ACTING CBP COMMISSIONER DAVID AGUILAR WITH MORE OUTREACH TO THE TRADING COMMUNITY

The CEEs will bring all of CBP’s trade expertise to bear on a single industry in a strategic location. They will be staffed with numerous trade positions using account management principles that are able to authoritatively facilitate trade issues. The CEEs will also serve as resources to the broader trade community and to CBP’s U.S. government partners.

Center personnel will answer questions, provide information and develop trade facilitation strategies to address uniformity and compliance concerns. They will also serve as a single point of processing for businesses enrolled in CBP’s trusted shipper programs: the Customs-Trade Partnership Against Terrorism (C-TPAT) and Importer Self-Assessment (ISA).

EU FLAG

Washington — U.S. Customs and Border Protection (CBP) and the European Union (EU) signed today a Mutual Recognition Decision between CBP’s Customs-Trade Partnership Against Terrorism (C-TPAT) program and the EU’s Authorized Economic Operator (AEO) program.

CBP Acting Commissioner David V. Aguilar and Director-General Heinz Zourek, European Union Taxation and Customs Union Directorate (TAXUD) signed the decision, which recognizes compatibility between the EU and the U.S. cargo security programs.

“I can look back with pride on the considerable work that was completed by CBP and TAXUD to make this effort come to fruition and that we always maintained the necessary focus on security throughout the process,” said Acting Commissioner Aguilar.

“Today’s decision on the mutual recognition of the EU and U.S. trade partnership programmes is a win-win achievement: It will save time and money for trusted operators on both sides of the Atlantic while it will allow customs authorities to concentrate their resources on risky consignments and better facilitate legitimate trade,” said Director-General Zourek.

C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. C-TPAT recognized that U.S. Customs and Border Protection can provide the highest level of cargo security only through close cooperation with the ultimate owners of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers

The massive Simon Schulte is the largest ship to ever dock at Domino Sugar’s Baltimore plant. The vessel will also set a record for unloading the most sugar in an east coast port – 95 million pounds of raw, unrefined sugar.

Just docking the 600-foot-long, 100-foot-wide bulk cargo ship at Domino’s Locust Point pier was an accomplishment, requiring two tugboats that spun the vessel 180 degrees before pushing it alongside the dock. U.S. Customs also initially checked the vessel which arrived from Guatemala. Homeland Security agents also boarded the ship to check crew members’ visas and search the ship for stowaways, protocol for vessels that travel the Panama Canal.

Plant workers will have to spend about 16 working days to discharge the cargo ship. It will be held in their raw sugar shed as inventory until appropriately processed. An estimated 6 million pounds of refined sugar is worked a day at the Domino plant, which equals out at nearly three week of operations for the refinery. They take this long, as it is done bucket by bucket with the addition of 30 mph winds and a ship bouncing against the dock.

ABC News reports that after the sugar comes off the ship, it goes into a hopper that sorts it for a conveyor belt. The belts run from the ship, around the plant and up into the sugar storage building where the unrefined product falls into piles waiting to be processed. Baltimore’s Domino plant refines about 140 million pounds of sugar each month.

This process generates a lot of productive activity for the port and the refinery. Manufacturing and the sugar industries both continue to remain strong. More importantly, as we continue to see ships being built at increasingly massive sizes, we can only expect the cargo and loads to be as large as this record-breaking one.

President Barack Obama hosts Prime Minister Stephen Harper of Canada and President Felipe Calderon of Mexico for talks on economic growth and competitiveness, citizen security against terrorism, energy and climate change, according to the White House.

“There are no relationships in the world more important than our relationships with Mexico and Canada from an economic and security standpoint,” said Robert A. Pastor, director of the Center for North American Studies at American University in Washington. “They are our two largest markets by far.”

Canada and Mexico, partners with the U.S. in the 1994 North American Free Trade Agreement, or Nafta, account for 19 percent and 13 percent, respectively, of all goods sold abroad last year, according to U.S. Census Bureau data. Put another way, sales to those two markets, at $479 billion, are more than four times the U.S. exports to China (TBEXCHNA).

“These are three of the largest economies in the world, three countries that now increasingly see things eye-to-eye,” said Steve Johnson, director of the Americas program at the Center for Strategic and International Studies, a Washington policy research group. “Economic competitiveness could be the one thing that could sort of be the deliverable.”

Keystone Pipeline

TransCanada Corp. (TRP)’s planned $7 billion Keystone XL pipeline may also come up during the day-long summit, as well as a U.S.- proposed Trans-Pacific Partnership trade deal, which currently excludes Canada and Mexico, analysts said.

