Tuesday, June 30, 2009

Buy American Lives on as Environmental Protection Agency Talks Tough

(The Canadian Press – Lee-Anne Goodman)

Opponents of the Obama administration’s so-called Buy American provisions are working furiously this summer under a Canadian deadline, trying to convince legislators to do something about the protectionist measure before a full-fledged trade war erupts.

Their efforts come despite recent Environmental Protection Agency directives reminding local utilities that they need not concern themselves with NAFTA obligations as the federal watchdog also issued stern warnings about Buy American non-compliance.

“We’re all under the Canadian clock,” Dawn Christof-Champney, president of the Waste and Wastewater Equipment Manufacturers Association, said Monday. Champney was referring to the 120-day deadline issued by the Federation of Canadian Municipalities on June 6. It gives the U.S. 120 days to exempt Canada from the Buy American provisions in President Barack Obama’s $787 billion economic stimulus package, or Canadian municipalities will begin shutting out U.S. firms from bidding on local contracts.

Various stakeholders opposed to Buy American, including blue-chip American corporations, recently made submissions to the White House Office of Management and Budget, or OMB, the department handling the stimulus package. They urged a reversal of the policy. “We all poured most of our energy into submitting our views,” Champney said.

Submissions in hand, the Obama administration will now write the final rules on how to implement Buy American. A spokesman for the OMB said recently the legislation is expected to be tweaked, “but to what extent and how significantly, that remains to be seen.” Read more here.

Is ‘Buy China’ a Protectionist Threat?

(New York Times – Catherine Rampell)

“Government investment projects should buy domestically made products unless products or services cannot be obtained in reasonable commercial conditions in China,” a Beijing government edict said.

The Chinese government quibbled with the “protectionist” characterization of its edict – not surprisingly, given how energetically the Communist leadership protested the protectionist portions of the United States’ stimulus package. But economists have fretted about it nonetheless, fearing that it may be a potential harbinger of a new wave of protectionist policies throughout the developing world.

Is this a trend free trade advocates should really worry about? Should we expect other emerging economies to start hoisting up trade barriers, under the impression that the current crisis has somehow debunked capitalism? Read more here.

Customs Notice: Canada-EFTA Free Trade Agreement


The following is now available on the CBSA Web site:

CN09-014 Proposed Regulatory Amendments and Proposed New Regulations Related to the Implementation of the Canada-European Free Trade Association Free Trade Agreement

This notice announces regulatory amendments and new regulations proposed by the Canada Border Services Agency (CBSA) in support of the implementation of the Canada-European Free Trade Association Free Trade Agreement (CEFTA). It is further proposed that these regulatory amendments and new regulations come into force on July 1, 2009, on condition that the Governor in Council make them.

Monday, June 29, 2009

Jordan, Canada Sign Free Trade Agreement

(AP/CTV News)

Canada has inked a free trade pact with Jordan that will lift duties on Canadian exports to the Arab nation.

Trade Minister Stockwell Day and his Jordanian counterpart signed the agreement Sunday in Jordan's capital, Amman.

Canada's forestry, manufacturing and agriculture sectors are expected to benefit from duty-free access.

In return, Canada will give the Mideast country preferential trade conditions, including full exemption from customs duties for Jordanian goods.

The deal is expected to be ratified by both parliaments later this year.

Bilateral trade stood at about $92.2 million in 2008, according to a news release from Canadian government. Read more here.

Automated Broker Interface: Implementation Delay – Pending ISF Transaction Sets


On June 19, 2009, CSMS #09-000249 was issued announcing that pending changes to the Importer Security Filing (ISF) Transaction Sets for ABI and AMS will be implemented on July 1, 2009. Those changes will NOT be implemented on July 1; instead, they will be implemented on Sunday morning July 12, 2009 during the scheduled ACS maintenance window that extends to 03:00am Eastern Time. Again, the changes will become available in both the Production and the Certification regions at the conclusion of that maintenance window.

The pending Transaction Sets as well as a list of the specific changes can be found here.

Obama Opposes Trade Sanctions in Climate Bill

(New York Times – John M. Broder)

President Obama on Sunday praised the energy bill passed by the House late last week as an “extraordinary first step,” but he spoke out against a provision that would impose trade penalties on countries that do not accept limits on global warming pollution.

“At a time when the economy worldwide is still deep in recession and we’ve seen a significant drop in global trade,” Mr. Obama said, “I think we have to be very careful about sending any protectionist signals out there.” He added, “I think there may be other ways of doing it than with a tariff approach.”

The passage of the House bill on Friday night was an important, if tentative, victory for the president, becoming the first time either chamber of Congress had approved a mandatory ceiling on the gases linked to global warming. Read more here.

Global Supply Chain Hit by Uniserve Case

(International Freighting Weekly – Gavin van Marle)

Carriers could find themselves fully liable for goods following delivery errors

The number of supply chain partners vulnerable to the new liability loophole uncovered by IFW last month could be far greater than originally thought, and include carriers of all modes, as well as forwarders and warehouse operators.

UK-based freight operator Uniserve was recently found liable in a High Court ruling for a £375,000 (US$610,000) pallet of mobile phone devices that was stolen from one its warehouses in 2003 after being delivered there in error.

The company’s CEO, Iain Liddell, said that more than just the forwarding sector could be liable for goods accepted in good faith, but delivered in error. “If the error is such that your customer didn’t intend to deal with you at all, then no contract will arise and you are liable for the full cost of the goods if you are at fault for their damage or loss, “ he said.

“An error can be as simple as the principal or his agent delivering the goods to the wrong party, but the party receiving those goods may well have a trading relationship and have every intention of providing a service to the principal or his agent and accept the goods in good faith, totally unaware that an error has been made.”

He outlined some potential ways in which hauliers, shipping lines and airlines could find themselves fully liable as the result of errors that would invalidate a contract: Read more here.

Friday, June 26, 2009

Canada Asks for Talks on ‘Buy American’ Issue

(Journal of Commerce Online – Alan M. Field)

Canadian trade officials would like to discuss with U.S. counterparts an agreement that would enable U.S. and Canadian companies to have reciprocal access to local and municipal government procurement contracts.

Canadian Trade Minister Stockwell Day asked U.S. Trade Representative Ron Kirk today to “explore” such a deal, which would permit Canadian suppliers to continue to bid for U.S. local and municipal governments, despite “Buy American” provisions in the current U.S. economic stimulus plan. The two countries already have an agreement governing reciprocal access to government contracts on a federal level.

Although the idea has been widely discussed, this is the first time that the Canadian government has brought the idea directly to the Obama administration. Read more here.

Minister Day Promotes Canadian Trade in France

(Minister of International Trade)

The Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, today concluded a two-day visit to France where, during important multilateral meetings, he strongly reiterated Canada’s calls to keep markets open and resist the temptation of protectionism.

Minister Day and Ted Menzies, Parliamentary Secretary to the Minister of Finance, met with Organisation for Economic Co-operation and Development (OECD) and World Trade Organization (WTO) partners to address the current state of the world economy and the need for continued trade and investment liberalization.

“In order for us to succeed in restoring prosperity to the global economy, we need to work with OECD and WTO members to fight the impulse to hide behind trade barriers. Canada is leading by example by pursuing free trade agreements with markets all over the globe,” said Minister Day. “We are strongly opposed to protectionism and will continue to defend free and open trade on the world stage.

“The Doha Round of WTO negotiations offers the best way forward to ensure fair, rules-based international trade. We need to aggressively pursue these talks to ensure our Canadian companies gain access to as many markets as possible, especially during this difficult economic period.”

Following the OECD meetings and informal meetings of WTO ministers, Minister Day delivered a speech to senior business officials from the Canada-France Chamber of Commerce where he highlighted Canada’s aggressive free trade agenda, positioned Canada as the best place in the world to do business and called for the need to resist protectionism.

Minister Day also had a very productive meeting with his French counterpart, Anne-Marie Idrac, Secretary of State for Foreign Trade, where he reinforced the need for stronger commercial relations with France and emphasized the importance of concluding negotiations on a comprehensive economic and trade agreement with the European Union as soon as possible.

“An agreement with the European Union, now more than ever, will help provide Canadian companies with enhanced access to the world’s largest market,” said Minister Day. “We will continue to work with our European partners, such as France, to ensure this becomes a reality.”

France is Canada’s eighth-largest merchandise trading partner worldwide and its third-largest in Europe, after the United Kingdom and Germany.

For the complete text of the OECD meeting’s ministerial conclusions is available here (PDF) and more details about Minister Day’s visit can be found here.

CBP: Mandatory Automated Filing of Export Information


Memorandum: Frequently Asked Questions Enforcement of U.S. Census Bureau Regulations Requiring Mandatory Automated Filing of Export Information has been updated.

