M.E. Dey & Co. Honored by State Officials

On June 14^th, M.E. Dey hosted a customer appreciation event in celebration of reaching our 100^th year in business. 

The evening’s program included presentations by Mayor Tom Barrett and Secretary of Commerce Mary Burke on behalf of the Governor’s Office.  M.E. Dey was recognized for our contributions to the support and development of Wisconsin business through trade.  We received additional accolades from Harbor Commissioner Daniel J. Steininger for the successes realized through joint partnership with the Port of Milwaukee, and were particularly honored by remarks given by Port Director of Customs and Border Protection, Mike King who acknowledged M.E. Dey as having one of the highest compliance rates in the community and conducting business with the utmost integrity.
 

We wish to thank those of you that attended the event and helped us commemorate the occasion.  It was a pleasure to share our accomplishments with the people that helped us realize our success.

We are grateful to all of our customers and affiliates for your continued support as we enter our second century of success.

Rob Gardenier, President    
Sandi Siegel, Executive Vice President    

View photos of the event

U.S. CUSTOMS AND BORDER PROTECTION

Intellectual Property Rights Violations

US Customs agents continue to detect the illegal importation of merchandise bearing a counterfeit mark without presenting a commercial entry.  Large quantities of pirated DVD movies, music CD's, clothing articles, baseball caps, duffel bags and other types of items that are not original are commonly sold south of the border. According to US Customs & Border Protection, they have detected many people trying to bring them to the United States.  "DVD's, textiles like T-shirts, baseball caps, trousers, women type of apparel like hand bags" are detected at land ports of entry said Felix Garza, CBP's spokesperson. CBP across the nation in Fiscal Year 2006 seized $155-million dollars in merchandise violating intellectual and property rights law. A 67% increase over the $93-million in merchandise seized in Fiscal Year 2005. 

"Customs & Border Protection has the authority to enforce the intellectual property rights of many trademark types of merchandise like those that you see everyday" said Garza.  It takes a quick trip to Matamoros, Reynosa, Nuevo Progreso or any other border city, to find a $3-dollar DVD movie which is now playing in theaters. 

A young lady quickly evaded our cameras as soon as she saw us walking into her store full of pirated material, but we learned that a lot of customers are from the US side. Wilson, Adidas, Fubu, Tommy, Puma, Nike, Spalding and many other brands are sold illegally.  US Customs officials have advice for anyone going to Mexico and who may run into counterfeit articles. "If we find that is pirated or counterfeit in most cases we're going to seize it and if it's commercial quantity, we will probably give an administrative penalty and those penalties can be pretty significant" said CBP Supervisor Felix Garza. 

Over the weekend in Laredo CBP officers seized over 200 pirated DVD movies and music CD's, and close to 200 shirts and baseball caps. A man was given a penalty of $9-thousand dollars for importation of merchandise bearing a counterfeit mark.  U.S. Customs & Border Protection officials say that if someone is in Mexico and suspects the product they're buying is counterfeit, the advice for consumers is to not buy the merchandise and to not bring it into the United States.

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CONTAINER SECURITY

The CBP program C-TPAT Customs Trade Partnership Against Terrorism, establishes a minimum standards as to container security.  Currently, this standard is being implemented or considered by an increasing number of ocean freight carriers.  We urge all importers to contact their suppliers overseas and negotiate an agreement for their compliance to the standard. Did you know that CBP also has standards for the container security and inspection?  Please see the following.  EXPORTERS, keep in mind that some ocean carriers  have already mandated this requirement for export boxes!!!

Container integrity must be maintained to protect against the introduction of unauthorized material and/or persons. At point of stuffing, procedures must be in place to properly seal and maintain the integrity of the shipping containers. A high security seal must be affixed to all loaded containers bound for the U.S. All seals must meet or exceed the current PAS ISO 17712 standards for high security seals.

Container Inspection
Procedures must be in place to verify the physical integrity of the container structure prior to stuffing, to include the reliability of the locking mechanisms of the doors. A seven-point inspection process is recommended for all containers: Front wall, Left side, Right side, Floor, Ceiling/Roof, Inside/outside doors, Outside/Undercarriage.  

Container Seals
Written procedures must stipulate how seals are to be controlled and affixed to loaded containers - to include procedures for recognizing and reporting compromised seals and/or containers to US Customs and Border Protection or the appropriate foreign authority. Only designated employees should distribute container seals for integrity purposes.

Container Storage
Containers must be stored in a secure area to prevent unauthorized access and/or manipulation. Procedures must be in place for reporting and neutralizing unauthorized entry into containers or container storage areas.

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Second Phase of E-Manifest Program Begins Tuesday for Commercial Vehicles Entering U.S.: Non-Compliant Entries Face Additional Screening
Wednesday, June 20, 2007

Laredo, Texas – U.S. Customs and Border Protection Port Director Gene Garza announced today that all commercial vehicles entering the U.S. must pre-file an electronic manifest or they will be referred to secondary examination to determine whether the shipments will be allowed entry.

As mandated in the Trade Act of 2002, the second phase of the e-Manifest regulations require an electronic manifest be sent to CBP one hour before arrival for regular entries and 30 minutes prior for Free and Secure Trade (FAST) lane entries. Any commercial entry that arrives at the port of entry without having sent an e-Manifest will be referred to secondary examination. At secondary an electronic manifest needs to be forwarded to CBP in order for the entry to be processed and allowed entry into the United States. If carriers completely disregard the requirements or make no attempt to file an e-Manifest, the shipment may be returned to Mexico.

Recently, the Laredo port of entry had an e-Manifest compliance rate of just fewer than 70 percent with some days exceeding 80 percent. It is anticipated that this number will quickly rise as the second phase of the e-Manifest requirement becomes effective on Tuesday, June 19.

