
jobs. So it is extremely important.
    To give you a snapshot of just what it is, Japan is No. 4 
in international inbound travel, 3.2 million travelers, 
spending over $5,000 each; South Korea and Australia, both a 
million travelers, spending $3,700 each. China has almost 
doubled in the past 2 years, so a huge increase from China. As 
I say, they buy so many business products.
    Asia-Pacific is extremely important and can really be a way 
that we can drive economic recovery. But, unfortunately, even 
with that growth, it is not as great as it could be. The last 
decade, while long-haul travel in other countries is growing by 
40 percent, or 60 million travelers, the United States only 
grew by 1\1/2\ percent, or 460,000 travelers. The opportunity 
to regain this travel and regain our share--we lost, went from 
a 17 percent share to 12 percent--really stands with these 
countries, especially Asia-Pacific.
    There are three things that we need to really have a proper 
plan to make that happen.
    First, we have to promote. Brand USA was recently created, 
which will begin explaining U.S. travel policies and promoting 
travel to the United States in these countries and also not 
cost the U.S. taxpayer--a great public-private partnership. In 
Japan, they will be launching their campaign in Japan this 
month, and South Korea and China in the next couple of months.
    Visas, the ability to get secure, efficient visas from 
China. The other three countries I mentioned are visa-waiver 
countries, as you know. But the challenge we have in China--we 
have five consulates. The wait time had been up over 100 days 
to get your interview. The State Department has done a terrific 
job this past year in bringing that down to under 2 weeks.
    I think Congress has a key role to ensure that we keep 
sustaining this progress they have made and not have it just be 
a glitch. So we are looking for Congress' support for a 10-day 
standard, a multi-year visa. In Canada you can have a 10-year 
visa from China. It is only 1 year here, and it is one-third of 
the people going through. So just a multi-year visa would help. 
To also look at secure videoconferencing. When you look at the 
five consulates in China, I always say it is sort of like 
having one cashier at Costco during the holidays. I mean, the 
opportunity there is so big.
    The last area is in the entry process. We need a secure and 
efficient process. Too many stories are about people coming to 
these countries and having to wait up to 3 hours. What we need 
is a multi-pronged approach here. First is to ensure a 20-
minute standard. I am not talking about an average, because you 
could say 10 minutes earlier in the day and 4 hours later in 
the day, but 20 minutes per person. Find a sensible funding 
plan to get the people needed to reach that goal. Have metrics 
on customer service, because I think customer service and 
welcoming and security are not mutually exclusive. You can do 
both. To expedite Global Entry. The previous speakers talked 
about Global Entry. It is a phenomenal program. I am in it, and 
it is just amazing what it can do to relieve the pressure.
    So I think if we are really going to look to be competitive 
in these global markets and increase our share beyond where 
they are, the stakes are high. With the right policies, we can 
get a phenomenal return to the taxpayers and to jobs.
    I want to thank you for your on-going interest in this 
area. I pledge that our industry will help you do all the 
things needed to make sure we have safe and secure travel from 
the Asia-Pacific countries. Thank you.
    [The prepared statement of Mr. Dow follows:]
                    Prepared Statement of Roger Dow
                             April 18, 2012
                              introduction
    Chairman Rogers, Ranking Member Jackson Lee, and Members of the 
subcommittee: I am pleased to offer testimony on behalf of the U.S. 
Travel Association (U.S. Travel), the National, non-profit organization 
representing all sectors of America's travel industry. U.S. Travel's 
mission is to increase travel to and within the United States. Last 
year the $759 billion travel industry generated a total of $1.8 
trillion in total economic output.
    I applaud you for holding today's hearing, in the wake of your 
recent trip to the region, to discuss how to build stronger 
partnerships in the Asia-Pacific region in order to facilitate travel, 
trade, and commerce and spur greater economic growth and job creation 
in the United States. I would also like to thank you for the strong 
leadership you have demonstrated on travel security issues, 
particularly around TSA, during your time here in Washington.
                  the economic opportunities of travel
    Travel provides good, domestic jobs that cannot be outsourced. In 
2010, travel supported 14.4 million jobs, including 7.5 million 
directly in the travel industry and 6.9 million in other industries, 
and is among the top 10 employers in 48 U.S. States and the District of 
Columbia. For example, travel directly employs nearly 78,000 Alabamans, 
contributes $7.2 billion annually to the Alabama economy and generates 
more than $889.5 million in State and local tax revenue. Similarly, 
travel directly employs more than 551,000 Texans, contributes more than 
$47.2 billion to the Texas economy and generates nearly $8 billion in 
tax receipts. In every region of America, travel helps pay the salaries 
of police, firefighters, and teachers without creating much new demand 
for those public services.
    International travel to the United States in particular is one of 
the most effective forms of economic stimulus--and it doesn't cost 
taxpayers a dime. When international visitors travel to the United 
States, they inject new money into the U.S. economy by staying in U.S. 
hotels, spending in U.S. stores, visiting U.S. attractions, and eating 
at U.S. restaurants. In many cases, they are also here to conduct 
business by inspecting products and services they are purchasing, 
attending meetings, and negotiating business contracts.
    Every dollar these visitors spend in the United States counts as an 
export--just like agricultural crops, minerals, or manufactured goods. 
In 2011, travel exports rose to a record $153 billion, larger than 
exports of other service industries as well as major manufacturing 
industries such as machinery, computers and electronic products, and 
aircraft. Expenditures made by international visitors made up 1 out of 
every 7 travel dollars spent in the United States. This record level of 
travel exports led to a record $43 billion travel trade surplus, which 
mitigated to some degree the $738 billion trade deficit in the United 
States in manufacturing and other goods.
    Complementing this export growth is job growth for Americans. The 
employment recovery in the travel industry has outpaced the rest of the 
economy and much of this employment growth is being supported by the 
spending of international visitors traveling in the United States. Of 
the 142,000 jobs added in the travel industry in 2011, more than half 
(54 percent) were supported by international travel spending.
    The most lucrative segment of international travel for the United 
States is the overseas market. These visitors tend to stay longer and 
spend more money while in the United States. On average, every overseas 
visitor spends $4,300 during their trip to the United States compared 
with less than $800 for Canadian and Mexican visitors. In fact, the 
spending of every 35 overseas visitors traveling in the United States 
supports 1 U.S. job.
    In looking at the specific subject of this hearing, travel from the 
Asia-Pacific region makes up a critical element of the overseas travel 
market. Nearly a quarter (24 percent) of the increase in travel exports 
over the past 2 years has come from four countries in the Asia-Pacific 
region: Australia, China, Japan, and South Korea. Collectively, the 
spending by these four countries in 2011 supported 233,000 U.S. jobs, 
14,200 more than were supported in 2010. Below please find a snapshot 
of travel from each country to the United States and how each 
contributed to exports and job creation in America.
   Australia.--From 2009 to 2011, the number of arrivals to the 
        United States from Australia increased by 314,000 to over 1 
        million. With Australian visitors spending on average $3,900 
        during a trip in the United States, spending totaled $4.5 
        billion in 2011. This accounted for 10 percent of total U.S. 
        exports of goods and services to Australia in 2011. The 
        spending by travelers from Australia supported 34,000 jobs in 
        the United States last year.
   China.--From 2009 to 2011, the number of arrivals to the 
        United States from China increased by 565,000 to 1.1 million. 
        Chinese nationals are now the highest-spending visitor to the 
        United States, spending on average $5,300 during their trip. 
        Spending from Chinese visitors to the United States totaled 
        $5.7 billion in 2011. Since 2009, travel exports from China 
        have increased by 59 percent, which is 20 percent faster than 
        the growth rate of other U.S. goods and service exports to 
        China. The spending by travelers from China supported 44,000 
        jobs in the United States last year.
   Japan.--From 2009 to 2011, the number of arrivals to the 
        United States from Japan increased by 331,000 to 3.2 million. 
        With Japanese visitors spending on average $5,100 during a trip 
        in the United States, spending totaled $16.7 billion in 2011. 
        This accounted for 14.5 percent of total U.S. exports of goods 
        and services to Japan in 2011. Spending by travelers from Japan 
        supported 127,000 jobs in the United States last year.
   South Korea.--From 2009 to 2011, the number of arrivals to 
        the United States from South Korea increased by 401,000 to 1.1 
        million. With South Korean visitors spending on average $3,400 
        during a trip in the United States, spending totaled $3.8 
        billion in 2011. This accounted for 6.2 percent of total U.S. 
        exports of goods and services to South Korea in 2011. The 
        spending by travelers from South Korea supported 29,000 jobs in 
        the United States last year.
    Much of the growth in travel from South Korea can be attributed to 
        its entry into the Visa Waiver Program (VWP). The VWP allows 
        the United States to sign bilateral visa-free travel agreements 
        with countries that are certified by the Department of Homeland 
        Security (DHS) as meeting stringent security standards. In 
        South Korea's first year in the VWP, spending by South Korean 
        visitors surged 23 percent, adding an extra $1 billion to the 
        U.S. economy.
