| Join Us at 2011 CME Manufacturing Week |  | |
GHY International is once again pleased to be a sponsor of the 2011 CME Manufacturing Week events taking place March 22-24 at the Winnipeg Convention Center. Click here to find out more.
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| Authorization of Textile and Apparel Remission Orders Delayed by CBSA |  | |
The CBSA has advised that they are experiencing a delay in the issuance of annual renewals of authorizations required to import textiles and apparel under duty remission orders covering: tailored collar shirts; outerwear greige fabrics; shirting fabrics; outerwear apparel; blouses, shirts and co-ordinates; and, outerwear fabrics.
This delay arose during the course of a quality assurance review being conducted by the CBSA. The CBSA is initiating immediate action to resume the review and approval of annual authorizations.
Authorized apparel manufacturers and fabric producers will continue to have the ability to recover any duties that have been paid on qualifying goods by filing drawback claim. Additional information on this issue can be found
here.
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| Electronic Validation of Animal Health Import Permits |  | |
According to the Animal Health Regulations, importers of animal products and by-products, and commodities containing these as ingredients, are required to obtain an animal health import permit (dependent on commodity
and country of origin), issued by the Canadian Food Inspection Agency (CFIA). The importer is required to
obtain a permit for the commodity(ies) being imported, and to include any other documents that may be necessary for compliance with Canadian requirements (e.g. registration of livestock feed).
As of April 1, 2011, the CFIA Electronic Data Interchange (EDI) will accept only a valid animal health import permit number that matches the one issued to the importer by the CFIA. If the import permit is not valid, the EDI transaction will be rejected, and the commodity will not be permitted entry into Canada, until such time as
a replacement transaction (or version) is submitted.
Currently, live animals are not processed through EDI; however, all import transactional data for live animals is manually entered into the CFIA Import Control and Tracking System (ICTS), and the import permit number will be validated, based on the same validation points as stated above.
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| Proposed Changes to the Country of Origin Marking Rules |  | |
The Department of Finance is considering the possible replacement of Canada's two sets of country of origin marking regulations with one generic set of marking regulations to apply to all imported goods that are subject to marking.
The new regulations would use the same list of goods required to be marked as those in the current regulations, but use the marking exemptions used in the NAFTA regulations.
Click here for background information including a draft version of Schedule III Tariff Shift Rules incorporating the proposed changes.
It is understood that this issue will be discussed at the next meeting of the CBSA's Border Commercial Consultative Committee.
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| Tapping Technology to Protect the Supply Chain |  | |
A recent study signals that cargo theft remains an ever-growing issue in the U.S., affecting a wide range of goods within the supply chain, but that RFID technology might be a strong solution.
According to FreightWatch's 2010 Annual Cargo Theft Report, industry-wide cargo theft rose by 4.1% in 2010 and averaged 75 cargo theft incidents per month, a new record high.
The food and beverage industry was the hardest hit, accounting for nearly 21% of the total theft activity, with an average loss value of $125,000 per incident. Electronics accounted for 19% of all cargo theft with an average loss per incident of $512,000. |
| eManifest Update |  | |
The CBSA has requested that we help circulate the following reminder about the upcoming elimination of the "77YY" itinerant highway carrier code.
With the implementation of eManifest, all carriers will be required to use a CBSA assigned carrier code and the use of itinerant carrier codes will be eliminated. As such, effective April 1, 2011, the Canada Border Services Agency (CBSA) will no longer accept the "77YY" itinerant highway carrier code.
Carriers currently using code "77YY" should obtain a unique, CBSA-assigned, carrier code as soon as possible. Information on obtaining a carrier code can be found on the CBSA Web site here and copy of the CBSA notice to carriers about this issue can be downloaded from our website here.
For additional updates from the CBSA concerning the progress of eManifest implenmentation, please visit Tradelines here.
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ON TIME Act Likely DOA Says Jacobson |  | |
A bill recently introduced in Congress calling for a "freight fee" on international trade goods could, if approved, cost Canadian and U.S. importers and exporters an estimated $420 million a year over 10 years.
Sponsored by California Republican Ken Calvert and Illinois Democrat Jesse Jackson Jr., the bill would impose a "nominal ad valorem fee" equal to .075 per cent of an article's declared value. The fee would be capped at a maximum of $500. Funds collected from the freightage fees would then supposedly be used for road and highway work. The import-levy bill, called the "Our Nation's Trade, Infrastructure, Mobility and Efficiency Act" or the ON TIME Act, was first introduced in 2009, but failed to pass before the session ended.
