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| New Duty-Free Rules Take Effect June 1st | 
Under changes announced in the last budget, effective June 1st, the duty-free threshold on stays longer than 24 hours rises to $200 from $50, while the limit on stays longer than 48 hours rises to $800 from the current two-tiered levels of $400 and $750, depending on the length of stay. The new limits match those applied to U.S. travellers returning from Canada. |
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| AMPS Under the Canada Consumer Product Safety Act | 
Health Canada is currently conducting a consultation on the creation of the proposed Administrative Monetary Penalties (Consumer Products) Regulations under the Canada Consumer Product Safety Act. (CCPSA). These proposed Regulations are meant to further clarify the CCPSA provisions of the administrative monetary penalties process on matters such as classifying violations, fixing penalties, and the circumstances under which penalties may be increased or reduced. For more information on this proposal, please visit the Canada Gazette online.
The proposed regulations are currently undergoing a 75-day comment period, which ends on June 7, 2012. Comments received before this date will be formally reviewed and considered by Health Canada. |
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| Colombia-US Free Trade Agreement Comes into Force |  | |
A free-trade agreement between the U.S. and Colombia took effect May 15 after years of negotiations. Both countries hope the deal will boost mutual exports and investments, as well as underpin the two countries' close political ties. Colombia has long been seen as one of the United States' staunchest allies in the region.
The pact means a wide variety of goods, including machinery, raw materials and agricultural products, can be traded without import tariffs needing to be paid. The US International Trade Commission estimates that the value of US exports to Colombia could rise by more than $1 billion, while Colombian exports the other way could grow by $487 million.
CBP announced May 16 that the Automated Commercial System and the Automated Commercial Environment are now ready to accept claims for preferential tariff treatment (and exemption from the MPF) under the U.S.-Colombia Trade Promotion Agreement.
Also on May 16 CBP issued an information bulletin to importers, brokers and others specifying instructions for implementing the Colombia FTA. This bulletin addresses issues such as rules of origin, transit and transshipment, regional value content calculation, de minimis provisions, textiles and apparel, correction of false or unsupported claims, certification and other information requirements, verification of claims, protest rights and post-importation claims.
It should be noted that Colombia will no longer qualify for preferential treatment under the Generalized System of Preferences or the Andean Trade Preference Act.
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| WTO Decision on U.S. COOL Appeal Expected Soon |  | |
The World Trade Organization (WTO) Appellate Body is expected to deliver its decision this summer on a trade dispute arising from the U.S. country-of-origin labeling (COOL) law. The U.S. COOL law requires retailers and supermarkets to provide customers with information regarding the source of pork, beef and other food products.
Since its inception, U.S. trading partners, specifically Canada and Mexico, have been contesting the U.S. labeling requirement arguing to the WTO that the labeling law is a protectionist measure. Their efforts resulted in a finding by the world trade body that the COOL law violates its trade standards.
A WTO dispute panel ruled against the United States finding that the cost of segregation required by COOL puts an unnecessarily high cost on meat derived from animals imported from Canada and Mexico. The WTO finding was then appealed by the United States. The WTO ruling on the U.S. appeal may be announced in June.
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| Fuel and Freight Rates Must Rise Says Container Shipping Group |  | |
NOL Group, the Singapore- based container shipping company which includes APL and APL Logistics, published Q1 figures earlier this month showing a jump in net losses from US$10 million for the period in 2011 up to a massive $254 million this year. The cause was put down purely to the drop off in freight rates due to the now inherent over- capacity which is plaguing the industry plus the rapid rise in fuel prices, figures achieved despite the estimated $100 million in costs saved by the group in the first three months of 2012.
NOL's financial statement said that recent General Rate Increases have resulted in improved freight rates since March. However, the global economic outlook remains uncertain and the container shipping industry continues to face high fuel costs and overcapacity. If conditions for rates and fuel costs do not improve, the Group's financial performance will remain weak.
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| Senate Extends Export Import Bank Charter |  | |
The Senate passed legislation reauthorizing the Export-Import Bank on May 15, after voting down five amendments that would have limited the program's scope and power.
Renewing and expanding the authority of the bank, which helps U.S. companies sell products abroad by providing foreign buyers with loan guarantees and some forms of limited insurance, is a priority of the Obama administration as it seeks to boost U.S. exports.
