US, EU Look to Boost Economies with Trade Pact

Posted on December 14, 2012 by marketing

After years of trade disputes, US and European Union officials are considering a drastic change in direction: a US-EU trade pact. It would be the world’s largest trade agreement, and could give a significant boost to both struggling economies.

Negotiations are still in the preliminary stages, and both sides will have much to overcome — including differences on agriculture, food safety, and climate change legislation — but top EU and US officials insist they want to see the pact happen. Even America’s main labor group, the AFL-CIO, which usually opposes such trade pacts, said it wouldn’t interfere with this one. Secretary of State Hillary Clinton also appears to be in support of the trade agreement:

If we get this right, an agreement that opens markets and liberalizes trade would shore up our global competitiveness for the next century, creating jobs and generating hundreds of billions of dollars for our economies.

Labor unions in the States have tried to discourage huge trade agreements ever since the politically fraught debate over the passing of NAFTA in 1991, arguing that starkly lower wages and lax environmental regulations in certain countries would place American workers at a competitive disadvantage. Those issues don’t seem as pressing in deals with the EU.

Big business in the US appears to give similar support.

However, negotiators do not have an easy path ahead. The most recent dispute concerns EU’s carbon trading scheme, which could penalize American airlines that don’t meet EU standards. Intellectual property laws and food safety regulations also differ broadly across the Atlantic, as do agricultural restrictions on the use of genetically modified foods in Europe.

Enthusiasm seems to be the most common factor across these economies right now. Where do you think these negotiations will lead?

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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.

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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.

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!

US, South Korea to Meet to Discuss Pending Free Trade Agreement

Posted on September 27, 2010 by marketing

Reuters announced that the US and South Korea have plans to meet to further discuss the KORUS Free Trade Agreement.

Last week, two high-level officials “‘exchanged views on the timing and venue of an upcoming ministerial-level meeting on the trade agreement,’ said Carol Guthrie, a spokeswoman for the U.S. Trade Representative’s office.”

The two countries signed the agreement more than three years ago. It has languished because of U.S. auto industry concerns that it removes remaining U.S. tariffs on South Korean cars but does not do enough to eliminate non-tariff barriers that keep American cars out of South Korea.

Read the complete article: U.S. and South Korea eye date for trade pact meet.

In other news, the Governor of California, Arnold Schwarzenegger, called for ratification of the trade agreement during a speech made at the American Chamber of Commerce in Seoul:

“One of the most powerful tools to spread freedom, peace and prosperity is free trade and free enterprise. In his State of the Union Address, President Obama pledged to double American exports in five years and I commend him for his vision. Now we need to see the action,” said Governor Schwarzenegger. “The U.S.-Korea Free Trade Agreement, and two others, has been gathering dust in the halls of Congress for over three years. And while we stall, other global leaders are picking up the slack. The ratification of these agreements will lead to increased exports, production and investment, all of which create jobs at a time we need them most. So I say to Congress, if your number one priority is stimulating our economy, approve these free trade agreements so we can start putting people back to work — not next month, not next year, but right now.”

Read more of the Governor’s statement at: Governor Calls for Approval of U.S.-Korea Trade Agreement from the California Chamber of Commerce.

No Free Trade Agreement for US, Taiwan

Posted on July 19, 2010 by marketing

The US has squashed a potential free trade agreement with Taiwan over disputes concerning US beef.

: Image Courtesy: Lodick Family

Just after Taiwan has signed a landmark free trade agreement with China, David Shear, the State Department pointman on China-Taiwan ties, said the “The United States has no plans to begin talks with Taiwan about an FTA at this time.”

The US and Taiwan were previously negotiating a Trade and Investment Framework Agreement in 2007.

According to the AFP, Taiwan and other Asian countries have been hesitant to implement trade agreements with the US due to various agricultural trade disputes, including beef, pork, and poultry.

The countries imposed restrictions in late 2003 after mad cow disease was detected in an American herd. Some scientists believe humans can contract the brain-wasting illness by eating infected animals’ brains and spinal cords.

Taiwan agreed with the United States in October to let in more beef products but the island’s parliament reimposed restrictions three months later after a public outcry.

Read the complete article at Google News: AFP: US rules out Taiwan free trade deal

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Take the NAFTA Benchmarking Survey

Posted on May 21, 2010 by marketing

Are you interested in learning about the best practices of firms qualifying product for NAFTA and other Free Trade Agreements?

Many firms walk away from these duty savings due to the difficulty of learning origin rules or due to the time-frame involved in accurately qualifying a product for reduced duties – even when the benefits are significant.

Please participate in a survey on how companies manage NAFTA qualification! With the results, we hope to advance industry knowledge of best practices and better understand overall use of NAFTA processes across a wide spectrum of organizations.

Take the 2010 NAFTA Benchmarking Survey

This is a brief survey and should take less than 10 minutes to complete. Your answers are kept strictly confidential and will be reported anonymously.

Customs & Trade Solutions, Inc. and Management Dynamics are working to identify best practices when dealing with the complexities of NAFTA. Our goal is to identify best practices, and pass those along to you so that your company may benefit from improved processes and procedures.

The results will be used to prepare a report which Management Dynamics and CTSI Advisors will distribute during the AAEI Annual Conference, June 6-8. If you plan to attend the AAEI Conference, please stop by our booth for a copy of the results. Otherwise, we will email you a copy when it’s ready.

Take the 2010 NAFTA Benchmarking Survey

The survey will close on June 2nd, so please be sure to participate early.

Please refer to your own company’s policy on whether this would be considered a work-related activity, and be sensitive to what data about the company can be provided.

Best Practices – Trade Agreements

Posted on April 19, 2010 by nathan

EU-West Africa Trade Pact

Posted on June 19, 2009 by marketing

The European Union is negotiating a trade pact with two West African regional groups and is hoping to complete the process by October 2009.

The Economic Community of West African States (ECOWAS), and the West African Economic and Monetary Union (UEMOA) encompass the entire West African region, with oil-rich Nigeria contributing to over half of the $60.5 billion in trade between the region and the EU.

According to the Journal of Commerce,

The agreement between the EU and the entire West African region will cover trade in goods, some trade rules, and development cooperation. “The decision today has set us on the road to concluding a comprehensive trade partnership with the full West African region. … I am confident we can settle the remaining issues and move forward,” Commissioner Ashton said.

Global Trade Management Newsletter

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South Korea-EU Free Trade Agreement

Posted on June 16, 2009 by marketing

According to the Korea Times, South Korea and the EU are getting closer to finalizing a free trade agreement.

“Korea and the EU share the view that an early conclusion of the FTA and upgrading the Framework Agreement for Trade and Cooperation, signed by the two sides in 1996, are crucial to developing future-oriented partnership,” said a joint statement issued at the end of the summit.

They also agreed to increase cooperation on issues related to North Korea’s nuclear program, the global economic crisis, climate change, the energy crisis and the United Nations’ global peacekeeping programs, the statement said.”

Even in a global recession, there has been a lot of free trade agreement activity. Many countries are looking to new export markets in hopes to jumpstart their industries at home.

Keeping up with all these trade agreements can be hard, but the benefits far outweigh the costs – especially when you have a program to automate your trade agreements. As you add more agreements, your cost savings increase exponentially.

If your company is trying to learn more about free trade agreements, check out the recent webinar from World Trade Magazine: “Moving Beyond Global Sourcing to Trade Agreement Management.”

The presenters address key findings from an industry survey on how companies are using FTAs and deliver best practices for your company to fully take advantage of FTA opportunities. It’s available on-demand (with a short registration page) until June 2010. Learn more at World Trade Magazine’s Webinar page.

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