 |
| Temporary Instructions for Reporting NRCan 5 Data Elements | 
Amendment 11 to Canada's Energy Efficiency Regulations was published in Canada Gazette Part II on October 12, 2011. This amendment came into force on April 12, 2012.
As part of the Regulations, importers have an obligation to report import information on energy-using products they import into Canada. HS codes for those products under Amendment 11 are still being compiled and will therefore not be in the ACROSS system for April 12, 2012. For the time being, NRCan has provided temporary instructions to facilitate the reporting of import data until the ACROSS system is fully functional. | |
|
 |
 |
|
| Canada, Japan Enter Negotiations on Free Trade |  | |
Following a bilateral meeting in Tokyo at the end of March, Prime Minister Stephen Harper and his Japanese counterpart announced that Canada and Japan have agreed to enter free trade talks. "These are important steps forward; historic steps forward," Harper said.
Harper said a deal would strengthen the Canadian economy by generating billions of additional dollars in commerce with Japan. He estimated Canadian exports to the island nation could increase by two-thirds.
After initially being shut out Trans-Pacific Partnership talks, both countries embarked on a joint study on economic co-operation, which Canadian government officials say found complimentary areas.
The Joint Study also noted however that both countries aren't seeing eye-to-eye on several trade issues, differing on rules of origin and labour provisions, for example, and that both will want to protect industries like agriculture - leading some to cast doubt on the seriousness of the exercise. Canada and Japan have long been important political and economic partners, with significant two-way trade in goods and services, investment, flows of technology and knowledge, and movement of people. In 2010, Japan was Canada's fifth largest trading partner while Canada was Japan's 18th largest trading partner. Total merchandise trade stood at approximately $22.6 billion Canadian. said.
|
| U.S.-Korea Free Trade Agreement Now in Effect |  | |
The U.S.-Korea FTA took affect on March 15, 2012. This agreement will promote the further integration of the U.S. and Korean economies and enhance the competitiveness of U.S. businesses in this large market.
As result of the agreement, almost 80% of U.S. exports of industrial products and almost two-thirds of agricultural products to Korea are now duty-free. .
This FTA also strengthens protections for intellectual property rights benefitting American innovators. You can access the tariff schedules for Korea and the U.S. on the USTR website here. Look for the links at the bottom of the page called "Korean Tariff Schedule" and "U.S. Tariff Schedule". The USTR website also has a link to the FTA Tariff Tool, which allows you to find out what the tariff will be for a specific product. Guidance from U.S. Customs can be found here |
| Canadian Truck Traffic, Freight Rates Increase |  | |
The Canadian spot market for truckload freight hits its second highest point in 11 years in February, according to TransCore's Canadian Freight Index. At the same time, trans-portation costs are climbing for Canadian shippers, according to the Canadian General Freight Index sponsored by Nulogx.
"Rising accessorial charges continue to be the primary driver of increasing freight costs for Canadian shippers," said Doug Payne, president and COO of Nulogx.
The TransCore spot market-based index climbed 1% from January, with equipment listings on Loadlink climbing 16% year-over-year. TransCore's index is based on its Loadlink freight-matching database, which the company says matches more than 13 million Canadian shipments and trucks a year.
|
| Preparing for the New FSMA Food Defense Standards |  | |
Protecting the US food supply from intentional adulteration requires coordination at all levels of government and throughout the private sector. Companies engaged in the manufacture, importation, distribution or storage of food for the U.S. market will be interested in a new article published by the Food and Drug Law Institute that provides an introduction to post-9/11 policy developments related to the incorporation of new intentional adulteration safeguards into U.S. food supply regulations.
The article reviews the authority granted to FDA by the Food Safety Modernization Act, the responsibilities of other government agencies in protecting against intentional adulteration, and the efforts of non-governmental entities to minimize risks in the supply chain.
|
| Canada to Counter-Appeal WTO Ruling on U.S. COOL |  | |
A World Trade Organization panel's ruling criticizing the U.S. government's country-of-origin labelling (COOL) law is now under appeal from both sides of the table.
The WTO has reported receiving formal notice that Canada, like the U.S., plans to appeal parts of last November's ruling from the WTO Dispute Settlement Body (DSB).
The U.S. filed its appeal on March 23, seeking to overturn the DSB's ruling that COOL violates Washington's WTO obligations and "does not fulfil its legitimate objective" of consumer education.
