Posts Tagged ‘NAFTA’


 

Will CPTPP Impact NAFTA Negotiations?

North America

Prior to the latest NAFTA negotiations, Canada entered into the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In this blog, we look at how this may impact the next round of NAFTA negotiations in late February, early March.

Before the January NAFTA Negotiations

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership

Canada and Mexico has agreed to the new CPTPP. An international trade agreement between 11 countries the U.S. previously withdrew from on January 23rd, 2017.

With the U.S. adopting a bilateral trade agreement philosophy, while Canada and Mexico have joined the multilateral CPTPP agreement. How will this impact the NAFTA negotiations going forward?

 

New U.S. Duties on Solar-Panels and Washing Machines

Also, the U.S. recently introduced new import duties on solar-panels and washing machines. Solar-panel duties have increased by 30%, while washing machines duties have increased by 50%. The new duty on solar-panels will have a minor impact on Canada and Mexico. The new washing machine duty will only impact Mexico.

 

January’s NAFTA Negotiations: Round Six

Tuesday, January 23rd, Canadian, American and Mexican representatives met in Montreal for the sixth round of NAFTA negotiations. Let us focus on the four main focal points surrounding the latest NAFTA negotiations. Chapter 19, the auto parts industry, the dairy industry and the sunset clause.

Chapter 19: Trade Disputes

The U.S. is looking to eliminate Chapter 19 in the NAFTA negotiations. Currently, Chapter 19 allows for trade disputes between two NAFTA countries to go through an independent third party arbitrator. This prevents Canada and Mexico from having to enter into the U.S. legal review process for anti-dumping and countervailing duties imposed by the U.S. government.

Previous Chapter 19 rulings have favored Canada. Most recently Boeing made a bid to increase import duties by 300% on Bombardier’s CSeries. An independent third party arbitrator, the U.S. International Trade Commission (USITC), voted 4-0 to reject the 300% duty because it did not have a negative impact on the U.S. aircraft industry.

The Auto Parts Industry

With the new CPTPP in place, the NAFTA negotiations are going to feel some extra pressure in the auto parts industry. At the moment, NAFTA allows for 37.5% of a cars parts to come from outside of Canada, the U.S. and Mexico. However, in the new CPTPP agreement, the percentage of allowable foreign composition is 55%. This difference will create a more competitive market for auto parts in Canada and Mexico, while at the same time acting as a disadvantage for Canadian and Mexican companies creating auto parts.

The U.S. is aiming to decrease the percentage of car parts that come from outside of North America to 15%. Translating to more job opportunities for Americans in the auto industry.

Canadians are trying to introduce a line of thinking that auto industry software and other high-tech equipment should be taken into consideration when talking about the net cost of auto parts since a higher percentage of software and high-tech equipment is created and produced in Canada, the U.S. and Mexico. Thus adding to the auto parts percentages.

The Dairy Industry

The CPTPP agreement has also opened up the dairy debate as well. Since there has been a small opening to Canada’s originally closed market, the U.S. wants greater access to Canadian consumers. Currently, if a U.S. dairy farmer was to export milk to Canada, they would face a 270% duty. Eliminating dairy trade barriers would be beneficial to Canadian consumers, but would deal a great blow to Canadian dairy farmers who presently enjoy the benefits of the ongoing trade barrier.

The Sunset Clause

The U.S. also wants to implement a sunset clause. A sunset clause would allow any of the three NAFTA countries to walk away from the proposed agreement after five years. If the sunset clause was to be implemented it would almost certainly mean the end of the current NAFTA agreement in five years, since it would be unlikely for all three countries to be happy with the state of the agreement in five years.

 

NAFTA Negotiations and Trade

Despite all of the uncertainty with NAFTA, trade between the three countries has remained steady and consistent. Everyday airplanes, trains, cargo ships, and trucks transport essentially everything you use daily. If you would like to explore international trade opportunities, give us a call. We can provide you assistance with customs clearance, freight forwarding, trade education and trade advisory services.

