Category Archives: Trade

News stories and links about trade, from a Vancouver perspective.

U.S. raises value of customs exemption, adds other customs revisions

Yesterday, the U.S. Senate passed Bill H.R. 644 “Trade Facilitation and Trade Enforcement Act of 2015.”

It is the sense of Congress that the USTR [U.S. Trade Representative] should encourage other countries to establish commercially meaningful de minimis values for express and postal shipments that are exempt from customs duties and taxes and from certain other entry documentation requirements.

This bill amends the Tariff Act of 1930 to increase from $200 to $800 the general de minimis aggregate fair retail value in the country of shipment of duty-free articles imported by one person on one day.

The de minimis provision appears under the bill’s “Miscellaneous Provisions”. The bill also contains provisions that:

  • The Government Accountability Office (GAO) must report to Congress on the effectiveness of CBP (Customs & Border Protection) enforcement of U.S. customs and trade laws (trade enforcement), along with several other directives aimed at “trade facilitation and enforcement.”
  • Tighter enforcement of “import related protection of intellectual property rights.”
  • Under “evasion of CVD (CounterVailing Duty) and AD (Anti-Dumping Duty)”, CBP will be required to:

    – investigate other federal agency claims of evasion of antidumping (AD) or countervailing duties (CVD), including any cash deposits or other security, with respect to covered merchandise entered into the United States; and
    – take specified enforcement actions if necessary, including suspension of liquidation.
    This requirement applies to goods from Mexico and Canada as well as goods from elsewhere.

  • Tighten other AD and CVD provisions.
  • New provisions to address what the U.S. considers currency manipulation or undervaluation by its trading partners.

(Source: https://www.congress.gov/bill/114th-congress/house-bill/644)

The Asia Pacific Gateway Skills Table report library

The Asia Pacific Gateway Skills Table (APGST) is a Transport Canada (TC) initiative to “ensure the Asia Pacific Gateway has enough people with the right skills and training to meet its needs.”

Today it released Study of Innovative Technologies for Communicating Real-Time Information to Port Drayage Drivers, which was conducted with the assistance of the Montreal Port Authority and looked at 10 ports around the world to understand their information systems for communicating important traffic and terminal conditions to drayage companies and drivers.

Here’s a partial list of APGST’s available titles:

  • Engineers, Geoscientists, Technologists and Technicians Labour Market Information
  • Port of Montreal Drayage Labour Profile and Technology Penetration Study
  • Women in Transportation Careers – Understanding Participation in Canada
  • Accelerated Apprenticeship Learning for Mobile Crane Operators in B.C. – Pilot Project
  • Technology and Skills in Transportation
  • Terminal Trades Occupational Analysis
  • Drayage Excellence Metrics in Metro Vancouver
  • Labour Force Profile of Port Drayage Drivers in Metro Vancouver
  • Vancouver Drayage Truck Turn-Time Analysis
  • Identifying Successful Business Practices of Profitable Drayage Owner Operators in Metro Vancouver
  • Labour Market Initiative
  • Tracking Tradespersons: Understanding the Labour Mobility of Tradespersons in the Asia Pacific Gateway

Trans Pacific Partnership webinar

The Trans-Pacific Partnership Trade Agreement: Threats and Opportunities, Winners, and Losers, taking place on Wednesday, February 3, 2016 at 02:00 PM EST. In this special 60-minute webinar, you’ll gain a unique perspective on the implications of the TPP from someone who knows both sides of the Canada-U.S. border. Our speaker, Dr. Laura Dawson, is the Director of the Canada Institute at the Woodrow Wilson Center in Washington DC, and a former Senior Economic Analyst at the U.S. Embassy in Ottawa.

Dawson will use her expertise and perspective to describe the new trade advantages brought on by the TPP; the impact on North American sectors such as manufacturing, the key trade-offs among the negotiating partners; areas for improvement and refinement in the agreement; the road ahead, and recommended next steps. Directly or indirectly, your organization will be affected by the TPP, so you will not want to miss this important session.

