GHY Tradelines

The latest edition of our monthly Tradelines Newsletter is now available online.

Topics covered include: Incoterms® 2010 Take Effect Jan. 1, 2011; Blanket Certificates of Origin Need to be Renewed for 2011; CBP Chief Outlines 7 Principles for Agency’s Success; C-TPAT 2010 Partner Survey Results Released; International Trade Compliance Strategies Blog Launched; Customs Moving to Require Ocean and Rail Data Filing Through ACE; Economy at Moment of Truth: EDC Forecast; eManifest Update; FAA Issues Safety Alert on Lithium Batteries; No Change to Gender- and Age-Based Import Tariffs; Operation Global Hoax a Success; WTO Issues Trade Policy Review of US Trade Policy; DFAIT Issues New Guidelines on Encryption Controls

You can also reference back issues of our newsletter by visiting our Tradelines Archive.

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This is a quick reminder to update your bookmarks as we will no longer be publishing updates to GHY Tradelines on the Blogger platform effective October 31, 2010.

Note: The old site will remain in existence for archive purposes, but will no longer be supported otherwise.

An updated list of recently published government memorandums, notices, regulations and decisions for the week ending October 29, 2010 is now available on our website here.

(The Globe and Mail – Barrie McKenna)

A new study warning that free trade with Europe could cost Canada 28,000 jobs is a misguided ideological attack on open markets, Canadian Trade Minister Peter Van Mr. Van Loan Loan says.

The study by Canadian Auto Workers economist Jim Stanford for the Canadian Centre for Policy Alternatives concluded that a proposed Canada-Europe free trade deal would wipe out thousand of jobs in industries such as food processing, apparel making and the auto industry, while widening an already yawning trade deficit.

Mr. Van Loan said the CAW and CCPA are ideologically opposed to free trade, even though previous agreements clearly benefitted the Canadian auto industry and Canadian workers.

“The fact is they are ideologically opposed to an agreement that hasn’t even been completed yet,” Mr. Van Loan told reporters in Ottawa. “I have no difficulty dismissing that and focusing on the fact that this is a free trade deal that offers enormous upside potential for Canadian jobs.” Read more here.

(CBSA)

Letter to the Editor: Ottawa Citizen; Vancouver Sun; National Post; The Province; Windsor Star concerning the Auditor General Annual Report, Chapter 8: Facilitating the Flow of Imported Commercial Goods

Please allow me to provide some additional context to the points raised in your article regarding the Auditor General’s findings on “Facilitating the Flow of Imported Commercial Goods.”

As the Auditor General stated, Canada imported over $440 billion in commercial goods in 2008. However, the $2 billion reported in your article is not substantiated in the Office of the Auditor General report and is a simplistic extrapolation from the data.

The Canada Border Services Agency (CBSA) does recognize that its current system is inadequate.

We are implementing a compliance strategy to increase assurances that duty and tax information provided by importers is accurate and complete. This will allow the Agency to identify specific causes of non-compliance so that effective corrective measures can be put in place.

Much like Canada’s income tax system, whereby Canadians file income tax information that is later assessed by the government, the CBSA has a vigorous program to review and verify duty and tax information that is declared by importers. We have also designed a detailed program to help improve how we monitor non-compliant importer activities.

The CBSA continues to strengthen and refine its processes in order to optimize conditions at the border while ensuring its operations support a strong Canadian economy.

Cathy Munroe
Vice-President, Programs Branch
Canada Border Services Agency

[The original article from the Vancouver Sun is here.]

(World Trade Interactive/STR)

At the annual WESCCON conference in San Diego Oct. 23, U.S. Customs and Border Protection Commissioner Alan Bersin gave a major policy speech outlining his vision for the future of CBP and its relationship with the trade community.

Reassessing Trade Processes

Bersin said CBP is in the early phases of developing several concepts that would improve trade processing.

• risk-based account management, which would seek to raise compliance by focusing on areas of risk rather than volume and by expediting trade with trusted partners through improved targeting and risk segmentation
• simplified entry and financial processes that would expedite legitimate trade, provide for earlier release decisions and streamline the submission of information and payments

• establishing centers of expertise and excellence, a virtual concentration of CBP personnel who would leverage expertise and provide uniform guidance

• finding ways to leverage the investment made in the Automated Commercial Environment to ensure that it fully supports account management efforts

“Whatever form these initiatives ultimately take,” Bersin stated, “they signal a fundamental transformation of our relationship with the private sector” into one that “significantly enhances supply chain security, improves enforcement of trade laws, and expedites legitimate commerce.”

