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| USTR Seeking Input on TPP Negotiating Priorities for Canada and Mexico | 
The U.S. Trade Representative recently posted two announcements in the Federal Register requesting input from the public and stakeholder groups on how its Trans-Pacific Partnership agreement (TPP) negotiating priorities should be updated in light of the inclusion of Canada and Mexico in the list of TPP member countries. Instructions for participation online, or in person, are included in the links posted below. Regarding Canada Regarding Mexico The next negotiating round of the TPP will take place in Leesburg, Virginia from September 6-15, 2012. |
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| Video of Canada Consumer Product Safety Act Webinar |  | |
Health Canada has posted a video of its CCPSA webinar from October 5, 2011. Ms. Helen Ryan, Director General of Health Canada's Consumer Product Safety Directorate, provides an overview of the new CCPSA regime.
The video highlights key partners, the previous Hazardous Prouducts Act Part 1 with a particular focus on industry's key new obligations, Section 14, the duties in the event of an
incident, your mandatory reporting obligations, requirement to maintain and prepare documents for traceability.
To view the 90 minute webinar click here.
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| Canada-Japan Free Trade Talks Open |  | |
Canada and Japan took an initial step toward free trade negotiations with the first formal meeting of senior officials since the March declaration the two countries intended to seek closer economic relations.
Officials of the Joint Economic Committee met for two days of discussions in Ottawa during the first week of July in what is seen as a table-setting exercise to broader discussions.
Discussions focused on reconstruction efforts following last spring's earthquake and tsunami, bilateral co-operation in energy, natural resources, as well as co-operation in science and technology.
Although Japan is the world's third largest economy, with a gross domestic product of almost $6 trillion, the proposed Canada-Japan free trade initiative has been overshadowed by Canada's trade talks with the European Union and its bid to joint the TPP.
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| Streamlining Border Could Save Billions |  | |
Border delays, duplicate inspections and loads of paper work at the U.S.-Canada border could be costing Canadians more than $16 billion per year, according to representatives from Beyond the Border, an agreement aimed at aligning Canadian and U.S. regulations in order to facilitate the flow of cross-border goods and services.
The group, who presented at the Pacific Northwest Economic Region's (PNWER) annual summit on July 16, says the two countries need to work together to improve border security. But that doesn't always mean tightening up regulations.
"What we need to be most alert to is catching (threats) at point of entry" said MP Rob Merrifield, chairman of parliament's international trade committee, who spoke at the presentation.
"If we do that properly, we can relax the 49th parallel a little bit so we don't shoot ourselves in the foot when it comes to trade."
The group hopes more integration and cooperation between national security organizations and border officials will help identify threats before they arrive.
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| Michigan Voters May Consider Bridge Crossing |  | |
A committee created by the owners of the Ambassador Bridge turned in just over 600,000 signatures, almost twice the number needed for a ballot initiative that would require voter approval for a competing international bridge crossing. Filings made with the Secretary of State indicate that owners of the existing bridge spent $4.7 million on the ballot initiative.
However, before the issue can be put on the November ballot, the Michigan Bureau of Elections must review the signatures and make a recommendation.
In June, Michigan Gov. Rick Snyder (R) reached a public-private partnership agreement with Canada to build a second bridge crossing between the Detroit and Windsor.
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U.S.-Mexico Cooperation Strengthens Port Security and Capacity to Intercept WMDs
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The government of Mexico and the U.S. Embassy announced, on July 24, the successful implementation of the Megaports Initiative. This project was achieved thanks to cooperation between the U.S. Government and Mexico's Customs Administration (SAT) at four principal Mexican ports. The Megaports Initiative
is a U.S. Department of Energy program intended to enhance the ability of ports
around the world to detect and interdict illicit shipments of special nuclear
and other radioactive materials.
This was accomplished thanks to the donation of fixed and portable radiation
detectors and isotope identifiers, and by providing specialized training and
technical assistance focused on key cargo ports. This project was implemented
in the Mexican ports of Manzanillo, Altamira, Lazaro Cardenas, and Veracruz,
through which 92% of Mexico's containerized cargo pass.
