Will TPP Really Boost U.S. Exports?

The negotiation of the Trans-Pacific Partnership Agreement (TPP) concluded in Oct. 2015 between its 12 member countries, which include the United States, Australia, Brunei Dar es Salaam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

The overarching objective of the TPP is to reduce, or eliminate, tariff and nontariff barriers across virtually all goods and services traded within the member countries with the goal being, in pertinent part, to

·       Facilitate the development of production and supply chains

·       Increase transparency across country specific trade laws

·       Encourage the smooth process of customs and border procedures

·       Open up domestic markets, and

·       Raise living standards and support job creation.

It includes provisions specific to certain industries in order to promote a common regulatory approach across the TPP region, which includes medical devices, information and communications technology products, and pharmaceuticals to name a few.

It's also being angled by the U.S. Trade Representatives Office to support American workers, businesses and values first, and has a special provision designated to wearing apparel and textiles.

As stated on the USTR's website:

TPP’s Textiles and Apparel chapter will create export opportunities for Made-in-America clothes, fabrics, and yarns and support jobs in the United States. This objective is advanced by a “yarn-forward” approach that requires use of yarns and fabrics from TPP countries in end products qualifying for preferential treatment under TPP — with some flexibility so that American businesses and workers whose products depend on inputs not available within the TPP region can still benefit. The yarn-forward approach also will help to develop a regionally-integrated supply chain that will promote long-term growth and investment in this sector in the United States. The Textiles and Apparel chapter also secures close customs cooperation among TPP Parties to facilitate effective enforcement of the rules; and ensures that U.S. companies have access to temporary relief if an import surge causes, or threatens to cause, serious damage to their business.   

Only time will tell if TPP will really boost U.S. origin exports and with the drafting of laws getting underway, that day will be here sooner than later.  Stay tuned.

AGOA Eligible Countries Keep Benefiting Despite GSP Lapse

Even during the present lapse in the Generalized System of Preferences (GSP), US Customs clarified for the trade community today that GSP-eligible imports from African countries eligible under the African Growth and Opportunity Act (AGOA) continue to benefit from GSP.

As currently legislated, the AGOA remains in effect through September 30, 2015.

Special program indicators (SPIs) denoted by a letter are shown on the Harmonized Tariff Schedule of the US (HTSUS) to indicate under which special program a product may apply.

The overwhelming majority of AGOA-eligible tariff items in the HTSUS indicate one of three GSP SPIs, namely “A,” “A*” or “A+,” and not the AGOA’s SPI “D.”

US Customs requires that the AGOA claim be made on these GSP-eligible tariff items by prefacing the HTSUS number with the SPI “A.”

To receive AGOA preference for eligible goods on a tariff item with the SPI “A,” “A*” or “A+” in the “Special” column of the HTSUS (and not “D”), importers should transmit the entry summary with the SPI “A” and without duty.

For further clarification please refer to the AGOA regulations, 19 CFR 10.178a, and the GSP regulations, 19 CFR 10.171-178.

Questions about this may be directed to the Trade Agreements Branch at FTA@dhs.gov or to myself by posting below or emailing me at clark.deanna@gmail.com

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US Customs Report Shows Importing Community Doing a Good Job

US Customs recently published its 2010 mid-year fiscal report entitled, “Import Trade Trends.” Not surprisingly, after the IRS and Social Security Administration, money collected through US Customs is the third largest source of revenue for the US government.

What may be surprising however, is that only 29% of imported goods are dutiable! The remaining 71% are either duty-free or free under a preferential tariff program.

In case you think this sounds charitable on the part of the U.S., think again. Just as benefits to some foreign imports exist at our borders, the same goes for U.S. products entering those other countries. It is not so much that the U.S. wants to give another country a “hand” (though it may be framed that way in the media), but the idea behind preferential trade agreements is to help facilitate greater U.S. exports by causing more favorable conditions of our products in to foreign lands.

Of interest in the report is that starting last year, China – a country the U.S. does not have a preferential trade agreement with – surpassed Canada – a country the U.S. has NAFTA (North American Free Trade Agreement) with – as the top source of imports for America. China is further projected to maintain this lead into 2011.

So far, the first 6 months of the 2010 fiscal year has resulted in $15 billion in revenue for the federal government. Not only that, but a random sampling by US Customs showed that 98.6% of these 2010 imports were materially compliant with the regulations and trade laws of the U.S.

Not only is this rate higher than in recent years, but it demonstrates that importers, and those of us who help importers be compliant, are doing a pretty good job.

Priority trade issues include those involving:

-Textiles - Penalties

- Intellectual Property Rights

- Antidumping and Countervailing Duties

-Import Safety - Agriculture

-Revenue Collection

Lastly, in the spirit of increased partnering with the public, US Customs has a new online reporting system called “e-Allegations” to report suspected illegal import/export activity as well as the US Customs Freedom of Information Act (FOIA) Electronic Reading Room.

For importers specifically, the new phase of ACE was rolled out and is now capable of processing 98% of the entry summaries received by US Customs.

To read the full report, click here.

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