Obama has scheduled two hours of closed-door talks with Calderon and Harper, stretching through a working lunch and concluding with a press conference in the White House Rose Garden at 1:15 p.m. Washington time.

The three leaders last met for the North American Summit in Mexico in 2009. A meeting set for last November in Hawaii was postponed after a helicopter crash took the life of Francisco Blake Mora, Mexico’s interior minister and a key presidential confidant. Calderon announced yesterday that former President Miguel de la Madrid had died at age 77.

The summit may yield more progress on two separate studies aimed at harmonizing border-crossing issues that hamper the movement of commerce, analysts said. Increased “speed bumps” at borders that resulted from the Sept. 11 terrorist attacks has eroded many of the trade benefits from Nafta.

After Sept. 11

“In many ways, North American economic integration peaked in 2001,” said Pastor, former national security adviser for Latin America during the Carter administration. After that, trade slowed, manufacturing jobs shrunk and illegal migration and drug violence rose.

“None of the countries can really address effectively” railroad and truck-crossing restrictions “without a new form of collaboration with each other,” Pastor said.

The fastest way “to create jobs and double exports is for the three governments to work together on continental plans for transportation, education and infrastructure” Pastor wrote in the Miami Herald on Nov. 15.

The trilateral meeting may produce further steps toward a “seamless market,” a transcontinental infrastructure of eased regulatory burdens governing the flow of commerce among the three nations, he said.

“We started doing that after Nafta, but with 9/11 we in some ways moved backwards,” Pastor said. “Our ability to compete with East Asia really depends on widening our continental markets” and “flattening” rules, rather than raising barriers.

Trilateral Cooperation

There were fresh signs of trilateral cooperation in Canada last week, as U.S., Canadian and Mexican defense ministers meeting in Ottawa promised for the first time to increase military cooperation.

U.S. Defense Secretary Leon Panetta, Canadian Defense Minister Peter MacKay and two Mexican officials, Defense Secretary General Guillermo Galván Galván and Navy Secretary Admiral Mariano Saynez, pledged to forge a new partnership in battling narcotics and transnational criminal organizations while improving public security and responses to natural disasters in the Western hemisphere.

The meeting was “remarkable,” according to Johnson, a former assistant defense secretary for Western hemisphere affairs.

Diplomatically ‘Prickly’

“Mexico, diplomatically, had been traditionally a very prickly country to deal with,” he said in a telephone interview. “It has maintained its distance and was very sensitive over sovereignty issues about any kind of encroachment by the U.S.”

“A decade ago, such a meeting that included Mexico would have been unthinkable,” Johnson said.

Until now, Canadians have shown very little interest in Mexico. “That one statement suggests they are prepared to play a more effective role,” Pastor said.

On the energy front, Canada, the world’s 10th-largest economy, is planning to sell more oil and gas to Asia after Obama denied a permit for construction of the Keystone XL pipeline, which would deliver 700,000 barrels a day of crude from Alberta’s oil sands to U.S. refineries near the Gulf of Mexico. The permit was denied based on environmental concerns in Nebraska; the company is developing a new route to avoid environmentally sensitive areas in the state.

Presidential Election Stakes

“The common belief is that this will all change after the presidential election, so I think that’s still where the investor community is,” Alberta Finance Minister Ron Liepert said in February. “The U.S. needs the product. Canada has the product. It just makes no sense that it’s not coming to the U.S.”

Calderon and Harper may also pressure Obama to let Canada and Mexico join the Trans-Pacific Partnership that the U.S. is negotiating with eight nations.

The U.S., which is leading the talks, hasn’t said yet if it will let Canada and Mexico into the proposed free-trade deal that involves Chile, Vietnam, Australia, Peru, Singapore, Malaysia, New Zealand and Brunei. Japan is also interested.

The nine nations already involved in the discussions would need to reach consensus on any new members joining the talks.

Pacific Trade

The Obama administration is aiming to complete negotiations on the Pacific trade deal this year, U.S. Trade Representative Ron Kirk told Congress March 7.

The Trans-Pacific Partnership, which would be the biggest trade accord for the U.S. since 1994, when Nafta took effect, is “a top priority” for the administration.

Obama has “got to come up with something that’s a deliverable that shows how the three countries are cooperating on something,” Johnson said.

The president, who is facing re-election this year, may also show interest in overhauling U.S. immigration laws, though he has said that will require cooperation from Congress. In three years, there will be almost as many Mexican residents and Mexican-origin U.S. citizens as the entire Canadian population, about 35 million, according to Johnson.

“I think he wants to show Mexicans — and the Hispanic vote is going to be quite keen in this election — that he does want to pursue immigration reform” and deeper collaboration with both Mexico and Canada, Johnson said.