Cooperation on this project between Mexico's Customs Administration (SAT) and
the Department of Energy began in 2007, and the July 24 ceremony signifies the
completion of the equipment installations at the four Megaports, and equipment turnover to the Government of Mexico for long term maintenance and operation.
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| GHY E-Newsletter August 2012 |
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How Your Company Can Benefit From the CBP's Transfer Pricing Policy Changes
U.S. companies that import goods from related foreign parties may soon be eligible to more easily implement post-import pricing adjustments required under transfer pricing policies and advanced pricing agreements. In a modification of its long-standing approach, U.S. Customs and Border Protection (CBP) issued a ruling on May 30, 2012 setting forth the agency's new policy toward the treatment of post-import pricing adjustments for related party transactions. Under the new policy, effective July 30, 2012, CBP will allow related parties to use the transaction value (i.e., the price actually paid or payable for the goods) in the appraisal of imported merchandise, even where post-import pricing adjustments apply, provided that: the companies' transfer pricing policy constitutes an objective formula, as determined by an analysis of enumerated criteria; and the parties demonstrate that the relationship did not influence the price. The ruling was in response to a Request for Internal Advice that had been under review by CBP for nearly ten years. A large percentage of imports into the United States involve trade between related parties. In fact, related-party trade accounted for over 40% ($1,295 billion) of the total goods imported into the United States during 2010. For tax purposes, U.S companies typically implement formal intercompany transfer pricing policies to ensure that the relationship of the parties does not impact the price of inter-company sales. To replicate the price of an arm's-length transaction, these transfer policies often provide for various post-import adjustments to the transfer price. Based upon this decision, CBP will now permit importers to use the transaction value to make both upward and downward price adjustments to the sales prices as required under a company's formal transfer pricing policy, provided that the transfer pricing policy constitutes an "objective formula," as determined by satisfying certain criteria. How Your Company Can Benefit:
1) Identify Cost Savings From Post-Import Adjustments:
In light of the recent ruling, importers that frequently purchase items from foreign related parties should evaluate whether taking advantage of valid post-importation adjustments could result in duty savings. 2) Review Transfer Pricing Policy and Customs Valuation Methodology:
Importers who wish to benefit from transaction value appraisement for their related-party goods should familiarize themselves with the five factors enumerated by CBP and assess their transfer pricing policies accordingly. If a pricing policy fails to comply with any one of the enumerated criteria, the respective imports will not qualify for transaction value appraisement. More sophisticated transaction pricing policies may require the assistance of outside auditors and counsel to ensure compliance with CBP's customs valuation policies. 3) Participate in CBP's Reconciliation Prototype Program:
CBP strongly encourages importers to participate in its Reconciliation Prototype Program for reporting post-import pricing adjustments. Reconciliation allows importers the flexibility to file entry summaries with CBP using the best available information, with the mutual understanding that certain elements, such as the declared value, remain outstanding. While enrollment in the program is not mandatory, importers claiming an adjustment without using the program must demonstrate at the time of entry that the price is arm's length. By contrast, the program allows importers twenty-one months to file a reconciliation entry, and provide the final value information to CBP. |
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'Comprehensive' Canada-India Trade Deal on Fast Track
A fifth round of talks for a Comprehensive Economic Partnership Agreement - CEPA - between Canada and India took place July 24 to 26 in New Delhi amid sudden optimism from the Harper government about the possibility of concluding the deal in the near future.
