CBP Vessel Repair Process Improvement

CBP Vessel Repair Process ImprovementU.S.-flag vessel owners and operators are subject to a 50% ad valorem duty for vessel repairs made in foreign shipyards.  Claims for relief that are not adequately presented or documented will be denied relief and assessed the onerous duties.  It is therefore important to adopt processes for the collection of critical documentation in support of claims for relief.  This presentation provides insight from years of experience with administrative applications for relief, protests and litigation as to best practices in the collection of the documentation and presentation of claims.

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International Trade – The States Are Economic Stakeholders

International Trade benefits statesThis appeared on AmericanLegislator.org on February 3, 2015.

It is so widely accepted that citizens of countries embracing international trade fare better economically than citizens of countries that do not, it’s considered established fact. Open economies grow faster than closed economies. The World Bank has reported that per capita real income grew more than three times faster for developing countries that lowered trade barriers (5.0% per year) than other developing countries (1.4% per year) in the 1990s. [1] Think tanks from the Heritage Foundation to the Brookings Institution agree that freedom of international commerce in trade and services promotes economic development.

By reducing poverty, international trade also addresses some national security concerns. According the OECD, trade openness can be tangibly measured in terms of economic growth, productivity, a higher standard of living, further innovation, stronger institutions and infrastructure, and even the promotion of peace.

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What Does the WTO Trade Facilitation Agreement Really Mean for Business?

Decreased risk in emerging markets through trade facilitation agreementsOn November 27, 2014, the World Trade Organization (WTO) was finally able to overcome an impasse created by India in July which prevented implementation of the Trade Facilitation Agreement reached in Bali in December 7, 2013. As described by WTO Director General (DG) Azevedo, “the impasse related to the political link between two of the Bali decisions – the decision on Public Stockholding for Food Security Purposes, and the Trade Facilitation Agreement.” The WTO General Council was able to address India’s objections after a breakthrough made by the U.S. and India on November 13, 2014 to simultaneously adopt the protocol necessary to implement the TFA and a decision clarifying the terms of an existing food security “peace clause.”

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Trade Facilitation Agreement Is Back On Track

Because of an impasse created by India over food security this past July, which prevented ratification of the Trade Facilitation Agreement (TFA) reached in Bali in December 2013, some questioned the continued viability of the World Trade Organization. On Nov. 27, 2014, the WTO was finally able to overcome the deadlock and adopted the protocol of amendment which opened TFA for ratification and implementation.

The WTO General Council was able to address India’s objections after a breakthrough made by the U.S. and India on Nov. 13, 2014, to simultaneously adopt the protocol necessary to implement the TFA and a decision clarifying the terms of an existing food security “peace clause.” As stated by Director-General Roberto Azevedo, this was “a very important moment for the WTO” putting “negotiations back on track” and creating a “renewed commitment to the multilateral trading system.”

The protocol of amendment formally inserts the TFA into the WTO rulebook, according to Director-General Azevedo. This clears the way for the TFA to come into force. However, it also removes the July 31, 2015, deadline for WTO members to ratify the TFA leaving open the ratification process open indefinitely. The agreement enters into force once two-thirds of WTO members have completed their domestic ratification process.

So what does this first WTO multilateral agreement mean to the global economy, the developing world and international business? U.S. Trade Representative Ambassador Michael Froman says that “[t]he Trade Facilitation Agreement has the potential to fundamentally reform global customs practices and substantially reduce the costs and time associated with goods crossing borders. It’s a perfect example of how breaking down barriers to trade can unlock new opportunities for developed and developing countries alike, and it’s a particularly important win for small- and medium-sized businesses in all countries.” It is no wonder why TFA implementation is strongly supported by groups like the International Chamber of Commerce.

What does the TFA do? The agreement simplifies and harmonizes customs procedures and mandates customs reforms such as introducing transparency, risk based management by customs administrations, a “single window” for all government agencies dealing with imported merchandise, automation, electronic payment of duties and the separation of the payment of duties from the release of cargo, among other things. These improvements are intended to facilitate trade across borders, thereby reducing the costs for international traders and ultimately consumers.

The agreement also offers donor assistance and capacity building to developing and least developing countries so that they can enjoy the well-documented benefits of implementation. The improved trading environment should attract more trade and investment to countries that implement good governance in the form the improved customs procedures. The improvements, which have the effect of increasing transparency and reducing discretion of customs officials, should also address corruption at the border at least to some extent.

So what impact will the customs modernization reforms contained in the TFA have? What does this mean to business engaged in global trade and foreign direct investment? It should introduce an element of predictability in the form of rule of law and good governance for business embarking on what heretofore were riskier trading endeavors. It should take some of the risk out of doing business in emerging markets, where it is said that some of the greatest business opportunities lie. Perhaps even small- and medium-sized businesses will venture out into these markets stimulating the global economy and presenting a win-win for the developed and developing worlds as predicted by Ambassador Froman.

There is much work to be done. The argument must be made that ratification is in each country’s best interest. Countries must be proactive to avail themselves of the assistance offered by donor organizations like the World Bank, World Customs Organization and the WTO, whose Trade Facilitation Agreement Facility is now operational with the finalization of the agreement. Each country must prioritize its most important customs reforms and donor organizations must coordinate efforts to avoid wasting valuable resources. Business can also make their priorities known to the governments and donor organizations on areas of importance to business and what needs to be addressed first in particular countries. As Director-General Azevedo states, now the “real work begins.”

WTO Problems Won’t Stop Trade Facilitation

This article first appeared in Law360 and has been reprinted here with permission.923716_34344390

World Trade Organization Director-General Roberto Azevedo has offered little hope for overcoming the obstacle presented by India in blocking the protocol necessary to finalize the WTO trade facilitation agreement reached in Bali Dec. 7, 2013.[1] Meanwhile, there is a great deal of discussion about what this means for the WTO, but what does it mean for trade facilitation? I would suggest that while this development means a lot to the WTO it means little to trade facilitation. The train has left the station as far as trade facilitation goes because countries and business appreciate the merits of its implementation.

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