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Issue 9 2018 - FBJNA From the Editor


CONTACTS 2018 SALES


MATT WEIDNER Tel: + 1 610 486 6525 matt.weidner@fj-online.com


JOHN SAUNDERS - PUBLISHER Tel: +44 (0)151 427 6800 Mobile: +44 (0)7932 102026 john.saunders@fj-online.com


EDITORIAL


KAREN THUERMER-EDITOR karen.thuermer@fbj-online.com CONTRIBUTING EDITORS: PETER BUXBAUM MARK CALDWELL HANK DONNELLY JOHN JETER ADINA SOLOMAN


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LORRAINE CHRISTIAN Tel: +44 (0)151 427 6800 lorraine.christian@fj-online.com


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By Karen E. Thuermer


So much news has overshadowed the agreement reached between the United States, Mexico, and Canada dubbed the USMCA. A replacement for NAFTA, this agreement supports North American manufacturing and mutually beneficial trade and is said to “create more balanced, reciprocal trade that supports high- paying jobs for Americans and grows the North American economies.” Here are some highlights. The US, Mexico, and Canada have concluded substantive discussions on


new rules of origin and origin procedures, including product-specific rules for passenger vehicles, light trucks, and auto parts. This update to the rules of origin will provide greater incentives to source goods and materials in the United States and North America. A key achievement, White House officials say, is Increasing Regional Value Content Rule. This deal encourages US manufacturing and regional economic growth by requiring that 75% of auto content be made in North America. The rules will impact logistics operators as it intends to help incentivize up to


billions annually in additional US vehicle and auto parts production; preserve and re-shore vehicle and parts production in the US; and transform supply chains to use more United States content. Another aspect to the USMCA is the US, Mexico, and Canada have agreed


to stronger rules of origin that exceed those of both NAFTA 1.0 and the Trans- Pacific Partnership (TPP), including for autos and automobile parts and other industrial products such as chemicals, steel-intensive products, glass, and optical fiber. “This deal exceeds NAFTA 1.0 and the TPP by establishing procedures that


streamline certification and verification of rules of origin and that promote strong enforcement,” White House officials say. “This includes new cooperation and enforcement provisions that help to prevent duty evasion before it happens. The new rules will help ensure that only producers using sufficient and significant North American parts and materials receive preferential tariff benefits.” New commitments have been included in the Market Access chapter


of USMCA to reflect developments in United States trade agreements that address non-tariff barriers related to trade in remanufactured goods, import licensing, and export licensing. The intent is to more effectively support trade in manufactured goods between the US, Mexico, and Canada by removing provisions that are no longer relevant, updating key references, and affirming commitments that have phased in from the original agreement. Specifically, the Market Access chapter maintains duty-free treatment for


originating goods; maintains the prohibition on export duties, taxes, and other charges and the waiver of specific customs processing fees; adds new provisions for transparency in import licensing and export licensing procedures; prohibits Parties from applying: (a) requirements to use local distributors for importation; (b) restrictions on the importation of commercial goods that contain cryptography; (c) import restrictions on used goods to remanufactured goods; and (d) requirements for consular transactions and their associated fees and charges. It updates provisions for duty-free temporary admission of goods to cover shipping containers or other substantial holders used in the shipment of goods. The new provisions on textiles incentivize greater North American


production in textiles and apparel trade, strengthen customs enforcement, and facilitate broader consultation and cooperation among the Parties on issues


USMCA intends to rebalance trade


///NEWS


Freight Business Journal North America - FBJNA reaches out to the decision makers and influencers involved in international freight transport and logistics. FBJNA boasts the most informative and authoritative source of information with unrivalled in depth knowledge of the rapidly changing freight business environment. Our complimentary website www.fbjna. com provides the most up to date news and analysis from within the international shipping industry.


If you have any stories or letters which should be of interest or any feedback on FBJNA, please contact our editor Karen Thuermer - karen.thuermer@fbj-online.com


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Our next issue will include features on: 2019 Outlook, Transport Trends for Cross Border Trade, Commodity Focus: Lumber and Paper & Market focus: Canada. For further details contact: Matt Weidner - T: + 1 610 486 6525 E: matt.weidner@fbj-online.com


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related to textiles and apparel trade. Officials contend this will strengthen supply chains to provide new market opportunities for the textile and apparel sector by promoting greater use of Made-in-the-USA fibers, yarns, and fabrics by limiting rules that allow for some use of non-NAFTA inputs in textile and apparel trade; requiring that sewing thread, pocketing fabric, narrow elastic bands, and coated fabric, when incorporated in most apparel and other finished products, be made in the region for those finished products to qualify for trade benefits. The provisions also establish a Textiles chapter for North American


trade, including textile-specific verification and customs cooperation provisions that provide new tools for strengthening customs enforcement and preventing fraud and circumvention in this important sector. The White House believes the new Textiles chapter provisions are stronger than those in NAFTA 1.0 with respect to both enforcement and incentivizing North American production of textiles. In addition, the US, Mexico, and Canada have also reached agreement on


new provisions covering trade in specific manufacturing sectors, including Information and Communication Technology, Pharmaceuticals, Medical Devices, Cosmetic Products, and Chemical Substances. Each of the annexes includes provisions that exceed NAFTA 1.0 and TPP that promote enhanced regulatory compatibility, best regulatory practices, and increased trade among the countries.


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