Organized Crime

The three leaders may use today’s summit meeting to lay the groundwork on unified positions on immigration, drugs and the war on organized crime in Mexico as they prepare for the 34- nation Summit of the Americas in Cartagena, Colombia, in mid- April.

There are increasing calls from Latin American leaders to debate decriminalization or legalizing the consumption of drugs as frustration with a U.S.-led crackdown grows. It’s “a delicate issue to raise” during Obama’s re-election campaign, Johnson said.

Vice President Joe Biden, on a trip to Central America in March, said that while such debates are “totally” legitimate for the Colombian summit, there’s “no possibility” the Obama administration will retreat from its opposition.

To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

New ipad 3 set for distribution

Apple will start selling its next-gen iPad March 16, but the supply chain may be the real hero.

By Larry Dignan | March 13, 2012, 3:00am PDT  FROM ZD NET

Apple’s new iPad will go on sale March 16 and sellouts are widely expected, but the real hero will be the company’s supply chain. It’s a juggernaut that can move 1 million units in a product launch without blinking.

Gene Munster, an analyst at Piper Jaffray, is already projecting that Apple will top 1 million new iPad units in a day. That first wave of product is hard to replicate by most vendors.

Indeed, Apple’s supply chain is its secret weapon. After all, Apple was able to line up millions of new retina display panels and leapfrog rivals.

Here’s a look at Apple’s supply chain by the numbers.

1 million+: Number of units Apple is expected to sell when the new iPad launches March 16.

12: Countries that will sell the new iPad on March 16.

$7.1 billion: Amount expected to be spent in fiscal 2012 on “product tooling and manufacturing process equipment, and corporate facilities and infrastructure, including information systems hardware, software and enhancements.”

$2.9 billion: Inventory component prepayments as of Dec. 31.

$13.4 billion: Outstanding off-balance sheet outsourced manufacturing and component purchase commitments as of Dec. 31.

156: Number of suppliers in Apple’s supply chain.

97 percent: Portion those 156 suppliers represent in terms of Apple’s procurement expenses.

229: Number of Apple supply chain audits performed in 2011. Of that sum, 188 were standard, 27 were process safety assessments and 14 were specialized environmental audits.

150 days: Time the typical purchase commitments cover the company’s supply needs.

60: Maximum hours worked per person allowed under Apple’s supply chain code.

1: Day of rest mandatory per seven days of work.

93 facilities: Number that had more than 50 percent of workers topping 60 hours at least 1 week of a 12 week sample.

39 percent: Portion of net sales in 2011 that came from customers in the U.S.

1 region: Asia is where the final assembly of all the company’s hardware products.

Two vendors: Two suppliers account for a significant portion of Apple’s non-trade receivables.

2012-2022: Time frame where Apple’s component agreements expire.

23.1 million: Metric tons of greenhouse gas emissions from Apple in 2011. 61 percent of that was manufacturing, 5 percent transportation, 30 percent product use, 2 percent recycling; and 2 percent facilities.

Changes planned to CBP fines

Mexican trucks line up to cross border.

Members of Canacar — Mexico’s trucking association — who attended Friday’s session complained that Mexican truckers face more stringent requirements than their U.S. counterparts under the current pilot project, the Union-Tribune story said.

By Lyndon Finney
The Trucker Staff

2/27/2012

TIJUANA, Baja California, Mexico — Twenty-two Mexico-domiciled carriers have now applied to participate in the cross-border demonstration project, and two representatives of the Federal Motor Carrier Safety Administration stepped over into Mexico Friday to appeal for more additional carriers to apply.

Anna Amos, director of safety programs for the FMCSA, and Marcelo Perez, a transportation safety investigator for the agency, expressed concern over low participation by Mexico-domiciled carriers, saying their enrollment is critical to the success of the three-year project, according to a story in the San Diego Union-Tribune.

During the meeting, the two said that without significant Mexican involvement, the U.S. Department of Transportation won’t have enough data to show that Mexican trucks can operate safety outside the commercial trade zone.

The stated objective of the pilot is to collect and evaluate data on the safety performance of Mexico-domiciled carriers.

That data would then be evaluated to determine whether the program should be made permanent.

The agency has a three-year target of 4,100 inspections. It said it would take about 46 Mexico-domiciled participating carriers to reach that target.

As of Monday, only two carriers have operating authority to participate in the pilot program.

Five other carriers are awaiting the result of their Pre-Authorization Safety Audit (PASA).

Another, Grupo Behr, passed the PASA, but concerns about the carrier’s safety record during the public comment period resulted in FMCSA not granting operating authority pending further investigation.

