Courtesy of Supply Chain Brain American Shipper | January 27, 2011 A bipartisan handful of senators have introduced legislation to support Congressional passage of several pending U.S. free trade agreements and calls to end anti-competitive supports for the country’s sugar manufacturing industry. Sens. Rob Portman, R-Ohio, and Joseph Lieberman, I.-Conn., proposed the so-called 2011 Creating [...]
Courtesy of Supply Chain Brain
American Shipper | January 27, 2011
A bipartisan handful of senators have introduced legislation to support Congressional passage of several pending U.S. free trade agreements and calls to end anti-competitive supports for the country’s sugar manufacturing industry.
Sens. Rob Portman, R-Ohio, and Joseph Lieberman, I.-Conn., proposed the so-called 2011 Creating American Jobs Through Exports Act, which calls for congressional passage of U.S. free trade deals with South Korea, Colombia and Panama. The bill would also reinstate President Obama’s trade negotiating authority.
“Passage and adoption of the three pending trade agreements would be an immediate action to spur economic growth by opening up markets for U.S. businesses,” said Portman.
Sens. Jeanne Shaheen, D-N.H., and Mark Kirk, R-Ill., announced the Stop Unfair Giveaway and Restrictions (SUGAR) Act.
“The sugar support program costs consumers $4bn a year to disproportionally benefit a limited group of wealthy sugar producers,” Shaheen said. “We must stop sugar’s sweet deal.”
A Harmonized (Tariff) Christmas – Credit: Tyler Brown, Sr. Export Technical Representative, Office of Export Compliance, Jet Propulsion Laboratory (reprinted with permission).
(SEDA-Council of Governments) – For this analysis, we assumed that the Lords, Ladies, maids, and entertainers are not performing defense services. Articles and material would appear to all be EAR99. Dealing only with the associated hardware, I propose the following…
A Harmonized (Tariff) Christmas
(SEDA-Council of Governments)
For this analysis, we assumed that the Lords, Ladies, maids, and entertainers are not performing defense services. Articles and material would appear to all be EAR99. Dealing only with the associated hardware, I propose the following HTS designations:
• Twelve drummers drumming: 9206.00.20 00 – Percussion musical instruments (for example, drums, xylophones, cymbals, castanets, maracas): Drums
• Eleven pipers piping: 9205.90.20.60 – Woodwind instruments: Flutes and piccolos (except bamboo)
Canada’s initiatives to foster greater cooperation between research universities and the business community, as well as a pending comprehensive trade agreement with the European Union, could open doors for Atlanta companies.
Canada’s initiatives to foster greater cooperation between research universities and the business community, as well as a pending comprehensive trade agreement with the European Union, could open doors for Atlanta companies, Canadian Minister of Industry Tony Clement told GlobalAtlanta.
The Canadian government is investing heavily in research and development laboratories in an effort to attract talent to Canadian universities. It wants to see more collaboration between the academic community and business, especially in the areas of energy and environmental research.
Georgia universities and companies are invited to participate, Mr. Clement said during an interview at the Americas Competitiveness Forum in Atlanta, Nov. 15.
But the “big elephant in the room” is the Canada-European Union Comprehensive Economic and Trade Agreement that is expected to be ratified by the end of 2011, Mr. Clement added. Georgia companies will be able to use this “massive trade deal” as a “gateway to the EU and vice versa,” he said, noting that companies that operate in Canada will have opportunities for free trade with more than 500 million European consumers.
“This trade deal is not at the top of mind with many media, nor is it part of our political discourse yet, but it’s going to be huge,” he said.
For the complete article: click here
It is clear that strategies of all kind appear to be critical for 2011 as the need for Integrated Trade Communities and expanding trade geographies increase, while in parallel the Agencies responsible to handle the administration of International Trade on behalf of our governments are using increased trade compliance to ensure the health, safety, and security of their citizens.
The Canadian Chamber of Commerce recently released a new white paper, Strengthening Our Ties: Four Steps Toward a More Successful Canada-U.S. Partnership.
The premise for this piece is summarized in this excerpt:
Canada and the U.S. have a long, vibrant history of cooperation and success, but it is clear that bilateral relations have drifted. At a time when the global economy is undergoing significant shifts, it is imperative that both countries recognize the advantages of the integrated North American market. Canada needs to develop a dedicated strategy for engagement in the U.S. that focuses on highlighting the gains from the bilateral arrangement and promoting free trade.
It is clear that strategies of all kind appear to be critical for 2011 as the need for Integrated Trade Communities and expanding trade geographies increase, while in parallel the Agencies responsible to handle the administration of International Trade on behalf of our governments are using increased trade compliance to ensure the health, safety, and security of their citizens.
What do you think? Are these issues real for you and your organization?
A survey conducted by a large North American foreign exchange provider found that 80% of the corporations surveyed acknowledged that their businesses were exposed to significant foreign exchange risk. However, only 42% of these corporations indicated that they currently employ currency hedging techniques to manage their risk.