    While it is clear that international travel to the United States, 
and in particular travel from the Asia-Pacific region, is helping to 
drive the U.S. economic recovery, the benefits are not as great as they 
could be. The United States' share of global international long-haul 
travel actually fell from 17 percent in 2000 to just 12.4 percent in 
2010 despite a 40 percent growth in overall global travel. So while 
global international travel boomed over the last decade, America failed 
to keep pace. Thankfully, we have a chance to regain our lost market 
share and attract billions in new travel exports. On a world-wide 
basis, total international tourist arrivals are projected to grow 
another 36 percent between 2010 and 2020. Outbound long-haul travel 
from Australia, China, Japan, and South Korea specifically is expected 
to increase by 24 million over the next 5 years. This presents enormous 
economic and diplomatic opportunities for the United States. However, a 
proper plan must be put in place promptly to aggressively pursue a 
larger share of this market. In the Asia-Pacific region, our efforts 
must include three key elements:
    (1) international travel promotion of America as a premier travel 
        destination;
    (2) a visa issuance process that efficiently secures visas for 
        qualified Chinese visitors; and
    (3) a more efficient and welcoming customs clearance process at 
        major U.S. ports of entry for our international guests.
    I will discuss each element in turn.
                     international travel promotion
    Thanks to the support of Chairman Rogers and Ranking Member Jackson 
Lee, in 2010 the Travel Promotion Act was enacted and created a public-
private organization, known today as Brand USA, to help explain U.S. 
travel and security policies and develop global promotion campaigns to 
attract millions of additional visitors to the United States. Oxford 
Economics estimates that the travel promotion program authorized by the 
Act could attract as many as 1.6 million new visitors each year, 
generate as much as $4 billion in new visitor spending annually and 
create 40,000 new U.S. jobs. Recognizing that the United States was 
facing a global competitive disadvantage in the international travel 
marketplace, Congress showed strong leadership, and America will reap 
the rewards for years to come.
    As a tangible first step in this regard, Brand USA will launch its 
first global advertising campaign to entice foreign travelers to visit 
the United States later this month. The first campaign will target the 
Japanese market along with the United Kingdom and Canada; South Korea 
has been identified for a second round of global advertising. We are 
confident that travel promotion will be a success and will help attract 
more international visitors to the United States.
                         visa issuance process
    The Chinese travel market is growing exponentially. Over the next 
decade, economists predict that long-haul travel from China will 
increase by 151 percent. The United States must aggressively pursue a 
large share of that out-bound travel from China, but to succeed it must 
be prepared to handle the growth in demand for U.S. visas. Unlike 
travelers from Australia, South Korea, and Japan, each visitor from 
China, must first apply and be granted a U.S. visa at an American 
consulate in order to travel to the United States. Once a visa is 
granted it is valid for just 1 year.
    Initially, the State Department struggled with the growth in visa 
demand from China which resulted in crowded and cramped waiting rooms 
at U.S. consulates and visa processing waiting periods of up to 90 
days. Working in partnership with the travel industry, the State 
Department has undertaken several constructive steps, most importantly 
dedicating more personnel and resources toward visa adjudication and 
has addressed the long delays in visa issuance.
    We believe Congress can play a key role in ensuring that the visa 
reforms the State Department has implemented in China are sustained 
over time by working in support of the following recommendations:
   Codifying a 10-day visa processing standard for 
        applications;
   Directing the State Department to tie visa personnel 
        staffing levels to meeting a 10-day visa processing standard;
   Requiring yearly reports from the State Department on the 
        short-, mid-, and long-term plan to meet visa demand from China 
        efficiently;
   Granting Chinese nationals multi-year leisure and business 
        visas; and
   Directing the State Department to pilot the use of secure 
        video-conferencing technology to interview visa applicants 
        remotely.
           efficient and welcoming customs clearance process
    In order to gain a larger share of the out-bound travel market from 
the Asia-Pacific region, it is essential that the United States process 
visitors securely and efficiently through our Nation's airports. Today, 
a shortage of inspection agents and inefficient staffing allocation 
decisions produce excessive delays in processing international 
passengers at some of this Nation's highest-volume international 
airports. Some international airports have reported to U.S. Travel that 
passengers arriving from long flights--some from the Asia-Pacific 
region--experience delays of up to 3 hours at U.S. customs processing 
facilities.
    We would like to work with your subcommittee to find a sensible 
funding solution to ensure adequate staffing is provided to process 
international travelers visiting our Nation. Furthermore, we intend to 
continue our partnership with DHS and U.S. Customs and Border 
Protection (CBP), and hope you will join us in supporting the following 
recommendations that will result in a more effective and efficient 
entry process for millions of visitors from the Asia-Pacific region.
   Efficient Passenger Screening
     Direct CBP to establish a passenger wait time goal of 20 
            minutes per individual at international airports, and use 
            it as a performance measure to help CBP assess whether 
            staffing levels are sufficient to address passenger volume.
   Airport Staffing Levels
     Dedicate enough CBP officers to the Nation's top 20 
            highest-volume international airports to meet the 20-minute 
            passenger screening goal.
     CBP should brief Congress on its recently completed 
            Workload Staffing Model and identify the resources needed 
            to staff the Nation's airports appropriately.
     CBP should also expand the Staffing Workload Alignment 
            Tool (SWAT) to additional airports in order to better 
            anticipate short-term staffing demands and reduce wait 
            times at primary inspection areas.
     Limit the practice of reducing authorized expenditures of 
            CBP Officer overtime pay. Overtime pay inflexibility can 
            lead to extended passenger processing wait times.
     DHS should ensure that the $110 million in annual funding 
            resulting from the elimination of the COBRA fee exemptions 
            from Canadian, Caribbean, and Mexican air and sea travelers 
            be reinvested into CBP staffing and facilitation at air and 
            sea ports of entry.
   Implementation of a Customer Service Improvement Strategy
     Develop comprehensive CBP customer service reports using 
            the data submitted by passengers through CBP's comment 
            cards, and include the reports in the Air Travel Consumer 
            Report issued by Department of Transportation's Office of 
            Aviation Enforcement and Proceedings (OAEP).
     Work with the private sector to review existing customer 
            service training and, where appropriate, develop new 
            training techniques.
     Establish metrics to measure the customer service 
            performance of CBP officers at airports, and provide 
            rewards for officers that demonstrate exceptional 
            performance.
     Direct CBP officers to greet passengers arriving at 
            primary inspections with ``Welcome to the United States'' 
            or ``Welcome home.''
   Global Entry Program.--CBP has implemented some travel 
        facilitation recommendations quite effectively, such as the 
        creation of a trusted traveler program for pre-approved, low-
        risk travelers known as the Global Entry program. This program 
        provides fast-track immigration processing for previously 
        vetted Americans and select international visitors. It adds 
        significant efficiency to the entry process by removing 
        participants in the program from the general processing queues 
        and allowing them to use automated kiosks that can process the 
        average person within 40 seconds. Additionally, Global Entry 
        adds to the security of our borders by gathering voluntarily 
        provided background information from each program applicant. 
        That information, in turn, is run against a series of terrorist 
        watch lists and criminal history records before determining an 
        applicant's eligibility to participate in Global Entry.
    Currently, Global Entry is available broadly to citizens from 
        Canada, the Netherlands, and Mexico. There is a very limited 
        pilot program with the United Kingdom and Germany. As it 
        relates to the Asia-Pacific region, the United States has 
        signed an agreement with South Korea to participate in the 
        program but it is not yet in operation. DHS has also begun to 
        have discussions with Australia, Japan, and South Korea about 
        Global Entry. Expanding access to Global Entry to more 
        countries in the Asia-Pacific region is critical to our 
        Nation's success as a strong partner on travel facilitation and 
        security.
     CBP should fully and expeditiously implement the 
            reciprocal agreement signed with South Korea for use of 
            Global Entry this year.
     A reciprocal agreement should be signed with Australia 
            that would allow Australian's access to Global Entry and 
            American's access to Australia's trusted traveler program, 
            known as SmartGate.
     A reciprocal agreement should also be signed with 
            Singapore and Japan that would allow nationals from these 
            two countries to apply for Global Entry access.
     CBP should work to develop a more user-friendly process 
            for individual Global Entry enrollment registration to the 
            program.
     CBP should prioritize implementation of the APEC Business 
            Travel Card, which was authorized by Congress last year. By 
            taking this step, CBP would facilitate the processing of 
            American business leaders seeking to expand commercial 
            relations with the growing APEC region.
                                closing
    Becoming more competitive in a global economy entails increasing 
our Nation's share of the travel market from the Asia-Pacific region 
and beyond. The stakes are high, but with the right policies, we should 
be successful. Thank you for your on-going interest in travel exports. 
Our industry is eager to continue to work closely with you to welcome 
many more leisure and business visitors to the United States.

    Mr. Rogers. I thank you for that opening statement.
    The Chairman now recognizes our second witness, which is 
Mr. Gary Wade, the vice president of security at Atlas Air 
Worldwide. He will be testifying on behalf of the Cargo Airline 
Association.
    Mr. Wade is now recognized for 5 minutes.

 STATEMENT OF GARY E. WADE, VICE PRESIDENT OF SECURITY, ATLAS 
 AIR WORLDWIDE HOLDINGS, INC., ON BEHALF OF THE CARGO AIRLINE 
                          ASSOCIATION

    Mr. Wade. Thank you, sir.
    Good afternoon, Chairman Rogers, Ranking Member Jackson 
Lee, and Members of the subcommittee. I am vice president of 
security for Atlas Air Worldwide Holdings. I am here today to 
speak on behalf of the Cargo Airline Association, where I serve 
as the chairman of the association's Security Committee. I 
appreciate the opportunity to testify today.
    The Cargo Airline Association is a Nation-wide trade 
organization representing the interests of the Nation's all-
cargo air carriers. Operating safely and securely in a 
worldwide marketplace is the No. 1 priority of Atlas and the 
rest of the all-cargo air carrier industry.
