The new infrastructure — including gates, cameras and vehicle scales — aims to hamper the smuggling of drug money and weapons to Mexican cartels. Businesses are protesting the increased wait times.
Mexico tightens security at U.S. border crossings
November 26th, 2009NEW APPROACH BY FDA
February 9th, 2010In a Feb. 4 speech to the Center for Strategic and International
Studies, Food and Drug Administration Commissioner Margaret
Hamburg laid out the elements of the “new approach” the agency is
adopting to ensure the safety of imported food and drug products.
Hamburg said FDA is “moving from a system that places most of the
regulatory burden on the FDA’s modest inspection force, to one that
creates greater oversight at points further back along the production
chain.” The FDA needs to know “who is making our foods and drugs
[and] where they are located,” she said, “and we need to be sure
that these facilities are being inspected and are accountable for what
goes into their products as well as the products they produce.”
Hamburg asserted that “massive change is required for FDA to be
able to keep up with a globalized economy.” It is “simply not
possible to count on interdicting everything harmful at our borders,”
she said, noting that an estimated 20 million shipments of FDA regulated
imports will enter the U.S. in 2010 but that less than 1%
are likely to be examined by FDA inspectors. “Similarly,” she added,
“FDA cannot alone conduct a sufficient number of inspections at
foreign manufacturing facilities to help ensure product safety.”
As a result, Hamburg said, “FDA must adopt a new approach …. an
approach that takes into account the entire supply chain and its
complexity; and an approach that will address product safety by
preventing problems at every point along the global supply chain…
from the raw ingredients… through production… and distribution… all
the way to U.S. consumers.” To apply this “basic principle of
prevention to all imports,” FDA is taking the following steps.
Better Controls at Point of Production. Hamburg said FDA is
moving into a phase where it works with regulators, manufacturers
and suppliers wherever they are. There are now permanent FDA
offices in China, India, Costa Rica, Mexico, Chile and, soon, Jordan
that are aiding aid FDA efforts to help these countries and others to
establish the regulatory powers necessary to support safe products
for their own domestic use and a strong, reliable export market. FDA
also now has more than 30 agreements with foreign counterparts to
share inspection reports and other non-public information that can
help the agency make better decisions about the safety of foreign
products.
Holding Importers Responsible for Supply Chains. “In this day
and age,” Hamburg said, “companies must be able to effectively
demonstrate that safety, quality and compliance with international
and U.S. standards are built into every component of every product
and every step of the production process.” Best practices already in
use by some companies “need to become standard practice
throughout industry,” she said, and FDA plans to work with industry
to set standards for technologies and other approaches that can help
them strengthen the safety of their supply chains.
PREDICT System. Stating that FDA has a responsibility to deploy
its resources as strategically as possible, Hamburg formally
announced the Predictive Risk-Based Evaluation for Dynamic Import
Compliance Targeting (PREDICT) system. This new Web-based risk
assessment tool will replace the admissibility screening function of
the legacy OASIS system, assist entry reviewers in targeting higher risk
shipments for examination and expedite the clearance of lower risk
cargo (provided that accurate and complete data are provided
by importers and entry filers). PREDICT was piloted in Los Angeles
and is currently being brought online in New York, and Hamburg
expressed hope that it will be up and running around the U.S. by the
end of the spring.
According to Hamburg, PREDICT uses a variety of assessments to
rank import shipments according to risk. “It considers everything
from whether a product is intrinsically risky–raw seafood falls into
this category– to information we’ve acquired from previous
examinations of shippers or producers,” she said. “We can even add
information on things like floods, hot weather or market conditions
that suggest whether a particular shipment is at risk of being spoiled
or shoddy. These and other factors are added up to give a risk score
—and the riskiest items are the ones that our investigators will check
first.” Hamburg said PREDICT will automatically flag potentially risky
shipments but will also give lower risk scores to more innocuous
materials, which can then be cleared rapidly through FDA inspection.
MEXICO TRUCKS MIGHT ROLL…..MAYBE
February 9th, 2010U.S. borders may soon be opening up to allow more trade with Mexico and for some exporters it can’t happen fast enough.
