Canadian Business Leaders Call for Rapid Conclusion of TPP to Boost Economy, Jobs

On July 8, 2014, in International Trade, Trade Compliance & Strategy, by admin

As representatives of 12 Asia-Pacific countries meet in Ottawa this week to continue talks on Trans-Pacific Partnership (TPP) agreement, Canadian business leaders today emphasized the need to tear down economic barriers that impede growth and job creation across the region. “Concluding a wide-reaching TPP agreement that removes barriers to trade will give Canadian businesses new […]

As representatives of 12 Asia-Pacific countries meet in Ottawa this week to continue talks on Trans-Pacific Partnership (TPP) agreement, Canadian business leaders today emphasized the need to tear down economic barriers that impede growth and job creation across the region.

“Concluding a wide-reaching TPP agreement that removes barriers to trade will give Canadian businesses new opportunities in a $28 trillion market with nearly 800 million customers,” said John Manley, President and CEO of the Canadian Council of Chief Executives.

As Asia’s rapid growth transforms the global economy, it is essential that Canada intensify its commercial engagement in the region. The TPP offers an historic opportunity to improve trade, investment and people-to-people ties across the Asia-Pacific region.

New market opportunities for Canada through the TPP are primarily in those countries where our country does not have existing free trade agreements, namely Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam.

“Canada has a unique opportunity to become the only nation in the world with preferential trade access to the United States, the European Union and some of the largest economies in Asia. The TPP will position Canadian firms to go where global growth and customer demand are accelerating,” Manley added.

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Contentious “Buy American” Issue Resurfaces

Protectionist Measures Threaten to Undermine Market Access and Confidence in “Free Trade”  With the much-touted Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union apparently stymied by a number of unresolved issues and the ambitious Trans-Pacific Partnership (TPP) making little substantive headway despite more than 20 rounds of negotiations to date, the […]

Protectionist Measures Threaten to Undermine Market Access and Confidence in “Free Trade” 

With the much-touted Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union apparently stymied by a number of unresolved issues and the ambitious Trans-Pacific Partnership (TPP) making little substantive headway despite more than 20 rounds of negotiations to date, the biggest threat to the Harper government’s vaunted free trade agenda may be coming from an unexpected quarter — Canada’s largest trading partner.
Uncle-Sam
After temporarily resolving a dispute in early 2010 over the protectionist “Buy American” provision in the Obama Administration’s $800 billion stimulus package, the same issue has resurfaced in the new U.S. Water Resources Reform and Development Act, which stipulates that all the iron and steel used in projects must be made in the U.S. to be eligible for federal subsidies. The contentious “Buy American” provision also appears in the massive government-backed Grow America Act, which calls for 100 percent U.S. content in all federally funded transit projects.

The proposed measures have Canadian exporters and manufacturers crying foul. “What this really means is that Canadian companies are excluded from selling into the procurement market in the U.S.,” said Jayson Myers, president of the Canadian Manufacturers and Exporters. “And more than that, it sends a chill through the supply chain because distributors don’t want to hold Canadian, or foreign, products if they can’t be differentiated from U.S. products.”

In a statement issued during a meeting at the World Trade Organization (WTO) last month, International Trade Minister Ed Fast expressed concern about the repeated attempts to impose domestic content requirements for products purchased by federal, state and municipal-level governments within the U.S. “Canada’s focus is on eliminating trade barriers, not erecting new ones. Protectionism is bad policy, and bad for businesses on both sides of the border,” Fast said.

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CFIA Launches Pre-market Application Submissions Office

The Canadian Food Inspection Agency (CFIA) last week announced the establishment of a Pre-market Application Submissions Office (PASO). Stakeholders are now required to contact the PASO for processing applications for livestock feeds, Plant Breeder’s Rights, fertilizers, variety registration, plants with novel traits, and veterinary biologics, or to follow up on the status of a previously […]

The Canadian Food Inspection Agency (CFIA) last week announced the establishment of a Pre-market Application Submissions Office (PASO). Stakeholders are now required to contact the PASO for processing applications for livestock feeds, Plant Breeder’s Rights, fertilizers, variety registration, plants with novel traits, and veterinary biologics, or to follow up on the status of a previously submitted application.

CFIA’s PASO delivers and coordinates the services and activities related to reviewing and processing applications for products requiring a CFIA pre-market approval. The new office is the first point of contact for questions regarding the status of a previously submitted application, or administrative guidance to complete a new application package for any of the above mentioned services.

The CFIA believes that centralizing the submission of applications will result in increased consistency and efficiency in the delivery and administration of pre-market application requests. The CFIA notes that technical information/advice will still be provided by the responsible program officers and states that establishment of the PASO should not affect programs’ current service delivery standards.

