WJ Byrnes banner

Global Partner for Personalized Logistics Services

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

United States Secures Full Access for US Beef and Beef Products to Peru
Office of the USTR - 25 March 2016 and update from ongoing APEC meetings in Peru
On Monday, March 14, in Lima, Peru, US Agriculture Secretary Tom Vilsack and US Trade Representative Michael Froman announced that the US government has reached agreement with the government of Peru to remove barriers for US beef exports to Peru that have remained in effect since 2003, opening one of the fastest growing markets in Latin America to all American beef and beef products.

Secretary Vilsack said: "Since 2009, the United States and Peru have enjoyed one of the strongest bilateral trade relationships in the Western Hemisphere, and today it became much stronger. Since 2003, USDA and USTR have worked diligently to reopen and expand markets once closed to US beef. This is another win in a long line of successes that led to a near-record US beef and beef product exports in 2015. The Obama Administration will continue to work hard around the world to remove unfair barriers and create a more level playing for America's farmers, ranchers, producers and rural communities."

Ambassador Froman stated: "Peru has been a growing market for American beef and this agreement will only further expand opportunities for American producers and exporters. Not many years ago, there was little American beef going to Peru, but through the US-Peru Trade Promotion Agreement, and agreements like this, we are seeing increased demand for high-quality American beef."

In 2015, the United States exported $25.4 million in beef and beef products to Peru. Since the US-Peru Trade Promotion Agreement (PTPA) entered into force in 2009, US beef and beef products have grown substantially but have been hampered due to burdensome certification requirements installed by Peru in 2003. This agreement, reached last week during Secretary Vilsack's trade and investment mission to Peru, removes those barriers - called the export verification program - and assures American ranchers of expanded market access.

Details

SOLAS Slowly and Unevenly Takes Shape Worldwide
Reynolds Hutchins, Associate Editor JOC | Mar 23, 2016
There are now less than 100 days before a new international container weight rule goes into effect and the rollout is taking shape in very different ways in each of the 162 participating nations, with some governments giving clear guidelines while others haven't provided any direction at all to date. Effective July 1, container lines will be obligated to reject any box that doesn't have a verified gross mass, or VGM, according to an International Maritime Organization amendment to the Safety of Life at Sea, or SOLAS, treaty.

Among those nations with guidelines, the language varies, not only with attention to detail, but in the severity of penalties and fines shippers and carriers could face if they are found in noncompliance. That wide variation is lending credence to industry concerns that the rule remains mired in confusion so close to an international deadline. Only 10 countries to date have had their guidelines and regulations published to the website of the World Shipping Council, a group that represents roughly 90 percent of global container capacity and was a major player in the creation of the new rule. Those 10 are just a fraction of the 162 signatories to the SOLAS treaty.

Moreover, the published documents are at different levels of finalization. Whereas Canada has produced draft procedures; Argentina has full-on regulations; Australia, a discussion paper; Denmark, a preliminary order.
No signatory, yet, has challenged the methodology for obtaining a container's VGM. The SOLAS mandate is clear that it requires shippers to give carriers the VGM of onboarding containers gained either by weighing the container after it is loaded and sealed, known as Method 1, or weighing each individual package and cargo item and adding the tare weight of the container to the sum of the single masses, Method 2.

The US Coast Guard has staked out a very hands-off approach, saying it most likely would only occasionally check for VGM on inbound containers, and it will hold cargo without a VGM until the country of the ship's flag nation clears the cargo. It is not even clear, at this point, if the Coast Guard would levy a punishment against the carrier for loading a container without a VGM, a violation of the container weight mandate.

Other maritime administrations, though, have been operating under the understanding that the shipper is ultimately responsible for misdeclared weights, creating penalties for shippers in violation of the rule. Canada and Japan, for example, have already said that shippers could face various fines if they misdeclare the weight of their containers. The guidelines on implementation published by the South African Maritime Safety Authority take a similarly more hardline approach.

Shippers that have misdeclared their VGM may face prosecution, according to the guidelines published Jan. 21.
If the South African authority or an appointed third party identifies that a shipper has misdeclared the gross mass of a packed container, the authority has the right to require that the appointed third party, suspend or revoke the -shipper's approval."

After this, the offending shipper must use Method 1 to verify the gross mass of a packed container, limiting the opportunity for misdeclaration of weights inside the container. Otherwise, the authority could require an -admission of contravention- to be signed and paid, failing which, the alleged contravention will be prosecuted, the guidelines state. When it comes to a margin of error for container weights, -SOLAS does not provide for a margin of error,- the document states bluntly.

South Africa stands out among the SOLAS signatories for its attention to detail, as well as the severity of its penalties. Across the Atlantic, Argentina's lead agency takes a softer approach to misdeclared VGMs. According to the regulations published by the Argentine Naval Prefecture dated March 8, the South American country has established no penalties, to date, associated with supplying the wrong VGM to carriers. Unlike South Africa's lead agency, Argentina does provide a 5 percent margin of error for container VGMs.