In order to be able to send an e-Manifest, carriers can either log onto eManifest: Trucks on CBP.gov and learn how to send an e-Manifest free of charge through the ACE Secure Data Portal or purchase software to send an e-Manifest or contract with a company to send e-Manifests for their commercial shipments on their behalf for a fee. ( e-Manifest: Trucks (pdf - 635 KB )

“We encourage the international trade community to avail themselves of the resources provided in this announcement in order to ensure that e-Manifests are sent to CBP in a timely manner and so that their shipments do not face additional delay or return to Mexico if no attempts to file an e-manifest are made,” said Laredo Port Director, Gene Garza.

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Important CBP Announcement - Increase in Customs Exams
31 May 2007, NCBFAA

Effective May 30, 2007, U.S. Customs and Border Protection (CBP) implemented updated enhancements to their internal data system that may cause an increase in the number of intensive examinations of identified “high risk” shipments.

Concurrently, the referenced enhancements should resolve issues involving Permit To Transfers (PTT) and consolidated shipments moving in-bond under one (1) Master Bill of Lading (MBL). With the new functionality, risk assessments will be conducted on individual shipments rather than being linked to other shipments under the Master Bill of Lading.

Further enhancements are contemplated. When changes take place, CBP will update the trade community in a timely manner.

Please contact your local CBP Port Office, if you have questions.

Land, Sea Passport Requirements Delayed Until Summer ’08
By Eleanor Stables, CQ Staff

Passport requirements for travelers — including U.S. citizens — entering the United States by land and sea from Canada, Mexico and Bermuda will be postponed by about six months, Homeland Security Secretary Michael Chertoff announced.

DHS will institute the passport requirement around the end of next summer, instead of January 2008 as it originally aimed. In the interim, beginning Jan. 31, 2008, DHS intends to stop accepting oral declarations of citizenship as the sole means of entering the country by land or sea. U.S. and Canadian citizens will instead need to present a passport, or, alternatively, a government-issued photo ID plus proof of citizenship — such as a driver’s license and birth certificate. Mexican citizens are already required to present a passport and visa, or certain border-crossing cards, to enter the United States; Bermudans will be required to present a passport.

After six to eight months of allowing U.S. and Canadian citizens to present the alternative documents for entry via land and sea, DHS will eliminate this option and require a passport, Chertoff said. Other acceptable but less common documents that will be accepted beginning Jan. 31, 2008, are trusted traveler cards such as Nexus, SENTRI, and FAST, and identification for merchant mariners and the U.S. military.

Chertoff said a U.S. Customs and Border Protection agent at the land border currently can accept an oral declaration of U.S. citizenship to let someone enter the country. The agent can also request documentation but because numerous different kinds of U.S. birth certificates exist, it is difficult to evaluate the document’s authenticity. The agent’s time would be better used evaluating the traveler’s behavior, “which is probably the number one tip-off that someone is up to no good,” according to Chertoff.

With the interim requirements allowing U.S. citizens to present a driver’s license and birth certificate — of which roughly 50 and 8,000 kinds exist respectively — DHS is “closing the window of vulnerability, but it will not have closed it.”

The passport requirements are part of the Western Hemisphere Travel Initiative (WHTI) in the 2004 intelligence overhaul law (PL 108-458), which requires U.S. citizens and other travelers entering the United States to present a passport or other approved documents when coming from countries previously exempt from such documentation requirements.

Sen. Joseph I. Lieberman, who co-wrote the law containing the provision, noted it “fulfills a 9/11 Commission recommendation to identify vulnerabilities and close loopholes in our travel systems that could be exploited by terrorists” and that he is pleased DHS will “begin to implement some WHTI travel requirements at land and sea ports of entry.” Lieberman, I-Conn, is chairman of the Senate Homeland Security and Governmental Affairs Committee.

The department’s plan to phase in the passport requirements “will provide an added layer of security without sacrificing careful execution of the program,” he said, cautioning that technology, infrastructure and manpower must be put in place to avoid delays when WHTI is fully implemented.

C. Stewart Verdery Jr., former DHS assistant secretary for border and transportation security policy and planning, said the initiative’s success depends on the State Department increasing passport production, creating and issuing the passport card, and building related infrastructure.

Until State can show passport and passport card operations are quickly meeting demand, Congress is unlikely to allow DHS to fully implement WHTI requirements, he predicted. Many states will seek to create driver’s licenses that can be used as a WHTI-compliant border-crossing card and “that could end up being the savior for WHTI,” according to Verdery, president and founder of the Monument Policy Group. Among the group’s clients are Digimarc, producer of most of country’s driver’s licenses, and the Travel Industry Association.

The state of Washington is proceeding with such a driver’s license program. Chertoff said he would welcome more states doing the same.

But Verdery said he is “not convinced that the marginal increase in security for six months or so” that the interim requirements would bring “is worth the likely confusion among the traveling public.”

However, he praised DHS for “putting a proposal out there that sets some markers and shows that they are moving ahead,” singling out Kathleen Kraninger, director of the Screening Coordination Office at DHS, as doing a “good job corralling” the various agencies, border states and other parties involved.

Patrick Yoest contributed to this story.

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CBP to assess fines for violations of the
Wood Packaging (WPM) Import requirements.

These requirements have been in effect for nearly a year.  They require all WPM entering the United States to be properly marked to indicate that it has been either heat treated or treated with methyl bromide in accordance with the International Standards.  Immediate exportation is required of any non-complaint WPM.   This includes WPM that is unmarked, inappropriately marked or marked but found infested with live wood boring pests.  All costs associated with the handling and exportation of this material are the responsibility of the violator (importer).

