Trade News

September 23, 2020

Canada Abandoning Free Trade Negotiations With China

Canada is abandoning free trade negotiations with China amid a host of disagreements on a range of topics, according to Foreign Minister Francois-Philippe Champagne.

“I do not see the conditions being present now for these discussions to continue at this time. The China of 2020 is not the China of 2016,” Champagne said about trade negotiations as quoted by The Globe and Mail.

The comments mark a major policy shift towards China that brings Canada more in line with the hardline posture adopted by the United States, Australia and parts of the European Union.

What began as an expressed interest in fostering deeper economic ties between the two countries, has now turned soured after Canadian authorities detained Huawei CFO Meng Wanzhou in 2018 at the request of the U.S., which was followed by the arrests of two Canadian nationals on charges of espionage in China.

The tense relationship has been further exacerbated by Canada’s condemnation of the newly enacted Chinese law on national security in Hong Kong and a suspension of some bilateral agreements with the special administrative region.

Beijing has said that it reserves the right to respond to any interference on Canada’s part and the Canadian side will be held accountable for all the consequences.

Despite the tensions, China remains Canada’s second-largest trading partner after the US.

(Source: Economic Times)

September 22, 2020

CERS Transition Date — September 30, 2020

The Canadian Export Reporting System (CERS) is a free, web-based, self-service portal for submitting electronic declarations and Summary Reporting Program monthly reports. It is replacing the Canadian Automated Export Declaration (CAED) system.

All Canadian exporters will have to report in the new system by September 30, 2020. The Canadian Border Services Agency (CBSA) has recently release new documents to support transition to the new system:

If you have any questions, please get in touch with Carson Freight Services by clicking on the button below.

Please note that Carson has pre-loaded the information of existing Carson Freight clients, effectively registering you for the new CERS system.

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September 22, 2020

Clock Is Ticking for Canada-U.K. Trade Deal

With only three months to go, businesses that trade between Canada and the United Kingdom are worried about not having a post-Brexit deal in place.

Although the United Kingdom left the European Union in January, the terms of the EU’s Comprehensive Economic and Trade Agreement (CETA) with Canada continue to apply until Dec. 31, offering a bit more time to negotiate a bilateral replacement deal — but not that much more.

“As the U.K. and EU’s transition period nears its end, the clock is ticking,” reads a joint statement Monday from the Confederation of British Industry and the Canadian Chamber of Commerce. “The benefits businesses have under CETA are set to disappear and without a trade deal in place both our countries will be going into unchartered territory.

“After months of trade and supply chain disruptions due to the pandemic, a continuation of uncertainty as our economies slowly rebuild is not an environment businesses can withstand,” they said.

CETA has been good for both countries, the statement said, boosting two-way trade by about 10 per cent over its first two years. That’s why they’re calling for a bilateral deal to replace it “at the earliest opportunity.”

According to International Trade Minister Mary Ng’s office, officials now are working toward a “transitional agreement” to minimize disruptions for businesses and workers.

A transitional agreement with Canada in the short term won’t be the same as a customized, bilateral agreement. That would take far longer than three months to conclude.

It would, however, prevent the two countries from “crashing out” of CETA, offering a stop-gap measure until both sides have the time and capacity to negotiate something more bespoke.

Ng confirmed that Canada and the U.K. are back at the table while taking questions during a webinar Monday morning hosted by the Canada–EU Trade and Investment Association to mark CETA’s three-year anniversary.

The minister said she is “very hopeful” and it’s her ambition to reach a transitional agreement “before or in time” for Brexit.

“That will set the stage for a more comprehensive [free trade agreement] with the U.K.,” she said. “The most important thing for me right now is stability for Canadian businesses … It’s our job to make sure that we do our level best to accomplish that environment for them.”

(Source: CBC News)

September 21, 2020

Steel Import Licenses Must Include Country of “Melt and Pour”

The U.S. Department of Commerce’s Steel Import Monitoring and Analysis System (SIMA) will be modified effective October 13, 2020, to require that the country where the steel was “melted and poured” to be identified in the license application. Other changes in the final rule published on September 11, 2020, include adding coverage for eight additional HTS numbers in order to synchronize the system with the coverage of Section 232 for basic steel mill products; increasing the low-value license to $5,000, and allowing multiple uses; and extending the SIMA program indefinitely.