Contact Information:

Pre-market Application Submissions Office
Canadian Food Inspection Agency
59 Camelot Drive
Ottawa, Ontario K1A 0Y9

E-mail: paso-bpdpm@inspection.gc.ca
Telephone: 1-855-212-7695
Fax: 613-773-7115

COAC Trade Efficiency Survey Now Open

The Commercial Operations of Customs and Border Protection (COAC) recently announced the kick off to their 2014 Trade Efficiency Survey. The survey will be open until Wednesday, July 23, 2014.  Click here to access the survey. COAC states that information gathered in this survey will be used to obtain facilitation priorities by industry, assess the economic […]

The Commercial Operations of Customs and Border Protection (COAC) recently announced the kick off to their 2014 Trade Efficiency Survey. The survey will be open until Wednesday, July 23, 2014.  Click here to access the survey.

COAC states that information gathered in this survey will be used to obtain facilitation priorities by industry, assess the economic impact of specific trade initiatives, and assist in creating metrics that explain the key benefits of partnerships with U.S. Customs and Border Protection (CBP) and its Partner Government Agencies (PGA).

COAC is asking both importers, exporters, and their service providers to respond to this survey. This survey allows for multiple responses from the same entity. The survey consists of multiple choice questions that request information on a number of issues, including exam rates, estimated cost of doing business, time expenditures, satisfaction level with CBP and PGAs. The survey takes only 20 minutes to complete. Results will be shared in upcoming COAC meetings.

 

 

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5 Ways the World Cup is Like Global Trade

On July 4, 2014, in International Trade, Trade Compliance & Strategy, by admin

As the 2014 World Cup heads towards the final match on July 13, it’s time once again to draw parallels between the world’s largest sporting event and global trade. Previously, we noted the report produced by Goldman Sachs linking the event with world trade and economics. This time, finance expert Richard Barrington writing in The […]

As the 2014 World Cup heads towards the final match on July 13, it’s time once again to draw parallels between the world’s largest sporting event and global trade.
SoccerWorld
Previously, we noted the report produced by Goldman Sachs linking the event with world trade and economics. This time, finance expert Richard Barrington writing in The Huffington Post, suggests there are five ways the World Cup resembles international trade.

“Competition is always a moving target. What seems to be the established order can change quickly, and so defending champion Spain did not make it out of group play at this year’s World Cup, while lightly regarded Costa Rica advanced to the quarter-finals.

“This should be a cautionary tale for both countries and companies that consider themselves world leaders in any area — such status is a target, not an entitlement. The danger of having an upstart eat into market share may seem like a danger of world trade, but ultimately it is the competition that helps keep countries and companies from becoming complacent.”

In addition to the five comparisons he makes, Barrington concludes with another similarity (especially apt for Team USA under the circumstances):  Even if you do not always win, there is a lot to be gained just by competing.

 

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Agriculture Quarantine Inspection (AQI) Stakeholder Briefing

The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) and the Department of Homeland Security’s Customs and Border Protection (CBP) will be holding a briefing for stakeholders regarding the proposed adjustment to agricultural quarantine inspection (AQI) fees. The briefing is scheduled for Wednesday, July 9, at 3:00 p.m. EDT and will be […]

The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) and the Department of Homeland Security’s Customs and Border Protection (CBP) will be holding a briefing for stakeholders regarding the proposed adjustment to agricultural quarantine inspection (AQI) fees. The briefing is scheduled for Wednesday, July 9, at 3:00 p.m. EDT and will be held via conference call and Webinar.
USDA_Aphis
In addition to providing an overview the proposed AQI fee changes and a chance for stakeholders to learn more about the issue and ask questions, organizers of the event indicate that will also afford interested parties another opportunity to provide their input within the framework of the comment period on the USDA’s Notice of Proposed Rulemaking that was recently extended through July 24, 2014.

Many companies within the trade community strongly oppose the proposed fee increases including U.S. produce importers, maritime cargo shippers and cross-border trucking companies. In its submission to the USDA, Canadian Trucking Association said it “strongly objects to the way in which the APHIS program is administered, applied and funded.” The group also believes the fees may be illegal under the North American Free Trade Agreement, which prohibits customs user fees, and the General Agreement on Tariffs and Trade, which says that all fees and charges shall not represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purposes. APHIS claims the proposed adjustments — the first changes to AQI user fees in nearly a decade — will ensure the AQI program has the financial stability it needs to continue the critical work of keeping U.S. agriculture safe and productive.

To participate in the briefing, organizers ask that you please register in advance and provide your name, organization and email address. Once you submit your information, you will promptly receive an email with the call-in number and a unique conference code to enter the call as well as a link to join the Webinar. In the event you experience technical difficulties, you will still be able to hear the audio portion of the call even if you’re unable to connect to the Webinar.