The bill allows for an increase in the bank's loan-exposure cap, which has been stuck at $100 billion since 2001 and includes new rules intended to provide greater transparency for transactions of $100 million or more.
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| Still No Decision on Additional TPP Participants |  | |
The 12th round of negotiations toward the Trans-Pacific Partnership agreement concluded May 18 in Dallas, Texas.
The TPP is currently being negotiated by Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam. Canada, Mexico and Japan expressed an interest in joining in November 2011 and since then have been conducting bilateral talks with existing participants. Those discussions have centered on whether Ottawa, Mexico City and Tokyo are willing to put their various sensitive issues on the TPP negotiating table.
U.S. officials have suggested recently that no other countries will be added to the TPP until after a final agreement is reached. USTR Ron Kirk said that "if the nine of us don't produce an agreement ... within the near term, it doesn't matter" if other interested parties are ready to join or not.
Earlier this month, Trade Minister Ed Fast said six of the member states have given Canada "a clear, strong undertaking of support." That leaves the United States, New Zealand and Australia who need to be convinced that Canada is serious about putting the country's protectionist supply management system for dairy, eggs and poultry on the table.
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| CITT Initiates Preliminary Injury Inquiry re Carbon Steel Pipe |  | |
On May 16 the Canadian International Trade Tribunal imitated a preliminary injury inquiry into complaints from domestic producers that they have suffered injury as a result of the dumping of certain carbon steel welded pipe from Chinese Taipei, India, Oman, Korea, Thailand, Turkey and the United Arab Emirates.
On July 13, 2012, the Tribunal will determine whether there is a reasonable indication that the alleged dumping and subsidizing have injured the domestic industry. If so, the CBSA will continue its investigations and, by August 13, 2012, will issue preliminary determinations.
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| GHY E-Newsletter June 2012 |
Imported Food Sector Regulatory Proposal The Canadian Food Inspection Agency (CFIA) is proposing to introduce new regulations for certain imported food products that are not currently regulated under other commodity-specific regulations administered by the CFIA. This is as a result of the Food and Consumer-Safety Action Plan (FCSAP) initiative that was previously announced in 2007. Due to the ever increasing food imports into Canada which also includes imported ingredients that go into our domestic food products, newer food safety requirements are necessary to modernize and strengthen this system. Under this proposal, minimum food safety requirements would be established as well as, new record keeping requirements, the development and requirement of a recall plan, and the imposition of a licensing requirement for these food products would be established. It is anticipated that the cost for such a license, which would be valid for two years, will not exceed $300.00 and that only one license would be required per importer, regardless of the number of products imported. To obtain a licence, importers would also need to develop, implement and maintain a written Preventive Food Safety Control Plan outlining the actions and measures taken to keep their food safe and compliant with Canadian regulations. The goods that would be included under these proposed regulations are such products as, but are not limited to: bakery products; beverages; biological additives such as bakers' and brewers' yeast; coffee and tea; confectionery/chocolate; fats and oils; infant formula; grains, breads and cereals; juices; meal replacements and formulated liquid diets; snack foods; spices and seasonings.These proposed changes would include different types of importing businesses that may be subject to the new regulations and that may require a licence and include food manufacturers and importers, retailers, brokers, distributors, some domestic producers and food processors, and shipping services. The CFIA are currently receiving input and feedback from interested stakeholders and additional opportunities for comment will be available when this proposal is published in the Canada Gazette Part I which is anticipated in the fall of 2012. For additional background information, refer to the CFIA's Imported Food Sector Regulatory Proposal. |
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EDC's Global Infrastructure Project List Now Online - Great Resource for Canadian Companies
OExport Development Canada (EDC) recently announced that is has parlayed the success of its annual Canadians at Work: 50 International Infrastructure Projects publication into a new online resource for Canadian companies. "Connecting Canadian companies to global infrastructure projects, and to other Canadian companies already involved in them, is another opportunity to help create trade opportunities for Canada's infrastructure sector," said Francoise Faverjon-Fortin, Vice-President, Infrastructure and Environment, EDC.  EDC developed the site to deliver three key benefits for Canadian companies: * First, companies can register their projects online, giving them international exposure in the infrastructure sector. * Second, companies can be alerted to new opportunities being presented to EDC and DFAIT through local networks around the world. * Third, companies can research and learn about other Canadian companies in the infrastructure sector, allowing for information-sharing and networking opportunities. As Canadian companies register their companies and their projects online, the website will evolve and expand its network. More than four new projects will be posted monthly, as will a feature article discussing a specific area of Canadian innovation or expertise in the infrastructure sector. "Enhancing the ability of Canadian companies to identify and facilitate new partnerships is an important part of tapping into global supply chains, particularly in the infrastructure sector," said Ms. Faverjon-Fortin. "The website will help showcasing Canadian expertise and innovation towards these ends." |
