Beyond The Border: Harper, Obama Sign Deal to Bolster Security, Reduce Trade Barriers

(Althia Raj — Huffington Post Canada)

Canada’s new border deal with the United States could lead to fewer missed connections at the airport, more American law-enforcement officials working on Canadian soil, harmonized U.S. standards for prescription drugs, new names for cuts of meat and fewer inspections of food cargo as both governments strive to ensure better information sharing and less red tape for companies trying to get their goods and people across the largest land border in the world.

The massive Perimeter Security and Economic Competitiveness Action Plan was described by Prime Minister Stephen Harper Wednesday as the most significant step forward in Canada-U.S. co-operation since the North American Free Trade Agreement. [...]

For cargo from overseas, the U.S and Canadian governments hope to de-clutter the border by screening goods only once — when they first arrive.

Two pilot projects in Prince Rupert and Montreal will be launched in 2012. Shipments coming from overseas will only be screened on arrival and won't be inspected on subsequent border crossings unless absolutely necessary. If the pilot projects work, single screening will become the new norm.

For businesses, other pilot projects are being developed, such as a pre-inspection of cargo carried on trains, which will begin in September. Another year-long project will involve issuing advance clearance for trucks carrying fresh meat.

The governments will also move to eliminate red tape. An American firm wanting to import fridges currently has to file paperwork with nine government departments, in the future all those applications will be filed through one website. Read more here.

Related:
Canada, U.S. Take ‘Most Significant’ Step Since NAFTA (CBC News)
Main Perimeter Pact Initiatives Still Years Away as Canada-U.S. Unfurl Plans (The Canadian Press)
New U.S.-Canada Border Deal Aims to Cut Bottlenecks, But at a Price (Toronto Star)

Prime Minister Stephen Harper’s Statement on Beyond the Border

Prime Minister Stephen Harper on Wednesday made the following statement as details of the Beyond the Border perimeter security and trade deal between Canada and the United States were unveiled in Washington.

“Today, we are pleased to announce ambitious agreements on perimeter security and economic competitiveness, as well as on regulatory co-operation.

“These agreements create a new, modern border for a new century.

“Together, they represent the most significant steps forward in Canada-U.S. co-operation, since the North American Free Trade Agreement.

“The first agreement merges U.S. and Canadian security concerns with our interest in keeping our border as open as possible to legitimate commerce and travel.

“As I said in February... Canada has no friends among America’s enemies.

“What threatens the security and well-being of the U.S., threatens the security and well-being of Canada.

“Nevertheless, measures to deal with criminal and terrorist threats can thicken the border, hindering our efforts to create jobs and growth.

“Today, our two governments are taking practical steps to reverse that direction.

“We are agreed, for example, that the best place to deal with trouble is at the continental perimeter. . . That smarter systems can slash the needless inconvenience posed to manufacturers and travellers by multiple inspections of freight and baggage.

“We also believe that, Just as threats should be stopped at the perimeter, trusted travellers should cross the border more quickly.

“Indeed, these priorities are complementary: The key that locks the door against terrorists also opens a wider gate to cross-border trade and travel.

“The second joint initiative will reduce regulatory barriers to trade, by streamlining and aligning standards where it makes sense to do so.

“Naturally, in this area, as in all others, no loss of sovereignty is contemplated by either of our governments.

“However, every rule needs a reason.

“Where no adequate reason exists for a rule or standard, and that standard hinders us from doing business on both sides of the border, that rule needs to be re-examined.

“Ladies and gentlemen, today’s agreement will yield lasting dividends to travellers, traders, manufacturers, — in fact everybody — whose legitimate business or pleasure takes them across the border.

“And we take these steps — both of us — to protect jobs, to grow our economies, and to keep our citizens safe.

“I say ‘we,’ because we are each other’s largest export customers.

“The benefits of co-operation will therefore be enjoyed on both sides of the border.

“So, let me take this opportunity, Barack, to recognize your leadership in this work.

“It reflects the vision — the large vision - you have for continental trade and security, and your commitment to jobs and growth.

“And it is, I believe, the next chapter in a relationship that is a shining example to the world.” 

Trans-Pacific Pact Participation by Japan, Canada, Mexico Subject of USTR Inquiry

(World Trade Interactive)

The Office of the U.S. Trade Representative is inviting written comments by noon on Jan. 13, 2012, on the interest expressed by Japan, Canada and Mexico in potentially joining the Trans-Pacific Partnership negotiations. USTR is assessing this interest in light of the TPP’s high standards for liberalizing trade and specific issues of concern to the U.S. regarding barriers to agriculture, services and manufacturing trade, including non-tariff measures, in these countries. USTR is particularly interested in the following issues.