To read the full CBP legal bulletin, go here (PDF).

Thursday, June 25, 2009

U.S. Sends Encouraging Trade Signals on Buy America: Flaherty

(CBC News – The Canadian Press)

U.S. congressional leaders appear to be prepared to work with Canada to dampen the threat of protectionism between the world’s two largest trading partners, Finance Minister Jim Flaherty said Wednesday.

Earlier, the finance minister met with several key senators, including former Democratic presidential candidate John Kerry, as well as House budget chairman John Spratt, on the financial crisis and trade issues. “What I heard today was a willingness to work on this issue,” he said in a conference call from Washington. “[And] that Canada is viewed as having a special trading relationship with the United States.”

But Flaherty gave no indication whether the congressmen he met, who were both Republicans and Democrats, were willing to lobby for a repeal of the so-called “Buy America clauses being inserted in billions of dollars of infrastructure spending programs.”

The laws require lower-level governments to use American steel and manufactured goods exclusively in procurement that uses federal infrastructure dollars. The laws do not contravene free trade agreements because the spending is being directed by states and municipalities, not Washington. Read more here.

Manufacturers Want Early Transport Bill

(Journal of Commerce Online – John D. Boyd)

Factory sector lobbying giant ties high-wage jobs to health of freight sector

Getting a new multi-year, federal transportation spending program approved by Congress quickly is a key to the health of the factory sector, says the head of the National Association of Manufacturers. “Transportation is more than just mobility for people and goods – it’s also about high wage manufacturing jobs,” said NAM President John Engler, as he urged lawmakers to speedily pass new legislation to replace the program that expires September 30.

He issued the remarks following approval June 24 by a House subcommittee of the Surface Transportation Authorization Act of 2009.

Engler said those factory jobs depend on a healthy freight shipment system to bring in raw materials and distribute goods or equipment through the supply chain. “Transportation is the circulatory system of the nation’s economy,” Engler said. “We must keep it in excellent health.” Read more here.

Proposed "Trade Act" Could Lead to Re-opening NAFTA

(GHY International)

A trade reform bill introduced this week would put the brakes on pending trade agreements and could result in re-opening existing pacts such as the North American Free Trade Agreement.

Led by Rep. Mike Michaud (D-Maine), chairman of the House Trade Working Group, more than 100 supporters of the legislation claim it sets out a new international trade model that would help protect human rights, the environment and U.S. jobs. The working group has opposed free-trade agreements, including the Central American Free Trade Agreement and the pending pacts.

The proposed legislation would require that pending agreements with Panama, Colombia and South Korea be renegotiated to meet the TRADE Act’s requirements. The bill has the support of several progressive organizations, such as Public Citizen’s Global Trade Watch, environmental groups and all the major unions, including the AFL-CIO and Change to Win.

“This is the opportunity to build a new model for trade,” said Michaud, noting that a companion bill in the Senate is also in the works.

Business groups and industry lobbyists, however, say the measure would stifle trade and hurt the U.S. economy.

“This is a recipe for disaster,” said Christopher Wenk, trade lobbyist for the U.S. Chamber of Commerce. “These guys want to set a course backward on trade, and we want to set a course forward on trade. This is not the course our workers and exporters need right now.”

Andrew Shore, a partner with the trade law and lobbying firm Jochum Shore & Trossevin, which represents retailers and importers, said he also thought the measure was bad policy.

“From what we’ve seen, this piece of legislation is focused on stopping trade, not facilitating trade,” Shore said. “And it is totally counterproductive to the trade debate.”

The "Trade Act" would require that all future U.S. agreements include more labor and environmental provisions, and it includes a “sense of the Congress” proposal that calls for a replacement to so-called fast-track authority — which gave the Congress only a yes or no vote on trade agreements — by giving Congress a more signiicant say in selecting negotiating partners.

Wednesday, June 24, 2009

Lead-Footed Safety Issues

(Washington Times – Carter Wood, National association of Manufacturers)

It’s a safe bet that no member of Congress has ever given a speech proudly endorsing a bill to close mom-and-pop businesses, hurt low-income shoppers, cause libraries to discard children’s books and ban products ranging from dirt bikes to ballpoint pens.

Last year, Congress overwhelmingly passed a law that did all these things – forcing small businesses to close and punishing manufacturers, retailers and consumers. Yet the Consumer Product Safety Improvement Act (CPSIA) became law with few warnings – and no congressional floor speeches – about the serious economic harm it would cause.

To be sure, the CPSIA came in response to the public’s legitimate concern about dangerous toys and products, especially those contaminated by lead paint. Reports in 2007 produced a media storm and political pressure. Manufacturers and retailers alike welcomed increased funding and staffing for the CPSC. But Congress went further. Read more here.

Tuesday, June 23, 2009

Europe and U.S. Accuse China of Unfair Trade Practices

(New York Times – Jack Healy)

The United States and European Union accused China of unfair trade practices on Tuesday, saying the Chinese government was restricting exports of raw materials to give manufacturers in that country a competitive advantage.

Ron Kirk, the United States trade representative, said China had imposed quotas, export duties and other costs on raw materials used in the production of steel, chemicals and aluminum. In effect, he said, China was putting its thumb on the scale and giving Chinese manufacturers an unfair edge. He said that restrictions on exports of bauxite, zinc, yellow phosphorus and other raw goods make it more expensive for manufacturers to produce finished goods and threatened thousands of jobs in industries already rocked by the global recession. “Trade has to be fair,” Mr. Kirk said in a news conference in Washington. “If you’re going to do business with the United States, you’re going to have to play by the rules.”

The United States and European Union filed complaints with the World Trade Organization, the first step in what could be a years-long process of trying to resolve grievances against China.

“The Chinese restrictions on raw material distort competition and increase global prices, making things even more difficult for our companies in this economic downturn,” the European Union’s trade commissioner, Catherine Ashton, said in a statement. Read more here.

Monday, June 22, 2009

Minister Day Launches Infrastructure Trade Mission to Russia

(Minister of International Trade)

The Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, arrived in Russia today with a trade mission composed of 33 Canadian companies representing various facets of Canada’s infrastructure sector.

Minister Day’s trade mission kicks off with a tour of Novie Veshki, a Canadian-built housing complex and one of the largest subdivisions in Moscow. This development is the first in Russia to mirror Canadian building codes, making it a good example of how Canadian expertise can be applied – with great success – in this country.

“The Novie Veshki project is moving forward with the direct involvement of Canadian engineers and architects. It represents the first housing project in Russia to adopt building codes that mirror Canada’s strict regulations,” explained Minister Day. “I was impressed to note that this new housing complex looks just like the ones we see in Canada. In fact, looking around, it feels like I haven’t left Canada!”

The trade mission will stop in Moscow and Sochi, where Minister Day will also meet with representatives of Canadian companies already doing business in Russia, including infrastructure development for the Sochi 2014 Olympic and Paralympic Winter Games.

“Canadian companies have proven to be world-class competitors. They have a lot to offer, particularly expertise in construction and infrastructure development,” said Minister Day. “I am here in Russia this week to promote what Canada has to offer and to help Canadian businesses build bridges to the Russian marketplace.”

The Russian Federation is an emerging market and remains a key destination for Canadian companies specializing in technology, agriculture and infrastructure. Canada’s exports to Russia grew by 30% in 2008 and have increased almost sevenfold since 2000.

More details about Minister Day’s trade visit to Russia can be found here.

B.C. Truckers Keep Border Crossing

(Today’s Trucking)

Chalk a victory up for B.C. truckers. Regional officials from the Canada Border Services Agency (CBSA) in B.C. were persuaded by the B.C. Trucking Association to keep the Aldergrove border crossing (northbound) open to commercial vehicles.

Earlier this month, CBSA floated the idea of closing the Aldergrove crossing to truckers because the crossing is not equipped with the proper security checks to detect illegal activity in commercial trucks, and wanted the traffic diverted to the Pacific Highway crossing.

Aldergrove is the 12th busiest border crossing in Canada and about 100,000 commercial trucks use the route to cross the Canada/U.S. border per year. Read more here.

Trading Barbs: Canada Tries to Outlaw U.S. Cigarettes

(The Hill – Ian Swanson)

Tobacco country lawmakers are seething over a bill that would outlaw U.S. cigarettes in Canada. Bill C-32, which has been approved by Canada’s House of Commons but not the Senate, would ban the use of all flavorings, except menthol, in all cigarettes.

The controversial legislation is being considered amid a debate over “Buy American” language in the $787 stimulus bill that required U.S. content in projects as long as that did not violate trade deals.

The Canadian bill’s intent is to make tobacco products less affordable and accessible to young people by prohibiting candy-flavorings in cigarettes used to turn children on to smoking.

