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Global Trade Exchange (GTX)[1] as presented by Northrop Grumman, at a U.S. Government-sponsored Trade and Investment Seminar, Amman, Jordan, 2008

The Global Trade Exchange (GTX) is, or was, a controversial Homeland Security intelligence project,[2] related to cross-border trade financial data,[3] being one of three pillars of the Safe Ports Act-related Secure Freight Initiatives. The Global Trade Exchange idea originated in 2004 from the Department of Homeland Security Intelligence and Analysis office, and between 2007 and 2008 was avidly promoted by the U.S. intelligence community, yet in March 2008 was suddenly placed in an "on hold" status. Described as a ready-to-buy, commercially available database,[4] the GTX was rush-funded by Congress as part of and championed relentlessly by then-United States Secretary of Homeland Security Michael Chertoff in evident disregard of objections of confused and frustrated U.S. private sector trade groups. The Global Trade Exchange was discussed in October 2007 in the House Homeland Security Meeting on Maritime Terrorism and the "Safe Ports Act". In the October 30, 2007 House Homeland Security Meeting on Maritime Terrorism meeting, Customs Commissioner Thomas Winkowski reported to House Representative Henry Cuellar that the Global Trade Exchange was a "data warehouse" about which a "series of meetings have been held", and that "our lawyers are trying to get our arms around it".[5][6]

After a year-long spate of official support, media hype, and after award of Congressional funding of $13 million, the GTX was put "on hold for further study by the [U.S.] Navy" on April 2, 2008.,[7] for reasons still yet to-be explained. Touted by senior U.S. officials and Congress in 2007 as an anti-terrorism database for tracking long-haul shipping containers, the Global Trade Exchange's principal focus appears to have a different focus, notably advance trade-finance information for market-making purposes.

DHS Intelligence Trade Data Project

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Jon D. Glassman, former State Department Official, currently Vice President for Government Affairs at Northrop Grumman, forwarded the Global Trade Exchange in the Asia-Pacific and Middle-East regions

In Spring of 2007 DHS Secretary Michael Chertoff began to actively promote the Global Trade Exchange to the media and trade community as a commercial off-the-shelf (COTS) database, able to provide unique and vital national security protection from 'all hazards' threats,[8] Senior DHS Customs officials, described the GTX as a repository of corporate data, and transportation shipping data. Congress noted the GTX description as a COTS tool and placed it into the July 2007 Homeland Security Appropriations budget bill; this done above the vociferous objections of the U.S. private sector. Three major U.S. trade consortia rendered written and spoken testimony to Congress, expressing concerns about the sudden arrival of this new tool, the secrecy surrounding it, as well as posing questions as to why the U.S. Government would be sharing collected corporate data with foreign governments, such as Secretary Chertoff described.

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Financial Services Data Warehouse.[9] The early version of the Global Trade Exchange, presented at APEC seminar, Chile 2004
ISPS Financial Services Data Warehouse for APEC Meeting 2004, Chile

GTX was championed by former State Department official Jon D. Glassman[10] most famous for having drafted the White Paper on El Salvador and for serving as Chargé des Affairs in the U.S. Embassy in Afghanistan during CIA operations to support the Mujahadeen. Between 2004 and 2007, Mr. Glassman championed the Global Trade Exchange at various APEC counter-terrorism meetings and intergovernmental meetings in the Middle East, as a means of foregoing U.S. Congressional requirements for 100 per cent scanning of shipping containers.