U.S. Ambassador David Jacobson however says that Canadian businesses shouldn't be worried about the proposal, which likely won't make it far in the legislation process in Washington. "It's kind of like a private members bill here in Canada," Jacobson told CTV's "Power Play" program, adding that in the context of a trillion-dollar trade partnership, the obscure bill should not be a cause of great concern for Canadians. "I don't think we should get too exercised," he said.
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| GHY E-Newsletter #15 February 2011 |
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Changes in Regulations Concerning Wood Packaging Material Between Canada-USA
Truckers Warn New Pallet Requirements Could Slow Trade at the Border 
The Canadian Food Inspection Agency (CFIA) and the United States Department of Agriculture's Animal and Plant Health Inspection Service (USDA-APHIS) are moving forward to remove the current exemptions that allow Canadian and U.S. wood packaging material to cross the border without first meeting the treatment and marking
requirements that apply to wood packaging material from the rest of the world. These actions have been deemed necessary to prevent the introduction of new forest pests, as well as slow the spread of forest pests already established in North America.
The less restrictive requirements on Canadian and U.S. wood packaging moving between the two countries had been based on the premise that because of their common forested boundary Canada and the U.S. share to a reasonable degree the same forest pests. However, a USDA pest risk analysis conducted last year determined that there are some unique forest pests and pathogens that are established in Canada and have the potential to be introduced or reintroduced into the U.S. via the movement of WPM.
Under the International Standard for Phytosanitary Measures No. 15 (2009) that will become applicable as a result of these policy changes, wood packaging must be heat-treated or fumigated with methyl bromide and marked accordingly with an ISPM 15 compliant approved wood packaging certification stamp.
Canada and the United States are aiming for full implementation of ISPM 15 for WPM as early as the summer of 2012. At that time, shipments with wood packaging material found to be non-compliant will not be permitted to enter the country of destination. If live pests are detected, the importer may also be required to treat the shipment to prevent pest escape, before having it returned to the country of origin.
In the meantime, regulators are working together on development of a phased approach to implementation based on consultation processes in both countries.
The Canadian Trucking Alliance (CTA) has expressed concerns about supply chain disruptions at the border that could result if enforcement of the new standard begins before there are enough ISPM 15 compliant pallets in circulation to meet demands. According to USDA estimates, about 320 million pallets are used every year to transport goods across the Canada-U.S. border.
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Rx for Canadian Customs Compliance
Some basic tips that can help avoid stress when implementing & managing a successful trade compliance program
In the January 10, 2011 Journal of Commerce, Robert Pisani, a well-known international trade lawyer who was formerly Senior Attorney at U.S. Customs Headquarters in Washington, outlined some of the compliance challenges facing U.S. importers in 2011. While many of the challenges described are shared by their counterparts here in Canada, considerable differences exist in terms of the regulatory specifics involved. Here then is a similar prescription for Customs compliance to that provided by Mr. Pisani, but one that's written from a Canadian perspective.
As rightly noted by Mr. Pisani in his article, the "foundation of Customs compliance hasn't really changed" - what has though are the various factors now making it a more challenging and complex undertaking than ever before. Aside from the increasingly globalized nature of supply chains in general, foremost amongst these is the comprehensive post 9/11 trade security regime that continues to spawn ever more government regulation affecting all aspects of the logistics and customs process on both sides of the border.
The economic downturn also hasn't made the job of compliance any easier. In a period of downsizing and belt-tightening for many companies, trade managers have been forced to assume additional responsibilities and tackle new regulatory burdens without necessarily having the corresponding staff or resources needed to deal with them effectively.
All this comes at a time when trade compliance expectations have never been higher; not only from government authorities looking at more efficient and targeted approaches to regulatory enforcement, but from companies themselves who increasingly view compliance as way of realizing cost savings while also minimizing their exposure to potential liability.
Given all these highly stressful "symptoms" in the present trade environment, what is the best means of implementing or managing an effective compliance program? >> Read more here.