But the ban on flavorings would also include mild flavorings used in the processing of American-blend cigarettes made from burley tobacco. The flavorings are intended to make the products taste less harsh and are not detectable to smokers, according to Roger Quarles, president of the Kentucky’s Burley Tobacco Cooperative. Read more here.

World Bank Cuts Forecast for Developed Economies

(New York Times – Bettina Wassener)

Companies in Japan and Germany may have become less gloomy about their prospects in recent months, as surveys showed Monday, but neither they nor businesses elsewhere have much to cheer about as the world economy remains mired in a recession that could see it shrink by about 2.9% this year. Forecasts from the World Bank on Monday highlighted just how painful the recessions will be in various regions, despite mounting signs that the very worst of the downturn may be over.

The bank earlier this month said it expected a deeper global recession, forecasting a 2.9% contraction in gross domestic product for this year, rather than 1.7%, as it projected as recently as March. More detailed forecasts released Monday showed that much of this pain will be in high-income areas like the euro zone, the United States and Japan. The bank said that it expected economies in high-income nations to contract a total of 4.2% this year.

It expects the U.S. economy to shrink 3% and the euro zone 4.5%, rather than the 2.4% and 2.7% it forecast in March. For Japan, the World Bank now projects contraction of as much as 6.8% this year – significantly higher than the 5.3% it forecast three months ago. Read more here.

Revised D-Memo


Tariff Classification of Certain Articles Using Bluetooth® Technology

This memorandum (PDF) explains the Canada Border Services Agency administrative policy for the tariff classification of certain articles using Bluetooth® technology. The “Guidelines and General Information” outline the Bluetooth® protocol, and list several types of Bluetooth® adapters and Bluetooth®-enabled devices. The memorandum provides examples of Bluetooth® adapters and Bluetooth®-enabled devices and suggests appropriate tariff classifications.

Friday, June 19, 2009

$1B for Pulp Firms Threatens Trade Fight

(Winnipeg Free Press – Julian Beltrame, The Canadian Press)

The federal government has extended a $1-billion lifeline to Canada’s struggling pulp and paper industry in an effort to match billions of dollars in subsidies available to U.S. rivals. But the irony is that the effort may have the effect of touching off another costly and protracted trade fight with the United States over whether Canada is unfairly subsidizing its forestry industry.

The government’s announcement Wednesday was quickly followed by a release from the notoriously litigious U.S. Coalition for Fair Lumber Imports, which labelled the program an unfair subsidy. “To the extent that the subsidy goes to corporate groups that produce softwood lumber, this likely constitutes a violation of the U.S.-Canada Softwood Lumber Agreement,” said the group’s chairman Steve Swanson in a release.

Trade Minister Stockwell Day said the Canadian program is designed to level the playing field with the U.S., adding that the government has sought legal advice to ensure it does not contravene the agreement. “I would suggest anyone on the U.S. side who thinks this is not compliant with (the softwood agreement) needs to look in the mirror,” he told reporters late Wednesday. Read more here.

N. America’s Empty Ports to Get Busier as Year Ends – Analyst

(Wall Street Journal – Laura Mandaro)

The sharp drop in container volume at North America’s largest ports is likely to moderate toward year-end as consumer demand picks up for boxed goods like TV sets and sneakers, says a forecasting firm. IHS Global Insight, which estimates the volume of inbound container shipments at about a dozen U.S. and Canadian ports, expects volumes to fall at a slower pace as the year winds down and to even flatten.

“By the fourth quarter there will be signs of a turnaround. We will have stopped declining in terms of volume,” said Paul Bingham, managing director in global commerce and transportation at IHS Global Insight.

Supporting forecasts for a recovery is the recent improvement in consumer sentiment surveys that suggest households will buy more of the manufactured goods that Asia exports to the U.S. and Canada on large ocean-going ships, he said. Read more here.

Manufacturers Say 10+2 Costs $20 Billion

(Journal of Commerce Online – Alan Field)

Manufacturers say operations, delays to double cost of tariffs

U.S. Customs and Border Protection’s Importer Security Filing rule will impose an annual cost of more than $20 billion on the U.S. economy, according to a study by a manufacturers’ group. The “10+2” rule will require manufacturers and other importers to provide expensive new data to the government, says a report by the Customs and Border Coalition, a group launched by the National Association of Manufacturers in December.

Based on a survey of companies accounting for nearly 60% of seaborne manufactured imports, the survey corroborates an earlier report issued by the NAM, said NAM President John Engler. “The potential impact of this rule is huge,” Engler said. “To put the cost in perspective, it is virtually the equivalent of doubling the import tariffs that manufacturers now pay to bring products and components into the United States.” Read more here.

Thursday, June 18, 2009

Exporters’ Abject Pessimism Fades

(Export Development Canada – Peter G. Hall)

Last fall’s crisis of confidence sent worldwide gauges of business and consumer sentiment reeling. A growing sense that the global economy is no longer in freefall has recently increased the feel-good factor. Canadian exporters concur: the abject pessimism recorded six months ago has faded, with the Spring 2009 Trade Confidence Index posting its largest one-period gain since the post-9/11 surge.

The jump in confidence is needed relief. The Spring result interrupted a three-period tumble dating back to the fall of 2007, with each successive drop setting a new record low level. Market turbulence in the fall of 2008 only deepened what was already a serious loss of confidence. As impressive as the current gain is, it lifted the Index to just a whisker above the previous low point in the Fall of 2001.

Key to improved sentiment is a sense that both global and domestic economic conditions will improve. About one-quarter of respondents see brighter near-term prospects, up sharply from the previous survey. There was an even more dramatic change in the share of those expecting worse conditions. From a clear majority in the past survey, the pessimists shrunk back to about a quarter of total respondents. The remaining half of exporters in the survey expect current conditions to persist – hardly comforting, given the very subdued current levels of international trade activity.

Exporters are less enthusiastic about actual sales prospects. Although 37% of respondents expect near-term international sales to increase, the share fell slightly from the Fall 2008 result, and is well below the 50% norm. Domestic sales are not expected to fill the gap. True, 30% actually expect domestic sales to climb in the coming months, a slight gain over the previous survey – but the share is down from 40% a year earlier. For both foreign and domestic sales, the dominant group is the share of exporters expecting no growth – again, a sobering result given the current state of demand. Read more here.

Beijing Orders ‘Buy China’ for Stimulus Projects

(The Associated Press – Joe McDonald)

China has imposed a requirement for its stimulus projects to use domestically made goods – a move that could strain ties with trading partners after Beijing criticized Washington’s “Buy American” stimulus provisions.

Projects must obtain official permission to use imported goods, said an order issued by China’s main planning agency and eight other government bodies.

Even before the order, business groups worried that foreign companies might be excluded from construction and other projects financed by Beijing’s 4 trillion yuan ($586 billion) stimulus. Foreign makers of wind turbines complain they have been shut out of bidding on a $5 billion stimulus-financed power project.

“Government investment projects should buy domestically made products unless products or services cannot be obtained in reasonable commercial conditions in China,” says the order, dated June 1 and reported this week by state media. “Projects that really need to buy imports should be approved by the relevant government departments before purchasing activity starts.” Read more here.

Wednesday, June 17, 2009

CBP: Input Sought on Registration, Foreign Assembler Information Collections

(World Trade Interactive)

U.S. Customs and Border Protection is extending to July 17 the comment period on the proposed extension without change of forms 4455 and 4457, Certificate of Registration. This certificate is used to expedite duty-free or reduced duty entry for foreign-made personal articles that are taken abroad, which are dutiable each time they are brought into the U.S. unless there is acceptable proof of prior possession. It is also used for the registration, examination and supervised lading of commercial shipments of articles exported for repair, alteration, processing, etc., that will subsequently be returned to the U.S. either free of duty or at a reduced rate.

In addition, CBP is seeking comments by August 17 on the proposed extension of the Foreign Assembler’s Declaration (with Endorsement by Importer), which is used to substantiate a claim for duty-free treatment of U.S.-fabricated components sent abroad for assembly and subsequently returned to the U.S.

There Are Better Plans Than Buy Canadian

(Embassy – Leslie Campbell)

After enduring years of border thickening and complaining with little result, the “Buy American” provision in President Obama’s stimulus bill may have gone one step too far, awakening Canada from its torpor and simultaneously uniting the federal, provincial and municipal governments around one problem – something few other issues can do.

As is now well known, Obama’s stimulus plan, formally called the American Recovery and Reinvestment Act of 2009, contained a provision stipulating that all of the “iron, steel and manufactured goods used in the project are [to be] produced in the United States.”