As early as 2004, Ambassador Glassman proposed, at various APEC counter-terrorism seminars, the Global Trade Exchange as an unregulated financial exchange using port-shipping manifest data, i.e. as a Northrop Grumman-led Financial Services Data Warehouse.[10] A relationship to stock-trading was clear, but the relationship to counter-terrorism not. Many U.S. financial services sector presented this kind of tool for hedge-fund risk management.[11]

2007: DHS Secretary Chertoff spearheads project

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Michael Chertoff spearheaded the Global Trade Exchange as a DHS joint project with the DOD and ODNI

Although never fully explained in terms of content, the Global Trade Exchange was noted as being one of the three pillars of the U.S. Customs and Border Protection (CBP) strategy for trade data-gathering.[12]

Global Trade Exchange (GTX) was touted as a valuable DHS intelligence project[13] which was "OTS" (off the shelf) and ready to acquire from a private-sector company in cooperation with foreign governments;[14] data was to have been obtained on a voluntary basis by companies. On July 26, 2007 Senator Patty Murray added the GTX to the Department of Homeland Security Appropriations budget, by adding Amendment (S.2499) to another bill of Senator Robert Byrd and Senator Thad Cochran[15] into H.R. 2638.

Controversy about secrecy

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CBP Ahern presented the Global Trade Exchange at a Maritime Security Expo, November 2007.[16]

U.S. trade groups expressed strong displeasure at the sudden implementation of the new project, as well as with the general lack of transparency, public interaction, and disclosure about GTX.[17][18][19] These groups found the lack of information regarding justification for, and modalities such as were related to, data-sharing with foreign governments, particularly disturbing.

These U.S. trade groups provided formal complaints and testimony to various Federal agencies, as well as various Congressional Committees and Subcommittees. These communications noted concerns that they didn't know the business-reporting sources of data nor what the data were; these groups were normally very involved with such definitions.[20][21] Also, DHS mentions of using the GTX to share private sector data with foreign governments caused US industry risible worries about business data confidentiality.[22] In December 2007, a request for quote[23] and statement of work[24] were put forth by the DHS.

Congressional funding awarded in July 2007

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Despite the controversy, Global Trade Exchange was allocated $13 million[25] as part of the DHS section of the 2008 Consolidated Appropriations Budget, in January 2008. Northrop Grumman presented the GTX in late February[26] as part of wider DOD supply-chain "GEX" data-warehousing projects.[27]

"U.S. Attorneys involved in appropriating the database in October 2007

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On 30 October 2007, Deputy Commissioner of Customs Thomas S. Winkowski testified to Rep. Henry Cuellar that U.S. Attorneys were still trying to "go around the legal challenges that [the U.S. government] had in obtaining the database and that Customs was "Still trying to get our arms around" the Global Trade Exchange, so that they could "know what's inside it".[28]

Discussed by the Senate Finance Committee in March 2008

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On March 13, 2008, the Global Trade Exchange was discussed in the Senate Finance Committee, as part of the data-gathering program framework of the Homeland Security Department.[29] The topic was presented by Mr. Sam Banks, Executive Vice President of Sandler and Travis Trade Advisory Services, the firm which won the no-bid award for the GTX in January 2008.[30] Sandler, Travis and Rosenberg is a customs law and international trade consultancy firm known for management of the IBERC database used under the GATT textiles agreement, the Multifibre arrangement (MFA).[31][32]

Global Trade Exchange project

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Sam Banks, a former Deputy Commissioner, U.S. Customs Authority working for U.S. trade law firm Sandler, Travis and Rosenberg.[33] forwarded the Global Trade Exchange

Despite that the GTX was, in principle, a ready-to-purchase database of corporate data which was collected, the actual content of the global trade exchange was never fully presented to either the media nor to U.S. trade groups. Clues to the premise of the project can be found in the GTX statement of work,[34] provided in the 2008 request for quote,[23] released to a small select group of companies, in December 2008.

The commercial transaction data was to have been run by a private company information broker performing the following functions:

Global Trade Exchange (GTX)[1] as presented by Northrop Grumman, at a U.S. Government-sponsored Trade and Investment Seminar, Amman, Jordan, 2008
  • Collection, integration, and transmission of data and images from multiple sources;
  • Coordinating the participation of all supply chain parties (e.g. foreign host governments & shippers) providing information to GTX;
  • Establishing and maintaining all necessary communications and interfaces;
  • Ensuring protection of all collected and/or transmitted by the GTX;
  • Transmitting data to participating foreign government systems in compliance with foreign government requirements.

