US FTZ trade hits new highs as exporters, retailers increasingly tap zones

The value of total trade and exports moving through U.S. foreign-trade zones last year hit record highs, reflecting exporter and retailers’ increased of the hubs.

The value of exports through the nation’s 177 FTZs jumped 13.7 percent year-over-year to $79.5 billion last year, while total trade through the zones rose 14.1 percent to $835.8 billion. That roughly 65 percent of the merchandise received in the FTZs was sourced from the U.S. suggests manufacturers are increasingly using the zones to produce goods for domestic and foreign markets. The share of domestically sourced merchandise brought into foreign-trade zones was 58 percent in 2012 and 57 percent in 2011.

“FTZ user companies have done more than their share to meet President Obama’s goal of doubling exports,” Daniel Griswold, president of the National Association of Foreign-Trade Zones, said in a statement. “Since 2009, exports from foreign-trade zones have almost tripled, from $28 billion to nearly $80 billion. The FTZ program shows that when U.S.-based companies are allowed to access global inputs at competitive prices, they can become export powerhouses.”

The make-up of FTZ users is also changing. Vehicle, electrical machinery and consumer product shippers are using the zones more, offsetting a decline in usage by energy refiners. Retailers are also increasingly using the zones even when they don’t introduce domestic components into the FTZs.

By operating in an FTZ, retail shippers can consolidate their Customs processing fees into a weekly payment instead of having to pay whenever a shipment is received, as required when operating outside a zone. That cuts down on retailers’ paperwork and allows them to better manage their inventory.

Retail shippers, including The Coleman Group and Kawasaki Motor Manufacturing, told JOC Inland attendees last October they are embracing FTZs in Kansas City. The increased popularity of FTZs among retail shippers is reflected in the rising proportion of merchandise received for warehouse and distribution. Last year, 32 percent of merchandise received, or $265.4 billion worth of goods, was for warehouse and distribution, while the remaining $571.3 billion was intended for production. The share of merchandise received for warehouse and distribution made up 25 percent of the total in 2012 and 17 percent in 2011, according to the Annual Report of the Foreign-Trade Zone board.

The traditional benefits of operating in an FTZ remain. Companies that manufacture, assemble and package within a zone have a choice of paying the duty on the final product or its foreign components, with the former often being cheaper. Shippers can also use FTZs as export hubs because they don’t have to pay U.S. duties on final products that are re-exported.

Contact Mark Szakonyi at mszakonyi@joc.com and follow him on Twitter:@szakonyi_joc.

http://www.joc.com/regulation-policy/trade-policy/united-states-trade-policy/us-ftz-trade-hits-new-highs-exporters-retailers-increasingly-tap-zones_20140827.html

Australian company signs security deal with Chinese govt

SYDNEY – Australian anti-counterfeiting technology company, YPB Group, announced on Monday that it has signed a deal with the Chinese government’s Ministry of Public Security to provide its invisible tracer products and T1 scanners.

The company is also making a smartphone app to help Chinese consumers spot fakes by authenticating branded products as genuine.

The company said that counterfeit is systemic all across Asia. It estimates the greater-Asian anti-counterfeit authentication market is valued at $14 billion a year and growing 20 percent each year.

YPB Executive Chairman and Chief Executive John Houston said in a statement that the company’s contract in China was the start of bigger and better things.

“The contract forms part of the first stage in this process, and we continue to be excited by the level of interest in our unique anti-counterfeit technology and its potential applications,” he said.

http://www.chinadaily.com.cn/business/2014-08/25/content_18483091.htm

CBP Policy Shift on Post-Entry Preference Claims

U.S. Customs and Border Protection (CBP) issued a guidance letter to the ports Aug. 11 2014 that it will no longer accept post-liquidation claims for certain free trade agreements (FTA) and preference programs.  Before the change, importers could obtain a refund of duties paid for within one year after importation by raising a new claim for preferential treatment. Importers would file a post-entry amendment before liquidation or submit an administrative protest after liquidation. This is consistent with 19 USC 1514, which gives importers the legal right to make post-importation changes to their entries. Now, however, such claims made pursuant to GSP, AGOA and certain FTAs not subject to the special rules in 19 USC 1520(d)may be made prior to liquidation but not via a post-liquidation protest.