The Canadian Manufacturers and Exporters (CME) noted in a May 25 briefing document that two subsequent bills, the Water Quality Investment Act, and the Green Schools Act contain similar protectionist clauses and the CME fears that most new appropriations bills will contain similar language.

Initial hopes that Canada would be protected by existing trade agreements proved mostly false. Much of the stimulus money is transferred to the states and local government for “shovel-ready” public projects to be started immediately. State and municipal procurement preferences are not covered under existing international treaties.

The Canadian government has been active on the issue since Buy American first emerged, and the Canadian Embassy in Washington brought all 13 of Canada’s consul generals to Capitol Hill on June 9 [see video below] to hold meetings with a reported total of 75 members of Congress and staff. Read more here.

All Politics Is Local

(Canadian Embassy, Washington DC)

On June 9, 2009, Canada’s most senior diplomats in the U.S. met with over 75 members of Congress and staff to drive home the message that the Buy American restrictions in the U.S. Recovery Act are costing jobs on both sides of the border. The Canadian delegation was accompanied by close to 30 American business leaders who support the message that by working together our two countries can kick-start the North American economy.

Tuesday, June 16, 2009

Buy Australia Policy Sparks Fears of Trade War

(Jacob Saulwick—Sidney Morning Herald)

The “Buy Australia” policy to be included in the state budget risks setting off an international trade war, the Trade Minister, Simon Crean, says.

Today's NSW budget will include a leg-up for Australian firms bidding for Government contracts in a bid to preserve jobs. But Mr Crean said giving Australian companies preferential treatment amounted to a de facto tariff and, in contributing to a “tit-for-tat downward spiral”, could have the perverse result of driving up unemployment.

“The bigger problem is that it triggers an international trade war. The gist of this runs completely contrary to everything we have said in terms of arguing not just for increased liberalisation of markets and the opening of markets but stopping the spread of protectionism.

“And what people have to understand is that there is a large number of jobs in Australia that are as the result of trade, not just in the export business but also in the import business.” Read more here.

CBP Makes “Significant Change” in Textile Entry Requirements

(via World Trade Interactive)

U.S. Customs and Border Protection recently issued a memorandum to its field offices outlining “a significant change in textile entry requirements” in light of the elimination of quotas on merchandise from China entered after Dec. 31, 2008.

Formal Entry

On May 24, 1989, CBP provided a list of HTSUS numbers that required formal entry regardless of value because of quota/visa concerns as well as a separate list of HTSUS numbers for which formal entry was required because of regulatory requirements. With the elimination of the China quotas, however, there is no longer a requirement to file a formal entry as established by TBT-01-036, except (pursuant to 19 CFR 143.21(a)) with respect to shipments of articles valued in excess of $250 that are classified in HTSUS Sections VII, VIII, XI and XII; Chapter 94; and Chapter 99, subchapters III and IV. The following HTSUS numbers currently fall within these sections:

• 3901.10.1000 - 4304.00.0000
• 5001.00.0000 - 6704.90.0000
• 9401.10.4000 - 9406.00.8090
• 9903.02.21 - 9904.52.50

CBP states that it is in the process of reviewing the above regulations to raise the $250 limit but that before a change can be implemented it must be proposed through the formal regulatory process.

Commercial Samples

With the elimination of the visa arrangements, CBP states, no provisions remain that allow for properly marked commercial sample shipments. As a result, samples entering the U.S. must now meet the conditions in HTSUS chapter 98, under subheading 9811.00.60, providing for mutilated samples, or another chapter 98 provision, as appropriate. Read more here.

Provinces Have Only Themselves to Blame for Buy American Woes

(Barrie McKenna — Globe & Mail)

It should have been a historic moment: Ten provinces and Ottawa united in wanting a sweeping reciprocal agreement with the United States to open up the two countries’ state, provincial and local purchasing markets.

Sadly, this watershed offer comes about 10 years too late. When the hundreds of billions in stimulus money are long gone, buried under layers of asphalt, reciprocity won’t be worth nearly as much.

This is a classic case of 20-20 hindsight.

After the signing of the North American free-trade agreement, Canada had a golden opportunity to do a deal that would have averted much of today’s frustration and heartache about U.S. “Buy American” restrictions. Read more here.

Study Highlights Need to Modernize Freight Transportation System

(World Trade Interactive)

The RAND Corporation released recently a study finding that the long-term efficiency and effectiveness of the U.S. freight transportation system is threatened by bottlenecks, inefficient use of some infrastructure components, vulnerability to disruptions and crucial environmental and energy concerns. Demand for freight transportation is expected to increase in the future, a RAND press release states, but the nation’s highways, ports and railroads are nearing the limits of their capacity in key urban areas and transportation corridors, and delays and uncertainty in the system’s performance translate into higher prices for consumers and reduced productivity.

“There’s an opportunity now for the United States to develop policies and plans that will improve the flexibility and security of the freight transportation system, which is currently vulnerable to a host of dangers that could cause costly disruptions, whether from a terrorist attack or a natural disaster, such as an earthquake,” said Richard Hillestad, lead author of the study. “The whole functionality of freight transportation is built on reliability and speed, and those elements need to be protected.”

Read more here or download the complete report (163 page PDF via STR Trade).

Monday, June 15, 2009

Government of Canada Announces $450 Million in New Funding for BDC to Assist Canadian Businesses

(Ministry of Industry)

The Honourable Denis Lebel, Minister of State (Economic Development Agency of Canada for the Regions of Quebec), on behalf of the Honourable Tony Clement, Minister of Industry, today announced that the Government of Canada is providing $450 million to the Business Development Bank of Canada (BDC) in support of small and medium-sized enterprises and innovative firms.

The funding will include $100 million to establish the Operating Line of Credit Guarantee and $350 million over three years to help drive venture capital investment in promising Canadian technology businesses.

“Today’s announcement will enable BDC to team up with financial institutions to give businesses with strong balance sheets and business fundamentals access to credit that will enable them to continue playing a key role in the vitality of our country’s economy. The venture capital funding will help growth-oriented businesses achieve even more ambitious objectives, while stimulating the Canadian economy.”

The Operating Line of Credit Guarantee will be delivered under the Business Credit Availability Program as part of the government’s Extraordinary Financing Framework announced in Canada’s Economic Action Plan, and it will improve access to financing for Canadian businesses during this period of economic uncertainty.

Read the complete government press release here.

Manufacturing Ranked #1 Industry for Economic Prosperity

(Industry Week – Adrienne Selko)

Americans still believe that manufacturing remains the backbone of the economy says new Deloitte study

A new annual index released earlier this week by Deloitte LLP and The Manufacturing Institute shows that Americans view manufacturing as the most important industry for a strong national economy. There is a wide perception gap, however, between the public’s highly positive views of manufacturing’s contributions to America’s economic success and their negative views about pursuing a career in manufacturing.

The survey, Public Viewpoint on Manufacturing (PDF), which assessed public perceptions and understanding of a wide range of issues related to manufacturing, shows that the majority of respondents (71%) view manufacturing as a national priority with 59% agreeing that the U.S. manufacturing industry effectively competes on a global scale. These results fall in line with public perceptions that manufacturing plays a larger role in overall economic prosperity compared to the technology, energy, health care, retail, communications and financial services industries.

“The public’s ranking of manufacturing as the top industry of importance to our economy, as well as its belief that U.S. manufacturers can compete globally, is very telling,” said Craig Giffi, Deloitte LLP vice chairman and U.S. Consumer & Industrial Products industry leader. “Americans clearly still believe that manufacturing remains the backbone of the economy.” Read more here.

Minister Day Launches Advertisements to Promote Canada’s Asia-Pacific Gateway

(Minister of International Trade)

The Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, today launched an international advertising campaign promoting Canada’s Asia-Pacific Gateway as the fastest, most reliable way to transport goods between Asia and North America.

“Our economic prosperity depends on moving goods quickly and efficiently around the world,” said Minister Day. “We are working hard with our partners throughout Asia and North America to promote the benefits of using Canada’s transportation system to move products from the factory floor to store shelves.

“The Government of Canada has taken a number of important steps to enhance the country’s transportation network. This international ad campaign will help make businesses more aware of the advantages of moving their goods through our seaports and airports, and on our highways and railways.”

Beginning June 15, advertisements will appear featuring the slogan “With Canada’s Pacific Gateway, everything gets there sooner than you think.” The ads will be placed in marine and air shipping trade publications in the United States, Japan, Korea and China, including Journal of Commerce, Logistics Management, Air Cargo World, Payload Asia, China’s Foreign Trade and Maritime Press. The ads will appear in publications and as online web banners at intervals over the next 10 months.

Read the complete government press release here.