 

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Your Designation Maintenance Begins with our Professional Development Courses

Image: Seminar Room

 

A new year means a new start and this includes a reset to the maintenance requirements of your professional designations set forth by the credential’s governing body. Your Professional Development starts with Pacific Customs Brokers.

Taking any of our seminars and webinars may earn you maintenance points, credits, and hours towards a variety of professional designations. Some examples of eligible designations are:

  • Certified Customs Specialist (CCS)
  • Certified Trade Compliance Specialist (CTCS)
  • Certified Export Specialist (CES)
  • Designate with the Law Society of British Columbia (LSBC)
  • Accounting Professional


Registration for Spring is now open!

Review and plan your professional development maintenance for the first half of 2018 by clicking on the course names below:

  CSCB NEI LSBC
Webinar CCS CTCS CCS CES  
CDN Importing for Beginners Part 1
CDN Importing for Beginners Part 2
US Importing for Beginners Part 1 1
US Importing for Beginners Part 2 1
FDA Regulated Goods 2 2 1
CFIA Regulated Goods 2 2
NAFTA for Beginners Part 1 1 1
NAFTA for Beginners Part 2 1
 
Seminar
Shipping Perishables – NEW! 3 3
CDN Trade Compliance Part 1 5 5
CDN Trade Compliance Part 2 5 5 3
Exporting from Canada 5 3 3
US Trade Compliance Part 1 5 5 3
US Trade Compliance Part 2 5 5 3 3
HS Tariff Classification 5 6 4
Free Trade Agreements 5 5 5
Customs Valuation 5 5
CFIA 5 5
FDA 5 5 3
C-TPAT 2.5 2.5 2 2

 

If you have never attended one of our Professional Development Courses, the following information might help you decide on attending the next one.

Professional Development Courses – Webinars

Our webinars are designed to meet the demands of the global trade community. These live sessions are a convenient way for trade professionals to stay ahead of new regulations with international trade and gain additional knowledge in key areas. Benefits of attending an online course include:

  • Cost-effectiveness – More affordable than industry standards
  • Global accessibility – Travel is removed from the equation for companies with multiple locations or branches
  • Convenience – Attend from the comfort of your desk or home
  • Concise training – In a fast-paced industry, efficiency becomes just as important as staying compliant
  • Industry accreditation – Earn points towards maintenance of your industry designations

Professional Development Courses – Seminars and Workshops

At our in-person courses you learn the best practices of being a compliant importer and/or exporter which will help you expedite your commercial shipments to and avoiding costly delay triggers. Our experts share their knowledge and stories on international and cross-border shipping regulations to keep you current with customs and partner government agency requirements.  Benefits of attending an in-person seminar or workshop include:

  • All day access – Get our experts to answer your questions one-on-one
  • Case studies and real-life examples – Examine other attendees’ trade compliance hurdles
  • Cost-effectiveness – More affordable than industry standards
  • Range of topics – Choose from a wide variety of topics
  • Certificate of Completion – Receive a certificate for each course you attend
  • Handouts – Take home your own set of course material
  • Industry accreditation – Earn points towards maintenance of your industry designations
  • Networking – Connect with other like-minded professionals

 

Have questions or comments about any of our courses? Call 888.538.1566 or email us today!

TradeTalk |BC Trees and Trade Agreements

Softwood, Hardwood and Forestry - NAFTA Re-Negotiations

 

A year after the initial signing of the Trans-Pacific Partnership (TPP) on February 4th, 2016, the U.S. pulls out and presses forward on renegotiations of NAFTA as well. Will these U.S. Trade actions impact Hardwood, Forestry Trade or Softwood Lumber Agreement negotiations between the U.S. and Canada?

With the October 12, 2015 expiration of the Softwood Lumber Agreement (SLA) and looming concern over tariff increases due to the December 16, 2016, United States Department of Commerce decision to initiate countervailing and anti-dumping investigations into imports of certain Canadian softwood lumber products the conversation and its topics seems to have changed between these two countries – or has it? Let’s have a look at what the goals for the forestry industry were in that conversation by both sides, and then let’s look realistically on the status of those goals today.