 

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Canada: A Relatively “Good” Country

On July 3, 2014, in International Trade, Trade Compliance & Strategy, by admin

Indexes and surveys abound that measure country performance according to a variety of metrics such as economic growth, stability, justice, transparency, good governance, productivity, democracy, freedom, or even happiness. These however almost always measure countries in isolation. Simon Anholt, an independent policy advisor in Britain, has developed “a new way of looking at the world” […]

Indexes and surveys abound that measure country performance according to a variety of metrics such as economic growth, stability, justice, transparency, good governance, productivity, democracy, freedom, or even happiness. These however almost always measure countries in isolation. Simon Anholt, an independent policy advisor in Britain, has developed “a new way of looking at the world” called the “Good Country Index” (GCI) that measures how much a particular country contributes to the world at large in terms of science and technology, culture, international peace and security, world order, climate, prosperity, equality, and the health and well-being of humanity.

Using a wide range of reliable data from the U.N. and other international organizations, Anholt and his team have assigned each country a balance-sheet to show at a glance whether it’s a net creditor to mankind, a burden on the planet, or something in between. Anhold is quick to explain that he’s not making moral judgments about countries, but simply determining how they “contribute to the greater good.” He also notes that the GCI is not commenting on the reasons behind any country’s scores. Speaking of which, Canada ranked #12 in between France and Germany (the United States was #21 and the U.K. #7 – click here for the complete chart).

One might ask how this unusual new index is related to global trade, but as Anhold explains in his talk at the TED Summit in Berlin on June 23rd 2014 (video above) the GCI is really an outgrowth of his Anholt-Gfk Roper Nation Brands Index™ which aims to measure the reputation of countries. Anhold maintains that the branding and image of a nation-state “and the successful transference of this image to its exports – is just as important as what they actually produce and sell.” This is also sometimes referred to as “country of origin effect” which describes how consumers’ attitudes, perceptions and purchasing decisions are influenced by products’ country of origin labelling. When Anhold queried the Nation Brands Index dataset to determine why some people prefer one country more than another, the answer he got from it was that the kinds of countries we prefer are so-called “good” countries.

 

What Does Intellectual Property Have to Do With Free Trade?

On July 2, 2014, in International Trade, Trade Compliance & Strategy, by admin

The term “intellectual property” (IP) generally refers to three areas of law collectively: patent, copyright, and trademark. These are all known in legal parlance as “intangible interests” that are defined and protected by statutory or common law. Since IP law was introduced into the international trading system for the first time 20 years ago with […]

The term “intellectual property” (IP) generally refers to three areas of law collectively: patent, copyright, and trademark. These are all known in legal parlance as “intangible interests” that are defined and protected by statutory or common law. Since IP law was introduced into the international trading system for the first time 20 years ago with the World Trade Organization (WTO) administered Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), it is now a significant feature of most free trade agreements.

With the latest rounds of negotiations concerning both the Transpacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) taking place this month — free trade agreements that could rewrite global rules on IP enforcement and potentially affect the digital rights of citizens around the world — the non-profit digital rights group Electronic Frontier Foundation (EFF) raises a fundamental question: Should intellectual property be included in trade agreements?

The EFF states it “does not believe that IP and trade agreements are a good match” and along with a number of other public interest groups contends that the “undemocractic” and secretive process by which trade agreements are negotiated is an unacceptable means for devising binding rules that change what it regards as national non-trade laws.

Click here to view a playlist of other videos from the Transatlantic Consumer Dialogue (TACD) event that was held in Washington on June 24.

 

Global Survey 2014: Rethinking Trade and Finance

On July 2, 2014, in International Trade, Trade Compliance & Strategy, by admin

The International Chamber of Commerce (ICC) today released the Global Survey 2014: Rethinking Trade and Finance, its largest and most comprehensive Global Survey to date – including data from 298 banks across 127 countries. The Survey concludes that the growth rate of international trade has dropped drastically when compared to the years prior to the […]

The International Chamber of Commerce (ICC) today released the Global Survey 2014: Rethinking Trade and Finance, its largest and most comprehensive Global Survey to date – including data from 298 banks across 127 countries. The Survey concludes that the growth rate of international trade has dropped drastically when compared to the years prior to the global financial crisis.
Rethinking-trade-finance
Global trade growth was a shade above 3% during 2013, although picked up to an annualized growth rate of 4% during the first quarter of 2014 and is anticipated to accelerate beyond 5% through 2016.

“We are cautiously optimistic, with a realization that this optimism is framed within a fragile international trade environment,” said Vincent O’Brien, Member of the ICC Banking Commission Executive Committee. “The fragility is magnified by unpredictable political developments on the fringes of Europe, the Middle East, South East Asia and other part of the emerging world.”