U.S., Others Agree to Move Ahead on Anti-Counterfeiting Trade Agreements Talks

(World Trade Interactive)

The Obama administration has decided to continue negotiating a new multilateral Anti-Counterfeiting Trade Agreement, according to a June 12 announcement from the Office of the U.S. Trade Representative, having determined that the ACTA “remains an important part of the U.S. trade agenda.” Talks are set to resume in Morocco in July, with a goal of concluding an agreement in 2010.

The ACTA negotiations were launched in October 2007 and participants currently include the U.S., Australia, Canada, the European Union, Japan, Mexico, Morocco, New Zealand, Singapore, South Korea and Switzerland. USTR states that the ACTA is intended to help governments combat more effectively the proliferation of counterfeit and pirated goods that undermines legitimate trade and the sustainable development of the world economy and in some cases contributes to organized crime and exposes consumers to dangerous fake products. Specifically, this agreement aims to increase international cooperation, strengthen the framework of practices that contribute to effective enforcement and strengthen relevant intellectual property rights enforcement measures themselves. Read more here.

What To Do About Buy America?

(Globe & Mail)

U.S. states and municipalities buying goods for infrastructure projects are discriminating against Canadian manufacturers, despite Ottawa's lobbying efforts. Six panelists offer their solutions: William Robson (president of the C.D. Howe Institute), Ken Lewenza (president of the Canadian Auto Workers union), Chuck Gastle (a trade lawyer at Bennett Gastle P.C.), John Hayward (president of pump maker Hayward Gordon Ltd.), Gordon Giffin (former U.S. ambassador to Canada) and David Miller (mayor of Toronto).

Click here to read the article.

Harper Should Appeal to Obama, Exporters Say

(Kevin Carmichael — Globe & Mail)

Prime Minister Stephen Harper is coming under pressure to appeal directly to President Barack Obama to exclude Canada from his economic stimulus program’s Buy American provisions.

Canadian Manufacturers & Exporters, the Ottawa-based trade association that represents some 10,000 companies, wants Mr. Harper to seize a growing recognition of the issue in Washington to bring about a quick resolution before any more stimulus money is spent at the exclusion of Canadian bids.

“At the end of the day, it’s an issue that will be resolved faster and more efficiently if the request comes from the Prime Minister to the President,” said Jayson Myers, president of the CME, which accounts for 90 per cent of Canada’s exports.

Mr. Myers has been leading a lobby in the U.S. capital to match the fine print of Mr. Obama’s $787-billion (U.S.) stimulus plan with the spirit of his pledge that the spending will be done in a way that is consistent with the U.S.’s obligations under the North American Free Trade Agreement. Read more here.

Friday, June 12, 2009

U.S. to Boost Canada Border Presence by 45%

(National Post – Ian MacLeod, Canwest News Service)

Just days after a passport requirement for Canadians crossing U.S. land borders took effect, the United States is preparing to dispatch 700 more agents to patrol its northern border, the Ottawa Citizen has learned.

The move, confirmed Thursday by U.S. Customs and Border Protection, represents a 45% “plus-up” over current staffing of 1,550 agents. It will bring the total number of northern U.S. border agents to about 2,200 by September, 2010, more than a sixfold increase since 9/11.

Much of the additional manpower is needed to operate new border monitoring equipment and to run down investigative leads and other information generated by the new technologies, said a CBP spokesman in Washington. “We want to be sure and allocate resources to do the best job possible ... to make the technology and all that stuff that we're using up there work,” said Lloyd Easterling.

The technologies include radiation detectors, hidden ground sensors, security cameras and air and marine units, including Predator unmanned patrol planes monitoring remote border regions for potential terrorists and other criminals heading south across the almost 9,000-kilometre boundary. Read more here.

Thursday, June 11, 2009

Tory Tobacco Bill Holds Match to Brittle Trade Bond with U.S.

(Sheldon Alberts — Canwest News Service)

American cigarettes won’t be allowed in Canada: congressmen

Add American cigarettes to the growing list of products getting caught up in the increasingly testy trade relationship between Canada and the United States.

Tobacco growers in Kentucky have launched a protest against the Harper government over a new anti-smoking bill they argue will lead to a ban on the vast majority of U.S. cigarette exports to Canada.

Two U.S. congressmen have taken up the cause of 8,100 Kentucky farmers who grow “burley tobacco” — used in popular American-style cigarettes such as Camel and Winston — and have warned International Trade Minister Stockwell Day that Canada’s legislation violates NAFTA and other trade agreements.

The U.S. grievance was sparked by the introduction last month of Bill C-32, an amendment to the Tobacco Act that would ban the addition of certain flavours and additives to cigarettes and cigarillos that the federal government says are marketed at children and teenagers. Read more here.

Wednesday, June 10, 2009

Scuppered Projects Resurfacing

(Export Development Canada – Peter G. Hall)

Booming commodity prices led to announcements of sizable mineral investment projects in recent years. The commodity bust saw many immediate project cancellations. Rapid evaporation of billions of dollars of anticipated spending likely contributed to the economic downturn, and to the alarming drop in business confidence. But are all of the scuppered projects on indefinite hold.

Large-scale projects that were cancelled around the world are too many to number. Suffice it to say that there were enough of them that mineral commodity-watchers quickly projected an impending second rapid run-up in prices due to supply shortages, economic downturn notwithstanding. With its heavy mineral sector interests, Canada was not exempt. Cancellations hit the oil and gas industry, with the highest-profile cuts being multi-billion-dollar oilsands projects. Key investments in a number of base metal mines were also pulled in the past year.

At first glance, plunging selling prices seem reason enough to pull the plug. But that argument only works if the projects in question needed sky-high prices to justify them. For some projects, this appeared to be the case. But for most, projects were designed to make money at much lower prices than last year’s peaks. If so, then why the headline-grabbing cancellations?

Actually, plunging prices are in fact the answer – with a twist. Input costs for these huge projects also went into freefall. Everything from steel to copper and other base metals, fuel, building materials, to machinery and equipment has seen price compression in the past year. Declines have been well into the double digits, and as such, have a marked impact on the bottom line. Read more here.

Canadian Ports Call U.S. Allegations They’re Receiving Subsidies ‘Hogwash’

(The Canadian Press – Brenda Bouw)

Canada’s port operators are scratching their heads at allegations coming from south of the border that they are receiving government subsidies that may contravene international trade rules, calling the complaints yet another U.S. protectionism measure.

Gary Leroux, executive director of the Association of Canadian Port Authorities, accused in turn the U.S. ports of being awash in government money. “It just boggles the mind that that kind of assertion can be made, under the WTO especially... I think the reverse might be in order,” Leroux said in an interview Tuesday. “It’s hogwash. Canadian ports are cash cows and the U.S. ports are recipients.”

Leroux was commenting on allegations that surfaced this week from the U.S. ports that Pacific ports in Vancouver, and Prince Rupert, B.C., in particular, are taking business away from their American competitors thanks to allegedly illegal government subsidies which are against World Trade Organization rules.

Leroux said while money has been spent on upgrading road and rail links to the B.C. ports, the U.S. ports receive several types of government funding from infrastructure dollars to low-interest bonds and through the collection of municipal taxes. Read more here.

Business, Foreign Governments Raising Concern on “Buy American” Requirements

(World Trade Interactive)

Domestic business groups and foreign governments are cautioning the U.S. against the proliferation of “Buy American” provisions. The primary concern is that other countries will pursue similar measures, sparking a trade war that could significantly hamper prospects for economic recovery.

In comments on the Buy American requirements included in the economic stimulus bill passed earlier this year, the U.S. Chamber of Commerce said events are beginning to validate its prediction that these requirements “would have numerous unintended consequences on the United States and harm American workers and companies.”

For example, there is “a high degree of confusion” among government agencies and private-sector contractors as to what exactly is covered under the statutory language, a situation that is “even further exacerbated at the state and local levels,” where these issues are “completely unfamiliar concepts.”

This confusion has caused both the government and businesses to “be overly cautious and not take into account certain exemptions due to an incorrect belief that certain products are covered that are in actuality not covered,” which in turn has caused “many of our trading partners tremendous concern.” The Chamber cautioned that more U.S. manufacturers could feel the adverse impacts of the Buy American mandate as time goes on if the government does not provide guidance on which products are covered and allow additional exemptions. Read more here.

Say ‘No’ to Buy Canadian

(National Post – Terence Corcoran)

Canada has more to lose by playing the protectionist game

The great steam boats of Canadian trade retaliation are leaving port, heading off in all directions. There’s the SS Michael Ignatieff, who appeared set to engage the United States in a retaliatory skirmish over Buy American policies. “We need to remind the Americans that we’ve got a multi-billion dollar municipal and provincial procurement market in this country,” Mr. Ignatieff told the Federation of Canadian Municipalities (FCM) on the weekend. “Americans have unfettered access to it right now, but if they shut down their markets, there will be consequences.”