 

Preference Programs Included in 19 USC 1520(d)

Post-importation claims may be made under any of the following programs/agreements within one year of the date of importation:

CAFTA-DR

Chile FTA

Columbia TPA

Korea FTA

NAFTA

Oman FTA

Panama TPA

Peru FTA

 

Other Programs

The following programs are not included in 19 USC 1520(d), and therefore require importers to use a post-entry amendment or post summary correction to claim duty preferences after importation. Such claims must be submitted 30 days prior to entry liquidation, which varies depending on the type of entry:

African Growth and Opportunity Act (AGOA)

Australia FTA

Bahrain FTA

Caribbean Basin Economic Recovery Act (CBERA)

Caribbean Basin Trade Partnership Act (CBTPA)

Civil Aircraft Agreement Generalized System of Preferences (GSP)

Insular Possessions

Israel FTA

Jordan FTA

Morocco FTA

Pharmaceutical Products Agreement

Singapore FTA

Uruguay Round Concession on Intermediate Chemicals for Dyes

 

CBP’s announcement represents a dynamic shift from long-standing practice; and as such, it is important for importers to review their trade compliance policies and procedures to ensure these entries receive priority treatment for meeting filing deadlines.

See the CBP guidance message at http://apps.cbp.gov/csms/docs/20244_674951276/Post_entry_preference_claims(b).txt

United States Prevails in WTO Trade Enforcement Dispute Against Argentina’s Import Licensing Restrictions

Washington, D.C. – United States Trade Representative Michael Froman announced today that a World Trade Organization (WTO) dispute settlement panel found in favor of the United States in a dispute challenging widespread restrictions maintained by Argentina on the importation of U.S. goods. The Panel agreed with the United States that Argentina’s import licensing requirement and other import restrictions breach international trade rules.

“This is a major victory for American workers, manufacturers and farmers,” said Ambassador Froman. “Argentina’s protectionist measures impact a broad segment of U.S. exports, potentially affecting billions of dollars in U.S. exports each year that support high-quality, middle class American jobs. The Obama Administration will continue to enforce U.S. rights under our trade agreements and ensure that our trading partners play by the rules to help U.S. workers compete in the global economy.”

The import restrictions challenged by the United States in this dispute include an import licensing requirement (the Declaración Jurada Anticipada de Importación or “DJAI”) that applies to all imports of goods into Argentina. The United States also challenged restrictive trade-related requirements imposed by Argentina together with the DJAI and other licensing requirements. These requirements imposed by the Argentine Government mean that many U.S. companies seeking to bring their products into Argentina have had first to agree to export Argentine goods, make investments in Argentina, lower prices of their products, or refrain from repatriating profits to the United States.

Both the DJAI and the restrictive trade-related requirements serve to unfairly restrict the importation of U.S. goods into Argentina. The measures potentially affect billions of dollars in U.S. exports each year; key U.S. exports to Argentina include computers, industrial and agricultural chemicals, agricultural and transportation equipment, machine tools, parts for oil field rigs, and refined fuel oil.

This is the third significant WTO victory USTR has announced in 2014. In the first dispute, the WTO found that China breached WTO rules by imposing unjustified extra duties on American cars and SUVs. In 2013, an estimated $5.1 billion of U.S. auto exports were covered by those duties. In the second dispute, WTO panel and Appellate Body reports have found that China also breached WTO rules by imposing duties and quotas on exports of rare earths, tungsten, and molybdenum. Those export restraints promote China’s own industry and discriminate against U.S. companies using those materials, which are key inputs in a multitude of U.S-made products for critical American manufacturing sectors, including hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum and chemicals.

Background:

In 2012, the United States initiated this dispute, in cooperation with the European Union (EU) and Japan, by requesting consultations with Argentina concerning its import licensing requirements as well as restrictive trade-related requirements imposed together with those licensing requirements. After consultations failed to resolve the matter, the WTO established a single panel to consider the U.S. complaint as well as similar complaints filed by the European Union and Japan.

With respect to the DJAI requirement, the Panel found that this requirement constitutes a restriction on the importation of goods and is therefore inconsistent with Article XI:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994). The Panel found that the DJAI requirement restricts market access for imported products, creates uncertainty as to whether importation will be allowed, does not allow companies to import as much as they desire, and imposes a significant burden on importation.