The new rule defines “melted and poured” as “the original location where the raw steel is: (A) First produced in a steel-making furnace in a liquid state; and then (B) Poured into its first solid shape…The first solid state can take the form of either a semi-finished product (slab, billets or ingots) or a finished steel mill product.”

The reporting requirement does not apply to raw materials used in steel manufacturing. The new required information on the country of “melt and pour” may also be useful in investigating circumvention of duties.

The SIMA website will shut down from October 9 until October 13, 2020 when the new website is updated and goes live. Commerce has created a page with the latest updates regarding SIMA. In the interim, Commerce stressed that there will be limited availability for manual license processing.

Click here to read the Final Rule from in the Federal Register.

For any questions, please reach out to Carson.

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(Source: Global Trade)

September 16, 2020

Hong Kong Formally Objects to U.S. Demand for “Made in China” Export Label

Hong Kong has filed a formal objection with the United States over its demand for “Made in China” labels on goods exported from the Chinese semi-autonomous city, the commerce secretary said on Wednesday.

Washington’s move last month followed China’s imposition of a national security law on the former British colony and a U.S. decision to end a special status that had allowed Hong Kong different treatment from the rest of China.

Commerce Secretary Edward Yau said he formally asked the U.S. consulate to relay Hong Kong’s request for withdrawal of the new regulations to U.S. trade officials.

“Such regulations go contrary to WTO (World Trade Organization) regulations and infringe upon our rights as a separate customs region,” Yau told reporters. “We are a separate, and indeed, independent member of the WTO.”

The United States has extended until Nov. 9 its enforcement deadline on the “Made in China” label, from Sept. 25 previously.

(Source: The Chronicle Herald)

September 16, 2020

WTO Says U.S. Tariffs On China Broke International Trade Rules

The World Trade Organization found on Tuesday that the United States breached global trading rules by imposing multibillion-dollar tariffs in President Donald Trump’s trade war with China, a ruling that drew anger from Washington.

The Trump administration says its tariffs imposed two years ago on more than $200 billion in Chinese goods were justified because China was stealing intellectual property and forcing U.S. companies to transfer technology for access to China’s markets.

But the WTO’s three-member panel said the U.S. duties broke trading rules because they applied only to China and were above maximum rates agreed to by the United States. Washington had not then adequately explained why its measures were a justified exception, the panel concluded.

The decision will have little immediate effect on the U.S. tariffs and is just the start of a legal process that could take years to play out, ultimately leading to the WTO approving retaliatory measures if it is upheld – moves that China has already taken on its own.

The United States is likely to appeal Tuesday’s ruling. That would put the case into a legal void, however, because Washington has already blocked the appointment of judges to the WTO’s appellate body, preventing it from convening the minimum number required to hear cases.

During a two-year trade war with Beijing, Trump threatened tariffs on nearly all Chinese imports – more than $500 billion – before the two countries signed a “Phase 1” trade deal in January. Extra tariffs are still in place on some $370 billion worth of Chinese goods, and $62.16 billion in duties have been collected since July 2018.

(Source: Global News)

September 16, 2020

AIRS Update – Organic Fresh Fruit & Vegetables

On June 10, 2019, new OGD extensions for organic fresh fruits and vegetables were implemented in the Automated Import Reference System (AIRS) database. The AIRS database shows the import requirements for Canadian Food Inspection Agency (CFIA) regulated commodities.

The list of new OGD extensions was shared on May 22, 2019 with stakeholders prior to the AIRS publication. The list can be viewed here.

On October 1, 2020, the AIRS database will be updated to reflect the Organic Certificate (Registration type #68 ) admissibility requirements. Importers of fresh fruits and vegetables will be required to submit a digital copy of organic product certificate, when declaring organic products online using the Integrated Import Declaration (IID).

For information on how this affects your business, please reach out to Carson.

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September 15, 2020

U.S. Backs Down On Canadian Aluminum Tariffs

The U.S. Trade Representative’s office said today it’s poised to drop tariffs on Canadian aluminum imports — just hours before Canada was set to unveil counter-measures in retaliation.