Canada, however, wants to shut down the part of the DSB's ruling that implies COOL's main objective was legitimate in the first place.
|
| More Container Rate Increases on the Way |  | |
Container lines are hitting shippers with a succession of price rises in a bid to return to profitability ahead of any further downturns in demand in the main tradelanes and excess capacity that will likely exist once a wave of new mega-boxships comes on stream later this year.
The world's biggest ocean carrier, Maersk Line, will push its rates up by $400 per 20-foot, $500 per 40-foot, $565 per 40-foot high cube and $630 per 45-foot high cube container on cargo from Far East Asia to the U.S. West Coast, starting May 1. said.
From Far East Asia to the U.S. East Coast, the carrier will apply increases of $560 per 20-foot, $700 per 40-foot, $790 per 40-foot high cube and $885 per 45-foot high cube container. Rates on dry shipments from the U.S. to Far East Asia will increase by $160 per 20-foot, $200 per 40-foot/high cube and $250 per 45-foot high cube container.
Elsewhere, Hong Kong-headquartered OOCL is looking for another $450 per teu from its Asia-Europe shippers from 1 May, following $800 and $450 price hikes in March and April, respectively.
|
| U.S. Importers Move Manufacturing Outside of China |  | |
Importers who sell to major American retailers report that they have or have plans to move a portion of their manufacturing outside of China due to increased costs of raw materials and logistics, as well as the difficulties China-based factories face in obtaining financing.
According to Capital Business Credit's (CBC) Global Retail Manufacturers and Importers Survey, 50% of U.S.-based importers have moved some of their manufacturing outside of China and a third (34.2%) are considering moving manufacturing outside of the continent.
When asked which countries manufacturing is being moved to, Vietnam was most popular at 33.3 percent and the U.S. was also cited as a top choice at 27.8 percent. Other countries that are popular manufacturing destinations include Pakistan (22.2 percent) and Bangladesh (16.7 percent).
|
|
|
| GHY E-Newsletter #25 April 2012 |
|
Budget 2012: Customs & International Trade Highlights
The Government of Canada, in its recent federal budget (Budget 2012), announced several significant new priorities and planned measures intended to have an impact on international trade and investment to and from Canada.
Several of these announcements may have an immediate impact on Canadian businesses, while several others will offer an opportunity for businesses to provide their views to the government before its plans are finalized.
International Trade
The budget states that the Harper government opposes "protectionism" and "trade-restrictive measures" on the world stage. To that end, it highlights the various free trade agreements and foreign investment protection agreements the government has signed, and says Canada is in "active negotiations" with 10 others, most notably a comprehensive trade agreement with the European Union and a FIPA with India.
The budget discusses a "refreshed Global Commerce Strategy" that it intends toannounce in 2013 following extensive consultations with Canadian businesses. It also extends Export Development Canada's temporary domestic powers for financing until March 2013.
Streamlining Canada's Trade Remedy System
The government announced that it is in the process of streamlining Canada's trade remedy system by which companies in Canada can seek relief from the impact of imports that have been "dumped" into Canada or where imports have been improperly subsidized. In Budget 2012, the government indicates it will be introducing legislation to consolidate the trade remedy investigative functions under the Canadian International Trade Tribunal (CITT). Currently, trade remedies are jointly administered by the CITT and the Canada Border Services Agency.
Update to Perimeter Security Action Plan - Pilot Projects
In December 2011, Canada and the U.S. launched the "Beyond the Border" Action Plan, which provides a practical road map for facilitating more secure and rapid trade and travel across the Canada-U.S. border. Budget 2012 indicates that pilot projects implementing the Action Plan will soon begin at border crossings in Prince Rupert, B.C. and Montréal, Quebec, where "smarter systems" aimed at having goods screened only once will be deployed to reduce redundant multiple inspections of freight and baggage by Canadian and U.S. customs and border security authorities.
Comprehensive Review of Preferential Tariff Regime
Since 1974, Canada has applied a general preferential tariff regime to certain developing countries that trade with Canada predicated on promoting economic diversification and growth in the developing world. Noting that certain developing countries have experienced "significant shifts" in wealth and economic competitiveness since the 1970s, Budget 2012 proposes a comprehensive review of Canada's general preferential tariff regime to ensure that this form of
development assistance is appropriately aligned with Canada's development policy objectives.