Further encouragement came from the survey with 68% of respondents reporting positively that the availability of trade finance increased by value compared to the previous year. However, in terms of the “trade finance gaps”, 41% of respondents reported that they perceived a shortfall of trade finance globally. According to Mr O’Brien: “This gap remains a major challenge, especially for SMEs as without access to trade finance, now widely acknowledged as an engine of growth, SMEs will not be able to contribute substantially towards economic recovery and development.”

The ICC Global Survey also highlighted that G20 countries accounted for three quarters of the trade restrictive measures imposed since 2008, with Word Trade Organization figures showing that these countries introduced 193 new trade restrictive measures between December 2012 and November 2013. Such restrictions – many of which are protectionist and therefore trade distorting – have stalled the agenda to open up world trade.

Click here to download the report.

 

Anticipating US-Korea FTA Compliance Verifications

In the latest issue of Apparel magazine, Larry Ordet, a trade lawyer with Sandler, Travis & Rosenberg, P.A., writes about the “ramping up” of compliance verifications in connection with the U.S.-Korea Free Trade Agreement (KORUS or UKFTA) and reports on concerns expressed by importers about the heightened scrutiny of claims for preferential treatment that “has come […]

In the latest issue of Apparel magazine, Larry Ordet, a trade lawyer with Sandler, Travis & Rosenberg, P.A., writes about the “ramping up” of compliance verifications in connection with the U.S.-Korea Free Trade Agreement (KORUS or UKFTA) and reports on concerns expressed by importers about the heightened scrutiny of claims for preferential treatment that “has come in the form of excessive demands for documentation and on-site visits to suppliers several steps down the supply chain.” While the article notes that affected companies could eventually pressure the government to amend their procedures and ease the compliance burden, in the meantime Ordet advises they should “actively prepare for the increasing likelihood that they will be targeted for an audit or other compliance verification measure.”

In the U.S., ports of entry are given wide latitude to determine the type and extent of the reviews they conduct to determine the validity of claims of duty-free treatment under the UKFTA. Importers must therefore be ready to substantiate those claims using certifications or other documentation or their specific knowledge. While there is no specific format mandated by the UKFTA for a certificate of origin, there are certain required fields, including the importer, exporter and producer; the name of the certifying person; the good’s tariff number and description; and information demonstrating that the good is originating. Certificates of origin must be in the importer’s possession at the time a preference claim based on such a certificate is made, but no certificate is required for claims based on the importer’s knowledge (though such claims are often subject to particular scrutiny).

Claim verifications by CBP can take a number of forms. A written request for information (CF 28) may be submitted to the importer, exporter or producer seeking details such as flow charts or technical specifications outlining the manufacturing process, an explanation of how the goods originate, purchase orders and proof of payment, documentation relating to assists and indirect materials, or just about anything else that might be relevant. CBP officials may visit the exporter or producer in Korea to review records and/or observe production facilities, or they may request that the Korea Customs Service conduct an origin verification. Other methods may be used as well.

Ordet outlines a number of steps companies can and should take to minimize their risks when claiming free trade benefits, reminds them that the onus is squarely on the importer to prove their goods qualify for reduced duty states, and finally, suggests that establishing systems from the outset that track qualification saves both time and money in the long run, especially when the government inquiries start arriving in the mail.

 

Legal Opinion Backs CTA’s Claim APHIS Fees Violate Trade Agreements

On June 27, 2014, in Trade Compliance & Strategy, by admin

The Ontario Trucking Association yesterday published a release on its website outlining the legal opinion obtained by the Canadian Trucking Association (CTA) from Gowling Lafleur Henderson LLP. The CTA believes the opinion adds further credence to the objections raised in its formal comments submitted to the USDA regarding the proposed increase of the APHIS fees […]

The Ontario Trucking Association yesterday published a release on its website outlining the legal opinion obtained by the Canadian Trucking Association (CTA) from Gowling Lafleur Henderson LLP. The CTA believes the opinion adds further credence to the objections raised in its formal comments submitted to the USDA regarding the proposed increase of the APHIS fees in connection with funding the agency’s AQI program. The opinion describes the proposed fee increase as a “disguised restriction on trade” that violates both NAFTA and rules under the global General Agreement on Tariffs and Trade (GATT) that restrict fees at the border.

NAFTA Article 310 prohibits the adoption of customs user fees, defined as “an amount of money charged for processing goods through customs”. The AQI fees, which are charged regardless of the origin of the goods and whether they are actually inspected, clearly fall under this definition. According to Gowlings, “the basic effect of NAFTA Article 310 is to prohibit the United States, as a Party to the NAFTA, from adopting any customs user fees other than those that existed at the date of the coming into force of NAFTA, which ultimately were eliminated for goods originating in Canada.”