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Canada to Increase Export Duties on Softwood Lumber
The Canadian government has indicated that it will increase export charges on softwood lumber to the United States, after an arbitration court ruled it had wrongly subsidized lumber exports. In January, the London Court of International Arbitration supported U.S. claims that Canada broke the terms of the bilateral Softwood Lumber Agreement, levying a fine of $60 million against the lumber industry in Eastern Canada.
At the time, International Trade Minister Peter Van Loan remarked that while the tribunal had ruled in favour of the U.S., it did not fully support the Americans' claim. "I note that the tribunal rejected 97% of the United States' $1.86 billion claim as having no basis," he said.
The breach in this particular case is related to the use of the adjustment factor in the calculation of the volume of exports to the United States. Canada applied the adjustment factor to some provinces beginning July 2007, but the tribunal determined that Canada should have applied it beginning January 2007.
To bring Canada into compliance with the pact, Van Loan said Ottawa will implement additional export charges of 0.1% and 2.6% for Ontario and Quebec, respectively. "The government will complete the necessary steps in parliament to implement these additional charges as of March 1, 2011," the minister said.
The dispute is one of three between the two countries over the 2006 agreement, which was designed to regulate the multi-billion-dollar trade. In a previous case, Canada was ordered to pay over $68 million in export duties after failing to correctly calculate quotas. The arbitration process in the remaining case could last for two or more years before a decision is made. While it is ongoing, B.C. Forestry Minister Pat Bell said there would be no change in how that province's lumber is shipped to the United States.
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Reading the Tea Leaves
Americans Are Positive About Trade With Canada-Creating Unique Promotion Opportunity
Americans are becoming increasingly skeptical of trade with most other countries, but they view trade with Canada as both good and fair. Canada is uniquely positioned to take advantage of this positive sentiment. A new publication for The Conference Board of Canada's International Trade and Investment Centre argues that Ottawa needs to sell the new U.S. Congress that trade with Canada is "natural."
"The sell is Canada. Not NAFTA, not globalization, not formal trade pacts," said Marc L. Busch, author of the publication. "When the U.S. public rallies around free trade, it rallies around free trade with Canada. Ottawa and Washington have to spend more time talking about the relationship as Canada-U.S. trade."
The publication, Reading the Tea Leaves: The 112th Congress and Canada-U.S. Trade, assesses the implications of the November 2010 Congressional elections for Canada. Promoting trade negotiations may be even less of a priority in the 112th Congress than it was when the Democrats controlled the House of Representatives.
The arrival of the Tea Party Republicans, who are suspicious of global trade agreements, could bolster the protectionist sentiment in Congress. Many of the Tea Party-backed representatives have expressed support for unfettered trade, while opposing free trade agreements as government-led "managed-trade".
Trade with Canada, however, is the exception to the emerging U.S. wariness. Research by the Chicago Council on Global Affairs indicates that approximately four in five Americans see trade with Canada as being "fair". In comparison, 41 per cent of American respondents see trade with Mexico as fair and just 29 per cent share this view about China. Polling by the Pew Research Centre finds that about three-quarters of Americans say trade with Canada is "good" for the U.S. economy - no other major U.S. trading partner achieves more than 60 per cent approval on the question.
This positive sentiment gives Canada a real advantage in promoting trade with the world's largest economy. Choice of language is crucial - Ottawa needs to remind the 112th Congress that Americans view trade with Canada as being just as natural as trade with North Dakota. Promoting "Canada" offers a better likelihood of being exempted from potential anti-trade legislation that may come before Congress, such as a future Buy American policy.
Source: Conference Board of Canada |
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Proposals in Canada-EU Trade Negotiations Would Add $2.8 Billion Annually to Canada's Prescription Drug Bill: New Study
Changes to Canada's drug patent system proposed by the European Union (EU) would add nearly $3-billion annually to Canada's prescription drug bill according to a new study by two of Canada's top academics on pharmaceutical policy.
The study, The Canada-European Union Comprehensive Economic & Trade Agreement: An Economic Impact Assessment of Proposed Pharmaceutical Intellectual Property Provisions, was authored by Professor Aidan Hollis of the Department of Economics at the University of Calgary and Paul Grootendorst from the University of Toronto's Faculty of Pharmacy. The study was commissioned and released earlier this month by the Canadian Generic Pharmaceutical Association (CGPA).
