In The News

Foreign Regulatory Changes That Could Affect US Exports
10 Fri 2004, ST&R

 According to the DOC’s National Institute of Standards and Technology (NIST), the WTO has been notified by the following countries of proposed or final regulatory changes that may affect US exports of the products indicated:

• Argentina – Latex paints
• Argentina – Liquid fuel pumps
• Argentina – Safety auto parts and/or fittings
• Thailand – Hazardous substances
• Zambia – Fertilizers (calcium nitrates)
• Zambia – Kerosene
• Zambia – Petrol
• Zambia – Beer
• Zambia – Fertilizers (single super phosphate)
• Zambia – Plugs, sockets, adaptors, connection units
• Zambia – Used textile products
• Zambia – Motor vehicles
• Zambia – Roofing sheets
• Zambia – Safety belts and harnesses
• Zambia – Jams, jellies, and marmalades
• Zambia – Margarine specification
• Zambia – Electrical appliances
• Zambia – Asbestos-cement pressure pipes
• Zambia – Blankets suitable for use in public sector
• Zambia – Dimensions of bed blankets
• Zambia – Fertilizers (urea)
• Zambia – Fertilizers (ammonium sulphate)
• Zambia – Fertilizers (sulphate of potash)
• Zambia – Fertilizers (potassium chloride)
• Zambia – Fertilizers (magnesium nitrate)
• Zambia – Fertilizers (triple super phosphate)
• Zambia – Automotive gas oil (diesel)
• Zambia – Unleaded petrol

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Hot Topic
Ringing out the Old (Textile Quotas)

The quota system that's dominated trade in textiles and clothing since the '60s comes to an end with the New Year. China is expected to gain significant share: The World Trade Organization (WTO) estimates China will account for 18% of U.S. textile imports (versus 11% now), and 50% of U.S. apparel imports (now 16%). India is also poised to increase exports as much as fourfold.

China's gain will be somebody's loss. Local producers in North America and the European Union will surely feel the impact of heightened competition, as will the (generally less developed) countries that have enjoyed an unrestricted (quota-less) status

In October, a coalition of six U.S. trade associations and one labor union announced it had filed petitions for threat-based special textile China safeguards covering 15 product categories on which quotas are to be lifted. The petitioners may yet get some antisurge quotas, as permitted by the WTO to moderate spikes in imports - a prospect that troubles Chinese producers and U.S. retailers. Still, any safeguards would be temporary.

Other factors will shape long-term trends. Key among them: Fashion is a perishable good. Clothing makers proximate to high-end markets have an edge with buyers who want to capitalize on the latest trend. Speed and flexibility count as much as production costs when catering to fashionistas, says the WTO. This should minimize losses for Latin America, and, in particular, Mexico, which broke into the top 10 of clothing exporters in 2002, mainly on the strength of NAFTA commerce.

Textiles and clothing are "footloose" industries. Low start-up costs make them the first rung on the industrial development ladder. For the same reason, production can shift quickly when the market changes. You can read more about the WTO's assessment of the likely impact of lifting quotas in its Discussion Papers No. 5. To order a hardcopy, or download an electronic copy for free, click here.

You can keep track of the big changes about to take place in the American market for textiles and clothing month-by-month with PIERS U.S. import data. And PIERS international databases provide accurate, up-to-date information on strategic markets in Latin America and Asia. For more information, or to request a free sample of PIERS information, register online at http://www.piers.com/register/ or call +1 800 952 3839, ext. 7128.

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TSA Announcement: 2005 Rate Increases

Container shipping lines in the Transpacific Stabilization Agreement (TSA) have completed a detailed assessment of market, operational and infrastructure conditions in the Asia-US container freight market, and finalised pricing plans for 2005 tariffs and service contracts.

The carriers reported that aggregate operating costs in the Pacific continue to rise, and will increase next year by at least 11-12 per cent, depending on route and transport mode. Port and inland congestion in the US and Asia, and delays moving through the Panama Canal, have made the situation worse, the group said in a statement.

In response, TSA lines have recommended the following increases in current freight rates, effective in carrier tariffs and upon renewal of service contracts, by no later than May 1, 2005:

A US$285 per FEU increase will be imposed on US west coast and "Group 4" western US shipments. A $350 per FEU for inland point intermodal (IPI) and minilandbridge (MLB) cargo charge will also kick in next year.