Topics addressed include:

– The scope of the TPP trade deal, and the potential to reshape the North American Free Trade Agreement among Canada, the U.S. and Mexico.
– The good, the bad, and the ugly: big positives within the deal, and reasons why many TPP countries are already facing opposition to some provisions.
– How the current political environment in the U.S. could affect the prospects for ratification by Congress.

The registration fee for this session is $99. This fee gives you access to the live webinar and Q&A session, as well as access to the recording that you can share with your entire organization.

OmniTrax puts Port of Churchill and HBR up for sale

The American based shortline consolidator, OmniTrax, runs 19 “railroads” (as of 2014) and some port assets, among which are Hudsons Bay Railway (HBR), CTR (Carlton Trail Railway), the Port of Churchill, and Churchill Marine Tank Farm purchased in 1997.

Hudson Bay Railway Company (HBRY) owns and operates over 627 miles of former Canadian National (CN) trackage with a network that connects with other railroads in Manitoba, like CN in The Pas, running north through Manitoba to the Hudson Bay. HBRY is a vital transportation link in northern Manitoba, hauling perishables, automobiles, construction material, heavy and dimensional equipment, scrap, hazardous materials, kraft paper, concentrates, containers, fertilizer, wheat and other grain products. VIA Rail also operates remote services on HBR using its Hudson Bay passenger train between Winnipeg, and Churchill, Manitoba.

hbr_map
Hudsons Bay Railway system map (source: OmniTrax)

Port of Churchill Facilities
Season 14 weeks, July 15 to October 31
Berths 4 loading berths (including 1 tanker berth)
Dalgliesh (Tanker): 166 metres, max draft 9.9 metres
Grain Berth No. 1: 232 metres, max draft 11.5 metres
Grain Berth No. 2: 262 metres, max draft 9.0 metres
Wolfe (Lay-By) Berth: 255 metres, max draft 10.0 metres
Maximum Vessel Size 225 metres LOA
Maximum Draft Maximum 11.5 metres at low tide
Maximum Vessel Size Panamax
Storage 82,000 square feet of indoor storage (ample outdoor storage)
Laydown Area 9 acres
Cranes
One American 999 (100 tonne capacity)
Additional cranes mobilized as required
Towing
One HM Wilson 3,000 horsepower tug
One Mantaywi Sepe 1,600 horsepower tug
One George Kydd 600 horsepower tug

(Sources: http://www.portofchurchill.ca/operations/facilities; http://omnitrax.com/our-company/our-railroads/hudson-bay-railway-company/; CBC News, 2015-12-01, OmniTrax selling Port of Churchill, Hudson Bay rail line Late grain harvest led to 2015 northern shipment shortage, put strain on business, president says)

TPP text released

The consolidated text of the Trans-Pacific Partnership (TPP) trade deal was made available today in English. The government of New Zealand is hosting the file. The TPP text was negotiated in English. Canada is in the process of finalising the French version of the TPP text. The French and English versions will be posted on at once that process is complete.

Foreign Affairs, Trade and Development Canada (FATDC (?)) has a link to the file and also a copy of the “side instruments” affecting Canada. Side letters are instruments negotiated in conjunction with free trade agreements. The purpose of a side letter is to clarify bilateral matters between two Parties that do not affect the rights and obligations of the other TPP Parties.