Nine more Mexico-domiciled carriers whose names do not appear on the last operational report have completed applications and are being moved the PASA phase, an FMCSA spokesperson said Monday. Five other carriers have submitted applications, but those five applications were considered incomplete. The FMCSA is waiting for those carriers to return complete applications before moving them on to the PASA process.

During its Grupo Behr investigation, FMCSA discovered violations involving the carrier leasing its vehicles to a company with authority to operate beyond the commercial zones, something not allowed under U.S. law, an FMCSA spokesperson said.  FMCSA issued a Notice of Violation to the company. Grupo Behr has submitted a corrective action plan, and FMCSA intends to monitor the company’s operations for six months and reconsider its application for the program at that point.

FMCSA operational reports on the program are complete through Feb. 5, 2010.

The data show that there have been nine northbound border crossings.

There have been seven inspections, one of which resulted in a Transportes Olympic vehicle being placed out-of-service Jan. 2 for an inoperable required lamp.

The carrier corrected the problem on site and the vehicle was cleared to resume its trip.

Members of Canacar — Mexico’s trucking association — who attended Friday’s session complained that Mexican truckers face more stringent requirements than their U.S. counterparts under the current pilot project, the Union-Tribune story said.

“The new program has way too many limitations, and that’s possibly why there aren’t enough carriers” that have registered, the paper quoted Alfonso Esquér, Canacar’s representative in Tijuana, as saying.

Juan Carlos Muñoz Márquez, the national president of Canacar, according to the paper, said of the pilot that: “It is very complicated, it’s very expensive, and to tell you the truth, it hasn’t brought us any benefit.”

The paper said Muñoz is owner of Transportes Castor, one of Mexico’s largest trucking companies, which has not applied for the program. Like many owners of Mexican trucking firms, he works in tandem with a U.S. company — Castor Transport LLC — that takes his shipments and makes deliveries across the United States.

The Trucker staff can be reached for comment at editor@thetrucker.com.

Simplifying trade while securing our borders is a hard balancing act

On President’s Day, in true patriotic spirit, members of the Advisory Committee on Commercial Operations of Customs and Border Protection, also known as COAC, traveled from around the country to meet Tuesday in the nation’s capital. The meeting was the trade advisory group’s first public gathering in 2012. It also was the first time the committee had convened since the departure of Commissioner Alan Bersin, who was named the Department of Homeland Security’s assistant secretary of international affairs in December.

Members of the COAC were welcomed by Allen Gina, the assistant commissioner of CBP’s Office of International Trade, who co-chaired the proceedings with Timothy Skud, the deputy assistant secretary of tax, trade, and tariff policy for the U.S. Department of Treasury. In his opening remarks, Gina explained that he was sitting in for Acting Commissioner David Aguilar, who was traveling with Secretary Napolitano in South Texas. “Although he could not be here in person,” said Gina, “he asked me to convey his personal commitment to working closely with COAC and his continued support for the important work being done by the various subcommittees.”

Gina acknowledged that 2011 was an exceptional year for the advisory committee. “You have all provided innovative ideas and helped CBP move forward on a number of issues critically important to American business—and the U.S. government,” he said. Gina also underscored the value of the committee’s input. “For the sake of our security and economy, our partnership with the trade community is paramount. Many in this room have devoted your valuable time and energy helping CBP develop our trade and security programs—and for that we thank you,” said Gina.

Before opening the floor for business, Gina welcomed COAC’s newest member, Julie Ann Parks, senior manager for export/import operations at the Raytheon Company. Park is replacing David J. Vitale, who resigned last September after he was named the president of the Chicago Board of Education. Gina also congratulated the Department of Homeland Security’s presiding officer Ellen McClain on her recent appointment as the Department’s deputy assistant secretary for transborder policy.

The meeting included updates on trade programs and COAC subcommittee work. Among the topics discussed was the One U.S. Government at the Border initiative. “We’re looking at the import process from start to finish identifying redundancies that might exist today,” said Michael Ford, vice president of regulatory compliance and quality for BDP International, a customs house brokerage and freight forwarding firm. Ford explained that he and the subcommittee’s other trade co-chair, Ted Sherman, director of global trade services for Target Corporation, were meeting with various government agencies. “We’re sitting down and discussing how we can improve these processes together,” said Ford.

“Hopefully, we can lay a foundation that will build a process that will work, that’s sustainable, and doesn’t have us all collectively drowning in paper, courier packages, and different data for different agencies,” said Sherman, noting that the complexity of the import process is growing.