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U.S. Retailers Call on Congress to Reform Law Regulating Imported Products Containing Wood or Plant Material
The National Retail Federation (NRF) earlier this month urged the U.S. Congress to review and revise controversial rules on the importation of wood products and plant material that retailers fear could lead to unfair government seizure of merchandise ranging from furniture to musical instruments. "Retailers recognize the need for environmental conservation but the current law leaves them guessing on which products are legal and which aren't," NRF President and CEO Matthew Shay said. "Congress needs to carefully review the Lacey Act to ensure that the goal of eliminating illegal logging is its primary objective, not penalizing businesses that are doing their best to comply with an unworkable law."  At issue is the Lacey Act, a century-old environmental law originally directed at illicit trade in threatened and endangered animals. Congress expanded the law in 2008 to ban trade in products containing illegally harvested wood or plant material. Those changes also require importers to document the genus, species and country of harvest of any wood or plant material contained in an imported product. The Justice Department considers merchandise containing illegally harvested wood or plant products to be contraband, possession of which can result in fines, imprisonment, and seizure and forfeiture of the goods. NRF has argued that the scope of foreign laws and regulations that could result in a violation is too vague, and it can be virtually impossible to trace all the wood and plant content in many manufactured products, making effective compliance and enforcement of the law extremely challenging. "It is impossible from looking at or testing wood to determine whether it was illegally harvested," Everill said in remarks prepared for today's hearing. "This exposes companies potentially to millions of dollars in losses through no fault of their own." The requirement to file declaration forms on the wood content of merchandise is "costly and administratively burdensome for both importers and the U.S. government while achieving little to prevent illegal logging," she said. For products made from composite wood such as particle board and fiberboard - itself made from sawdust, wood scraps and other remnants that would otherwise be discarded rather than recycled - determining the wood's origin is "virtually impossible." NRF is working with the Natural Resources Committee to develop a new bill that would provide due process to importers who have done proper due diligence to ensure their products contain no illegally harvested wood or plant material that would allow them to petition a court for return of any merchandise seized under the law. The new measure would also specify that products made with wood or plant material harvested before 2008 are exempt under the law, clarify the scope of foreign laws covered to those directed at the conservation and preservation of trees and plants, and address fundamental problems with the import declaration requirement. |
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Beyond the Border Update
Canada and United States Release Joint Plan for Emergency Border Traffic Management
On May 14, Public Safety Minister Vic Toews announced the release of the Considerations for United States - Canada Border Traffic Disruption Management guide. The guide, which was developed jointly by Public Safety Canada and the U.S. Department of Homeland Security, fulfills one of the first commitments under the Canada-U.S. Action Plan on Perimeter Security and Economic Competitiveness.
"The Action Plan on Perimeter Security and Economic Competitiveness sets ambitious, achievable goals that will advance economic opportunity and lead to a more efficient border. Implementation of this guide will help maintain economic stability and ensure that priority traffic moves freely towards and away from the secure Canada - US border during times of crisis," said Minister Toews. "This plan is the result of close collaboration with a wide range of stakeholders, including government officials from the local, state, and provincial/territorial level, to manage the flow of traffic near the border during a disruption."
The guide outlines best practices and identifies critical issues to consider when developing or updating traffic management plans to ensure they are tailored to address regional requirements and individual border crossings.
As a next step, Public Safety Canada (PS) and U.S. Department of Homeland Security (DHS) officials will engage with regional authorities to adapt the guide to specific points of entry and conduct cross-border regional exercises. PS and DHS will report annually on the percentage of priority border crossings that are covered by a regional plan and validated through an exercise.
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A Ten-Point Guide to Trading in China
Chinese import tariffs can be as much as 270% for certain products, usually levied on the importer, according to a new guide released by credit insurance specialist Atradius.