Other Measures
* The Treasury Board will develop an Action Plan to address the various recommendations of the Red Tape Reduction Commission (eight of which pertain directly to the CBSA) that aim to deliver more efficient administration of regulations in order to reduce frustration and lower costs for Canadian business.
* The Canadian Food Inspection Agency (CFIA) will change how they monitor and enforce non-health and non-safety food labelling regulations which will help the agency cut $56.1 million from its overall budget by the next fiscal year.
* Canada will change the vehicle fuel consumption testing requirements to better align with those in the United States; this will affect the Green Levy Tax and amendments will made to the Excise Tax Act.
* Tax relief will be put in place for foreign-based rental vehicles temporarily imported by Canadian residents.
* Effective June 1st, travellers' exemptions will be increased to $200 and $800, for Canadian residents returning from abroad after 24-hour and 48-hour absences, respectively.
|
|
Auditor General: Border Controls on Imports Need Better Monitoring
While controls on commercial imports at the border are generally working, they need to be better monitored, says Michael Ferguson, the Auditor General of Canada, in his 2012 Spring Report. The Canada Border Services Agency (CBSA) works with other federal organizations to ensure that consumer goods entering Canada  conform with Canadian laws and regulations.
"We know the controls are generally working because we tested them, not because the responsible departments were able to tell us so," said Mr. Ferguson. "The Canada Border Services Agency and other departments need to be better at monitoring of their controls at the border."
According to the Agency, it processed 13 million shipments of commercial products in 2010-11, about 4 million of which were subject to federal import controls.
Some goods examined in the audit were allowed to enter the country even though they did not meet their import requirements. These were most often goods for which Health Canada is responsible, but for which there is no agreement with the CBSA explaining how border services officers should identify and deal with the goods.
The audit also found that border lookouts and examinations-controls reserved for shipments that are considered higher risk-need to be better managed. In 40 percent of cases reviewed by the audit, the results of examinations were incorrectly or incompletely recorded. The CBSA does not keep a record of how many shipments are stopped as a result of border lookouts. These gaps in monitoring make it difficult to determine whether the controls are working as intended.
"We looked at a sample of import transactions over a limited period. Knowing whether border controls continue to work as intended will require better monitoring on an ongoing basis," said Mr. Ferguson.
|
|
CBP Begins Move to ACE for Sea/Rail Manifests, AMS Phased Out in Six Months
The Customs and Border Protection Agency officially launched the transition for rail and sea cargo manifests to its Automated Commercial Environment (ACE) system with a notice in the Federal Register on March 29. The Agency expects that all rail and sea cargo manifests will be made using the CBP's modernized system by the fall.
 ACE begins after a six-month transition period and will become the only CBP-approved electronic data interchange system for filing required advance ocean and rail cargo information to the agency when the period is completed. ACE will replace the aging Automated Manifest System (AMS).
"This achievement is a result of the dedicated teamwork between CBP, the private sector, and participating government partners," said CBP Acting Commissioner, David V. Aguilar. "ACE is part of the CBP modernization process that is essential to facilitating trade and security, speeding the flow of commerce into the country."
Although the agency said AMS will continue to operate during the transition period and may still be used in the normal course of business for other purposes, it will no longer be available for purposes related to transmitting to CBP required advance ocean and rail cargo information.
ACE is a multi-year project to modernize the business processes essential to securing U.S. borders, speeding the flow of legitimate shipments, and targeting illicit goods. ACE is a key part of CBP's layered defense to facilitate trade and border security. CBP will continue to work with the affected trade community to ensure a complete and efficient transition to ACE.
|
|
Canada's Exports Need to Be Reoriented to the New Global Economy
In response to the global financial crisis, Canada's broad economic strategy has been to grow domestic demand and to encourage Canadian businesses to retool and reorient to the new global economy, Bank of Canada Governor Mark Carney said in a speech earlier this month. "On the former, we have been successful," he noted. On the second, he urged greater focus.
"As effective as the reliance on domestic demand in general and household spending in particular has been, the limits of this growth model are becoming clear," the Governor told business and community leaders in the Kitchener-  Waterloo region.
In contrast, Canada's export performance has been weaker than in prior recoveries. "Exports still have not regained their pre-crisis peak, and in fact remain below their level of a decade ago. Canada has steadily lost global market share throughout this period," Governor Carney noted.
While competitiveness has played a role, the primary explanation for Canada's deteriorating xport performance is the weakness of our main export markets. "The combination of overexposure to the U.S. market and underexposure to faster-growing emerging markets is almost entirely responsible for Canada's further loss in world market share over the last several years," said Governor Carney.
