Archive for the ‘International Trade’ Category

Canada-EU Economic and Trade Agreement…
Monday, May 3rd, 2010

The following is excerpted from the 30 April 2010 news release by DFAIT.

The Honourable Peter Van Loan, Minister of International Trade, took his free trade message to Toronto’s business community today in support of a Canada-European Union comprehensive economic and trade agreement. In a keynote speech to the Economic Club of Canada he said Canadians stand to benefit from strengthened economic ties with the European Union, the world’s wealthiest single common market.

According to a Canada-European Union joint study, a deal is expected to deliver a $12-billion annual boost to the Canadian economy.

“In addition to lowering taxes, investing in innovation and promoting freer enterprise, our government is expanding market opportunities to help Canada’s economy on the path to a lasting recovery,” said Minister Van Loan. “A comprehensive economic and trade agreement with the European Union will free trade, open doors for our businesses and create jobs for Canadians.”

For Canada, these negotiations represent our most significant trade initiative since the North American Free Trade Agreement. The North American Free Trade Agreement has doubled Canada’s trade with the United States, tripled trade with Mexico and created nearly 4.1 million jobs since it came into effect in 1994.

The Canada-European Union talks include the participation of the provinces at the table—a first for a free trade negotiation. Minister Van Loan underlined the important role of the provinces in working to deliver a successful agreement, on schedule, that aims high.

A third round of talks began in Ottawa on April 19. A fourth negotiating round will take place in Brussels in July 2010.

An agreement will benefit many sectors of the Canadian economy, including aerospace, chemicals, plastics, aluminum, wood products, fish and seafood, automotive vehicles and parts, agricultural products, transportation, financial services, renewable energy, information and communication technologies, engineering and computer services.

The European Union is the world’s largest exporter of goods and services and is Canada’s second most-important partner for trade and investment after the United States.

Big stakes in Canada-Europe trade talks, but little attention
Wednesday, April 28th, 2010

The following is excerpted from today’s edition of the “Canadian Press”.

It may well be the biggest and most important trade negotiation that most Canadians have never heard of.

While most of the news out of Europe of late has had to do with the Greek debt crisis and an ash-spewing volcano in Iceland, about 60 Canadian officials have been huddled in contentious trade talks with their European counterparts - at least video images of their counterparts - in what used to be Ottawa’s city hall by the Rideau.

There have been no demonstrators in front of the building denouncing a sell-off of Canadian sovereignty, and hardly a mention in the media or the House of Commons.

But if you listen to the critics, what is at stake is in some ways more troubling than the Canada-U.S. free trade talks of the late 1980s - over which an election was fought - or the NAFTA deal that followed.

“What we want is the most ambitious trade agreement we’ve ever had,” federal Trade Minister Peter van Loan said in an interview with The Canadian Press.

“We’re looking for something that is deeper and broader than even NAFTA, and this is with the world’s largest economy.”

The two sides are now in the third round of talks, with two more planned. If all goes well, Van Loan hopes to see ink on the Comprehensive Economic and Trade Agreement or CETA by late next year….

The talks involve practically everything it is possible for the two sides to place on the table - not just the usual stuff of tariffs and duties, but services, investment, agricultural subsidies, government procurement at the national and subnational levels, intellectual property, regulatory rules and labour mobility.

Given the size of the European Union market - 27 countries, 500 million people and $19 trillion in gross national product - Canada has been eager to get a deal done for years. The Europeans, not so much.

And that’s the problem, according to critics, who say Canada has appeared too eager in dealing with a savvy economic superpower.

“The Europeans could walk away without any negative political repercussions, whereas for our government, it has become a centrepiece of their foreign policy,” said Scott Sinclair, a researcher for the Canadian Centre for Policy Alternatives, who recently wrote a report on the negotiations.
Sinclair says the talks are not so much about freeing up trade, noting that tariffs on the more heavily traded items are already under three per cent, but about weakening the ability of governments on both sides of the Atlantic to regulate how multinationals operate.

