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TPP Leaders Set
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At a recent meeting in Cambodia chaired by American President Barack Obama, the end of 2013 has been set as an informal deadline by which to conclude the free trade Trans Pacific Partnership.
The U.S. President met leaders from five other countries at the East Asia Summit in Phnom Penh that are parties to the TPP talks: Singapore, Brunei, Australia, Vietnam, and Malaysia. Four other TPP countries were not there: Chile, Peru, Mexico and Canada.
The hard bargaining over agriculture and intellectual property that were put on hold until after the U.S. presidential elections are expected to be discussed at the 15th round of negotiations due to be held in Auckland, NZ next month. |
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| CFIA Postpones Phytosanitary Requirements for Grain and Legumes |  | |
As a result of input from various national trade associations, the CFIA has extended the comment period on the Phytosanitary requirements for imported grain and legumes until February 15, 2013.
This applies to draft directives,"D-12-04 Phytosanitary import requirements for grain of field crops including pulses, oilseeds, cereals (other than barley, oat, rye, triticale, and wheat), forages and other special crops from all origins except the continental United States" and "D-12-05 Phytosanitary import requirements for grain of field crops including pulses, oilseeds, cereals (other than barley, oats, rye, triticale, and wheat), forages, and other special crops from the continental United States."
In addition, the enforcement date of December 1, 2012 has been cancelled. A new date may be established once comments from industry have been reviewed in 2013.
Under the proposed new regulations, CFIA will require either a phytosanitary certificate or an import permit for the import of a variety of grains from the U.S. and foreign countries. Grain shipments impacted are those for direct human or animal consumption, those imported for further processing for human consumption or animal feed or research, education and testing.
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WTO Launches New "International Trade and Market Access" Interactive Tool
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The "International Trade and Market Access" interactive tool, launched by the WTO in November, provides a new dynamic presentation for all WTO data on merchandise and commercial services trade as well as selected market access indicators from World Tariff Profiles, a WTO, ITC and UNCTAD co-publication. The tool is accessed through the WTO's website.
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Election Results Clear Path for Detroit-Windsor Bridge
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Canadian Transport Minister Denis Lebel said the path is now clear for a new bridge to be constructed between Windsor, Ont., and Detroit, after Michigan voters were asked to weigh in on whether they should have a say in such a project.
During the recent U.S. elections, Michigan voters defeated Proposal 6, which would have called for a statewide vote on plans for any new international crossing, including the proposed new bridge over the Detroit River. Slightly more than 60 per cent of voters turned down the proposal, which would have been entrenched in the state's constitution.
Proposal 6 was one of the final hurdles that needed to be cleared for the building of a new bridge to proceed, and provide competition for the 83-year-old Ambassador Bridge, Canada's busiest border crossing, owned by billionaire Matty Moroun.
Lebel said the bridge will now be built "as soon as possible."
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International Action Needed on Falsified and Substandard Medicines
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Fake and substandard medicines harm and kill patients in developed and developing countries, say Canadian and inter-national researchers calling for a global treaty to tackle the problem.
The deadly meningitis outbreak in the U.S. from contaminated steroid injections highlights the consequences of fake
medicines that contain little or no active ingredients and substandard drugs that don't meet regulatory quality control standards, experts said in the British Medical Journal.
U.S. authorities are investigating connections between the Canadian owner of an internet pharmacy firm and the sale of counterfeit versions of bevacizumab, an injectable cancer medication that goes by the brand names Avastin and Altuzan.
"Why is it that global law on money counterfeiting a fake 10 dollar bill is tougher than global law on a fake cancer treat- ment that can kill you?" asked Amir Attaran, Canada Research Chair in law, population health, and global development
policy at the University of Ottawa, an author of the report.
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| GHY E-Newsletter December 2012 |
Blanket Certificates of Origin Need to be Renewed for 2013 Blanket certificates of origin (most usually for NAFTA but also for other free trade agreements) are usually filled-out to begin on January 1 and to expire, 12 months later, on Dec. 31. Accordingly, the majority of blanket certificates in our databases are currently due to expire December 31, 2012.
