Maritime transport exclusion among FTA requests

Date: Wednesday, January 23, 2019
Source: American Shipper

Commenters recently submitted their requests for provisions in a potential U.S.-United Kingdom free trade agreement.

The portal had been experiencing technical issues last week amid an ongoing government shutdown, but the comments were viewable as of Monday and Tuesday.

U.S. regional and bilateral free trade agreements have expressly excluded maritime transport services, addressing only the landside aspects of port activities, and have grandfathered the U.S. build requirement of U.S. cabotage laws, the United States Maritime Coalition said in its comments.

Including maritime transportation matters in any U.S.-U.K. trade agreement “would allow foreign-flag ships with foreign seafarers to enter our domestic trades, threaten our shipbuilding industry and put at risk the jobs of thousands of American seafarers and shipyard workers,” the coalition said.

The U.S.-U.K. trade agreement should exclude the Jones Act and related cabotage laws, the coalition said.

The American Association of Exporters and Importers (AAEI) called for reciprocity between the U.S. and U.K. in allowing goods to be precleared in transit and identified systematically to avoid border delays, recommending adoption of an “easy pass” program similar to the Free and Secure Trade (FAST) program, which allows expedited processing for vetted commercial carriers entering the U.S. from Canada and Mexico.

AAEI also called for a U.S.-U.K. agreement to provide a maximum 48-hour release for goods originating in either territory, customs rulings issued within 150 days and valid for a minimum of three years, and creation of an ombudsman role to address customs matters under the pact.

AAEI also endorsed comments by the Duty Drawback Coalition supporting full duty drawback and deferral programs in any U.S.-U.K. free trade agreement.

Deferral refers to the deferral by foreign-trade zone operators of payment of import duties, taxes and fees on imported foreign component parts or raw materials until those goods or the finished product incorporating those goods are entered into the U.S. market for consumption. If the goods are never entered for consumption, and instead exported, the duties, taxes and fees aren’t paid.


“The most efficient way to ensure that free trade and duty drawback/deferral work together to maximize U.S. trade with member countries of an FTA is to exclude any language about duty drawback/deferral in the FTA,” the Duty Drawback Coalition said. “This would provide the desired effect of allowing each member country’s duty drawback/deferral program to continue to function in an unrestricted manner, thereby serving to increase and make more competitive U.S. exports.”

The U.S.-Chile Free Trade Agreement, NAFTA and U.S.-Mexico-Canada Agreement (USMCA) include provisions that restrict the use of drawback, predicated on the premise that the pacts reduced import tariffs on FTA partners, the coalition said.

The U.S. Council for International Business (USCIB) agreed that any bilateral FTA with the U.K. should exclude drawback restrictions and called for the U.S. to provide leadership in talks with London — which will be reassuming an independent role in trade negotiations post-Brexit — to ensure the countries “reduce and constrain protectionism” through tariff reductions and facilitation of customs clearance procedures.

USCIB also suggested improving on common data elements for import and export, streamlined clearance to allow immediate release of goods upon arrival, binding rules on express delivery shipment channels, facilitation of electronic customs documentation via single-window platform, alignment of trusted trader programs and a centralized system for publication of binding tariff classification rulings.

Any U.S.-U.K. FTA should include “smart” customs provisions mirroring those included in USMCA and drawing upon the World Trade Organization Trade Facilitation Agreement, which both countries are a part of, said the American Apparel and Footwear Association (AAFA).

The prospective pact should treat trusted traders as partners and focus enforcement activities on traders more likely to present risks, AAFA said.

Further, customs provisions should apply to the whole agreement and not “single out any one industry” and should allow claims to be made at the six-digit harmonized tariff system code level where possible and reduce the need for codes at the 10-digit level, the association said.

Any U.S.-U.K. trade negotiations will largely hinge on Brexit execution.

Last week, the U.K.’s Parliament overwhelmingly voted against British Prime Minister Theresa May’s plan for the U.K. to leave the EU, casting uncertainty upon how, exactly, the U.K. will pull out ahead of a March 29 hard deadline to leave the bloc.

If lawmakers can’t agree on a plan, that would give way to a so-called “no-deal” Brexit, in which case the U.K. would automatically exit the EU with no agreement on its trading relationship with Europe.


The interagency Trade Policy Staff Committee is scheduled to hold a hearing to solicit further input for a potential U.S.-U.K. FTA on Jan. 29 in Washington, D.C.


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