TradeLane

Most of us have heard of the terms “sanctions” and “embargoes”. They are often used interchangeably, but they are quite different.

Trade sanctions target specific types of transactions, as in a prohibition to sell arms to a specific business, country, government or regime. An embargo represents a complete prohibition of all trade activities between countries.

Sanctions and embargoes are political tools used throughout the world.

I will be safely flying to Seattle tonight. From Charleston, SC to Boston and then on to Seattle. I listened to the Governor of South Carolina talk about assessing the ongoing risk and damage to the environment, to assets and to people’s lives. There are currently more than 500 roads closed in South Carolina. A cascade of dams are being breached. As my wife, Liz was driving us through the 18” of water on the road we were looking around at the carnage and it got me thinking about how this risk might have been assessed and mitigated earlier versus just assessing and repairing the damage after the fact.

In a similar manner, unidentified risks can lead to unexpected damage to your company. Experience tells us that it often starts with a single-issue request for information (CF28) from Customs and Border Protection and cascades like those dams, where each failure swiftly leads to the uncovering of others. I am sure that you have seen this. One classification inquiry leads to a second, and a third and then a request for a sample, and documents confirming transaction value. Then what about those free trade claims? It is very difficult to stop the process once it starts.

Making a gasket for a 1958 Plymouth Belvedere’s carburetor from an old piece of cardboard is a typical job for an auto mechanic’s apprentice in Cuba, where parts for American cars that were stranded on the island since 1960 are almost impossible to come by. Cuban mechanics have all acquired and perfected unique skills ever since the embargo was implemented by the U.S. in retaliation for Cuba’s nationalization of American-owned oil refineries. Now, talk of the embargo being lifted has buoyed the hopes of many U.S. auto parts companies that sell after-market parts, and U.S. classic car buffs are salivating at the chance to acquire classic Fords, Buicks, Oldsmobiles, and Cadillacs in ready-to-restore condition.

But not so fast…

A friend of mine was over a few weeks ago and while relaxing on the deck, the topic of EU Agriculture Regulation came up. I typically try to confine my weekend leisure discussions to things like how the NY Giants are doing, but alas, it was July. My friend is also a professor whose expertise lies in biotech regulation for EU member States, so I might have been out of my league. In a simultaneous attempt to confuse, amaze and distract, I brought up the US Chicken tax, one of the most obscure, draconian pieces of Trade Regulation I could come up with that somehow explains why we aren’t all driving German Pickup Trucks.

Is the Trusted Trader Program (TTP) the beginning of a “new trade era” for the Down Under?

You might be asking “What is it and how is it relevant to me?” The idea is that it is a modernized system developed by both Australian Customs and Border Protection (ACBPS) to enhance the competitiveness of Australian traders by relieving unnecessary administrative and regulatory burdens, whilst still protecting the borders from associated risk.  The process being designed is in accordance with the trade facilitation measures outlined in the World Trade Organization’s Trade Facilitation Agreement, also known as the SAFE Framework.

The TTP will provide some clearance privileges to recognized trusted traders. In simple terms, think of the TTP as a relationship with the ACBPS built on trust and shared responsibility. Sounds like a marriage, right?