Customs Brokers

Bersin reassured customs brokers that “the changes CBP is proposing will certainly not be the demise” of their industry. Instead, these changes will help brokers help their clients do business more efficiently. For example, brokers will be “critical” to making account management work, especially for small and medium-sized businesses. “With management by account, instead of managing shipment by shipment, we will be managing the larger final transaction,” Bersin said. “Customs will still have to determine the admissibility of shipments, but the overall process will be simpler and more efficient.” CBP also hopes that brokers will serve as the agency’s “boots on the ground” in efforts to intercept counterfeit goods and ensure import safety. “We can’t do our job without you,” Bersin said, “and I am committed to rebuilding our bonds of trust with you.”

Read the complete article here.

(Statistics Canada)

The Canadian railway industry saw an increase in cargo loadings in August, as traffic originating on domestic railways as well as traffic received from American railways rose. Total rail freight traffic increased to 25.1 million metric tonnes in August, up 19.6% from the same month last year.

Freight loadings originating in Canada rose 18.1% from August 2009 to 22.6 million metric tonnes. The industry’s core transportation systems, non-intermodal and intermodal, both contributed to rise.

Non-intermodal freight loadings, which are typically carried in bulk or loaded in box cars, rose 18.0% from August 2009 to 20.1 million metric tonnes. The commodity groups that saw the largest increases in tonnage were iron ores and concentrates, potash and iron and steel (primary or semi-finished). While the loadings of a majority of commodity groups rose in August, a number of groups registered declines. Those with the largest decreases were lumber, other cereal grains and wood pulp.

Intermodal freight loadings, which involves transporting freight through containers and trailers loaded onto flat cars, increased 18.6% from August 2009 to 2.4 million metric tonnes.

Rail freight traffic received from the United States rose to 2.5 million metric tonnes in August, up 34.7% from August 2009. The increase stemmed largely from non-intermodal freight loadings, which rose 37.3%.

From a geographic perspective, 53.6% of the freight traffic originating in Canada was loaded in the Western Division of Canada, with the remainder loaded in the Eastern Division. The Eastern and Western Divisions, for statistical purposes, are separated by an imaginary line running from Thunder Bay to Armstrong, Ontario. Freight loaded at Thunder Bay is included in the Western Division while loadings at Armstrong are reported in the Eastern Division.

(The Globe and Mail – Greg Keenan)

A free-trade agreement between Canada and the European Union would deal another blow to Canada’s already battered manufacturing sector, wiping out thousands of jobs in food processing, apparel making and the auto industry, according to an analysis of a potential agreement that will be released Wednesday.

Canada, which has run an annual trade deficit of $19-billion with the EU, on average, for the past 10 years, would lose 28,000 jobs – most of them in manufacturing – if tariffs were eliminated, says a study done by Canadian Auto Workers economist Jim Stanford for the Canadian Centre for Policy Alternatives (CCPA).

Instead of increasing imports of European goods and services, Canada should look to that continent to provide examples of “what is really required to build successful, innovative export industries, instead of continuing to naively hope that more free-trade agreements will solve all that ails our trade performance,” Mr. Stanford said. Read more here.

(World Trade Interactive)

Customs brokers would have more flexibility to share client information with other entities under a new proposal from U.S. Customs and Border Protection.

This proposed rule would allow brokers, with written consent from the client, to share client information with affiliated entities related to the broker so that they may offer non-customs business services to the broker’s clients. Brokers would also be allowed to use a third-party service provider to perform photocopying and scanning of client records, provided that the service provider enters into a non-disclosure agreement requiring it to keep confidential the contents and information contained in any records pertaining to the broker’s client.

Finally, brokers would be able to use a third-party messenger service for transporting and/or delivering client documents on the broker’s behalf if those documents are sealed so that the messenger cannot view, alter or amend them.

CBP states that these proposed changes are intended to codify its previously published rulings and to update its regulations to reflect modern business practices while protecting the confidentiality of client (importer) information. Comments on this proposal are due no later than Dec. 27.

(EDC – Peter G. Hall)

Chaotic movements in world economic output gave way to a new phase at mid-year. Suddenly, it seemed that everything got quiet. Far from an antidote to chaos, this is a disquieting quiet, a mid-rebound slowdown that doesn’t normally occur. It’s a shock, and many wonder why it has happened.

But shocks have almost become the norm in recent times. Think of the growth cycle that ended in 2008 – it lasted about 16 years, roughly twice the length of a normal growth cycle. Then the economy took its biggest tumble in 60 years. That was followed by an aggressive, six-month rebound that began in the fall of 2009. Agreed, the magnitudes are shocking, but the movements aren’t. For the most part, these are normal phases of the business cycle – this one was just super-sized. Read more or watch the video here.

