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UK, EU Sign Brexit Deal, But Trade Uncertainties Linger

The UK and European Union managed to forge a pact in late December on how to proceed post-Brexit just days before the deadline at the end of 2020. While the newly signed “EU-UK Trade and Cooperation Agreement” averted what could have been unprecedented disruption affecting the movement of goods and people across borders, trade uncertainties remain.

For example, fishing rights have been a sensitive topic throughout the negotiations, and while a compromise was reached that requires the EU to phase out a quarter of their fishing rights in British waters over the next five years, once the transition period is over annual negotiations will be implemented along with the ability for either party to apply tariffs to the other’s fish to compensate for any losses.

In addition, while trade in goods between the EU and UK stays duty-free, there will undoubtedly be an increase of non-tariff barriers, such as new checks and paperwork requirements, that will make trade more “costly,” noted Maddy Thimont-Jack, a specialist Brexit researcher at the UK’s Institute for Government, in an interview with Al Jazeera.

Non-tariff barriers cannot only slow the movement of goods and compromise just-in-time supply chains, they can also contribute to potential food shortages.

“Leaving the single market and customs union essentially means a lot more red tape. This is both for businesses looking to trade with the EU, but also for people travelling there on holiday, with pets, or who may want to move there in the future,” said Thimont-Jack.

Source: WashingtonPost.com, AlJazeera.com

Canada, UK Enact Short-Term Trade Deal During Post-Brexit Transition

Canada and the UK signed a short-term memorandum of understanding in late December to avoid trade disruptions while the Canadian parliament works to finalize a bilateral agreement between the two countries that was reached prior to the December 2020 Brexit deadline.

According to several news sources, Canadian International Trade Minister, Mary Ng, commented that the short-term trade deal means Canadian businesses can continue exporting to the UK at preferential tariff rates without additional paperwork.

Source: Reuters.com

Goods Originating From the United Kingdom are no longer entitled to CEUT Tariff Treatment under CETA; Canada Issues Order to Ensure Stability For Canada-UK Trade in Goods

Effective January 1, 2021, the United Kingdom and certain associated territories will no longer be covered by the Canada-EU Comprehensive Economic and Trade Agreement (CETA) by virtue of Brexit.

The eligibility for the Canada-European Union Tariff (CEUT) preferential tariff treatment is withdrawn under CETA for goods originating from the United Kingdom and certain associated territories, specifically the Channel Islands, Gibraltar, and the Isle of Man. However, it is worth noting that, at the end of December, Canada, in accordance with the Memorandum of Understanding between Canada and the UK, issued the Canada-UK Trade Continuity Remission Order to “ensure that tariff benefits afforded [as of December 22, 2020] to eligible imports from the United Kingdom under CETA, and replicated in the future Canada-UK TCA [Trade Continuity Agreement], are temporarily available to Canadian importers”.  For more information on this Order, please see CBSA Customs Notice 20-39.

Note, as of January 1, 2021, goods exported from the Sovereign Base Areas of Akrotiri and Dhekelia to Canada shall be declared as being exported from Cyprus.

Additional details, including eligibility conditions for in-transit goods are available in CBSA Customs Notice 20-38.

Source: cbsa-asfc.gc.ca; Canada.ca

US Announces Modifications to Tariffs On EU Products in Large Civil Aircraft Dispute, Effective Jan. 12

The long running dispute between the U.S. and European Union over aircraft subsidies recently escalated with the U.S. adding certain products of certain EU countries, such as certain French and German wine and spirits, to the list of products subject to additional duties.

In a statement on December 30, 2020, the U.S. Trade Representative (USTR) explained the action was taken because the EU had unfairly calculated tariffs against the U.S. last year when the World Trade Organization released its latest findings in September.

“The EU needs to take some measure to compensate for this unfairness,” stated the USTR.

Further details are available in the USTR’s Federal Register notice.

Source: Reuters.com

US Companies Voice Concern Over USTR’s Threats To Impose Tariffs On Vietnam

Business representatives from the National Retail Federation, U.S. Chamber of Commerce, the National Foreign Trade Council and others urged the Trump administration during a recent hearing to refrain from imposing tariffs on Vietnam for allegedly manipulating its currency.

The U.S. Trade Representative, Robert Lighthizer, launched an investigation in October under Section 301 of the 1974 Trade Act to determine if Vietnam was undervaluing its currency in order to gain an unfair trade advantage.

However, it is the Treasury Department that traditionally oversees matters related to another country’s currency practices, rather than the Office of the U.S. Trade Representative.

“Any actions by USTR at this point threatens to disrupt Treasury’s leverage with Vietnam and the ability to restore market balance,” noted the vice president for government and trade relations at a major undergarment manufacturer.

The threat by the Trump administration to impose tariffs on Vietnam is especially worrisome to U.S. exporters who have lost sales in key markets such as China and the European Union due to ongoing trade wars over the last few years.

“After three painful years, U.S. hog farmers simply cannot withstand more punitive tariffs whether imposed by Vietnam or other countries from around the world,” said the director of international affairs at the National Pork Producers Council.

It’s possible that tariffs could be imposed on Vietnam before Trump leaves office at the end of January. Otherwise, it will be left to the Biden administration to resolve.

Source: Politico.com

African Continental Free Trade Area (AfCFTA) Launched On January 1

The African Continental Free Trade Area (AfCFTA) formally launched on January 1, 2021, representing 54 member states and 1.3 billion people in a $3.4 trillion economic bloc that ranks as the largest free trade area since the formation of the World Trade Organization (WTO).

Delays attributed to the COVID-19 pandemic prevented AfCFTA from coming into force on July 1, 2020, its original target date.

