TAHOCO Logistics Inc. E-News

Buy American Lives on as Environmental Protection Agency Talks Tough

2009-06-30T11:22:00.000-07:00

(The Canadian Press – Lee-Anne Goodman)

Opponents of the Obama administration’s so-called Buy American provisions are working furiously this summer under a Canadian deadline, trying to convince legislators to do something about the protectionist measure before a full-fledged trade war erupts.

Their efforts come despite recent Environmental Protection Agency directives reminding local utilities that they need not concern themselves with NAFTA obligations as the federal watchdog also issued stern warnings about Buy American non-compliance.

“We’re all under the Canadian clock,” Dawn Christof-Champney, president of the Waste and Wastewater Equipment Manufacturers Association, said Monday. Champney was referring to the 120-day deadline issued by the Federation of Canadian Municipalities on June 6. It gives the U.S. 120 days to exempt Canada from the Buy American provisions in President Barack Obama’s $787 billion economic stimulus package, or Canadian municipalities will begin shutting out U.S. firms from bidding on local contracts.

Various stakeholders opposed to Buy American, including blue-chip American corporations, recently made submissions to the White House Office of Management and Budget, or OMB, the department handling the stimulus package. They urged a reversal of the policy. “We all poured most of our energy into submitting our views,” Champney said.

Submissions in hand, the Obama administration will now write the final rules on how to implement Buy American. A spokesman for the OMB said recently the legislation is expected to be tweaked, “but to what extent and how significantly, that remains to be seen.” Read more here.

Is ‘Buy China’ a Protectionist Threat?

2009-06-30T11:17:00.000-07:00

(New York Times – Catherine Rampell)

“Government investment projects should buy domestically made products unless products or services cannot be obtained in reasonable commercial conditions in China,” a Beijing government edict said.

The Chinese government quibbled with the “protectionist” characterization of its edict – not surprisingly, given how energetically the Communist leadership protested the protectionist portions of the United States’ stimulus package. But economists have fretted about it nonetheless, fearing that it may be a potential harbinger of a new wave of protectionist policies throughout the developing world.

Is this a trend free trade advocates should really worry about? Should we expect other emerging economies to start hoisting up trade barriers, under the impression that the current crisis has somehow debunked capitalism? Read more here.

Obama Opposes Trade Sanctions in Climate Bill

2009-06-29T09:54:00.000-07:00

(New York Times – John M. Broder)

President Obama on Sunday praised the energy bill passed by the House late last week as an “extraordinary first step,” but he spoke out against a provision that would impose trade penalties on countries that do not accept limits on global warming pollution.

“At a time when the economy worldwide is still deep in recession and we’ve seen a significant drop in global trade,” Mr. Obama said, “I think we have to be very careful about sending any protectionist signals out there.” He added, “I think there may be other ways of doing it than with a tariff approach.”

The passage of the House bill on Friday night was an important, if tentative, victory for the president, becoming the first time either chamber of Congress had approved a mandatory ceiling on the gases linked to global warming. Read more here.

Automated Broker Interface: Implementation Delay – Pending ISF Transaction Sets

2009-06-29T09:36:00.000-07:00

(CBP)

On June 19, 2009, CSMS #09-000249 was issued announcing that pending changes to the Importer Security Filing (ISF) Transaction Sets for ABI and AMS will be implemented on July 1, 2009. Those changes will NOT be implemented on July 1; instead, they will be implemented on Sunday morning July 12, 2009 during the scheduled ACS maintenance window that extends to 03:00am Eastern Time. Again, the changes will become available in both the Production and the Certification regions at the conclusion of that maintenance window.

The pending Transaction Sets as well as a list of the specific changes can be found here.

Canada Asks for Talks on ‘Buy American’ Issue

2009-06-26T13:23:00.000-07:00

(Journal of Commerce Online – Alan M. Field)

Canadian trade officials would like to discuss with U.S. counterparts an agreement that would enable U.S. and Canadian companies to have reciprocal access to local and municipal government procurement contracts.

