Changes could lead to big gains and even bigger losses if U.S. companies are not aware of them
CHICAGO – October 22, 2015 – Major new developments in global trade are expected to play a significant role in 2016 and affect nearly every business that imports or exports goods. These developments could lead to big gains and even bigger losses if U.S. companies are not aware of them. Livingston International breaks down these developments and spells out why they are important:
- Automated Commercial Environment (ACE): U.S. Customs and Border Protection (CBP) established mandation dates in 2016 as they continue the rollout of their modernization efforts. In February 2016, filers are required to transmit cargo release and entry summary for U.S. imports, as well as the first three Partner Government Agency data sets, following ACE processes and technical requirements. The modernization initiative aims to streamline and leverage more current technologies and process changes, improving the exchange of information between trade, CBP and 47 different federal agencies through a single government window. Importers, especially those with products regulated by one or more of the partner government agencies, should understand the new requirements the ACE environment presents.
- Country of Origin Labeling (COOL): A U.S. federal law that requires meat sold in grocery stores to indicate the country or countries where the animal was born, raised and slaughtered. In 2014, the World Trade Organization (WTO) found that COOL requirements put Canadian and Mexican livestock at an unfair disadvantage against U.S. animals. Canada requested authorization from the WTO to impose over $3 billion in retaliatory measures against U.S. exports to Canada – this includes increased tariffs on 30 U.S. products including beef, pork, cereals, baked goods and fruit if the U.S. legislation is not repealed by November 2015.
- IMMEX (Maquiladora) Program: This trade agreement allows companies to import raw goods and services to Mexico to be manufactured and re-exported, without paying customs duties. Although more than 6,000 companies think they are participating in IMMEX, they may not understand or be receiving the full benefits of the program. Changes in 2014 eliminated the value-added tax (VAT) exemption for temporary imports of goods performed by factories, resulting in a VAT of up to 16 percent unless companies obtain a certification.
- Information Technology Agreement (ITA): If approved in December 2015, this agreement would eliminate tariffs on roughly 200 IT products, valued at approximately $1.3 trillion in annual trade. This is the first tariff-cutting agreement in the World Trade Organization (WTO) in 18 years. More than 80 countries, including the U.S., Canada and China, representing 97 percent of world trade in information technology products have agreed to participate in the ITA. The ITA could offer trade opportunities that weren’t originally available. It could also increase competition for U.S. tech manufacturers by opening the U.S. market to similar products from other countries.
- Trans-Pacific Partnership (TPP): The TPP is the biggest free trade deal in history. The 12 countries participating in the TPP finally reached an agreement in October 2015 after seven years of negotiations. The agreement must now be ratified by the government of each country, a process that could start in the U.S. in 2016. Collectively, the countries — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – represent 40 percent of the global GDP $27.5 trillion combined economy, or a third of world trade. With the passing of TPP, multi-national businesses would have more intellectual property protection and overall consistency as investors and traders in the region. TPP would also lower or eliminate tariffs on a variety of products.
- Transatlantic Trade and Investment Partnership (T-TIP): T-TIP is a trade and investment agreement being negotiated between the U.S. and the 28 European Union member countries. It would increase access to both European and U.S. markets for goods and services. For example, T-TIP aims to coordinate on product testing, inspection, and certification procedures; resolve pest and pathogen sanitary issues with a single approval process; standardize forms filed at the border; and align fees and charges. U.S. businesses whose products are highly regulated should find navigating EU trade easier and incur lower costs for obtaining approvals and permits.
About Livingston
Livingston International focuses on customs brokerage and trade compliance, offering international trade consulting, global trade management and freight forwarding. It provides clarity in a world of trade complexity, so business can grow further, faster and smarter. Livingston employs over 3,200 staff at 125 key border points, sea ports, airports and other strategic locations across North America, Europe and Asia. www.livingstonintl.com
EDITORS’ NOTE: Photo of Cora Di Pietro available upon request.
MEDIA CONTACTS:[one_half_first]Pat Stanghieri
Livingston International
1-800-387-7582 ext. 3292
pstanghieri@livingstonintl.com
[/one_half_first][one_half_last]Samantha Blieden
PCI
312-558-1770 ext. 138
nterchek@pcipr.com
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