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Truck Rates Primed to Rise, Say Experts
|  | Trucking rates have nowhere to go but up, and they're ready now, several speakers told freight shippers at NASSTRAC's annual conference.
"Price increases will be coming, and they may be coming sooner rather than later," said Chad Thomas, director of intermodal at J.B. Hunt Transport Services.
He was talking about full truckload rates, but other speakers at the conference said the same dynamic holds true for LTL pricing.
"From a shipper's perspective, rates are going to go up," said Jon A. Langenfeld, transportation analyst and associate director of research at R.W. Baird & Co.
"Rates are going to move higher if for no other reason than the age of the capacity base out there," he said, noting that many older trucks are being retired.
"The age of the fleet today is as low as it's been in a generation, and that means there's not a lot of capacity out there for when demand increases."
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EU Launches Customs Security Portal
|  | Recently, the European Commission launched the first phase of a new web portal to help businesses to understand and follow the customs procedures for importing goods into and exporting goods from the EU group of countries.
Designed as a single point of access to relevant and practical information, the portal brings together in one website: EU legislation and explanatory documents on the safety and security amendment of the Community Customs Code; news items; and links to databases, documents and procedures used by national customs administrations. It also explains through the use of interactive "model transactions" the main steps in standard import, export and transit customs procedures into/out of the European Union.
For further information visit the European Customs Information Portal website.
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US Customs Proposes ACE Business Office
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CBSA and trade community to develop structure for ACE
Customs and Border Protection is setting up what it calls the ACE Business Office to work out the needs of the Automated Commercial Environment.
Dan Baldwin, assistant commissioner for international trade, said the business office will work with the trade community to clearly define what they want ACE to do before turning the project over to the Customs information technology office to develop the actual software.
"We decided to create an office to give ACE more structure," Baldwin said. "Then we can tell the IT people 'This is what you need to build,' so we can tell Congress 'this is what we intend to do and how much money we'll need to do it.'"
The effort stems from problems Customs has had in getting the $3 billion ACE fully operational. In 2001, Congress put ACE on a 10-year development cycle that runs out in fiscal 2011. Now Customs will have to return to Congress to receive further funding. Customs plans to fund ACE piece-by-piece.
The new strategy is to ask Congress for enough money to complete specific projects. Making the business case is what the ACE Business Office will do, Baldwin said.
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International Recognition for PMAC Accreditation Program
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The Purchasing Management Association of Canada's (PMAC) professional accreditation program has received recognition from the international purchasing body as meeting the highest global standard in supply chain education.
The International Federation of Purchasing and Supply Management (IFPSM), a union of 43 national supply chain associations, has awarded PMAC's Strategic Supply Chain Management Leadership Program (SSCMLP) its Certificate of Competence. This affirms that the PMAC program, which leads to accreditation as a Certified Professional Purchaser (C.P.P.), reflects current practices, learning methodologies and assessments. Officials say it is the only program in Canada to achieve this distinction.
Read the complete PMAC press release here.
It should also be noted that the Certified Professional Purchaser (C.P.P.) designation is being replaced by the new designation Supply Chain Management Professional (SCMP), a credential that PMAC's Board of Directs felt better reflects their field of practice of strategic supply chain management. PMAC states the new designation is now in the final stages of legal registration..
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U.S. Senators Unveil Proposed Climate Bill with 'Carbon Tariffs'
|  | U.S. Senators John Kerry and Joe Lieberman introduced new draft climate legislation this week aimed at cutting US emissions of GHGs.
Senators Kerry and Lieberman are the chief sponsors of the nearly 1,000-page piece of legislation, which aims to bolster the U.S. contribution to addressing climate change while spurring economic growth and creating jobs at home. The bill is in line with the United States' official international position to cut its emissions of carbon dioxide to 17% of 2005 levels by 2020. (An official summary of the bill is available from our website here.)
Critical for trade observers, proposed bill includes language that would allow for "border measures" (aka carbon tariffs) on imports from countries that haven't enacted strict regulatory measures on emissions of greenhouse gases.
The U.S. House of Representatives passed its own draft climate legislation last summer. That bill also included a provision that would impose a form of "carbon adjustment" at the border, although the provision would not take effect until 2014.
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FUN TRADE FACTS
|  | More than 1,200 beneficiaries of European farm aid received payments worth at least €1 million last year, according to recent analysis from farmsubsidy.org, a free enterprise EU watchdog group. Its analysis revealed the number of "subsidy millionaires" increased by a hefty 20% last year.
