NAFTA UPDATE - Stephen Harper offers a gloomy take on the state of international trade, NAFTA

SOURCE - The Canadian Press

WASHINGTON —Stephen Harper broke his public silence on current events by offering a gloomy assessment on the state of international trade, describing anti-trade sentiment in the U.S. as a long-term problem that predates the Trump administration, that lacks an easy fix, and could well result in the end of NAFTA.

Harper stepped into the role of political analyst during a panel discussion in Washington with a coincidence of timing that bordered on the surreal Wednesday. At the very same moment, Harper’s successor, Justin Trudeau, happened to be a few blocks away at the White House, discussing the North American Free Trade Agreement with U.S. President Donald Trump himself.

Powerful anti-trade forces that extend beyond Trump’s presidency are at play in American society and aren’t going away any time soon, said the former Conservative leader, who’s an ardent free trader.

Harper illustrated that with a story about being told by the Bush administration when he took office in 2006 that NAFTA would never have won a vote in the U.S. Congress at that time. He then described how Barack Obama campaigned against the deal. Now he says trade will remain controversial, whether or not Trump cancels NAFTA.

He said he is advising companies to start planning for the possibility of life without NAFTA.

“I believe that it is conceivable. I believe Donald Trump would be willing to take the economic and political risk of that under certain circumstances,” Harper said in a panel at the Dentons law firm.

“I would not want to simply bet that this is just all going to work out. What’s driving this are some very powerful political currents that, frankly, nobody — including Mr. Trump — has really figured out how to address, and they’re going to keep coming at us.”

Trudeau, for his part, sounded Wednesday like he was fearing a similar conclusion: “We are ready for anything and we will continue to work diligently,” the current prime minister told reporters, after meeting Trump.

Harper said he doesn’t believe a simple fix to NAFTA, with a few tweaks, will satisfy Trump. He called the president unpredictable, but said one thing is predictable — the political need for Trump to point to significant changes, given that he’s repeatedly blasted NAFTA as a horrific deal: “I just don’t know how you get from here to there,” Harper said.

He said he understands anti-trade frustration.

Harper described his own annoyance at spending his 50th birthday signing a bailout package for General Motors Canada, only to see the auto giant later move jobs out of the country.

“I’m not your average assembly-line worker, but even I was irritated by that.”

And while he proudly touts the fact that he signed trade agreements with dozens of countries, he not only sympathizes with people who feel they’ve been left behind by the modern economy — he agrees with them.

Harper said frustrated Americans can’t blame Canada for this problem, or even Mexico, or possibly even trade deals in general — but he said there’s little doubt jobs have moved away, especially to China.

“I’ve looked at the data,” Harper said.

“These people do not (just) perceive they have been left behind. They actually have been left behind… It’s a reality.”

He said he wanted to avoid opining too much on current politics, so he declined to discuss possible solutions to these problems. He also declined an interview request later. He offered one piece of advice, albeit in vague terms: He urged other parties to try seeing the issue through the U.S. government’s eyes, and finding solutions it can sell.

Another panellist was slightly more optimistic.

Newt Gingrich — a fixture of American politics and friend of the president — suggested Trump doesn’t really want to end NAFTA. He said he thinks a deal can eventually be reached, after long and difficult negotiations.

“My hunch is in the end we will get to a reformed NAFTA. We will not get to the end of NAFTA,” said the former House speaker and Trump campaign surrogate.

“I don’t think there’s an appetite for blowing it all up, other than the president’s occasional tweets… I think it”ll be a brawl (though).” He suggested the deal might get a new name: “It will probably be something like the Modernized Dramatically Improved 21st Century Trumpized NAFTA.”

Gingrich prefaced his remarks by saying the president is unpredictable, so nobody knows for sure.

Harper, meanwhile, also offered opinions on two other international relationships. He said Canada could easily strike a trade agreement with a pro-Brexit British government. He also said that if NAFTA collapses, the Chinese will be ready and willing to make a deal with Canada.

His sense of pessimism was underscored later at the same event. Trump’s commerce secretary Wilbur Ross addressed the same panel, and said the president is prepared to maintain NAFTA, split it into two bilateral deals, or walk away.

He brushed off questions about protectionist U.S. proposals. For instance, the U.S. has proposed Buy American rules that would restrict public contracts to a dollar-for-dollar basis with other countries, which is stricter than what non-NAFTA countries enjoy.