Managing Risk Should be Strategic
Our friends at Western Union Business Services have published a paper titled, Foreign Exchange Risk Management: Protect Your Profits and Prosper in an Uncertain Economy. While this is an area that I have no direct experience handling, I found it interesting and relevant for this site because it address’ how the act of managing foreign exchange risk can be strategic for an organization.
It is worthy to note that according to their paper:
A 2006 survey conducted by a large North American foreign exchange provider found that 80% of the corporations surveyed acknowledged that their businesses were exposed to significant foreign exchange risk. However, only 42% of these corporations indicated that they currently employ currency hedging techniques to manage their risk.
Financial Risk Management is part of the ‘F’ in FACTS based approach
This suggests that there is a lot of risk left on the table with regards to Foreign Exchange, that would be one of the areas of focus under a FACTS based approach of an Integrated Trade Compliance Strategy. The FACTS based approach is a way to view the tactical detail of reviewing aspects that relate to your trade compliance program. The letters represent that broad categories that we have found you should consider in your review Financial, Advisory, Compliance, Technology, Service. Rick Riess, President of GHY International shares his vision of this “unpacking the facts” approach in the following excerpt from the GHY International website:
Key to our approach is a comprehensive “360 degrees” trade assessment that examines your entire supply chain as an integral cycle encompassing various Financial, Advisory, Compliance, Technology and Service aspects of your business (that we collectively refer to by the acronym “FACTS”).
After having explored the FACTS to discover potential opportunities to increase your cash flow, compliance, supply chain visibility, etc., and/or decrease your exposure to the risk of non-compliance, the cost of excessive duty payouts, etc., we then develop a heuristic plan customized to your specific situation that allows you to “test drive” proposed solutions and evaluate them before proceeding further.
This road map is more clearly articulated on the GHY International web site where we share this vision as part of our approach with importers and exporters in order to define a GAP. You can read more about this offering here.
Foreign Exchange Management Expertise
In the white paper from Western Union Business Services they address the top 3 myths about currency hedging, which includes;
- Currency hedging is speculative and risky.
- Currency hedging is only for the short-term; in the long run exchange rates always average out.
- I don’t need to hedge currency risk if I operate in US dollars and conduct foreign business in US dollars—I’m not exposed to other currencies.
They also cover the 3 key components of managing risk with a hedging program. This and other great tips can be found in the white paper, you can check it out here.
Ascertaining NAFTA in motor vehicles is a complex process as referenced in the case of Duhamel & Dewar Inc. vs. the Department of National Revenue. Just because you have an NAFTA Certificate signed by the United States Exporter doesn’t ensure ‘duty free status’. When claiming NAFTA the importer is always in a position of ‘Buyer Beware’.
Importing a North American Made Vehicle – doesn’t mean it’s ‘Duty Free’
Ascertaining NAFTA in motor vehicles is a complex process as referenced in the case of Duhamel & Dewar Inc. vs. the Department of National Revenue. Just because you have an NAFTA Certificate signed by the United States Exporter doesn’t ensure ‘duty free status’. When claiming NAFTA the importer is always in a position of ‘Buyer Beware’, says Alan Dewar, Vice President Canadian Operations, GHY International
CBSA can request import duties up front or EVEN UP TO 4 YEARS LATER (perhaps after you no longer own the vehicle)
Importers should always exercise caution including a NAFTA indemnification clauses to minimize their risks on retroactive duty assessments
Be aware that when importing a vehicles there are 2 Canadian Government agencies that have regulations that must be met;
- Transport Canada – controlling the registration, recalls, etc. (which is really a hindrance to dealerships or organizations who buy vehicles for sale)
- Canada Border Services Agency (CBSA) import declaration purposes and taxation
Additional resources…….
We have worked with a partner who can add a LOT with respect to vehicles (challenges, regulatory elements, etc.) heading either north or southbound (including RIV process, Motorhomes, etc.) You can check out their offerings on this topic at:
Linkedin: Inspired Solutions International
Website: Inspired Solutions International
CentrePort Canada is North America’s new 20,000-acre inland port that has been designated Canada’s first Foreign Trade Zone (FTZ). Located in Manitoba next to Winnipeg’s James Armstrong Richardson International Airport, CentrePort Canada offers greenfield investment opportunities for a wide variety of business operations including distribution, warehousing and manufacturing.
CentrePort Canada – Better Faster Cheaper
CentrePort Canada is North America’s new 20,000-acre inland port that has been designated Canada’s first Foreign Trade Zone (FTZ). Located in Manitoba next to Winnipeg’s James Armstrong Richardson International Airport, CentrePort Canada offers greenfield investment opportunities for a wide variety of business operations including distribution, warehousing and manufacturing.
CentrePort Canada is strategically located in the central time zone in the heart of North America. It boasts a modern, well-established network of highways, railways, air and sea connections to important regional and international markets, including eastern and western Canada, the United States, Mexico and Latin America, as well as Europe and Asia.