On the U.S. side the concern is:

Q – Were too many concessions made to get trades agreements in place (TPP or NAFTA) or others?

Q – Are U.S. companies facing hardships because of current lumber trading activities?

 

On the Canadian side of the conversation:

Q – Did the Canadians press more feverently to get the TPP Agreement signed?

Q – Why claim our crown land lumber is subsidized – it has been proven otherwise in court.

Hardwood, Softwood and BC Trees:

 

Let us first take a look at Forestry and TPP. According to Joel Neuheimer Canadians did press into it, and for what appears to be clear reasoning and benefit to Canada:

The reason, as noted by Joel Neuheimer, Senior Director of International Business at the Association of Canadian forest products , is that with this ratification, the industry will be opening new outlets and increase the level of exports on the international market, particularly to countries such as Japan, Vietnam and Malaysia.

Canadian forestry companies export about $33 billion worth of goods each year In more than 180 countries, primarily in Asia.

NOTE*** NOT primarily in the U.S. as many believe.

The TPP Agreement would have removed customs barriers for Canada’s forest products currently subject to tariffs of up to 31% in Vietnam, 40% in Malaysia, 20% in Brunei and 10% in Japan as reported by Etienne Dumont / Canadian Broadcasting Corporation.

NAFTA Renegotiations

 

Second, let’s review the NAFTA Re-negotiations and their impact on softwood lumber.

Trevor Nichols, of Castanet News says – There is hope for softwood lumber!

According to Mr. Nichols, B.C. Premier Christy Clark, while speaking at a breakfast event in West Kelowna on January 27, said Trump’s promise to rebuild the American economy might work in Canada’s favour.

 

“While the Americans are getting more protectionist, Donald Trump, as a builder, knows intuitively that residential housing starts is a major driver for economic growth for Americans. They cannot grow their housing industry without Canadian softwood going into their country, because it’s just too expensive to build and buy without our lumber.

Because the U.S. can’t produce enough lumber on its own to drive residential building, it’s actually in the country’s best interest to make sure Canadian lumber is filling the void.”

Nick Arkle, the co-CEO of Gorman Bros. Lumber Ltd. agrees with Clark, saying Canadian lumber is “critically important” to the U.S.

Additionally, B.C. Forest Minister Steve Thomson shares his thoughts here:

“Since 1982, softwood lumber exports from Canada to the U.S. have been subject to five rounds of U.S. trade litigation. “This is round 5 of this process and the Canadian industry has always been successful in defending its softwood lumber policy,” said Thomson.”

Local update February 05, 2017 | B.C. Forest Minister Steve Thomson flew to Ottawa on Sunday to start working toward a new trade agreement on softwood lumber with the U.S. as officials anticipated release today of the latest U.S. International Trade Commission report on their investigation into the import of Canadian softwood lumber.

You can read this full article in more detail | HERE

For access to a copy of the Fed Register notice issued which means that preliminary reviews are starting for the softwood tariffs listed, you can review what is published so far in regards to the Softwood Lumber Agreement negotiations  HERE  a full scope has not been written as yet.

We know that you also want to know how to have your voices heard in that discussion, especially when you are directly affected.

You have questions:

  • How are the field experts responding to the Trade Deals / Negotiations/ Issues?
  • What are the experts discussing amongst their peers??
  • How is your voice heard in these conversations?

One way to share your voice is to publish your concerns, insights, ideas or expertise online. Each week we publish and share industry news, our insights and reports that impact you as our readers. Do you have something that you would like us to share? Ask? Research for you? Let us know and we will add your requests to our weekly research and publishing goals.

 

TRADE PERSPECTIVES | The Conversation – NAFTA Re-Negotiations

 NAFTA

How to stay informed and get involved in the NAFTA conversation.

