The Importance of Global Trade Content for Managing Free Trade Agreements

Posted on June 12, 2012 by marketing

With the May 14^th presidential proclamation putting the US-Colombia free trade agreement into force, it has never been more critical for GTM software users to understand the importance of the trade content that powers their solutions. Because FTAs specify changes in rules of origin and HS codes, it is important that organizations using global trade management software ensure that their vendor made the appropriate updates to the underlying trade content and put them in place immediately.

By having access to these trade content updates, organizations are able to find potential reductions in landed costs due to preferential treatment as of the effective date. Supply chain managers should be able to run scenarios that reflect preferential rates as they make sourcing decisions.

To learn more, click here to read the Supply Chain Digest article written by Anthony Hardenburgh, Vice President of Global Trade Content at Amber Road.

Presidential Trade Proclamation Signed to Implement the U.S.-Colombia Trade Agreement

Posted on May 18, 2012 by marketing

On May 14, 2012, President Obama signed the presidential proclamation that put the United States-Colombia free trade agreement into force. Designed to promote the flow of certain goods and services between the countries, the free trade agreement was years in the making.

According to the Office of the US Trade Representative (USTR), the tariff reductions in the Agreement will expand exports of US goods alone by more than $1.1 billion, supporting thousands of additional American jobs. The International Trade Commission also projected that the Agreement will increase US GDP by $2.5 billion. The Agreement will remove significant barriers to US goods from entering Colombia’s market, as over 80 percent of US exports of consumer and industrial products to Colombia will become duty free immediately, with remaining tariffs phased out over the next 10 years.

Because the agreement specifies changes in rules of origin and HS codes, Amber Road was anticipating the formalization with the necessary updates to its extensive body of trade content, known as Global Knowledge^®. Amber Road’s trade specialists constantly monitor government information feeds from around the world to ensure that the Global Knowledge^® database is kept current as trade regulations change.

In fact, the US-Colombia FTA is affecting 20,681 HS codes and 858 rules of origin. Amber Road’s customers will see these changes within 24 hours of the effective date of the agreement. No other vendor in the industry provides that level of service when it comes to trade content.

You can read the full press release here. To learn how Amber Road can help your company realize the benefits of an FTA program, check out our Trade Agreement Management brochure.

Management Dynamics FTA Solution Poised to Assist Importers and Exporters to Capitalize on Reduced Duties

Posted on October 14, 2011 by marketing

On October 12, the United States Congress ratified several landmark free trade agreements (FTAs) with South Korea, Colombia and Panama. While still awaiting the President’s signature, which is expected, these agreements are sure to usher in a new level of trade activity with these countries.

Proponents list a host of benefits from FTAs, including:

- Expanded access to markets for both goods and services

- Greater protection of intellectual property rights, and a

- Growth in jobs that would accompany the opening of new markets

Taking this into consideration, Management Dynamics offers a comprehensive Free Trade Agreement (FTA) management solution that provides solicitation and qualification in order to determine if a company’s product is eligible for preferential treatment. This can have a significant impact on the applicable duties for their products resulting in reduced total landed costs.

To learn more about the Free Trade Agreement Solution, read the full press release here.

Management Dynamics Releases New Version of On-Demand Export Compliance Solution

Posted on August 10, 2011 by marketing

Enhanced Restricted Party Screening and License Determination and Management among New Features

Management Dynamics today announced the release of Export On-Demand 1.2, its export compliance solution for small and medium-sized exporters. The new release provides for enhanced compliance screening and management of export licenses. Easily configured and deployed in a SaaS-based model, Export On-Demand can be implemented in a modular fashion without the cost and expense of an on-premise solution.

“This latest release of Export On-Demand improves support for global exporters with enhanced embargo and restricted party screening, as well as a new license determination and management module,” stated Nathan Pieri, senior vice president, marketing and product management for Management Dynamics. “The modularity of Export On-Demand allows our clients to first establish a foundation by managing product compliance and screening parties, then adding successive capabilities such as global license management, document generation and filing.”

To learn more about the features available in Export On-Demand 1.2, read the full press release.