    Specializing solely in the transportation of cargo, CAA 
members are the primary drivers of a global economy that 
demands the efficient time-definite transportation of a wide 
range of commodities. Looking specifically at the Pacific 
region, Hong Kong alone, for example, processed 1.4 billion 
tons of cargo for export, about 20 percent of the Asian market. 
The Asia-to-U.S. market today is estimated to be a 4 billion to 
5 billion kilo market per year.
    Atlas is a leading provider of global aviation operating 
services and owns a fleet consisting largely of Boeing 747 
freighter aircraft, eight of which are in full-time service to 
the Asian market. In addition, Atlas offers world-wide ad-hoc 
charter service with significant uplift for the U.S. Air 
Mobility Command.
    In 2011, Atlas operated more than 18,500 cargo flights, 
serving over 250 destinations in more than 90 countries. Last 
year, Atlas transported approximately 6 billion pounds of cargo 
around the globe. Atlas has also expanded in recent years for 
passenger charter service, which is based in Houston, Texas, 
that operate around the world, to include the Asia-Pacific 
region.
    In applying the necessary security measures to protect our 
businesses, it is important to understand that the one-size-
does-not-fit-all approach to the air cargo security is not as 
effective as a risk-based approach. As a practical matter, the 
aviation industry is composed of a myriad of businesses, each 
with their own unique operational models. These differing 
characteristics must continue to be taken into account in 
developing and implementing security policy.
    Our industry has learned a lot since October 2010 when the 
dissemination of intelligence led to the interception of the 
explosive devices originating in Yemen and ultimately bound for 
the United States on all-cargo aircraft. Simply put, the 
importance of good intelligence in the identification of high-
risk shipments, as we learned just yesterday, cannot be 
overstated. In addition to intelligence, isolating high-risk 
cargo involves the ability to learn as much as possible about 
the shippers and shipments as early as possible in the supply 
chain.
    Administrator Pistole testified in front of this committee 
last June and stated, ``TSA's existing security measures create 
a multilayered system of transportation security that mitigates 
risk. No layer on its own solves all of our challenges, but in 
combination they create a strong and formidable system.'' We 
absolutely agree with Administrator Pistole and TSA's approach.
    The approach that must be taken in securing the 
international supply chain is to screen 100 percent of 
shipments identified as high-risk. Using a risk-based approach 
is not only the right way to address cargo security, it is 
truly the most effective way to address cargo security.
    Identification of high-risk shipments requires a 
combination of shared intelligence and the ability to learn as 
much as possible about shipments as early as possible in the 
shipping process. In turn, effective screening involves 
adequate training of security personnel, the application of the 
appropriate technology at the appropriate time, and, where 
available, the use of canines trained to detect explosives.
    All segments of the cargo industry are engaged in efforts 
to enhance these elements of the security equation. For 
example, in conjunction with both TSA and CBP, industry members 
are participating in an extensive pilot program known as the 
Air Cargo Advance Screening Program, designed to provide as 
much shipment information as possible to the Government for 
purpose of targeting anomalies and inconsistencies. TSA is also 
in the process of developing a Trusted Shipper concept that 
would recognize that certain repeat shippers may pose less of a 
threat than the occasional single shipper.
    But it is important not to overlook low-tech initiatives to 
screen air cargo in both the international and domestic 
markets. Specifically, the use of canines has proven effective 
in the screening of air cargo, but the use of dogs has been 
hampered by the relative scarcity of TSA-trained animals. The 
use of canines should be aggressively expanded by permitting 
the use of private-sector but TSA-certified canines as a 
primary screening method.
    Simply stated, the threat-based approach combined with 
Administrator Pistole's commitment to work collaboratively with 
the stakeholder community is the key to enhancing security 
across the transportation system.
    [The prepared statement of Mr. Wade follows:]
                   Prepared Statement of Gary E. Wade
                             April 18, 2012
                              introduction
    Good afternoon Chairman Rogers, Ranking Member Jackson Lee, and 
Members of the subcommittee. My name is Gary Wade and I am the Vice 
President of Security for Atlas Air, Inc. I'm here today to speak on 
behalf of the Cargo Airline Association where I serve as the Chairman 
of the Association's Security Committee. I appreciate the opportunity 
to testify today on secure partnerships in travel, commerce, and trade 
with the Asia-Pacific region.
    The Cargo Airline Association is the Nation-wide trade organization 
representing the interests of the Nation's all-cargo air carriers.\1\ 
Specializing solely in the transportation of cargo, CAA members are the 
primary drivers of a world-wide economy that demands the efficient 
time-definite transportation of a wide range of commodities. Our 
industry segment has grown over the years to a point where, in fiscal 
2011, it accounted for 87.6% of the Revenue Ton Miles (RTMs) in 
domestic markets (up from 70.0% in 2000) and 69.2% of the RTMs in 
international markets (up from 49.3% in 2000). By 2032 the all-cargo 
industry domestic share is predicted to reach 89.7%.\2\ Looking 
specifically at the Pacific region, international air cargo RTMs had a 
significant increase in 2011 of 9.1%, increasing from 8.4 to 9.1 
billion RTMs.\3\
---------------------------------------------------------------------------
    \1\ Association members include ABX Air, Atlas Air, Capital Cargo, 
DHL Express, FedEx Express, Kalitta Air, and UPS Airlines.
    \2\ FAA Aerospace Forecast, Fiscal Years 2012-2032, p. 48.
    \3\ FAA Aerospace Forecast, Fiscal Years 2012-2032, p. 23.
---------------------------------------------------------------------------
    Atlas Air, Inc. is a leading global provider of aviation operating 
services. Atlas owns a fleet consisting largely of Boeing 747 freighter 
aircraft which are leased to airlines and express carriers on a 
contract basis offering aircraft, crew, maintenance, insurance (ACMI), 
as well as offering world-wide ad-hoc charter service with significant 
uplift for the U.S. air mobility command. Atlas also has expanded in 
recent years to passenger-charter operations based in Houston, Texas 
that operate around the world to include the Asia-Pacific region. In 
2011, Atlas Air operated more than 18,500 flights, serving over 250 
destinations in more than 90 countries. Last year Atlas transported 
approximately 6 billion pounds of cargo around the globe.
                  operating securely in today's world
    Operating safely and securely in a world-wide marketplace is a 
paramount priority of Atlas and the rest of the all-cargo air carrier 
industry.--We continuously strive to achieve the highest possible level 
of security while simultaneously operating a successful company and 
facilitating the flow of commerce throughout the globe. At the end of 
the day, smart effective security is smart business. None of us can 
afford to lower our guard in a world filled with potential terrorist 
threats.
    In applying the necessary security measures to protect our 
businesses, it is important to understand that a ``one-size-fits-all'' 
approach to air cargo security is not as effective as a risk-based 
approach.--As a practical matter, the aviation industry is composed of 
a myriad of businesses, each with their own unique operational models. 
For example, all-cargo operators do not carry ``passengers'' in any 
generally accepted definition of that term; have substantial operations 
that never touch U.S. soil (sometimes in the livery of foreign 
carriers); provide substantial support services for the U.S. military; 
and in many cases, have control over the pickup and delivery, as well 
as the transportation, of cargo. Some all-cargo carriers offer a time-
definite service and are generally known for their express operations, 
while other companies such as Atlas concentrate on traditional freight 
operations providing the transportation function through the air 
freight forwarder community. These differing characteristics must 
continue to be taken into account in developing and implementing 
security policy. Accordingly, all-cargo air carriers today operate 
under a different Security Program and different Security Directives 
than our passenger counterparts or the members of the indirect air 
carrier community. Each of these different regulatory requirements is 
tailored to address the unique threats and vulnerabilities of the 
separate industry segments.
           the risk-based approach to transportation security
    Transportation Security Administration (TSA) Administrator John 
Pistole testified in front of this committee last June and stated 
``TSA's existing security measures create a multi-layered system of 
transportation security that mitigates risk. No layer on its own solves 
all our challenges, but, in combination, they create a strong and 
formidable system.''\4\ We absolutely agree with TSA's approach and I 
would like to take the opportunity to explain what risk-based security 
means within the all-cargo community, including the measures being 
taking to mitigate identified risks in Asia and around the world.
---------------------------------------------------------------------------
    \4\ Statement of John Pistole, House Homeland Security Committee 
Subcommittee on Transportation Security hearing on TSA Authorization 
legislation, June 2, 2011.
---------------------------------------------------------------------------
    We firmly believe that the approach that must be taken in securing 
the international supply chain is to identify high-risk shipments and 
to screen 100% of those shipments found to possess such high-risk 
characteristics.--Using a risk-based approach is not only the right way 
to address cargo security; it is truly the only effective way to 
address cargo security. Identification of high-risk shipments requires 
a combination of shared intelligence and the ability to learn as much 
as possible about shipments as early as possible in the shipping 
process. In turn, effective screening involves adequate training of 
security personnel, the application of appropriate technology, and, 
where available, the use of canines trained to detect possible 
explosives.
    The importance of the role of good intelligence in the 
identification of high-risk shipments cannot be overstated.--
Intelligence is absolutely crucial in enabling companies such as Atlas 
to target potentially dangerous shipments. To be effective, however, we 
must find better ways to communicate such intelligence to those in the 
air cargo supply chain. If there were any doubt about the role of 
effective intelligence, that doubt should have been erased by the 
events of October 28, 2010, when the dissemination of intelligence led 
to the interception of explosive devices on all-cargo aircraft 
originating in Yemen and ultimately bound for the United States.\5\ The 
necessary intelligence sharing includes not only information on threats 
from U.S. Government sources to industry and from industry to TSA and/
or Customs and Border Protection (CBP), but also cooperation from 
foreign governments. This foreign government component is clearly an 
on-going challenge that TSA and CBP continue to face.
