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CBP ACE Deployment D Update

On January 7, 2015, in U.S. Customs Issues, by admin

On January 3, 2015, U.S. Customs and Border Protection (CBP) deployed core trade processing capabilities into the Automated Commercial Environment (ACE) that complete ACE Deployment D. The new capabilities are fully explained for the trade community on the CBP website.

The latest phase of the deployment includes:
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Manifest – In addition to normal processing in the Air Automated Manifest System (AMS), CBP will begin processing air manifest data in ACE on January 11, 2015. In February 2015, filers will be able to work with their Client Reps to test electronic air manifest data in the Certification environment to ensure it can be successfully processed in ACE. CBP will provide ACE air manifest training to all impacted ports in preparation for the May 2015 shutdown of the legacy Air Automated Manifest System (AMS).  Effective May 1, 2015, all electronic manifests must be filed in ACE.

Cargo Release – For ocean, rail and air shipments, ACE cargo release filers can now transmit Antidumping/Countervailing Duty entries (Entry type 03) to ACE. Code was deployed to production in support of advanced truck shipment processing in ACE. CBP will announce when ACE cargo release will be operationally expanded to include advanced capabilities for truck shipments. In addition to new development, CBP deployed updated code to the Certified from Summary capabilities. Notification on Certified from Summary for truck shipments will be issued in the near future.

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IE Canada, the national trade association for importers and exporters, has today issued a bulletin to its members expressing concerns about the customs information sharing agreement that was quietly signed last November by Stephen Harper while in Beijing on a state visit and trade mission.

DataSharing As reported at the time, given the history of intelligence breaches and theft of intellectual property alleged to involve China, many trade experts found the deal worrisome in terms of the security consequences that it may have, both for the country as a whole and the interests of businesses.

Charles Burton, an associate professor of Canada-China relations at Brock University, who was quoted by Global News said: “I’m hard-pressed to know why it is that Canada feels it would be in our interest to share information on sensitive matters of interdiction of illegal exports and other customs-related matters with the Chinese state, who would likely pass it on to exactly the people that we are hoping to prevent from doing this kind of illegal activity.”

IE Canada is now questioning why the deal was allowed to circumvent the public consultation process and wonders what, if anything, made signing the agreement so “urgent” that it compelled the Harper government to avoid the treaty going through “normal democratic channels” in this particular instance.

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Emerging Trade Trends for 2015

On January 6, 2015, in International Trade, by admin

At the beginning of January it seems almost obligatory for everyone to engage in a little prognostication about what might be anticipated in the year ahead. The Conference Board of Canada is no exception in this regard, and last week published an article in the Ottawa Citizen setting out what the Board’s Global Commerce Centre has identified as five emerging trade trends – and how Canadian businesses can take advantage of them. Briefly, they are as follows:

  • Services and expertise will represent huge international business opportunities in 2015. They should be central in our thinking, not afterthoughts.

Future Business

  • The United States was and will be Canada’s bread and butter market and can be our point of entry into world markets. But Canada has an increasing number of competitors in the U.S. market.
  • Growth in emerging markets is going to drive Canada’s future trade. Huge opportunities await Canadian businesses that can operate effectively in emerging markets and meet rising demand.
  • Not all Canadian companies have been nor will be successful in global markets. But those that know their markets well and have the skills to adapt their offerings to specific market needs can do extremely well – in both emerging and traditional markets.
  • Canada has an aggressive trade agenda to open doors for Canadian companies in global markets. Free trade deals, however, can only do so much. Companies need to understand the opportunities and challenges they face and adapt their offerings to each market.

A more detailed explanation concerning each of the trends is included in the article.

 

As last year drew to a close, International Trade Minister Ed Fast took the opportunity to review some of the Harper government’s key accomplishments in the advancement of its Global Markets Action Plan (GMAP) and delivering “on its commitment to open new markets, protect Canadian investment and support Canadian companies, particularly small and medium-sized enterprises (SMEs), as they seek to boost their exports.”
Ed Fast
These accomplishments include:

  • the conclusion of negotiations and release of the complete text of the historic trade agreement with the European Union, the world’s largest market with over 500 million consumers;
  • the conclusion of Canada’s first free trade agreement in the Asia-Pacific region with the landmark Canada-Korea Free Trade Agreement, which has received royal assent and will come into force on January 1, 2015;
  • a foreign investment promotion and protection agreement (FIPA) with China, bringing to 28 the number of FIPAs Canada has with countries around the world; and
  • the launch of a series of cross-country Go Global workshops, which this year provided over 300 SMEs with tools and practical information from all of Canada’s export agencies to help them reach their full export potential.

