CREATE Study Shows the Economic Benefit of U.S. Customs and Border Protection Centers of Excellence and Expertise

October 17, 2016

USC announced today the National Center for Risk and Economic Analysis of Terrorism Events (CREATE) has completed a study evaluating the economic impacts of the U.S. Customs and Border Protection (CBP) Center of Excellence and Expertise (CEE) Program on the U.S. trade community.

The CBP CEE Program aims to use government resources more efficiently and to facilitate commercial trade by reducing paperwork, improving information flows, and contributing towards a “single window” for documenting trade activity. The CEEs reflect a recent trend of governments worldwide to promote trade through the removal of non-tariff barriers.

The study, conducted in collaboration with Econometrica, a private research and management organization, revealed CEEs generated measurable cost savings by reducing the frequency of specific cargo inspections or trade exams and some CBP forms.

Researchers found that CEE membership is associated with realized savings in trade exam costs for CEE members. These savings are estimated at over $1 million totaled across all of the members in the Automotive and Electronics CEE alone in FY 2014.

If the impacts of membership for future members are similar in magnitude to the impacts achieved for current members, then importer savings summed across all CEE participants could yield savings of between $7 million and $18 million annually.

"The findings from this study can inform CBP about potential extensions and improvements to the CEE program.” Fynnwin Prager, co-lead researcher on the study, explains. “The study can also inform public officials and businesses worldwide in the areas of international trade, freight and logistics, and ports/border crossings as to the benefits of innovative trade processing approaches."

Co-lead researcher Bryan Roberts adds, "The study breaks new ground in terms of the data and methodology used to evaluate the impacts of changing customs processing practices. Researchers have generally not had access to data related to customs inspections at the level of the individual importer before. Having this data permitted us to estimate the quantitative impacts of introducing the CEEs with a high level of precision."

The study was completed by a team of researchers including Bryan Roberts, Fynnwin Prager, Katie Foreman, Charles Bashnagel, Adam Rose, Nathaniel Heatwole, Brett Shears, Timothy Beggs and Steve McConegal with Dan Wei, Katherine Lu, and Isaac Maya.

To read the report click here. An additional CREATE/Econometrica study examining the economic impact of CBP enforcement activity relating to priority trade issues can be found here. 

About CREATE:

CREATE is a U.S. Department of Homeland Security (DHS) Center of Excellence established by the DHS Science & Technology Directorate, Office of University Programs, and based at the University of Southern California in the Sol Price School of Public Policy and the Viterbi School of Engineering.

CREATE’s mission is to improve our Nation’s security through research and development of advanced models and tools to evaluate risks, costs and consequences of terrorism and natural man-made hazards and to guide economically viable investments in homeland security.

About Econometrica:

Econometrica is a private research and management organization that has extensive capabilities and experience in evaluation and technical assistance activities. It has conducted work on behalf of a diverse range of U.S. Government agencies, including several component agencies of DHS (the U.S. Coast Guard, U.S. Immigration and Customs Enforcement, the Transportation Security Administration, the National Protection and Programs Directorate, U.S. Customs and Border Protection, U.S. Citizenship and Immigration Services, and the Office of Policy Private Sector Office.) 

Econometrica’s primary services include program evaluation, economic analysis, statistical analysis, risk analysis, cost benefit and regulatory analysis, policy analysis, simulation modeling, survey research, operations research, training, data graphics design and production, and technical writing and editing.