• economic costs and benefits to U.S. producers and consumers of eliminating tariffs and eliminating or reducing non-tariff barriers on goods and services traded with these countries

• treatment by these countries of specific goods (described by HTSUS numbers), including product-specific import or export interests or barriers

• adequacy of existing customs measures to ensure that only qualifying imported goods from these countries receive preferential treatment, as well as appropriate rules of origin for goods entering the U.S.

• sanitary and phytosanitary measures, technical barriers to trade and/or barriers to trade in services that should be addressed

• relevant issues concerning electronic commerce, trade-related intellectual property rights, investment, competition, government procurement, environment, labor, transparency, innovation and competitiveness, new technologies and emerging economic sectors, the participation of small and medium-sized businesses in trade, and the development of efficient production and supply chains.

6 Things to Expect in New Canada-U.S. Border Deal

(Laura Payton — CBC News)

Canada and the U.S. are expected to announce a new agreement Wednesday to ease border congestion and better co-ordinate security between the two countries.

Prime Minister Stephen Harper and U.S. President Barack Obama announced the Beyond the Border agreement last February, leading to a year of consultations and talks on trade and security. The two leaders, who last met in Hawaii last month as part of the Asia-Pacific Economic Co-operation Summit, are meeting in Washington Wednesday.

Last August, the government released its consultation report, including comments from groups in favour of better co-operation and those worried about how much information Canada is prepared to share with U.S. authorities.

The report notes Canadians make almost 40 million trips to the U.S. every year and $1.6 billion in goods and services cross the border every day. Canada and the U.S. have more trade flowing across the Windsor-Detroit corridor than any other border crossing in the world.

The consultation report also hints at what Canadians can expect in the agreement. Read more here.

Canada-U.S. Border Deal: A Lot at Stake

(Nathan Elliott — The Leader-Post)

The border between Canada and the United States is an uncertain line. It divides and differentiates the two countries, but sometimes it connects and integrates them.

For months, the border has been under intense scrutiny, thanks, in part, to TransCanada’s ongoing Keystone XL pipeline imbroglio.

Another border dynamic now cuts through the middle of Canadian-American relations.

Today, Prime Minister Stephen Harper is in Washington, D.C. for a meeting with President Barack Obama, at which it is expected the two leaders will announce details of the Beyond the Border trade and security deal, first discussed last February.

The timing of the meeting is historic.

It comes 100 years after another border arrangement, the 1911 reciprocity agreement between the government of Sir Wilfrid Laurier and William Howard Taft's Republican administration. Read more here. 

Effort to “Tier” Export Control Lists Postponed to Avoid Problems for Exporters

(World Trade Interactive)

According to the State Department, the Obama administration has postponed part of its effort to overhaul existing export control lists. This delay is meant to avoid undue hardship for exporters, but the administration intends to revisit the issue at a later time.

In December 2010 the administration announced its intention make the U.S. Munitions List and the Commerce Control List more positive, tiered and aligned so that eventually they can be combined into a single control list. The administration also called for the establishment of a “bright line” between the USML and the CCL to clarify whether particular items are subject to the jurisdiction of the International Traffic in Arms Regulations or the Export Administration Regulations. Read more here.

Don’t Expect a Border Pact Backlash

(The Globe and Mail – Lawrence Martin)

To date, Stephen Harper has been an astute manager of Canada-U.S. relations.

He’s struck the right balance. A case in point is his two-pronged strategy on trade. The American market is in bad shape. It may never be what it once was. It makes sense therefore to diversify trade, as the Conservatives are now trying to do. It is also a given that, despite any decline, the U.S. will remain Canada’s largest trading partner. It makes sense therefore for the Prime Minister to secure that market as best he can. He will, therefore, sign the new Beyond the Border agreement, or perimeter accord, with President Barack Obama on Wednesday.

This comes after Washington’s pushback on the Keystone XL pipeline and its moves to invoke Buy America measures in its economic stimulus programs. In each case, Mr. Harper has had harsh words for the administration. That works politically because, again, it’s the balanced approach. History shows that Canadians like prime ministers who take on the Americans half the time and support them half the time. Read more here.