 

Sometimes we come across the most interesting people when we are researching the “State of Affairs” through the lens of North American Businesses. This week researching NAFTA we learned about Rosemary Coates. She has  an interesting perspective because of her  real world, hands on experience that she brings into her writing. Her article below, focused on the Mexico and U.S. cross-border challenges, and she has a point of view we hear being shared broadly. Let us introduce you and please let us know if you share her views or have another you believe we need to share as well!.

Coates is an expert in Supply Chain Dispute Resolution and she is the best-selling author of: 42 Rules for Sourcing and Manufacturing in China and Legal Blacksmith – How to Avoid and Defend Supply Chain Disputes. Ms. Coates lives in Silicon Valley and has worked with over 80 clients worldwide. She is also an Expert Witness for legal cases involving global supply chain matters. She is a globally savvy leader that understands not only supply chain, she understands history.

 

She writes this in her most recent article for Supply Chain Management Review (http://www.scmr.com/) :

 

“There are economists who say NAFTA has already caused the loss of so many jobs to the lower-cost environments in Mexico. They argue that instead of doing nothing, we should take every opportunity to raise tariffs, eliminate NAFTA and close our borders to immigrants and trade.

But we have gone down this pathway before with the Smoot-Hawley Tariff Act of 1930, which raised tariffs on about 900 products. Historians blame Smoot-Hawley for triggering the Great Depression of the 1930s.

For sure, NAFTA has its problems. The import/export paperwork to keep track of goods moving across the borders can be onerous. And the special rules for truckers from Mexico have taken a toll on American truckers. But overall, most economists think NAFTA has had a net positive effect on the US economy.

I hope we have learned our lesson from American history”

 

Rosemary shared these sentiments eloquently. We expect that we will not see too much hardship occur between Canada and the U.S. border trade under the new negotiations. We have not thus far, and we see reasons to stay focused on business as usual.

When topics as broad as free trade re-negotiations, tariff amendments, any type of international border barriers to business are being discussed many of us want to be the fly on the wall that hears the discussion. We try to be that fly on the wall for you, our valued readers.

We know that you also want to know how to have your voices heard in that discussion, especially when you are directly affected.  

You have questions:

  • How are the field experts responding to the NAFTA renegotiations?
  • What are the experts discussing amongst their peers??
  • How is your voice heard in these conversations?

One way to share your voice is to publish your concerns, insights, ideas or expertise online. Each week we publish and share industry news, our insights and reports that impact you as our readers. Do you have something that you would like us to share? Ask? Research for you? Let us know and we will add your requests to our weekly research and publishing goals.

 

Trade Talk | NAFTA Criticism affects this week and beyond…

 

Trade – The State of Affairs for NAFTA based cross border trading.

The NAFTA criticism has us all seeing news stories and hearing broadcasts that salaciously present and debate todays state of affairs for people or products crossing U.S. Borders.  NAFTA criticism combined with other Executive Orders affecting individuals crossing North American borders launched us into a noisy world. What as a business should you do, or do you focus on?

From our offices across the nation we can see carriers crossing the border without issues. In speaking with the Canadian Trucking Alliance this morning there are no reports of challenges with either carriers or cartage crossing the border between U.S. and Canada outside any norms expected. On all fronts that we have reached out to on the ground – all appears to be business as usual.

So what do you do? Carry on your business! Continue to press forward with what you do best and access your trade advisor when you come into anything that raises concerns about executing your business transactions across borders.

As for where to Focus – one place is on our weekly updates for you here, another is on opportunities perhaps not yet explored. For example, did you know that Canada has 12 Free Trade Agreements outside of NAFTA? Is it time to explore expansion opportunities or Alternative Trade Routes?

What we know for sure:

We shared this in last week’s post however it may serve well to share again one more time to remind everyone that life and business are carrying on because these things we know for sure and hope that you, our readers, feel confident about also:

  1. Products will continue to go to the U.S. from Canada and products will continue to go to Canada from the U.S.
  2. Duties, taxes and fees will still need to be managed, filed and paid.
  3. Businesses will continue to do business across our borders.
  4. Where there is a need, there will be a trade.