Here are the 23 side agreements, categorized:

  • National Treatment and Market Access for Goods
    • Letter from Canada to Australia (Distinctive Products)
    • Letter from Canada to New Zealand (Distinctive Products)
    • Letter from Canada to Vietnam (Distinctive Products)
    • Letter from Canada to Australia (Wines and Distilled Spirits)
    • Letter from Canada to New Zealand (Wines and Distilled Spirits)
    • Letter from Canada to Japan (Forest Products)
    • Letter from Canada to the United States (Transparency and Notification regarding Measures affecting Agriculture and Agri-food Trade)
    • Letter from Canada to the United States (Assessment of Food Safety Regulatory System for Certain Dairy Products)
    • Letter from Canada to Australia (Dairy and Food Processing)
    • Letter from Canada to Malaysia (Motor Vehicles)
  • Financial Services
    • Letter from Canada to Vietnam (Electronic Payment Services)
  • Government Procurement
    • Letter from Canada to the United States (Government Procurement Thresholds)
    • Letter from Canada to the United States and Mexico (Government Procurement Rules)
  • Intellectual Property

    • Letter from Canada to Japan (Geographical Indications)
    • Letter from Canada to Vietnam (Trademarks/Certification Marks)
    • Letter from Canada to Mexico (Geographical Indications)
    • Letter from Canada to Mexico (Cooperation)
    • Letter from Canada to Chile (Geographical Indications)
    • Letter from Canada to Peru (Geographical Indications)
    • Letter from Canada to Japan (Copyright)
    • Letter from Canada to the United States (IP Border Enforcement – In-Transit Information Sharing)
  • Environment

    • Peru-Canada Understanding (Biodiversity and Traditional Knowledge)
    • Malaysia-Canada Understanding (Biodiversity and Traditional Knowledge)

Download page for the TPP Consolidated Text

TPP agreement reached

Yesterday, the 12 countries negotiating the Trans-Pacific Partnership (TPP) trade agreement announced that they have a deal.

An announcement press release from Canada’s Department of Foreign Affairs and International Trade (DFAIT) can be found here. DFAIT has also published a “Technical Summary of the Agreement“, which is long on salesmanship and contains few, if any, technical details. The text of the agreement won’t be released until after a legal review.

Some details emerged from yesterday’s DFAIT technical briefing for news media:

  • Canada gave up less than expected against the domestic marketing boards that control dairy, egg and poultry production. On dairy, Canada will open 3.25 percent of its market to duty-free imports – mostly from the U.S., Australia and New Zealand — but the federal government will compensate dairy farmers with $4.3 billion of tax revenue over 15 years.
  • Canada lessened the potential damage to the country’s auto parts manufacturers by getting an increase in the amount of exporters’ domestic content. The final figure stipulates at least 45% country-of-origin content in autos to qualify for duty free status. The Japan-U.S. side deal reportedly allowed duty free status for vehicles with only 30% domestic content. (The NAFTA rule requires 61% domestic content.) Canada will also phase out, over five years, its 6.1% duty on imported cars.

Canada won’t ratify the TPP until sometime after the federal election of Oct. 19, 2015, and the country does seem likely to ratify unless that election results in a highly improbable outcome. The Green Party is the only party adamantly opposed to TPP. See Ira Basen’s useful piece about where Canada’s political parties stand: CBC News, 2015-10-06, “Spin Cycle: Only the Conservatives are free traders, right?”. (Other sources: CBC News, 2015-10-06, “Trans-Pacific Partnership unlikely to lower grocery or car costs much”; Globe and Mail, 2015-10-05, “Canada to pay out $4.3-billion to farmers in wake of TPP deal“)

Reaction To TPP From Other Countries

U.S. Congress battles over Export-Import Bank

A dispute within the Republican Party over the future of the Export-Import Bank of the United States (EXIM) has led to a splinter group’s attempt to overturn a suspension of EXIM’s operations.

In June 2015, the Republican-controlled Congress adjourned for their August recess without reauthorizing EXIM. Consequently, EXIM’s charter expired on June 30, 2015, when the bank ceased processing new applications or engaging in new business. EXIM continues to manage its $107 billion portfolio of outstanding obligations until such time as Congress acts to reauthorize the Bank.