As an FTZ, CentrePort Canada has significant tax and cost savings to offer foreign investors and businesses looking for new ways to bring their products to the North American marketplace. FTZ benefits include deferral of customs duties and a GST exemption on products imported to Canada for warehousing or processing before re-export out of country.
CentrePort Canada features an impressive collection of transportation assets that are unmatched anywhere in the region and provide businesses with real advantages such as:
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- Flying through Winnipeg is cheaper than flying into U.S. destinations; airlines landing in Winnipeg can cycle their aircraft faster and more time in the air increases revenue; and international cargo flights are exempt from provincial fuel tax.
- Winnipeg is home to one of Canada’s top cargo airports, has more than 1,000 for-hire trucking companies, is at the junction of three major continental railways (CN, CP and BNSF), and is closer to European and Asian markets via the polar routes.
- Winnipeg offers great road, rail and air connections to North America – in fact, many major U.S. and Canadian cities are less than 24 hours away by truck.
Winnipeg also boasts extremely competitive business costs including affordable office space and land, low construction costs and hydro-electric energy rates that are among the lowest in North America. Winnipeg’s taxes are also lower than those of most major cities in Canada and the U.S. In fact, Winnipeg has a lower effective Corporate Income Tax Rate and a lower Total Effective Tax Rate than 58 of 59 major U.S. cities, according to a recent KPMG study.
All of these advantages mean that it is more efficient and cost-effective for international businesses to ship North American-bound goods through Winnipeg.
To find out how CentrePort Canada can work for you, email us at busdev@centreportcanada.ca or telephone 1-204-784-1300.
As a member of IE Canada we are pleased to share with you the following event that is coming to western Canada later this month, please read on for an outline of the event and registration information. Speakers for this event include Joy Nott, President of IE Canada, and Susan McDonald of Perseus Trade Solutions Inc.
Understanding Incoterms® 2010 & NAFTA Audit Workshops
IE Canada Incoterms 2010 & NAFTA Audit workshop Western Canada Series Brochure
As a member of IE Canada we are pleased to share with you the following event that is coming to western Canada later this month, please read on for an outline of the event and registration information. Speakers for this event include Joy Nott, President of IE Canada, and Susan McDonald of Perseus Trade Solutions Inc.
To raise your awareness before this event, Click here to watch a short video on these new Incoterms.
Sessions scheduled for the following dates and cities:
• November 15, 2010 – Winnipeg
• November 16 – Calgary
• November 18 – Vancouver
AM Session:
Effective January 1, 2011, Incoterms® 2000 will be replaced by Incoterms® 2010.
Incoterms® serve to allocate costs and responsibilities between buyer and seller and their use is expected to increase in drafting both international as well as wholly domestic contracts for the sale of goods. Incoterms® are considered by customs and tax authorities in conducting customs and tax audits and therefore a clear understanding of Incoterms and the implications of their use is critical by in-house counsel, CFOs, buyers, as well as those involved in customs, transportation and logistics functions. The changes from Incoterms® 2000 are intended to clarify the terms and the obligations they impose on the vendor and purchaser in each case and to expand the use of the terms for use in domestic transactions not involving any import/export of goods. Certain terms have been eliminated and new terms added. There are better distinctions between the terms, and cargo security obligations have been incorporated into the terms, among other changes. This workshop will: review the Incoterms® rules; review the changes; discuss best practices in using Incoterms® on contract negotiation and drafting; identify potential pitfalls; and discuss the interpretation of Incoterms® in Canadian law
PM Session:
Most importers and exporters are eager to take advantage of the duty relief granted under the North American Free Trade Agreement (NAFTA), but remain unaware of the risks and liabilities associated with claiming the NAFTA tariff treatment. Many still do not know that more than 50% of NAFTA Certificates of Origin either contain errors which render them invalid or are not supported with the necessary documentary evidence. With NAFTA origin audit activity on the rise, more importers are being shocked by assessments of financial penalties and/or retroactive duty and GST, while some Canadian manufacturers and exporters are losing their competitive advantage in the North American market. In this down to earth, easy to understand session, we’ll cover the following:
- What importers and exporters should expect during a NAFTA audit conducted by either the Canada or U.S. Customs Agencies.
- Learn from the mistakes of others – Common errors made on Certificates / Statements of Origin, and during NAFTA audits.
- Sharing NAFTA strategies used by manufacturers, exporters and importers.
- Do you really know how your Customs Broker is handling this issue? Are you at greater risk than you thought?
Registration Options:
Sessions scheduled for the following dates and cities:
• November 15, 2010 – Winnipeg
• November 16 – Calgary
• November 18 – Vancouver
Online: www.iecanada.com
By Phone: 416-595-5333 x 37 or 1-866-616-2243 x 37
By Fax: 416-595-8226 (attention: Jesse Arsenault)
By Mail: 160 Eglinton Ave. E, Suite 300, Toronto, ON, M4P 3B5 (attention: Jesse Arsenault)