Canadian Trade Minister Stockwell Day asked U.S. Trade Representative Ron Kirk today to “explore” such a deal, which would permit Canadian suppliers to continue to bid for U.S. local and municipal governments, despite “Buy American” provisions in the current U.S. economic stimulus plan. The two countries already have an agreement governing reciprocal access to government contracts on a federal level.

Although the idea has been widely discussed, this is the first time that the Canadian government has brought the idea directly to the Obama administration. Read more here.

CBP: Mandatory Automated Filing of Export Information

2009-06-26T12:55:00.000-07:00

(CBP)

Memorandum: Frequently Asked Questions Enforcement of U.S. Census Bureau Regulations Requiring Mandatory Automated Filing of Export Information has been updated.

To read the full CBP legal bulletin, go here (PDF).

U.S. Sends Encouraging Trade Signals on Buy America: Flaherty

2009-06-25T13:18:00.000-07:00

(CBC News – The Canadian Press)

U.S. congressional leaders appear to be prepared to work with Canada to dampen the threat of protectionism between the world’s two largest trading partners, Finance Minister Jim Flaherty said Wednesday.

Earlier, the finance minister met with several key senators, including former Democratic presidential candidate John Kerry, as well as House budget chairman John Spratt, on the financial crisis and trade issues. “What I heard today was a willingness to work on this issue,” he said in a conference call from Washington. “[And] that Canada is viewed as having a special trading relationship with the United States.”

But Flaherty gave no indication whether the congressmen he met, who were both Republicans and Democrats, were willing to lobby for a repeal of the so-called “Buy America clauses being inserted in billions of dollars of infrastructure spending programs.”

The laws require lower-level governments to use American steel and manufactured goods exclusively in procurement that uses federal infrastructure dollars. The laws do not contravene free trade agreements because the spending is being directed by states and municipalities, not Washington. Read more here.

Many U.S. House Democrats Want Trade Policy Revamp

2009-06-25T12:53:00.000-07:00

(The Washington Post – Reuters)

Political pressure grew on President Barack Obama to reconsider pending trade deals with Panama, Colombia and South Korea as over 100 lawmakers called on Wednesday for a massive revamp of U.S. trade policy.

The 106 lawmakers, most of them members of Obama’s Democratic party, introduced legislation requiring a comprehensive review of the economic impact of existing major trade deals, such as the North American Free Trade Agreement (NAFTA) with Mexico and Canada, before any new ones are considered.

The legislation introduced on Wednesday, called the Trade Act, also stipulates environmental and labor standards and provisions for food and product safety and human rights protections that lawmakers say were omitted from previous trade deals and now must be included.

Obama, during his presidential campaign, said he favored changing NAFTA to include stronger labor and environmental protections that many members of his party wanted. But after he became president, his top trade official, U.S. Trade Representative Ron Kirk, said this was not necessary. Read more here.

Manufacturers Want Early Transport Bill

2009-06-25T12:51:00.000-07:00

(Journal of Commerce Online – John D. Boyd)

Factory sector lobbying giant ties high-wage jobs to health of freight sector

Getting a new multi-year, federal transportation spending program approved by Congress quickly is a key to the health of the factory sector, says the head of the National Association of Manufacturers. “Transportation is more than just mobility for people and goods – it’s also about high wage manufacturing jobs,” said NAM President John Engler, as he urged lawmakers to speedily pass new legislation to replace the program that expires September 30.

He issued the remarks following approval June 24 by a House subcommittee of the Surface Transportation Authorization Act of 2009.

Engler said those factory jobs depend on a healthy freight shipment system to bring in raw materials and distribute goods or equipment through the supply chain. “Transportation is the circulatory system of the nation’s economy,” Engler said. “We must keep it in excellent health.” Read more here.

Lead-Footed Safety Issues

2009-06-24T12:07:00.001-07:00

(Washington Times – Carter Wood, National association of Manufacturers)

It’s a safe bet that no member of Congress has ever given a speech proudly endorsing a bill to close mom-and-pop businesses, hurt low-income shoppers, cause libraries to discard children’s books and ban products ranging from dirt bikes to ballpoint pens.

