PORT SECURITY: A CHALLENGE FOR THE HEMISPHERE Presentation to the Inter-American Committee against Terrorism (CICTE), Organization of American States 7 March, 2008 Jon Glassman Director of Government Policy Business Development & Strategy Planning

PORT SECURITY Problem definition in U.S.: Protect U.S. ports from weapons of mass destruction and radiological weapons (“dirty bombs”) But maybe a bigger and different problem in countries outside U.S.? Problem definition in Latin America/Caribbean: Any blocking of capacity to export and import products vital to national well- being and growth.

DEPENDENCE ON FOREIGN TRADE % Relative to GDP Foreign trade-to-GDP ratios (measure of relative importance of external commerce): US and Brazil 26% Peru 44% Ecuador 62% Mexico 63% Chile 73% Dominican Republic 81% Honduras 102% Jamaica 105% Panama 136%

HEMISPHERIC COUNTRIES HAVE NEED TO PREVENT OBSTRUCTION OF FOREIGN TRADE Need is equal or greater than for U.S. Because 66% of increasing global commerce moves by sea, and Latin American/Caribbean maritime trade is expected to grow by 6-7% /year, it is important to improve port physical and policy infrastructure. But Latin American/Caribbean investment in infrastructure is only equal to 2% of GDP.

PORT INFRASTRUCTURE IMPROVEMENT IS INSEPARABLE FROM SECURITY Increased capacity/efficiency irrelevant if domestic or foreign actors or actions can shut down or disrupt Lat Am/Caribbean ports Reason: Very limited number of major seaports in a given country makes re-routing difficult Major seaports: US—361, Argentina, Brazil and Mexico—7, Ecuador and Venezuela—4, Panama—3, Guatemala—2

SMALL NUMBER OF PORTS COMBINED WITH HIGH FOREIGN TRADE DEPENDENCY = VULNERABILITY Catastrophic attack on U.S. port of Los Angeles/Long Beach would produce $45 billion loss (compared to US GDP of $11.7 trillion)—not devastating to national economy Closing down of one or several Lat Am/Caribbean ports for physical or policy reasons would be highly damaging, particularly for countries with high foreign trade dependency

NEED TO CONSIDER NOT JUST DIRECT THREATS BUT ALSO SECONDARY EFFECTS OF INCIDENTS ELSEWHERE Actual or feared catastrophic incident in U.S. could produce U.S. shutdown of shipments from a Lat Am/Caribbean transit port or ports U.S. could also impose 100% scanning requirement or discriminate among ports based on surveillance technology investment Good counsel: Cooperate with U.S. risk-analytic data collection and U.S. Container Security Initiative risk-based scanning to mitigate risk of U.S. domestic pressure for more extreme overseas surveillance

DIRECT THREATS Outside terrorist actions against U.S. European and Israeli cargo and cruise ships in Lat Am/Caribbean ports Multiple and continuing attacks generating sense of vulnerability of Hemispheric ports Efforts to disrupt physical or IT/communications nodes providing access to, or enabling and controlling operations of, port complexes Manipulation of the content of shipments, particularly related to food or pharmaceutical safety Criminal actions: theft, narcotics

CREATING SECURE PORT ENVIRONMENT Prevent damage to third parties: Producer-to-port cargo tracking/documentation Protection against intrusion: Additional sensors, data fusion and drilldown, decision aids, operations center/command and control for interdiction Domestic dimension: Identity management system for access to cargo custody chain, vessels and IT systems/databases, obligatory cargo handling procedures prior to port entry

ELIMINATE IMAGE OF ‘SOFT TARGET” Will generate secure, orderly throughout and revenue generation Will remove invitation to attack and criminal theft Will mitigate U.S. pressure for more extreme surveillance Financing for security can be covered as part of overall infrastructure upgrades.