ATA Carnet is a merchandise passport that is good for a year which facilitates temporary imports into foreign countries.  Virtually all goods, including samples, professional equipment, tradeshow items such a display booths, computers, repair tools, machinery, vehicles, jewelry, wearing apparel.  Items that may be eligible for an ATA Carnet that cannot be covered are consumable goods, disposable items or postal traffic. 

The carnet reduces costs to the exporter, eliminates VAT, duties, simplifies Customs procedures and eases re-entry into the US.  There is a cost for a Carnet.  The cost, starting at a minimum of $200, depends on the shipment value.   A security deposit is also required.  The security deposit often will take the form of a bond.  To apply online, goto www.unlockcustoms.org or visit www.merchandisepassport.org

SHIPPING AND TRANSPORTATION

Freedom of the Seas

Preserving freedom of the seas is one of the "foundation blocks" of the United States Navy, the commander of the Military Sealift Command told trustees of the United Seamen's Service recently.  "We can't survive as a nation without ocean trade routes and international trade, so the sea lanes must be open and free," said Rear Adm. Robert D. Reilly Jr. "Ninety-nine percent of the volume and 85 percent of the value of all intercontinental trade flows across the seas.  "Today, nearly 25 percent of the world's oil supply flows through the Strait of Hormuz on a daily basis. A closure of this critical chokepoint for any period of time would have a very substantial impact upon the U.S. economy, “he said.” In addition, with nearly 70 percent of the world's spare oil capacity located within the Persian Gulf region, it would be difficult to make up the supply differential elsewhere.  "Freedom of the seas and the economic access it provides can never be conceded in regions as vital as these," he added Speaking to the 64th annual meeting of the United Seaman's Service and its affiliate the American Merchant Marine Library Association in New York, Reilly noted, "The oceans have always been the great commons that connect us with the world. In this era of globalization, information and communication technologies inextricably link our interests and our economic prosperity to the freedom of those commons.  Our philosophy comes at a gigantic cost.  This cost relates to our defense spending. The United States spends more on defense than the ten countries combined.  Indeed, the US nearly outspends the rest of the world in defense spending.  Our navy is the only navy that can project decisive power and control over international waters.  Our defense spending will exceed 650 billion dollars in fiscal year 2007.

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LOGISTICS AWARENESS

Logistics is about cost. Logistics is about service. Both are equally important. Cost must not drive the supply chain. Quality service must not make the product uncompetitive. Low cost goals should not be allowed to save on freight dollars while allowing the demurrage costs to go through the roof – or worse, allowed to degrade your own customer service goals. Awareness beyond costs increases the effectiveness of the supply chain. Some issues to consider:

OIL

World Oil production and consumption is about at parity at more than 80 million Bbl per day.  There is a reported 1 million Bbl in spare world-wide capacity production (extraction) that can quickly come on line should a spike in demand or an unexpected decrease in production capacity.  This is a narrow margin.  Iraq, with the second largest oil reserve in the world, is challenged by civil war to increase its production much beyond pre-war (already depressed) levels.  Iran is hampered by restricted foreign investment needed in her oilfields.  Venezuela is well on its way in nationalizing its oil production and the effort has already contributed to a decrease in production.  China will see its consumption increase more than 10% again this year.  2006 represents the third year in a row that the quantity of newly discovered oil did not meet the amount of oil consumed.  It is our opinion that these factors make it unlikely that we can expect any long term significant drop in the price of oil.  In fact, the lack of excess capacity makes the oil infrastructure vulnerable to supply disruption.  $100 bbl oil may be unlikely in the near term but could happen tomorrow following a terrorist attack or a political upheaval in one or more of the big oil exporting countries.

LABOR

During the next year, it is unlikely that port side labor will contribute to delay or stoppages.  Labor instead will continue to work closely with ports.  West coast contract negotiations are staring more than a year ahead of the end of the contract. A possible near term problem appears quiescent at the moment. The ILWU office workers, whose contract expired at the end of last month, continued to work this week as negotiations resumed.  International Longshore and Warehouse Union office workers in Los Angeles-Long Beach continued to work this week. There is some potential for this work issue to shut down the southern California ports. The 900 member office clerical unit is a division of ILWU Local 63, the marine clerks local.

AIRFREIGHT

Congress is set to consider 2 similar bills that will require 100% screening/examination of air cargo.  Despite widespread concern among shippers that full inspection of belly cargo is too costly, the U.S. Congress could pass an air cargo security bill this summer.  The White House opposes the screening provisions, saying the technology does not now exist to handle the level of physical inspection required without impeding the "legitimate flow of commerce."  Air freight rates for Imports on trans-Atlantic routes increased 6.5 percent in April.  Eastbound shipment rates out of the United States to Europe slipped a fraction.  On the Pacific side, Imports to the US saw airfreight prices to decrease 1%, export pricing decreased 2.1% on average.  Domestic express volume slipped 1 percent and the profit engine in the trucking business slowed

OCEAN FREIGHT

Container cargo’s rate of growth has momentarily stopped in early 2007, but it is expected to resume later this year.  During the past several years, the peak season has been a “non event’ even though imports to the USA have been growing at about 9-10% (which means that total volume doubles every 8-9 years).   The situation is changing.  The benchmark container Asian/US container rates have declined slightly over the last 12 months.  Of course, this benchmark does not track the add-ons, Fuel and intermodal being chief.  These costs are increasing faster than inflation.  New vessels are not being introduced and shipping volume is catching up to shipping capacity.  Carriers recently transferred some of the larger capacity vessels to the PRC / Europe lane thus reducing overall capacity to the USA.  Inbound Asian cargo is filling containerships to 95% of capacity.  And this is prior to the beginning of peak season.