Last year, Congress overwhelmingly passed a law that did all these things – forcing small businesses to close and punishing manufacturers, retailers and consumers. Yet the Consumer Product Safety Improvement Act (CPSIA) became law with few warnings – and no congressional floor speeches – about the serious economic harm it would cause.

To be sure, the CPSIA came in response to the public’s legitimate concern about dangerous toys and products, especially those contaminated by lead paint. Reports in 2007 produced a media storm and political pressure. Manufacturers and retailers alike welcomed increased funding and staffing for the CPSC. But Congress went further. Read more here.

Europe and U.S. Accuse China of Unfair Trade Practices

2009-06-23T13:16:00.000-07:00

(New York Times – Jack Healy)

The United States and European Union accused China of unfair trade practices on Tuesday, saying the Chinese government was restricting exports of raw materials to give manufacturers in that country a competitive advantage.

Ron Kirk, the United States trade representative, said China had imposed quotas, export duties and other costs on raw materials used in the production of steel, chemicals and aluminum. In effect, he said, China was putting its thumb on the scale and giving Chinese manufacturers an unfair edge. He said that restrictions on exports of bauxite, zinc, yellow phosphorus and other raw goods make it more expensive for manufacturers to produce finished goods and threatened thousands of jobs in industries already rocked by the global recession. “Trade has to be fair,” Mr. Kirk said in a news conference in Washington. “If you’re going to do business with the United States, you’re going to have to play by the rules.”

The United States and European Union filed complaints with the World Trade Organization, the first step in what could be a years-long process of trying to resolve grievances against China.

“The Chinese restrictions on raw material distort competition and increase global prices, making things even more difficult for our companies in this economic downturn,” the European Union’s trade commissioner, Catherine Ashton, said in a statement. Read more here.

Trading Barbs: Canada Tries to Outlaw U.S. Cigarettes

2009-06-22T14:04:00.000-07:00

(The Hill – Ian Swanson)

Tobacco country lawmakers are seething over a bill that would outlaw U.S. cigarettes in Canada. Bill C-32, which has been approved by Canada’s House of Commons but not the Senate, would ban the use of all flavorings, except menthol, in all cigarettes.

The controversial legislation is being considered amid a debate over “Buy American” language in the $787 stimulus bill that required U.S. content in projects as long as that did not violate trade deals.

The Canadian bill’s intent is to make tobacco products less affordable and accessible to young people by prohibiting candy-flavorings in cigarettes used to turn children on to smoking.

But the ban on flavorings would also include mild flavorings used in the processing of American-blend cigarettes made from burley tobacco. The flavorings are intended to make the products taste less harsh and are not detectable to smokers, according to Roger Quarles, president of the Kentucky’s Burley Tobacco Cooperative. Read more here.

World Bank Cuts Forecast for Developed Economies

2009-06-22T13:37:00.000-07:00

(New York Times – Bettina Wassener)

Companies in Japan and Germany may have become less gloomy about their prospects in recent months, as surveys showed Monday, but neither they nor businesses elsewhere have much to cheer about as the world economy remains mired in a recession that could see it shrink by about 2.9% this year. Forecasts from the World Bank on Monday highlighted just how painful the recessions will be in various regions, despite mounting signs that the very worst of the downturn may be over.

The bank earlier this month said it expected a deeper global recession, forecasting a 2.9% contraction in gross domestic product for this year, rather than 1.7%, as it projected as recently as March. More detailed forecasts released Monday showed that much of this pain will be in high-income areas like the euro zone, the United States and Japan. The bank said that it expected economies in high-income nations to contract a total of 4.2% this year.

It expects the U.S. economy to shrink 3% and the euro zone 4.5%, rather than the 2.4% and 2.7% it forecast in March. For Japan, the World Bank now projects contraction of as much as 6.8% this year – significantly higher than the 5.3% it forecast three months ago. Read more here.