---------------------------------------------------------------------------
    \5\ It is perhaps important to note that the shipments intercepted 
through the application of intelligence had already been physically 
screened multiple times without uncovering the hidden explosives.
---------------------------------------------------------------------------
    In addition to the intelligence element, isolating high-risk cargo 
also involves the ability to learn as much as possible about both 
shippers and shipments as early as possible in the supply chain.--All 
segments of the air cargo industry are currently engaged in efforts to 
enhance these elements of the security equation. For example, in 
conjunction with both TSA and CBP, industry members are participating 
in an extensive program known as Air Cargo Advance Screening (ACAS) 
pilot program designed to provide as much shipment information as 
possible to the government for purposes of targeting potential 
anomalies. This program began with the express industry segment and is 
now expanding to passenger carriers, air freight forwarders, and 
traditional heavy freight operators.
    TSA is also in the process of developing a Trusted Shipper concept 
that would recognize that certain repeat shippers may possess less of a 
threat than the occasional single shipper. In the case of Atlas, 
upwards of 90% of non-express cargo exported from Asia comes from 
repeat customers in the high-tech arena, such as Apple and Samsung. 
Indeed, there are instances where certain shippers ship cargo from the 
same city pair with the same goods every month or every year. This 
predictability and understanding of the cargo being transported poses 
less of a threat to air cargo security compared to an aircraft loaded 
with shipments from many different shippers, some of whom may only 
occasionally ship on an airline or may be first-time shippers. The 
challenge is to mature this concept to permit the free flow of goods, 
while at the same time protecting against insider threats in the 
international environment. Eighty percent of the world's cargo comes 
from approximately 20 countries. Therefore, expanding ACAS coupled with 
a trusted shipper concept would produce a very effective security 
system and provide a foundation for what air cargo security should look 
like.
    As noted above, it is important not to overlook ``low-tech'' 
initiatives to screen air cargo--in both international and domestic 
markets. Specifically, the use of canines has proven effective in the 
screening of air cargo, but the use of dogs has been hampered by the 
relative scarcity of TSA-trained animals. We firmly believe that the 
use of canines should be aggressively expanded by permitting the use of 
private, but TSA-certified, canines as a primary screening method.
    While all of these initiatives apply generally to all international 
air cargo, they are particularly important in Asian markets where 
growth has far exceeded industry averages and further expansion of 
markets is expected in the coming years.
                    industry/government cooperation
    Finally, it is important to point out that supply chain security, 
in Asia and elsewhere, can only be effective if the industry and 
Government work together to identify both problems and solutions. 
Administrator Pistole's commitment to work collaboratively with the 
stakeholder community to develop the programs necessary to enhance 
security across the transportation system has been applauded by 
industry. To his credit, the administrator has made good on his promise 
to engage the industry in formulating policy as we move forward. This 
cooperation, including the understanding of the operationally unique 
characteristics of the various industry segments, will result in the 
best possible security regime.
                              conclusions
    To summarize, growth in air cargo all over the world and in the 
Asia-Pacific region is predicted to grow steadily throughout the next 
several years. Therefore, the challenges we face today in transporting 
cargo throughout the world will only continue. Addressing the security 
challenges both domestically and globally will hinge on a few key 
factors. Perhaps the two most important points to stress include the 
necessity for good, reliable, and timely intelligence and the focusing 
of resources on a risk-based, threat-based security system. Atlas and 
the rest of the all-cargo industry will continue to work cooperatively 
with both TSA and CBP to develop and implement the best possible 
security regime. We've learned the threats are constantly evolving and 
we need to continue to adapt to these dynamic challenges whether they 
be from our homeland or abroad.
    Thank you very much and I am happy to answer any questions from the 
committee.

    Mr. Rogers. Thank you, Mr. Wade, for your testimony. We 
appreciate you being here today. We know your time is valuable.
    Our next witness is Dorothy Reimold, who currently serves 
as assistant director for security and travel at the 
International Air Transport Association.
    The Chairman now recognizes Ms. Reimold for her statement.

STATEMENT OF DOROTHY REIMOLD, ASSISTANT DIRECTOR, SECURITY AND 
  TRAVEL FACILITATION, INTERNATIONAL AIR TRANSPORT ASSOCIATION

    Ms. Reimold. Chairman Rogers and Members of the committee, 
thank you for the opportunity to testify on behalf of IATA's 
240 members on the importance of cooperation between the United 
States and Asia.
    IATA member airlines traverse the globe, safely carrying 
passengers and cargo to their destinations. As our industry 
continues to evolve, we must keep pace to ensure that this 
safety is never compromised and that the full benefit of 
aviation can be realized.
    IATA recently partnered with Oxford Economics to assess the 
impact of aviation around the world, and the picture is clear: 
Aviation drives the world economy. Aviation provides 56.6 
million jobs and 3.5 percent of the global GDP. These numbers 
are expected to grow in the coming years, with nearly 6 billion 
passengers, 82 million jobs, and $6.9 trillion in economic 
activity forecast by 2030.
    Perhaps no part of the world better exemplifies the 
potential of aviation than the Asia-Pacific region. Given its 
exploding aviation markets, it currently represents 43 percent 
of the total jobs and 34 percent of the passenger traffic, the 
largest share of any individual region.
    Whether in Asia-Pacific or elsewhere, aviation needs 
regulatory support to sustain its growth and to continue to be 
an economic catalyst. But we need to strike a balance. Aviation 
is one of the most heavily-regulated industries in the world, 
and this burden is increased by sometimes uncoordinated and 
conflicting regulations.
    Growth also compels the need for a more harmonized approach 
to aviation security. The industry has changed dramatically 
over the last many decades, and while we have adapted to the 
changing environment, regulators have had to augment and 
sometimes patch systems to keep up with evolving threats, more 
passengers and cargo, and uncoordinated mandates. IATA believes 
that governments must continue to emphasize compatible security 
regulations. We support programs such as the Air Cargo Advance 
Screening Program being advanced by the CBP and TSA and laud 
their efforts to seek industry input.
    The Asia-Pacific market is becoming a prominent voice in 
defining aviation security. As an example, consider the 
business model of low-cost carriers, which depend on the fast 
turnaround of aircraft. In Asia, LCCs have grown from nearly 
zero percent to 25 percent of the market over the last decade. 
The success of this bourgeoning market will depend on increased 
efficiency across the aviation system, including security.
    In terms of passenger screening, we are proud of the vastly 
improved security environment that our collective efforts have 
provided. We also acknowledge that the combination of more 
people traveling and inconsistent security regulations and 
practices have resulted in less efficient security processing. 
This, in turn, has led to increased security costs, delays, and 
passenger frustration. The one-size-fits-all security screening 
model is outdated.
    IATA commends Secretary Napolitano and Administrator 
Pistole for their leadership in moving toward risk-based 
security screening. IATA is currently working with governments 
and industry around the world to drive the evolution of 
passenger security with our Checkpoint of the Future concept. 
We believe that this evolution is fundamental to our industry's 
ability to grow.
    Here again, we point to the need for a consistent 
regulatory approach. As with passenger screening, cargo 
security represents a challenge to the industry. The 2010 Yemen 
printer cartridge event is regarded by many as air cargo's 9/11 
in terms of the changes it brought to the business.
    IATA promotes two parameters to the solution. First, we 
must preserve speed along with security. Entire industry 
sectors have built their business models on the availability of 
a fast air cargo supply chain. If we don't keep the speed, 
business models around the world would change dramatically and, 
in fact, many could disappear. The second element is a need for 
a multi-layered approach that includes the entire value chain. 
We need to focus on risk management, securing the supply chain 
at the beginning, and utilizing technology. We recognize the 
efforts within the Asia-Pacific region to advance some of these 
elements.
    It is also important to note that the International Civil 
Aviation Organization has been instrumental in driving toward 
harmonized security standards and has included both government 
and industry in these efforts. IATA will continue to advocate 
the need for harmonization at this year's High-Level Aviation 
Security Conference.
    Global cooperation on security is complicated, and 
yesterday's news reinforces this all too well. But a 
complicated environment cannot create an excuse for lack of 
coordination or unilateral implementation of new regulations.
    Chairman Rogers and Members, on behalf of IATA, thank you 
again for the opportunity to speak with you today.
    [The prepared statement of Ms. Reimold follows:]
                 Prepared Statement of Dorothy Reimold
                             April 18, 2012
    Chairman Rogers, Ranking Member Jackson Lee, and Members of the 
committee, thank you for inviting me to testify on behalf of IATA's 
members on the importance of cooperation on aviation security between 
the United States and Asia. IATA's 240 member airlines crisscross the 
globe every day, safely carrying passengers and cargo to their 
destinations. At the beginning and throughout every stage of the 
journey, aviation security is paramount to the safety and success of 
our industry. As the industry continues to evolve, security must keep 
pace with the changing world to ensure the benefits of aviation are 
realized.
    IATA recently partnered with Oxford Economics to study the impact 
of aviation on 57 countries around the world, and the picture is clear: 
Aviation drives the world economy. Aviation is responsible for 56.6 
million jobs globally and 3.5% of global GDP. If aviation were a 
country, it would rank 19th in size by GDP. The industry is comprised 
of 23,844 aircraft, 3,846 airports, 192 air navigation service 
providers, 34,756 routes, and 1,568 airlines. All of these numbers are 
expected to grow over the coming years, with nearly 6 billion 
passengers, 82 million jobs, and $6.9 trillion in economic activity by 
2030. In addition, aviation carries about 35% of global trade by value 
but only 0.5% of actual tonnage, representing 48 million tons of cargo 
and $5.3 trillion in value. Over the next decade, world trade is 
expected to nearly double, with emerging markets leading the way. 