Similarly, while GATT Article VIII permits the imposition of certain customs fees to recoup expenses incurred in the course of inspection or documentation of goods, it also places limitations on such fees, specifically those that apply to inspection and quarantine services.

Among other conditions, GATT requires customs fees to be “limited in amount to the approximate cost of the service.” Therefore, they must first involve a “service” rendered, and the level of the charge must not exceed the approximate cost of that “service.”

Says Gowlings: “The AQI fees cannot be considered as GATT-compliant customs users fees in that the fees are applied irrespective of whether an individual conveyance is actually inspected, and irrespective of the actual need for an inspection to be performed given the nature of the shipment and the goods.”

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U.S. Businesses Press Congress for Increased Trade Compliance and Enforcement

Representatives from an unlikely coalition of industries – chicken, steel, soybeans, and pharmaceuticals – came together on Wednesday to testify before the U.S. Senate Finance Committee on the need for stronger trade enforcement. The business groups asked Congress to step up its game regulating international trade when it comes to protecting American business interests from […]

Representatives from an unlikely coalition of industries – chicken, steel, soybeans, and pharmaceuticals – came together on Wednesday to testify before the U.S. Senate Finance Committee on the need for stronger trade enforcement. The business groups asked Congress to step up its game regulating international trade when it comes to protecting American business interests from unfair foreign competition and negotiating trade agreements that standardize compliance requirements around the world.
US Senate
“Only when there are real teeth in trade agreements will the U.S. be able to use enforcement tools to protect our interests,” testified Richard Wilkins, treasurer of the American Soybean Association.

Mario Longhi president of U.S. Steel, and Leo Girard, international president of United Steelworkers, complained about the onerous requirements and time involved in taking retaliatory action against foreign competitors engaging in unfair practices such as dumping products at below normal values and creating networks of shell companies to circumvent U.S. trade laws. They expressed particular concern about South Korea, which they alleged is selling oil pipe for less than it costs to produce in an attempt to put the American steel industry out of business.

Committee Chairman Ron Wyden (D-Ore.) said he has been working since 2011 to pass a bill standardizing trade investigations and refocusing U.S. Customs officers on trade enforcement.

“Proper trade enforcement is an increasingly difficult job,” Mr. Wyden said. “It takes time, and the fact is that it’s impossible to stand up a trade case in a single day. But it’s essential for enforcement agencies to have the resources needed to do their jobs effectively. Too often, when these cases lag, American workers are losing their jobs and businesses are closing their doors. Succeeding in the global economy is already challenging enough; the U.S. cannot add to the difficulty by underfunding its enforcement efforts.”

“When enforcement is weak, slow or does not exist, we struggle to level the playing field,” said Bart Peterson of pharmaceutical company Eli Lilly and Co. “While enforcing compliance with the provisions of existing trade agreements is fundamental, it is equally important to have the highest standards enshrined in new agreements.”

Click here to read transcripts from the hearings and/or view the video (skip ahead 40 mins. for the start of the hearing).

 

 

Upcoming TPP & TTIP Free Trade Negotiations

On June 26, 2014, in International Trade, Trade Compliance & Strategy, by admin

Chief negotiators from the dozen countries that comprise the U.S.-led Transpacific Partnership (TPP) will be meeting in Ottawa from July 3-12 to resume talks that aim to create one of the world’s largest free trade zones.  To date, 19 formal rounds of TPP negotiations have taken place, plus several further meetings of chief negotiators and […]

Chief negotiators from the dozen countries that comprise the U.S.-led Transpacific Partnership (TPP) will be meeting in Ottawa from July 3-12 to resume talks that aim to create one of the world’s largest free trade zones.  To date, 19 formal rounds of TPP negotiations have taken place, plus several further meetings of chief negotiators and ministers.
Maze Solution
Discussions at the upcoming session are expected to focus on outstanding topics such as intellectual property rights, market access, and the elimination of tariffs. The U.S. and Japan, the two largest economies involved in the TPP negotiations, remain significantly at odds over the phase-out of tariffs, particularly concerning “sensitive” areas such as agricultural commodities and the trade in automobiles.

Next month will also see negotiators meeting in Brussels, Belgium from July 14-18 for the sixth round of the Transatlantic Trade and Investment Partnership (TTIP).

Negotiators will continue their discussions on issues such as trade in goods and services, regulatory harmonization issues, government procurement, environmental protection and labour rights, energy and raw materials, and opportunities for small- and medium-sized enterprises (SMEs).