This proves an expensive disincentive to buy so foreign suppliers should account for it in their pricing, whilst ensuring that their supply agreements protect against these costs being passed on to them by the importer, advises the guide, called Trade Successfully with China: Ten Important Principles.
Foreign suppliers should also be aware that, although there may have been agreement that their country's law covers the contract of sale, certain aspects of Chinese law must still be complied with, including China's competition laws such as those relating to misleading advertising and predatory pricing.
Here are some other important notes from the guide:
Beware of import restrictions
Not all goods can be freely imported into China. The Ministry of Commerce - the government department in charge of foreign trade in China - regularly revises its lists of restricted or banned goods. It is therefore advisable for foreign suppliers to first clarify whether their goods are subject to any licensing or quota requirements. Otherwise, there is a risk that the goods will not be allowed into the country.
Observe foreign exchange administration regulations Importers must report payments to the Chinese State Administration of Foreign Exchange if the value of the goods and the amount paid differ by more than the equivalent of U.S.$10,000 for a single contract.
Although it is the importer's responsibility to comply with foreign exchange laws, foreign suppliers should take into account the risks associated with the Chinese foreign exchange control regime, as it can hinder or prevent payment: for example, some importers are not entitled to make advance payments or to pay the purchase price by way of letter of credit.
Atradius' chief market officer Andreas Tesch commented: "Growing affluence within China is stimulating private consumption and this creates real opportunities for foreign exporters, provided that they understand the nature of the market and take sensible measures to protect their assets."
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CBP Expands Industry-specific Compliance Centers
U.S. Customs Border Protection doubled the number of its centralized compliance facilities on May 11, announcing two more centers of excellence and expertise aimed at the petroleum and automotive/aerospace industries.
Acting CBP head David Aguilar said the agency will Centers of Excellence and Expertise (CEE), will create a Center of Excellence and Expertise (CEE) for Automotive and Aerospace in Detroit and another for Petroleum, Natural Gas and Minerals in Houston.
CBP began the program last October, establishing CEEs for the information technology and consumer electronics industry in Los Angeles and pharmaceuticals, health and chemicals in New York.
The CEEs, it said, help increase uniformity of practices across ports of entry, facilitate the timely resolution of trade compliance issues nationwide, and further strengthen critical agency knowledge on key industry practices.
The two new virtual centers will provide one-stop processing to lower the oil, automotive and aerospace trades' cost of business, provide greater consistency and predictability, and enhance enforcement efforts, said the agency. The CEE's, it said, represent the agency's expanded focus on "Trade in the 21st Century," to align customs procedures with modern business. Industry-specific CEEs, enable the agency to provide tailored support to unique trading environments.
The CEEs will bring all of CBP's trade expertise to bear on a single industry in a strategic location, according to the agency. They will be staffed with numerous trade positions using account management principles that are able to authoritatively facilitate trade issues, it said, adding that the CEEs will also serve as resources to the broader trade community and to CBP's U.S. government partners.
According to CBP, CEE personnel will answer questions, provide information and develop trade facilitation strategies to address uniformity and compliance concerns. They will also serve as a single point of processing for businesses enrolled in CBP's trusted shipper programs: the Customs-Trade Partnership Against Terrorism (C-TPAT) and Importer Self-Assessment (ISA).
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EU-US Mutually Recognize 'Safe Traders'
The EU and the United States of America formally agreed to recognize each other's safe traders, thereby allowing these companies to benefit from faster controls and reduced administration for customs clearance, as a result of a mutual recognition decision signed by both parties. EU and U.S. certified trusted traders will enjoy lower costs, simplified procedures and greater predictability in their transatlantic activities. Mutual recognition will also improve security on imports and exports, by enabling customs authorities to focus their attention on real risk areas.
What this means in practical terms is that the U.S.-EU Mutual Recognition Decision officially recognizes the compatibility of the U.S. Customs- Trade Partnership Against Terrorism (C-TPAT) and the EU's Authorized Economic Operator (AEO) program. USCIB has long encouraged an agreement between the U.S. and EU that would recognize compatibility between the U.S. and EU cargo security programs.
There are currently some five thousand companies approved as Authorized Economic Operators (AEOs) in the EU - a number which is growing year on year. The EU and USA are strategic trade partners, with imports and exports accounting for almost €500 billion in 2011. The joint decision will start to be implemented from 1 July 2012.