$1B for Pulp Firms Threatens Trade Fight

2009-06-19T13:17:00.000-07:00

(Winnipeg Free Press – Julian Beltrame, The Canadian Press)

The federal government has extended a $1-billion lifeline to Canada’s struggling pulp and paper industry in an effort to match billions of dollars in subsidies available to U.S. rivals. But the irony is that the effort may have the effect of touching off another costly and protracted trade fight with the United States over whether Canada is unfairly subsidizing its forestry industry.

The government’s announcement Wednesday was quickly followed by a release from the notoriously litigious U.S. Coalition for Fair Lumber Imports, which labelled the program an unfair subsidy. “To the extent that the subsidy goes to corporate groups that produce softwood lumber, this likely constitutes a violation of the U.S.-Canada Softwood Lumber Agreement,” said the group’s chairman Steve Swanson in a release.

Trade Minister Stockwell Day said the Canadian program is designed to level the playing field with the U.S., adding that the government has sought legal advice to ensure it does not contravene the agreement. “I would suggest anyone on the U.S. side who thinks this is not compliant with (the softwood agreement) needs to look in the mirror,” he told reporters late Wednesday. Read more here.

N. America’s Empty Ports to Get Busier as Year Ends – Analyst

2009-06-19T13:14:00.000-07:00

(Wall Street Journal – Laura Mandaro)

The sharp drop in container volume at North America’s largest ports is likely to moderate toward year-end as consumer demand picks up for boxed goods like TV sets and sneakers, says a forecasting firm. IHS Global Insight, which estimates the volume of inbound container shipments at about a dozen U.S. and Canadian ports, expects volumes to fall at a slower pace as the year winds down and to even flatten.

“By the fourth quarter there will be signs of a turnaround. We will have stopped declining in terms of volume,” said Paul Bingham, managing director in global commerce and transportation at IHS Global Insight.

Supporting forecasts for a recovery is the recent improvement in consumer sentiment surveys that suggest households will buy more of the manufactured goods that Asia exports to the U.S. and Canada on large ocean-going ships, he said. Read more here.

Manufacturers Say 10+2 Costs $20 Billion

2009-06-19T13:06:00.000-07:00

(Journal of Commerce Online – Alan Field)

Manufacturers say operations, delays to double cost of tariffs

U.S. Customs and Border Protection’s Importer Security Filing rule will impose an annual cost of more than $20 billion on the U.S. economy, according to a study by a manufacturers’ group. The “10+2” rule will require manufacturers and other importers to provide expensive new data to the government, says a report by the Customs and Border Coalition, a group launched by the National Association of Manufacturers in December.

Based on a survey of companies accounting for nearly 60% of seaborne manufactured imports, the survey corroborates an earlier report issued by the NAM, said NAM President John Engler. “The potential impact of this rule is huge,” Engler said. “To put the cost in perspective, it is virtually the equivalent of doubling the import tariffs that manufacturers now pay to bring products and components into the United States.” Read more here.

Editorial: Mexican Sanctions Get Down to Business

2009-06-19T12:18:00.000-07:00

(Dallas Morning News)

Rare are the times when Mexico holds the upper hand in any dispute with the United States. Even rarer is Mexico’s ability to bend Congress to its will. The clash over treaty rights and Mexican truckers’ access to U.S. highways could be one of those rarities.

Earlier this year, Mexico announced retaliatory tariffs on 90 items U.S. manufacturers export south of the border – 85 of which are produced in Texas. The $2.4 billion sanction followed years of U.S. failure to enact provisions of the 1994 North American Free Trade Agreement giving approved Mexican freight trucks access to U.S. highways.

Because NAFTA is a treaty, the United States is legally bound by its provisions. Mexico is fully within its right to retaliate for the U.S. failure to abide by NAFTA, and considering how long this trucking issue has gone unresolved, the Mexican response has been patient and measured.

Congress is stalling under pressure from American truckers’ unions, who fear being put at a competitive disadvantage. Read more here.

Beijing Orders ‘Buy China’ for Stimulus Projects

2009-06-18T13:43:00.000-07:00

(The Associated Press – Joe McDonald)

China has imposed a requirement for its stimulus projects to use domestically made goods – a move that could strain ties with trading partners after Beijing criticized Washington’s “Buy American” stimulus provisions.