Both sides have indicated they will spend one day meeting with representatives from industry, non-governmental organizations, consumer groups, trade unions, and other stakeholders to obtain their input and views, as well as provide them with an update on the negotiations.

 

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Are Proposed APHIS Inspection Fees “Illegal”?

In a submission to the U.S. Department of Agriculture (USDA) concerning its proposal to substantially raise the Animal Plant and Health Inspection Service (APHIS) fees, the Canadian Trucking Alliance raised a number of strong objections to “the way in which the APHIS program is administered, applied and funded.” (Click here to read more about the […]

In a submission to the U.S. Department of Agriculture (USDA) concerning its proposal to substantially raise the Animal Plant and Health Inspection Service (APHIS) fees, the Canadian Trucking Alliance raised a number of strong objections to “the way in which the APHIS program is administered, applied and funded.” (Click here to read more about the proposed fee increase, and here for the latest CTA press release.)

In addition to its various criticisms of the APHIS program, the CTA also states that it “believes the fees may be illegal under the North American Free Trade Agreement (NAFTA), which prohibits customs user fees.” This belief, however, appears to be in error.  Although Article 310 (1) of the NAFTA dealing with “existing fees” (i.e., those in effect at the time of the agreement) prohibits the adoption of “any customs user fee of the type referred to in Annex 310.1 for originating goods,” the fee specifically referred to in Annex 310.1, Section B (that which is applicable to the United States) is the U.S. Merchandise Processing Fee (MPF). As such, the APHIS fees (and any other fees collected by CBP on behalf of other federal agencies such as, for example, the Harbor Maintenance Fee) are outside the scope of the NAFTA.

The CTA likewise believes that the fees may also be an illegal violation of the General Agreement on Tariffs and Trade (GATT), “which says that all fees and charges shall not represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purposes.” This assertion would also seem to be mistaken.

Subsection 1(a) to Article VIII of the GATT related to “Fees and Formalities connected with Importation and Exportation” states that “All fees and charges of whatever character… imposed by contracting parties on or in connection with importation or exportation shall be limited in amount to the approximate cost of services rendered and shall not represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purposes.” CTA omitted a key aspect of the provision (emphasized above) when claiming the AQI fees are not GATT compliant and because APHIS states the fees are simply meant to adequately fund the actual costs of running its inspection program (however flawed or suboptimal the approach may be), they would appear to be clearly permitted within the GATT guidelines.

 

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State of Logistics: Slow Growth, Capacity Challenges Could Result in Higher Truck Rates

The Council of Supply Chain Management Professionals (CSCMP) last week released its annual State of Logistics Report. Compiled by business analyst Rosalyn Wilson with additional commentary by a panel of industry leaders, the report is widely used by supply chain management professionals and organizations to benchmark activity within the U.S. logistics environment. According to the […]

The Council of Supply Chain Management Professionals (CSCMP) last week released its annual State of Logistics Report. Compiled by business analyst Rosalyn Wilson with additional commentary by a panel of industry leaders, the report is widely used by supply chain management professionals and organizations to benchmark activity within the U.S. logistics environment.
Logistics Globe
According to the report’s findings, U.S. business logistics costs rose 2.3 percent in 2013, a significant drop from the 3.4 percent rise in 2012. Business logistics costs increased to $1.39 trillion, up $31 billion from 2012. In 2013, logistics costs as a percent of the nominal GDP declined to 8.2 percent meaning that the freight logistics sector was growing at a slightly slower rate than GDP.

Freight volume in tonnage terms rose in 2013 more than the number of shipments and revenue figures suggest, but rates remained “stubbornly flat” which left the trucking industry, in particular, in a weaker position in 2013. Rising costs for drivers, equipment and maintenance have pushed marginal trucking companies over the edge, as the number of bankruptcies rose last year.

Trucking capacity is becoming a “more severe” issue for shippers, the report says. The truck driver shortage is the “No. 1 concern for trucking executives,” who are coping with higher costs for drivers as well as compliance with tougher government regulations regarding hours of service and other driver standards.

Last year’s report had suggested that the shortage of qualified drivers, now believed to stand at about 30,000, could swell to nearly four times that by 2016. The trucking industry is struggling to hire and retain younger drivers to replace those who retire, quit, or die. It has been estimated that only about 17 percent of the current driver population is under 35.

Capacity reduction in trucking likely means higher rates for shippers. Wilson predicts carriers should be able to “significantly” raise truck rates this year, “probably in the 5 to 8 percent range.”