The Bank expects that the core challenges and opportunities-a weak U.S. recovery, strong growth in emerging markets, historically high commodity prices and persistent strength in the Canadian dollar-are unlikely to change. "Emerging markets represent the greater opportunity for Canadian exporters," Governor Carney said.
The Governor urged businesses to refocus on developing new markets and new products; retool by investing in plant, equipment and ICT and developing new processes; and retrain by continuing to invest in our greatest resource - our people.
Carney noted that conditions in the Canadian economy have been somewhat stronger and the degree of slack somewhat smaller than the Bank had expected. While net exports have picked up somewhat, he said their contribution to growth will be limited by a still-weak level of foreign demand and ongoing competitiveness.
|
|
Canadian Manufacturers Ask U.S. to Rethink New Environmental Rule
Twenty Canadian industry associations are presenting a united front against the U.S. government's decision to broaden environmental legislation to the point where it's getting in the way of doing routine business.
Changes to the Lacey Act mandated by a 2008 farm bill require exporters to record where every scrap of plant fibre in a product originated. While the changes were made in an effort to help preserve the rainforests against untenable farming practices, a huge majority of the products containing plant materials that the U.S. imports originate in Canada, says the Canadian Manufacturing Coalition. The sheer volume of goods originating in this country should give Canadian firms an exemption.
 "To date, the imposition of this requirement on shipments from Canada has caused considerable disruption and has imposed unnecessary compliance costs," a March 16 letter the Regulatory Cooperation Council Secretariat of the Treasury Board of Canada says. "APHIS (the Animal and Plant Health Inspection Service of the US Department of Agriculture) receives approximately 6,000 import declarations every month and approximately 90% of these are filed by shippers from Canada. The direct costs pale in comparison to the in-house, corporate cost of completing, reconciling, matching and storing the required declaration information to the shipment destined to the United States."
Concerns are starting to snowball, CMC says. Companies in the auto and auto parts sectors, the chemical and plastics industries, the bioproducts industry and even nutrient supplement makers are starting to get worried about how to deal with "such a blunt import requirement" when supply chains cross both sides of the Canada-U.S. border.
Canada has a solid record when it comes to forestry management, the CMC says. Member associations have asked that the bilateral committee looking at ways to trim the thickening that has occurred at the border make the Lacey Act a top priority.
|
|
New Report Outlines Costs, Savings Associated with C-TPAT
U.S. Customs and Border Protection released its 2011 C-TPAT Costs & Savings Survey. CBP concludes from the review that C-TPAT "has become a vital part of supply chain security in the post-9/11 world" and that the program membership "continues to be a critical source of feedback and recommendations for improvement."
CBP states that the "overarching theme" of this survey is that "the value of C-TPAT membership cannot be measured adequately in terms of dollars and cents." On the one hand, there are indeed implementation costs and maintenance costs, which are offset by savings in only a minority of cases.
 In addition, a "non-ignorable minority of respondents" said they have not seen the expected improvements in processes that impact their profitability, such as faster border crossings, front-of-the-line programs and less-frequent inspections. At the same time, CBP said, "it is clear that C-TPAT members take pride in their membership, see it as an industry best practice and value it for reasons that go beyond a purely monetary frame of reference." These reasons include a best-practice approach to security issues that creates a business culture of more secure operations for all and constant improvements in security, the assurance that shipments will move predictably, reduced exposure to legal or financial risk, and the indirect benefits of efficiency and safety resulting from security activities that reveal equipment or personnel issues that do not directly impact security.
Other information revealed through this survey includes the following.
* Small numbers of importers and carriers reported their estimates of the costs of border delays in four different modes of transport. The median costs were $200 for land delays, $500 for air delays, $1,000 for rail delays and $1,500 for sea delays. * CBP asked what percentage of contracts for supply chain relationships these days require bidders to be C-TPAT certified. Eight percent of respondents said all of them while 9% said none. About 40% of respondents put the figure between 1% and 45% and about 30% said it was between 50% and 99%. * For the 75% of respondents who reported a dollar value for implementation costs related to C-TPAT membership, those costs ranged from $280 to $4 million, with a median of $17,370. For the 62% who reported a dollar value for maintenance costs, those costs ranged from $45 to $815,000, with a median of $9,000. * For the 26% of respondents who reported a number of person-hours for time savings related to C-TPAT membership, those savings ranged from 25 to 48,000 person-hours annually with a median of 373. For the 24% who reported a dollar value for cost savings, those savings ranged from $50 to $52 million, with a median of $5,350. * Asked to summarize the financial costs and savings related to C-TPAT membership as net positive, neutral or net negative, respondents fell about equally into each category. |
|
U.S. Customs Enforcing Wood Packaging Regulations
Canadian trucks have been turned back at the US border recently in what appears to be a strict enforcement of the regulations regarding wood packaging. One trucking company that has been turned back at the border advises 'carriers have been hit hard... It has been very frustrating.'