The Panel also found that the restrictive trade-related requirements are inconsistent with Article XI:1 of the GATT 1994 because they impose conditions on importation that have a limiting effect on imports and are characterized by a lack of transparency and predictability, which further discourages importation. The restrictive trade-related requirements include: (1) the requirement to export a certain value of goods from Argentina related to the value of imports; (2) the requirement to limit the volume of imports and/or reduce their price; (3) the requirement to refrain from repatriating funds from Argentina to another country; (4) the requirement to make or increase investments in Argentina (including in production facilities); or (5) to incorporate local content into domestically produced goods.

Under WTO rules, the report will be adopted within 60 days of the report’s circulation at the request of any party, or any party may appeal the report before it is adopted.

The following U.S. states represented the largest share of exports to Argentina in 2013, each exporting over $180 million in goods that year: Texas, Florida, Louisiana, California, Illinois, South Carolina, Michigan, New York, Georgia, North Carolina. The top categories of exports include: mineral fuel, nuclear reactors and parts, machinery, chemicals, plastics, pharmaceuticals, medical devices, aircraft and parts, and vehicles.

http://www.ustr.gov/about-us/press-office/press-releases/2014/August/US-Prevails-in-WTO-Dispute-Against-Argentinas-Import-Licensing-Restrictions

Japanese exports to US bounce back

Japan’s exports to the United States rose for the first time in three months in July on a year-on-year basis despite a sharp decline in auto shipments, according to preliminary trade figures released by Japan’s Finance Ministry.

Japan’s U.S.-bound exports grew 2.1 percent in July from a year earlier to ¥1.128 trillion ($10.9 billion), led by robust shipments of motors, auto parts and metal processing machinery, which surged 21.3 percent, 14.4 percent and 45.1 percent, respectively, in terms of value. Automobile exports tumbled 10.3 percent in terms of value and 13.4 percent in terms of volume.

Japan’s imports from the U.S. increased for the second straight month in July on a year-on-year basis, rising 6.2 percent to ¥644.6 billion. The relatively strong growth in imports was led by grains, liquefied petroleum gas and motors, which climbed 62.7 percent, 196.8 percent and 33.6 percent, respectively, in terms of value.

Japan’s trade surplus with the U.S. shrank for the sixth month in a row in July on a year-on-year basis, narrowing 3.0 percent to ¥483.7 billion, as imports grew at a much faster pace than exports.

Japan is now the world’s third-largest economy after the U.S. and China and is heavily dependent on exports for growth. The U.S. is Japan’s second-largest trading partner after China.

The U.S. overtook China to become Japan’s biggest export market for the first time in five years in 2013, although China remained by far the biggest source of Japanese imports.

Japan posted a trade deficit of ¥964.0 billion with the rest of the world in July, down 6.6 percent from a year earlier. It was the 25th consecutive monthly trade deficit, the longest streak of deficits on record.

Japan’s overall exports grew for the first time in three months in July on a year-on-year basis, rising 3.9 percent to ¥6.188 trillion, while its overall imports grew for the second successive month, increasing 2.3 percent to ¥7.152 trillion.

The growth in Japan’s overall exports was led by autos, metal processing machinery, and scientific and optical equipment, which rose 8.1 percent, 35.7 percent and 9.8 percent, respectively, in terms of value.

The growth in Japan’s overall imports was led by crude oil, liquefied natural gas and petroleum products, which jumped 6.9 percent, 7.4 percent and 23.3 percent, respectively, in terms of value.

Contact Hisane Masaki at yiu45535@nifty.com.

http://www.joc.com/international-trade-news/trade-data/asia-trade-data/japanese-exports-us-bounce-back_20140820.html

China willing to expand agro produce trade with Russia

BEIJING – Chinese companies exported $2.1 billion worth of agricultural produce to Russia last year, and China is willing to work with Russia to expand two-way agricultural produce trade, a Ministry of Commerce spokesman said Monday.

Shen Danyang, the spokesman, made the comments at a regular press conference when asked about Russia’s decision to restrict food imports from the United States and the European Union and increase trade with China.

Based on the China-Russia all round partnership of strategic cooperation, China is willing to boost economic and trade relations with Russia, and will continue to create conditions for bilateral cooperation in the energy, agriculture, infrastructure and high-tech sectors, he said.

Shen said China’s agricultural exporters choose export destinations based on market information, so it is normal commercial behavior for them to expand exports to Russia and arrange other business.