Air Freight Needs Less Paper and Better Security Procedures Says Cargo Advisory Group

(Handy Shipping Guide)

Shippers Should Join Discussion According to GACAG

Two new press releases today from the Global Air Cargo Advisory Group (GACAG), the body formed by the International Federation of Freight Forwarders Associations (FIATA), the International Air Transport Association (IATA), The International Air Cargo Association (TIACA) and the Global Shippers’ Forum (GSF) expounding the value of e-commerce and the need for continued development of cargo screening processes. The modernisation of documentary processes and better cargo security are the very raison d’être for GACAG.

At the heart of a long overdue process changes, the Group says, is the elimination of paper-based documentation. With participation from airlines, forwarders, ground handlers, customs and shippers, GACAG has initiated a review of the e-freight project launched by IATA in 2006, and will review other relevant initiatives, to identify the best possible roadmap to accelerate the implementation of a paperless transportation process. Two areas have been identified as priority for collaboration by GACAG members: the electronic air waybill (e-AWB) and the promotion of electronic Customs procedures. Read more here.

The Customs and Border Protection report of the recent meeting can be read here.

New IPR Infringement Petition on Portable Communication Devices

The International Trade Commission received Dec. 1 a petition requesting that it institute a Section 337 investigation regarding certain portable communication devices. The proposed respondents are from Canada, Taiwan, Korea, Japan, Sweden, Finland and the U.S.

Section 337 investigations primarily involve claims regarding intellectual property rights violations by imported goods, including the infringement of patents, trademarks and copyrights. Other forms of unfair competition involving imported products, such as misappropriation of trade secrets or trade dress and false advertising, may also be asserted. The primary remedy available in Section 337 investigations is an exclusion order that directs U.S. Customs and Border Protection to stop infringing imports from entering the U.S. In addition, the ITC may issue cease and desist orders against named importers and other persons engaged in unfair acts that violate Section 337, including selling infringing imported articles out of U.S. inventory.

The proposed respondents are: Research In Motion Ltd., Canada; Research In Motion Corp., Irving, TX; HTC Corporation, Taiwan; HTC America, Inc., Bellevue, WA; LG Electronics, Inc., South Korea; LG Electronics U.S.A. Inc., Englewood Cliffs, NJ; LG Electronics MobileComm U.S.A. Inc., San Diego, CA; Motorola Mobility Holdings, Inc., Libertyville, Illinois; Samsung Electronics Co., Ltd., South Korea; Samsung Electronics America, Inc., Ridgefield Park, New Jersey; Samsung Telecommunications America, LLC, Richardson, TX; Sony Corportion, Japan; Sony Corporation of America, New York, NY; Sony Electronics, Inc., San Diego, CA; Sony Ericsson Mobile Communication AB, Sweden; Sony Ericsson Mobile Communication (USA) Inc., Research Triangle Park, NC; Amazon.com, Inc., Seattle, WA; Nokia Corporation, Finland; and Nokia Inc., Irving, TX.

UK Export Control Organisation to Charge for Export Licences

(Lexology – George N. Grammas, Squire Sanders & Dempsey)

The UK export licensing body, the Export Control Organisation (ECO), has announced that it intends to introduce a charging regime for export licenses from April 6, 2012. Licenses were previously available to exporters at no cost.     

The ECO made the announcement at the bi-annual joint Government and Industry Export Control Advisory Committee meeting on May 11, 2011. It had been intended that a formal public consultation on the proposal would take place in September 2011, with final responses due by November 2011. However, the ECO has yet to commence any such consultation process so it seems likely that this timetable will slip back. 

Although the level of fees has yet to be determined, the ECO has indicated that once the charging regime comes into force then the cost of applying for a standard individual export license (SIEL) is likely to be in the region of £100-200 each. The ECO has also confirmed that a fixed fee will be payable for applying for open individual export licenses (OIELs) and an annual fee will be payable by an exporter for registering each open general export license (OGEL) that it uses. Read more here.

U.S. Customs Program Brings Increased Efficiency to Produce Imports

(Christina DiMartino — Produce News Daily)

U.S. Customs & Border Protection is in the midst of a trial program that uses smartphone technology to enable the release of inspected cargo on site and in real time.

The agency announced the pilot program in September.

Prior to the implementation of the program, CBP officers and agriculture specialists conducted inspections and the subsequent release of cargo was delayed until field personnel returned to the office site to enter inspection results into CBP data systems.

