The global trade world is constantly changing. Trade rules, geopolitics, free trade agreements, sourcing patterns, and even the most recent WCO tariff schedule update for 2022 all contribute to the complexity of trade compliance. That is why importers and exporters need to stay current on new and emerging trade regulations so that they can assist their businesses in remaining compliant and avoiding fines, penalties and reputational damage.
Global Trade Trends
1. Under the Generalized System of Preferences, the Trade Act of 2021 may extend duty-free trade.
The US Senate passed the US Innovation and Competition Act in June, which includes the Trade Act of 2021, a trade amendment that renews and expands two major trade programs: the Generalized System of Preferences (GSP) and the Miscellaneous Tariff Bill (MTB).
Thousands of products from more than 120 undeveloped countries are exempt from taxes under the GSP. It also allows US businesses tax-free access to a wider range of products and materials from a wider range of suppliers, lowering manufacturing costs. The program was set to expire on December 31, 2020, but if the US Innovation and Competition Act is passed by the House of Representatives, it will be extended for another six years, allowing many developing countries to trade with the US duty-free.
2. The new CBP Global Business Indicator (GBI) effort will necessitate a greater understanding of import/export statistics.
Another push for transparency to watch in the coming months is the US Customs and Border Protection’s Global Business Indicator (GBI) initiative, which proposes replacing current manufacturer/shipper ID codes (MID) with a new ID system that provides the CBP with significantly more information. The Evaluative Proof of Concept (EPoC) pilot initiative is set to launch in spring 2022. GBI will not be required to be reported, but the pilot will be open to anybody who wants to join.
The current MID system, according to the CBP, has to be modernized because of the increased volume of import/export activity — 28.5 million cargo containers at 328 US ports of entry in 2020 poses an intolerable danger. The CBP wants more data on goods entering and exiting the United States, partially to help detect high-risk cargo and partly to improve the overall system’s coverage and efficiency.
The new GBI will include eight additional data categories in addition to identifying a product’s legal ownership, country of origin and position in the supply chain, and will go a long way toward digitizing every aspect of supply chain management and regulatory control.
3. The CBP’s 21st-Century Customs Framework ushers in a new era of trade, according to global trade trends.
Meanwhile, the CBP is “reimagining” commerce through its 21st-Century Customs Framework (21CCF) initiative, which is the most ambitious endeavor to upgrade the global trading system since the US Customs Modernization Act of 1993, which was passed before the internet was even invented.
Given that so much commerce now takes place over the internet, and so many useful new technologies (such as blockchain, artificial intelligence, robotics, and APIs) have been developed in the last 25 years, the CBP believes it’s time to bring global trade’s entire technological framework into the twenty-first century.”We foresee a global trade environment that allows for an agile, efficient, data-driven, integrated and secure customs enterprise for the 21st-century and beyond” the CBP says.
4. The United States improves its enforcement of forced labour laws.
Increased attention to, and punishment of, different human rights breaches, particularly forced labour in countries like China and North Korea, is embedded in many of the measures covered thus far.
The US Departments of State, Treasury, Labor, Commerce, and Homeland Security issued a 36-page joint statement on July 13, 2021, detailing probable human-rights abuses in China’s Xinjiang province, as well as a long list of commodities whose supply chains could be impacted. “Businesses and persons that do not quit supply chains, endeavors, and/or investments associated to Xinjiang could run a high danger of breaking US law,” according to the statement.
5. Uncertainty over the USMCA’s implementation and enforcement persist.
Though the United States-Mexico-Canada (USMCA) trade agreement went into effect on July 1, 2020, most of the business world is still attempting to figure out what the law’s new regulations imply and what steps must be taken to comply.
6. How can importers and exporters in the United States keep informed and compliant?
Signing up for frequent free updates from CBP and the US Census Bureau will help your main up-to-date on the newest import/export laws and sanctions.Also, consider automating your import/export procedures using global trade management software that is coupled with up-to-date trade content for a larger, more comprehensive solution.
- Posted by WiserTech Solutions
- On January 3, 2022