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TradeInFocus   Our compilation of news to keep you in focus on key trade matters

New Advance Security Data rare Game Changing for Exporters
TIACA - 29 February 2016
New global security programs requiring advance data on all shipments will have a major impact on exporters.
Shipments could be delayed, or miss flights, if the required data is not submitted correctly, and in advance, whether the freight is being carried in the belly of passenger aircraft, or on a freighter.

The risk-based programs, referred to as Pre-Loading Advance Cargo Information, or PLACI, are the direct result of the bombs shipped via UPS and FedEx from Yemen in 2010. Under the programs, destination or transiting regulators will analyze shipment data elements including consignor name and address, consignee name and address, pieces, weight and commodity description plus HAWB number - the so-called "7+1" elements.

Those who are unable to transmit the "7+1" data electronically, either to a regulator, or to the carrier selected for transport, may see their shipments delayed whilst analysis is being completed. TIACA is encouraging all forwarders and exporters to make sure they understand the implications of the new legislation with a clear, concise explanation, set out here. TIACA is working closely with the regulators involved to help ensure the air cargo supply chain remains secure and robust.


Weighing-in on Box Weigh-ins
Cargo Business Newswire - 29 February 2016
Mis-declaration of container weights has been a hot topic for many years; it's probably responsible for many accidents and was implicated in the sinking of the MSC Napoli in 2007. That's because even one overweight or badly loaded container can have a huge impact on others once loaded on a container vessel. Erroneous weights can also lead to incidents on land, including trucking accidents and overweight cargo falling through the container bottoms.

Some 600 containers are washed overboard due to weight or loading discrepancies each year, according to official estimates, but that number might be much larger. In addition, the International Cargo Handling Coordination Association (ICHCA) has estimated that up to 20 percent of containers are mis-declared.

Last year the International Maritime Organization (IMO) amended the Safety of Life at Sea Convention (SOLAS) to require, as a condition for loading a packed container onto a ship for export, that the container have a verified weight - known as VGM (for verification of gross mass). After July 1, it will be a violation of SOLAS to load a packed container onto a vessel if the vessel operator and marine terminal operator do not have a verified container weight. Without it, the container can't be loaded aboard the vessel.

There are two methods in which the shipper can obtain the verified gross mass of a packed container:
Method 1 - Upon the conclusion of packing and sealing a container, the shipper may weigh, or have arranged that a third party weigh, the packed container.

Method 2 - The shipper or, by arrangement of the shipper, a third party may weigh all packages and cargo items, including the mass of pallets, dunnage and other packing and securing material to be packed in the container, and add the tare mass of the container to the sum of the single masses of the container's contents.
Regarding both methods, SOLAS says the weighing equipment used must meet the applicable accuracy standards and requirements of the country in which the equipment is being used. Shippers, freight forwarders, vessel operators, and terminal operators will all need to establish policies and procedures to ensure the implementation of this regulatory change.

And therein lies the rub because there isn't much clarity on how to implement those "policies and procedures". It can get pretty complicated. For example, while the rule says the shipper is responsible for providing the verification - who exactly is the shipper? Due to the complexity of the international supply chain, an entity identified as the "shipper" on the bill of lading might not have direct or physical control over key elements of the VGM weighing process.

SOLAS does not mandate any particular form of communication between the parties exchanging the verified gross mass information. Also, is the carrier or terminal operator obligated to check the value given for the gross mass by the shipper and report to the authorities any discrepancy that may be found? Is there a margin of error? And because there is no single international standard covering weighing equipment, does this mean that different standards will be applied around the world?

Most importantly, how will this mandatory rule be enforced? SOLAS says that as a "national" issue, fines and other penalties will be imposed under national legislation. But there's also a commercial issue in play. Penalties may involve repacking costs, administration fees for amending documents, demurrage charges, and delayed or cancelled shipments. The US Coast Guard said it will not act as the enforcer, so will each port have to enforce the rule? They aren't too keen on that idea, and few container terminals worldwide are jumping in to provide weighing services for shippers; so far the Port of Charleston is the only one in the US to say it might.