While Canadian wood packaging is still exempt from the ISPM15 requirements for the time being, the exemption does not apply to wood packaging containing or carrying goods of other origin. For example, if the goods are of Chinese origin, US CBP 'considers'' the pallet as being origin China. Further clarification has been received from CBP and Department of Agriculture on this issue.
 "The wood packaging material takes on the country of origin where the goods are made. For example if the products shipped are made in China then the assumption is that the wood pallets are of Chinese origin as well. Specifically those shippers who are in this type of commerce may use unmarked pallets but must issue a specific declaration stating that all unmarked wood packaging material is of either Canadian or USA origin. DO NOT MIX unmarked pallets with marked pallets or your goods will be rejected. Shippers are able to use pallets with ISPM 15 marking but all pallets must be the same. Canadian shippers of products produced in Canada may use unmarked pallets. However, the declaration regarding origin of wood packaging material must be clearly stated on all shipping documents.
Using CHEP pallets does not automatically exempt shippers from these rules. CHEP pallets can be heat treated and or unmarked. Again, shippers cannot mix CHEP boards that are marked or unmarked. Nor, should they be mixed with other pallets. These shipments may be refused entry. Also the shipper declaration "All of the unmarked wood packaging material in this shipment is of Canadian and or US origin." must appear on the shipper bills of lading and commercial invoice." |
|
CBP to Begin Allowing Electronic Submission of Certain Forms
U.S. Customs and Border Protection has announced its plan to begin soon a test of the Document Image System, which will allow participating importers and brokers to electronically submit certain forms required by CBP and other government agencies. This test will commence no earlier than April 6 and will continue until further notice. The CBP notice linked below describes eligibility criteria, procedural and documentation requirements, and test development and evaluation methods.
The first phase of this test will enable participating importers and brokers to transmit images of the following CBP and participating government agency forms with supporting information via electronic data interchange in an XML format in lieu of conventional paper methods.
DIS will provide for the storage of all submitted documents in a secure centralized location for the maintenance of associations with ACE entry summary transactions. Authorized CBP and PGA users will be able to select specific documents for review, change the status of documents and add comments based on the current state of their review. They will also be able to download or print the document image if necessary.
CBP notes that for the purposes of this test phase, APHIS, EPA and NOAA forms can be submitted only with ACE entry summaries that are certified for release.
Subsequent phases will incorporate additional forms and provide new interfaces for the integration of DIS with other systems in CBP and other government agencies. The exact dates and content of subsequent phases have not yet been determined but will be announced in the Federal Register when set.
|
|
U.S. Now Accounts for Less Than Half of Total Canadian Imports
According to a new report by Statistics Canada, between 2002 and 2011, the share of goods imported from the United States declined from 62.6% to 49.5%. In contrast, China's share of imports has shown the largest gains, increasing from 4.6% in 2002 to 10.8% in 2011.
The value of imports from the United States increased 8.6% from 2010 to $220.8 billion. Gains were led by imports of fuel oils, and other petroleum and coal products, both reaching record highs.
China remained Canada's second-largest source of imports for the 10th consecutive year. Imports from China amounted to $48.2 billion in 2011, an 8.1% increase from 2010. Electronic computers and other telecommunications and related equipment, including cellular telephones, have driven the growth of imports from China over the past decade.
Mexico remained the third-largest source of imports for the Canadian market in 2011, at $24.6 billion, up 11.1% from 2010. Automotive products, mainly motor vehicle parts, except engines, led the rise.
|
|
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.
If you would like to keep up to date on the latest developments in trade compliance and trade compliance strategies, please check out our Trade Compliance weblog.
Sign up for our RSS feed and get automatic updates to your favourite reader as soon as they're posted.
As well, you can follow any of the links below for the latest information, updates and links to articles of interest.     |
|
|