Canada and the EU are currently in negotiations for a comprehensive economic and trade agreement (CETA), which International Trade Minister Peter Van Loan hopes to conclude before the end of 2011. As part of these negotiations, the EU has tabled proposals that would considerably lengthen the period of market exclusivity for brand-name drugs in Canada and, according to the authors of the study released today, would provide "the most extensive structural protection for innovative drugs of any country in the world."
The study's key finding is that Canadian payers, such as the federal government, provincial governments, businesses and patients "would face substantially higher drug costs as exclusivity is extended on top-selling prescription drugs, with the annual increase in costs likely to be approximately $2.8-billion per year."
The authors also found that, if implemented, the proposals would delay the availability of lower-cost generics in Canada by approximately 3.5 years.
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The Future of Canadian Manufacturing
Clear the track and we can beat the world!
The future of the automotive industry and manufacturing in Canada generally depends not only on entrepreneurs who focus on customers, use technology intelligently and innovate boldly, but on governments being committed to implementing the right policies needed enhance competitiveness. That's the essential message of a commentary by Rob Wildeboer, Executive Chairman of the multinational auto parts giant Martinrea International, published earlier this month by a non-partisan Ottawa think tank (a copy can be downloaded from our website here).
Wildeboer wants to see Canadians re-engaged in the workforce of tomorrow through a comprehensive plan calling for:
* Secure access to US markets by dealing with American border security concerns.
* Canada to be the lowest tax jurisdiction for manufacturing.
* Government services provided at competitive costs.
* Protection of the environment in ways that don't unduly harm the economy.
* Maintenance and improvement of Canada's infrastructure.
* Maintaining focus on the country's areas of competitive advantage.
* More trade schools and/or apprenticeship programs.
* Smaller government that is more coordinated and consistent.
"Get these things right and opportunity will drive results," Wildeboer confidently asserts.
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North American Security Perimeter
Bilateral Deal a Step towards More Border Efficiency
Earlier this month, Prime Minister Stephen Harper and President Barack Obama announced talks at the White House aimed at sweeping away obstructions to cross-border trade while integrating efforts to deter transnational threats posed by criminals and terrorists.
The two leaders, touting the plan as a move toward greater security and prosperity, signed a four-page declaration committing the two countries to working more closely together on a wide range of cross-border issues.
To that end, the meeting resulted in the creation of a "Beyond the Border Working Group," which will be charged with the declaration's implementation and with reporting directly to the U.S. President and the Canadian Prime Minister in the next few months and on a regular basis after that.
The dual themes of "security" and "prosperity" were two of the main focuses of the new initiative that essentially supersedes the controversial Security and Prosperity Partnership (SPP) while carrying on many of its key objectives.
"To preserve and extend the benefits our close relationship has helped bring to Canadians and Americans alike, we intend to pursue a perimeter approach to security, working together within, at, and away from the borders of our two countries to enhance our security and accelerate the legitimate flow of people, goods, and services between our two countries," the declaration states.
"We intend to work together in cooperation and partnership to develop, implement, manage, and monitor security initiatives, standards, and practices to fulfill our vision," the document notes.
"We also recognize that cooperation across air, land, and maritime domains, as well as in space and cyberspace, our enduring bi-national defence relationship, and military support for civilian authorities engaged in disaster response efforts and critical infrastructure protection, have all contributed significantly to the security of our populations," it says, adding that increased information-sharing and working with all levels of government and the private sector is high on the agenda.
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Tariff Classification of Garments Impregnated, Coated, Covered or Laminated With Cellular Plastics Memorandum D10-14-59 outlines the policy of the Canada Border Services Agency (CBSA) in regard to the tariff classification of garments that have an outer layer made up of a textile fabric, which has been impregnated, coated, covered or laminated with cellular plastics, where the textile layer faces the exterior.
 The tariff classification of this type of garment is based on the character-istics of the visible, exterior layer.
Garments made up with an exterior, cellular plastic coated fabric is classified under either heading 61.13, Garments, made up of knitted or crocheted fabrics of heading 59.03, 59.06 or 59.07, or heading 62.10, Garments, made up of fabrics of heading 56.02, 56.03, 59.03, 59.06 or 59.07.
Importers, who have been issued a National Customs Ruling or an Advance Ruling for garments whose exterior layer is made up of a cellular plastic coated fabric, where the textile layer faces the exterior, should contact their local CBSA regional office in order to have their ruling(s) confirmed or updated.
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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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