In This Issue
Inconsistent Canada-U.S. Regulations a Barrier to Competitiveness
WTO Decision on COOL Dispute Expected This Summer
Canada-EU Free Trade Pact Legal Text Coming Soon
Survey Reveals Practical Barriers for Businesses Trading Across Borders
2014-15 CBSA Report on Plans & Priorities
'Three Amigos' See Progress on North American Trade Pact
eManifest Update: CBSA Moves Closer to Mandatory Compliance
New Executive Order to Streamline the U.S. Export Process By 2016
TPP Talks Stall on US-Japan Stand-off
Pilot Truck Cargo Pre-Inspection Program Starts at the Peace Bridge
Canada's New Free Trade Deal with South Korea
Port Metro Vancouver Truckers' Strike
Inconsistent Canada-U.S. Regulations a Barrier to Competitiveness: Canadian Chamber 

The Canadian Chamber of Commerce recently unveiled its Top 10 Barriers to Competitiveness report for 2014.

The Canadian Chamber launched this initiative two years ago to draw attention to the barriers that it determined are holding back Canada's progress and to urge all levels of government to act more swiftly to improve the country's ability to compete globally.

One of the key barriers to competitiveness included in the report is "Inconsistent regulatory policies between Canada and the U.S."

The report indicates a number of sectors where the Canadian Chamber believes closer regulatory alignment with the U.S. makes particularly good sense. These include automotive, health and personal care products, and agriculture and food products
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WTO Decision on COOL Dispute Expected This Summer

Canada and Mexico brought the long-running trade dispute with the United States over meat labelling back to WTO last month, arguing that the U.S. legislation violates trade commitments, and discriminates against foreign livestock.

Canada had hoped that there would have been a fix to COOL in the 2014 farm bill, but Congress left it intact; despite vocal opposition from American livestock producers and processors, who fear trade retaliation.

Canadian Agriculture Minister Gerry Ritz said he is confident the WTO panel will rule in Canada's favour. But he expressed frustration when asked if Ottawa was getting anywhere with the U.S.

"If you're talking about the Administration, absolutely not. They're intransigent," Mr. Ritz told reporters. "Somehow they think that this is a rightful discrim-ination. There's no such thing in my mind," Ritz said.

The WTO panel handling the complaint is expected to issue a confidential interim report to the governments on June 20 with the final report expected a month later.  

  

Canada-EU Free Trade Pact Legal Text Coming Soon

Trade Minister Ed Fast says the legal text of the Canada-European Union free trade agreement will be ready for Canadians to examine soon, possibly in the next month or two.

The agreement was signed amidst much fanfare in mid-October, but finalizing the text and putting it into legal language has taken time. Fast says the delay is not unusual given the complexities of the agreement.

He said Canada may see the document before Europe, where it will have to be translated into 24 languages
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Survey Reveals Practical Barriers for Businesses Trading Across Borders

A recently released International Chamber of Commerce (ICC) survey highlights common impediments to cross border trade that can be taken into consideration by governments and policymakers worldwide when determining what can be done to facilitate the flow of goods across borders thereby contributing to global economic growth.

While recognizing that the survey results are neither statistically valid nor entirely representative of the hundreds of thousands of organizations that trade globally, the survey does much to reveal a set of common prerequisites - such as predictability, reliability and consistency - that international traders seek.

With 88% of respondents involved in import and export or trade in services (including freight forwarding, transportation and third party logistics), the survey reveals a need for greater capacity building, in particular through education and making information more easily available, to ensure that both traders and border control officials follow proper international trading procedures. The survey results also serve to illustrate the need for an effective customs-business dialogue at national level to find ways to lessen delays in trade processes and shorten release times, as called for by ICC.  

 

2014-15 CBSA Report on Plans & Priorities

The Canada Border Services Agency  (CBSA) has released its Report on Plans and Priorities (RPP) for 2014-15 which provides details over a three-year period of the organization's main priorities by strategic outcome, program and planned/expected results.

Overall planned spending by the agency for 2014-15 is estimated to be $1.7 billion, reducing to $1.6 billion in 2015-16 and $1.5 billion in 2016-17.


In 2014-15, the Agency states that it will be exploring options to allow for more resources to be allocated to targeted verifications, which typically result in larger assessments.
  

 

GHY E-Newsletter                      March 2014
'Three Amigos' See Progress on North American Trade Pact  

 

Following their annual their trilateral North American Leaders Summit that ended Feb. 19, the leaders of the U.S., Canada and Mexico issued a joint statement on how the three NAFTA partners plan to work together on a variety of topics, including trade and economic competitiveness. They pointed out that in the 20 years since NAFTA was implemented trade among them has risen by at least 265% and investment within the region has been multiplied by six, spurred by "the competitive advantage of our integrated production and supply chains and our highly skilled workforce."

