Friday, February 15, 2013

Transatlantic Shipping Trade Negotiations Annoy UK Freight Forwarding Sector

Whilst Discussions Continue on a Free Trade Agreement British Agents See Themselves Sold Short
Shipping News Feature

EUROPE – US – As talks are announced regarding a potential Free Trade Agreement between the two continental powers which could simplify and revolutionise the €450 per annum transatlantic trade there are rumblings in UK freight forwarding circles that another agreement, potentially a precursor to the main agreement and involving the security concerns when shipping goods between the partners, does not appear to hold all that it originally seemed to promise.

The U.S. Customs and Border Protection (CBP) and the European Union (EU) have fully implemented mutual recognition of the CBP’s Customs-Trade Partnership Against Terrorism (C-TPAT) programme and the EU’s Authorised Economic Operator (AEO) programme. Although welcoming the news, the British International Freight Association (BIFA) is disappointed by the small print in the agreement. BIFA Director General, Peter Quantrill said:

“We are disappointed that freight forwarders and customs brokers which are AEO-accredited will not benefit from the reduced risk scores under the [Mutual Recognition Arrangement] MRA. When we studied the contents of a question and answer paper on the EU-US Mutual Trade Recognition Decision, we were surprised to see that the reduced risk scores benefit only applies to EU exporters and manufacturers which are AEO-accredited, not customs brokers and freight forwarders.

“It is clear that an AEO-accredited freight forwarder might only benefit indirectly from a reduced risk score if the manufacturer/exporter of the goods that are exported is an AEO. BIFA welcomes all attempts which do not compromise national interests to improve trade facilitation for goods moving across international frontiers.

“Since the programme started, BIFA has consistently supported the concept of AEO, and encouraged its members to work towards accreditation. To acquire the accreditation requires considerable effort in time, money and human resources. It is extremely disappointing that the efforts of our members to improve supply chain security and customs compliance are not recognised by EU and US regulators, who have overlooked the sector’s efforts to support their trade security ambitions.”

This final phase of the agreement provides reciprocal benefits to C-TPAT members when exporting to EU member states. These benefits which include lower risk score and fewer exams when shipping cargo were provided to members exporting into the U.S. in Phase I of the agreement which was implemented in July 2012. The agreement was first signed in May 2012 by CBP Deputy Commissioner David V. Aguilar and European Union Taxation and Customs Union Directorate, Director-General Heinz Zourek.

The goal of these arrangements is to link the various international industry partnership programs, so that together they create a unified and sustainable security posture that can assist in securing and facilitating global cargo trade.

C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. C-TPAT recognised that U.S. Customs and Border Protection can provide the highest level of cargo security only through close cooperation with the ultimate owners of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers. The C-TPAT program is one layer in CBP’s multi-layered cargo enforcement strategy. In addition to the European Union, CBP also has mutual recognition agreements with Canada, Japan, Jordan, Korea, New Zealand and Taiwan.

As to the potential for an expansion of free trade, European Commission President Jose Manuel Barroso, responding to President Obama’s State of the Union speech, this week observed that EU countries could benefit from a half percent growth in GDP if the talks, first begun in 2011, reached fruition. He said:

"A future deal between the world's two most important economic powers will be a game-changer, giving a strong boost to our economies on both sides of the Atlantic.”

The President concurs with this view and said that US trade would benefit equally, particularly as a firm trade deal would ‘level the playing field’ for the burgeoning Pan Asian trade. The likelihood however, given the history of such intercontinental relations coupled with players on both sides protectionist histories, is that the talks will still be continuing perhaps until the President has left the stage as even EU delegates are stating that the discussions will require at least a further two years before any tangible results are to be seen.