Thus fired up, Canada’s municipalities voted to adopt something called a “fair trade” resolution that establishes a “common front” to try to stop protectionism built into U. S. economic stimulus legislation. Under the stimulus laws, state and local municipal infrastructure projects can only buy international goods from countries that have local procurement agreements with the United States.

Many countries have such agreements, and as a result the Buy American provisions do not hurt their industries. But Canada does not have local procurement pacts with the United States, which means Canadian businesses cannot participate in the $780-billion U. S. economic stimulus bonanza.

The FCM mayors said they “stand united” – sort of, the vote being 189-175 – in threatening “countervailing procurement measures” against the United States. So as not to appear to be fomenting an immediate trade war, the resolution said the mayors are “holding back” their endorsement of countervailing trade action for 120 days.

This is all mostly sabre-rattling, but it can be dangerous. Among the dissenters was Toronto Mayor David Miller. The left-wing mayor of Canada’s biggest city suddenly emerged as a free-trader. “It is appropriate to ask for free trade; it is not appropriate to make threats.” Read the complete editorial here.

Tuesday, June 9, 2009

Canada to Launch Intense Lobbying Effort in Congress over Buy America

(The Canadian Press – Julian Beltrame and Ross Marowits)

Canada is launching a major arm-twisting effort in Washington on Tuesday that targets American congressmen and senators vulnerable to tit-for-tat retaliation against U.S. protectionism. Trade Minister Stockwell Day said Canadian trade officials from across the United States are descending on Congress and will be meeting with lawmakers armed with numbers about how many jobs in their districts could be lost if Canada retaliates against Buy America provisions.

“This is the ongoing full-court press to get the attention of Congress that the Buy America provisions as currently constituted are going to wind up hurting jobs, hurting business on both sides of the border,” he said in an interview. “We’ve produced a map that goes state by state, shows the vulnerabilities in each state where there are businesses that expressly do business with Canada that are at risk to being hurt if municipalities on our side of the border retaliate.”

Canada’s most senior diplomats in Washington and 13 consuls general are expected to meet with over 75 members of Congress and staff on the issue.

The action follows a narrow vote among Canadian municipalities over the weekend advocating retaliation in kind against Buy America, which forces U.S. municipalities and states to use American steel and manufacturing exclusively for projects paid by taxpayers. The Canadian municipalities say it would be fair trade to discriminate against any country that discriminates against Canadian suppliers in local procurement contracts. Read more here.

U.S. Ports Take Aim at B.C. Rivals

(The Globe and Mail – Steven Chase and Patrick Brethour)

Both sides make subsidy accusations; American port authorities want Washington to take issue to WTO

Canadian ports are being targeted by U.S. rivals as trade rule scofflaws benefiting from illegal government subsidies – part of a mounting wave of American protectionism as the global recession hammers shipping traffic.

U.S. port officials yesterday brought their complaints against Canada to the Office of the United States Trade Representative, making the case that government help for ports such as Vancouver is partly to blame for a decline in business at American terminals.

“We’re playing Paul Revere on this, but it’s the Canadians, not the British, who are coming,” Port of Long Beach commission president Jim Hankla told Bloomberg News in Washington yesterday.
California’s Long Beach, the second-busiest port in the U.S., has seen container traffic drop by more than 40 per cent from an August, 2006, peak – a decline Mr. Hankla said is largely due to the downturn but can be partly blamed on Canadian investments that diverted cargo from American facilities.

In a draft memo prepared for the Washington visit, a Long Beach port official argued that Canadian governments’ spending on rail and port infrastructure constitute illegal subsidies under the World Trade Organization, a global trade referee. Read more here.

Bilateral Canadian Beef Talks Fail

(JoongAng Daily – Cho Jae-eun)

Though U.S. beef is allowed back in Korean stores, its Canadian cousin is not

The feud over resuming Canadian beef imports in Korea is expected to continue to the final round as negotiations between the two countries in Geneva this week prove fruitless.

The consultation talks are one of the first steps in the World Trade Organization’s settlement procedure for disputes. This April, Canada asked the WTO to review Korea’s ban on imports of Canadian beef, calling it “unjustified” and against international trade rules.

Under WTO rules, when a complaint is filed, bilateral consultations must begin within 30 days. If, after 60 days, no agreement has been reached, the complainant may ask a dispute settlement panel to review the case and make a final ruling. Read more here.

U.S. Exporters Say Customs and Carriers Not on Same Page

(Logistics Management – Patrick Burnson)

Shippers are still complaining about the confusion caused by Customs & Border Protection enforcement policies. While the economy took center stage at last week’s annual meeting of the Agriculture Transportation Coalition (Agtc) in San Francisco, shippers were also expressing considerable concern about the New Automated Export System Regulations (AES).

“We are doing everything in our power to comply,” said Don Lake, an executive with Dunavant Cotton, “But without industry standards, it’s still difficult to avoid getting in trouble with Customs.”

Currently, The Customs and Border [Protection] (CBP) guidance is broken into various categories of non-compliance including non-filing and late-filing. U.S. cotton shippers are fine with this, said Dunavant, but other aspects of the law have been problematic. “Many of us don’t know the correct value of the shipment in time to meet the carrier deadline for proof of AES filing,” he said. “And as containers are often rolled, and it can be difficult to track containers and update AES accordingly.” Read more here.

Monday, June 8, 2009

Canada: Land of Opportunity

(The Toronto Star – Madhavi Acharya-Tom Yew)

The recession has cast our business potential in a whole new light – now we’re attracting more American suitors than ever

When you ask Darrell Gacom what he liked about his trip to Toronto last week, he’ll sound like any other tourist. He’ll tell you about clean streets, friendly people and going to the CN Tower for dinner. But here’s what really impressed the Tampa, Fla., businessman: the city’s educated workforce, the dozens of languages it speaks, the safe communities and the low corporate tax rates.

Gacom’s stop in Toronto was part of a trade mission. His company, Ott Lite, currently sells about $1 million worth of specialty light bulbs and fixtures in Canada. He figures that’s just the beginning. During his visit, he met with local firms that want to sell his products here. “There’s no real barriers to entry and no real barriers for growth, as far as I can see,” he said.

When it comes to trade, Canada has long been the quiet, sweet girl next door to the world’s economic powerhouse. No longer – these days, Canada is more like the prettiest country in the room. Long-time trading partners that were content to just gaze lovingly across the border are sending trade delegations, often with local politicians and business leaders in tow, eager to affirm existing business ties and make new connections.

“Over the course of the year, we might have half-a-dozen events. In 30 days, we’ve had three,” said Carol Wilding, president and chief executive of the Toronto Board of Trade. “Clearly there’s a trend of increasing interest for U.S. delegations to come to Toronto.” Read the complete article here.

EU Delays Mandatory Advance Cargo Information until 2011

(World Trade Interactive)

The European Union is delaying until January 1, 2011, the requirement for the advance submission of certain information on inbound and outbound cargo.

Under the Safety and Security Amendment to the EU Customs Code, which was enacted in April 2005, traders must provide customs authorities with certain information on goods prior to import or export from the EU. In principle, economic operators are required to electronically submit the relevant security data beginning July 1. However, the EU has recently announced that between July 1, 2009, and December 31, 2010, this advance declaration will be an option and not an obligation. During this transitional period goods not declared in advance will be submitted to risk analysis after arrival or before departure.

Click here for more information.

Border Crossing at Aldergrove Faces Commercial Traffic Closure

(Abbotsford News – Al Irwin)

A commercial traffic closure at the Aldergrove/Lynden border crossing would be “devastating” to the local economy, says Langley Township Mayor Rick Green. Green recently outlined what Lower Mainland mayors, chambers of commerce and MPs and MLAs have been doing concerning a proposal by the Canadian Border Service Agency to eliminate truck crossings at Aldergrove.

Meanwhile, chambers of commerce across the province have called for the federal government to take immediate action to balance the need for border security with the need to facilitate trade, commerce, and tourism opportunities in British Columbia. […]

The CBSA says that the Aldergrove border crossing was built originally for passenger vehicle processing only. The facility does not allow adequate space for officers to thoroughly conduct commercial truck exams. Dedicated ports of entry for commercial vehicles are located a short distance away at Pacific Highway and Huntingdon/Sumas.

CBSA also pointed out, “The recent Canadian budget includes $80 million nationally for border crossings. Pacific Highway and Huntingdon are specifically called out in the budget for improvements to commercial vehicle operations ...” Read more here.

Brokers Broadsided by Proposed FDA Registration

(American Shipper)

U.S. customs brokers say they were broadsided by proposed legislative provisions in the 2009 Food Safety Enhancement Act that would require them to be registered along with importers in an effort to strengthen the Food and Drug Administration’s oversight of the nation’s food supply.