In March of 2009, lawmakers canceled funding for a test program pioneered by the Bush administration that allowed Mexican long-haul trucks into the United states, because of safety and security concerns.
But Mexico retaliated by slapping taxes on a long list of U.S. exports, including fruits and industrial goods, worth an estimated $2.4 billion dollars.
“I can tell you that those industries in the united states, our farmers, our ranchers, our other exporters that have been subject of the retaliation, have made their displeasure known to congress and so there is a sense of urgency within the united states,” said U.S. Trade Representative Ron Kirk.
Kirk is packing his bags for Mexico this week to move forward with the discussion. He says that President Obama is pushing for congress to remove the clause, which cuts funding for the program and it’s giving congress the green light to move forward..
“We have been able to work with congress and Obama is very pleased that the language in the 2009 appropriations bill that essentially cut off the funding for the demonstration safety program was not included in the 2010 appropriations bill,” said Kirk
MEXICAN TRUCK BAN/HIGHER IMPORT TARIFFS
February 4th, 2010Tariffs on U.S. agricultural exports to Mexico over the past 11 months are weighing on sales, and a coalition of industry advocates and sympathetic Democratic lawmakers are pushing the Obama administration to solve the Mexican truck dispute that caused the trade friction.
In a Jan. 29 letter to members of Congress, Rep. Dennis Cardoza, D-Calif., and Rep. Rick Larsen, D-Wash., asked colleagues to sign a letter encouraging Department of Transportation Secretary Ray LaHood and U.S. Trade Representative Ron Kirk to find a solution to Mexican agricultural tariffs.
Congress terminated funding in the fiscal year 2009 omnibus appropriations bill for a pilot program that would allow trucks from Mexico into the U.S. to deliver loads directly to buyers.
File Photo
A Mexican truck unloads produce in Houston in 2006.
Cardoza and Larsen said the truck ban directly led to Mexico imposing retaliatory tariffs last March, resulting in economic setbacks for hundreds of growers and businesses.
The lawmakers wrote that Congress removed the prohibition in the fiscal year 2010 consolidated appropriations bill.
“Despite repeated letters and communication with the administration, the department of transportation has not moved forward to develop a plan that would remove these burdensome tariffs from the backs of our domestic businesses and farmers,” the letter said to their colleagues said.
In the letter to LaHood and Kirk, the lawmakers expressed concern about the lack of action and transparency by the Department of Transportation to address the tariffs imposed by Mexico.
“These tariffs have had a devastating impact on our local industries and area economies and we urge you to take immediate action to implement a plan of action to rectify this situation,” the letter said.
Calls to the public affairs office of the Department of Transportation were not returned.
Mexico has imposed retaliatory duties on more than 90 products, with ranging between 10% and 45%. Fresh produce items hit by the retaliatory tariff include lettuce, strawberries, pears, apricots, dates and onions. Frozen potatoes were also hit by a 20% tariff.
Without 20% retaliatory tariffs on cherries last season, Mark Powers, vice president of the Northwest Horticultural Council, Yakima, Wash., said industry experts believe that Northwest cherry exporters could have exported 50% more volume to Mexico.
Likewise, the cumulative negative effect on fresh pear growers is close to $11 million, Power said.
“That’s coming straight out of the growers’ pockets,” he said.
The letter to the administration officials said that despite expressions of confidence from the Obama administration for 11 months, a solution would be found that would fulfill U.S. obligations to Mexico under the North American Free Trade Agreement the letter said there is still vision for what the proposed plan will be.
“Our constituents need help immediately and we implore you to work quickly to implement a program that ensures safety and normalizes trade between the U.S. and Mexico,” the letter said.
Powers said a recent USDA listening session about rural economic development in Washington State had growers point out to Administration officials that solving the tariff problem would create instant opportunity and sales for growers.
Meanwhile, he said that U.S. also must show it adheres to its trade obligations to have credibility with other trading partners.