The Transpacific Stabilization Agreement (TSA), is recommending that its members impose substantial increases in their fuel surcharges, effective this week.  The bunker surcharge would rise from $745 for 45-foot hi-cube, $715 for 40-foot hi-cube and $590 for standard 40-foot boxes to $805, $715 and $635.  The rate for 20-foot containers would increase from $475 to $510.  The inland fuel surcharge for intermodal rail moves to $211 per container, down from the current $222.  The trade imbalance continues to give US exports some leverage in controlling freight costs.  The ratio is about 2.5 containers inbound for each outbound container.

UNDER INVESTMENT

Investment in land side supply chains, while robust, has not kept up with intermodal growth.  Some predict that Container traffic from Asia to West coast North American ports to increase 300 per cent in the next 15 years.  British Columbia Premier Gordon Campbell was quoted, “You take all the potential growth for Los Angeles-Long Beach…for [Seattle and Tacoma], all the potential growth for [Canada's] Port of Vancouver [and] Port of Prince Rupert, and we don't have enough space, we don't have enough logistics, we don't have enough capacity to deal with that 300-per-cent increase,"

Disruptions

China is a victim of its own magnificent successes.  Management of explosive growth is extremely difficult.  From time to time, logistics are hampered by its very success.  Qingdao market lacking in available containers.  Shipping  companies in Qingdao have been experiencing a severe shortage of container equipment in May and June this year as a result of surging export volume in the city since April, Xinhua reported.  Experts said June is the peak season of American east coast and west coast services as well as the European services, and shipping companies are expected to suffer greater pressure from shortages.  As exports surged, shipping companies also expected to suffer from capacity supply pressures and frequently full vessels, especially on the European and North American routes, the report said

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Plastic ducks arriving after 15 year voyage

A flotilla of plastic ducks is heading for England’s beaches. The ducks began life in a Chinese factory and were being shipped to the US from Hong Kong when three 40ft containers filled with 30,000 plastic bath toys fell into the Pacific during a storm on January 29, 1992. Two thirds of them floated south through the tropics, landing months later on the shores of Indonesia, Australia and South America. But 10,000 headed north and by the end of the year were off Alaska and heading back westwards. It took three years for the ducks to circle east to Japan, past the original drop site and then back to Alaska on a current known as the North Pacific Gyre before continuing north towards the Arctic. Some of the ducks, known as Friendly Floatees, are expected to reach Britain after a journey of nearly 17,000 miles, having crossed the Arctic Ocean frozen into pack ice, bobbed the length of Greenland and been carried down the eastern seaboard of the United States. Those that had not been trapped in circulating currents in the North Pacific, crushed by icebergs or blown ashore in Japan are bobbing across the Atlantic on the Gulf Stream and on their way to England.

High Security Bolt Seal 

As of May 25 the, 2005,  U.S. customs has formally launched the requirement that all maritime cargo containers entering through U.S. ports from foreign points of origin must be secured with a high security seal, which complies with strength values as specified in the ISO -17712 standards.

Presently, most of the countries have adopted this principle and today it is commonly required for containers to be carried sealed with high security bolt seals.

We are pleased to advise out that the seals we purchase for laden containers are all high security seals (cable/bottle) meeting the ISO 17712 standards for high security seals.

On the other hand, substantial quantities of containers carried by the company are still sealed by the supplier's seals, for which we have no control and are low standard plastic seals and/or others.

In case a container arrives at destination bearing an unauthorized seal, namely not high security bolt seal, the authorities may take serious financial and/or criminal measures, such as the detaining and/or seizing of containers, emptying the cargo, fines, etc.

We, as carriers, will reject any responsibility and/or liability, which may result from the above and will debit the Merchant with all our costs.

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WORLD TRADE

The United States office of Foreign Assets Control has issued new guidelines concerning trade with the Palestinian authority.

The United States government has concluded that it is in the national interest to authorize U.S. persons to engage in all transactions with the Palestinian Authority in light of the appointment of Prime Minister Salam Fayyad and a slate of ministers who are not affiliated with the designated terrorist group Hamas. Accordingly, OFAC has issued a general license (General License No 7) authorizing such transactions. More generally, while OFAC sanctions do not prohibit U.S. persons from providing assistance to, or engaging in business dealings with, undesignated private individuals, corporations, or organizations in the West Bank or Gaza, U.S. persons should be aware that dealings with designated terrorist entities such as Hamas or other designated persons remain prohibited.

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U.S., New Zealand Establish Joint Trade Security Arrangement
Friday, June 29, 2007

A major step toward implementing the Customs-to-Business pillar of the World Customs Organization’s SAFE Framework of Standards was accomplished today when W. Ralph Basham, Commissioner of United States Customs and Border Protection, and Martyn Dunne, Comptroller and Chief Executive of the New Zealand Customs Service, signed a Mutual Recognition Arrangement at the 109th/110th WCO Council Sessions held in Brussels, Belgium.

This is the first such arrangement entered into since the adoption of the Framework in June 2005. It will assist the two nations in safeguarding global trade.

The arrangement will provide for closer cooperation and coordination between CBP’s Customs-Trade Partnership Against Terrorism program and the New Zealand Customs Service’s Secure Export Scheme. New Zealand's Secure Exports Scheme is a voluntary arrangement where goods exported by New Zealand program participants are packed and transported securely, without interference, to the place of shipment.

Once the two countries have established the compatibility of the membership levels between their supply chain programs, each country is expected to treat members of the other country's program in a manner comparable to that of its own members.