The importance of finding funding for CBP’s automated trade processing system, the Automated Commercial Environment, or ACE, was also duly noted. “You can’t really have a simplified entry process that’s going to lower transaction costs without ACE,” said George Weise, executive vice president of Sandler & Travis Trade Advisory Services and a former commissioner of CBP’s legacy agency, the U.S. Customs Service.

“We need to understand that there is a sense of urgency in these two issues. And candidly, collectively all of us in this room are facing a crisis that we aren’t getting the funds necessary to get ACE delivered to get things like simplified entry in place,” said Weise. “We need to have our voices heard on the Hill. We’ve got to get the funds. We’ve got to get this moving forward. It’s 20 years overdue.”

Air cargo security was another topic highlighted at the meeting. “Everybody has pointed to ACAS [the Air Cargo Advance Screening pilot program] as a great example of partnership between government and the private sector, and it certainly has been that,” said Barbara Vatier, the COAC subcommittee co-chair.

The ACAS pilot program, a joint effort with CBP, the Transportation Security Administration, and the air cargo community, was launched in December 2010 in response to a foiled terrorist plot in which explosive devices were planted within cargo shipments on board aircraft bound for the U.S. The pilot program’s objective is to receive pre-departure cargo data globally to allow CBP and TSA to conduct joint security risk analysis to identify potential threats to aviation.

“We’ve had over 12 million transmissions already that we’ve been able to verify through our ACAS pilot,” said Dan Baldwin, executive director of CBP’s Cargo and Conveyance Security Programs. “Less than one percent of those numbers have required some kind of adjudication either foreign or domestic.” What this means said Baldwin is “that we’re keeping aviation security at its optimal level.”

The pilot, which has entered its second phase, now includes passenger carriers and freight forwarders in addition to express consignment operators. “It’s very important that we get a good representation from the entire industry,” said Kim Costner Moore, TSA’s assistant general manager for air cargo security. “We want everybody to come to the table to help us build a system the right way.”

Some of the other issues that were discussed at the meeting include a broker revision project, intellectual property rights enforcement, risk-based bonding and risk factors, and the National Strategy for Global Supply Chain Security, which was approved by President Obama in January.

Shortly before the conclusion of the meeting, Acting Deputy Commissioner Thomas Winkowski joined the proceedings. “We have a challenging year in front of us,” he said, noting the current budgetary constraints. “I think we all have to recognize that we have to do a better job of prioritizing projects. We need to have a clear vision and a clear understanding of what’s important to CBP and the trade community.”

On that note, COAC co-chair Tim Skud concluded the meeting by encouraging members to look for superfluous regulations. “We know we have some regulations that are more burdensome than they ought to be,” said Skud. “There are lots of opportunities out there for simplifying—maybe even doing away with regulations. As you do your work in preparation for the next meeting, keep an eye out for what kind of regulations we could get rid of, what regulations are hard to comply with, and what regulations are too expensive to comply with. Is there a cheaper way to accomplish our goals?”

COAC is a 20-member advisory committee that was established by Congress in 1987. The committee provides advice and recommendations to CBP and the Department of the Treasury on the commercial operations of CBP and trade-related interdepartmental functions. Some of the issues that COAC focuses on include enhanced border and supply chain security, international efforts to harmonize customs practices and procedures, import safety, compliance, and modernization and automation processes used to facilitate trade.

The next COAC meeting is scheduled to be held in Savannah, Georgia on May 22.

Mexican New Law Given Extention

A few months ago, the Mexican Government announced a new regulation known as Mexican Foreign Trade’s Unique Portal, or Ventanilla Única de Comercio Exterior Mexicano (VUCEM). The first announcement was about the opening of the trial period from November 30, 2011 until January 1, 2012.  After the trial was successfully completed in January, another announcement was made giving all companies doing business in Mexico until March 1, 2012, to prepare their companies to file Comprobante de Valor Electrónico (COVE) via the VUCEM.   As many companies were frantically preparing for this enforcement date, the Mexican Government and the Mexican Confederation of Association of Customs Brokers (CAAAREM) issued a reprieve.  In a press release sent on February 23, 2012, the Arturo Rojas Rivas, Central Administrator of Competence and customs modernization, announced an extension until June 1, 2012 for the enforcement of the VUCEM. Today, the Mexican Tax Administration Authorities (SAT) announced this extension in a press release making this official.

According to a press release, the Mexican Government estimates that companies participating in VUCEM experience more than a 90% reduction in the time needed to manage Customs procedures.  Other added benefits include a decrease in the time it takes for Aduanas to clear cargo at the borders by 11%, thus allowing carriers to increase their operations by 50% and deliver goods in a more efficient manner.