 

Proposed Increases to APHIS User Fees

The United States Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) has announced proposed changes to the fees it charges to recoup the costs of conducting agricultural quarantine inspections (AQI) at U.S. ports of entry. The proposal amends the user fee regulations by adding new fee categories and adjusting current fees charged […]

The United States Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) has announced proposed changes to the fees it charges to recoup the costs of conducting agricultural quarantine inspections (AQI) at U.S. ports of entry. The proposal amends the user fee regulations by adding new fee categories and adjusting current fees charged for certain agricultural quarantine and inspection services that are provided in connection with certain commercial vessels, commercial trucks, commercial railroad cars, commercial aircraft, and international passengers arriving at U.S. ports and customs on a cost recovery method. It is further proposing an increase in overtime inspection fees. The original notice concerning inspection fees can be found here and one dealing with overtime fees here.

The proposed changes would see commercial trucks with a transponder pay US$320 a year – a 205% increase from today’s fee of US$105. Including the $100 CBP portion, the total fee to a commercial vehicle using a transponder would be $420, up from $205, under the plan. Trucks without transponders will be charged US$13.50 per crossing, up 52% from today’s fee of US$10.75. A complete list of the proposed fee changes is available here.

APHIS states that the increase will ensure that the program has the financial stability it needs to continue the critical work of keeping U.S. agriculture safe and productive. APHIS notes that “as volumes of international trade and travel both increase, so do the risks that foreign animal and plant pests and diseases can enter and establish themselves in the United States.” It is the position of APHIS that “fees should fully fund the actual costs of running the AQI program and be borne by those using the services.” APHIS further notes that in many cases current AQI fees do not generate sufficient revenue to cover the costs of the services it provides and that while the program has hired several hundred additional inspectors and incurred other costs to meet the needs associated with the significant increase in international trade and passenger volumes over the past decade, its user fees have not risen commensurately during that time.

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CBP Accepting Applications for Trusted Trader Pilot Aimed at Streamlining Supply Chain Security, Trade Compliance

On June 23, 2014, in Trade Compliance & Strategy, U.S. Customs Issues, by admin

The U.S. Customs and Border Protection (CBP) recently issued a Federal Register general notice announcing the launch of the Trusted Trade Pilot testing phase.  The new test program combines the Customs Trade Partnership Against Terrorism (C-TPAT) initiative and the Importer Self-Assessment (ISA) program with the aim to “streamline the process through which importers can establish […]

The U.S. Customs and Border Protection (CBP) recently issued a Federal Register general notice announcing the launch of the Trusted Trade Pilot testing phase.  The new test program combines the Customs Trade Partnership Against Terrorism (C-TPAT) initiative and the Importer Self-Assessment (ISA) program with the aim to “streamline the process through which importers can establish to CBP that they strive to secure their supply chains and strengthen their internal controls for compliance with the existing laws and regulations administered or enforced by CBP.”
CBP Logo
The objectives of the program are to:

  • Increase the efficiencies in the existing trade programs
  • Strengthen security
  • Identify low-risk trade entities
  • Increase overall efficiency of trade
  • Achieve integrated U.S. government collaborations
  • Enhance information sharing between government agencies
  • Lower the administrative cost of participants by streamlining the application and validation process

CBP seeks to encourage entities through incentives not currently available to members participating in both C-TPAT and ISA with a whole government approach to supply chain security and trade compliance by strengthening government collaboration between CBP and FDA and between CBP and CPSC. Some of the benefits of the program for participants will include the following:

  • Reduced FDA targeting/examination risk score
  • Penalty offsets upon request
  • Participants who also participate in the Reconciliation Prototype will be allowed to flag and unflag entries for reconciliation retroactively after the entry summary is filed
  • CBP will reduce the number of Foreign Trade Zone (FTZ) on-site inspections
  • Drawback claimants will be exempt from on-site visits from Drawback Specialists
  • Full desk reviews will be limited to no more than one (1) per year for drawback claimants
  • CBP will process Post-Entry Amendments (PEA) on unliquidated entries within a ninety (90)-day timeframe
  • In the post-release environment, test participants may have the ability to choose an exam location

Applications for participation in the test program can be submitted through July 16, 2014. Selected applicants will be notified individually of their participation date.

 

Low Risk Bank Financing Could Help Boost Global Trade

On June 20, 2014, in International Trade, Trade Compliance & Strategy, by admin

A new report released today by the International Chamber of Commerce (ICC) provides empirical evidence that, in all forms, trade and export finance is a low risk bank financing technique – further supporting ICC’s advocacy of trade finance as a strong contribution to economic recovery and growth. The group says this evidence has the potential […]

A new report released today by the International Chamber of Commerce (ICC) provides empirical evidence that, in all forms, trade and export finance is a low risk bank financing technique – further supporting ICC’s advocacy of trade finance as a strong contribution to economic recovery and growth. The group says this evidence has the potential to alter attitudes towards trade finance, and therefore contribute to the growth of both global trade and the global economy.
2014-ICC Trade Report
Based on data contributed by the major global commercial banks and reflecting more than 4.5 million transactions totalling an exposure in excess of US$2.4 trillion, the ICC Trade Register Report 2014 (“the Trade Register”) empirically demonstrates that trade finance is lower risk than many other types of financing and assets. It records that short-term trade finance customer default rates range from a low of 0.033% to a high of 0.241%, which is a fraction of the 1.38% default rate reported by Moody’s for all corporate products (according to 2012 figures).