Mutual recognition by U.S. and New Zealand customs administrations of their respective customs-to-business partnerships will benefit both industry and government. For industry, the benefits could include reduced costs of doing business, decreased pilferage and, due to speedier clearance times, increased control over “just-in-time” deliveries. Governments will be able to direct resources to priority areas.

"Today’s announcement represents an important step in SAFE Framework implementation," said Commissioner Basham. "I believe customs-to-business partnerships are an essential component of today’s global economy and that mutual recognition will enhance supply chain security and facilitation for U.S. and New Zealand businesses".

"I am pleased that Comptroller Dunne continues to demonstrate his strong commitment to making the SAFE Framework the success it is today," Basham added.

Comptroller Dunne says the agreement is recognition by the U.S. of New Zealand program participants as low risk trading partners, especially when trading with U.S. C-TPAT partners. "This is a further step in what is already a close working relationship with U.S. CBP, and a significant achievement toward the WCO Framework. It shows both our countries are committed to trade facilitation while fully supporting global security".

"It also provides an opportunity for New Zealand Customs to engage with other trading partners who have reciprocal standards for their trade security," said Comptroller Dunne.

CBP is the agency of the Department of Homeland Security charged with safeguarding U.S. borders from terrorist activity while facilitating legitimate travel and trade. CBP takes a leadership role in global trade security programs and is an active member of the WCO.

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United States and Vietnam Sign Trade and Investment Framework Agreement
06/21/2007

WASHINGTON, DC – The United States and Vietnam today signed a Trade and Investment Framework Agreement (TIFA) that will create a platform on which to further expand and deepen bilateral trade and investment ties between the two countries. 

“The TIFA signing marks another important step forward for both countries in the steady expansion of our economic relations,” said Ambassador Karan Bhatia, who signed the TIFA on behalf of the United States.  “I am pleased with the ambitious work program we’ve agreed to undertake under the TIFA, which will support Vietnam’s domestic economic reform agenda, create new opportunities for U.S. and Vietnamese businesses, and allow us to consider additional steps we may want to take to further strengthen our relationship.”

Signing on behalf of Vietnam was that country’s Vice Minister of Trade Nguyen Cam Tu.

Under the TIFA, the United States and Vietnam will discuss implementation of the 2001 U.S.-Vietnam Bilateral Trade Agreement (BTA) and Vietnam’s WTO commitments.  The two sides also will explore new initiatives to increase trade in industrial and agricultural products and services, and to encourage further investment between the two countries.

Earlier this week, U.S. and Vietnamese officials held their annual review of Vietnam’s progress in implementing the BTA.  They discussed a broad range of issues including importation rights for U.S. firms, licensing procedures for U.S. investors and service providers, intellectual property rights, customs, and agriculture issues. 

“We applaud the substantial progress Vietnam has made to implement its bilateral and WTO commitments and to reform and open its economy,” said Ambassador Bhatia.  “While there is additional work to be done, we look forward to continuing to support Vietnam’s efforts, which have generated impressive economic gains and boosted immensely Vietnam’s regional and global competitiveness.”

Background

Two-way goods trade between Vietnam and the United States totaled $9.7 billion in 2006, an increase of 23 percent over the previous year.  The United States exported $1.1 billion worth of goods to Vietnam last year.  Vietnam became the WTO’s 150th Member on January 11, 2007.  With a market of over 82 million people, Vietnam is the 14th most populous nation in the world and has experienced economic growth of more than 7 percent per year for each of the last five years.

The TIFA negotiations between the United States and Vietnam were launched in March 2007, during the visit to Washington of Vietnam’s Deputy Prime Minister and Foreign Minister Pham Gia Khiem.  The TIFA was negotiated under the Enterprise for ASEAN Initiative (EAI).  President Bush launched the EAI to further strengthen ties with countries in the commercially and strategically significant Southeast Asian region, and the United States now has TIFAs with Brunei, Cambodia, Indonesia, Malaysia, Philippines, and Thailand, and an FTA with Singapore.

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United States and Panama Sign Trade Promotion Agreement
06/28/2007

WASHINGTON, D.C. – U.S. Trade Representative Susan C. Schwab and Panamanian Minister of Commerce and Industry Alejandro Ferrer today signed the United States – Panama Trade Promotion Agreement, a comprehensive trade agreement that will eliminate tariffs and other barriers to the trade in goods and services between the United States and Panama.

“Today’s signing marks the beginning of a new era in the long-standing, yet still evolving commercial partnership between the United States and Panama.  This is an historic agreement between two countries that for over a century have been joined by bonds of shared values, community, and friendship,” said Ambassador Schwab.  “This agreement includes important commitments on market access as well as ground-breaking labor and environment provisions, a result of the bipartisan agreement between the Bush Administration and Congressional leadership.  This agreement will promote increased economic growth and prosperity for both of our nations and will generate significant economic opportunities for U.S. workers, consumers, manufacturers, farmers and ranchers by leveling the playing field for U.S. exports to Panama.  In turn, the agreement will serve as a catalyst to further develop and diversify Panama’s economy and promote investment between the two countries.”

Minister Ferrer stated, “This agreement reinforces the shared vision of both countries that trade can become a major tool for economic and social growth.”  He continued by saying, “This is really a partnership for growth and we are confident it will create significant opportunities, and new jobs, especially for small and medium Panamanian companies and in our rural areas; as well as promote entrepreneurship, innovation, and competition necessary to succeed in the 21st century economy.”

“This agreement with Panama is instrumental in our strategy to advance democracy, the rule of law, security, and market-based development within our hemisphere,” Ambassador Schwab continued.  “Panama is a valued partner of the United States on many fronts – from counternarcotics to antiterrorism – and we will work with Panama to enhance its role as a commercial and financial crossroads in today’s global economy.  We look forward to continuing to build bipartisan support for the United States – Panama Trade Promotion Agreement in the U.S. Congress in order to quickly approve this agreement.”