A statement from the USTR said that after consultations with the Canadian government, the U.S. has determined that trade is expected to “normalize” in the last four months of the year, declining after “surges” experienced earlier in the year.

“Accordingly, the United States will modify the terms of the 10 per cent tariff imposed in August on imports of Canadian non-alloyed unwrought aluminum,” the statement reads.

The USTR’s statement lays out shipment volumes for each of those four months, which will be monitored to ensure they aren’t exceeded. If they do, the U.S. expects that imports would decline by a corresponding amount the following month.

The tariffs could be re-imposed if shipment volumes exceed 105 per cent of the stated volumes, it said.

The government had said during the summer that unless the U.S. dropped its latest round of aluminum tariffs, Canada would impose $3.6 billion in counter-measures.

Canada was responding to a 10 per cent tariff announced by President Donald Trump in August, a move that hit more than half of Canada’s aluminum exports to the U.S.

Click here to read the statement from the USTR.

(Source: CBC News)

September 9, 2020

CBSA Launches Investigation Into Alleged Wheat Gluten Dumping

As of August 14, 2020, The Canada Border Services Agency, pursuant to subsection 31(1) of the Special Import Measures Act has initiated an investigation to determine whether certain wheat gluten from Australia, Austria, Belgium, France, Germany and Lithuania is being sold at unfair prices in Canada.

The investigation is the result of a complaint filed by ADM Agri-Industries Co. located in Candiac, Quebec, and is supported by Permolex Ltd. The complainant alleges that the Canadian industry is facing an increase in the volume of the allegedly dumped imports, suppression of market share, lost sales, price undercutting, price depression, price suppression, accumulation of inventories, threats to investment plans, negative impacts on the ability to raise capital, impacted financial results and declines in employment wages and a reduction in hours worked.

For the purpose of this investigation, subject goods are defined as:

Wheat gluten, whether or not blended with wheat flour, salt or any other substance, with a minimum wheat protein content of 40% by weight on a dry basis calculated using a Jones factor of 5.7, originating in or exported from Australia, Austria, Belgium, France, Germany and Lithuania, but excluding:

devitalized wheat gluten;
hydrolyzed wheat gluten;
wheat protein isolates; and
organic wheat gluten that is certified organic in accordance with and otherwise meets the requirements of the Food and Drugs Act, R.S.C., 1985, c. F‑27, and regulations made thereunder, and the Safe Food for Canadians Act, S.C. 2012, c. 24, and regulations made thereunder including the Safe Food for Canadians Regulations, S.O.R./2018‑108, all of which as may be amended or replaced from time to time.

The allegedly dumped goods are normally classified under the following tariff classification numbers:

1109.00.10.00
1109.00.20.00

The listing of tariff classification numbers is for convenience of reference only. The tariff classification numbers include non‑subject goods. Additionally, subject goods may fall under tariff classification numbers that are not listed. Refer to the product definition for authoritative details regarding the subject goods.

If you have any questions regarding the alleged dumping of Wheat Gluten, please contact our Trade Advisory group at tradeadvisory@carson.ca.

September 8, 2020

U.S. to Block Cotton Imports From China’s Xinjiang Over Forced Labour

The United States will move to block imports of cotton from western China’s Xinjiang region over allegations that it is produced with forced labour. The Trump administration has put a spotlight on China over its treatment of Xinjiang’s Uighur Muslim population. The United Nations has said it has credible reports that 1 million Muslims have been detained in camps in the region, where they are put to work.

The “Withhold Release Order” allows U.S. Customs and Border Protection to detain shipments based on suspicion of forced labour involvement under longstanding U.S. laws aimed at combating human trafficking, child labour and other human rights abuses.

Xinjiang accounts for 85% of Chinese cotton production. The U.S. imported about $50 billion worth of textiles and clothing from China last year, and Uighur cotton, yarn and fabric is used by other countries such as Vietnam, Indonesia, Cambodia, Bangladesh and Sri Lanka to make clothing.

China denies mistreatment of the Uighurs and says the camps are vocational training centres needed to fight extremism.

(Source: Politico)