Similar to Canada’s EDC (Export Development Canada), EXIM offers assistance to exporters with services such as:

  • Export Credit Insurance
  • Working Capital
  • Loan Guarantees
  • Project and Structured Finance
  • Direct Loans
  • Finance Lease Guarantees

A number of Republicans in Washington favour killing EXIM on the grounds that it only helps large corporations which can replace EXIM services with internal resources. It should be noted however that the Republican-controlled Senate voted in July to extend EXIM through September 2019 in an amendment added to a highway-funding bill that the House has yet to consider.

Over the summer some of those large corporations (Boeing is EXIM’s biggest customer) have begun threatening to move production offshore and warning that they stand to lose large foreign contracts. The threats and warnings have gotten the attention of about 40 Republican Representatives under the leadership of Stephen Fincher, who proposes an alliance with House of Representatives Democrats to force a vote on renewing EXIM’s charter. Fincher’s proposal is contentious because it avoids the usual, more time consuming procedure of preparing legislation through Congressional committee and much of his party’s leadership opposes it. Although outgoing House Speaker John Boehner supports EXIM, his putative replacement Kevin McCarthy is strongly opposed.

The earliest a vote could take place is Oct. 21, 2015. (Sources: Bloomberg News, 2015-10-01, “Ex-Im Renewal May Have Enough Support to Force U.S. House Vote“; EXIM)

Trans-Pacific Partnership: Harper ignores election precedents in quest for deal

Historically in Canada, governments have gone into hibernation during federal election campaigns, suspending legislative and diplomatic initiatives while allowing the civil service to continue with housekeeping tasks. The Harper government, conversely, is determined to conclude the TPP (Trans-Pacific Partnership) trade deal during the campaign before the Oct. 19, 2015 general election.

It is so anxious to sport this feather in its cap that it seems willing to renege on past promises to Canada’s dairy industry, while giving the auto parts industry an inadvertent kick in the teeth (Mexico, which now has a larger auto industry than Canada, objected to a side deal in which the U.S. conceded a large advantage to Japan’s parts industry even before Canada appeared aware of the situation).

CBC News has learned Canada is prepared to offer up a significant share of its domestic market (as defined by consumption levels), including not only fluid milk, but also possibly butter, cheese, yogurt or the milk powders and proteins used to make other foods.

Canada also appears ready to cave on intellectual property protection (IPP) for pharmaceuticals. Extending patent expirations for brand name drugs and delaying the introduction of generic alternatives would lead to higher drug costs for Canadians.
(Source: CBC News, 2015-09-25, “Trans-Pacific Partnership could include big dairy concession“)

The Trans-Pacific Partnership

The TPP originates with the Asia-Pacific Economic Co-operation forum (APEC), a 21-member collective established in 1989 to promote free trade within the Pacific basin. The TPP was preceded in 2006 by the Trans-Pacific Strategic Economic Partnership Agreement between:

  • Brunei
  • Chile
  • New Zealand
  • Singapore.

In 2008, TPP negotiations opened between those four with the inclusion of:

  • United States, and later in 2008,
  • Australia
  • Peru
  • Vietnam.

Since then, the following countries joined:

  • Malaysia (2010)
  • Canada (2012)
  • Mexico (2012)
  • Japan (2013).

Additionally, other countries have expressed a desire to join but have not been admitted:

  • Colombia
  • Philippines
  • Thailand
  • Taiwan
  • South Korea

Wikipedia has a useful précis that includes a history of the TPP and some of the controversies surrounding it, such as the absence of China and the Wikileaks publication of some national negotiating positions.

