CONECT counsel shares biggest trade developments, trendsBy Peter A. Buxbaum, AJOTInternational trade is dynamic and changing and not all of the change is for the good. Some positive developments took place in the last year, such as the passage of the Columbia and South Korea trade agreements and the growth in United States exports. But there is danger on the horizon as well, according to Peter Friedmann, Washington counsel for the Coalition of New England Companies for Trade (CONECT). Customs regulations may make exporting more difficult; there is a movement afoot to impose the Harbor Maintenance Tax on imports arriving by rail from Canada; and China bashing in the political arena could spark a disastrous trade war. Here is Friedmann’s catalog of the international trade developments to celebrate as well as trends to watch. CBP is hindering US export growth. Option 4, a program designed to expedite U.S. exports, is on the chopping block. The Safe Port Act of 2006 required that steamship lines provide Customs and Border Protection with data about incoming shipments 24 hours before a vessel sails. “Unfortunately,” said Friedmann, “Congress applied this requirement to exports as well, even though imports were clearly the focus of concern.” Why the blunder? “Congress acted hastily,” said Friedmann. ” Maybe they didn’t want bomb making material exported and then coming back. But Congress didn’t account for all the non-security sensitive exports they were effecting.” This blooper has caused all kinds of complications. Some ship lines informed their customers they need as much as 48 hours notice in order to timely file the required information. But for many exports, most notably, agricultural products, it’s impossible to provide the accurate and detailed information that Customs and the Census Bureau want prior to a ship’s sailing. “Broccoli could still be in the field the day before sailing,” Friedmann said. “It is hacked the evening before, crated, and then trucked to the port where it is refrigerated. Even then, it is sometimes impossible to know what ship a given batch will be sailing on. The products are put into a big refer pool and shipped as vessels become available.” CBP has been struggling to implement these rules in a way that does not impede U.S. exports. But one program designed to aid established exporters of non-sensitive products, known as Option 4, will be coming to an end. “Under Option 4 pre-cleared exporters can file their declarations ten days after the ship sails,” said Friedmann. But four years ago Customs closed Option 4 to new members, and five months ago, the bureau issued a ruling which would eliminate the program. What’s an exporter to do? “Customs advises them to file dummy information and then amend the submission when they have the accurate weight, count, and measure,” said Friedmann. “But that requires people to go into the system twice, and there are significant fines and penalties if they don’t get it right. “This puts a real burden on exporters,” Friedmann continued. “It may mean that these products will be sourced from other countries. There is little that we export—agricultural commodities and forest products—that can’t be sourced elsewhere.” What’s the solution? “There are proposals for the reinstatement of Option 4 as a C-TPAT for exporters,” said Friedmann. “Previously vetted exporters shouldn’t have a problem. The same exporter in Memphis shipping the same cotton from the same fields to the same mills in China for the last 40 years obviously doesn’t pose a security threat.” HMT on products crossing the US-Canada border by rail? Washington ports want the Harbor Maintenance Tax to be levied on U.S. imports offloaded at Canadian ports. The ports of Seattle and Tacoma for years sought to gain an exception from the HMT for imports offloaded in those ports, arguing that the imposition of the 1.25 percent charge encourages the diversion of cargo to the nearby Canadian ports of Vancouver and Prince Rupe