(CSCB – CBP)

US Customs and Border Protection will launch two pilots on November 1, 2010 to further strengthen the agency’s relationships with its trade and business partners.

The Center of Excellence and Expertise (CEE) pilot will develop comprehensive strategies to facilitate trade and manage risk within the pharmaceutical industry. Anne Maricich, the Assistant Port Director for Trade at the Los Angeles International Airport, will direct the pilot center.

The CEE will drive uniform implementation of policies, procedures, and technical guidance within the pharmaceutical sector. CEE’s core staff will manage risk throughout the pharmaceutical sector, by leveraging a matrix organization involving CBP personnel with pharmaceutical expertise. This initiative will also evaluate opportunities to collaborate with other government agencies on touch points involving pharmaceutical imports.

It is intended that the pharmaceutical industry and importers of pharmaceutical products will use the CEE to address systemic issues and will serve as a source of information to increase expertise throughout the agency.

The Account Executive (AE) pilot will test CBP’s ability to engage trusted partners in the electronics industry to facilitate trade while ensuring continued compliance with all import requirements. Successful engagement will enhance our ability to formalize an account-based approach to dealing with trusted (low-risk) trade partners, remove transactional hurdles and other barriers for trusted partners and enable CBP to focus its resources on higher-risk companies and shipments.

Leon Hayward, Assistant Director, Field Operations, for Trade and Cargo Security in New York City, will serve as the pilot Account Executive. The AE pilot will draw upon existing positions and areas of expertise resident in CBP today, and supplement that expertise with training related to general and industry-specific business practices, processes, and standards. The AE will build on CBP’s successful targeting skills and develop industry knowledge to allow strategic-level targeting and maintenance of high-compliance rates.

(CBSA)

1. This notice serves as a reminder that the Canada Border Services Agency (CBSA) will be strengthening its commercial importation process respecting goods contaminated with soil. As previously announced, February 1, 2010 marked the launch of a twelve-month transition period culminating in the full implementation and enforcement of the strengthened process in 2011. This period allows industry an opportunity to adjust their operations and ensure that goods arriving in Canada are clean and free of soil.

2. Goods contaminated with soil are not admissible into Canada. The Canadian Food Inspection Agency (CFIA) is responsible for establishing the policy regarding the importation of goods contaminated with soil. The CBSA is responsible for administering and enforcing that policy to the extent it applies at the border.

3. Beginning February 1, 2011, non-compliant goods, i.e. goods contaminated with soil, arriving at the Canadian border will be restricted to a CBSA-controlled area and may be cleaned on-site by a mobile wash facility approved by the CFIA, provided certain conditions can be met, e.g. there is no risk of soil dislodgement during transport, operational capacity exists, availability of a CFIA-approved mobile wash facility. If a CFIA-approved mobile wash facility is not available, or if other conditions listed above are not met, the contaminated goods will be refused entry into Canada under the authority of the Plant Protection Act and the Health of Animals Act. Note: Plants and/or plant products are not eligible for remedial action.

4. The costs associated with cleaning or removal from Canada will be paid for by the importer.

5. This strengthened approach is in line with the CBSA’s existing commercial processes and procedures, as well as the CFIA’s policy regarding the importation of foreign soil. It will further ensure that the CBSA maintains appropriate control over the contaminated goods, thereby preserving the safety and security of Canada and Canadians.

6. Under the current process, the CBSA may allow contaminated goods to be transported to either a stationary or mobile CFIA-approved treatment facility. However, treatment may only occur if certain conditions can be met, e.g. there is no risk of soil dislodgement during transport, operational capacity exists, availability of a CFIA-approved stationary or mobile wash facility. If the conditions listed above cannot be met, the shipment is refused entry into Canada and ordered removed at the importer’s expense.

7. Inquiries and comments about this notice should be directed to:

Food, Plant and Animal Program, Programs Branch
Canada Border Services Agency
Telephone: 613-957-6868, Fax: 613-946-1520 E-mail: fpa-ava@cbsa-asfc.gc.ca

(Bloomberg – Paul Badertscher)

Canadian policy makers said they will be “relentless” in keeping pressure on China and other economies with fixed exchange rates to allow their currencies to appreciate, following meetings with colleagues from the Group of 20 nations last weekend.