March 2008: GTX on hold for further study

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Three weeks after public presentations at U.S. trade conferences, and two months after funding was awarded by Congress, DHS customs official Jayon Ahern announced publicly that the project was premature, and would be delayed for further study.;[35][36] it remained delayed as from Basham's departure, yet is again part of the 2009 DHS appropriations budget[37] and remains under study for future implementation.[38] In the U.S. House, House Homeland Security Appropriations Chairman David Price (D-NC) has repeatedly expressed wishes for results on the project.[38] As late as May 1, 2009 Commissioner Ahern was providing explanations to Congressman David Price about the DHS ongoing pursuit to find the commercially available COTS database.

Global Trade Exchange (GTX)[1] as presented by Northrop Grumman, at a U.S. Government-sponsored Trade and Investment Seminar, Amman, Jordan, 2008

See also

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References

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  1. ^ a b c "Dennis.Dalton.NG.pdf".
  2. ^ "Archived copy". www.cbp.gov. Retrieved 12 January 2022. {{cite web}}: Check |archive-url= value (help)CS1 maint: url-status (link)
  3. ^ Testimony of Thomas S. Winkowski before the House Appropritions Committee
  4. ^ CONGRESSIONAL RECORD, July 26, 2007 - Issue: Vol. 153, No. 121 — Daily Edition 110th Congress (2007 - 2008) "SA 2499. Mrs. MURRAY submitted an amendment intended to be proposed to amendment SA 2383 proposed by Mr. Byrd (for himself and Mr. Cochran) to the bill H.R. 2638, making appropriations for the Department of Homeland Security for the fiscal year ending September 30, 2008, and for other purposes; as follows: On page 69, after line 24, insert the following: Sec. 536. (a) The amount appropriated by title II for necessary expenses for the U.S. Customs and Border Protection for enforcement of laws relating to border security, immigration, customs, and agricultural inspections under the heading ``salaries and expenses is increased by $30,000,000 to procure commercially available technology in order to expand and improve the risk-based approach of the Department of Homeland Security to target and inspect cargo containers under the Secure Freight Initiative and the Global Trade Exchange. (b) The amount appropriated by title IV under the heading ``systems acquisition is reduced by $30,000,000."
  5. ^ GTX mentioned at 1:14 of CSPAN video Recording of October 2007 in the House Homeland Security Meeting on Maritime Terrorism
  6. ^ The SAFE Port Act: Status of Implementation One Year Later : Hearing Before the U.S. Congress House Committee on Homeland Security. Subcommittee on Border, Maritime, and Global CounterterrorismOctober 2007 in the House Homeland Security Meeting on Maritime Terrorism
  7. ^ Global Trade Exchange RIP Buried deep within extensive testimony given by U.S. Customs and Border Protection Deputy Commissioner Jay Ahern on April 2 before the House Homeland Security Appropriations Subcommittee was a brief announcement that CBP has decided not to pursue the Global Trade Exchange cargo shipping risk assessment program. GTX, previously known as the Secure Freight Initiative before that name began being used to describe overseas scanning programs, had ended up being the Spruce Goose of cargo security – oversold and too big a concept for liftoff. Knowing that there was extensive information about cargo shipments that is not normally supplied to U.S. Customs and Border Protection (CBP), former DHS Deputy Secretary Michael Jackson began pushing the concept of private sector information vetting engine in the fall of 2005. ... GTX hit its high point when it received a mention in the FY08 Omnibus appropriations bill and CBP was allowed to use some part of $13M to move forward on the initiative. But just weeks later, Jackson announced his resignation and would-be integrators were unable to convince importers to surrender priceless commercial data to help a vendor make a credible proposal. The procurement wheel continued to spin briefly with a RFQ issued in December 2007, but Ahern's testimony put a sharp and decisive end to the program. Only time will tell if Jackson's GTX was truly ahead of its time, or an unnecessary distraction from an effective CBP effort to secure our inbound cargo.