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GHY E-Newsletter Issue #8 May · 2010
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NAFTA Verifications on the Rise
What To Do When U.S. Customs Comes Calling
Cyndee Todgham Cherniak, Lang Michener LLP
Most Canadian businesses do not relish a visit from a Canadian tax auditor and also do not view with anticipation a fax from the United States Customs and Border Patrol (USCBP) asking to come for a visit to conduct a NAFTA verification of their certificates of origin.
NAFTA Article 506 sets out
the authority for each Party to NAFTA (Canada, Mexico and the United
States) to conduct verifications of the books and records of exporters
and/or producers located in the territory of another Party. As such, NAFTA
Article 506 permits U.S. Customs & Border Patrol Agency to conduct verifications on Canadian soil - i.e., the facilities of Canadian manufacturers/exporters.
The overall objective of an NAFTA verification is to confirm that products covered by a certificate of origin completed by the exporter or producer qualify as originating in accordance with the rules of origin in NAFTA (found in Chapter 4).
The Verification Process
Usually the NAFTA verification process starts with a fax from USCBP. They get the information from the certificate of origin that was provided by a U.S.-based importer when they claimed NAFTA duty-free treatment for imported goods from Canada. The fax/letter usually indicates that the USCBP would like to visit. USCBP usually provides a planned date for the NAFTA verification. The fax/letter also indicates for which goods they plan to verify origin. It can be just a single good that is sold or it could cover a broad range of goods. The fax/letter also indicates that if the Canadian producer refuses to allow USCBP to visit to conduct the verification, shipments to the United States will be denied NAFTA preferential treatment.
What should the Canadian producers/exporter do when they get such a letter?
1. Do not panic - this is normal and USCBP is making sure that the certificates of origin are valid and non-NAFTA goods are not being transshipped via Canada.
2. Call the USCBP officers to let them know that you are consenting to their visit. If you need to change the date, please let them know why the date of the visit needs to be changed.
3. Ask the USCBP officers what documents they would like you to organize for them to review - having all documents organized will make the visit run more smoothly and may shorten the time to must entertain the USCBP officers. Often USCBP will select a sample of export transactions.
4. Contact a Canadian lawyer or professional trade consultant to assist you organize the documents and to act as an observer during the visit.
5. Conduct a review of your records as soon as possible to identify any problems before the USCBP officers arrive. If you have not undertaken a origin review, this is the time to do it. You will need to create a bill of materials for each input in the final good and assess whether the rules of origin are satisfied. You will need to classify each input according to the HS harmonized code. You will need to look up the corresponding NAFTA rule of origin. You may need to apply a transformation test (regional value content or tariff classification or both). You may need to contact suppliers of inputs and gather information about the origin of the inputs.
To read the complete article and learn more about all of the other response steps you should take, please click here.
Cyndee Todgham Cherniak is counsel in the International Trade Law, the Business Law and the Tax Law Groups in Lang Michener's Toronto office.
Note: Although this article deals with USCBP verification initiatives, the same basic procedures are likewise applicable to the compliance enforcement efforts of the CBSA with respect to NAFTA origin requirements and proper certification.
GHY has the resources to needed to help safeguard your interests. Should you be contacted in this regard by the CBSA or USCBP, involving our compliance specialists in the process at the outset will help to prevent undue complications and possibly damaging expenses that could otherwise be incurred. As a precautionary measure, our experts can also help insulate you from the most pernicious aspects of a customs verification audit by ensuring that your firm is fully in compliance with all applicable NAFTA obligations and regulatory requirements.
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Small & Medium-Size Businesses Are Big International Traders
Canada's small and medium-size businesses (SMEs) are increasingly dependent on a secure and open border for their livelihood
A new report by the Canadian Federation of Independent Business states small business owners make up a significant chunk of Canada's exports. The report entitled: Trade Without Borders: A small business report card on the Canada/US border, involved a membership survey that produced 6,000 answers.
Corinne Pohlmann, CFIB's vice-president of national affairs, said companies with less than 50 employees represent 73% of all businesses that export and account for nearly one third of the total value of Canadian exports.
Pohlmann added "despite the large contribution of small exporters, the SME sector is usually an afterthought when discussing trade and border issues. Given the important role that SMEs play in the economy, lawmakers on both sides of the border should take careful note of these findings."
CFIB presented their findings at the Canadian Association of Importers and Exporters in Toronto, April 20. Canada Border Services Agency was also to present on Business Simplification and Service Improvements at the Canadian border.
CBSA Rates Poorly with Small Businesses
As part of the report, CFIB members were asked to rate the agency on certain aspects of their operations, and the service that they received from front-line staff. The intent was to assess how well the CBSA was meeting its mandate to facilitate the free flow of goods.
