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

Trading Cloth for Humans?

I recently had the pleasure of sitting down with author, Catherine McKinley, where we found ourselves talking about cloth and trade.

After explaining my research on the AGOA (African Growth and Opportunity Act) trade agreement to her and my focus of its impact on African economies, in particular vis-à-vis the textiles and apparel sector, she then began sharing with me the importance of cloth in African culture as well as in the history of trade.

Part of this discussion included her sharing with me that during the time of the slave trade, her research revealed that cloth had been traded for humans in quantities as small as two (2) bolts of fabric. 

I cringe at the thought of what the duty rate in the tariff would have been on the life of a human, however, with the US abolishing the trans-atlantic slave trade just a handful of years after the first tariffs came into being, I have been unable to locate any data to share here.

In her most recent book, “Indigo,” which came out last year, Catherine discusses this valuable dye and describes its historic significance.  The book has been described by Amazon.com as:

"For almost five millennia, indigo - a blue pigment obtained from the small green leaf of a parasitic shrub - has been at the centre of turbulent human encounters, prized by slave traders, religious figures and the fashion world. Indigo is the story of this precious dye and its ancient heritage: its relationship to slavery as the 'hidden half' of the transatlantic slave trade, its profound influence on fashion, and its spiritual significance, which is little recognized but no less alive today. It is a richly told story, brimming with electrifying tales of those who shaped the course of colonial history and world economy. But this is also the story of a personal quest: Catherine McKinley's ancestors include a clan of Scots who wore indigo tartan, several generations of Jewish 'rag traders' and Massachusetts textile factory owners, and African slaves who were traded along the same Saharan routes as indigo, where a length of blue cotton could purchase human life. Her journey takes her to nine West African countries and is resplendent with powerful lessons of heritage and history."

For more information on how to obtain your own copy of this book, click here.  I'm looking forward to reading my copy!

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

Africa Business and Trade

I had a rare opportunity to participate in a focus group recently with individuals familiar with doing business in Africa both from a US and foreign perspective.

Evident throughout the discussion was that trade with Africa is not without its frustrations.  Also apparent, however, was its great potential for the return on investment there.

Regarding the first point, from physical infrastructure issues to differences in cultural attitudes with respect to work ethic, setbacks to doing cost-effective business are varied and numerous.  Sourcing, quality control, viable transportation to carry cargoes to available ports, and high costs of vessel carriage were also issues raised by participants.

It should be noted however, that these variables change depending on what actual country you are doing business in.  Viable transportation out of a landlocked country for example, would not necessarily be an issue if you are sourcing and exporting from a port city.

There are however, real prospects for growth with profit potential in Africa being better than in other countries as is often the case with emerging markets.

More specifically to textiles and apparel, as pointed out by one participant, Africa has the greatest quantities of fallow land in the world, and has great potential for natural fibers like cotton.

My focus with business in Africa is with the textiles and apparel sectors as it relates to trade and importing into the US.  I have therefore, had the opportunity to speak publicly about the AGOA (African Growth and Opportunity Act) Agreement and plan to attend a conference next month in Washington DC on it.

It is called the 11th Civil Society Organization Session of US-Africa Trade and Economic Cooperation Forum and is hosted by the AGOA Civil Society Network.  For more information about the event, click here.

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

Responsible Supervision Over Employees of Customs Brokers

The Customs Brokers regulations under 19 CFR §111.28 provides for the exercise of responsible supervision by brokers over the transaction of customs business within such business entity or sole proprietorship.

Under the statute, 19 USC §1641(b)(4), responsible supervision and control means that degree of supervision and control necessary to ensure the proper transaction of the customs business of a broker, including actions necessary to ensure that an employee of a broker provides substantially the same quality of service in handling customs transactions that the broker is required to provide.

Factors US Customs looks at in order to gauge whether or not responsible supervision and control had been exercised by a broker lays in its evaluation of certain factors including:

1.      The training required of employees of the broker;

2.      the issuance of written instructions and guidelines to employees of the broker;

3.      the volume and type of business of the broker;

4.      the reject rate for the various customs transactions;

5.      the maintenance of current editions of the Customs Regulations,  the Harmonized Tariff Schedule of the United States, and Customs issuances;

6.      the availability of an individually licensed broker for necessary consultation with employees of the broker;

7.      the frequency of supervisory visits of an individually licensed broker to another office of the broker that does not have a resident individually licensed broker;

8.      the frequency of audits and reviews by an individually licensed broker of the customs transactions handled by employees of the broker;

9.      the extent to which the individually licensed broker who qualifies the district permit is involved in the operation of the brokerage; and

10.   any circumstance which indicates that an individually licensed broker has a real interest in the operations of a broker.

These factors are required to be considered by US Customs when imposing a monetary penalty upon a broker for a lack of responsible supervision and control. [US v. UPS, 686 F. Supp.2d 1337 (2010)]

Therefore, it would be prudent to ensure that oversight of employees with respect to these factors remains high.

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

World Trade Week Networking Event - May 15th, 6 - 8 PM

Come out and join me tomorrow night at FORUM BAR near New York City's Union Square!

The NY Chapter of the Organization of Women in Interational Trade is hosting a FREE event at Forum Bar with complimentary hors d'oeuvres along with a cash bar.  While women are a majority of members of the organization, men are always invited and welcome to attend our events!

Every year, the President of the United States declares the third full week of May as World Trade Week.


Trade organizations, businesses and other stakeholders come together both nationally and locally to promote and facilitate international trade in the U.S. economy. 


The New York City tri-state region’s trade and transportation community celebrates World Trade Week by offering a full agenda of educational seminars, global business networking events and the Awards Breakfast that recognizes the exemplary achievements by practitioners in the field.


For more information about the event, go to www.owitny.org.


Forum is at 127 4th Avenue (btw. 12th and 13th streets) - conveniently located one block from Union Square


Hope to see you there!