Shipments without a 2013 Certificate on file effective January 1, 2013 will be released and accounted for "NON-NAFTA" (i.e., the Most Favoured Nations tariff treatment will apply). If you provide NAFTA certification after this date, please indicate at the same time whether you would like us to subsequently pursue refunds for duties (and MPF in the case of U.S. entries) on shipments accounted for at the higher rates. Also, it should be noted that products throughout the year that are not included on your Blanket NAFTA will be processed as Non-NAFTA; therefore, if you add or remove products over the course of the year, it is imperative you provide us with the additional or updated information so that we can avoid the risk of unnecessary duty overpayments or non-compliance situations by ensuring that our database is as comprehensive, accurate and up-to-date as possible. If you have any questions about this issue, don't hesitate to contact our NAFTA administration team: nafta@ghy.com. |
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The Relative Cost of Cross-border and Domestic Trucking: StatsCan Report
Despite the elimination of tariff barriers between Canada and the United States, the volume of trade between the two countries has been less than would be expected if there were no impediments. While considerable work has been done to gauge the degree of integration between the Canadian and U.S. economies through trade, relatively little analysis has parsed out the underly  ing costs for cross-border trade.
The latest figures from Statistics Canada show that it costs 15% more to ship cargo across the border from Canada to the United States by truck than it does to transport equivalent goods the same distance between two destinations within Canada. If cargo happened to be picked up in the United States and brought into Canada, the cost of importing these goods was estimated at 28% more than shipping the same goods domestically.
This study from Statistics Canada provides a first-ever estimate of the magnitude and sources of costs associated with trucking goods across the border.The two main factors in cross-border trucking costs are fixed costs per shipment of moving goods across the border and higher line-haul costs of trucking cargo over longer distances.
Delays at the border and other border compliance costs add to the fixed costs per shipment incurred by trucking firms. These fixed costs include facilities cost, insurance, and terminal costs, that is, loading and unloading costs. Similarly, differences in fuel prices or difficulties finding "backhauls"; i.e., cargo for a return shipment, can add to the line-haul costs of shipping to and from the United States.
The estimates are reversal of the situation in previous years, resulting primarily from changing line-haul costs, which, relative to domestic line-haul costs, fell for exports and rose for imports.
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CBP Focusing on Validity of NAFTA Claims
U.S. Customs and Border Protection (CBP) prioritizes which trade issues to look at, based on a strategic risk-management approach and the potential impact of non-compliance. These issues range from agricultural programs to anti-dumping, textiles, intellectual property rights, penalties, and import safety to trade agreements.
Sources quoted in the Canadian Shipper publication warn that CBP has committed a stronger focus to trade agreements. CBP officials have recently stated that they have found through NAFTA verification that a high percentage of claims can't be verified and are, therefore, considered inaccurate. As a result of their findings, CBP plans to conduct far more NAFTA reviews.
It should be noted that in most cases, CBP will not grant any extensions of time to supply the requested proof because NAFTA rules demand that analysis to support NAFTA claims be done prior to the signing of a NAFTA certificate. Accordingly, proof of NAFTA should be readily available upon request. Failure to timely prove NAFTA eligibility could result in the denial of the NAFTA claim and/or the opening of an investigation or penalty action.
With the above in mind, we strongly recommend that U.S. importers and Canadian exporters evaluate their NAFTA and other trade agreement claims and also ensure that they have the appropriate documentation to substantiate their specific trade agreement claims prior to the signing of a certificate or prior to accepting one supplied by another party.
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What Might Canada's Future Exports Look Like?
Canada depends on trade to generate economic growth. Unfortunately, the future of the world economy is uncertain. Ongoing economic difficulties among Canada's major trading partners will affect exchange rate movements, real GDP growth, and, in turn, Canada's exports.
This study examines the long-term growth path for Canadian exports to our major trading partners: the United States, the United Kingdom, the eurozone, Japan, China, India, Mexico, and Brazil.
The authors provide long-term forecasts of exports by major trading partner to 2025. They also examine the sensitivity of their forecasts to changes in real GDP growth or exchange rates. They conclude that, while Canada's share of both merchandise and service exports to the U.S. will decline by 2025, the U.S. will remain Canada's largest export market by a considerable margin. The share of merchandise exports from Canada to developing countries will increase if solid economic growth in these countries continues. Click here to download the Conference Board report from our website.
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C-TPAT Suspension Process Needs Fixing
The Canadian Trucking Alliance (CTA) is asking the US Customs and Border Protection (CBP) Agency to follow due process as it relates to C-TPAT suspensions and appeals.
The current process is administered in a way that can have a "devastating impact on a carrier's business without due process, prior notice/communication, or consideration of the level of exposure carriers involved in moving high volumes of freight a  cross the border face," said CTA president and CEO, David Bradley.
Bradley pointed to a Canadian carrier that recently had its C-TPAT membership temporarily suspended, but only learned of that fact when their customers informed them; CBP had not contacted the carrier in regards to the suspension, let alone the reasons behind the suspension. The nine day suspension severely damaged the carrier's reputation with existing customers and caused the loss of several potential customers representing tens of thousands of dollars, CTA explained.
