GHY Tradelines

(Journal of Commerce Online – R.G.Edmonson)

Officials will receive detailed reports on goods, allowing quicker cargo release times

Customs and Border Protection officials said Monday it will launch a “simplified entry” pilot project, the first step in a move to expedite the entry of goods into the U.S. in exchange for detailed import data at least one full day in advance.

The project, the result of an agreement between the trade and Commissioner Alan Bersin, permits qualified importers to submit entry data on cargo well in advance of its arrival at U.S. ports, at which point Customs can release the goods.

Simplified entry combines elements of the Importer Security Filing rule with the entry document itself, effectively eliminating one step in the traditional process. Customs began enforcing the ISF rule, also known as 10+2, in 2010. It requires importers to report 10 data elements – and carriers two elements – about the cargo no later than 24 hours before it leaves a foreign port. Read more here.
 

(The Economist)

In recent years BlackBerrys have become an essential component in the young professional’s toolkit in Buenos Aires. But if you failed to buy one before the southern-hemisphere winter, you may be out of luck. “We have trouble getting them,” says an assistant at a Claro mobile-phone store in posh Recoleta. “We haven’t had them for months,” is the answer at a Personal shop in leafy Palermo. Movistar advertises the 8520 model on its home page, but the phone is in fact sold out.

At South America’s southern tip, the missing BlackBerrys are almost ready to roll off the line. On October 3rd Brightstar, a multinational manufacturer, will begin importing kits of the phones’ parts to its factory in Tierra del Fuego, the normal base for cruise ships going to Antarctica. Some 300 workers will brave the frigid austral fog to assemble the pieces and put them in locally sourced packaging.

Making BlackBerrys south of the Magellan strait will cost $23m upfront, plus $4,500-5,000 a month per worker, some 15 times more than in Asia. But the government touts the project as a triumph of its trade policy. It will help cut foreigners’ share of Argentina’s mobile-phone market from 96% in 2009 to a forecast 20% by the end of 2011. “We have a domestic market with growing demand. The goal is to supply it with local labour and production,” said Débora Giorgi, the industry minister, when the deal was announced. Read more here.
 

(World Trade Interactive)

U.S. Customs and Border Protection is inviting public comments no later than Oct. 24 on a possible policy change on the applicability of transaction value in the context of post-importation adjustments. This change would make it easier to make transfer pricing adjustments after importation and could result in some duty savings as well.

Merchandise imported into the U.S. is appraised under 19 USC 1401a and the primary method of appraisement is transaction value, or the price actually paid or payable for the merchandise when sold for exportation to the U.S. plus certain additions. The term “price actually paid or payable” means the total payment (whether direct or indirect) made, or to be made, for imported merchandise by the buyer to, or for the benefit of, the seller. Transaction value is normally fixed at the time of importation but may be arrived at by using a formula. Rebates, or any other decreases in the price actually paid or payable made or effected after the date of importation, are to be disregarded for the purposes of determining transaction value.

However, CBP notes, importations that involve transactions between related parties may involve adjustments to initial transfer prices after importation in accordance with the company’s formal transfer pricing policy or formula. In some cases that policy may provide for year-end compensating adjustments to comply with the requirements of an advance pricing agreement between the U.S. party and the Internal Revenue Service. Such adjustments could affect whether the price is considered fixed or determinable by objective formula at the time of importation.

CBP’s current policy on the treatment of post-importation adjustments is set forth in ruling HQ 547654, dated Nov. 9, 2001, in which the price for the goods was arrived at pursuant to a methodology that included an initial sum subject to adjustments. CBP determined that transaction value did not apply because the price was not considered to be fixed or determinable pursuant to an objective formula prior to importation because at least one of the elements for determining the price was within the control of the buyer and/or the seller. Nonetheless, following the hierarchy of the valuation statute, CBP found that the goods could be appraised using the “fallback” method of valuation based on the related party price and that the adjustments could be reported (and claimed) to CBP through reconciliation.
Read more »

(Journal of Commerce Online – William B. Cassidy)

Wall Street firm says market may be ‘underestimating’ strength of freight shipping

There may be more of a peak in trucking’s peak shipping season than expected this year, according to Morgan Stanley Research. The firm’s dry van truckload freight index increased over the past two weeks, and is trending above average.

“This suggests that (the market) may be underestimating the potential strength of underlying freight demand,” the research firm said in a Sept. 26 note to investors. Read more here.
 

(World Trade Interactive)

U.S. Customs and Border Protection has issued a clarification regarding the discontinuation of paper courtesy notices of liquidation as of Sept. 17.

According to CBP, the Sept. 17 paper courtesy notice includes liquidations through Sept. 30. As such, there will be no printed paper courtesy notices for entry summaries filed via the Automated Broker Interface with a liquidation date of Sept. 30 or later. For entry summaries filed electronically via ABI, CBP will send electronic courtesy notices via ABI to the entry summary filers. For entry summaries not filed through ABI, CBP will continue to mail paper courtesy notices of liquidation to the importers of record.