Ag industry decries tariffs
The Alliance to Keep U.S. Jobs, a coalition of agriculture and industry leaders seeking an end to the retaliatory tariffs, said more than $1.5 billion in U.S. manufactured products and $900 million in U.S. agriculture are hurt by the added costs of exporting to Mexico.
“It’s crazy when you have the administration saying on one hand it is all about jobs, jobs, jobs and you don’t fix this problem,” said John Keeling, executive vice president and chief executive officer of the Washington, D.C.-based National Potato Council. Keeling said U.S. frozen potato exports to Mexico are off 50% in value and 60% in volume over the past year, while Canadian exports to Mexico are up 70%.
“The ball has been in the administration’s court to move this forward,” said Kam Quarles, vice president of government relations and legislative affairs for the United Fresh Produce Association, Washington, D.C. Union support for elimination of the pilot program appears to be contributing to the delay in solving the problem, he said. Quarles said simply restoring the program that had been in place could likely solve the problem in short order.
That pilot program allowed limited access for Mexican trucks on U.S. highways. It began in 2007, six years after a North American Free Trade Agreement dispute settlement panel ruled that the U.S. was in violation of the NAFTA by prohibiting Mexican trucks in the U.S.
“It wasn’t everything the Mexicans wanted under NAFTA, but it was accepted,” Quarles said.
Given the letter from Cardoza and Larsen, Quarles said there is frustration on Capitol Hill about the how much time it is taking to restore the pilot program and remove the retaliatory tariffs
2010 GOOD YEAR FOR MEXICO GROWTH
February 3rd, 2010Economists following Mexico’s economy are now forecasting higher growth and more benign inflation this year, taking pressure off the central bank to raise interest rates.
A monthly poll by the central bank showed economists on average expect the economy will grow 3.3 percent this year, higher than a forecast of 3.1 percent in the previous poll.
Despite the higher forecast for growth, economists cut their inflation outlook to 4.93 percent from 5.04 percent, according to the poll which was released on Tuesday.
Mexico’s central bank is expected to raise rates this year to head off inflation even though Central Bank Gov. Agustin Carstens has said he is not that worried about inflation.
Tuesday’s poll will probably make Carstens even less worried, as his chief concern has been that higher taxes and fuel prices push up inflation expectations.
Speaking in Madrid before the release of the poll, Carstens said inflation pressures are well anchored in Mexico despite recent tax and fuel price rises and there is as yet no pressure to raise interest rates.
NAFTA NOT TO BLAME
February 3rd, 2010Participants at a recent conference in Washington blamed Mexico’s failure to achieve above-average economic growth in the past decade on the North American Free Trade Agreement (NAFTA). This criticism is unfair and unwise. The NAFTA agreement is one of the best examples in recent history of a successful, mainstream, and bipartisan project. According to the U.S. Chamber of Commerce, in the 15 years since NAFTA came into force annual U.S. trade with Canada and Mexico has tripled to nearly $1 trillion. More than 100,000 small and medium-sized U.S. firms now employ Americans to produce goods and services for export to our NAFTA neighbors.
NAFTA was conceived by President Bush 41, ardently supported by President Clinton (at some considerable political cost to himself), and later promoted as a good model for economic development under the administration of President George W. Bush. The discussion at the Carnegie Endowment seems to be an ideologically driven departure from something that has delivered good results and should be continued.
The real problem, of course, has been the steady refusal of the deeply entrenched public-sector labor unions and politicians on the left in Mexico and the corporatist enablers who head Mexico’s many monopolistic and oligopolistic companies to make the badly needed economic and governance reforms that would open key sectors such as energy to competition and private foreign and domestic investment. NAFTA has been a success for both the U.S. and Mexico, to the extent that it has been permitted to succeed in both countries. Unfortunately, since President Obama came into office he and the U.S. Congress have taken some steps that conflict with either the letter or the spirit of NAFTA (e.g. the cases of “Mexican Trucks” and “Buy America”).
President Felipe Calderon has been trying to get some reforms through the Mexican Congress, but has been largely stymied. The answer is not “to overhaul NAFTA” but to finish the overhaul of the economy and to observe NAFTA rules in the U.S.