Projects must obtain official permission to use imported goods, said an order issued by China’s main planning agency and eight other government bodies.

Even before the order, business groups worried that foreign companies might be excluded from construction and other projects financed by Beijing’s 4 trillion yuan ($586 billion) stimulus. Foreign makers of wind turbines complain they have been shut out of bidding on a $5 billion stimulus-financed power project.

“Government investment projects should buy domestically made products unless products or services cannot be obtained in reasonable commercial conditions in China,” says the order, dated June 1 and reported this week by state media. “Projects that really need to buy imports should be approved by the relevant government departments before purchasing activity starts.” Read more here.

Logistics Costs Drop First Time in Six Years

2009-06-18T13:41:00.000-07:00

(John D. Schultz — Supply Chain Management Review)

An annual benchmark released today [Wednesday] shows the impact of the recession on the U.S. logistics industry. The 20th Annual “State of Logistics Report” released by the Council of Supply Chain Management Professionals (CSCMP) reveals that, after rising over 50% during the previous five years, business logistics costs fell to 9.4% of U.S. Gross Domestic Product (GDP) in 2008. This number is down from 10.1% in 2007. For consumers, the new numbers indicate that the final, delivered cost of goods in the U.S. may have declined slightly.

Total U.S. logistics costs dropped to $1.3 trillion last year, a decrease of $49 billion from 2007. Interest rates plummeted to over 50% lower in 2008 than they were the prior year.

Since 1988, the report has tracked and measured all costs associated with moving goods through the U.S. supply chain. The report benchmarks key metrics in U.S. logistics such as transportation and inventory-carrying costs, freight volumes, and revenues, giving practitioners a big-picture view of the performance of the U.S. supply chain process. Read more here.

U.S. Economy: Leading Index, Factory Gauge Show Slump Easing

2009-06-18T13:40:00.001-07:00

(Bloomberg – Shobhana Chandra and Bob Willis)

The index of U.S. leading economic indicators rose in May for a second consecutive month and a regional factory gauge climbed more than forecast in June, showing the worst recession in five decades may soon end. The leading index increased 1.2% after a 1.1% gain in April, the best back-to-back performance since November- December 2001, the New York-based Conference Board reported today. The Federal Reserve Bank of Philadelphia’s general economic index jumped to the highest level in nine months.

Stocks snapped a three-day losing streak and Treasury securities fell for a second day after the reports bolstered forecasts the world’s largest economy will begin to grow in the second half of 2009. A third report showed the number of Americans receiving jobless benefits dropped for the first time since January, indicating the job market is starting to thaw.

“The freefall-type environment we saw in the first quarter is definitely behind us,” said Zach Pandl, an economist at Nomura Securities International Inc. in New York. Manufacturing “is turning a corner” and “we will exit the recession at some point toward the end of this year.” Read the complete article here.

CBP: Input Sought on Registration, Foreign Assembler Information Collections

2009-06-17T20:30:00.000-07:00

(World Trade Interactive)

U.S. Customs and Border Protection is extending to July 17 the comment period on the proposed extension without change of forms 4455 and 4457, Certificate of Registration. This certificate is used to expedite duty-free or reduced duty entry for foreign-made personal articles that are taken abroad, which are dutiable each time they are brought into the U.S. unless there is acceptable proof of prior possession. It is also used for the registration, examination and supervised lading of commercial shipments of articles exported for repair, alteration, processing, etc., that will subsequently be returned to the U.S. either free of duty or at a reduced rate.

In addition, CBP is seeking comments by August 17 on the proposed extension of the Foreign Assembler’s Declaration (with Endorsement by Importer), which is used to substantiate a claim for duty-free treatment of U.S.-fabricated components sent abroad for assembly and subsequently returned to the U.S.