  8. ^ "Archived copy". www.cbp.gov. Archived from the original on 17 October 2009. Retrieved 12 January 2022.{{cite web}}: CS1 maint: archived copy as title (link)
  9. ^ "APEC_NorthrupG_GTX_04_star_ms_004.pdf".
  10. ^ a b "APEC_NorthrupG_GTX_04_star_ms_004.pdf".
  11. ^ "GlobalSupplyChain_and_Financial_Services_GBI.pdf".
  12. ^ "Trade Facilitation, Strategy Discussed in DC - CBP.gov". www.cbp.gov. Archived from the original on 21 October 2012. Retrieved 15 January 2022.
  13. ^ "Remarks by W. Ralph Basham 2007 Trade Symposium - CBP.gov". www.cbp.gov. Archived from the original on 8 March 2010. Retrieved 12 January 2022.
  14. ^ https://www.hsdl.org/?view&did=29200 [bare URL PDF]
  15. ^ "Congressional Record - 110th Congress (2007-2008) - THOMAS (Library of Congress)".[permanent dead link‍]
  16. ^ "U.S. Maritime Security Expo – November 27-28, 2007".U.S. MARITIME SECURITY EXPO November 27–28, 2007 KEYNOTE, Jayson Ahern Moderator: Peter Tirschwell, Vice President and Editor-in-Chief, The Journal of Commerce Jayson Ahern, Deputy Commissioner, U.S. Customs and Border Protection, DHS
  17. ^ Joint Industry Group Chair, Mary Alexander (August 2, 2007). "Joint Industry Group comments regarding Global Trade Exchange - FINAL, Letter to Michael Chertoff, Secretary of the Department of Homeland Security, cc: Jackson, Deputy Secretary of Homeland Security, DHS Stewart Baker, Assistant Secretary for Policy, DHS Alfonso Martinez-Fonts, Assistant Secretary for Private Sector, DHS W. Ralph Basham, Commissioner, US Customs and Border Protection Bennie G. Thompson, Chairman, House of Representatives Committee on Homeland Security Joseph Lieberman, Chairman, Senate Committee on Homeland Security & Governmental Affairs Carlos M. Gutierrez, Secretary, US Department of Commerce Susan C. Schwab, Ambassador, US Trade Representative" (PDF). No. Joint Industry Group Opposition to Global Trade Exchange. The Joint Industry Group * 1620 I Street * 6 th Floor * Washington, DC 20006 * Tel: 1-202-466-5490 * Fax: 1-202-463-8498. The Joint Industry Group * 1620 I Street * 6 th Floor * Washington, DC 20006 * Tel: 1-202-466-5490 * Fax: 1-202-463-8498. Archived from the original (PDF) on 2011-07-26. Retrieved December 24, 2020.
  18. ^ Northcott, Hal (August 2, 2007). "Global Trade Exchange: Request for Information, Letter to Michael Chertoff from the American Association of Exporters and Importers". No. Concerns about Global Trade Exchange and secrecy. the American Association of Exporters and Importers. the American Association of Exporters and Importers. Archived from the original on 2014-03-11. Retrieved December 24, 2020.
  19. ^ "Archived copy" (PDF). www.worldshipping.org. Archived from the original (PDF) on 5 July 2008. Retrieved 12 January 2022.{{cite web}}: CS1 maint: archived copy as title (link)
  20. ^ "A & A Contract Customs Brokers - Headline News : News article". Archived from the original on 2010-11-19. Retrieved 2009-02-17.
  21. ^ Muoio, Mary Jo (August 2, 2007). "President's Report by Mary Jo Muoio (2007 NCBFAA Annual Report)". National Customs Brokers and Forwarders Association of America. Retrieved December 24, 2007.
  22. ^ "Archived copy" (PDF). www.apl.com. Archived from the original (PDF) on 17 May 2008. Retrieved 22 May 2022.{{cite web}}: CS1 maint: archived copy as title (link)