"I've been working closely with my Indian counterpart, Anand Sharma, to make these negotiations a success," Trade Minister Ed Fast said at a Canada-India Business Roundtable in Montreal. "Our shared aim is to conclude them in 2013."  For negotiations that really only got started at the end of 2010 with a country of more than a billion people and a vastly different economy, completing a deal the government estimates could give the Canadian economy a '$6-billion boost' would seem to be a coup. Beyond Fast's ambitious timeframe however, closer examination indicates that the deal is likely to be comprehensive in name only. "So far it certainly doesn't look as comprehensive as the C in CEPA would indicate," said Jean-Michel Laurin, vice-president of global policy at the Canadian Manufacturers and Exporters. Jason Langrish, the central business representative for the Canada-EU deal, but also a senior trade advisor for the Canada-India Business Council, shares that view. "It seems that several limitations have been placed on the negotiations on the part of the Indians -- a lot of things they don't want to discuss, including sub-national procurement and intellectual property," he said. That will certainly come as a disappointment to the Canadian Chamber of Commerce, which included ensuring high intellectual property standards as a must in their assessment of what the government should be looking for in all new trade agreements. To date, though, the focus has been on market access and to a degree - services and investment - while the Indian negotiators have been pushing for better access to the Canadian labour market for their numerous IT workers, according to Langrish. |
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Canada and the U.S. Launch New Technology to Reduce Border Wait Times
The Government of Canada recently announced the installation of new technology at the Peace and Queenston-Lewiston Bridges to help people cross the border faster. "Canada and the United States are taking action to promote the safe, secure and efficient movement of people and goods across the border," said Minister Rob Nicholson (speaking on behalf of Transport Canada). "This technology will make cross-border travel easier and facilitate trade by providing reliable, up-to-date information to help drivers plan and choose the fastest crossing."  New and advanced sensor technology near customs plazas and approach roads will measure and report delays, and relay this information to travellers. People will be able to plan their routes better, time their crossing, and select the bridge with the best wait-times. "While driving to the border, we naturally wonder whether it will be faster to cross at Fort Erie or Queenston," said Nicholson. "With this new technology, accurate, up-to-the-minute crossing times will be posted well before you reach the border." This new system is expected to reduce border wait times for the travelling public and commercial carriers by up to one million hours per year. Up-to-date information on the Peace Bridge and Queenston-Lewiston Bridge websites will help drivers to plan and save money on fuel by avoiding congestion. "This technology demonstrates significant progress on behalf of the Beyond the Border Action Plan by updating critical infrastructure at our ports and enhancement of the border-crossing experience for travelers," said Acting Customs and Border Protection Commissioner David Aguilar. "This latest example of US-Canadian collaboration demonstrates our nations' partnership to ensure continued economic competitiveness." "Freight movement is essential to commerce and a healthy economy," said Federal Highway Administrator Victor Mendez. "This technology will help U.S. businesses move their goods and products more efficiently across the border to help grow our national economy and create jobs." This project supports commitments under the Beyond the Border Action Plan announced by Prime Minister Stephen Harper and U.S. President Barack Obama on December 7, 2011. Under this Plan, Canada and the U.S. committed to reduce, eliminate and prevent barriers to cross-border trade and travel and install border wait time measurement technology at the top 20 land crossings. |
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US Lawmakers Reach Deal on Russia Trade, Rights Bill
The U.S. Senate Finance Committee has approved a bill that would establish permanent normal trade relations (PNTR) with Russia by removing the nation from the Jackson-Vanik Amendment.
The Jackson-Vanik amendment was introduced to prohibit most favoured nation status for non-market economies originally on the basis of human right concerns. The U.S. has retained the law but has each year since 1992 granted a waiver to Russia. The removal of Russia from the Jackson-Vanik Amendment will be tied to approval of the Magnitsky Bill, which introduces sanctions, such as visa denials and asset freezes on those believed to have perpetrated human rights offences in Russia. An updated version of the Bill, approved by the Senate Finance Committee last month, includes additional provisions to address corruption issues in Russia, and to ensure that the US Administration closely monitors and enforces Russian compliance with its World Trade Organization (WTO) obligations.
"By enacting PNTR together with the Magnitsky bill, we are replacing Jackson-Vanik with legislation that addresses the corruption and accountability issues that Russia confronts today," Max Baucus (D - Montana), the Chairman of the Senate Finance Committee, said.
In approving the bill, Baucus said a major step had been made "All this boils down to one thing: jobs. Russia will formally be a member of the WTO next month, so that is Congress's deadline for passing PNTR. There is no time to waste - America risks being left behind. If Congress misses that deadline, American farmers, ranchers, workers and businesses will lose out to the other 154 members of the WTO that already have PNTR with Russia. American workers will lose the jobs created to China, Canada and Europe when Russia, the world's seventh largest economy, joins the WTO and opens its market to the world. This is an opportunity to create jobs we can't pass up."