Agricultural produce trade between the two neighboring countries has a unique edge and growth potential, he said, adding that the Chinese side will encourage both Chinese and Russian companies to increase agricultural produce trade.

Russia is a major trade partner of China. In the first seven months of 2014, bilateral trade grew by 4 percent year on year to $53 billion, according to the Chinese customs data.

Nehru Port breaks ground on trade zone, road connector projects

Jawaharlal Nehru Port Trust (Nhava Sheva) broke ground Aug. 16 on its long-awaited special economic zone project, a port-based multi-product export processing center that is expected to help India’s largest container gateway boost its export volumes.

Indian Prime Minister Narendra Modi laid the foundation stone for the SEZ project, a first-of-its-kind in a major state-owned port complex in the country, in Nhava Sheva on Aug. 16. At the ceremony, which was attended by senior cabinet ministers, port officials and industry representatives, the prime minister also launched construction on a new 27-mile expressway connecting JNPT with the interstate highway system.

“Export promotion was the need of the hour. Until we join manufacturers in export promotion, and unless state and central governments work together, we cannot achieve new heights in exports,” Modi said, speaking at the ceremony.

Officials said a special-purpose company would be set up to implement the 277-hectare industrial site under an “engineering, procurement and construction” scheme. The first phase, involving an investment of about $650 million, is scheduled for completion in three years.

Shipping Minister Nitin Gadkari, who spoke at the ceremony, said the project will have the potential to create about 150,000 direct and indirect jobs.

The expressway connector project, which was approved by the union government last September, comprises 13 miles of six-lane and 14 miles of eight-lane routes. Work on the $316 million project is targeted for completion by December 2017. “Due to rapid development in the area on account of development of JN Port, JNPT-SEZ and the proposed International Airport, it was felt necessary to augment the carrying capacity of the existing road network,” an official statement said.

The prime minister also stressed the need for development of minor ports by state governments through private participation and announced a special port development plan, named Sagarmala, for maritime states. ”This would envisage not merely port development, but port-led development which would include ports, SEZs; and rail, road, air and waterway connectivity with the hinterland, including linkages of cold storage and warehousing facilities,” Modi said. “Ports can become gateways to India’s prosperity.”

JOC Staff | Aug 17, 2014 9:14PM ED

http://www.joc.com/port-news/asian-ports/port-nhava-sheva/nehru-port-breaks-ground-trade-zone-road-connector-projects_20140817.html

Ports of Montreal, Halifax bullish on Canada-EU trade pact

The long-term outlook for the trans-Atlantic container trade between Canada and Europe brightened this month with the agreement in principle on the text of a new free trade agreement. Executives at Canada’s two main east coast container ports of Montreal and Halifax say it will boost their volumes.

It will take another year or more for the draft text to be finalized and ratified by Brussels and Ottawa, but the ports already are laying the groundwork for expansion to handle the additional volumes they expect. “We are gearing up for the FTA with Europe, which gives us confidence that traffic will go up,” said Tony Boemi, vice president of growth and development at the Montreal Port Authority.

“We see a lot of potential in this agreement because we are the closest full-service port to Europe,” said Lane Ferguson, a spokesman for the Port of Halifax. He said the port expects to see a 20 percent increase in export shipments after the pact takes effect. Halifax has 17 shipping lines that link it with Europe.

Montreal already is expanding its capacity from 1.6 million 20-foot-equivalent container units to 2.2 million by the end of this year. It also has compacted and repaved the yard of a former bulk terminal at Viau and Maisonneuve so that it can be quickly converted to handle future container growth. Montreal’s terminals are currently limited to handling ships of up to 6,000 TEUs. The port is working on a design that will enable it to boost this limit to 7,000 TEUs.

Halifax last year completed a $35 million expansion of Pier C at the Halterm Container Terminal, which installed two super-post-Panamax container cranes at $10 million each that can reach across 22 rows of containers. Halifax will complete the $17 million expansion of its multipurpose Richmond Terminal in the third quarter of this year.

The terminal is expected to benefit from substantial increases in project and breakbulk cargo generated by the $122 billion in mega-projects underway in Atlantic Canada. These include the $30 billion contract to build Canadian Navy ships, awarded to Irving Shipbuilding’s yard next to the terminal; the $8.5 billion Muskrat Falls hydroelectric project in Newfoundland, and the link to connect it to Labrador; and various large mining and offshore oil projects.