Finance Minister Jim Flaherty and central bank Governor Mark Carney said that while the G-20 made progress on promoting flexible currencies and other issues, they remain a long way from the ultimate goal. “We’re not satisfied with the degree of exchange rate flexibility, the moves on exchange rate flexibility, in key emerging markets,” Carney said in an interview following the meeting in Gyeongju, South Korea. Read more here.

(Washington Post – Will Englund)

Corruption in Russia has grown even more blatant over the past year, according to  a report issued Tuesday by Transparency International, and the country has fallen from 146th place to 154th on the organization’s Corruption Perceptions Index. Russia tied with Tajikistan, Papua New Guinea and several African countries, and was ranked most corrupt among the G-20 nations.

For the first time since Transparency International began issuing its annual list 15 years ago, the United States dropped out of the top 20 least-corrupt nations, because of financial scandals it has endured. The United States fell from 19th place to 22nd, behind Chile. [Canada is 6th from top]

Denmark, New Zealand and Singapore topped the list as least corrupt, and Somalia was at the bottom, just below Afghanistan and Burma. Read more here.

(Europolitics – Chiade O’Shea)

The European Union has expressed concerns that its trading partners are using too many restrictive commercial measures, posing a threat to a speedy recovery from the financial and economic crisis. Trade Commissioner Karel De Gucht on 25 October called for an end to the practice.

“With the economic recovery still fragile, the world’s major economies must remove the trade restrictive measures that put a break on growth,” De Gucht said as he published a new report detailing the extent of these tariff and non-tariff barriers. The report, which De Gucht says is an important tool to monitor rises in protectionism, lays out over 300 restrictive trade measures taken by the European Union’s 30 top trade partners in the two years since the crisis began in 2008. They included so-called ‘classical trade barriers’ like import bans and tariff increases, but also the now infamous ‘non-tariff barriers’ such internal incentives to “buy national”. Read the complete report here.

Lance Scoular (“The Savvy Navigator”), founding partner and CEO of Australian consulting firm Key Directions, presents an introduction to the new Incoterms® 2010 rules and explains the rationale behind the revisions.

CBP Commissioner Alan Bersin outlined seven principles that guide his agency in a speech at the Migration Policy Institute in Washington, DC, earlier this month, emphasizing that the facilitation of legitimate trade and travel is as important to national security as keeping terrorists out of the country.

(Reuters/News Center)

Anybody could tell right away that the Louis Vuitton shoulder bag was fake because it was delivered in a recycled box that once shipped batteries.

Warnings printed on the inside of the box read: “Danger Contains Sulfuric Acid” and “Poison – Causes Severe Burns” — not the sort of messages that would normally accompany a product from one of the world’s most iconic luxury brands.

But it sure looked real. It was dark brown, sported a braided strap with brass fittings and the Louis Vuitton monogramme stamped all across the bag.

I had ordered the bag from a website called www.ericwhy.com for this special report, which explores the growing problem of counterfeit merchandise sold over the Internet.

Reuters wanted to trace the problem from a consumer in Washington D.C. to the shadowy producers based in Guangzhou China, where my colleague Melanie Lee found the illicit workshops and markets. Read more here.

(Andrew Mayeda — Postmedia News/Regina Leader-Post)

Old measures fail to keep pace with knowledge-based economy

Open the back of a BlackBerry sold in Canada, and chances are you’ll find three words that speak volumes about Canada’s most celebrated modern-day invention: “Made in Mexico.”

The print may be small, but the implications are significant for Canada’s trade balance. When a BlackBerry assembled in Mexico crosses the border into Canada, the transaction is booked as an export from Mexico to Canada, despite the fact the device was designed and developed by some of Canada’s finest brain power at Research In Motion’s headquarters in Waterloo, Ont.

It’s an example of the occasionally absurd outcomes produced by the traditional approach to trade — a system of measuring global commerce that is becoming more old-fashioned with each text-message that pulses through the world’s wireless networks. Read more here.

(CSCB – Journal of Commerce)

CBP Commissioner Alan Bersin concedes working partnership ‘polarized’ over demands

Customs and Border Protection Commissioner Alan Bersin wants to rebuild the agency’s frayed relationship with the customs brokerage community.

U.S. Customs and brokers traditionally worked together in what Bersin called village atmosphere to facilitate trade and to ensure import duties were paid and contraband did not enter the country. However, the September 11 terror attacks changed that as the agency took the lead in fighting the potential for terrorist exploitation of the supply chain, straining relations with trade facilitators as requirements and restrictions mounted.

“The village has been polarized,” Bersin told the annual Western Cargo Conference of the Pacific Coast Council of forwarders and brokers in San Diego. Read more here.