The Foreign Service Journal, December 2005

passports do not come cheap. Initial U.S. yearly cost esti- mates range between $1.6 billion and $2.4 billion. Further, as the new passports are only in a limited trial, reliability has yet to be proven. And, transmission times have been too long. In the midway report on the trials with Australia, New Zealand and the U.S., the aver- age time to read the chip varied from a low of 1.7 seconds with a New Zealand passport to a high of 6.3 seconds with a U.S. passport. It remains to be seen whether the planned implemen- tation schedule can be maintained. Given the complex nature of the technology, and the amount of training that will go into a full rollout of the new passports, Congress should be prepared to extend the October 2006 deadline, itself an extension of the original October 2004 deadline. The Logistics of Globalization Independently, the U.S. Department of Defense and Wal-Mart, the world’s largest retailer, are now requiring their primary suppliers to tag each of their products with RFID tags. It’s hard to say no to such behemoths. For many suppliers, no matter how large or small, these mandates will change the way they do business. Both DoD and Wal-Mart are interested in maintain- ing a flow of goods and products from and to points around the globe. For Wal-Mart and other corporations invested in assembling and moving goods globally, being able to guarantee genuine parts manufactured in China, assembled in Japan, shipped through Europe, and dis- tributed in the United States adds value to the finished product. Being able to track assets throughout the manufacturing and distribution process — the supply chain — is also a counterbalance to counterfeit and theft. At the beginning of 2005, Wal-Mart started hold- ing trials with its top suppliers. The key to why RFID is so seductive to those in the business of moving products around the world is the fact that digital data remains in its native digital format. Once encoded into the tag, identifying information such as serial number, manufacturer’s code and product line is F O C U S D E C E M B E R 2 0 0 5 / F O R E I G N S E R V I C E J O U R N A L 33