What we are talking about:

Nafta CriticismTalk around here is pretty quiet this week, we spoke with Mike, one of our trade compliance experts upstairs and he shared that he hasn’t had a single customer reach out to compliance with any concern about what is happening with NAFTA or in the US lately. From his vantage point it’s business as usual. So this is good news.

Status Quo carries on and your business should too – as usual and beyond! For now, it is still unclear if this will all add up to something or sit quietly at the nothing it is in practice today.

 

What we think:

Might we suggest, carrying on with your business and perhaps viewing this time as an opportunity to proactively explore new markets within some of the 12 other Free Trade Agreements Canada
has, or the 20 other Free Trade Agreements the U.S.A. have. New business after all is just beyond the horizon and well within reach of small and enterprise business in both countries.

Have a chat with one of our Trade Compliance Advisors and let’s see where you can grow to:  Trade Consulting

What we advise:

Focus some time with your broker this week to be sure your company rulings are up to date with the new HS Tariff amendments that came into effect in January this year.

If you are a client of Pacific Customs Brokers we have already updated any rulings prior to the amendment taking effect however it’s good to check in with your broker because ultimately as the vendor responsibility rests with you.

What we are Reading:

What we are reading about NAFTA this week is that not too much is being impacted to any great degree.  At least not yet.

Here are a couple of reads that were particularly interesting this week.

From Wall Street Journal (WSJ):

Nafta’s Net U.S. Impact Is Modest

Nafta’s Net U.S. Impact Is Modest. For all of the debate sparked by the North American Free Trade Agreement, most economists say its concrete impact on the U.S. economy has been modest—a small gain in growth and efficiency, and a small loss in jobs and lower wages for certain factory workers.
But as with most free-trade agreements, the gains over 23 years have been diffuse and the pains more concentrated, helping stoke the intense political backlash that powered : thumbnail courtesy of wsj.com

From LA Times:

NAFTA doesn’t count for much economically, but it’s still a huge political football. Here’s why:

 

Kevin Drum at Mother Jones tried Sunday to mediate a debate over NAFTA between economists Brad DeLong of UC Berkeley and Dani Rodrik of the Harvard Kennedy School. He takes DeLong’s point that the overall economic impact of NAFTA has been minuscule as a share of gross domestic product. “NAFTA’s impact on the U.S. — whether good or bad — is inevitably tiny,” Drum concludes, and he’s right.

President Trump threw trade experts for another loop Thursday by endorsing — or seeming to endorse — a new tax system for imports and exports that he said would “reduce our trade deficits (and) increase American exports.” Not so incidentally, he also said it “will generate revenue from Mexico that…

That’s important, because Trump’s approach to trade is all about those limited impacts. Those impacts are far beyond his ability to fix, even if he really wanted to, which is questionable.

Link: http://lat.ms/2kWqbdI 

From our Friends at Sandler, Travis & Rosenberg Trade Report

Renegotiated NAFTA Likely to Require Congressional Approval, CRS Says

 

President Trump would likely have to secure congressional approval for any substantive changes to U.S. law that would be required to implement a renegotiated NAFTA, according to a recent Congressional Research Service report.

CRS states that the negotiation of international agreements is generally considered to be the exclusive prerogative of the executive branch, which consequently does not appear to need approval from Congress to discuss changes to NAFTA with representatives of Canada and Mexico. There has been speculation that a future renegotiation of this agreement might cover issues such as tariff rates on goods trade, rules of origin, elimination of investor-state dispute settlement provisions, modifications to the general dispute settlement system, immigration and border security, and cooperation on migration from Central America, drug trafficking, and the illegal flow of arms and money.

Instead, attention will likely focus on whether any revised agreement resulting from such negotiations must be approved by Congress before it may take effect.

Link: http://bit.ly/2jHE3Ue

 

Our initial offering in this series: have a read https://blog.pcb.ca/2017/01/trade-talk-this-week-in-nafta/8743