All Politics Is Local

2009-06-17T20:23:00.000-07:00

(Canadian Embassy, Washington DC)

On June 9, 2009, Canada’s most senior diplomats in the U.S. met with over 75 members of Congress and staff to drive home the message that the Buy American restrictions in the U.S. Recovery Act are costing jobs on both sides of the border. The Canadian delegation was accompanied by close to 30 American business leaders who support the message that by working together our two countries can kick-start the North American economy.

Critics Fear Canadian Fallout From ‘Buy American’

2009-06-16T14:45:00.000-07:00

(Zack Hale — National Journal Online)

Provisions In The Stimulus Bill Are Raising Concerns About The Country’s Biggest Trade Relationship

Far south of the U.S.-Canadian border, at Camp Pendleton Marine Corps Base near San Diego, locals recently hailed the start of construction on a new stimulus-funded hospital, which they say will create jobs and provide health care to servicemen and women.

But north of the border, a contracting snafu during the hospital’s construction has come to epitomize the folly many Canadians and trade experts see in “buy American” provisions, which are causing new tensions in the U.S.-Canadian trade relationship.

When one contractor decided last month to junk thousands of dollars in functioning sewage pipes labeled “made in Canada” for pricier, American-made counterparts, Canadians worried they were being shunned by their largest trading partner. Critics pointed to the Pendleton case as an example of policies they say undermine the spirit of the North American Free Trade Agreement.

They were also quick to note that the offending pipes were made using resin produced in the U.S., which is endemic of the cross-border flow of products and components that defines the North American economy. Read more here.

CBP Makes “Significant Change” in Textile Entry Requirements

2009-06-16T14:33:00.000-07:00

(via World Trade Interactive)

U.S. Customs and Border Protection recently issued a memorandum to its field offices outlining “a significant change in textile entry requirements” in light of the elimination of quotas on merchandise from China entered after Dec. 31, 2008.

Formal Entry

On May 24, 1989, CBP provided a list of HTSUS numbers that required formal entry regardless of value because of quota/visa concerns as well as a separate list of HTSUS numbers for which formal entry was required because of regulatory requirements. With the elimination of the China quotas, however, there is no longer a requirement to file a formal entry as established by TBT-01-036, except (pursuant to 19 CFR 143.21(a)) with respect to shipments of articles valued in excess of $250 that are classified in HTSUS Sections VII, VIII, XI and XII; Chapter 94; and Chapter 99, subchapters III and IV. The following HTSUS numbers currently fall within these sections:

• 3901.10.1000 - 4304.00.0000
• 5001.00.0000 - 6704.90.0000
• 9401.10.4000 - 9406.00.8090
• 9903.02.21 - 9904.52.50

CBP states that it is in the process of reviewing the above regulations to raise the $250 limit but that before a change can be implemented it must be proposed through the formal regulatory process.

Commercial Samples

With the elimination of the visa arrangements, CBP states, no provisions remain that allow for properly marked commercial sample shipments. As a result, samples entering the U.S. must now meet the conditions in HTSUS chapter 98, under subheading 9811.00.60, providing for mutilated samples, or another chapter 98 provision, as appropriate. Read more here.

Study Highlights Need to Modernize Freight Transportation System

2009-06-16T12:16:00.000-07:00

(World Trade Interactive)

The RAND Corporation released recently a study finding that the long-term efficiency and effectiveness of the U.S. freight transportation system is threatened by bottlenecks, inefficient use of some infrastructure components, vulnerability to disruptions and crucial environmental and energy concerns. Demand for freight transportation is expected to increase in the future, a RAND press release states, but the nation’s highways, ports and railroads are nearing the limits of their capacity in key urban areas and transportation corridors, and delays and uncertainty in the system’s performance translate into higher prices for consumers and reduced productivity.

“There’s an opportunity now for the United States to develop policies and plans that will improve the flexibility and security of the freight transportation system, which is currently vulnerable to a host of dangers that could cause costly disruptions, whether from a terrorist attack or a natural disaster, such as an earthquake,” said Richard Hillestad, lead author of the study. “The whole functionality of freight transportation is built on reliability and speed, and those elements need to be protected.”

Read more here or download the complete report (163 page PDF via STR Trade).