Perhaps no part of the world better exemplifies the potential of 
aviation than the Asia-Pacific region, whence a significant portion of 
this growth will originate. And cooperation between the United States 
and Asia will have a dramatic impact on the future of aviation.
    The Asia-Pacific aviation market is growing. The Asia-Pacific 
region represents 43% of total jobs and 21% of the GDP generated by the 
air transport industry world-wide. In 2010, airlines carried nearly 2.7 
billion passengers. Thirty-four percent of that traffic belonged to the 
Asia-Pacific region, the largest share of any individual region. 
Beijing is the second-largest airport in the world in terms of 
passenger traffic, and of the top 10 countries by passenger traffic, 
four are from the Asia-Pacific region. Over the next 20 years, these 
numbers are expected to grow significantly. Passenger numbers are 
expected to almost triple in the region from 779.6 million in 2010 to 
over 2.2 billion in 2030. This increase represents an astounding 6.7% 
annual growth rate for passenger traffic, and cargo is expected to grow 
similarly in the region by 6.3% per year. However, if the region 
continues to press for liberalization in the industry and investment in 
infrastructure, this growth could be much larger.
    Yet for all of its potential, aviation's continued ability to serve 
as an economic catalyst is highly dependent on regulatory relief and 
support. Open Skies agreements, such as the one between the United 
States and Japan, have greatly increased the opportunities for growth 
in the U.S.-Asia markets. But more work needs to be done. Aviation 
growth cannot translate into economic benefit unless we have a 
regulatory regime that supports it. And the unfortunate reality is that 
aviation is one of the most heavily-regulated industries in the world. 
Other transportation modes benefit from fewer regulations and better 
harmonization. For example, maritime cargo security regulations are far 
less burdensome than aviation security regulations, leading businesses 
to choose shipping over air freight. Fortunately for our industry, this 
isn't always an option. Speed remains a critical component for some 
industries, but without proper regulatory support, the full benefits of 
air freight cannot be realized.
    Similarly, harmonization and cooperation in aviation security has 
never been more important. The aviation industry today is dramatically 
different than it was when the security checkpoint was designed some 40 
years ago. While airports, aircraft manufacturers, and airlines have 
adapted to the industry's growth, regulators continue to augment and 
patch their current systems to keep up with evolving threats, more 
passengers, and uncoordinated approaches. Security lines are sometimes 
considered the single worst part of the travel experience. That's on 
the passenger side.
    Cargo screening also suffers from myriad approaches and reactive 
over-regulation and imparts enormous cost on the cargo supply chain. We 
must change the paradigm in aviation security to be proactive instead 
of reactive and to fit the industry as we know it today. To this end, 
governments must renew their emphasis on compatible security 
regulations. We are excited about programs such as Air Cargo Advance 
Screening (ACAS), a program of the U.S. Customs and Border Protection 
(CBP) and the U.S. Transportation Security Administration (TSA) that is 
being developed with industry input. While the United States has been a 
leader in aviation security, the emerging Asia-Pacific market is 
quickly becoming a prominent voice in security regulation. In order to 
maintain aviation's competitiveness across borders, regulators from the 
United States and Asia must work together to promote regulations that 
both improve security and also support efficiency in the industry.
    Inconsistencies and reactive, often duplicative regulations have 
led to less efficient security processing, which in turn has led to 
skyrocketing security costs for governments and industry, passenger 
frustration, and global confusion. Today's security checkpoint is 
outdated and does not fit our industry. Each passenger is processed at 
the same threat level, even though we know that all but a very select 
few travelers pose no threat to the system. Under Homeland Security 
Secretary Napolitano and Transportation Security Administrator Pistole 
we have seen important initiatives to move to a risk-based approach to 
screening. An example is TSA's PreCheck program, which will 
dramatically improve security and efficiency by focusing resources on 
passengers about whom a threat level is unknown or undecided. However, 
substantial challenges remain.
    The one-size-fits-all mandate limits the ability to focus resources 
where threats are greatest. Additionally, while some have suggested 
that the market-based increase in carry-on baggage has led to this 
slowdown, we know this is not the case. We have assessed security 
throughput since 2005, and checkpoints were slowing down long before 
fare unbundling caused more carry-on bags. In reality, the requirement 
for passengers to remove jackets, shoes, and belts and to remove 
numerous items from their bags has dramatically slowed throughput at 
U.S. airports. And every new requirement at the checkpoint, such as the 
3-3-1 rule for liquids and gels, leads to longer lines, more confusion, 
and more frustration. This slowdown has also hampered airline 
schedules. For instance, the business model of low-cost carriers (LCCs) 
depends on the fast turnaround of aircraft. In Asia, LCCs have grown 
from nearly 0% of the market to 25% over the last decade and are 
projected to reach 50 airlines by the end of 2012. The success of this 
burgeoning market will depend on increased efficiency across the 
aviation system, including security.
    On top of these frustrations, global cooperation on security is 
complicated by a lack of coordination and by regulatory conflicts 
between nations and regions. Europe is looking to lift restrictions on 
liquids, aerosols, and gels next year, but what happens to the 
passenger transiting through one of Asia's major hubs? Screening 
practices for passengers vary from country to country, for instance: 
Shoes off in one country and not in the other. Furthermore, aviation 
security often suffers from significant duplication, such as at certain 
airports where boarding passes are checked at the entrance to the 
airport and then again at the checkpoint. This must change. Our 
industry must be able to be assured that security practices are 
consistent but unpredictable. They must be clearly understood, and they 
must be uniformly implemented.
    IATA is working with industry and regulators from around the world 
to try to modernize and reform the security checkpoint through the 
Checkpoint of the Future project. We are working to evolve today's 
security checkpoint to focus on risk-based passenger differentiation 
and proactive, targeted screening. A pivotal piece of this reform will 
be global cooperation. Regulators must come together to address common 
challenges and to devise a path to create a truly global security 
system, where passengers can move more freely across borders through a 
more effective security regime. Efficiency does not preclude security. 
In fact, by increasing the effectiveness of security and focusing on 
proactive threat assessment and detection, efficiency improvements are 
virtually automatic. We imagine checkpoints in the future will allow 
passengers to walk through screening without cumbersome requirements to 
remove clothing or items from their bags. But the key to defining this 
future is to ensure that we undertake this evolution with a consistent 
and harmonized approach, especially for regulations.
    As with passenger screening, cargo security represents a key 
challenge to industry and regulators. The 2010 Yemen printer cartridge 
incident was a reminder of the evolving challenge and the need for 
constant vigilance. Many regard it as air cargo's 9/11 in terms of the 
changes it is bringing to the air cargo business. There are two 
parameters to the solution. First, we must preserve speed along with 
security. Entire industry sectors have built their business models on 
the availability of fast air cargo supply chain links. If we don't keep 
the speed, business models around the world would change dramatically, 
and many could disappear. The second element is the need for a multi-
layered approach that includes the entire value chain. The areas we 
should focus on are: Risk management; securing the supply chain 
upstream; and, using the latest technology.
    On risk management, IATA is working with stakeholders and 
regulators to harmonize risk-assessment measures in compliance with the 
World Customs Organization SAFE standards. IATA, Airlines for America 
(A4A), the International Federation of Freight Forwarders Associations 
(FIATA), and other stakeholders are working jointly with regulators on 
projects such as the European Union and the U.S. Air Cargo Advanced 
Screening pilot project to achieve harmonized results. And a jointly 
developed e-Consignment security declaration is being put forward as a 
recommended practice within the International Civil Aviation 
Organization (ICAO) Annex 17 regulations. This will help facilitate a 
consistent provision of data to regulators for risk-management 
purposes.
    The second element is securing the supply chain, and Asia-Pacific 
is in the forefront, as Malaysia launched the first IATA Secure Freight 
pilot initiative in 2010. Secure Freight evaluates the strength of a 
Nation's aviation security infrastructure and works with the civil 
aviation authorities to ensure that cargo has come from either a known 
consignor or regulated agent and has been kept sterile until it is 
loaded. It identifies the gaps within a security regime and helps to 
seal this process upstream, which will prevent bottlenecks at the 
airport. Meanwhile Kenya, Mexico, Chile, South Africa, Egypt, and the 
United Arab Emirates are set to start their own programs, and China and 
Brazil are showing interest.
    Complimentary to the focus on cargo security is IATA's e-freight 
program, a supply chain initiative, which is designed to remove paper 
from cargo manifests in favor of electronic airway bills. To be 
successful, the air cargo value chain must meet customer expectations 
with efficient and quality products and processes. In addition, 
electronic information allows data to be kept in a secure, need-to-know 
channel and provides improved tracking of shipments within the supply 
chain. Moving to a completely paperless system is a huge challenge, and 
e-freight is the single most important project to shore up the 
competitiveness and efficiency of air cargo. The Asia-Pacific market is 
providing significant leadership in e-freight, and global participation 
by regulators and freight-forwarders will be pivotal to this program's 
success. It is imperative that the U.S. Government embrace the need for 
electronic commerce to keep America competitive with other nations and 
to facilitate trade between the United States and Asia-Pacific. This 
includes the expedited adoption of paperless documents for import and 
export shipments of all types.