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Posted on February 10, 2011 by marketing

Businesses, Politicians Clash Over US-South Korea Free Trade Agreement

Posted on February 8, 2011 by marketing

Since December, when President Barack Obama and South Korean President Lee Myung-bak announced that they made further progress on the US-South Korea Free Trade Agreement (KORUS-FTA), the agreement has been highly debated on its way to Congress. In order for the measure to take effect, both the Congress of the United States and the Congress of South Korea must ratify the agreement.

On one side, local and national business leaders are urging Congress to approve the agreement, citing the success of NAFTA and its effect on US exports and job creation. President Obama, at the time of his signing of KORUS-FTA, stated that deal would “boost US exports to 11 billion and support at least 70,000 jobs.”

Failing to act would hurt the US as well, proponents of the measure argue, as South Korea is in talks with Canada about a free trade agreement and has already inked one with the European Union. If approved, these agreements create a more attractive trading option for South Korean businesses than what the US has to offer, and thus inevitably decreasing the amount of US exports to South Korea.

korea-us-free-trade-agreement If approved, the US will benefit from the gradual reduction of South Korea’s current tariffs of up to 40%, all the way down to zero in 95% of industries within three years, with most remaining tariffs being eliminated within ten years. This will obviously aid many trade industries by reducing the cost of trade and opening new opportunities, including the auto industry and the National Cattlemen’s Beef Association (NCBA), who, along with 60 other food and agricultural groups and companies, have sent a letter to Speaker of the House John Boehner (R-Ohio); House Democratic Leader Nancy Pelosi (D-Calif.); Senate Majority Leader Harry Reid (D-Nev.) and Senate Republican Leader Mitch McConnell (R-Ky.) in support of the recent agreement.

However, not all businesses and politicians support the agreement because they believe the agreement will actually hurt US businesses and create major job loss due to jobs going overseas. California, one of the US’s largest traders with Korea, lost 800,000 jobs due to NAFTA, according to the California Labor Federation, and would likely see further erosion of jobs with another free trade agreement.

California does not necessarily hold the trend for the rest of the US, as it shares the closest ties with South Korea with more than half of a million South Koreans living in the state, and thus is the most vulnerable economically.

Overall, free trade agreements will at the very least increase opportunities for US businesses to increase exports, and will likely save or create jobs as well. The free trade agreement is even more vital if the EU and Canada agreements get finalized, as US cannot afford to fall behind and lose export revenue to the Asian economic giant.

Receive the Trade Agreement Best Practices Benchmark Study Now!

Implementing and maintaining compliance with a free trade agreement is a complex and technical process. Make sure your company takes full advantage of the trade agreement savings by benchmarking your process against 300 respondents across many different industry verticals and revenue size.

Download the Trade Agreement Best Practices Benchmark Study today to learn key insider information related to program management challenges, monetary savings, legal responsibilities, and strategies to help your firm initiate and sustain an effective program.

NAFTA and Duty Recovery Saves $6 Million

Posted on December 9, 2010 by marketing

a guest blog by Nigel Fortlage of International Trade Compliance Strategy at GHY.

An industry leading organization specializing in window covering was able to save over $6M in duty as a result of having an effective integrated trade compliance strategy. By coordinating NAFTA with organizational processes by use of a compliance champion, the company was able to assign tariff to every item.

This then allowed the organization to have clear visibility of duty payments thus allowing the option of duty recovery for particular items. By integrating a well structured NAFTA program throughout the industry, the organization was able benefit from multiple drawbacks and save both time and cost.

Case Analyzed

The message is clear, by using the model of an Integrated Trade Compliance Strategy, this firm created efficiencies in terms of process but also cash management with an integrated strategy that factored NAFTA status and duty drawback for Non-NAFTA related products.

The resulting $6 million savings were a result of their in-house trade compliance champion who oversaw the entire process on imports as well as exports and worked in conjunction with their professional trade services provider to handle the claims paperwork on both sides of the border.

Best Strategies for Managing NAFTA

Posted on November 5, 2010 by marketing

Given the advantages of NAFTA and other free trade agreements, exporters and importers seek to widen the advantages of reduced duty impact by participating in trade agreements.

However, developing expertise on the complex rules associated with NAFTA and free trade agreement qualification is difficult and individuals within firms responsible for signing certificates may not have the expertise required to complete the form.