At the same time, the leaders identified a number of initiatives that they will pursue to build on that success including the following:

- A North American transportation plan will be developed, beginning with a regional freight plan and building on existing initiatives.

- A North American trusted traveler program will be established in 2014, starting with the mutual recognition of the NEXUS, Global Entry, SENTRI and Viajero Confiable programs.

- Energy ministers will meet later this year to discuss opportunities to promote common strategies on energy efficiency, infrastructure, innovation, renewable energy, unconventional energy sources, energy trade, and responsible resource development.

- A new outreach mechanism will be developed in 2014 through which experts and stakeholders will be able to share their perspectives on the joint agenda and propose new lines of action. 

 

- The statement also pledged additional work on streamlining procedures and harmonizing customs data requirements for traders, along with increased cooperation to combat the importation of counterfeit products, but no further details were provided.  

 

eManifest Update: CBSA Moves Closer to Mandatory Compliance         

 

Following the recent announcement regarding certain changes to its border crossing process for commercial trucks (i.e., a new notification system for eManifest users and an update of its Electronic Data Interchange maps), Canada Border Services Agency (CBSA) has proposed regulations that all trucks carrying freight into the country will be subject to eManifest requirements.
 
The rule, proposed Feb. 15, 2014, represents the first of two packages of regulatory amendments designed to support the full implementation of eManifest. "Package 1" includes requirements for electronic pre-arrival information in the highway and rail modes, enhancements to existing processes in the marine and air modes, and provisions that would allow the CBSA to dev elop administrative monetary penalties for non-compliance with eManifest requirements.

The second package is expected to be introduced in 2015/2016 and would mainly include provisions relating to advance information requirements for importers. It is estimated that the implementation of "Package 1" would result in a net benefit for businesses of $391 million over a 12-year period from reduced delays at the border and from efficiencies achieved by replacing paper processes with electronic ones.

Voluntary eManifest submissions began in October 2012. The CBSA estimates that more than 95 percent of cross-border carriers are already using the system.


The CBSA notes that the mandatory compliance date (coming into force date) cannot be confirmed until after the agency responds to comments received from stakeholders on the proposed regulation. The date may also be affected by the normal regulatory process.

Once the rule has been finalized, the CBSA will give carriers 45 days' notice of the compliance date. After a six-month soft enforcement period, carriers will risk administrative monetary penalties for non-compliance.
 

 

GHY's ACI and ACE eManifest Portal making eManifest requirements for northbound or southbound freight easier and faster for highway carriers and importers with their own trucks. Click here to find out more.  

 

New Executive Order to Streamline the U.S. Export Process By 2016        


After promising a "year of action" in his recent State of the Union address, President Barack Obama last month signed an executive order mandating the completion of a web-based platform called the International Trade Data System (ITDS). The platform is expected to cut through much of the red tape associated with launching export/import operations, as it would allow businesses to submit documentation to various federal agencies by way of a single portal, or single window.

The order states: "To ensure that our nation is well-positioned to compete in an open, fair, and growing world economy, the federal government must increase efforts to improve the technologies, policies, and other controls governing the movement of goods across our national borders."

Currently, the export/import process can require businesses submit information to multiple agencies and fill out (both online and paper) forms each time. The process is seen as particularly burdensome to small businesses that don't typically have the resources to throw at dealing with regulatory compliance.

The ITDS would let companies submit all the required data electronically and all in one place. The system would then distribute the data to the agencies that need it. Obama's executive order charges the board of directors for ITDS, which consists of representatives from the agencies, with choosing a standard set of data elements for the system to collect and share.   

 

TPP Talks Stall on US-Japan Stand-off    

 

Talks between 12 Pacific Rim countries ended Feb. 25 in Singapore with no breakthrough in creating the largest free-trade zone in history, linking key Asian-Pacific economies with Canada, the U.S., Mexico, Peru and Chile. The so-called Trans-Pacific Partnership would unite 40 percent of the world's gross domestic product under one pact aimed at eliminating most tariffs and dismantling regulatory barriers among participating countries.

A joint statement said participants "agreed on the majority of the landing zones," have "charted a path forward" to resolve the issues that remain, and are committed to concluding the talks "as soon as possible." But key sticking points remain between the two main economies in the pact.

Press reports indicate Japan is holding firm on its opposition to removing protective agricultural trade barriers on foreign grains, meat, sugar and dairy products. Vehicle exports to Japan also remain a big sticking point, especially for U.S. automakers, who want access to consumers there. The U.S. has its own issues about opening up certain industries, such as removing sugar import tariffs and quotas that would harm American sugar beet farmers. The U.S. is also facing the sensitive prospect of inflicting harm on domestic textile and seafood producers in the negotiating process.