    On the technology side, we all know the present constraints of 
security systems. The good news is that regulators are listening to and 
involving industry in discussions on technology. It is clear that a 
robust risk assessment needs both physical and data screening programs. 
And of course these must be harmonized. The worst thing for both 
industry and states would be to have these programs competing with each 
other across airline networks. It is imperative that Customs 
Administrations and Civil Aviation Authorities coordinate their 
requirements and initiatives.
    Cargo security harmonization is being driven by ICAO, which since 
the Yemen incident has undertaken a significant role in getting 
industry and regulators to the table. Secretary Napolitano and ICAO 
joined forces immediately following the incident to convene a series of 
conferences around the world to focus on harmonization, with the 
recognition that we are only as strong as our weakest link. In 2011, 
the ICAO Aviation Security Panel established a working group to address 
air cargo security concerns in an inclusive manner, in accordance with 
terms of reference that incorporate the relevant elements of the 
Secretariat Study Group on Supply Chain Security. The primary task of 
the new working group is to recommend practical measures that could be 
adopted by states on an urgent basis to enhance cargo security on 
passenger and cargo aircraft. In parallel, the ICAO Secretariat is 
carrying on with development of guidance material in the field of air 
cargo security, with a particular focus on international cooperation 
and information sharing, technology, and processes for the detection of 
explosives, personnel training, and quality control and oversight 
inspection systems to ensure proper implementation of supply chain 
security processes.
    Passenger and cargo security are paramount to the continued safety 
and success of the aviation industry. We are confident that continued 
efforts by the TSA, ICAO, and other regulators as well as industry will 
continue to improve security and efficiency in passenger and cargo 
markets. Chairman Rogers and Ranking Member Jackson Lee, thank you 
again for the opportunity to speak to you today about the future of 
aviation and security. IATA applauds your commitment to improving 
aviation security and making the experience more enjoyable for 
passengers. The future of flight is bright, and your collaboration is 
vital to our continued success as an industry.

    Mr. Walberg [presiding]. Thank you, Ms. Reimold. It is hard 
to keep track of the players up here. Chairmen change so 
quickly. But thank you for your testimony.
    Now I recognize Mr. Mullen for your testimony.

  STATEMENT OF MICHAEL C. MULLEN, EXECUTIVE DIRECTOR, EXPRESS 
                     ASSOCIATION OF AMERICA

    Mr. Mullen. Thank you, Mr. Chairman. It is a real pleasure 
and an honor to be able to appear before the committee today.
    I am going to focus my testimony today on the Air Cargo 
Advance Screening, or ACAS, project, which, as my colleagues 
have indicated, began in late 2010 after al-Qaeda in the 
Arabian Peninsula attempted to ship explosive devices hidden in 
printer cartridges coming out of Yemen on express delivery 
flights. While technical screening, canines, and physical 
inspection failed to detect the bombs, the plot was disrupted 
when specific intelligence describing the details of the threat 
allowed the express companies to immediately identify and 
neutralize the shipments.
    The day after the Yemen bombs were discovered and the plot 
disrupted, the four member companies of the Express Association 
of America--DHL, FedEx, TNT, and UPS--had a telephone 
conference with senior U.S. Customs and Border Protection and 
Transportation Security Administration officials. We all agreed 
the express carriers needed to provide information on air cargo 
shipments from high-threat areas earlier in the supply chain so 
the government could complete its targeting process sooner in 
order to prevent a similar attack in the future.
    The express companies were permitted to take the lead in 
developing an operationally feasible approach to providing this 
data, and this became the ACAS project. To date, information on 
over 18 million air cargo shipments has been analyzed by the 
ACAS unit. No terrorist threats to aviation have been detected, 
and no shipments have been designated as ``do not load.''
    The express companies are constantly expanding the number 
of countries, which is now over 150, for which shipment data is 
transmitted, with the ultimate goal of providing global 
information on shipments coming to the United States from any 
country. Deliveries from Asia to the United States represent a 
large percentage of the millions of packages moved by express 
delivery firms around the world on a daily basis. Some very 
high-volume Asian countries--China, Japan, and Korea--are 
considered low-risk for terrorist threats and are just now 
being added to the ACAS pilot. As more countries in the Asian 
region are added to ACAS, the resulting increase in the volume 
of information will require that both the Government and the 
private sector ensure adequate resources are available to 
provide the information, conduct the analysis, and respond 
operationally to the results of the targeting.
    Several really innovative things were done to implement the 
ACAS project. For example, the express companies are providing 
access to their proprietary information and targeting systems 
to help CBP and TSA resolve anomalies in the shipment data. I 
cannot say enough about how skillfully CBP and TSA cooperated 
with each other and with the express delivery industry to make 
this project a success.
    To establish ACAS, CBP, and TSA employed an approach that 
has come to be known as co-creation, in which the private 
sector determined at the outset an operational concept for the 
project and how the data will be transmitted. This approach 
differs significantly from the normal method of allowing the 
business community to comment on the Government's approach to a 
security issue only after a regulation has been drafted.
    Based on the success of this approach, after the pilot 
project has run for a sufficient amount of time and the results 
are analyzed, the ACAS private-sector participants will engage 
with CBP and TSA to draft a regulation that is based on the 
operational lessons learned from the pilot.
    I want to end by mentioning four key lessons we already 
have learned from the ACAS project. First, the private sector 
and the Government should approach a new security challenge 
from the outset as fully equal partners who share common goals 
and a dedication to finding a solution that will meet the 
highest security standards while preserving operational 
capabilities the private sector needs to remain fully 
competitive internationally.
    Second, the Government needs to develop a more robust 
capability to share intelligence information with the private 
sector. Third, security programs can be tailored to private-
sector business models in a way that is operationally feasible.
    Fourth, analysis of all available information should be the 
basis for focusing technical screening resources on shipments 
identified as potential threats. Once screening has determined 
that a shipment is not a threat to aviation, that clearance 
should stay with the shipment regardless of it being 
transferred to another carrier, and additional screening should 
not be necessary.
    So, again, I very much appreciate the opportunity to 
discuss these issues with you.
    [The statement of Mr. Mullen follows:]
                Prepared Statement of Michael C. Mullen
                             April 18, 2012
               i. our response to the yemen bomb incident
    On October 28, 2010, al-Qaeda in the Arabian Peninsula attempted to 
ship explosive devices hidden in printer cartridges coming out of Yemen 
and destined for the United States on express delivery air cargo 
flights. While technical screening, canines, and physical inspection 
failed to detect the bombs, the plot was disrupted when specific 
intelligence describing the nature of the threat was obtained which 
allowed the express companies to immediately identify and neutralize 
the shipments.
    The day after the Yemen bombs were discovered and the plot 
disrupted, the four member companies of the Express Association of 
America (EAA)--DHL, FedEx, TNT, and UPS--had a telephone conference 
with senior U.S. Customs and Border Protection (CBP) and Transportation 
Security Administration (TSA) officials. All participants in the call 
agreed that providing information on air cargo shipments earlier would 
be a key step toward improving security and disrupting any future 
terrorist attempts to deliver a weapon through the air cargo supply 
chain. A series of meetings began which focused on concrete approaches 
to achieving this goal. Government agencies identified seven key data 
elements from the existing manifest submission that are critical to 
risk-targeting capabilities. The concept was to provide this data as 
soon as possible, with the complete information in the manifest on the 
aircraft continuing to be submitted in accordance with the Trade Act 4 
hours before arrival. The express companies were permitted to take the 
lead in developing an operationally feasible approach to providing this 
data as early as possible in the supply chain. The express firms found 
the data could be transmitted several hours before the shipment left 
the last point of departure on its trip to the United States, and each 
company worked with the CBP National Targeting Center to develop the 
technical means to deliver the information.
                        ii. development of acas
    The resulting project is named Air Cargo Advance Screening or ACAS. 
By January 2011 all four express firms were transmitting data on 
shipments from a list of countries identified by the Department of 
Homeland Security as high priorities. CBP and TSA initially focused the 
pilot program on express consignment operators since this sector of the 
trade accounts for more than 70% of all international air cargo 
shipments. The four members of the Express Association of America 
account for approximately 93% of the international air cargo shipments 
in the express consignment environment.
    As operational experience with the ACAS pilot project increased, 
both the Government and the express companies found innovative 
approaches to improving the targeting and risk management process. The 
express companies are providing access to their proprietary information 
and targeting systems to help CBP and TSA resolve anomalies in the 
shipment data, which allows a more rapid risk assessment of the cargo. 
Express carrier personnel have worked with the ACAS Unit at the 
National Targeting Center to share their expertise on express delivery 
operations with Government personnel and to develop a deeper 
understanding of the Governmental targeting process. ACAS Unit 
personnel have visited express delivery hubs to gain awareness of the 
operational environment. CBP and TSA, and other key stakeholders, have 
developed and refined rules and weight sets within the automated 
targeting system to better identify shipments that pose a security risk 
to aviation. The express companies are constantly expanding the number 
of countries--now over 100--for which shipment data is transmitted, 
with the ultimate goal of providing global information on shipments 
coming to the United States world-wide. CBP and TSA are providing 
additional resources to the ACAS unit to manage the increasing volume 
of information and still ensure the shipment risk assessment process is 
completed expeditiously. In short, ACAS has become an extremely 
effective and well-developed partnership between the public and private 
sectors.