Montreal’s throughput increased to 692,000 TEUs in the first six months of 2014, up 4.4 percent year-over-year. Boemi said some of the increase was because of cargo diverted from U.S. West Coast ports during labor talks between the International Longshore and Warehouse Union and the Pacific Maritime Association over a new union contract. Some of the increase was fueled by the inclusion of CMA CGM in a vessel-sharing agreement with Maersk Line on the TA-4 service, which has brought the French carrier’s ships into the port.

Throughput at the Halifax, however, dropped 8.1 percent in the first half to 224,582 TEUs, largely because of severe winter storms in the first quarter. Ferguson said throughput started to recover in May and June, and he expects growth to continue through the rest of the year.

Montreal expects full-year volumes to increase 4 to 4.5 percent because of growth in refrigerated imports from and forest products exports to Latin America carried by Mediterranean Shipping Co.’s direct service between Freeport, Bahamas, and Montreal. From Freeport, cargo is transshipped throughout the region.

The port also is benefiting from increasing imports from Asia that are transshipped at hubs in the Mediterranean. The port is getting numerous inquiries from carriers that want to increase their imports from Asia via the Med, Boemi said.

Contact Peter Leach at pleach@joc.com and follow him on Twitter: @petertleach.

http://www.joc.com/port-news/international-ports/port-montreal/ports-montreal-halifax-bullish-canada-eu-trade-pact_20140815.html

US-Mexico Truck Pilot Just One Obstacle to NAFTA 2.0

WASHINGTON — A key report from the Federal Motor Carrier Safety Administration this fall will go a long way toward determining how committed politicians and business leaders are to taking the North American Free Trade Agreement to the next level.

The FMCSA, the Department of Transportation agency responsible for regulating safety on U.S. roads, in October is expected to report to Congress on the results of a pilot program tracking 13 Mexican trucking companies hauling goods across the border to the U.S. and back. How Congress responds to the political hot potato — one the Teamsters union reheats with near-constant complaints — will demonstrate just how much an appetite there is for a so-called NAFTA 2.0.

Twenty years after the landmark free trade deal took effect, NAFTA trade is rising steadily, particularly between the U.S. and Mexico. Still, lthe trio has yet to resolve some major hurdles to NAFTA trade, namely streamlining cargo processing and raising the level at which shipments entering the three countries are free from tariffs, taxes and formal customs procedures.

Considering manufacturers from all three countries source components heavily from each other, reducing trade friction would increase the global competitiveness of North American manufacturing, free trade proponents argue. The rising cost of Chinese labor and transportation, along with shippers’ drive to shorten their supply chains to avoid disruptions, gives NAFTA members a rare opportunity to tap the so-called regionalization of trade.

But all three countries have work to do, and one of the first tests will come when Congress receives a report detailing how well the 13 Mexican trucking companies’ 63 drivers and 55 rigs measure up in terms of safety, said Federico Dominguez, director general of Mexico’s Federal Motor Transport agency. The report will reveal the results of more than 4,100 FMCSA inspections over three years.

NAFTA opponents are likely to criticize the study for not having enough Mexican motor carriers involved. The pilot originally called for at least 46 carrier participants, but the majority of the inspections have come from two larger trucking companies, said Fred McLuckie, director of the Teamsters’ department of federal legislation and regulation.

If Congress expands the long-haul pilot to all Mexican drivers, Dominguez doesn’t expect a flood of drivers hauling goods past the 20-mile border zone. The Mexican trucking industry is highly fragmented, and few carriers want to haul goods any farther than the cross-docks in U.S. border towns, he said, in part because it’s difficult for carriers to find loads to haul back across the border. For Mexican truckers, that means the deeper they travel into the U.S., the more empty miles they likely face on the return trip. Under NAFTA, the Mexican drivers can’t move freight from one U.S. destination to another, and U.S. drivers are hemmed in by the same rules when operating in Mexico and Canada.

There isn’t a whole lot of interest from U.S. trucking companies in hauling goods into Mexico past the border region, either. As of mid-April, the pilot program involved only 41 U.S. drivers and 67 vehicles. With this in mind, the pilot is more a symbol of commitment to the free trade pact, Dominguez said at April’s NAFTANEXT conference in Chicago. That commitment has wavered. Congress in 2009 defunded a pilot program that began in 2007 during the George W. Bush administration, and it took another two years before the Obama administration launched another pilot program.