  23. ^ a b https://web.archive.org/web/20110722120322/https://www.hlswatch.com/sitedocs/gtx-pilot-request-for-quotations.jpg [bare URL image file]
  24. ^ "gtx_statement_of_work.pdf".
  25. ^ Root. "Homeland Security Watch » Search Results » gtx".
  26. ^ "Dennis.Dalton.NG.pdf".
  27. ^ "Division A--Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2008".
  28. ^ Testimony of Thomas S. Winkowski before the House Appropritions Committee
  29. ^ "The United States Senate Committee on Finance". Senator GRASSLEY. Also for you, Customs and Border Protection recently issued a request for quotation for a program known as the Global Trade Exchange. Do you have any concerns with respect to the proposed program? Can you identify any benefits with respect to the proposed program? What types of challenges would importers face if such a program were made mandatory? Mr. BANKS. I think most of industry objects to this Global Trade Exchange. They are concerned about, nobody knows exactly what it is. Second, industry is very concerned about their proprietary trade data being shared with a privately owned and operated company. My personal view is, if this program were to be developed as kind of a prototype, a test bed, on a voluntary basis for participants, I do not know that it would not be a good thing, to find out, can you get more data, can you help with security, and can you actually provide these benefits to industry as a result of it? But if you ask most of industry, they are going to do thumbs down on that concept.
  30. ^ "Archived copy" (PDF). Archived from the original (PDF) on October 6, 2011. Retrieved October 6, 2011.{{cite web}}: CS1 maint: archived copy as title (link)
  31. ^ "Internet Archive Wayback Machine". 12 November 2006. {{cite web}}: Cite uses generic title (help)[dead link‍]
  32. ^ "The IBERC Group, Sandler, Travis & Rosenberg, P.A. Launches 2005 IBERC Diagnostic Program for Apparel Importers". 26 March 2006. Archived from the original on March 26, 2006.{{cite web}}: CS1 maint: unfit URL (link)
  33. ^ "STR & STTAS International Trade and Customs: International Trade and Customs".
  34. ^ "Archived copy" (PDF). www.strtrade.com. Archived from the original (PDF) on 6 October 2011. Retrieved 12 January 2022.{{cite web}}: CS1 maint: archived copy as title (link)
  35. ^ Reidy, Stefan (4 April 2008). "Global Cargo Monitoring / Cargo Tracking / Supply Chain Intelligence: US CBP suspends GTX Program".Asenior U.S. Customs and Border Protection official said this week that CBP has suspended its plans to develop a global trade exchange system that would have expanded the amount of trade data collected by the agency. In his prepared testimony for an April 3 hearing of the House Appropriations Subcommittee on Homeland Security, Deputy Commissioner Jay Ahern also recommended that 100 percent scanning of U.S.-bound maritime cargo containers be limited to high-risk trade lanes. Ahern discussed the progress CBP has made in implementing its various supply chain security programs, but he pointed out that these efforts are focused on the ocean environment and that there are other areas that need to be addressed as well. Ahern told the committee that after considering comments from the trade community CBP has concluded that “further consideration of the GTX concept is premature at this time and may not be a prudent use of limited resources.”
  36. ^ "Remarks by W. Ralph Basham - CBP.gov". www.cbp.gov. Archived from the original on 2 December 2009. Retrieved 12 January 2022.
  37. ^ https://fas.org/sgp/crs/homesec/RL34482.pdf [bare URL PDF]
  38. ^ a b "Congressional Record - 110th Congress (2007-2008) - THOMAS (Library of Congress)". Archived from the original on 2009-01-09.
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