The Europeans, he says, want to do away with Canada’s supply management system in dairy and poultry, along with the Wheat Board and the ability of provincial and municipal governments to favour local supplier in their procurements. One big prize Europe covets is Ontario’s green technology initiative, he says.

In return, he believes, Canada would get to send more raw materials to Europe.

Not so, says former Liberal finance minister John Manley, who now heads the Canadian Council of Chief Executives, the country’s most influential business lobby group.

Manley argues that with the U.S. economic star fading, Canada needs to diversity its trade and Europe, a prosperous and in many ways similar economy to Canada’s, would bring major benefits.

The World Customs Organziation supports ash cloud crisis trade recovery efforts
Wednesday, April 21st, 2010

The following press release was issued today by the WCO.

The World Customs Organziation (WCO) has called on Customs authorities around the world to expedite Customs clearances of air freight, to the greatest extent possible, to support rapid global recovery of aircargo supply chains following the volcanic ash cloud crisis that shutdown much of Europe’s airspace for one week, resulting in the airline industry suffering its worst disruption since 9/11.

Eurocontrol, the pan-European air traffic control agency, estimates that around 95 000 flights were grounded since no-fly zones were introduced on 15 April. This affected not only passengers but also left trade stranded in many countries across the globe. According to the BBC, IATA Director General Giovanni Bisignani estimates the shutdown to have caused losses in revenue to the airline industry of 250 million US Dollars per day. Losses to global business are expected to run into billions.

More favourable weather conditions yesterday enabled European authorities to begin a phased opening of airports but it is expected to take days to recover and clear the backlog. More than 50% of the normal number of flights is expected to land and take-off across Europe with the lifting of the ban.

WCO Secretary General Kunio Mikuriya said, “The global Customs community is ready to support international efforts that will bolster recovery. I have issued this call as a means of galvanising Customs authorities to facilitate trade by expediting Customs clearances of air freight to the greatest extent possible as this will play an important role in ensuring that global trade begins to flow as smoothly and as fast as possible.”

The impact on trade of the European shutdown is being felt across the globe. Many firms dependent on rapidly moving their goods, especially perishables, using fast air freight had felt the strain. A Reuters report states that Kenya’s flower exporters are said to have lost up to 2 million US Dollars per day while South Korea’s Incheon International Airport, the world’s fourth-busiest cargo handler in 2008, suffered 3,216 tonnes of lost shipments to Europe in the first four days of the crisis.

Mr. Mikuriya added, “Customs are aware that since moving to just-in-time production methods, busineses are vulnerable to any trade disruptions. To facilitate trade and fast clearance of goods, the WCO has developed a range of instruments and tools that assist Customs in their daily operations. Two in particular can help Customs to speed up its response to recovery efforts – the WCO revised Kyoto Convention on the simplification and harmonization of Customs procedures and the WCO Immediate Release Guidelines.”

The WCO believes that efficient Customs procedures are critical, even more so in a time of crisis and to ensure rapid recovery. It will continue to promote Customs best practices and enusre that administrations have the capacity to effectively deal with the challenges posed by global trade.

Europe Flying Again, Moving Cargo Backlog
Wednesday, April 21st, 2010

The following is excerpted from today’s edition of “The Journal of Commerce”.

Europe’s airline industry lurched back to life Wednesday as carriers put planes back into the air after being grounded for nearly a week by a volcanic ash plume from Iceland. Most airports across Europe were open April 21.

But airlines warned it will take weeks to clear up several thousand metric tons of cargo and well over 100,000 passengers stranded at airports around the world.

Eurocontrol, the European air traffic agency, said it expects 21,000 flights to take off Wednesday, 75 percent of the 28,000 that would normally be scheduled.

British Airways expected to operate 70 percent of its schedule, and cargo airlines began to reopen air express hubs.

But FedEx Express said it would take days to clear out its backlog and had restrictions on shipments needing special handling.

Manufacturers depending on air shipments were still struggling after a week with deliveries coming in only fits and starts.

Airbus said Tuesday it was facing parts shortages that could slow down its aircraft production line. And some European auto plants warned of layoffs and factory shutdowns because needed car parts had run out.