Upgraded Suez Canal opens

The Suez Canal has been at the heart of Egypt’s economy for more than 150 years. The project to build a new 72km waterway will enable two-way traffic and double the current daily ship capacity. As a result, the canal authority is set to increase its annual revenue from $5.3 billion in 2015 to $13.2 billion in 2023, as well as underscore the canal’s position as a major maritime trade route against a backdrop of growing competition. 1

Most pundits are skeptical about the projected size of the revenue gains. In any case, an elaborate ceremony yesterday celebrated 35 km. of new channels cut through the desert and a further 37 km. where existing bodies of water were dredged to make way for larger ships. (Source: The Guardian, “Egypt to open Suez canal expansion two years early” (with map))

The canal can now handle ships up to 20 m (66 ft) draft or 240,000 deadweight tons and up to a height of 68 m (223 ft) above water level and a maximum beam of 77.5 m (254 ft) under certain conditions.(…) Some supertankers are too large to traverse the canal. Others can offload part of their cargo onto a canal-owned boat to reduce their draft, transit, and reload at the other end of the canal. 2

1 http://newcanal.suezcanal.gov.eg/
2 https://en.wikipedia.org/wiki/Suez_Canal#Capacity

FMC reports on U.S. port congestion

The U.S. Federal Maritime Commission (FMC) has released its report on seaport congestion following a series of stakeholder consultations. The FMC took the “port congestion discourse into the field with an open mind to hear firsthand the problems that ports, their customers, and other partners in the U.S. intermodal system were facing as a result of problems brought on by contemporary developments in liner shipping.”

The report organizes and further develops discussion around six major themes that emerged at the four 2014 FMC Port Forums held at major gateway ports:

  1. investment and planning;
  2. chassis availability and related issues;
  3. vessel and terminal operations;
  4. port drayage and truck turn-time;
  5. extended gate hours, PierPASS and congestion pricing; and
  6. collaboration and communication.

U.S. Container Port Congestion and Related International Supply Chain Issues: Causes, Consequences and Challenges (An overview of discussions at the FMC port forums) is available as a free download (88 pp., 1.3 MB pdf) from the FMC.

Here is an abridged1 Table of Contents for the report:

  • Introduction
    • Global Trade and the U.S. Economy
    • Industry Condition and Trends
    • Federal Government Interest in Port Performance and Port-Related Infrastructure
    • The FMC Port Forums
    • Other FMC Follow-Up Efforts
    • Organization of the Report
  • Capital Investment & Planning
  • Chassis Availability and Related Issues
  • Vessel and Terminal Operations
  • Port Drayage & Truck Turn-Time
  • Extended Hours, PierPASS, and Congestion Pricing
  • Collaboration and Communication
  • Other Issues
    • Demurrage & Detention
    • Class I Railroads
    • Federal Partners in U.S. International Supply Chains
    • Congestion Costs
    • Port/Supply Chain Congestion Diagnostics as Identified by FMC Forum Participants
  • Appendices
    • Appendix A List of participants at the FMC public forums on port congestion and international supply chain efficiency
    • Appendix B Container volumes at U.S. ports, January 2005 through December 2014
    • Appendix C Average size of containerships calling at U.S. ports and average number of containers exchanged
    • Appendix D Glossary of Acronyms and Abbreviations

1 The main chapters each contain the following subsections:

  • Framing the issues
  • Cross-section of stakeholder viewpoints
  • Stakeholder suggestions and proposed fixes
Largest U.S. Ports
Rank & Port Loaded TEUs (2014)* Cumulative percentage of U.S. total
1 Los Angeles 5,881,556 18.60%
2 Long Beach 4,927,219 34.20%
3 New York/New Jersey 4,276,081 47.70%
4 Savannah 2,592,825 55.90%
5 Norfolk 1,931,479 62.00%
6 Houston 1,629,083 67.10%
7 Oakland 1,612,261 72.20%
8 Charleston 1,428,416 76.80%
9 Tacoma 1,371,178 81.10%
10 Port Everglades 755,843 83.50%
11 Seattle 751,779 85.90%
All U.S. ports Combined 31,632,000 100.00%

* The figures cited relate to international inbound and outbound full containers and, therefore, exclude the handling of empty, domestic, and transshipment containers.
Source: PIERS Interactive, Federal Maritime Commission