Ross said the neighbouring countries should be happy. The U.S. is offering a one-for-one arrangement, when the ratio of its market to Canada’s is 10 to 1, Ross said: “It’s very fair.” He also insisted against some evidence that the U.S. runs a trade deficit with Canada.

Harper smiled and took notes during Ross’s presentation.

Thompson Ahern – Staying Ahead of The Curve

WATERLOO, Ontario, Sept. 25, 2017 -- Descartes Systems Group (Nasdaq:DSGX) (TSX:DSG), the global leader in uniting logistics-intensive businesses in commerce, announced that, as of today, it is the only service provider that has been certified to submit commercial import data for the Canada Border Services Agency's (CBSA) Single Window Initiative (SWI), the primary, modernized system through which the Canadian government will track, control and process information related to the import of goods into the country.

Using the CBSA-certified Descartes Canadian Customs Brokerage™ solution, customs brokers, freight forwarders and/or importer self-filers can now streamline the submission of customs entries to CBSA and Participating Government Agencies (PGA) through a centralized platform, which simplifies the import process by eliminating manual tasks and paper documentation in the Canadian customs process. Nine government departments are participating in the SWI, as well as agencies representing 38 government programs. CBSA has set April 1, 2018 as the deadline for mandatory use of the SWI.

"Being an early adopter in the certification process for the CBSA Single Window Initiative has been a top priority for Thompson Ahern," said Rod Kyle, President and General Manager, Thompson, Ahern & Co. Limited. "The ability to more effectively communicate with the CBSA and PGAs will allow us to work more efficiently and process time-sensitive shipments more rapidly. Descartes has enabled us to achieve this goal by achieving certification for the initiative."

An on-demand, enterprise-level software solution, the Descartes Canadian Customs Brokerage solution leverages the power of the Descartes Global Logistics Network™ (Descartes GLN™). Electronically connecting customs brokers, freight forwarders and/or importer self-filers with shippers, carriers and regulatory authorities around the world. With the CBSA certification, the solution can now be used to send customs entries directly to the following government departments and agencies: Canadian Food Inspection Agency (CFIA); Natural Resources Canada; Transport Canada; Health Canada; Environment and Climate Change Canada; Public Health Agency Canada; Global Affairs Canada; Fisheries and Oceans Canada; and Canadian Nuclear Safety Commission.

"With an ongoing investment in technology, Omnitrans is committed to providing clients with market-leading solutions," added Blair Katz, Executive Vice President, Omnitrans. "We're proud to honour that commitment by being the first Customs Broker in Canada to be certified on all available PGAs, thanks to our close partnership and collaboration with the Descartes team."

"Descartes is pleased to have earned the necessary certification from CBSA to help early adopters, like Thompson Ahern and Omnitrans, comply with the Single Window Initiative," said Glenn Palanacki, Director of Product Strategy at Descartes. "As governments around the world look to modernize their systems to better balance the need for information with a more global business environment, the combination of our software-as-a-service offerings and the world's most extensive logistics messaging network can help organizations of all sizes in diverse industries enhance preparedness to meet current and future global trade mandates."

Customs Notice 17-30

CBSA released this notice September 14 to confirm that CETA will be implemented September 21 2017.
The opening paragraph is:
“1. This customs notice is to inform you that the Canada–European Union Comprehensive Economic and Trade Agreement (CETA) will be implemented on September 21, 2017. With the exception of a few agricultural goods, the CETA will essentially eliminate the customs duties on all imports from a European Union (EU) country or other CETA beneficiary, either immediately upon implementation of the agreement, or through a tariff phase-out.”
Paragraph 10 and 11 explains Proof of Origin
Proof of Origin

10. The required proof of origin is a statement and is referred to in the CETA as the Origin Declaration. The Origin Declaration and the various languages in which it may be completed are contained in Annex 2 of the Protocol on Rules of Origin and Origin Procedures. This Origin Declaration may be provided on an invoice or any other commercial document that describes the originating product in sufficient detail to enable its identification.

11. In order to claim the preferential tariff treatment accorded under the CETA, importers must have in their possession the Origin Declaration completed by the exporter in the EU country or other CETA beneficiary of export, as well as any necessary permits referred to in paragraph 8.

Refunds may be applied for within 4 years from the date the goods were accounted for.