“These provisions surfaced only last week, were preceded by no consultation with our industry and, we are told, may go to subcommittee mark-up next week,” said Mary Jo Muoio, president of the National Customs Brokers and Forwarders Association of America, in a letter to House Energy and Commerce Committee Chairman Henry Waxman on Thursday.

Muoio noted to the chairman that “the committee’s draft treats customs brokers as if they are importers.”

She further added that the committee ignored existing regulatory and licensing requirements already long in place for the customs broker industry. The draft legislation “attempts to erect a duplicate regulatory framework that distorts the role of the broker,” she said. Read more here.

Canada a Rogue State; Yeah, That’s the Ticket

(Tom Ford — Winnipeg Free Press)

Trade experts say a border is “thick” when bureaucracy impedes the movement of goods, services and people. The Canada-U.S. border is now so thick it has love handles.

If our fatso border doesn’t slim down, it could ruin Canada’s and America’s long-term relationship of being good neighbours and each other’s best trading partner.

The border is getting fatter because Canadians and Americans view it differently. Canadians think it’s a line on a map that we should be able to cross quickly. Americans are focused on protectionism and the horrors of terrorism and want a border like China’s Great Wall.

The border’s problems are compounded by the fact that America has a Democratic president and a Congress controlled by Democrats. They are susceptible to the pleadings of unions interested in protectionism. As well, they’re worried Dick Cheney, the former vice-president, and other Republicans will accuse them of being soft on terrorism.

We talk about friendship and free trade, but the Americans are not listening. Janet Napolitano, the American secretary of homeland security, thought, until she was corrected, that some of the 9/11 terrorists came from Canada. At an appearance last week in Toronto, former presidents George W. Bush and Bill Clinton were unaware Canadians now need a passport or approved document to get into the States. Read the complete editorial here.

Britain Launches Anti-protectionism Trade Website

(Peter Griffiths — Reuters)

Britain launched a website on Monday that will give live updates on global protectionism to foster free trade and help the world economy recover from the worst recession since the 1930s.

British Business Secretary Peter Mandelson said the Global Trade Alert site would act as a watchdog to deter governments from protectionist measures that he warned would only make the recession “longer and more painful”.

“Everyone is watching everyone else and there is a lot to be said for peer pressure,” he said. “(The) trading system faces a huge crisis of demand and of credit, but the real long-term risk to its health lies in protectionism.” Read more here.

Related: “Early warning on protectionism needed” Times Editorial by Lord Peter Mandelson.

Ottawa Pours $1M Into U.S. Border Crossing

(The Canadian Press)

The federal government says it's planning to invest $1 million to improve the Canadian customs facility at the Peace Bridge in Fort Erie, Ont. The bridge links Canada to the United States at Buffalo, N.Y.

In a statement, Justice Minister Rob Nicholson says the project includes the construction of a fifth inspection booth for Canada-bound commercial vehicles. Nicholson, an MP for the area, says the funding provides much-needed economic stimulus to the community while also supporting international trade.

He says the improvements will reduce traffic congestion, facilitate local border crossings and complement projects on the American side of the border. Construction is schedule to begin in September, 2009, and is scheduled for completion in February, 2010. Ottawa's contribution will be matched by the Buffalo and Fort Erie Public Bridge Authority.

The Peace Bridge is the third-busiest Canada-U.S. commercial truck crossing.

Related: Government of Canada press release.

Friday, June 5, 2009

Appointment of Close Obama Associate as U.S. Ambassador Good News for Canada

(The Canadian Press – Lee-Anne Goodman)

The close friendship between the incoming U.S. ambassador to Canada and President Barack Obama is delighting those who have been hoping for a better relationship with the United States. David Jacobson, a 57-year-old Chicago lawyer who served as a key fundraiser during Obama’s historic run for White House, got the official nod on Thursday after weeks of speculation.

The president announced his pick for Canada along with a handful of other appointments to countries including Mexico, Saudi Arabia and South Africa.

I am grateful that these individuals will help represent our nation abroad during this important time for our country and the world,” Obama, who was in Egypt on Thursday to deliver a speech to the Muslim world, said in a statement. “They bring a depth of experience and I look forward to working with them in the months and years to come.”

Jacobson replaces George W. Bush confidante David Wilkins, who left the post the day before Obama’s inauguration in January. While his appointment has yet to be confirmed by the U.S. Senate, there’s no indication it will be held up. In the wake of a series of senior Obama cabinet appointees stepping aside because of past tax issues, the administration has been careful to do extensive and meticulous vetting of its would-be ambassadors to avoid any further embarrassments.

Kory Teneycke, spokesman for Prime Minister Stephen Harper, said the PMO welcomed working with Jacobson once his appointment has been confirmed. “It’s good news,” he said, calling the U.S. “our friend, our neighbour, our ally, our largest trading partner.” Read more here.

New on the WTO Website – Map of WTO Disputes


View the map on the WTO website.

Click on a country to see a country’s involvement as complainant, respondent or third party.

Example: The one case brought by Canada against Australia concerns measures affecting the importation of salmon.

DFAIT – State of Trade and Investment Update 2009

(CIFFA eBulletin)

Canada’s State of Trade: Trade and Investment Update 2009 is Foreign Affairs and International Trade Canada’s annual flagship report highlighting Canada’s international trade and investment at home an abroad in 2008.

Backgrounder information and an Executive Summary can be found here.

Thursday, June 4, 2009

Ottawa Pushes for New Chapter in Free Trade with U.S.

(The Globe and Mail – Campbell Clark and Rhéal Séguin)

To get around Buy American provisions, PM hopes to bring awarding of local contracts under the free-trade umbrella

The Canadian government is asking the provinces to join it in creating a new trade deal with the United States. Motivated by growing concern that Canadian firms are being frozen out of billions of dollars worth of bids in an increasingly protectionist United States, the Prime Minister is attempting to redraw the U.S.-Canada trade map.

Because the 1993 North American free-trade agreement does not include spending by local jurisdictions, contracts across North America involving everything from sewage systems to subway repairs are being awarded outside the framework of continental free trade.

And as the recession continues, Canadian firms have reported it is increasingly difficult to win rich contracts in U.S. cities because of the Buy American provisions of President Barack Obama’s massive economic stimulus package, even though NAFTA countries are supposed to be exempt from them.

So at a press conference yesterday, Prime Minister Stephen Harper said he wants to bring the awarding of local contracts – in both the United States and Canada – under the free-trade umbrella.

Any Canadian proposal to add a new chapter to NAFTA, however carries the risk that the United States will demand trade concessions in other areas. Read more here.

New Book Published on Carriage of Goods

(International Freighting Weekly – James Falkner)

TT Club has published a new transport manager’s handbook on the Conventions for the International Carriage of Goods. It replaces an earlier version and offers a guide to what conventions are in use in which countries, for all modes of freight transport.

The handbook is designed specifically for transport managers who do not have a legal background, but who have to deal with claims and insurance for their companies.

Editorial: The Peril of ‘Buy American’

(New York Times)

It’s not surprising that Democrats in Congress could not resist adding a “Buy American” provision to the fiscal stimulus bill earlier this year. It might seem sensible (or at least politically useful) to ensure that taxpayer dollars would be used exclusively to support American jobs.

But as states and municipalities start spending stimulus money, the idea is starting to look as counterproductive as it should have looked from the beginning. It is sparking conflict with American allies and, rather than supporting employment at home, the “Buy American” effort could ultimately cost American jobs.

Foreign and domestic companies that employ hundreds of workers in this country cannot bid for government projects because they cannot guarantee the American provenance of all the steel, iron and manufactured goods in their supply chain, as the provision requires. Others are scrambling to figure out whether American-made alternatives exist to replace their foreign inputs.

The steel company Duferco Farrell, for example, has cut about 600 jobs in Pennsylvania after it lost orders from its biggest customer because some of its goods are partly produced abroad. The Westlake Chemical Corporation of Houston has lost sales to a Canadian vinyl pipe maker that is cutting back production because it can’t bid for some American jobs.

America’s trading partners expected more of President Obama, who signed a declaration against protectionism at the summit of the biggest nations in April. He convinced Congress to add a clause to its “Buy American” effort promising Washington would meet its international obligations. But cities and some states are not bound by the rules of the World Trade Organization and the North American Free Trade Agreement. Read more here.

Globalization Dented, not Derailed

(Export Development Canada – Stephen S. Poloz)

Globalization always rubs some people the wrong way, but this is especially the case during recessions. This one is worse than usual, because many blame globalization for the contagion that brought the U.S. financial crisis and economic downturn to their shores.