The majority of continental European airports, including the top three cargo hubs, Frankfurt, Paris Charles de Gaulle and Amsterdam, opened early on Tuesday April 20 as the ash cloud dispersed with only UK airspace remaining a no-fly zone.

The UK eventually opened its airports, including London Heathrow, Europe’s fourth largest cargo airport, late Tuesday night following protests from airlines that it was applying stricter safety rules than European authorities….

With some 20 British Airways long haul aircraft heading toward London Heathrow and Gatwick airports, the Civil Aviation Authority lifted the ban on flights in UK airspace.

The International Air Transport Association estimated the flight bans imposed on April 15 had cost airlines more than $1.7 billion by April 20.

EU Report Blasts 100 Percent Scanning Requirement
Monday, February 22nd, 2010

The following was reported on in today’s edition of ST&R’s “WorldTrade Interactive”.

The European Commission (EC) issued a working paper this month that blasts a U.S. statute that requires all foreign cargo containers shipped to the United States (except U.S. and foreign military cargo) to be scanned by non-intrusive imaging equipment and radiation detection equipment at the foreign port before being loaded on a U.S.-bound vessel by July 1, 2012. The EC believes that if 100 percent scanning were implemented in European ports “it would be excessively costly, would be unlikely to improve global security, would absorb resources currently allocated to EU security interests, and would disrupt trade and transport within the EU and worldwide.” The report states that the EU does not contemplate implementing 100 percent scanning of containers at export and will instead prioritize investments to enhance multilayered risk management systems for targeting and inspecting dangerous cargo and strengthening international cooperation to facilitate this process.
The report indicates that European port procedures and regulations would have to be fundamentally redesigned to comply with the 100 percent scanning requirement. This would represent a considerable financial burden, including 430 million for investments for scanning and radiation detection and an increase of  200 million per year in operational costs. The EC also estimates that the direct transport costs of U.S.-bound consignments would increase by approximately 10 percent and observes that ports unable to implement 100 percent scanning would lose access to the U.S. market, increasing congestion and environmental costs for other ports. Furthermore, the EC believes that the annual welfare loss from trade disruption could total some 10 billion for the EU and U.S. combined and some 17 billion worldwide. According to the report, these welfare costs could skyrocket to about &euro150 billion per year if 100 percent scanning were replicated on a world scale.!

The report favors a system where all exports and imports undergo comprehensive and effective multilayered risk management processed using a range of methods and technologies. The EU is working to fully deploy such a system by the end of this year that will (1) combine electronic systems and practical tools of collection of information prior to arrival to and departure from the EU; (2) enhance risk analysis and risk management procedures; (3) develop new technologies; and (4) coordinate enforcement by customs authorities in all EU member states.

In addition, the EU is seeking to intensify international cooperation with the United States and other countries to “maximize effectiveness and efficiency” and may also consider strengthening bilateral cooperation on such matters as ensuring effective collection of quality data; exchanging relevant security information; implementing mutual recognition of trade partnership programs and other security controls; developing and spreading utilization of new security technologies, including scanning; and building capacities and training of staff for effective implementation.

Secretary of Homeland Security Janet Napolitano told the Senate Commerce, Science and Transportation Committee on December 2, 2009, that her agency will seek a two-year extension of the July 2012 deadline for achieving 100 percent scanning of all inbound ocean-borne cargo containers. Napolitano explained that the Department of Homeland Security would require significant additional human and technological resources that do not currently exist, as well as the redesign of many ports, to be able to comply with the current deadline. The law allows Napolitano to extend the 100 percent cargo scanning deadline by two years and to renew this extension in additional two-year increments if she certifies to Congress that systems to scan containers (at least two of the following criteria would have to be met).

-are not available for purchase and installation
-do not have a sufficiently low false alarm rate for use in the supply chain
-cannot be purchased, deployed or operated at ports overseas, including, if applicable, because a port does not have the physical characteristics to install such a system
-cannot be integrated, as necessary, with existing systems
-will significantly impact trade capacity and the flow of cargo
-do not adequately provide an automated notification of questionable or high-risk cargo as a trigger for further inspection by appropriately trained personnel

U.S. Trade Groups Submit recommendations for reform of the U.S. export control system
Thursday, January 28th, 2010

The following was reported on in today’s edition of “WorldTrade Interactive”.