Over the past few days and last week, the CSCB has consulted with both CBSA and Global Affairs Canada regarding the many questions received from members about CETA. We are happy to report that both CBSA and GAC have been terrific with their responses and we thank them for that. Here is a list of what we have so far:

Q1. Do the tolerance rules for textile and apparel products apply to goods of both Annex 5 and Annex 5-A?

A1. Yes. The CETA tolerance provisions set out in Annex 1 apply to textile and apparel products of Chapter 50 through 63 of the HS, regardless of whether the product-specific rule of origin being used is in Annex 5 or 5-A.

Q2. Do originating goods manufactured in one CETA country and shipped to Canada from another CETA country keep their originating status?

A2. Yes. Originating goods can be shipped from any CETA country, regardless of where they were produced.

Q3. Does a statement of origin on the EU exporter’s letterhead constitute a statement of origin, as per paragraph 2 of Article 18?

A3. Yes. As per paragraph 2 of Article 18 of the CETA Protocol on rules of origin and origin procedures, provided the EU company letterhead document describes the originating product in sufficient detail to enable its identification and contains the origin declaration, the CBSA would consider the requirements of this article to have been met.

Q4. What is CBSA’s policy regarding the following, in Article 19 - Obligations regarding exportations:

7. The Parties may allow the establishment of a system that permits an origin declaration to be submitted electronically and directly from the exporter in the territory of a Party to an importer in the territory of the other Party, including the replacement of the exporter's signature on the origin declaration with an electronic signature or identification code.

Will CBSA change their policy regarding the use of electronic signatures, considering the above?

A4. Indeed paragraphs 3 and 7 of Article 19 allow the Parties to apply flexibility with respect to the completion of the origin declaration. As a result, Canada and the EU have confirmed that where exporters in Canada provide the Business Number or exporters in the EU provide the Registered Exporter (REX) number in field 2 of the origin declaration, then field 5 may be left blank.

Q5: With respect to CETA, if there is no requirement for the origin declaration to include the HS classification of the goods, how will CBSA conduct origin verifications when a tariff shift rule has been used?

A5. You are correct that there is no requirement to include the HS classification on the origin declaration. The CBSA will conduct the origin verification using the same procedures as it does when conducting verifications under its other FTAs, such as the EFTA. The origin verification process under the EFTA is similar to that of the CETA, (EFTA Article 24 of Annex C of the EFTA), whereby the country of export will verify the originating status of a good on behalf of, and upon request of the country of import.

In the case of origin verifications (i.e. post-importation), Canada and the EU have agreed to assist each other, through the customs authorities to perform origin verifications on each other's behalf. In other words, CETA requires the CBSA to conduct origin verifications of Canadian exporters on behalf of and upon the request of an EU Member State's customs authority. Reciprocally, the EU Member State's customs authority will conduct origin verifications of EU exporters, upon request by the CBSA.

Q6. Verification by CBSA of the origin of exported goods on behalf of the foreign customs authority will mean additional work for CBSA. Is the issue of staff resources being addressed?

A6. Thank you for your concern. Yes, the CBSA is aware of resourcing expectations regarding CETA.

14 September 2017

*Source: CSCB Daily Articles

ARL Update – Drawbacks

August 17, 2017

In response to a recent query, CBSA has provided the following information regarding the filing of drawback claims.

By completing Box 2 of the K32 with broker information and including your broker ASEC, the drawback claim and related credit will be broker-tagged and will appear on your DN/SOA thereby making it available to clear your broker-tagged debt for that importer.

When Box 2 is left empty, this tells CBSA that the claim is importer self-filed and that the approved amount will be untagged importer credit. Therefore, it will display on the importer DN/SOA and be used to clear importer debt.  Problems can arise if Box 2 is filled with importer information so please do not complete this Box if you want the credit posted to the importer account.

ARL Update- ePayments with CIBC

August 1, 2017

Further to our July 20 message in which we advised that CIBC was not ready to process commercial online banking payments for CBSA accounts, CBSA has just advised that CIBC is now ready to do so. The online banking “payee” name is CBSA CUSTOMERS/ASFC DOUANES

All importers with a GST direct letter or Importer Bond can now send directly to CBSA.This is the direction CBSA is going. In order to reduce the number of cheques received at the month end they would like all secured importers to pay directly. All the major banks are now set up to receive these payments. Give us a call to discuss any of these details. Contact Ruki Matinez @ 905-678-5475

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