NAFTA SURFACE TRADE DOWN
January 29th, 2010The decline in surface transportation trade among the United States, Canada and Mexico slowed in November from a year ago compared with comparable figures for October, the Department of Transportation said Thursday.
Trade among the North American Free Trade Agreement partners fell 2.9% year-to-year, to $58.9 billion. That compared with October’s 15.5% year-to-year decline, DOT said.
Truck imports to the United States rose 2.6% to $20.2 billion from a year earlier, while exports dipped 0.5% to $21.2 billion.
Rail imports fell 9.4% to $6.1 billion, while exports fell 11.9% to $3.5 billion. Pipeline imports plunged 18.5% to $4.2 billion, while exports declined 18.3% to $281 million.
U.S.-Canada trade fell 7.2% to $35 billion, while the value of truck imports to the U.S. fell 6.1% and the value of truck exports slipped 1.8%.
U.S.-Mexico trade fell 4.4% to $23.9 billion. The value of truck imports rose 11.5% and the value of truck exports rose 1.7%.
Surface transportation consists largely of freight movements by truck, rail and pipeline. About 90% of U.S. trade among NAFTA partners moves by land
SECRETS IN GUADALAJARA
January 25th, 2010This week some 38 or so countries are holding a secret negotiation in Guadalajara, Mexico, on something called the Anti-Counterfeiting Trade Agreement. The title is a bit of a fraud, as it highlights the emotive and prejudicial word counterfeiting, while the agreement is about a wide range of intellectual property enforcement issues, of which counterfeits are a small part. The negotiating text is secret. The names of the negotiators are secret. The actual location of the meeting is secret. The scope of the agreement is secret. Even the reason why everything is secret is clouded with secrecy. Well, actually, the agreement is no secret to hundreds of corporate lobbyists who are cleared advisers or who get access under non-disclosure agreements. It’s just secret from the general public.
Despites tons of grass roots and some DC lobbying only a few members of the U.S. Congress have spoken out calling for the negotiating text for ACTA to be made public. Make that, three members of the U.S. Congress, out of 535. Really, how difficult is it to call for transparency of an IPR negotiation? Apparently too hard for 532 members of Congress. Position Senate House
Make ACTA text public
Sherrod Brown (D-OH)
Bernie Sanders (I-VT)
Representative Zoe Lofgren (California, 16th)
New Incoterms Nearing
January 25th, 2010Incoterms 2010 Likely to Take Effect in January 2011
[Editor’s Note: The following article originally appeared in a Jan. 20
post in International Trade Law News, a blog by ST&R member Doug
Jacobson, and is reprinted here with permission.]
Frank Reynolds, the U.S. Delegate to the International Chamber of
Commerce’s (ICC) Incoterms committee, has provided International
Trade Law News with an update on the status of the revisions
currently underway to Incoterms 2000, the standardized trade terms
commonly used in international sales contracts.
After receiving a large number of comments from the ICC National
Committees, the Incoterms Drafting Group recently completed a
third draft of the revised version of Incoterms. After comments on
the third draft are submitted by the ICC National Committees, the
Drafting Group will meet in March 2010 to prepare a fourth version
of the draft revisions to Incoterms.
At this time, it remains the ICC’s goal to release the final version of
Incoterms in the fall of 2010 with an effective date of January 1,
2011 (this date is subject to change).
In a change from previous reports, it appears that the new version
of Incoterms will be entitled “Incoterms 2010,” reflecting the release
date rather than the date they come into force (this is the third
name change during this revision). In addition to the information
provided in previous updates, Mr. Reynolds has provided the
following information on items that may be contained in the final
version of Incoterms 2010.
• There will be clear differentiation between the omnimodal terms
and those intended only for marine use.
• Cargo security will be covered to the extent possible with differing
regulatory systems.
• The preambles to each Incoterm will be expanded to better inform
users of its intended use.
• A new term will be included to facilitate use in domestic
transactions and those within Customs Unions where no export or
import clearance obligations exist (as previously noted there are
likely to be fewer than the 13 Incoterms in Incoterms 2000).