The Export Control Practitioners Group recently submitted to the Obama administration a number of recommendations for reform of the U.S. export control system, an issue the White House is currently reviewing. The ECPG’s recommendations were drafted by export controls professionals from industry, associations and law firms… They were submitted just ahead of several high-level meetings on export control reform issues that were held in Washington, D.C., this week.

“Many of these recommendations, if enacted, would have a favorable impact on our firm’s clients that produce products subject to the USML and EAR,” Jacobson said. “In particular, reform of the commodity jurisdiction process would be of significant benefit to exporters since it is often difficult for exporters to know with certainty whether their products are subject to the ITAR or EAR. In addition, the EPCG’s recommendations relating to revamping the process and structure for the imposition of penalties for violating export control laws and regulations would be welcome news.”

The group’s recommendations focus on process and policy changes as well as a number of substantive and practical ways to modernize and improve the current system. They include many similarities to, but some substantive differences from, the reforms being advocated by the Coalition for Security and Competitiveness. Among the group’s specific proposals are the following.

Agency Structure

- maintain the overall interagency export control structure but attempt to ensure more cooperation, including physical collocation where possible

- do not add more layers of bureaucracy, including a single point of entry at the front end of the process or an overarching supervisory structure as some have advocated

Commodity Jurisdiction

- establish the national security advisor as the final decision maker to resolve conflicting CJ claims by different agencies

- move items that do not belong on the USML to the Commerce Control List at an
appropriate level of control so that Wassenaar Arrangement Munitions List items are placed on the USML, multilaterally controlled dual-use items are placed on the CCL, and items not controlled by a multilateral regime or treaty are subject to the Export Administration Regulations

- quickly implement a uniform, common sense and objective definition of defense article that focuses on core military functionality

Control List Review and Reduction

- conduct regular annual reviews of export control lists with a “default to decontrol” provision that would require items to be removed in the absence of a timely, documented, genuine review and justification for retaining controls

- create a special mechanism to automatically decontrol certain items based on their anticipated life cycle and the forecast arrival of the next generation

Foreign Availability

- base analyses of foreign availability on controllability; i.e., whether the item is available in sufficient quantity and comparable quality so as to render attempts to control ineffective in achieving their intended purpose

- if foreign availability is determined to exist for an item but the president decides to maintain an export control, that control should clearly be labeled as a unilateral control and the president should have to renew his/her determination pursuant to an automatic foreign availability review every year

Licensing

- with respect to the ITAR: simplify the use of exemptions by locating all of them in one section of the ITAR, combine similar exemptions for transactions with parties in destinations that pose the least risk to national security, allow all exemptions to apply to defense articles, technical data and defense services, and create an exemption for re-exports with less than 10% U.S.-origin ITAR controlled content to relieve pressure to design out U.S.-content

- with respect to the EAR: expand the validated end-user program to include additional countries and end users, implement the long-awaited intra-company transfer rule, eliminate licensing requirements for NATO and other allied countries, consider preferential treatment for trusted exporters, and broaden exemptions for mail and telephone communication to include instant communication technologies, personal communications software and Web services

Enforcement

- establish a civil penalty structure that (a) draws meaningful distinctions among violations resulting from willful or knowing conduct, gross negligence, negligence or strict liability and (b) includes tiers of penalties with caps on the amounts that may be assessed based on levels of culpability as well as significant mitigation for voluntary self-disclosures

- conduct periodic agency review, update and enhancement of enforcement policies and guidelines to establish uniformity in their application, particularly with respect to agency handling of VSDs

- encourage enforcement agencies to improve procedures for sharing information to facilitate global settlements of prosecution and penalty cases

Deemed Exports

- limit deemed export licensing requirements to sensitive, multilaterally controlled technology