When it came to rating certain aspects of CBSA's responsibilities, the proportion of respondents who cited poor significantly outweighs those who answered good. Most troubling is the poor ratings that CBSA received for the amount of paperwork (42 per cent) and speed of crossings (43 per cent) as they affect all businesses attempting to conduct cross-border trade.
About one in two survey respondents rated the CBSA's 'Readability/simplicity of information' and 'Willingness to give interpretations' as 'poor'. Given most SMEs import goods and services from the US, the reluctance to provide explanations or opinions on border questions could be detrimental to the well-being of businesses. The latter is especially important given the context of quickly changing rules at the border so many smaller firms are really just trying to understand their obligations and the lack of willingness among border staff makes an already complicated process even more cumbersome.
Brokers Score Favorably (Except for the Brokerage Arms of Large Courier Companies)
By contrast, the report indicates a high level of satisfaction with customs brokers. More than two thirds of businesses were satisfied with their broker services with those industries most likely to be involved in trade such as manufacturing (80 percent), primary/resources (79 per cent) and wholesale (78 per cent) businesses being the most satisfied with their broker services.
The exception is the broker services of large courier companies, which get mixed results from those who use them. According to the CFIB, the following is is typical of many member comments with regards to large courier companies: "Dealing with [large courier company] as a broker is a huge hassle. From incorrect invoicing to incorrect currency calculations, I can't get any logical answers only the run around. As a small business owner I can't afford to waste so much time on continued mistakes."
Download the complete report from our website here. |
U.S. Trade Representative Releases Report on Foreign Trade Barriers
Issues raised could shape future trade policies
Last month, the Office of the U.S. Trade Representative released its annual report detailing foreign barriers to U.S. exports and investment. The report, entitled 2010 National Trade Estimate Report on Foreign Trade Barriers, covers 62 major U.S. trading partners and describes specific measures that restrict market access in each one.
 Issues raised in the NTE report are usually brought up during bi-lateral talks with concerned countries and may serve as the basis for future investigations of unfair trade practices.
Some notable highlights of the 2010 NTE report related specifically to Canada include the following:
* U.S. producers are frustrated by Canada's supply management regime that severely limits their ability to increase exports to Canada above the Tariff Rate Quota (TRQ) levels and also they claim, inflates prices Canadians pay for dairy and poultry products. The U.S. is pressing for expanded in-quota quantities for these products as part of the negotiations regarding disciplines on TRQs in the WTO Doha Round agricultural negotiations.
* The U.S. continues to urge Canada to facilitate cross border trade for returning residents by relaxing its taxation of goods that Canadian tourists purchase in the United States. Canada's allowance, which is linked to the length of a tourist's absence from Canada and allows a zero exemption for tourists absent less than a day, is approximately $47.00 for tourists absent for at least 24 hours, and approximately $379.00 and $711.00 for visits exceeding 48 hours and 7 days, respectively. The USA provides much more generous treatment for its returning travelers, with a minimum allowance of $200 and, once each 30 days, a $800 allowance for travelers returning after 48 hours.
* The U.S. has longstanding concerns about what it describes as "the monopolistic marketing practices" of the Canadian Wheat Board. The U.S. is seeking a level playing field for U.S. farmers, including through the elimination in the WTO agricultural negotiations of the monopoly power of exporting State Trading Entities (STEs) such as the Wheat Board.
* Softwood lumber continues to be a contentious issue between Canada and the United States. The United States filed a second request for arbitration on January 18, 2008, challenging a number of assistance programs implemented by Quebec and Ontario, which the U.S. believes are inconsistent with Canada's obligations under the anti-circumvention provision of the Softwood Lumber Agreement. An award in this arbitration is expected in 2010.
* U.S. suppliers of equipment and services have complained that the Ontario Power Authority's feed-in tariff energy program unfairly provides a disincentive to purchase energy efficient goods and services from the United States.
* The U.S. is urging Canada to implement legislative changes to provide for a stronger border enforcement system by giving its customs officers the authority, without the need for a court order, to seize products suspected of being pirated or counterfeit.
The complete report (404 pages) can be downloaded from our website here.
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U.S. Pushing for More Open Trade in Green Technologies
Trade barriers could be eliminated on a wide range of machinery and equipment
The U.S. is currently engaged in talks with Canada, the European Union and Australia about eliminating tariffs on solar, wind and related energy technologies to spur their use, U.S. Trade Representative Ron Kirk said last month.
Kirk said the U.S. is seeking an "early harvest" for an agreement on so-called green technologies, which means an environ-mental deal wouldn't have to wait for completion of the Doha Round of World Trade Organization talks.
