This week’s Apec summit in San Francisco, which includes 21 nations in the Pacific region, including the US and China, will cover any number of predictable topics, from trade relations to currency and debt issues. It will also cover an unexpected one: fentanyl. The highly addictive narcotic is responsible for some 70,000 drug-related deaths in the US. But it has also become an unexpected window into global supply chains and how they work — or don’t — in an era of deglobalisation.
Over the past few weeks, business leaders and politicians have been talking about how fentanyl is making its way into the US, as well as other countries such as Mexico, via small shipments of goods in amounts less than $800 that aren’t subject to the usual trade and customs barriers. These small international package shipments (whether of drugs, forced labour-made apparel, or any other banned substance) are extremely unlikely to be checked by customs and border authorities because they are exempt from the usual rules under “de minimis” loopholes.
Unfortunately, say some industry leaders in the US, these loopholes that are intended to allow Americans to buy, say, a rug made in Asia and have it shipped to the US without extra taxes or red tape, have become a route for drug mules and those wishing to smuggle counterfeit goods. Ecommerce has radically increased the number of small international shipments, which are made via Chinese fast fashion websites but also on any number of US-owned or other global ecommerce sites.