A press release from the government states that it “will continue to build on the momentum of the most significant year for trade in Canadian history.” A more detailed review of the various achievements and trade initiatives undertaken by the government over the past year as they relate specifically to Ontario businesses can be found in an article published at Northumberland View.

 

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An article in yesterday’s Globe & Mail brought some needed attention to an overlooked financial product that many small businesses may be unfamiliar with, but which could enhance their borrowing capacity and ability to obtain more favourable financing, especially when looking to develop new export market Riskopportunities.

Using the case of a New Brunswick-based software startup that almost had a potentially lucrative deal with a multinational technology company scuttled by its inability to obtain a line of credit from the various lenders it approached, the piece explains how obtaining accounts receivable insurance from the Export Development Bank of Canada (EDC) in this instance proved vital to eventually obtaining the bank financing required to secure and fill the company’s international sales contract.

In addition to credit insurance, the article quotes EDC spokesperson Phil Taylor regarding other types of insurance the development bank offers to help exporters mitigate different types of international trade risk including “contract frustration insurance that provides coverage from losses on one particular contract, political risk for exporters that do business in politically unstable countries, and performance security insurance, which covers the loss of a cash guarantee that an exporter put up to bid on a project.”

 

Two decades in the making, a landmark United Nations treaty regulating the multibillion-dollar global arms trade came into effect on Wednesday; perhaps not coincidentally, the day prior to a holiday associated by many around the world with the concept of “peace on Earth.”
Peace on Earth
The Arms Trade Treaty (ATT) seeks to stop weapons sales and “irresponsible arms transfers” to dictators, terrorists and human rights abusers. The ATT requires countries that ratify it to establish national regulations to control the transfer of conventional arms and components, and to regulate arms brokers. It prohibits the transfer of conventional weapons if they violate arms embargoes or if they promote acts of genocide, crimes against humanity or war crimes, and if they could be used in attacks on civilians or civilian buildings such as schools and hospitals.

To date, 61 countries have ratified the treaty including half of the top 10 arms exporters — France, Germany, Italy, Spain and Britain. Another 130 countries have signed but not ratified the ATT, including the United States, by far the world’s largest arms producer and exporter. Canada, Russia, India and China are among the countries that so far have refused to sign on to the treaty. The Harper government has previously said that while it supports the treaty’s objectives, it remains concerned about how it might affect the rights of Canadian gun owners with respect to the “transfer of firearms for recreational uses such as sport shooting and hunting.”

U.N. Secretary-General Ban Ki-moon called on all countries that haven’t yet ratified the ATT to do so “without delay.” However, most political observers consider there to be little chance any time soon of U.S. ratification, which requires approval by two-thirds of the Senate. Republicans, who will assume control the Senate at the start of 2015, overwhelmingly oppose gun restrictions of any kind. The treaty is also vehemently opposed by the highly influential National Rifle Association which dismissed it as nothing but a “global gun grab.”

 

A new report released today by the U.S. International Trade Commission (ITC) says that India’s trade, investment and industrial policies in recent years have made it more difficult for U.S. companies to fully engage with that country’s market. If however India was to remove discriminatory trade barriers and improveIndia Wall its intellectual property protection regime, the report estimates that exports would rise by two-thirds (the equivalent of $14.4 billion, based on 2013 data) and U.S. investment in the subcontinent would roughly double.

Requested last year by the House and Senate trade committees of Congress following numerous complaints from businesses over Indian trade policies perceived as being discriminatory, the study was based on comprehensive economic modeling dating back several years and an extensive survey of 8,000 companies. From its findings, the ITC concluded that various policies such as high tariffs, investment restrictions, forced localization requirements, weak IP protection and other non-tariff barriers have “become more burdensome between 2007 and 2013.”

The ITC determined that more than a quarter of U.S. businesses surveyed are “substantially adversely affected by restrictive Indian policies,” with manufacturing, agriculture and financial services among the sectors most harmed. Intellectual property-related barriers were less of an impediment to U.S. companies than tariffs and taxes the ITC found, “even by U.S. companies that considered IP protection very important to their operations.” The report noted however that the IP environment and local content requirements were “particularly problematic for pharmaceutical companies, with 27.9 percent substantially affected.” Overall, more than half the firms polled believe India’s policies are discriminatory and “adversely affect their own firm more than Indian companies.”