Opponents of the pilot program have painted Mexican drivers as unsafe operators of faulty equipment, but that picture doesn’t hold up when inspections of pilot drivers are compared with the inspection records of U.S. drivers, according to a congressional report released in January. In fact, the rate of Mexican trucking companies placed “out of service” in the pilot was lower than the U.S. average, said John Frittelli, a specialist in transportation policy.

Border ports of entry, clogged for years amid the growing northbound traffic, will remain congested even if Congress expands the pilot to allow all Mexican drivers to drive past the border region and into U.S. markets. Canadian and U.S. trucking companies, for example, have been able to cross their shared border for years, but trucks can still pile up for miles on either side.

“The land ports of entry are bottlenecks,” Juan Carlos Villa, regional manager of Latin America at the Texas A&M Transportation Institute, said at NAFTANEXT. “There are two ways to improve them: Build more infrastructure and change the processes.”

Signs are emerging that Congress realizes it needs to invest not only in policing the borders for immigrants but also for speeding up trade. A House-Senate spending deal reached this year will allow Customs to hire 2,000 more agents and spend $128 million on modernizing the port of entry between Otay Mesa, California, and Tijuana, Mexico.

But those are just trickles compared with the $6 billion Customs needs to modernize its ports of entry on the borders with Canada and Mexico. Tight budgets in all three countries prevent the NAFTA partners from just spending their way out of the problem.

That’s why cross-border trade advocates increasingly are looking to technology to improve the tracking of cross-border transportation so customs and other agencies involved in cargo clearance use their agents and lanes more effectively. The other benefit technology can bring to the industry is tracking shipments from the factory or warehouse to the border crossing. By showing customs agents that the shipment has been secure from the time it was loaded onto a truck or train, the government agencies can focus on other loads that don’t face the same type of security.

Secure Origins, an El Paso, Texas-based technology provider, is using that model at the El Paso-Juarez, Mexico, port of entry. Trucks that are tracked from Mexican factories to their U.S. destinations via GPS units are cleared at the border three times as fast as trucks that aren’t in the public-private partnership between the city of El Paso and U.S. Customs.

“We didn’t add another lane. We didn’t add more people,” said Nelson Balido, vice president of public affairs at Secure Origins. “This is a process issue, not a manpower or infrastructure issue.”

The other way to speed up trade is through pre-inspecting goods before they hit the border. U.S. has two pilot projects for the U.S.-Mexico trade — one for agricultural goods moving from Otay Mesa and another for air cargo out of Laredo, Texas. A third pilot involving the pre-inspection of goods produced at a Foxconn plant in San Jeronimo, Mexico, has stalled, however, because the union representing U.S. Customs agents won’t let its members operate just a few hundred feet across the border without their guns, according to sources familiar with the situation. The Union for Federal Employees didn’t respond to a request for comment.

U.S. Customs has announced — but hasn’t launched — another pilot program allowing shippers to pay for additional staffing during busy times or for extended hours.

It will take years of monitoring before Congress can decide whether to expand the pilots, but U.S. and Mexican shippers and transportation providers could see faster cargo processing at the border as soon as the end of the year. Mexico wants to give members of its trusted trader program, the New Certified Companies Scheme, or NEEC, and those in the U.S. Customs-Trade Partnership Against Terrorism program special privileges, such as getting their trucks to the front of the line at border crossings, Alejandro Chacon Dominguez, Mexican Customs’ administrator general, said at the agency’s East Coast Trade Symposium in Washington, D.C., in March.

Mutual recognition between the two trusted trader programs — which aim to expedite cargo processing for users who can show customs agencies that their supply chains are secure — would be implemented in early 2015 at the latest, he said.

But for a real impact, the C-TPAT program needs to deliver more benefits to members. Many C-TPAT members question whether the extra costs and paperwork equate to fewer inspections, and a lack of new members in recent years suggests they might be right.

Those concerns appear to have connected in Congress. Sen. Orrin Hatch, R-Utah, is pushing legislation that would force U.S. Customs to provide measurable benefits to members of trusted trader programs. The Trade Facilitation and Trade Enforcement Reauthorization Act also would require other federal agencies to speed cargo clearance at ports of entry.