In addition, a $430 per FEU rise for all-water shipments to the US east coast and Gulf ports via the Panama and Suez Canals is to be added.

Carriers further recommended retaining a peak season surcharge (PSS) of $400 per FEU, applicable to shipments from June 15, 2005 through November 30, 2005.

The PSS covers higher contingency planning and operating costs during periods of full vessel utilization, such as have been experienced in 2004. It also addresses the structural costs to carriers of maintaining year-round vessel and equipment fleets and schedules. Sustained peak period conditions during 2004 have prompted TSA lines, in a separate action, to recommend extending the current PSS for US-east coast all-water shipments through January 31, 2005.

TSA members include: APL, "K" Line, CMA-CGM, MOL, Cosco, NYK, Evergreen Marine, OOCL, Hanjin Shipping Co., P&O Nedlloyd , Hapag Lloyd, Yangming Marine Transport Corp. and Hyundai Merchant Marine.

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Port security Update

Feds 'Still Fighting Last War' On Terror
Ports 'Scraping Bottom  Of Barrel', Port Security Council Chief Says

Despite accounting for more than one-quarter of U.S. gross domestic product, America's seaports and related industries "have been virtually cast adrift by the federal government when it comes to homeland security spending," said Jay B. Grant, director of the Port Security Council.

"The U.S. Coast Guard's own conservative estimates say that $1 billion was needed in port security funding for Fiscal 2005, with a multi-year estimate of $7 billion," Grant said in prepared remarks for delivery before the annual meeting of the Information Sharing and Analysis Center Council, held Monday at the George Mason University campus in Arlington. "That number could be as high as $15 billion."

"However, the fiscal 2005 homeland security bill passed by Congress and signed into law by President Bush authorized just about one-third of the $400 million the country's seaports say was absolutely the minimum necessary to protect their facilities for terrorist attack," Grant added.

"The current 'Band-Aid approach' to homeland security spending has to come to an end--the country cannot afford it." Grant said.

The Port Security Council was created in May by leading sectors of the U.S. maritime industry to address terrorist threats to the nation's seaports and the maritime transportation system through the promotion of greater public and official awareness of the dangers posed to these facilities, and the need for them to receive greater federal support.

The mission of the ISAC Council is to promote physical and cyber security of North American critical infrastructure sectors by establishing and maintaining a framework for meaningful interaction between and among its members and with the federal government.

In prepared remarks, Grant pointed out that the nation's seaports, one of the country's most critical infrastructure sectors, account for more than one-quarter of U.S. GDP and that any attack on them could have far-reaching consequences.

"As we saw during the 2002 West Coast ports shutdown, a terrorist attack on one or more major maritime facilities could cripple the U.S. economy," Grant said.  "Nonetheless, as dire as the needs are, and despite the rhetoric of the 2004 political campaign, Congress and the Administration have not stepped up to the plate to make the kind of effort that is needed to protect the ports."

"The problems faced by America's seaports are not just problems for the port authorities to address, or only those of the maritime community-they are national problems that need to be addressed nationally," Grant said. "The ports are protecting America's commerce pipeline."

The needs faced by the ports continue to grow, Grant added, and are in part the effect of legislative mandates from Washington, such as the Maritime Transportation Security Act of 2002, which went into effect this year.

"As a result in Fiscal 2006, it is likely that the total port security funding requested may be more than double, as much as $1 billion," Grant said.

Despite numerous studies, such as the final report of the official 9/11 commission, which point out that Washington may have overreacted on aviation security funding, thus squandering money on efforts that amount to nothing less than "fighting the last war, critical needs such as those of the ports are left scraping the bottom of the barrel for economic and security sustenance," Grant said.

"Spending billions of dollars on programs making all airline passengers remove their shoes at airports, or giving chemical protection suits to firefighters in remote areas of the country does not add any real value to fighting terrorism," Grant said. "A much wiser approach would be to identify areas-either geographically or according
to other quantifiable criteria, that warrant extra efforts and then spend scare taxpayers' dollars accordingly.

"I believe that the Department of Homeland Security should subject all of its efforts to means-based risk analysis, ordering is priorities and spending its resources on where the threat is most critical and where the challenge to them can be remedied," Grant said. He added that the part of the Port Security Council's 2005 lobbying strategy is to move legislation "beyond 'gates, guns and guards' and the chimera of 100 percent container screening, to investments in costly but also cost-efficient technology."