International Trade and Human Rights

PBS aired a news piece recently that spoke to the human rights abuses in textiles factories in Cambodia. 

How do human rights abuses affect international trade?

 Maltreatment of apparel workers in the developing world as well as here in the US is common practice and has been for decades. 

How do we as a country that prides itself on labor laws and OSHA regulations (the "healthy workplace" standards in the US) so easily ignore this reality when we as consumers can have a direct impact in trade and overseas production if we speak with our wallets?

Doesn’t money talk?

Indeed it does, as many licensors know who place manufacturing requirements in its contracts with importers in an attempt to improve the working conditions of overseas laborers.  (See my article here for more information.)

Many importers of both unfinished and finished products, as well as agribusiness, see Africa as the “new frontier”. 

What I would like to know is:  Will we do it the “right way?”

That is, in a place with loose regulations (at best) will we – those of us going into the many countries that make up Africa – take advantage of the people and their land?

Or, will we create a business environment where human life and dignity are respected and sustainable production is expected, such that the health and welfare of both the people and the environment are respected?

In my view, the latter is the only answer, not only from an ethical standpoint but from that of a sustainable business model. 

Questions/comments?  Post below or email me at clark.deanna@gmail.com

11th Session of the African Growth and Opportunity Act (AGOA) Forum

I attended the AGOA Forum last week in Washington, DC, to which I attended primarily out of curiosity and without any particular expectation or affiliation.

I mention the latter because “going down to Washington” in the context of attending a conference specific to a piece of legislation means being surrounded by lawmakers, lobbyists, and a substantial amount of less visible players whom are trying to make sense of the benefits and impact of the legislation.

At the forefront of the Forum was a focus on two (2) exigent issues.

1)  An extension of the 3rd Party Country Fabric Provision, and

2)  An extension of the AGOA itself which is set to expire in 2015

 AGOA usage is premised on a product being of either African or American origin.  If an article derives from either of these origins, then it is eligible for duty-free treatment under the AGOA.

The 3rd Party Provision is an exemption to this rule whereby countries recognized as a “Least Developed Country” can make products which contain components that neither derive from the US nor Africa, but are instead from other “third party” countries.

The ability to continue using Third Party components is set to expire in about 3 months and many believe the extension is necessary.

The AGOA itself expires in 2015.  Many proponents believe an extension must be implemented now.  They are right.

Or, business needs to know now that it will not be. 

What is needed now is an answer one way or the other.

Any businesswoman attempting to make reasonable financial projections cannot reasonably do so with this uncertainty of an AGOA Extension.  It’s risk enough to consider setting up in an emerging economy but to try and do so in a setting where your basic cost of doing business cannot be calculated due to shifts in landed duty costs of nearly 20%, if we take the case of the ubiquitous cotton t-shirt as an example, is nothing short of a waste of time.

Something business owners already have little of - time that is.

If Congress thinks AGOA is a mere “handout” type of reformative development tool that is a waste of taxpayer dollars then now is the time to inform the public that it will not be continued so that the private sector can made realistic business projections.

Growing an economy in the face of government caused uncertainty during a time of recession is counterproductive.  This is precisely what Congress is doing in its failure to vote one way or the other to extend the AGOA.

Make a decision so that those of us who want to do business in Africa can do so in a realistic commercial environment.

Questions/comments?  Post below or email me at clark.deanna@gmail.com.

Exporting From the US and the USPPI

With President Obama’s export initiative in place, a greater focus is on sales by US sellers to the foreign marketplace.  One important party in these transactions is the person or entity that would be considered the US Principal Party in Interest (USPPI) in export transactions, and particularly so when considering the filing the electronic export information (EEI), which is the export declaration made to the US Census Bureau through its AES Direct website. 

By definition, the USPPI is that who receives the primary benefit of a transaction, be it monetary or otherwise.  This may be the seller of the product or the manufacturer when it sells its goods directly to an entity in a foreign area. 

There are however, many variations for which determining the definition of the USPPI turns, which depends on what their involvement in the transaction is.

If a U.S. manufacturer sells goods as a domestic sale to a U.S. buyer (wholesaler/distributor) and that U.S. buyer sells the goods for export to a FPPI, then the U.S. buyer (wholesaler/distributor) must be listed as the USPPI in the EEI.

If a U.S. order party directly arranges for the sale and export of goods to a foreign entity, then the U.S. order party must be listed as the USPPI in the EEI.

If a customs broker is listed as the importer of record when entering goods into the United States for immediate consumption or warehousing entry, then the customs broker may be listed as the USPPI in the EEI if the goods are subsequently exported without change or enhancement.

If a foreign person is listed as the importer of record when entering goods into the United States for immediate consumption or warehousing entry, then the customs broker who entered the goods, may be listed as the USPPI in the EEI if the goods are subsequently exported without change or enhancement.

Understanding who the USPPI actually is matters, not solely in your typical export transaction, but also for identifying the record keeping requirements of a USPPI in the case of a “routed shipment.”  For more information about this, click here.

Questions/comments?  Post below or email me at clark.deanna@gmail.com