Protectionist rhetoric and practice is on the rise, and there has been a sharp decline in international trade flows. With transportation costs creeping higher, and some predicting an eventual return to sky-high energy costs, it would seem that globalization faces its own perfect storm.

Obviously, there is more than one way to look at this, but let’s begin by carefully defining globalization. Most would agree that globalization refers to the emergence of borderless business.

One manifestation of this trend is the development of global supply chains, where companies fragment their production processes just as they would if they were in a single building, but instead locate each process in a specialized facility located anywhere in the world that makes good business sense. The processes are then connected by international trade, rather than by a conveyor belt – our trade dependence rises.

That’s a good definition, but not the whole picture. A second manifestation of globalization is cross-border investment, as some companies replicate their operations in their target sales markets. To illustrate, Canadian companies have levels of sales from their foreign-based affiliates that are about the same order of magnitude as total Canadian exports. These sales do not show up in our basic trade statistics, but they are very important to Canadian incomes and to the sustainability of our companies. Read the article or view the video here.

Wednesday, June 3, 2009

New Documents to Assist ACE Transition


U.S. Customs and Border Protection is providing supporting documentation on its website for the new ACE entry summary process it successfully piloted in Buffalo last month and in Chicago, Laredo and Long Beach in May.

ACE or the Automated Commercial Environment is a CBP initiative designed to modernize the agency’s international trade business processes, improve homeland security and re-engineer the technology system that supports them.

The latest ACE pilot program allows the trade community to file and CBP to process, in ACE, the two most common entry types, 01 Consumption and 11 Informal. The ACE entry summary pilot will be extended to additional ports in stages to permit rigorous testing before it is implemented nationally. ACE entry summary processing for remaining entry types will be added throughout the next few years.

The ACE outreach documents will assist the international trade community in their transition to ACE. This information includes additional links to helpful memos and directives on ACE entry summary processing, and will be continually updated with every major ACE release.

• ACE Entry Summary Instructions These instructions are organized the way the data is transmitted and stored in ACE. They include descriptions of the entry summary data fields and links to program and policy documents.

• Business Rules and Process Document (Trade) Version 1.1 ACE is a true electronic system of record keeping for entry summary processing. This significant change requires revised operational policies and procedures, and this document informs the public of those changes. Links to program and policy documents are included as well.

• CBP Form 7501 TEST – Document/Payment Transmittal This test 7501 transmittal may be used by the trade as a cover sheet to submit required paper documents or monies due related to an ACE entry summary.

• ACE Entry Summary Rejection Response This response template may be used to respond to a CBP initiated electronic entry summary rejection.

CBP has been working closely with the members of the Trade Support Network and the ACE ambassador representatives to develop these documents, and will continue this collaboration over the coming months to ensure clear and transparent guidance on CBP’s importing requirements.

Feds Say Bridge Treated Fairly

(The Windsor Star – Dave Battagello)

The Canadian government has assured Michigan lawmakers that Canada is committed to building another border crossing as quickly as possible, despite a bid by the Ambassador Bridge to derail the process.

Michael Wilson, Canada’s Ambassador to the United States, said in a letter to state leaders that bridge allegations of unfair treatment surrounding its twin span proposal are unfounded. Wilson denied complaints by bridge officials that the Canadian government has delayed the twin span’s environmental assessment and said the view that the government-sponsored Detroit River International Crossing bridge is costly and not needed are misguided.

Wilson’s three-page letter was addressed to the speaker of the Michigan House of Representatives and Senate majority leader. A copy was also issued to Michigan Gov. Jennifer Granholm.

Wilson said the bridge twinning was ruled out by DRIC because of negative environmental impacts in Windsor, lack of system redundancy and inadequate space for a border inspection plaza in Windsor. “In Canada, the bridge company does not have any of the approvals necessary to proceed with construction,” Wilson said. Read more here.

Tuesday, June 2, 2009

In Tough Times, We Can’t Afford Provincial Barriers

(The Globe and Mail – Gordon Gibson)

Section 121 of the BNA Act needs teeth

A reason for the success of our federalism is decentralization of power, from Ottawa to the provinces and from the provinces to towns and the private sector. Indeed, we need more of this. But there is one area where the feds should take a legal sledgehammer to the provinces and do what the Americans call a “cramdown” to free up trade in this country.

Petty impediments to interprovincial trade in terms of local licensing and standards and particularly in provincial and municipal procurement have always been a nuisance. Now they’re a major problem, driven by tough times.

First, the United States is turning more protectionist and inserting “Buy American” requirements into more and more government projects. In some cases, NAFTA offers no defence and, even when it does, the rules take years to enforce. When a town in California instructs a contractor to rip up some piping because the valves were made in Canada, you know you have a problem. But the Americans can reply: “Your provinces do the same thing”

Second, Ottawa is working hard to negotiate a free-trade agreement with the European Union. This would be a good thing on its own merits, with the additional advantage of making us a bit less reliant on America. But there’s a huge stumbling block for the Eurocrats. Since so much of the purchasing in Canada is controlled by the provinces, the EU wants any deal to be enforceable on provincial and municipal procurement as well. This is a deal breaker. Read more here.

President´s FY 2010 FDA Budget Proposes Food Industry User Fees

(Mondaq – Michael D. Flanagan et al., Foley & Lardner LLP)

President Barack H. Obama’s recently released Fiscal Year (FY) 2010 budget for the U.S. Food and Drug Administration (FDA) proposes historic spending for the agency of more than $3 billion, an increase of more than $500 million over FY 2009 spending. One of the two major initiatives proposed by the FY 2010 budget is “Protecting America’s Food Supply.” To help fund the budget increases, the president’s proposal would impose four new user fees to generate more than $200 million. The president’s FY 2010 budget for the United States Department of Agriculture (USDA) also proposes new user fees, but would require new legislation to allow the USDA to collect the fees.

Under the food safety initiative, funding for food-industry regulatory activities would exceed $1 billion, a $259 million increase over FY 2009 spending levels. Notably for the food industry, the budget proposes to collect nearly $95 million in new user fees. The proposed user fees would be allocated to register food facilities, increase food inspections, issue food and feed export certificates, and re-inspect food facilities that fail to meet the FDA’s safety standards. Read more here.

Monday, June 1, 2009

Tighter U.S. Border Risky to Both Sides

(The Toronto Star)

This country’s financial future hangs somewhere between the optimism of Washington security czar Janet Napolitano’s Wednesday visit here and the pessimism of Monday’s new “papers, please” border controls. In the fight to keep trade flowing freely, painful Canadian sacrifices in blood, money and principles are proving poorly matched against U.S. terrorism fears and rising protectionism.

Two hard truths frame our current reality. Apart from national unity, not much is more vital to this country than timely access to the world’s richest market. And nothing Ottawa has done since 9/11, not even Afghanistan missions costly in lives and loonies, convinced Washington that America’s back door is latched and locked.

That failure, multiplied by recession and the reflex U.S. “Buy American” response, has risky consequences. Along with squeezing arteries carrying more than a $1 million in goods and services every minute, they threaten the success of two economies moving beyond trade to making things together.

Without open capillaries between corporations operating in both countries, job-creating industries vital to Canada, including an auto sector already staggering under continental restructuring, will strangle. After all, only a bonehead CEO would invest on the wrong side of a thickening border easily closed by a terrorist strike.

Liberals recognized that danger and their Conservative successors have been just as willing to counter it by testing Canadian sensibilities. From intrusive anti-terrorism laws to abandoning a teenage Guantanamo Bay prisoner, to sending troops to Asia, key decisions continue to be shaped by determination to prove Ottawa takes security seriously. Read more here.

Day Blasts “Buy American’’ Movement

(Canwest News Service)

International Trade Minister Stockwell Day lashed out Friday at growing American protectionism, warning that if trade barriers continue multiplying, retaliatory action is inevitable.

Day, in Calgary to speak to the city’s chamber of commerce, said Ottawa is aggressively lobbying political, diplomatic and business leaders in the United States in a bid to quell “Buy American’’ fervour.

He encouraged Calgary’s business community and provinces to join the federal effort.

“If this continues - the Buy America provisions - people everywhere are going to get hurt,’’ Day told reporters after his speech. “Workers will be hurt in Canada and the United States, and we want to see this turn around.’’

Day said the Harper government would like to see U.S. President Barack Obama sign an executive order overruling a decision by Congress to expand Buy American rules that bar Canadian companies from bidding on $787 billion US worth of economic-stimulus projects.

The fallout is already being felt in Canada, as some municipal and state governments are prohibiting Canadian firms from bidding on lucrative infrastructure contracts.

In response, one municipality west of Toronto has banned the purchase of goods from any country that bars Canadians products. A similar resolution will be debated at the Federation of Canadian Municipalities’ annual conference next month. Read more here.