Many of the delays at the U.S. border don’t result from Customs, but from the other 47 agencies, including the Food and Drug Administration and the U.S. Department of Agriculture, that must approve clearance of some goods. Not only is cargo processing not these agencies’ primary focus, but they also often only deploy inspectors for one shift, meaning trucks hauling pertinent goods must wait an additional day to get the final go-ahead, said James Phillips, president and CEO of the Canadian/American Border Trade Alliance.

Creating a single window in which U.S. importers and exporters submit all necessary information for Customs and the other agencies in one form will help, though, he said. The U.S. is expected to roll out the International Trade Data System in 2016, joining Mexico and Canada in having a one-stop spot for data necessary for cargo clearance. Ultimately, the goal is for all NAFTA partners to have a shared window, creating “one face at the border.”

On the Canadian border, U.S. Customs has taken its pre-inspection pilot to the next phase by giving some trucks crossing the Peace Bridge to Buffalo, New York, faster clearance by taking care of their initial paperwork in nearby Fort Erie. The pilot, which currently allows 90 percent of southbound truck traffic to be cleared in about five seconds, comes after a five-month pilot at the crossing in Blaine, Washington, adjacent to Surrey, British Columbia. Phillips believes the two countries will roll out a more ambitious effort later this year that will make the pre-inspection process permanent and set up lanes for trucks in the trusted trader program and those that aren’t.

“Right now, we have a Monte Carlo approach to the border here — that is, whoever gets there first, he’s in line first,” Phillips said. “The key is to stream all trusted trader (trucks) together.”

When possible, shippers also increasingly are relying on intermodal rail services to get their goods across the borders. Through its pre-inspection work, Kansas City Southern Railway can move 200 containers across the border in 30 minutes. Canadian National Railway traffic from the Port of Prince Rupert, British Columbia, is pre-inspected before it hits the U.S. border via a pilot run by U.S. and Canadian customs agencies. The rail pre-inspection process, however, still needs some tweaking to reduce congestion at border ports of entry, Phillips said. Containers that need to be inspected should be pulled from the train at the railyard of origin or destination, not at the border.

Another way to increase trade between NAFTA partners is through the harmonization of the de minimis values, the level at which shipments entering the three countries are free from tariffs, taxes and formal customs procedures. But Canada, Mexico and the U.S. have made little headway in creating a uniform de minimis level, Amgad Shehata, vice president of public affairs at UPS, said at NAFTANEXT. The U.S. de minimis level is $200, while Canada’s is $20 and Mexico’s is $50.

Part of the reason efforts haven’t succeeded is “because of the security focus, and some it is because people view it as a threat to their livelihood,” FedEx founder, CEO and Chairman Frederick W. Smith told the JOC in March.

Hatch, the ranking member on the Senate Finance Committee, hopes to change that, at least on the U.S. side. He wants to pass legislation by the end of the year that would raise the de minimis level to $800.

Like efforts to speed up cross-border cargo processing, the proposed de minimis change isn’t likely to spur Congress to action or grab national media attention. But the dullness of taking NAFTA to the next level is only matched by its potential to boost North American manufacturing on the global stage.

Contact Mark Szakonyi at mszakonyi@joc.com and follow him on Twitter: @szakonyi_joc.

For charts and images visit http://www.joc.com/international-trade-news/us-mexico-truck-pilot-just-one-obstacle-nafta-20_20140514.html

How much will Russian ban hit US poultry shippers, ports?

Russia’s one-year ban on food imports from the U.S. and other countries will hit U.S. poultry exports particularly hard, given Russian fondness for American frozen chicken. The U.S. shipped more than $1 billion in food products to Russia last year, of which some $300 million was poultry. In the seven months from December through June, U.S. suppliers shipped 9,067 20-foot-equivalent container units worth of poultry to Russia, according to PIERS, the data division of JOC Group Inc. Mobile, Alabama, was by far the largest export port, accounting for nearly 40 percent of all U.S. poultry exports to Russia, which means the ban will have a big impact on its reefer operations. Poultry represented 24 percent of Maersk Line’s U.S.-to-Russia volumes during the seven-month period.

See link for interactive graphic that takes an in-depth look at the ports, carriers and exporters involved in the poultry trade to Russia, based on PIERS data, allowing for a detailed assessment of which players will be most affected.

http://www.joc.com/maritime-news/international-freight-shipping/how-much-will-russian-ban-hit-us-poultry-shippers-ports-interactive_20140808.html