The pact is both historic and important for Africa, explained Wamkele Mene, secretary-general of the AfCFTA secretariat.

“COVID-19 has demonstrated that Africa is overly reliant on the export of primary commodities, overly reliant on global supply chains,” he said. “When the global supply chains are disrupted, we know that Africa suffers.”

The comprehensive AfCFTA is expected to take at least several years or more to become fully functional. Moreover, the continent’s generally poor infrastructure, red tape, and protectionism among some member states create additional challenges.

Nonetheless, “Economic integration is not an event. It’s a process,” remarked Silver Ojakol, chief of staff at the AfCFTA secretariat. “We must start somewhere.”

Source: AlJazeera.com

Deployment Of ACE Drawback Functionality For USMCA Scheduled For March 13, 2021

On December 17, 2020, U.S. Customs and Border Protection (CBP) advised via its Cargo Systems Messaging Service (CSMS #45198584) that the ACE (Automated Commercial Environment) system is being updated to support Drawback for the USMCA (United States-Mexico-Canada) Agreement, with deployment of the functionality scheduled for March 13, 2021.

According to CBP, a follow-up CSMS message will be issued once the technical changes to ACE have deployed allowing claim acceptance.

In the meantime, the trade community should “continue to file NAFTA drawback claims, if applicable, under the NAFTA requirements,” advised CBP.

Furthermore, “USMCA regulations, which are pending, will be housed in 19 CFR 182. Further guidance will be issued in a CSMS once regulations are final.”

Source: Content.GovDelivery.com

CBP Advises Importers To Flag GSP Goods Following Expiration of GSP On Dec. 31, 2020

The U.S. Generalized System of Preferences (GSP) program expired on December 31, 2020, after it failed to be reauthorized by Congress.

CBP issued a CSMS advising the trade that GSP-eligible goods entered or withdrawn from warehouse need to pay “General” (column 1) duty rates effective, January 1, 2021, 12:00 a.m.”

In addition, CBP encourages importers to continue to flag GSP-eligible importations with SPI “A” during the lapse, starting January 1, 2021.

Importers may not file SPI “A” without paying duties.

If Congress renews the GSP program retroactively, CBP has programming in place that will allow the agency to automate the duty refund process.

Source: Content.GovDelivery.com

US Trade In Goods Hits Record High Deficit In November

Strong imports of consumer electronics and industrial supplies contributed to a record high deficit in U.S. goods trade for November.

The Commerce Department reported November’s goods trade deficit widened to $84.8 billion from a revised $80.4 billion in October.

A rebounding U.S. economy is helping drive the imports of goods. However, U.S. exports are experiencing a slower bounce-back due to lagging economic recoveries in overseas markets.

Likewise, U.S. trade in services, including tourism and finance, remain suppressed because of the COVID-19 pandemic.

Source: MarketWatch.com

CBP: Quarterly IRS Interest Rates Used For Calculating Interest/Refunds on Customs Duties

U.S. Customs and Border Protection published the Internal Revenue Service (IRS) interest rates used to calculate interest on overdue accounts (underpayments of customs duties) and refunds (overpayments of customs duties).

For the calendar quarter beginning January 1, 2021, the interest rates for overpayments will be 2 percent for corporations and 3 percent for non-corporations, and the interest rate for underpayments will be 3 percent for both corporations and non-corporations.

These interest rates are applicable as of January 1, 2021, and are unchanged from the previous quarter.

Source: FederalRegister.com

CBP Announces New Dates For 2021 Customs Broker’s License Exam

U.S. Customs and Border Protection (CBP) announced new dates for the 2021 April and October customs broker’s license exam as a result of the limited availability of testing sites due to COVID-19 restrictions.

The revised dates for 2021 are:

Wednesday, April 21, and Thursday, October 21.

For further information contact Melba Hubbard, Acting Director, Commercial Operations, Revenue and Entry, Office of Trade, at (202) 325-6986, or via email at brokermanagement@cbp.dhs.gov.

Source: FederalRegister.com

FDA Extends Comment Period For “Food Traceability” Proposed Rule Until Feb. 22, 2021

The Food and Drug Administration (FDA) is extending the comment period for the proposed rule entitled “Requirements for Additional Traceability Records for Certain Foods,” that was originally published in the Federal Register on September 23, 2020.

“We are taking this action in response to a request from stakeholders to extend the comment period to allow additional time for interested persons to submit comments on the proposed rule,” stated the FDA.

Source: FederalRegister.com

Trade Shows/ Conferences

Trade Shows/Conferences Location Date
 NRF Virtual Big Show https://bit.ly/3bJOUvA Jan 12 – 14, 19, & 21-22
SMC3 Jump Start https://bit.ly/3oIuerv Jan 25 – 27
RILA Retail CEO Forum 2021 https://bit.ly/2XGI0Pl Jan 27 – 28
21st Annual TPM Conference https://bit.ly/3bCIfmW Feb 25 – Mar 3
SCOPE Virtual Supply Chain Summit https://bit.ly/38KbgLs Mar 1 – 5


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Please do not reply directly to this e-mail. UPS will not receive any reply message. For questions or comments, contact UPS. For information on UPS’s privacy practices, refer to the Privacy Notice. For information on UPS Terms and Conditions of Service, visit Terms and Conditions of Service.UPS provides this summary of significant developments for the use and convenience of its valued customers. It is collected from a variety of publicly available sources and is intended to be informational only. This information does not constitute legal or business advice. Your use of this information is at your own risk. In no event will UPS be liable to any person or entity for any damages under any theory of law for any errors in this information. UPS TradeSenseTM, trade consulting and education, and managed services provided by UPS Trade Management Services, Inc.