FREE TRADE AGREEMENTS
SFIA supports free trade agreements (FTA) to lower costs and increase access to foreign markets. The United States currently has FTAs in place with 20 countries. With the Trade Promotion Authority (TPA) expired, Congress can amend FTAs, and, countries are not eager to negotiate new deals with the U.S. that Congress could alter.
The U.S. pulled out of the Trans-Pacific Partnership in 2017 and is not currently part of any of the other current Asia-Pacific agreements. SFIA supports U.S. efforts to negotiate an Indo-Pacific economic framework to facilitate trade, that will not require TPA or Congressional approval. The U.S. Trade Representative anticipates the framework will include provisions on high labor standards, environmental sustainability, sustainable food systems, transparency in regulatory practices, and trade facilitation, but, SFIA is concerned it will not address market access.
Many U.S. pacific-rim trading partners, excluding China, entered into the Comprehensive and Progressive Agreement for Trans-Pacific Partnerships (CPTPP), but, the Regional Comprehensive Economic Partnership (RCEP) agreement, ratified by 15 U.S. trading partners in the pacific rim, included China.
Click here for strategies for dealing with EU policy on price differentials.
SUPPLY CHAIN AND SHIPPING
The COVID-19 pandemic has caused the largest disruption of global supply chains in history. The problems are broad and exist at every stage of the supply chain, from inputs and labor shortages at factories, to port delays and trucker shortages in the U.S.
SFIA supports the Ocean Shipping Reform Act of 2021 (ORSA), which gives the Federal Maritime Commission (FMC) the authority to require common carriers and marine terminals to share information on cargo throughout availability with shippers, and, the power to investigate common carrier fees to ensure detention and demurrage charges are justified and fair.
Ocean Shipping Reform Act of 2021 Summary:
- Sets forth requirements for operating a shipping exchange involving ocean transportation in the foreign commerce of the United States;
- Requires ocean common carriers to report to the Federal Maritime Commission (FMC) each calendar quarter on total import and export tonnage and the total loaded and empty 20-foot equivalent units per vessel that makes port in the United States;
- Requires the FMC to publish and annually update all its findings of false certifications by ocean common carriers or marine terminal operators and all penalties assessed against such carriers or operators;
- Revises annual reporting requirements for the FMC on foreign laws and practices to include practices by ocean common carriers;
- Prohibits ocean common carriers and marine terminal operators from retaliating or discriminating against shippers because such shippers have patronized another carrier, or filed a complaint;
- Directs the FMC to establish rules prohibiting ocean common carriers and marine terminal operators from adopting and applying unjust and unreasonable demurrage and detention fees;
- Authorizes the FMC to initiate investigations of an ocean common carrier’s fees or charges and apply enforcement measures, as appropriate;
- Directs the Department of Transportation to seek to enter into an agrement with the National Academy of Sciences to study the U.S. supply chain industry, including data constraints that impede the flow of maritime cargo and add to supply chain inefficiencies; and
- Provides authority for the FMC to issue an emergency order requiring ocean common carriers or marine terminal operators to share directly with relevant shippers, rail carriers, or motor carriers information relating to cargo throughput and availability.
*This is not yet a law, but has passed in the House
SFIA supports the Uyghur Forced Labor Prevention Act, which was signed into law on December 23, 2021. New rules on products imported from China’s Xinjiang Uyghur Autonomous Region (XUAR) or with inputs from XUAR go into effect on June 21, 2022. Under the new rules, Customs and Border Patrol (CBP) will presume forced labor was used in “any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in” the Xinjiang region, and the product is not eligible to enter the U.S. The ban extends beyond XUAR to include entities identified by the Forced Labor Enforcement Task Force (FLETF) that work with XUAR government to recruit, transport, or receive forced labor from the Xinjiang Uyghur region.
Click here for a recording from a previous SFIA webinar that provides more information on the law and how to ensure compliance.
For more information or questions regarding SFIA’s international trade efforts, please contact Bill Sells.