No date was set for the next round of talks although it's speculated that it could take place in China in May
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Pilot Truck Cargo Pre-Inspection Program Starts at the Peace Bridge

 

A pilot program that will allow for U.S.-bound cargo trucks to be pre-
inspected in Canada is getting under way. The test program is the second phase of a pilot called for in the Beyond the Border Action Plan which allows American customs officers to inspect U.S.-bound cargo trucks in Canada, a move both countries hope will expedite the flow of trade and travel.

Authorities will watch to see whether pre-inspecting trucks on the more expansive Canadian side of the Peace Bridge will reduce wait times and pollution-causing idling on the 86-year-old span between Fort Erie, Ont., and Buffalo, N.Y.
The bridge handled 1.2 million truck trips and more than $40 billion in trade last year, making it the third-busiest truck crossing on the U.S.-Canada border.

Under the voluntary program, trucks equipped with transponders are inspected in Canada. Once in the U.S., the pre-inspected vehicles are directed into an enforcement booth where drivers see either a green light, signalling they've been cleared, or a red light requiring them to stop for a secondary inspection. Under the system, which keeps enforcement on the U.S. side, drivers do not know until they get to the light whether they have been flagged.

 

New Free Trade Deal with South Korea Canada's First Agreement with an Asian Country

 

Canada and South Korea finalized years of negotiations on their bilateral free trade agreement (FTA) on March 11 after summit talks between Stephen Harper and his South Korean counterpart President Park Geun-hye.

The protracted FTA negotiations started in 2005, but later ground to a halt over disputes about import ban on Canadian beef. The new FTA, signed Tuesday by trade ministers of the two countries, is expected to take effect in 2015 after domestic procedures for the ratification.

"This agreement is a great deal for both of the countries," said Harper. "It will create jobs and opportunities for Canadians today and, just as importantly, more generations to follow." Harper added the agreement is "good news" for Canadian beef and pork producers, and for the wine, fish, seafood, medical and chemical sectors.

According to the Harper government, the deal is expected to increase Canadian exports to South Korea by 32 per cent and expand the economy by $1.7 billion. Speaking in Seoul, Harper also noted that the FTA will "level the playing field for Canadian companies competing with South Korea's other trading partners, including the United States and the European Union, who already have free trade agreements with South Korea."

Although trade between the two countries stood at just over $10 billion as of 2013, it is considered significant for being the first free trade pact Canada has signed with an Asian country. Neither Japan nor China has a trade agreement yet with the North American country, and Canada hopes Korea will be a gateway to the Asia-Pacific region in the future.

Once in force, the deal will eliminate virtually all tariffs between the countries, with Korea cutting 81.9 per cent of duties upon the first day of the FTA coming into force, and Canada removing 76.4 per cent of levies. Some tariffs will take much longer to be fully phased out, however. South Korea will remove a 40 percent import duty on Canadian beef within 15 years, while eliminating a tariff of 22.5-25 percent on pork imported from Canada over the next 13 years.  

   

Canada will cut the 6.1 percent tariff on South Korean vehicles in two years after the FTA implementation, a move that many believe will enable South Korean automakers such as Hyundai and Kia to gain ground in the Canadian market. Automobiles currently account for 43 percent of Korea's exports to Canada.

 

Port Metro Vancouver Truckers' Strike 

 

On March 19 the B.C. government announced it's preparing back-to-work legislation that will apply to about 250 unionized drivers who went on strike on March 10. The province says the legislation, which could be introduced as early as March 24, includes a 90-day cooling off period. 

Striking truckers had earlier rejected a 14-point action plan put forward by the Canadian and B.C. governments together with Port Metro Vancouver, dismissing it as a "non-negotiable take-it-or-leave-it package" and demanded more negotiations.    

 

Hundreds of non-unionized container truck drivers walked off the job on Feb. 26 in a dispute over pay and services at Port Metro Vancouver, with unionized drivers subsequently joining them on the picket line. The work stoppage has crippled operations at the city's container terminals, resulting in severe impacts on the national economy such as halting the export of commodities like lumber and grain products, as well as severely delaying the import of consumer goods arriving at the port.

Port Metro Vancouver has threatened that drivers who don't return to work could risk losing their license and has issued notices to terminate the licences and permits of up to 150 truckers which are due to expire soon. The striking truckers have vowed not to return to work claiming that government ultimatums and "bully tactics" won't solve the root causes of the dispute: low wages and long wait-times to pick up loads at the port.

Until the situation is resolved, importers should expect continued delays and added expenses concerning shipments arriving at the Port of Vancouver.  

 

And Furthermore...
Finding time to follow the latest international trade developments and programs of Customs agencies on both sides of the border relevant to your business can be challenging, so we hope you find this issue of our Tradelines e-newsletter to be a helpful resource in this respect.

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