THE TTALK QUOTES 

On Global Trade & Investment

 

Published Three Times a Week By

The Global Business Dialogue, Inc.

Washington, DC   Tel: 202-463-5074

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No. 18 of  2016

TUESDAY, MARCH 22, 2016

Filed from Portland, Oregon


Click here for yesterday's quote from EU Commissioner Cecilia Malmstr�m.
PRELUDE - FOR BRUSSELS
As you will see from the entry below, today's TTALK Quote, like yesterday's, is taken from a dialogue in Washington with the EU Trade Commissioner - a routine event that underscores the bonds - the thousands upon thousands of connections - that bind the two cities.

Like much of the world, we were sickened by the news of this morning's ISIS attacks in Brussels.  Our hearts go out to those who mourn, to those who struggle to recover, and to those who have the responsibility of responding.  Each of these awful events brings to mind the same unforgettable line from John Donne's most famous devotion:

"Any man's death diminishes me, because I am involved in Mankind."

***

That thought needs no elaboration and certainly no discourse on poetry. And yet, before quoting it here, we went back and re-read the entry on Donne from Louis Untermeyer's "Lives of the Poets."  What we found was this:

"The spirit in which [Donne and] the metaphysical poets wrote was the modern spirit, violently troubled but anxious to keep personal order in the midst of general turmoil."

That's the challenge.  It is not easy, and in Brussels today, we know, it's really tough. 
CONTEXT FOR A CUSTOMS QUESTION
It was less than two weeks ago, but still, in a sense, it was a more innocent time when Cecilia Malmstr�m, the EU Trade Commissioner, spoke at the Peterson Institute for International Economics on March 10.  Yesterday, we highlighted some of what she had to say about TPP, and doubtless we will soon be talking about her broad sense of the goals and opportunities of TTIP, the Transatlantic Trade and Investment Partnership. Today, we look at a question that was put to Commissioner Malmstr�m by a FedEx executive during the Q&A session on March 10.
 THE QUESTION

"[European businesses] ... can take orders up to $800, and it comes flying into the U.S - no duties, no taxes, no customs entry.
 
"Meanwhile in Europe, the de minimis is stuck at 22 euros [$24.64]  ...[and] in 12 rounds [of TTIP] negotiations, we've seen no flexibility on the EU side. ...

"And so I wonder, can we hope for any flexibility from the Commission going forward?"

David Short
FedEX
May 10, 2016
MORE CONTEXT
Mr. Short's question is straightforward and contains its own explanation, but a few brief notes are in order.

De Minimis - a threshold of sorts - comes from the Latin statement: De minimis non curat lex - The law does not concern itself with trifles.  In the context of customs duties, U.S. law - for the most part - will no longer concern itself with shipments of $800 or less.  That's a relatively high figure for a de minimis value, and it is relatively new.  Up until February 24, the U.S. de minimis value for such shipments was $200.  The higher, $800 amount was, however, included in the Trade Facilitation and Trade Enforcement Act of 2015, which President signed into law last month.

In urging the EU Trade Commissioner to consider a higher de minimis level for the EU, Mr. Short referenced a paper produced by the Peterson Institute on this subject.

Commissioner Malmstr�m responded, really, in the only way she could.  She said:

"I think the answer is that maybe, sir, you could give me a copy of that study, and I'll go home and read it, talk to my people, and then we will see." 

COMMENT
We applaud the new Trade Facilitation and Trade Enforcement Act, including the higher de minimis level for shipments to the U.S.  And we would be pleased indeed to see Europe move in the same direction.  But then we have a preference for anything that makes trade easier, faster, and cheaper. 

With apologies for revisiting a recent entry in this series, the whole issue brings to mind something Peter Allgeier said when he was at GBD last month. Speaking then as the president of the Coalition of Service Industries, he said: 
 
"You take the combination of the internet, express delivery, and electronic payments, and that allows almost anybody to get into international trade, simply by putting their product or their services up on the internet, and they are engaging in what we call random exports."

Mr. Allgeier was talking about very small firms getting into trade, but, obviously, this is a game with plenty of big players as well.  In short, the global commerce that is being driven by the troika of the internet, express delivery, and electronic payments may involve many relatively small orders and it may be many things, but it is not a trifle.
SOURCES & LINKS
Malmstrom at the Peterson Institute is a link to the page on the Institute's website with detail of Commissioner appearance there on March 10, including audio and video recordings of the event. 

Logistics Reform for Low-Value Shipments by Gary Hufbauer and Yee Wong, June 2011.  We believe this is the article Mr. Short was referring to in his discussion of the de minimis customs issue.

Allgeier at GBD is a take you to the TTALK Quote of March 7, which talks about Peter Allgeier's remarks at the GBD event on February 24.

 

 

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