Business groups, such as the U.S. Chamber of Commerce, had wanted Congress to pass the trade legislation before its August recess to make sure U.S. companies share in the benefits of Russia's upcoming entry in the WTO, but this seems unlikely.
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First Ever Container Shipping Reliability Report Published
INTTRA, an active worldwide network for ocean shipping, and SeaIntel, container shipping market analysts, recently announced the availability of the initial publication of the industry's only shipping reliability report that combines on-time performance with schedule reliability measures.
"For the first time shippers can now analyze actual container delivery time versus vessel arrival time on a country-by-country level," said Lars Jensen, CEO of SeaIntel Maritime. "This is a game changer in how shippers can evaluate carrier performance and make more informed decisions on how their freight is moved.
"For the first time shippers can now analyze actual container delivery time versus vessel arrival time on a country-by-country level," said Lars Jensen, CEO of SeaIntel Maritime. "This is a game changer in how shippers can evaluate carrier performance and make more informed decisions on how their freight is moved.
While knowing when the vessel arrives is an indicator of on-time arrival, what's most important to a shipper is how timely their cargo is moving. With this report, shippers now have timely information, at a level of detail that makes it actionable."
For information on how to receive the complete market report. click here.
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Softwood Lumber Ruling Victory for Canada But Conflict May be Far From Over
A major win for British Columbia's lumber industry came on July 19 in an announcement that Canada had not circumvented the Softwood Lumber Agreement (SLA), as alleged by the US.
The London Court of International Arbitration (LCIA) ruled in favour of Canada's forestry sector in the SLA trade dispute with the United State s over the timber pricing system for British Columbia's Interior.
Minister of International Trade, Ed Fast, welcomed the decision that he claimed will bring certainty and stability to a vital sector in the Canadian economy.
The US lumber industry claimed in 2008 that a high volume of lumber affected by the mountain pine beetle in the BC Interior was being misgraded as low-value Grade 4 logs. These claims led the US government to request arbitration under the Canada-US SLA, stating the systemic misgrading thwarted the agreement by underpricing the logs.
The BC forestry industry created more than 53,000 jobs and exported about $10 billion in forest products worldwide in 2011. The same year, the province exported $1.7 billion worth of softwood lumber products to the US.
The U.S. Lumber Coalition, a lumber lobby group, said in a statement that it "vehemently disagrees" with the decision, maintaining B.C.'s timber practices allow the province to give "back to lumber producers with one hand the export taxes it had collected with the other."
U.S. Rep. Mike Michaud said the most recent decision will impact U.S. sawmills and lumber retailers, and that the agreement should be revisited to ensure it "adequately protects U.S. businesses and workers from unfair trade practices."
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What Role Do You Play in Import Compliance?
In January 2011, CBP kicked off the Role of the Broker - Regulatory Revision Workgroup, together with the National Customs Brokers and Forwarders Association of America. CBP has described the Role of the Broker initiative as an effort to develop solutions to the challenges of 21st Century commerce, to leverage broker relationships and extend opportunities for small and medium businesses, and to encourage the spread of best practices in the industry.
It is CBP's view that current broker regulations have not kept up with advancements in technology and the trade facilitation goals of the agency. CBP describes the main goals of the planned changes to the regulations as:
* Clarifying brokers' responsibilities related to importer validation and to provide greater visibility regarding importers to CBP; and
* Modernizing the regulations to align with current electronic capabilities and business practices - hopefully resulting in decreased administrative costs for CBP, customs brokers and importers
As part of this initiative,CBP is conducting several public Webinars during the summer of 2012 to solicit comment and input on all facets of the broker regulations (19 CFR Part 111).
With CBP reviewing the role of the broker, now is an excellent time for importers to review their own procedures for instructing and managing brokers. Written instructions to the broker, periodic meetings with broker personnel, and periodic review of broker filings by the importer are among the steps that importers should implement, or at least consider. These steps will facilitate compliance and increase the accuracy of the importer's filings with CBP. These steps also have the added advantage of providing defenses for a CBP penalty case or, even worse, an audit.
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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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As well, you can follow any of the links below for the latest information, updates and links to articles of interest.     |
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