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Earlier this week, a coalition of EU and U.S. business organizations representing countless thousands of businesses of all sizes in every sector of the economy on both sides of the Atlantic (the “Employers’ Group”) presented the Economic and Social Committee of the European Parliament with an outline of the key objectives they each hope to see realized from the Transatlantic Trade and Investment Partnership (TTIP).

In his introductory remarks, U.S. Ambassador Anthony Gardner concisely encapsulates the overall aim of the trade agreement which is to “help narrow unnecessary divergences in our regulatory and standard setting systems, while maintaining on each side the high levels of health, safety, labor, and environmental protections we all expect.” This sentiment is echoed in one form or another in almost all of the submissions. From a strategic standpoint, Gardner says that TTIP “will also set a standard for future regional and global deals that reflect the value the United States and EU place on rules-based trade, high standards, and regulatory transparency and accountability.”

A number of the submissions stress the need for top trade officials to be more vigorous in moving the TTIP negotiation process forward in the year ahead. Markus Beyer, Director General of the lobby group BusinessEurope wants to see EU Trade Commissioner Cecilia Malmström and U.S. Trade Representative Michael Froman to “set an ambitious calendar” for 2015 and to “engage in finding solutions that are neither the EU model nor the U.S. model.” The National Association of Manufacturers (NAM) likewise wants officials to do more than just the recently promised “fresh start” in order to make job creating trade agreements like TTIP a reality. “They need a clear finish line and the focus and political will to get there,” says the association’s president Jay Timmons.

One thing made clear from the presentation is a greater level of awareness emerging on the part of business leaders to the increased level of public attention and debate the trade talks have attracted in recent months, especially in Europe. The head of BusinessEurope, for example, frankly admits that it was something “we were not expecting” because trade “has always been considered a technical issue, reserved for experts.” Now however, “TTIP has completely changed this picture,” Beyer says.

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An article posted on the CBC News website yesterday about the so-called “price gap” is unlikely to provide Canadian holiday shoppers with anything in the way of comfort let alone joy about having to deal with the possibly unexpected paperwork and various import costs associated with their cross-border purchases that might now as a result seem considerably less of a bargain than had initially appeared to be the case.
Online Taxes
Citing a new report by the Conference Board of Canada, the story claims that “economic benefits to cutting taxes on cross-border shipments outweigh costs” — specifically, that raising the level at which Canadians have to pay taxes and tariffs on orders shipped from outside the country (known as the “de minimis” threshold) from the current $20 level to $200, while possibly resulting in the federal government incurring up to $237 million per year in lost tax revenue, this amount would be more than offset by an estimated $5 billion boost to the Canadian economy from changing the value threshold.

Unfortunately, the Conference Board of Canada report the article refers to has yet to be published online, but the figures come directly from a 2012 research paper entitled “De Minimis Thresholds in APEC” by Stephen Holloway and Jeffrey Rae prepared on behalf of the Conference of Asia Pacific Express Carriers and was published in the World Customs Journal. Vijay Gill, director of policy research at the Conference Board of Canada, quoted in the news article, says that “methodology used in the study that calculated the $5 billion in benefits is correct, but that the Conference Board didn’t re-do the research.”

The aggregate economic benefit estimated by the report comprises various resource savings the researchers calculated would be generated to multiple parties in the supply chain in terms of merchandise transit time, government administration, and business compliance — factors that when taken collectively were bluntly described by a 2011 Australian productivity commission examining the same issue as “a deadweight loss to the community.”

 

Despite having aimed to reach a conclusion by the end of the year on expansion of the World Trade Organization’s 17-year-old Information Technology Agreement (ITA), negotiations in Geneva collapsed late last week, reportedly over a deadlock between China and South Korea concerning liquid crystal display (LCD) screens.
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Hopes for updating the stalled agreement had been lifted tremendously last month following a breakthrough compromise at the APEC forum between the U.S. and China over the scope of the changes to be included and exemptions that would be allowed.

Failure of trade diplomats to conclude a deal that would reduce global tariffs on an estimated $1 trillion in high-tech goods by up to $15 billion a year seems unlikely to be the last word on the matter however. “The participants have significantly reduced the gaps on expanding the coverage of the ITA agreement,” said WTO Director General Roberto Azevêdo, adding that “unfortunately it has not been possible to finalize the negotiations this week.”

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Findings contained in a report issued recently by the Canadian Automotive Partnership Council (CAPC) point to a number of “worrying trends” in the industry that could spell dire trouble for the future if left unchecked.