"We think it only makes sense to make the trade of those goods more open," Kirk said at a Washington event on patent protections. "We think it is important enough" that it could move ahead on its own, he said.
The U.S. and EU in 2007 jointly proposed eliminating trade barriers for 43 products ranging from thermostats to universal joints for wind turbines to parts for boilers. The proposal also called for easing investment rules for environmental services and a longer-term, broader round of tariff cuts for other environmental goods.
Total trade in such products topped $600 billion in 2006, according to U.S. statistics.
Kirk didn't say when he hopes to wrap up a deal on environmental goods. President Barack Obama has made doubling U.S. exports a top economic goal, and spurring trade in green technologies could help accomplish that, according to Kirk.
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Anti-counterfeiting 2010 - A Global Guide
The Customs-Business Partnership: The Key to Better IP Rights Protection
Globalization of trade also means globalization of crime. By way of proof, one need look no further than the Customs and IPR Report 2008 produced by the World Customs Organization (WCO) for its 176 members, which revealed that over 2,000 brands were counterfeited in 2008, with counterfeit goods originating in 106 countries and destined for some 140 countries. Judging by the numbers, counterfeiting is a lucrative trade.
 While the crucial role played by rights holders in this struggle is now acknowledged, it is not always easy for businesses to guard against counterfeiting and piracy. The reasons for this are manifold. Rights must first be secured prior to being asserted before the appropriate authorities. Despite the comprehensive legal armoury available (eg, patents, trademarks, designs, geographical indications, new varieties of plants and copyright) to deter counterfeiters, this protection comes at a cost, which rises still further if proceedings are initiated following the detention of counterfeit goods.
Moreover, guarding against counterfeiting and piracy is not always feasible, given disparities in national laws. The only global legislation on IP rights is the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), which lays down minimum standards of protection that must be applied by all members. In addition, guarding against IP crime can be a complex undertaking, especially for small and medium-sized enterprises, which are often the target of choice for counterfeiters.
Download the complete article from our website here. This forms the Introduction to the publication Anti-counterfeiting 2010 - A Global Guide by Kunio Mikuriya which is available from the WTO here (brief chapters on individual countries can be downloaded separately -- registration required).
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The "Once or Future" Debate Over Assessment Method for Anti-Dumping/Countervailing Duties
U.S. Commerce Department gathering input on Retrospective vs. Prospective Systems for collecting anti-dumping/countervailing duties
The Department of Commerce has launched a process to gather information on the pros and cons of a retrospective versus a prospective system of collecting anti-dumping and countervailing duties on imported goods.
 This initiative was required by Congress last year, apparently due to longstanding concerns about the difficulties that U.S. CBP has had in collecting AD and CV duties, particularly on certain imported goods from China. It is unclear at this point whether the information gathering exercise will be followed by any specific actions.
In fiscal year 2009 the total amount of uncollected AD/CV duties was US$294.7 million, up sharply from US$180.5 million in FY 2008. China accounted for 94.2 percent of this total, or US$277.5 million, a significant increase from 81.1 percent in FY 2008 (US$146.3 million).
The U.S. government has taken several steps to try to improve its collection of AD/CV duties, with apparently unsatisfactory results. In 2006 Congress suspended provisions in trade remedy law that allowed new shippers of products subject to AD or CV duty orders to post a bond in lieu of a cash deposit to cover estimated AD or CV duties. New shippers, which had been implicated as a major source of the duty collection problems, were therefore required to post cash deposits. But given that such efforts have yet to make a noticeable impact on the amount of uncollected AD/CV duties, policymakers continue to consider other options.
One of these is a change to the U.S. system of collecting AD/CV duties, which unlike that of most major economies is retrospective (final duties are assessed well after the subject entries are made and can change between entry and assessment) rather than prospective (duties are assessed at time of entry).
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Finding time to follow the latest international trade
developments and programs of Customs agencies on both sides of the border
relevant to your business can be challenging, so we hope you find this
issue of our Tradelines e-newsletter to be a helpful resource in this respect. As
always, we'd greatly appreciate any opinions, comments and suggestions you may
have to help us improve this information resource, so please don't hesitate to
let us know what you think.
If you haven't already, we'd like to take this opportunity to invite you to
check out our Tradelines E-News weblog where you can
find current stories updated daily about business events and developments that
are important to Canadian importers and exporters. Sign up for our RSS feed and
get automatic updates to your favourite reader as soon as they're posted. As well, you can now follow GHY on Twitter for the latest information, updates and links to articles of interest.
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