Major developments in global trade, broad in scope and substance, are expected to play a significant role in 2016 and affect nearly every business that imports or exports. Many of these developments represent several years of negotiation or implementation phases. To stay competitive this year, companies should start planning for their implications now. To prepare, companies first need to understand the details and how they impact their business.
Automated Commercial Environment (ACE) – In February, filers will be required to transmit cargo release and entry summary for U.S. imports as well as the first three Partner Government Agency (PGA) data sets, under ACE’s modernized processes and technical requirements. This U.S. Customs and Border Protection (CBP) initiative aims to streamline and leverage more current technologies and process changes, improving the exchange of information between trade, CBP, and 47 different federal agencies through a single government window.
Comprehensive Economic and Trade Agreement (CETA) – Expected to come into force in 2016, the Canada-European Union (EU) agreement is the country’s most ambitious trade initiative. Signed in fall 2014, CETA could increase cooperative trade in goods and services between Canada and the EU by 23 percent, or $36.8 billion, and deliver an anticipated $12-billion annual boost to Canada’s economy. With the agreement, 96 percent of all tariffs will be duty free and the remaining will see reductions in duty rates over a three-, five-, or seven-year period. It will also remove end limitations in access to public contracts; improve market access in some of the EU’s 12 service sectors, including tourism and engineering; offer predictable conditions for investors; and help prevent illegal copying of EU innovations and traditional products.
Information Technology Agreement (ITA) – This agreement, which includes more than 80 countries and represents 97 percent of world trade in information technology products, eliminates tariffs on roughly 200 IT products valued at approximately $1.3 trillion in annual trade. This is the first tariff-cutting agreement in the WTO in 18 years. The WTO projects that approximately 65 percent of tariff lines will be fully eliminated by July 1, 2016. The ITA will increase competition for U.S. tech manufacturers by opening the U.S. market to similar products from other countries.
Trans-Pacific Partnership (TPP) – The 12 countries participating in the TPP, the biggest free trade agreement in history, finally reached an agreement in October 2015 after seven years of negotiations. The agreement must now be ratified by the government of each country, a process that could start in the U.S. in 2016. Collectively, the countries–the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam–represent 40 percent of the global GDP $27.5-trillion combined economy, or a third of world trade. With the passing of TPP, tariffs on a variety of products would be lowered or eliminated and multi-national businesses would have more intellectual property protection and overall consistency as investors and traders in the region.
Transatlantic Trade and Investment Partnership (T-TIP) – T-TIP is a trade and investment agreement being negotiated between the U.S. and the 28 EU member countries. It would increase access to both European and U.S. markets for goods and services. U.S. businesses whose products are highly regulated would find navigating EU trade easier and incur lower costs for obtaining approvals and permits.
Once they understand how the changes could affect them, companies should prepare by implementing a trade compliance program based on the rules of each applicable regulation or trade agreement. As part of this process, companies can determine how to best work with foreign suppliers and choose the right supply chain to align with their business strategy. Partnering with a customs broker or compliance expert can help simplify the process and provide assistance with data analytics, classification, rules of origin, and other services.
Source: Candace Sider’s article in
http://www.inboundlogistics.com/cms/article/-get-ready-for-trade-developments/