Background

The United States and Panama launched negotiations on a free trade agreement in April 2004 and have incorporated amendments derived from the bipartisan trade agreement between the Bush Administration and Congressional leadership.  The United States had a goods trade surplus with Panama of $2.3 billion in 2006, and is Panama’s largest trading partner.  Total goods trade between the United States and Panama was $3.1 billion in 2006.  Panama is a growing market for U.S. products.  U.S. goods exports to Panama increased 25 percent from 2005 to 2006. 

Panama is predominantly a services-based economy, with services accounting for about 80 percent of economic activity.  The Panama Canal is the focal point of Panama’s economy, with much of the country’s economic activity tied to the canal’s infrastructure and to the logistics and financing of international shipping.  The trade agreement will provide U.S. exporters significant opportunities to participate in the $5.25 billion expansion plan for the Panama Canal, which is due to begin in 2008 and is expected to be completed by 2014.

Like many other developing countries, Panama already enjoys broad duty-free access to the U.S. market through various trade preference programs designed to promote economic development, such as the Caribbean Basin Initiative (CBI) and the Generalized System of Preferences (GSP).  In 2006, 96 percent of U.S. goods imports from Panama entered the U.S. duty-free under current preference programs and our most-favored nation duty-free rates.  Meanwhile, only 25 percent of U.S. industrial exports and 34 percent of U.S. agricultural exports entered Panama duty-free.  The trade agreement will eliminate tariffs on U.S. exports to Panama and secure permanent duty-free access for exports from Panama to the United States.   In addition, the agreement will help support democratic and economic reforms undertaken by Panama’s leaders and spur additional reforms of Panama’s domestic legal and business environment that are important to encourage investment, enhance regulatory transparency, and strengthen protections for workers and the environment.

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U.S., South Korea sign free trade agreement
www.chinaview.cn  2007-07-01

WASHINGTON, June 30 (Xinhua) -- The United States and South Korea on Saturday signed a free trade agreement, the biggest such U.S. deal since the North America Free Trade Agreement 15 years ago.

Under the agreement, tariffs on nearly 95 percent of trade in consumer and industrial products between the United States and South Korea, its seventh-largest trading partner, will be phased out within three years.

Meanwhile, almost two-thirds of U.S. farm exports will be immediately duty-free when the agreement is implemented, said U.S. Commerce Secretary Carlos Gutierrez said in a statement.

The deal also expands business opportunities for U.S. service providers in sectors ranging from banking to telecommunications to express delivery.

"This is the most commercially significant trade agreement for the United States in nearly 15 years and is another step toward fulfilling President Bush's trade agenda to promote U.S. exports, promote economic growth and raise living standards," Gutierrez said.

The two-way trade between the United States and South Korea topped 75 billion dollars in 2006, according to the Commerce Department.

The agreement, which was inked by U.S. Trade Representative Susan Schwab and her South Korean counterpart Kim Hyun-chong, came hours before U.S. President George W. Bush's trade promotion authority (TPA) expires at midnight Saturday.

The deal could face strong opposition in the Democratic-controlled U.S. Congress, according to analysts.

Democrats complain that the agreement opens the U.S. market to more South Korean cars while failing to tear down non-tariff trade barriers that they blame for a huge imbalance in automotive trade between the two countries, news reports said.

TPA, known as "fast-track" authority, allows the administration to negotiate free trade agreements which only can be approved or rejected by Congress, but not amended. The legislation expires on June 30 after five years in force.

On Friday, Schwab, Gutierrez and other senior officials from the Bush administration urged Congress to renew TPA so the country can negotiate more trade deals with the rest of the world.

House of Representatives Speaker Nancy Pelosi and other leading Democrats, however, said that "our legislative priorities do not include the renewal of fast-track authority." 

Editor: Mu Xuequ

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Statement by U.S. Trade Representative Susan C. Schwab regarding the expiration and renewal of Trade Promotion Authority
06/29/2007

"America needs to remain open for business to the 95 percent of the world’s consumers living outside the United States. American workers cannot afford for us to hang up a ‘Closed for Business’ sign. The United States must be in the game and not on the sidelines as other nations negotiate deals that disadvantage our businesses, farmers, ranchers and service providers. Our trading partners and competitors are already negotiating and closing trade deals around the world. At least 100 regional trade agreements have gone into force since 2002 and more than 100 are under negotiation. The President – indeed every President – should have TPA to ensure that the United States can best advance our country’s trade interests.

President Bush has used Trade Promotion Authority to open new markets for American farmers, ranchers, manufacturers, and service providers.  With TPA, the United States was at the negotiating table, and able to reaffirm U.S. leadership in expanding the free and fair flow of commerce around the world to the benefit of the U.S. economy.   U.S. exports to the ten countries with which we have implemented FTAs since 2001 have increased nearly twice as fast as U.S. exports to the rest of the world (25% vs. 13%).  These exports have contributed to solid economic growth and job creation.   Our agreements also provide American workers and their families a wider range of affordable products.  

The Bush Administration and Congressional leaders have found a bipartisan path forward for Congressional approval of FTAs with Peru, Colombia, Panama, and Korea.  I am hopeful this spirit of cooperation will guide our efforts to renew TPA, as President Bush requested in January, to keep the United States at the table negotiating for the continued benefit of the American people.”