Shippers said that under the new regulation, they will be required to supply the tare weight along with the weight of any packed goods and dunnage. "A shipper should only be responsible for their gross cargo weight. A shipper should not be required to certify the weight of equipment (the container), which is owned or leased by the steamship line."


United States, Europe making 'real progress' in T-TIP talks
American Shipper ? March 1, 2016
United States and European Union trade negotiators on Monday wrapped up another round of Transatlantic Trade and Investment Partnership (T-TIP) talks in Brussels, citing progress with negotiating the "nitty-gritty" of the trade agreement. "Our intensified engagement over the past few months - during which many of our negotiators have been in almost daily contact with their EU counterparts - has yielded real progress: We now have proposed text in the vast majority of the negotiating areas. And in many cases, we are already removing brackets and agreeing on wording," the Office of the U.S. Trade Representative said in a statement to the press.

Two of the texts reviewed during this round revolve around labor and environmental objectives. "Just as in our previous trade agreements, we propose making adherence to labor and environmental standards enforceable in T-TIP, which we believe strengthens those protections," USTR said. "We believe that T-TIP also has the potential to increase transatlantic cooperation in addressing labor and environmental challenges more generally, to the benefit of all of our citizens and people around the world." The United States during this round put forward proposals on customs and trade facilitation, sanitary and phytosanitary measures, and rules of origin.

"The goal of our efforts in these areas is to simplify customs procedures, to cut unnecessary red tape, to ensure that health and safety regulations are based on science and to make certain that the benefits of T-TIP go mainly to those who create value within the transatlantic area," USTR said. In October, the United States and European Union had a second exchange of T-TIP tariff offers in which both sides agreed to liberalize 97 percent of their tariff lines, most of them immediately upon entry into force of the agreement.

"This is a good start, but the United States remains committed to the goal of eliminating transatlantic tariffs under T-TIP. We look forward to working with the European Union in the coming months to achieve that objective," USTR said, adding focus will be placed on reducing phase-out timeframes for tariff lines not scheduled for immediate elimination. "Our common goal is to reach by July an advanced stage of text consolidation across the board, narrowing down our differences to the most sensitive issues and putting us in a position potentially to complete the agreement in the second half of the year," USTR said.


Trans-Pacific Partnership (TPP) Championed by US-ASEAN Business Council
Supply Chain - February 22, 2016
Election year politics notwithstanding, Alexander Feldman, president and CEO of the US-ASEAN Business Council (US-ABC) is a strong advocate of the TPP. "The TPP agreement marks an extraordinary opportunity to open markets and level the playing field for American exporters and investors competing in some of Asia's fastest growing markets, including four ASEAN markets," says Feldman. "Building on the success of the US-Singapore Free Trade Agreement of 2004, American exports to Singapore have grown by nearly 90 percent, and we believe that TPP can offer similar export opportunities in Brunei, Malaysia and Vietnam."

According to Feldman, US exports to ASEAN have increased in recent years, but market share of ASEAN's imports has eroded. TPP puts the United States back on a strong footing and can reverse this adverse trend, he maintains. Keith Williams, US-ABC chairman, is also bullish on the effort, noting that the TPP creates "a more balanced playing field" for US businesses competing in Asia against businesses from China, India and Europe by establishing pro-innovation standards in a wide variety of areas. "In electronic commerce, for example, the TPP contains important commitments to the free flow of data and consumer protection," says Williams.

Furthermore, adds Williams, it will eliminate 100 percent of the tariffs on thousands of qualifying exports of industrial goods and textiles. And by streamlining customs procedures to simplify the release of goods across borders, it will help small and medium-sized businesses obtain greater opportunities out of trade agreements.