                           iii. acas results
    To date, information on 17.5 million air cargo shipments has been 
analyzed by the ACAS Unit. Over 250,000 shipments have been selected by 
the targeting system for further review and nearly 3,000 of these have 
been identified for additional data analysis or screening. No terrorist 
threats to aviation have been detected and no shipments have been 
designated as ``do not load''. Security concerns for identified 
shipments are mitigated through TSA-implemented security screening 
protocols conducted by the carrier prior to lading. In the event of a 
``do not load'' situation, protocols have been developed to engage 
host-country authorities and lines of communication are defined to 
ensure all relevant stakeholders would receive required information.
    The key factor to the success of the ACAS project has been the 
flexibility displayed by both the public and private sectors. From the 
beginning, the Government agreed that no time deadlines would be 
applied to the submission of ACAS data, and no penalties would be 
assessed for inaccurate or incomplete data. The National Targeting 
Center developed a capability to accept ACAS data in any format and map 
the information to existing targeting databases, as opposed to 
requiring the data in a specific format from all participants. The 
private sector agreed to submit the data as early as possible in the 
supply chain, which has developed into a capability to transmit the 
information nearly as soon as it is recorded in express carrier 
databases. The transmission time is often 24 hours or more before the 
shipment is loaded on the aircraft that will bring it to the United 
States. As ACAS is expanded to additional countries and eventually the 
entire globe, maintaining a flexible approach to the information 
reporting will be critical to ensuring the continued success of the 
project.
                          iv. screening issues
    ACAS also has served to illuminate issues around the operational 
protocols for screening shipments considered to be elevated risk. ACAS 
information analysis can result in a requirement to screen a shipment 
at origin, before it begins a trip to the United States that may 
involve several plane changes. We need to find a better way for the 
results of this screening, and the identification of a package as non-
threat, to stay with the shipment as it moves through the supply chain, 
assuming it is kept in secure environments. Under existing TSA-
regulated procedures and National requirements of other governments, 
shipments screened at origin often require re-screening, particularly 
at the last point of departure of the flight to the United States. A 
more rapid expansion of TSA's National Cargo Security Program is a 
potential approach to providing upstream screening that would meet TSA 
requirements. Developing an international version of TSA's domestic 
Certified Cargo Screening Program is another potential solution for 
this problem. The air cargo industry is developing a proposal to 
present to TSA on this issue.
                           v. acas expansion
    Deliveries from Asia to the United States represent a large 
percentage of the millions of packages moved by EAA members around the 
world on a daily basis. As more countries in the Asian region are added 
to ACAS, the resulting increase in the volume of information will 
require that both the Government and the private sector ensure adequate 
resources are available to provide the information, conduct the 
analysis, and respond operationally to the results of the targeting.
    The volume of ACAS information is also expanding through the 
addition of more participants to the pilot project. Since late 2011 
several passenger airlines and air cargo consolidators such as freight 
forwarders have engaged in the ACAS project, and information on the 
cargo being shipped and carried by these entities is being analyzed. 
CBP and TSA have published a plan to bring additional air cargo 
entities into ACAS, including heavy lift air cargo airlines. The 
Government has been particularly adept at realizing that the business 
models of the new participants are quite different from express 
delivery operations, and that a ``one size fits all'' approach is not 
feasible for ACAS.
              vi. acas: the new public-private partnership
    ACAS represents a breakthrough in the development of public-private 
partnerships to achieve mutual security and trade facilitation goals, 
or, as the CBP Commissioner has described it, ACAS is a ``game 
changer''. To establish ACAS, CBP and TSA employed an approach that has 
come to be known as ``co-creation'', in which the private sector 
determined at the outset an operational concept for the project, how 
the data would be transmitted, and how the reaction to the results of 
the risk assessment would be managed. These pillars of the project were 
then discussed with the Government and refined to ensure the effort 
would meet their requirements. The private sector also decided the pace 
and direction of the expansion of ACAS to additional countries, within 
a set of priorities that was determined by CBP and TSA. This approach 
differs significantly from the normal method of allowing the business 
community to comment on the Government's approach to a security issue 
only after a regulation has been drafted.
    Based on the success of this approach, CBP and TSA intend to use a 
similar method to eventually move ACAS to a regulatory framework. After 
the pilot project has run for a sufficient amount of time and the 
results are analyzed, the ACAS private-sector participants will engage 
with CBP and TSA to draft a regulation that is based on the operational 
lessons learned from the pilot and that incorporates the flexibility 
and feasibility of the approach employed in the pilot. The regulation 
will also not attempt to employ a ``one-size-fits-all'' approach, but 
will recognize the different business models of the ACAS participants 
and provide a flexible approach to ensuring optimum security, tailored 
to the specific industry entities in the air cargo environment. While 
participation in ACAS is now voluntary, CBP and TSA have often pointed 
out that the primary benefit of engaging in the ACAS pilot will be the 
opportunity to engage in the regulation writing process.
                          vii. lessons learned
    ACAS has already provided significant lessons learned, and as the 
project moves forward the members of the Express Association of America 
would like to see these lessons applied to establish a permanent air 
cargo security regime characterized by flexibility and driven by a 
determination to employ the most operationally feasible approach. The 
key lessons from ACAS are:
   The private sector and the Government should approach a new 
        security challenge from the outset as fully equal partners who 
        share common goals and a dedication to finding a solution that 
        will meet the highest security standards, while preserving the 
        operational capabilities the private sector needs to remain 
        fully competitive.
   The Government needs to develop a more robust capability to 
        share intelligence information with the private sector. More 
        effective information sharing needs to occur in the short term 
        in the event of a terrorist incident to ensure the operational 
        response is optimally effective in disrupting the attack, as 
        well as in the longer term to make the private sector more 
        aware of trends that may indicate their resources are being 
        targeted.
   Flexibility and a willingness to discard previous practices 
        and adopt new procedures, sometimes overnight, is the key to 
        defeating an adaptive terrorist enemy and ensuring attempted 
        attacks do not have a serious negative impact on U.S. and 
        global economic interests.
   Security programs must be tailored to private sector 
        business models in a way that is operationally feasible, but 
        still meets high security standards. The division of the 
        international logistics system into four ``modes''--air, sea, 
        rail, and truck--is overly simplistic and creates operational 
        inefficiencies. There are at least three air cargo business 
        models and possibly more.
   Analysis of all available information should be the 
        precondition for focusing technical screening resources on 
        shipments that have been identified as potential threats. If 
        this analysis indicates screening is required, it should occur 
        as far upstream as possible, preferably at origin, to ensure a 
        high-risk shipment is interdicted early in the supply chain. 
        Once screening has determined that a shipment is not a threat 
        to aviation, that result should stay with the shipment 
        regardless of it being transferred to another carrier, and 
        additional screening should not be necessary.

    Mr. Walberg. I thank the gentleman for your testimony.
    I understand that Mr. Dow is on a tight time schedule here, 
and our having to recess has hurt that. So, understanding that 
you have to get to a carrier to do some travel, we certainly 
would say you are welcome to be dismissed.
    If you have a moment, could I ask you one question before 
you leave? Going back, you were here for the testimony----
    Mr. Dow. Yes.
    Mr. Walberg [continuing]. Of the previous panel, and 
specifically in relationship to the foreign repair stations. 
Has your industry been negatively impacted by the lack of rules 
for the foreign repair stations?
    Mr. Dow. Our industry, as far as--I can't speak for the 
airlines, but the travelers, the consumers, and the business 
travelers have not. But I do think there is a necessity of 
getting those regulations in place.
    Mr. Walberg. Okay. Well, thank you, and pleasant journeys.
    Mr. Dow. Thank you.
    Mr. Walberg. Let me recognize myself for questioning time 
here, since I am the only one in the room right now.
    Let me turn to each member of the panel. I would like to 
ask for your response to this same question: In your opinion, 
what are the biggest challenges to security in the Asia-Pacific 
region?
    Mr. Wade.
    Mr. Wade. Well, the Asia-Pacific region is a large area to 
cover. I think you have to look at it in different sectors of 
that region. I think a large majority of the cargo coming out 
of Asia--as I said earlier in my testimony, we have eight 
aircraft dedicated to Asia--the large majority of it is coming 
out of Hong Kong and Shanghai, Korea, and Japan. I think the 
threat level there is different, demonstrably different, than 
it is in other places in the region, specifically Indonesia and 
the Philippines.
    Mr. Walberg. Why is that the case?
    Mr. Wade. Both the Philippines and Indonesia are known to 
be the base for several extremist groups that have acted out 
and been part of or completely responsible for terrorist acts 
in the region, in the Philippines and in Indonesia.
    So I think when you look at that region, one of the 
challenges is to understand that the risk-based model can be 
regionally directed, that you would not necessarily apply the 
same security measures in Hong Kong or Shanghai, certainly, as 
you would in Jakarta. So that is a big challenge for us. So 
recognize that, and apply the right security measure that meets 
and deals with the specific threat of the region.
    Mr. Walberg. Ms. Reimold, what are the biggest challenges 
of security in the Asia-Pacific region for you?
    Ms. Reimold. Thank you, Mr. Chairman.
    When we talk about Asia, as my colleague has mentioned, it 
is a very broad range of states and certainly landmass. But 
when we look at a country like China and look at its rapidly 
growing aviation market, we have to consider that along with 
growth comes some attendant considerations in terms of both 
safety and security. The ability to develop an aviation market 
like any other market and to do so safely and securely takes 
resources and it takes know-how. So I would propose that one of 
the challenges certainly that has been identified by the Civil 
Aviation Authority of China is its organizational capacity. So 
IATA, in fact, has a very robust capacity development program 
to try to help them build their organizational capacity. That 
is one area.