Prepared by CAPC’s Manufacturing Competitiveness Committee, which is co-chaired by Ray Tanguay, Toyota Motor Manufacturing Canada and Toyota Canada Chair, and Rob Wildeboer, Executive Chairman of Martinrea International, the position paper entitled “A Call for Action: II” represents the collaborative effort of Canadian automakers, parts manufacturers and labour, and provides what the CPAC describes as “a blueprint for sustaining a competitive automotive industry in Canada.”

The paper states that of the estimated 3.5 million units of assembly capacity that will be added to the North American auto industry between 2011 and 2015, Canada will receive just 3% (110,000 units of capacity) despite having 16% of production and 10% of sales.  The U.S. is poised to receive 63% of new capacity and Mexico will gain 34%.  CPAC notes that over the past decade Canada “has gone from being one of the lower cost places to build vehicles in the world, to one of the more expensive.”

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On Monday, Finance Minister Joe Oliver announced the five-year term appointments of Rose Ritcey and Peter Burn as permanent members of the Canadian International Trade Tribunal (CITT). “Their collective experience in research, public policy and advising government on various trade issues makes them strong additions to the Tribunal,” said the minister.
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Ms. Ritcey was the Special Advisor to the Chairperson of the CITT, contributing to the tribunal’s restructuring and the creation of a development program for trade remedy investigations staff. An MBA from Dalsousie, Ritcey previously held various research roles within the tribunal and also worked at the Department of Finance in the International Trade and Finance Branch.

Mr. Burn is Counsel in the Public Policy and Regulation Group for Dentons Canada LLP in Ottawa. A member of the Ontario bar since 1981, Burn has been an international trade and investment counselor to governments, corporations, industry associations and multilateral organizations, with experience conducting business in Latin American and Asian markets while serving as a senior executive with Bell Canada International.

The CITT provides Canadian and international businesses with access to fair, transparent and timely processes for the investigation of trade remedy cases and complaints concerning federal government procurement and for the adjudication of appeals on customs and excise matters. At the request of the Government, the CITT also provides advice on tariff, trade, commercial and economic matters.

 

The Secretary General of the World Customs Organization (WCO), Japan’s Kunio Mikuriya, recently announced that organization will be dedicated in the coming year to promoting Coordinated Border Management under the slogan “Coordinated Border Management – An inclusive approach for connecting stakeholders.”
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“It behoves all border agencies to work together for the common good despite varying regulatory mandates. With this in mind, the WCO and Customs administrations have long supported the notion of Coordinated Border Management (CBM), which aims to enhance the effectiveness and efficiency of the multiple public service functions undertaken at borders,” said Mikuriya.

The term CBM refers to a cooperative approach by border control agencies, both at the national and international level, in the context of seeking greater efficiencies over managing trade and travel flows, while maintaining a balance with compliance requirements.

CBM can result in more effective service delivery, less duplication, cost-savings through economies of scale, enhanced risk management with fewer but better targeted interventions, cheaper transport costs, less waiting times, lower infrastructure improvement costs, more wider sharing of information and intelligence, and strengthened connectivity between all border stakeholders.

The 180 WCO-member countries will have the opportunity to promote the enhanced coordination practices and mechanisms that they have implemented within their administrations and with other Customs administrations and government agencies, as well as with economic operators involved in cross-border trade.

 

The Manitoba government last week introduced legislation that would create a new special planning area for CentrePort Canada to speed up development approvals, help attract new private investment and create jobs while ensuring local landowners and residents continue to participate in a public review process for planning and development, Premier Greg Selinger announced.

The proposed planning amendment act would create a new special planning area (SPA) for CentrePort land located within the Rural Municipality (RM) of Rosser. It would also establish a new special planning authority that would hold public hearings and provide advice and recommendations to the minister of municipal government on planning bylaws, amendments, subdivision applications and other development within the SPA.

“The proposed new special planning area and authority would provide CentrePort with another key differentiator when it comes to selling the inland port to potential investors,” said Diane Gray, president and CEO, CentrePort Canada Inc. “This single-window approach will result in more timely approvals and give us a competitive edge in attracting new and early private investment decisions. It will also provide business with improved cost and planning certainty, and provide the community with an accountable and transparent planning process.”

The creation of a special planning area is a key part of the Manitoba government’s strategy to support the ongoing development of CentrePort Canada, the premier said. He noted other important provincial investments include the construction of CentrePort Canada Way and its planned extension to bypass Headingley, the extension of water and sewer services to CentrePort lands, and the development of the new CentrePort Canada Rail Park.