After surveying import and export compliance managers from 200 firms, Customs & Trade Solutions Inc and Management Dynamics have compiled key statistics into our latest benchmark study, “Best Practices for Managing NAFTA and Free Trade Agreement Programs.”

Despite the hurdles for developing NAFTA and Free Trade Agreement (FTA) expertise, the programs bring strong benefits to companies.

For exporters, signing a NAFTA certificate allows their customers to legally declare a lower, preferential duty rate in the receiving country – making the exporter’s product more competitive on pricing than exporters not qualifying their product for NAFTA.

For an importer, cost savings associated with NAFTA qualifying products can be high and a major impact on the company’s bottom line. Most survey respondents recognized savings of $50,000 to $500,000 annually due to NAFTA and/or other Free Trade Agreement qualifications – a strong indicator for the company to continue to pursue free trade agreement programs.

The benchmark study also revealed key findings in NAFTA qualification management:

86% of all firms used a manual process to manage their NAFTA data
Only 34.3% of all companies were confident of the information they shared with Customs and their Customers through the NAFTA certificate
32% of respondents have had their customs group audited in the last 3 years

Additionally, firms qualifying products for trade agreements realized significant savings, with 28.2% of the participants posting savings of $500,000 or more per year. Clearly working with trade agreements can result in substantial savings to a firm, justifying both the staff and training programs for maintaining accuracy with the filing of NAFTA certificates.

On the other hand, 36% of all companies could not qualify their duty savings through their NAFTA / FTA programs. Management resources are generally allocated to programs where impact on the bottom line is quantifiable – so the key insight here is to start measuring your savings (or unnecessary spend if you have not implemented NAFTA) in order to secure future support of your programs.

Best Practices for Managing NAFTA and Free Trade Agreement Programs

Curious about what else the survey uncovered? If you’d like to benchmark your best practices, download the NAFTA Benchmark Report for yourself!

Webinar: Business Case for Free Trade Zones

Posted on October 27, 2010 by marketing

Tuesday, December 9th at 2:00 pm EST

As companies turn to the supply chain to wring out additional cost savings, one of the most exciting areas of value creation is in the area of Foreign Trade Zones (FTZs).

FTZs were established in 1934 to stimulate economic growth by allowing companies to operate in a specially designated area, outside the Customs territory of the United States. Now, seventy five years later, companies are still generating tremendous returns by reducing or eliminating duty payments, and minimizing transactional costs.

This webinar will help you build your business case for an FTZ as well as present a case study of best practices in the application, activation and on-going administration of a zone.

Register for the WT100 Webinar: The Business Case for Foreign Trade Zones

What you will learn:

The overall process to apply for and certify an FTZ
The key business benefit areas to present to senior management for approval
Best practices in on-going administration of your FTZ
How an FTZ fits in an overall Global Trade Management deployment

If you’re busy that day, sign up anyway. You can play back the scheduled broadcast anytime you like.

AberdeenGroup Releases New Trade Compliance Report

Posted on October 22, 2010 by marketing

The AberdeenGroup has come out with a brand new report, which will be available for free for a limited time –

Global Trade Management: Strategies for Mastering Trade Compliance and Supply Chain Complexity.

For this research report, Aberdeen surveyed 136 global exporters and importers in August and September of this year.

Their findings revealed that trade compliance teams are actively revamping and augmenting their Global Trade Management (GTM), specifically their Global Trade Compliance programs, to stay current with supply and demand fluctuations, growing global operations, increasing operational complexity and risk, and trade lane changes.

Here are a few key findings in the report:

Best-in-Class companies had 8.2% in average trade compliance cost to value ratio
Best-in-Class companies achieved 95.0% perfect order rate received on imports received from international suppliers
Best-in-Class companies experienced 96.0% for perfect order rate delivered on exports to international suppliers/customers
Best-in-Class companies improved their average trade compliance cost to value ratio by 1.4% improvement, year over year
Best-in-Class companies increased their total land cost per unit handled versus prior year by 0.6%, a 5.5 percentage point

GTM Best Practices

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Category Archives: Trade Agreement Software