The report offers those involved in trade — whether in business, finance, government or multilateral institutions — a tool for understanding the risks, which should support liquidity and the regulatory oversight of the technique. Around 80-90% of cross-border trading activity relies on some form of trade finance, making the regulatory treatment of instruments such as letters of credit (L/Cs) and pre-export finance vital for the health of the world’s economy. In fact, it was the market’s concern that the regulatory requirements were subjecting trade finance to disproportionately stringent capital-adequacy standards that encouraged ICC’s Banking Commission, through an initial partnership with the Asian Development Bank, to initiate the Trade Register in 2009.

“The intention of the Register was to progress the understanding of trade finance, its importance to global trade and its highly-effective risk mitigation capabilities,” explained Kah Chye Tan, Chair of ICC Banking Commission. “The impact of the Register, however, is much greater. As the latest results show, the Register provides concrete fact-based evidence that trade finance is low risk which, if fully reflected in capital requirements, would help banks to give companies the financing support they need for their exports, and to contribute even further to the global economy as it recovers from the global financial crisis.”

 

Webinar: Export and Import of Rough Diamonds

CBSA/NRCan Single Window Initiative Trade Session on Kimberley Process  Canada is a comparatively recent entrant into the club of diamond producing nations but already ranks third in the world in terms of production value (approximately $2 billion). A great deal of emphasis is placed on the Canadian diamond industry as an alternative to the so-called […]

CBSA/NRCan Single Window Initiative Trade Session on Kimberley Process 

Canada is a comparatively recent entrant into the club of diamond producing nations but already ranks third in the world in terms of production value (approximately $2 billion). A great deal of emphasis is placed on the Canadian diamond industry as an alternative to the so-called blood or conflict diamonds mined in Africa. Canada was one of the main supporters of the Kimberly process, a certification initiative created in 2000 to help deter the trade of conflict diamonds.
Diamonds
The Canada Border Services Agency (CBSA), in conjunction with Natural Resources Canada (NRCan), is hosting a Trade Consultation Session, via WebEx, with a focus on the importation of products regulated under the Export and Import of Rough Diamonds Act.

The objectives of this webinar will be to provide participants with an update on the Single Window Initiative (SWI) as it relates to products regulated under the Kimberley Diamonds Process and to provide a forum for discussion on the following aspects:

  • Update of SWI
  • Business process changes for the Kimberley Diamonds Process
  • Data requirements for the Kimberley Diamonds Process

Date: Thursday, June 26, 2014
Time: 1:00 – 3:00 PM (EST)

This webinar is being offered in English and provided free of charge to participants.

Click here to register for this training session. Once you are approved by the host, you will receive a confirmation email with instructions for joining the session.

 

Canada’s New Anti-Spam Law Goes Into Effect July 1, 2014

On June 13, 2014, in Trade Compliance & Strategy, by admin

Ten years after the CAN-SPAM Act went into effect in the United States, on July 1, 2014, the Canadian Anti-Spam Law (CASL) goes into effect which forbids almost all unsolicited commercial electronic messages (CEMs). The new legislation will be one of the strictest anti-spam policies in the world and unlike the U.S. CAN-SPAM Act that allows for […]

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Ten years after the CAN-SPAM Act went into effect in the United States, on July 1, 2014, the Canadian Anti-Spam Law (CASL) goes into effect which forbids almost all unsolicited commercial electronic messages (CEMs). The new legislation will be one of the strictest anti-spam policies in the world and unlike the U.S. CAN-SPAM Act that allows for opt-out, the CASL is an opt-in for consumers – a fact which could significantly impact how companies (both in Canada and the U.S.) communicate with their Canadian customers.
No Spam
The CASL specifically:

  • prohibits the sending of commercial electronic messages without the prior consent of the recipient and provides rules governing the sending of those types of messages, including a mechanism for the withdrawal of consent.
  • prohibits other practices that discourage reliance on electronic means of carrying out commercial activities, such as those relating to the alteration of data transmissions and the unauthorized installation of computer programs.
  • provides for the imposition of administrative monetary penalties.
  • provides for a private right of action that enables a person affected by an act or omission that constitutes a contravention under that Act to obtain an amount equal to the actual amount of the loss or damage suffered, or expenses incurred, and statutory damages for the contravention.

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