"In our view, carriers should be given a warning and have the opportunity to put measures in place to correct a problem and subsequently prove to C-TPAT that these steps are being followed," said Bradley. "A suspension should be the last and final option after all attempts to correct the behavior have been made."
The carrier eventually learned that its C-TPAT membership had been suspended on account of a few seal-related incidents over a period of several years. During that period the carrier transported almost 200,000 shipments across the border and had seal violation rate of 0.00004 percent, CTA noted.
"Given the carrier's exposure, suspension in this case seems to be a gross overstatement and an inefficient use of CBPs resources," said Bradley.
This isn't the first time that the issue has come up, and it has been an issue that both the CTA and the American Trucking Associations have brought up with CBP before.
"CTA and its members have long promoted the C-TPAT program and we value partnerships with government, especially where it involves national security." But, says Bradley, "we'd like to see the introduction of a compliance program built on due process and progressive sanctions."
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Legislative Update: Russia PNTR Advances, Miscellaneous Trade Bill Could be Next
A short, post-election session of Congress this month could see progress on at least two trade-related measures. Other bills of interest to the trade community will likely have to wait until a new Congress convenes in January.
Russia Permanent Normal Trade Relations (PNTR)
Repealing the Jackson-Vanik Amendment and extending permanent normal trade relations status to Russia is necessary to allow U.S. businesses to take advantage of the trade liberalization measures associated with Russia's accession to the World Trade Organization, which became official Aug. 22. The House of Representatives approved a bill making these changes on Nov. 16  by a 365-43 vote. This bill, which also extends PNTR to Moldova, including language that imposes certain sanctions on those identified as responsible for "gross violations of human rights in Russia."
The Senate Finance Committee approved a Russia PNTR bill in July but attached a broader human rights measure not limited to Russia. However, the Senate is expected to soon vote to accept the more limited House bill.
Miscellaneous Trade Bill (MTB) Both the House and Senate have been working to assemble a miscellaneous trade bill, which will remove or reduce import duties on hundreds of manufacturing inputs and other products. Some House Republicans oppose the MTB as an earmark, which is prohibited under current House rules, but Republican leaders in that chamber have voiced support for it. There has also been an effort to streamline the process of assembling the MTB by allowing companies to submit their proposals directly to the International Trade Commission and retaining final approval authority for Congress.
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Update on ACE Initiatives
U.S. Customs and Border Protection has posted to its website an update on the functionality already implemented in the Automated Commercial Environment as well as near-term priorities for other ACE deliverables, such as Cargo Release, entry summary edits and export processing  . ACE is currently in an operations and maintenance phase but CBP recognizes that additional functionality is necessary to achieve broad participation and is therefore committed to working with ACE stakeholders to develop business cases for remaining functionality in order to secure the additional funding needed to implement it.
CBP states that for the development of future capabilities it is reorienting its development team and processes to produce smaller pieces of functionality more frequently, resulting in a more flexible, user-focused development process. Recent efforts such as Simplified Entry were developed using this approach with great success, and based on this success CBP is working to implement this approach across the ACE program. The goal of this effort is to achieve an automated single window system that supports a competitive global economy, efficient trade processing, collection of federal revenue, and safe and secure trade flows.
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Customs Compliance Programs - A Must for Importers
All who import goods into the United States know it is a complicated exercise. Importing can be fraught with peril in the absence of attention to detail. Mistakes in importing can lead to detained or seized merchandise, forfeitures, Customs and Border Protection investigations, lost time, dissatisfied or lost customers, strain on an importer's human and financial resources, additional duty assessments, and sizable penalties. Because importing is complicated and there are so many pitfalls, compliance programs should be a must for all importers. The time and expense in implementing and maintaining a compliance program can easily be de minimis in comparison to the cost of defending against just one penalty action. 
The elements of a good compliance program vary among importers depending on the goods imported, the size of an importer's operations, the country of origin of the goods imported, whether an importer is taking advantage of one of the various Free Trade Agreements, and numerous other factors. For example country of origin marking could be a factor in one compliance program, but not in another; certificates of origin may be an issue; pricing may be an issue particularly when importing from a related party; assists may be at issue if the importer supplies the vendor with items used in the production of the imported goods; classification is always of utmost importance as is valuation of merchandise. Recordkeeping will always be of significance, and of vital importance is the importer/customs broker relationship.
While a compliance program will have to be structured to meet the needs and requirements of a particular importer, there are certain elements that must be present in every program. Click here to read the complete article.
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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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