Enforcement Link to Mobile Operations-Cargo, being referred to as ELMOcargo, accesses cargo targeting data and permits field personnel to release the cargo in real-time at the conclusion of the inspection. ELMOcargo significantly decreases the time an importer has to wait for cargo that has been cleared. Read more here.

Beyond the Border: Noise and Promise

(The Globe and Mail – Colin Robertson)

Colin Robertson, a former Canadian diplomat, was a member of the team that negotiated the FTA and NAFTA. He is a senior strategic adviser at McKenna, Long & Aldridge LLP and vice-president of the Canadian Defence and Foreign Affairs Institute.

On Wednesday, Prime Minister Stephen Harper and President Barack Obama will announce a framework agreement on their Beyond the Border initiative with “risk management” as its guiding principle.

The deal is likely to include the following: Pre-clearance, currently offered at our major airports, will be extended to cargo leaving the factory gate; thresholds for inspected goods will be more generous; the “fast pass” privileges for trusted travellers will be expanded; access roads and ports will be improved to make them gateways rather than chokepoints; electrical grids, oil and gas pipelines, and the circuitry for everything from ATM transactions to air traffic control will be reinforced against cyber threats.

There will be reforms aimed at greater regulatory compatibility because differing national “standards” are the new barrier to commerce. They range from baby food bottles to seat belts to the Cheerios that U.S. Ambassador David Jacobson eats for breakfast. Read more here.

Border Pact Tops Agenda at White House

(Jason Fekete — Postmedia News)

Harper, Obama talk; PM also likely to raise possibility of joining Pacific partnership

Prime Minister Stephen Harper is heading to the White House on Wednesday for a meeting with U.S. President Barack Obama, when it's expected they will announce details of the contentious Beyond the Border trade and security deal.

Business groups say the agreement is badly needed to reverse a continual thickening of the border, while opposition parties and even Canada's privacy commissioner are raising concerns about its potential to infringe on the privacy rights of Canadians.

The tête-à-tête also will provide Harper an opportunity to further discuss Canada's interest in joining the nine-country Trans-Pacific Partnership trade group that already includes the United States. Read more here.

Update on Obama Administration Trade Priorities

(World Trade Interactive)

In a Nov. 30 speech to the U.S. Chamber of Commerce, U.S. Trade Representative Ron Kirk laid out five areas of emphasis for the Obama administration’s trade policy. These topics are largely the same as those set forth in the 2011 Trade Policy Agenda the White House released in March, and Kirk’s remarks revealed no significant new initiatives.

The first two issues relate to free trade agreements: implementation of the recently approved FTAs with Korea, Colombia and Panama, and conclusion of the Trans-Pacific Partnership Agreement. “We think TPP will be a deeply ambitious, groundbreaking trade arrangement, with binding commitments to market access across all sectors,” Kirk said. In addition, “TPP partners are taking on the latest challenges that our companies and workers are facing in the 21st century, many of which have never before been addressed in a trade agreement.” These include regulatory coherence, small and medium-sized businesses, supply chains, competitiveness, business facilitation, wildlife conservation, digital technology and state-owned enterprises. Kirk also indicated that the Obama administration “will discuss additional negotiating authority that may be necessary” to ensure congressional approval of the TPP “at the appropriate time.” Read more here.

News from TAHOCO: Weekly Updates

An updated list of recently published US government memorandums, notices, regulations and decisions for the week ending December 2, 2011 is now available on our website here.

Vessel Operating Fees in Mumbai to Rise

(Journal of Commerce Online)

Cargo-related charges to rise 30%, while marine dues to increase 23%

Operating costs for vessels calling at India’s Port of Mumbai will go up substantially mid-December following a tariff increase decision by the Tariff Authority for Major Ports, the country’s port regulator.

The revised rate scale, effective Dec. 21 through March 31, 2014, calls for a 30% hike in cargo-related charges and a 23% in marine dues. Cargo-related charges cover stevedoring, wharfage and demurrage, while marine dues include berth hire and pilotage fees. Read more here.

WTO Ruling Prompts Grocers to Urge Congress to Revisit COOL Law

(Produce News Daily – Joan Murphy)

After hearing news the World Trade Organization ruled against the U.S. country-of-origin labeling program in a trade dispute, the supermarket industry said that Congress should revisit it and perhaps repeal it because it is costing the industry millions of dollars and providing little benefit to consumers.