Intracompany Transfers

- provide trusted party license exceptions for dual-use intra-company transfers to and among non-embargoed destinations

- grant two distinct intra-enterprise license exceptions for (a) exports, re-exports and retransfers of software and technology, including deemed exports and (b) production and test equipment, parts and products that will be placed in inventory

Encryption

- remove encryption controls on products that do not have cryptography as their core function

- remove review requirements from mass-market and other commodity products and components

- ensure mass-market treatment for components that are designed for use in mass-market products or are otherwise widely available

- eliminate post-export reporting requirements

- eliminate controls on products utilizing only publicly available software

End-User and End-Use Screening

- link end-use/end-user controls and screening requirements (e.g., expectations of due diligence) imposed by OFAC, BIS and DDTC to specific control levels and transaction categories

- consolidate the various end-user lists maintained by the various agencies into one centralized list, including names and data in the end users’ native languages, to afford easier access by exporters and other interested parties

Statement by Trade Ministers of the United States, Canada and Mexico
Thursday, May 7th, 2009

The following news release has been issued today by DFAIT.

Canadian Minister of International Trade and Minister for the Asia-Pacific Gateway, Stockwell Day, United States Trade Representative Ron Kirk, and Mexican Secretary of the Economy Gerardo Ruiz Mateos today issued the following statement calling for an end to unscientific bans on pork imports from their respective countries due to the fears of the H1N1 flu virus, noting the large and negative economic impact of such bans. More than a dozen countries worldwide have sought to ban pork imports from H1N1-affected nations:

“We would like to express our concern for the victims of the current outbreak of H1N1 human influenza. Our governments remain committed to doing everything possible to bring the outbreak under control.

“We are also concerned that some trading partners are imposing restrictions on trade in swine, pork and other meat products from North America that are without scientific justification and inconsistent with their international obligations. These unjustified restrictions will likely result in serious trade disruptions without cause and result in significant economic damage.

“On May 2, the World Health Organization [WHO], the World Organization for Animal Health [OIE], the Food and Agriculture Organization [FAO] and the World Trade Organization issued a statement saying that ‘there is no evidence that the virus is transmitted by food. There is currently therefore no justification in the OIE Terrestrial Animal Health Standards Code for the imposition of trade measures on the importation of pigs or their products.’ They stressed that ‘pork and pork products, handled in accordance with good hygienic practices recommended by the WHO, FAO, Codex Alimentarius Commission and the OIE, will not be a source of infection.’

“In view of the above, we urge our trading partners to remove these restrictions on our products immediately. We will continue to follow this situation closely, and will take any steps to prevent the enforcement of unjustified measures against our exports, as appropriate.”

CN09-007, Canada-European Free Trade Association Free Trade Agreement (CEFTA) Implementation
Thursday, May 7th, 2009

This customs notice is to inform you of the July 1, 2009 implementation of the Canada-European Free Trade Association Free Trade Agreement (CEFTA). The CEFTA consists of a main Free Trade Agreement, which deals with industrial products and selected processed agricultural products, and three bilateral agreements on agriculture signed with Norway, Iceland and Switzerland, respectively, which deal with selected agricultural products. Switzerland and Liechtenstein have a customs union, and the agreement with Switzerland covers both countries. These four agreements are to operate together to eliminate duties on all non-agricultural goods and eliminate or reduce tariffs on selected agricultural products.

Information regarding the CEFTA and the text of the agreements can be found on the Department of Foreign Affairs and International Trade (DFAIT) website .

The CEFTA implementing legislation Bill C-2 received royal assent on April 29, 2009 and is scheduled to come into force on July 1, 2009. The legislation (Bill C-2) can be found at the Parliament of Canada website .

Proposed regulatory amendments and new regulations under the Customs Act will be announced in a separate customs notice.

The complete Customs Notice is available on the CBSA website at: http://www.cbsa-asfc.gc.ca/publications/cn-ad/cn09-007-eng.pdf.

Canada Requests Further Round of WTO Consultations on U.S. Country-of-Origin Labelling
Thursday, May 7th, 2009

The following is excerpted from today’s news release by DFAIT.

The Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, and the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food, today announced that the Government of Canada is taking action on behalf of Canadian farmers in the dispute over U.S. country-of-origin labelling (COOL) measures. Canada has taken the next step in the World Trade Organization dispute settlement process by formally seeking further consultations with the United States.

“We are concerned with the approach the United States is taking to implement COOL and the negative impact it is having on our exporters,” said Minister Day. “Recent instructions from the U.S. Secretary of Agriculture encouraging the U.S. industry to use very strict labelling practices have removed the flexibility previously envisioned in the legislation and this affects the ability of our cattle and hog exporters to compete fairly in the U.S. market.”…

Canada initially requested WTO consultations with the U.S. on COOL in December 2008, as it believed the measures were creating undue trade restrictions, to the detriment of Canadian exporters. At that time, U.S. provisions were being implemented on an interim basis.

A Final Rule to implement COOL was published in the U.S. Federal Register on January 15, 2009. However, on February 20, 2009, the U.S. Secretary of Agriculture issued an open letter to the U.S. industry, encouraging the use of stricter and broader labelling practices. According to Canadian industry representatives, those proposals will only add to the challenges they are already experiencing. They have observed that, since COOL came into effect, some U.S. processors are choosing not to buy Canadian animals, or are trying to buy them at a reduced price.

Mexico is in the process of filing a similar request at the WTO. This underscores both countries’ concerns over the impact of COOL on the integrated North American industry.

WTO consultations provide parties with an opportunity to resolve a dispute through discussions. If consultations fail to resolve the matter, the complaining party may request that the matter be referred to a WTO dispute settlement panel.

Europe and Canada Trade
Wednesday, May 6th, 2009

The following is written by Bill Emmott, a former editor of The Economist, and Roy MacLaren, a former Canadian minister for international trade. They are co-chairmen of the Canada-Europe Roundtable for Business. This op-ed piece appears in today’s edition of “The New York Times”.

Amidst dark mutterings about the rise of protectionism in global trade the good news is that the European Union and Canada are today launching “comprehensive trade and investment negotiations,” leading to a free-trade agreement.

This is exactly the signal that the major trading countries should be sending in recognition that barriers to trade are part of the world’s current economic problem, not part of the solution. As G-20 leaders have repeatedly declared, open trade remains central to global recovery.

Unfortunately, prior to the current economic malaise, leading trading countries, both developed and developing, have failed to come together on new multilateral initiatives in the now long-running Doha Development Round of the World Trade Organization. Against that background of stalled multilateral talks, a number of countries have moved forward on a regional or bilateral basis, concluding free trade agreements that are typically narrow in scope and unambitious.

The European Union and Canada, however, are on the move. Following last year’s joint study of the substantial trade and investment benefits of further liberalization and harmonization between them, they proceeded to “scope” the proposed negotiation of an ambitious trans-Atlantic agreement that would go beyond the terms of more conventional free trade agreements (such as the E.U. already has with Canada’s Nafta partner Mexico).

In addition to the removal of all tariffs, the new agreement will take in a wide diversity of influences on trade. These will include the free movement of skilled workers, the opening up of government procurement, and the elimination or harmonization of a range of regulations that are otherwise a particularly noxious form of protectionism. …

The European Commission expects Canada to provide a model for subsequent negotiations with other developed countries of the O.E.C.D. For hitherto the E.U. has limited its bilateral or regional trade liberalization initiatives to developing countries and has not attempted any with developed countries.

That negotiations with developed countries will now go forward is implied in the growing recognition in the United States that, in the words of the U.S. National Manufacturers Association, the combination of an existing E.U.-Mexico agreement and the prospect of a E.U.-Canada agreement “leaves us out,” putting the United States “at a significant disadvantage.” …

But it is not only the U.S. that is taking notice of the E.U.-Canada answer to protectionism. Asian countries will not fail to recognize that with trans-Atlantic liberalization afoot, it is time that they negotiated seriously with the West for fear of losing competitive access to a potentially yet more massive trans-Atlantic economy.