    The second would be, there is a differing level of maturity 
between some of the established countries within Asia--Japan 
certainly comes to mind, and it has had a long-time aviation 
relationship with the United States--and then like an emerging 
market such as China.
    You know, again, Australia has been a long-time partner 
with the United States, and we have had the ability to work 
with them on a number of issues and their aviation for our 
member airlines. The good news when you have a long-term 
partnership like that, you can look at some of the established 
carriers and have them work with some of the emerging countries 
to mentor the airlines. So we have taken our capacity 
development into a mentoring relationship, as well.
    I highlight these two areas because they are, you know, 
directly in response to your questions. The challenge, just to 
summarize again, is about organizational ability and capacity 
development.
    Mr. Walberg. Thank you.
    Mr. Mullen, same question.
    Mr. Mullen. Thank you.
    I would agree with Mr. Wade that when you look at the high-
volume countries for air cargo out of Asia--China, Japan, 
Korea, Hong Kong, Singapore--that these are highly secure 
countries, both due to the relative absence of international 
terrorist activity in those countries but also the fact that 
the governments themselves have very strong security programs 
when it comes to air cargo and aviation in general. So when you 
add to that the relatively strong security programs that 
companies like the express industry and other air cargo 
industry bring to the table, I think you have an already very 
strong environment.
    The key thing I think you need to look at is, if you are 
taking this already very secure operation and a very secure 
supply chain, what steps make sense to add what is only going 
to be an incremental increase in the amount of security that 
you can provide through additional Government activities? I 
think that is the challenge that has to be looked at very 
carefully.
    Really, in the end, from Asia or any other part of the 
world, there is no such thing as 100 percent security. But you 
have to ask yourself, what is a reasonable cost to add a small 
amount of security, a kind of incremental amount of security, 
to this very secure system that already exists? I think that is 
the challenge for both Government and private sector going 
forward.
    Mr. Walberg. Okay. I appreciate that. Thank you.
    We are waiting for a few other Members potentially to 
arrive. Based upon that, I will have the luxury of asking some 
further questions.
    Going back to Ms. Reimold, would you talk a bit more about 
some of the over-regulation that you feel is placed on the 
aviation industry? You mentioned in previous statements about 
excessive regulations. What are some of those?
    Ms. Reimold. Thank you, Mr. Chairman.
    My comments were directed largely at the sometimes 
conflicting regulations. We certainly support the regulators' 
mandate to ensure that our systems remain safe and secure. Our 
concern, as expressed by our member airlines and certainly by 
other parts of our industry, are the inconsistency of the 
regulations--the shoes off in one country and not off in 
another country, liquids in a bag in one country and not in 
another country.
    So I would like to characterize my comments in terms of the 
inconsistency and then sometimes that inconsistency leading to 
a direct conflict in regulations between one state and another.
    Mr. Walberg. Okay. We see some of that inconsistency in 
airports in the United States, as well, on some of those same 
things. Thank you.
    Going back to a question I asked Mr. Dow before he left on 
the issue of foreign repair stations, have any of you seen 
negative impacts to your specific area of the industry related 
to foreign repair stations?
    Mr. Wade.
    Mr. Wade. At Atlas we have not. We support the rule as it 
is proposed.
    But I think one thing from a pure security standpoint that 
it is important to understand is that, speaking for Atlas, at 
foreign repair stations we have Atlas employees present during 
the large maintenance--or during all maintenance operations, 
large or small. So we have a USFA-certified mechanic who is 
there who, No. 1, validates the person doing the repairs as 
being qualified to do it, being qualified on that airframe, and 
after doing that they oversee the entire operation. I am not 
suggesting it is 24-hour-a-day oversight, but every repair has 
to be verified and signed off on by an Atlas mechanic who is 
FAA-certified.
    Mr. Walberg. That is in 400 stations?
    Mr. Wade. That is in all the stations that Atlas uses.
    Mr. Walberg. Okay. Okay.
    Mr. Mullen.
    Mr. Mullen. Mr. Chairman, my members have also not 
expressed a problem in this area, and I think the procedures 
that they are using are almost identical to what Mr. Wade 
described.
    Mr. Walberg. Okay.
    Ms. Reimold.
    Ms. Reimold. I would go back to my earlier comments about 
the potential of there being a direct impact when you have a 
growth market. It is easy to envision that while I am not 
personally aware of any direct member complaints from our 
airlines, but I could speculate that in a market like China 
that is forecast to order billions of dollars' worth of new 
aircraft and put those into service, that the issue could 
potentially get very serious if there are not enough repair 
stations to accommodate their service requirements.
    Mr. Walberg. Okay.
    Let me ask one final question of each of you. What efforts 
has your industry made to encourage harmonization within the 
countries in the Asia-Pacific?
    Mr. Wade.
    Mr. Wade. We work very closely with TSA to come up with a 
harmonization policy that works for us. Harmonization not only 
in Asia but around the world is extremely important. As I 
mentioned earlier, Atlas flies to over 90 countries in over 170 
locations a year. If you can imagine each one of those having 
their own set of rules and regulations for cargo security, it 
is an impossible task to meet each one of those regulations and 
the notifications required behind those.
    Most recently, TSA has worked with the European Union on 
harmonization and what cargo security should look like there. I 
think it is important that TSA communicate closely with the 
aviation industry to make sure that they express our opinions 
and our methods of achieving the level of security, because no 
one knows our business as well as we do.
    Mr. Walberg. Are they open to those opinions? Is there a 
fairly free flow?
    Mr. Wade. Yes, Administrator Pistole is. It is just 
important that we continue to express the opinions of the 
aviation community on how we can best achieve the regulations.
    Specifically on this issue, it is the issue of 100 percent 
screening on all cargo aircraft as opposed to screening 100 
percent of at-risk cargo. In my opinion, there is very little 
use in making a regulation that no one can comply with. We have 
to find regulations that accomplish the goal that we can comply 
with.
    Mr. Walberg. Okay.
    Ms. Reimold, what would you add?
    Ms. Reimold. I would add that, in addition to the 
relationship that IATA has established with ICAO as it works to 
harmonize the regulations, whether we are talking about 
passenger screening or cargo screening, there are some more 
direct efforts, I think, about the issue of the liquids, 
aerosols, and gels, the regulations, and the efforts going on 
in the European Union to remove the restrictions. We are 
working directly, through our member airlines, with the 
governments to ensure that there is a harmonized approach--if 
their restrictions are lifted in one part of the world, that 
they are lifted similarly.
    This really comes into play in the Asia-Pacific region, as 
well. Australia is working very aggressively on testing some of 
the newer technologies to ensure that they can, you know, do a 
positive identification on the liquids, aerosols, and gels. Our 
role very much is to promote that information sharing among our 
member airlines and, in fact, with their respective 
governments.
    Mr. Walberg. Thank you.
    Mr. Mullen.
    Mr. Mullen. Mr. Chairman, the express industry is also very 
active, working through ICAO, to ensure that air cargo security 
regulations are harmonized globally to the greatest extent 
possible. As you are well aware, this is an industry where 
minutes are extremely important to the success of the 
operation. The industry would also have an extremely difficult 
time dealing with a proliferation of different regulations, 
screening requirements, and information-reporting requirements 
from a number of different countries globally, including the 
United States.
    So the harmonization efforts that are driven by adherence 
to ICAO rules we feel is the best approach to making sure that 
that challenge doesn't become too severe.
    Mr. Walberg. Okay. Thank you. My time has expired.
    Welcome back, Mr. Chairman. I recognize you for any 
questions.
    Mr. Rogers. Thank you. I only have one thing that I would 
like to put on the record. I apologize for having to leave. I 
had to go to another hearing with the Armed Services Committee.
    Mr. Wade, before the hearing, you and I discussed this 
topic, and I just want to make sure I get on the record what 
you shared with me in our meeting earlier today. That is, when 
you look at cargo screening technologies that are out there and 
you know that we have a lot of pressure to try to achieve 100 
percent screening with some type of technology in the near 
future, what do you think is the most viable technology that 
would help the cargo industry achieve 100 percent screening of 
their merchandise?
    Mr. Wade. Oh, I don't think there is any question, sir, 
that private-sector canine screening, from an undeveloped 
initiative standpoint, is by far the most important to us. It 
allows us flexibility. Canines can be retrained for new 
threats, very little cost, very quickly. As we know, terrorists 
adapt quickly and change. Once we find out their methodology, 
they will adapt those. We need to be able to do something in a 
manner to address that cost-effectively and quickly. Canines 
give us that capability.
    The governments, including TSA and around the world, do not 
have the capability all the time or maybe any of the time to 
address all of the aviation needs given a specific threat. 
Private-sector canines give us that capability at a reasonable 
cost and immediate capability, especially concerned about the 
cargo. If there is a threat, the fact is the passenger 
carriers, and rightly so, are going to get the attention of the 
TSA canine teams. We understand that and agree with that, but 
that leaves us without an alternative of primary screening. So 
it is very important to us to see that measure move forward.
    Mr. Rogers. Great. I appreciate that, and I appreciate you 
putting that on the record for us.
    Thank you, Mr. Chairman. That is all I have.
    Mr. Walberg. Thank you, Mr. Chairman.
    I thank the witnesses for their valuable testimony today 
and the Members for their questions.
    The Members of the committee may have some additional 
questions for the witnesses, and we will ask you to respond to 
these in writing, if you would, please. The hearing record will 
held open for 10 days.
    Without objection, the committee stands adjourned.
    [Whereupon, at 2:50 p.m., the subcommittee was adjourned.]

                                 
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