"The US-ABC recognizes there are a variety of special concerns to be dealt with regarding TPP," allows Williams. "However, we are confident that government and industry working together can find practical solutions leading to even stronger congressional support for ratifying the TPP." The National Industrial Transportation League and other leading US shipper advocates agree that existing treaties are already generating deals that can help expand mutually beneficial trade and investment relations between the United States and ASEAN.

Obama Signs Customs Authorization Bill
American Shipper - February 26, 2016
President Barack Obama signed The Trade Facilitation and Trade Enforcement Act, the first reauthorization of Customs and Border Protection since the creation of the Department of Homeland Security in 2003, streamlines or makes permanent many CBP trade programs.

Highlights of interest to the trade community include strengthened revenue collection and trade enforcement activities, such as those related to Intellectual Property Rights violations and anti-dumping countervailing duty enforcement; formal establishment of the Centers of Excellence and Expertise, which are control towers for more efficiently processing entry summaries by industry category; raising the de minimis level; reform of the complex duty drawback refund process by 2018; and authorization of continued funding for the Automated Commercial Environment (ACE), the new IT platform for import and export transactions.

Shipments with values under the de minimis level receive simplified and expedited clearance at the border, are free of duties and taxes and require no paperwork beyond the airway bill. The law raises the filing threshold for shipments to $800 from $200, providing the same border clearance privileges for low value cargo shipments that are enjoyed by products US travelers bring back from foreign trips.

Importers, logistics providers and consumers will also be spared countless hours filing paperwork to clear their goods. The bill called on the USTR to encourage trading partners to similarly exempt low value shipments from duties, taxes and certain customs documentation. The Centers of Excellence and Expertise are an example of good governance and innovation. By centralizing industry clusters and allowing expertise to concentrate, the consistency of the customer experience - in this case classification and entry issue resolution - will only improve. Kudos to Congress for recognizing that this program works and making it permanent.

The anti-dumping changes also provide some relief for importers in the form of a 375-day cap for complaints to be filed, a response to complaints about retrospective anti-dumping duties being assessed two years or more after a product has been imported. Another provision of the TFTEA will enable CBP to more rigorously enforce a longstanding ban on importing goods produced by child or slave labor.


Obama Sets Sights on 2016 TPP Approval, Despite Political Landscape
White House - 25 February 2016
US President Obama said that he was "cautiously optimistic" that Congress will be able to pass the Trans-Pacific Partnership (TPP) Agreement, pledging to submit the necessary legislation for lawmaker's approval this year. The TPP was signed earlier this month by trade ministers from 12 Pacific Rim countries, a group that covers approximately 40 percent of global GDP. Of these 12 countries, the US makes up the largest economy in the talks, with its ratification therefore being crucial in order for TPP to meet the necessary threshold to enter into force. Under the terms of the trade pact, the first-best scenario for ratification involves all 12 signatories passing the deal in their respective legislatures within two years. Otherwise, at least six economies making up 85 percent of the group's GDP must do so.

The renewed, revised version of Trade Promotion Authority (TPA) was enacted into law last summer, following a heated congressional fight that brought front and center the concerns both in Washington and among the wider American public over the TPP and other trade pacts. TPA sets both the priorities that international trade pacts must meet, as well as the terms for securing "fast track" approval procedures for voting such deals through Congress - in other words, a straight up-or-down vote, without amendments by lawmakers.

An annual White House report pegged TPP - as well as other planned trade deals, such as the Trade in Services Agreement (TISA) and TTIP - as having the potential for "a large effect on output." The report cited the findings from a Peterson Institute for International Economics study, which indicated that the TPP could yield a boost in US real incomes - while also warning that even a one-year delay in implementation could yield costs of US$94 billion. "The complicated global economic environment underscores the importance of the President's trade agenda in opening new markets and ensuring a level playing field for US firms," the White House report said, referring to the TPP as the "centerpiece of that agenda."

tradeinfocus is a summary of news and events on the trade policy front for clients, trade & legislative colleagues, and professional friends of W.J. Byrnes & Co.