Service Advisory for customers that ship with APL

Import Per Diem Billing Policy

Store Door Deliveries vs. CY Moves Policy Reminder & Key Email Box Contact

Store Door Delivery Per Diem Policy

Under the scenario where APL is performing the loaded delivery to your location and the container is “dropped” at your facility, the per diem clock starts when the container leaves the APL operational facility. Once customers are in possession of the container, it is your or your agents responsibility to advise APL as to when the container has been unloaded and is available for pick up.  To communicate this empty availability, please send an email to the appropriate regional email address noted below and include the container numbers that are now available. Only then will APL update the container to reflect the empty status, thus stopping the Per Diem clock. 

Central     apl.ctlmty@apl.com
Northeast       kea-mty@apl.com
Pacific Central pctmty@apl.com 
Pacific Northwest       pnwmty@apl.com 
Pacific Southwest       pswmty@apl.com 
South Florida   sflmty@apl.com 
Southern        stnmty@apl.com 

Per Diem billing will be generated if the container has been in your possession beyond the agreed to free time at the time of your notification of availability.   If the empty availability date differs from the date the email notification is received, APL will use the date that the notification is received as the availability date.  Customers need to ensure they advise APL personnel via the email addresses noted and not the trucker who performed the delivery. 

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ASIA

China, U.S. to Step Up Anti-Piracy Work

Beijing Cultural Law Enforcement Agency officers destroy pirated DVDs and CDs video and music material in the outskirts of Beijing, China Saturday April 14, 2007. China has promised to pursue product pirates identified by American authorities in a new effort to stamp out its thriving counterfeit industry, the head of the U.S. Customs agency said Friday June 15, 2007. (AP Photo/Elizabeth Dalziel, FILE

By JOE McDONALD  AP Business Writer

BEIJING (AP) - China has promised to pursue product pirates identified by U.S. authorities in a new effort to stamp out its thriving counterfeit industry, the head of the U.S. Customs agency said Friday.

The agreement comes amid mounting concern that Chinese pirates are endangering public safety in the United States and elsewhere by selling fake medicine, auto parts and other goods.

China accounted for about 80 percent of the 14,775 shipments of counterfeit goods seized at U.S. ports last year, said W. Ralph Basham, commissioner of U.S. Customs and Border Protection.

Under a memorandum of cooperation signed this week, U.S. Customs will provide China with information on the source of seized goods, and Beijing will report back within 90 days on the status of efforts to track down the counterfeiters, Basham told reporters.

"We've got to start dealing with the source of the problem. We can't expect to rely upon interdiction to be our tool in order to stop these products," Basham said.

China has long been the world's leading source of illegally copied goods ranging from designer clothes to movies and music. But concern about possible danger to the public has risen following the discovery of a toxic chemical in Chinese-made toothpaste.

Basham said his talks with Chinese officials did not touch on tainted products, which he said was the responsibility of the U.S. Food and Drug Administration. He said the FDA was in touch with Chinese officials.

Under foreign pressure, China has increased penalties for piracy and launched repeated crackdowns. But business groups including the U.S. Chamber of Commerce and the Motion Picture Association of America say the scale of piracy is growing faster than enforcement.

Basham met with his Chinese counterpart, Mu Xinsheng, and other officials this week.

Basham said American officials offered China help with security for the 2008 Beijing Olympics. He said that might include support from a U.S. program used at several foreign airports to identify travelers who might be barred from the United States.

Copyright 2007 The Associated Press.

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Commerce Department Announces Updated Export Controls for China
WASHINGTON June 15, 2007

 The Commerce Department’s Bureau of Industry and Security (BIS) today announced significant changes to U.S. dual-use export licensing policy for certain high-technology exports to the People’s Republic of China.

BIS will remove individual license requirements for certain authorized customers in China while imposing new licensing requirements on a targeted list of items that could contribute to China’s military modernization.

"This new rule strikes the right balance in our complex relationship with China," said Commerce Secretary Carlos M. Gutierrez. "It is a common-sense approach that will make it easier for U.S. companies to sell to pre-screened civilian customers in China, while at the same time denying access to U.S. technology that would contribute to China's military. The steps we are taking today are good for national security, and for American exporters and jobs."

The rule creates the Validated End-User (VEU) program, an innovative way to facilitate exports to trusted customers in China. Companies in China that qualify for VEU will be authorized to receive certain U.S.-controlled items without individual export licenses. The Commerce Department expects to publish an initial list of approved Validated End-Users as early as next month. As the program expands and matures, it could facilitate millions of dollars of U.S. exports to China. Sectors likely to benefit from VEU include electronics, semiconductor equipment, and chemicals.

The updated regulations also impose new controls on a focused list of items if they are destined for military end-uses in China. The controls target items that could enhance China’s military if incorporated into weapons systems, and are consistent with the longstanding U.S. embargo on arms exports to China.

The list of items covers 20 product categories and associated technologies and software, as described in 31 entries on the Commerce Control List. Items subject to the new military end-use control include aircraft and aircraft engines, avionics and inertial navigation systems, lasers, depleted uranium, underwater cameras and propulsion systems, certain composite materials, and some telecommunications equipment for space communications or air defense. This list was carefully developed by the Departments of Commerce, Defense and State to target militarily useful items not widely available on world markets.

Background

The Commerce Department’s Bureau of Industry and Security (BIS) is charged with the development, implementation, and enforcement of U.S. export control policy for dual-use commodities, software, and technology. Dual-use items subject to BIS regulatory jurisdiction have predominantly commercial uses, but also have conventional military and weapons of mass destruction applications.

Under the “Validated End-User” VEU Program, certain “trusted customers” in China, companies that qualify, with a track record of responsible civilian use of U.S.-controlled technology will be able to receive certain items without individual export licenses.

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Qingdao encounters worsening container shortage

SHIPPING companies in Qingdao experienced a severe shortage of containers in May and June this year as a result of surging export volume in the city since April, Xinhua reported.