In addition, CBP deployed the new Courtesy Notice of Liquidation Report via the Automated Commercial Environment portal on Sept. 24. This report includes liquidation information for ACE entry summary types 01 (consumption) and 03 (antidumping/countervailing duty) as well as all Automated Commercial System entry types except 11 (informal) and 12 (informal quota). CBP stresses that this report is not the official notice of liquidation, has no legal effect and does not trigger the protest filing period. Also, CBP is asking users to refrain from running this report until it issues further notification that the data load is complete.
 

(San Antonio Business Journal)

Mexico’s maquiladora manufacturing plants have bounced back from their 2009 recession levels and have returned with higher-skilled, higher-paying jobs, according to the Dallas Federal Reserve.

Despite the violence in Northern Mexico, jobs in Mexico’s manufacturing sector grew 8.2 percent due largely as a result of an uptick in the automotive and electronics industries. Meanwhile, exports to Mexico during the first five months of 2011 are up $14 billion over 2010 levels, according to U.S. Census trade data.

What’s driving the job growth in Mexico is the pickup in activity in U.S. trade. Manufacturers are continuing to fill orders despite the drug war and violence that has consumed part of Mexico.

Because of this increase in cross-border activity, the Border Trade Alliance is urging Washington to address the severe shortage of U.S. Customs personnel at the nation’s port of entries. Read more here.
 

(Laura Dawson and Paul Frazer — Toronto Star)

If the new American Jobs Act passes, Canadian manufacturers and suppliers will again feel the squeeze of Buy America rules that restrict how U.S. state and local governments can spend federal stimulus money. Is Buy America a sign that the United States wants to torpedo our negotiations on better borders and smarter regulations? No. The White House designed the act with the needs of unemployed Americans in mind. Canada did not figure into the equation. But Buy America is indicative of the serious problem of ad hoc economic management that has become the norm in Canada-U.S. relations.

Instead of working together on strategies to reduce internal problems and build our regional competitiveness in the world, we hop from crisis to crisis.

Blocking imports might have preserved jobs when goods were produced in one country and shipped to another but integrated, cross-border production means that a disruption to any node in the supply chain has far-reaching economic consequences. If the United States blocks the importation of a Canadian engine that uses components made in the United States, then those American component-makers will be hurt. Read more here.
 

(Industry Canada)

Monday, the Honourable Maxime Bernier, Minister of State (Small Business and Tourism), attended a round-table meeting with Canadian and American small business owners on cross-border issues affecting small business. The Minister of State was joined by David Jacobson, United States Ambassador to Canada, and Catherine Swift, President and CEO of the Canadian Federation of Independent Business.

“I was pleased to sit down with small business owners from Canada and the United States to hear about the challenges of cross-border trade,” said Minister of State Bernier. “Canada and the United States remain strongly committed to improving our shared border to increase cross-border trade, economic growth and job creation for our respective countries.”

The United States is Canada’s most important export market, with trade supporting one in seven jobs in Canada. In turn, Canada is America’s largest export market-larger than China, larger than Mexico, larger than Japan or all the countries of the European Union combined. Thus, it is in the interests of both Canada and the United States to ensure that our common border remains open, efficient and secure.

In February, Prime Minister Harper and President Obama announced an initiative entitled “Beyond the Border: a shared vision for perimeter security and economic competitiveness.” This initiative establishes a new, long-term partnership between Canada and the United States that is designed to strengthen security while accelerating the legitimate movement of people and goods between the two countries, thereby improving economic competitiveness. The Government of Canada is working with the U.S. government to develop a joint action plan to implement the goals of the initiative, which is expected to be released later this year.

“Jobs and growth will continue to be a priority for our government, and we are committed to ensuring that small businesses play a key role in driving our economy forward,” said Minister of State Bernier. “These efforts include defending free and open trade on the global stage, as we recognize that protectionism stalls growth and kills jobs.”

The Government of Canada is committed to providing the best business climate possible for entrepreneurs through measures such as creating the Hiring Credit for Small Business, reducing the small business tax rate from 12 to 11 percent and establishing the Red Tape Reduction Commission to cut government red tape and reduce unnecessary paperwork.
 

(The Economist)

First they went for the currency, now for the land

On September 15th Guido Mantega, Brazil’s finance minister, announced a 30-point increase in the country’s industrial-product tax on cars. The amount was startling, but the purpose familiar. Cars that are mostly made in Brazil, Mexico or the Mercosur trade block will be exempt; only importers will pay. “Brazilian consumption has been appropriated by imports,” he said in announcing the tax.

According to the National Carmakers’ Association, poor infrastructure and pricey credit and labour mean that making cars is 60% more expensive in Brazil than in China. Local manufacturers have long relied on high tariffs. Imports are gaining market share, from 16% of sales in 2009 to 23% this year. The new measure will probably reverse that trend, since it will increase the price of imports by a quarter. Read more here.
 

(AFP)

International travellers at Australia’s airports were Sunday warned to expect delays this week due to strike action by Customs and border security staff over failed contract talks.

The nationwide industrial action Tuesday would comprise one and two hour walkouts and partial work bans at locations including airports, container screening and international mail operations, Customs said.

“Customs and Border Protection has in place contingency arrangements to protect Australia’s borders and minimise impacts on business operations,” the government agency said.  “Our arrangements will minimise impact on our cargo and mail operations, but we anticipate that there will be delays to the processing of international travellers at airports.” Read more here.