Mutual recognition of trade partnership programs prevents the proliferation of incompatible standards, and promotes harmonization of customs practices and procedures worldwide.
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USDA Switching to New Plant Data Inspection System
Long in the making, the USDA's new Public Health Information System (PHIS) is scheduled to begin on May 29. It will replace the Performance Based Inspection System at all regulated USDA establishments and for all meat and poultry imports and exports.
Dr. Elisabeth Hagen, USDA under secretary for food safety, has hailed the coming of PHIS as a method of "arming our inspectors with a powerful tool, on the ground, to carry out USDA's food safety mission more effectively."
Hagen says the new single database designed to gather, collate and use all data collected by the Food Safety and Inspection Service's (FSIS's) entire inspection regime is not just a change out in the IT system, but an entirely new inspection infrastructure.
According to food safety experts, PHIS will result in more thorough documentation of regulatory violations because it will generate a "pick list" for inspectors to use in recording the reasons behind their actions.
The new PHIS is going to put the plant's entire profile at the fingertips of inspectors, including non-compliance records, appeals, Food Safety Assessment reports, test results, recall actions, memorandums from interviews, and other information like the establishment's entire Hazard Analysis & Critical Control Points Plan.
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Canadian American Business Council Advocates Revision To 'MAP Act'
TFor 25 years, the Canadian American Business Council (CABC) has supported efforts to update and improve infrastructure and spur economic growth and job creation on both sides of the Canada/U.S. border. However, upon learning about latest provisions announced to the Moving Ahead for Progress in the 21st Century Act ("MAP Act") in the U.S. Congress, the CABC has urged conferees appointed to work out a compromise on the bill calling for an exemption to protectionist provisions.
"The proposed MAP Act includes provisions that represent a significant departure from existing 'Buy America' preferences," the letter stated. "Specifically, if at least one contract for a project receives any federal funding under this act, then all contracts for a project, regardless of their funding source, would be subject to Buy America preferences."
Alluding to concerns about the 'Buy America' provisions' applicability to Canada and their economic impacts on both countries, the CABC is asking the Senate to consider amending the 'Buy America' provision so that purchases of goods from Canada not be deemed to violate this requirement.
The letter continues: "'Buy America' provisions applied to Canadian companies will inhibit, not create, economic growth in both the U.S. and Canada given the integrated nature of our two countries' economies. To enhance our countries' collective competitiveness, it is important to reduce barriers to trade and investment and transition away from outdated 'Buy America' provisions that fail to recognize the integration of our economies."
The CABC is also drawing on support from business leaders on both sides of the border. In March, the CABC issued a survey that uncovered the top-of-mind issues in 2012 for business leaders in the United States and Canada. Cited among the top three issues was seeing Canada secure an exemption to Buy America provisions of procurement legislation.
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The Top 10 Ways to Use Trade Data
Trade data is import and export trade information that is taken from dozens of sources, including the U.S. Census Bureau and U.S. Customs, and assists businesses in a multitude of ways. Here are two identified by trade intelligence vendor Zepol Corporation:
Feel Awesome when Audited: Importers Stay Compliant
When dozens of import compliance sources are combined into one place, it's easy to adhere to the latest U.S. government regulations and keep track of records. Compliance data tools can help your company ensure that you're paying the correct duty rate for products, monitor changes, and even know if there's an anti-dumping case relevant to your product.
Recently, importers of bottom-mount refrigerators coming from South Korea and Mexico were under an anti-dumping investigation. The companies who were aware of the investigation early on had the best chance of responding proactively and discovering if their suppliers were subject to the dumping. Staying aware of recent investigations helped those companies avoid immense fees and also have the opportunity to defend themselves, gather documents, and even appeal the ruling to the ITA.
Stay Proactive. A Hurricane Hits your Supplier, Now What?
When you have access to over 100 million Bills of Lading at your fingertips, it's easy to proactively respond to changes in your marketplace. Importers can search for specific products and find suppliers across the globe, using near real-time information. Take, for example, the lag in electronic imports after the tsunami hit Japan. Trade data helped businesses be prepared for changes...before the storm hit.
To read the complete "top ten" list, click here.
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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.
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.
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