Although the shipping companies had made adjustments, the demand of Qingdao market for containers still is greater than supply, said the report, which earlier had lost its meaning in translation, and it was wrongly reported that the port faced an equipment shortage rather than a container shortage.

Experts said June is the peak season of American east coast and west coast services as well as the European services, and shipping companies are expected to suffer greater pressure from shortages.

As exports surged, shipping companies also expected to suffer from capacity supply pressures and frequently full vessels, especially on the European and North American routes, the report said.

China's Consumer Market: Opportunities and Challanges
6/11/2007 - by Prema Nakra

Everyone is talking about the People’s Republic of China (PRC or China), and not just because the country is hosting the next Olympic Games. Today China stands tall as a one of the fastest growing economies in the world. In the last three decades, as per the latest figures, China’s economy grew by 10.6%. The Chinese economy has gone from being a lumbering agrarian economy 25 years ago to a rapidly developing economy today. China-based factories make 70% of the world toys, 60% of world’s bicycles, 50% of world’s shoes, and 33% of world’s luggage.

The first part of the article, discusses the miracle of China’s economic growth and what multinational corporations have done to succeed—and fail—in the Chinese marketplace. The second part of the article, addresses some of the challenges International marketers face in their efforts to win the hearts and minds of Chinese consumers and other stakeholders.

AN INTRODUCTION TO THE CHINESE MARKETPLACE

At the present time China’s economic growth is in the golden era with high growth and low inflation. China is now the third largest trading nation and one of the fastest growing markets for U.S. goods and services. China’s economic miracle can be attributed to soaring exports and huge investments in buildings and the requisite infrastructure. Foreign investment is flowing in; trade is rising, as are the real estate and stock prices. China has received the highest Foreign Direct Investment (FDI) in the world. FDI in China was $63 billion in 2006.

Between 1985 and 2003, China has consistently been the world’s fastest growing economy with an average growth rate of nine percent. Since its entry into the World Trade Organization in 2001, China has been seen in a new light, not just the world's center of low cost manufacturing, but also as a legitimate consumer market open for global business. Currently, about 80% of the world’s top 500 companies have invested in China.

China’s Vast Consumer Market

The Chinese consumer market is growing by leaps and bounds as is evidenced by the sales record of many consumer durable products. According to The Economist magazine, car sales in China have risen by 30% over the last year. Sales of mobile phones and household electronics are up by 20% to 40%. Retail sales grew by 12.3% in real terms in 2006.

Already there are an estimated 300,000 Chinese with a net worth of $1 million USD or more, but it is not just millionaires who are on a buying spree. The China Branding Strategy Association claims that some 175 million Chinese can afford to buy luxury products. In a recent survey by the China Market Research Group, CMR, 60% of respondents claimed to have purchased luxury goods. A large majority of these (89%) luxury goods buyers were between the ages of 20 and 30 with assets less than $25,000 USD. Most foreign consumer companies decided to position their products at the top of China’s market pyramid.

Multinationals That Succeeded!

With their vast capital, technology and product lines, early entrants into China were the well recognized brand name owners such as Coke, Pepsi and P&G. These global giants practically scooped up the market with the power of their marketing offenses and the acquisition of existing local leading brands. Gaining a dominant market share was relatively easy for these early adopters.

Examples of successful marketers in China are illustrated here:

• Johnson and Johnson is now a very enviable household name in China and Volkswagen produces cars for 80% of Shanghai taxis. Nokia, Erickson, Honda, Buick, Sony, Glaxo, Phillips and Pierre Cardin have all been engrained in minds of Chinese consumers as brands of choice.

• Three years after its entrance in the Chinese market, Bentley has sold 133 cars (19 of which carried price tags over $1 million USD). In 2004 the total number of Bentleys sold in China was 56, with total revenues of $28 million USD, making China the third biggest Bentley market after America and Japan.

• In 2005 BMW sold 23,595 vehicles in the Chinese mainland, up 52% from 2004. In the first six months of 2006, BMW had already sold 16,833 vehicles to mainland China, a 78.4% increased from the previous year.

• China imported 20 million bottles of whiskey like Chivas Regal worth $87 million in 2005, an 86% increase over 2004.

• Car sales in China have risen by 30% over last year. Sales of mobile phones and household electronics are up by 20% to 40%. Retail sales grew by 12.3% in real terms.

Multinationals That Retreated!

Some Western business leaders are moving into China without any clear knowledge of the many pitfalls they will encounter: the weak rule of law, forceful government intervention, a scarcity of managerial talent, the likelihood of counterfeiting, a fast-paced business environment and highly aggressive local competitors.

Here are a few examples:

• Many global brewers entered China's market in the early 1990s trying to sell premium beer only to exit a few years later in the face of tough competition from countless low-cost Chinese brewers. The companies obviously rushed to market without a sufficient understanding of China’s market dynamics.

• In the high-technology industry, Google has lost market share to the search engine Baidu. Baidu.com is an internet search engine start up that began operating a few years ago and has one of the most trafficked websites in the world. The look of its home page is similar to that of Google, which invested in Baidu several years ago, but then sold its small stake at huge gain last year after Baidu went public on the NASDAQ. According to iResearch, Baidu commanded 63% share of the market Google was second with 19% and Yahoo with 7.6%.

• Yahoo recently transferred its operations to a Chinese company Alibaba.com and eBay even after buying one of its biggest competitors in China continued to lose ground. In December 2006, eBay handed over its operations to Tom.com, which is based in Hong Kong, in a joint venture.
  Article Courtesy www.i-b-t.net

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Enhancing Secure Trade with China

Remarks by