According to Mr. Reynolds, the “net result will be a more userfriendly
set of terms reflecting up-to-date trade practice. The
changes are substantial, but the benefits are well worth the effort to
learn.”
In order to prepare for 2011 implementation of the revised
Incoterms, the United States Council for International Business will
be conducting training programs starting in the fall of 2010.
The ICC introduced the first version of Incoterms, short for
“International Commercial Terms,” in 1936. There are currently 13
Incoterms. Incoterms have been revised six times in order to reflect
international trade developments.
Frank Reynolds is the author of Incoterms for Americans, a useful
publication for U.S. exporters and importers, which will be revised
following the publication of Incoterms 2010.
Laredo Bomming Town
January 19th, 2010In Laredo, Texas, the local economy’s connection to the vagaries of trade around the world could hardly be more obvious.
It is a border town where the Mexican flag is rarely far from sight, and the border checkpoints connecting Laredo to its Mexican neighbor, Nueva Laredo, are the foundation of the town’s prosperity.
Laredo is the largest inland port in the US, with 9,000 trucks a day shuttling goods between countries thanks to the North American Free Trade Agreement (NAFTA).
In times of global economic turmoil, the connection is both a blessing and a concern. The 9,000 trucks are down from 12,000 trucks a day, and the occupancy rate at the warehouses that hold imports from Mexico is down slightly.
Moreover, China is making a play to take part of the Mexico’s share of the manufacturing market. As in many places across the US, these are uncertain times.
How ‘Immigration Nation’ copes
Yet Laredo also shows how “Immigration Nation” communities with large numbers of Hispanics are in some ways better positioned to ride out the recession than other Patchwork Nation community types.
“There aren’t many places in the US that have the kind of growing workforce like we have,” says Roger Creery, executive director of the Laredo Development Foundation, an organization that works to attract companies to the town.
“You look very attractive to industries that are trying to determine what their business model is going to look like with what’s happening in the world,” he says. “They’re young, energetic, 97 percent Hispanic, have strong family values, strong family culture, are entrepreneurial.”
The belt-tightening that occurred across most of the US this recession made a dent here. A decade ago, Laredo was one of the fastest growing cities by a Census Bureau ranking. Now that growth has slowed.
But in the scheme of things, it “hasn’t been as cataclysmic here as it has been in other areas,” Mr. Creery says.
Border as boon
According to NAFTA, Mexican truckers are restricted from driving further than 20 miles into the US and this creates a demand for warehouse space. Truckers unload their goods into yards and warehouses along the border and US drivers come to bring them further into the interior to American distributors and consumers.
The proximity to the border also creates a larger consumer base for the stores in Laredo. With two Walmarts, two Best Buys, and a Target, some of the largest chain stores in the US are here, and their prices are lower than in Mexico.
The Walmart will be crowded in the middle of the night, people here say, and Mexican shoppers will take the tags off clothes and leave boxes in the parking lot in order to avoid import taxes when they cross back over the border.
The US-Mexico border on the Rio Grande River wraps around the west and south of this town. The border is fluid; there are four international bridges for cars and pedestrians and one railway bridge. Across the river is Nuevo Laredo, and the ties between the two cities are more than economic.
“In Texas there is an openness, a back and forth that goes culturally and economically. It goes between families and companies and businesses and individuals on both sides of the border,” said Xochitl Mora Garcia, a spokeswoman for the City of Laredo.
China’s role
A large factor that will determine if Laredo continues to thrive is China, says Mark Dotzour, a real estate economist at Texas A&M University.
“There’s a contest going on between Mexico and China to be a low cost producer to American markets. Growth has been a bit slower simply because China’s influence,” Mr. Dotzour said.
For Creery, he is watching for a revival in the automotive industry that he believes will benefit the region’s manufacturing and supplier networks.
—–
Traffic from Mexico Down
January 18th, 2010http://webbts.bts.gov/press_releases/2010/bts001_10/pdf/bts001_10.pdf