"If there were clear grounds for believing that the information declared does not match the actual gross mass of the packed container, the terminal may weigh the container," according to the agency document. "This weighing shall be the responsibility of the shipper only if the verification results in a difference that is greater than the allowed tolerance." Like Argentina, Denmark?s maritime authority does prescribe a margin of error, but only for a specific method and only during a specific timeframe.

"As an alternative to a suitable weight (method 1), measuring equipment ensuring that the weight of the packed container is established within an accuracy of +/- 1,000 kg may be used,- a preliminary order from the Danish Maritime Authority reads. That margin of error, however, is to only be in effect "during the period until 30 June 2017." After which, it is unclear if any deviation will be permitted.

The preliminary order only notes that the authority recognizes that Method 2 may result in deviations in VGM. -Such deviations shall be documented and handled as a part of the shipper's quality management system. In this connection, it shall be ensured that the sum of these deviations is inconsiderable compared to the actual weight." Highlighting further the lack of harmony among these various regulations is the fact that Germany's initial container loading protocol on the country's Federal Ministry of Transport and Digital Infrastructure website includes no reference to margins of error or possible penalties whatsoever.

Details

Why Trade Matters
The Hill, Stefan Selig, US Undersecretary of Commerce for International Trade - March 24, 2016
Given the way trade has been discussed on the campaign trail, it is easy to overlook what our exporters accomplished last year. US exports of goods and services in 2015 totaled more than $2.2 trillion. We increased goods exports to 58 international markets, reached record highs with 20 global partners and saw a record year in services exports, totaling $716 billion. Most importantly, our exports support more than 11 million American jobs that pay up to 18 percent higher salaries on average.

Details

Mayors Rise to the Defense of Free Trade
The Atlantic - March 23, 2016
Trade has become an increasingly important part of the United States economy. In the 1960s, exports and imports represented less than 10 percent of US gross domestic product; today the share is closer to 30 percent. As a result, American exporters sell more US goods abroad than ever before - and imports give American consumers more choices at lower prices. Americans have higher living standards because trade enables them to afford more goods.

Details

Editorial: Mr. Obama's Honest Message in Cuba
New York Times - March 22, 2016
President Obama began his speech to the Cuban people on Tuesday with humility and grace.
?Cultivo una rosa blanca,- he said, reciting the opening line of one of the most famous poems by Jos- Mart-, the island?s national hero. "I plant a white rose." It was an inspired way of extending an olive branch to a neighboring nation with which America has feuded for more than half a century. Mr. Obama made a compelling case that the ties that bind Cuba and the United States are more powerful than their differences.

Details

US Customs Sets up 'War Room' for ACE Implementation
US Customs - March 29, 2016
A major part of the transition to filing electronic entry summaries in CBP's Automated Commercial Environment begins March 31 and the agency has escalated resources to help shippers address any technical issues. US Customs and Border Protection has set up a "war room" to help importers and customs brokers resolve issues related to the March 31 deadline for filing electronic entry summaries through the new Automated Commercial Environment (ACE).

ACE will be the only electronic interchange systems authorized by CBP after that date for processing entries and entry summary filings. Filers are required to switch from the legacy Automated Commercial System, which will be turned off later this year. CBP said it will have extra personnel ready to assist during the transition through April 8.

The March 31 deadline also covers entries and corresponding entry summaries that must be cleared by the National Highway Traffic Safety Administration as well as the Animal Plant Health Inspection Service. Filers are urged to contact their designated client representative if they have technical issues. The client representatives will have direct access to the "war room" and will escalate issues brought to them, if necessary.

Details

CBP Announces All Trade Centers Fully Operational, Serve to Further US Trade Goals
US Customs - March 30, 2016
US Customs and Border Protection (CBP) announced that all 10 Centers of Excellence and Expertise (Centers) are operating at full capacity. The full operation of all 10 Centers is the culmination of considerable work within CBP and with trade stakeholders to streamline operations and modernize the way CBP does business.

"The Centers transform the way CBP interacts with trade stakeholders while meeting the needs of economic growth and facilitating supply chain security," said CBP Commissioner R. Gil Kerlikowske." As one of the agency's major modernizing efforts to streamline trade operations, the Centers increase uniformity at our ports and enhance CBP's industry expertise to better enforce the nation's trade laws."

The announcement aligns with the agency's effort to strengthen America's economic competitiveness by facilitating lawful trade as described in the Trade Facilitation and Trade Enforcement Act of 2015, signed by President Barack Obama on February 24. The Centers provide centralized points of contact for specific industries.

CBP's 10 Centers of Excellence and Expertise are:
- Apparel, Footwear & Textiles ? San Francisco
- Electronics - Los Angeles
- Machinery - Laredo
- Natural Gas & Minerals - Houston
- Base Metals - Chicago
- Consumer Products & Mass Merchandising - Atlanta
- Industrial & Manufacturing Materials Buffalo
- Automotive & Aerospace - Detroit
- Agriculture & Prepared Products - Miami
- Pharmaceuticals, Health & Chemicals - New York

Visit CBP.gov for more information about CBP.


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.