In December 2008, Canada challenged the COOL law, which required labels to declare the country of origin at retail for certain meats, fish, produce and other commodities. Canada, joined later by Mexico, argued that the farm bill program violated international trade rules in the handling of hog and cattle imports, particularly the provision that animals had to be born, raised and slaughtered in the United States to gain the U.S. COOL label.

A WTO panel ruled Nov. 18 in favor of Canada and Mexico, saying that COOL violated a trade agreement by “according less favorable treatment to imported Canadian cattle and hogs than to like domestic products.”

The supermarket industry pointed to the WTO ruling as an open door to change the law. Read more here.

Railroads, Unions Reach Tentative Accord

(Journal of Commerce Online – Mark Szakonyi)

Agreement with engineers, dispatchers eliminates strike threat — for now

Two unions representing railroad workers have reached tentative agreement with major U.S. railroads, averting the immediate threat of a national labor action.

The move relieves shippers’ fear of an immediate labor strike or stoppage as early as next week that would have crippled shipping amid the peak holiday season. Agreements have been struck with 12 of the 13 railroad unions, most recently with the Brotherhood of Locomotive Engineers and Trainmen and the American Train Dispatchers Association, which represent approximately 26,500 workers. Read more here.

MP Raises Alarm Over Border Talks

(Dave Battagello — The Windsor Star)

Breaches of privacy feared

Canadians - especially residents in border cities like Windsor – should be alarmed over a border agreement that may include an entry-exit system using digital fingerprints or eye scans to track everyone entering the U.S. and Canada, MP Brian Masse (NDP – Windsor West) said Tuesday.

“We are agreeing to tell the U.S. about every single person that comes in from Canada,” said Masse, a member of the federal government’s Canada-U.S. border relations committee. “What happens if it’s someone they say they don’t like?

“What’s their response going to be and how will we deal with that?”

But details of the plan are not being released despite indications in Ottawa a new Canada-U.S. security perimeter agreement called Beyond the Border could be signed by Prime Minster Stephen Harper and U.S. President Barack Obama next week when they meet in Washington. Read more here.

Monthly Surface Trade with Canada and Mexico Down 3.3% in September

U.S. monthly surface transportation trade in goods with NAFTA partners Canada and Mexico fell 3.3% in September after an 11.1% gain in August, according to statistics released Nov. 29 by the Department of Transportation. The September total of $77.7 billion was up 13.8% from a year before. Over the last ten years total surface transportation trade with Canada and Mexico has risen 83.0%, including a 99.0% gain for exports and a 71.3% increase for imports.

Surface transportation includes freight movements by truck, rail, pipeline, mail, foreign-trade zones and other modes and in September accounted for 85.6% of U.S. trade by value with Canada and Mexico. Surface trade between the U.S. and Canada totaled $46.1 billion, down 2.9% from August but up 14.7% from a year before. Exports fell 4.5% for the month but were up 10.3% from the previous September, while imports saw a 1.4% monthly decline but an 18.8% rise year-on-year. U.S.-Mexico surface transportation trade totaled $31.6 billion, down 4.0% from August but 12.5% higher than the previous year. Exports and imports were down 6.0% and 2.3%, respectively, for the month but rose 16.8% and 9.2% over September 2010.

Interim Import Statistics Highlight Goods that May Become Ineligible for GSP

(World Trade Interactive)

The Office of the U.S. Trade Representative has made available import statistics for the first nine months of 2011 that identify goods that could become ineligible for benefits under the Generalized System of Preferences. Specifically, these interim statistics identify articles for which 2011 trade levels may exceed statutory competitive need limitations. USTR states that this information may be useful in deciding whether to submit a petition to waive the CNLs, and thus retain preferential treatment, for GSP-eligible articles from individual beneficiary developing countries. Such petitions are due by 5:00 p.m. EDT Dec. 16.

GSP provides for the duty-free importation of designated articles when imported from designated BDCs. When the president determines that a BDC has exported to the U.S. during a calendar year either (1) a quantity of a GSP-eligible article having a value in excess of the applicable amount for that year ($150 million for 2011) or (2) a quantity of a GSP-eligible article having a value equal to or greater than 50% of the value of total U.S. imports of the article from all countries, GSP duty-free treatment for that article from that BDC must be terminated by no later than July 1 of the next calendar year. However, the 50% CNL may be waived with respect to an eligible article imported from a BDC if the value of total imports of that article from all countries during the calendar year did not exceed the applicable de minimis amount for that year ($20.5 million for 2011). Read more here.