Reconciling U.S., Mexican and Canadian de minimis levels, and lowering the U.S.’s current $800 level if necessary, could prove difficult within NAFTA renegotations, Jon Kent, a lobbyist for the National Customs Brokers & Forwarders Association of America, said Sept. 11 during the NCBFAA Government Affairs Conference. While some believe that raised de minimis levels are good for U.S. small businesses, Kent believes that’s a “fairy tale” that rapidly increased imports. “It chews up a lot of business,” Kent said of the U.S.’s now $800 de minimis level.
The Justice Department’s recent intervention in a whistleblower case against a UK retailer that allegedly split shipments on its U.S. imports to avoid duties “sends a clear message that this behavior will not be tolerated,” said the law firm Constantine Cannon, which represents the whistleblower, in a Sept. 8 press release. The July complaint alleges that Pure Collection and its executive Samantha Harrison deliberately split large orders so their shipments to the U.S. would fall under the $200 de minimis threshold, later raised to $800, despite knowing the practice violated customs rules.
Trade executives agreed during a Sept. 6 conference that better alignment of NAFTA de minimis levels could benefit commerce, but offered different opinions on the best path toward uniformity. Jon Kent, who lobbies for the National Customs Brokers & Forwarders Association of America (NCBFAA), said during the Air Cargo Industry Summit that there should be a “reconciliation” between de minimis thresholds in the U.S., Canada and Mexico but that the U.S. $800 level might not be the optimal benchmark. He suggested the Trump administration might even consider reducing the level to help close the gap between the U.S. standard and Canada’s $15 threshold and Mexico’s $50 benchmark. “You’re importing huge quantities of goods,” he said. “I don’t know how the administration can reconcile that big jump in imports with its own predispositions.”
CBP and other agencies involved in trade still have some ways to go before resolving an ongoing debate on how to describe goods in Section 321 shipments, said Christa Brzozowski, deputy assistant secretary for trade and transport at the Department of Homeland Security, at the U.S. Air Cargo Industry Affairs Summit Sept. 6 in Washington. The government still needs to work through process issues related to what goods are eligible for expedited release, and what role partner government agencies (PGAs) will have in the process, before considering whether to require 10-digit Harmonized Tariff Schedule numbers or written descriptors, she said.
NAFTA talks probably will extend past the U.S.’s hoped-for deadline of Dec. 31, as major differences among the three parties involved start to emerge and the U.S. lacks political direction on several fundamental issues, trade analysts said Sept. 5. The U.S. during the second round of renegotiations Sept. 1-5 in Mexico City floated domestic content requirements for automobiles under NAFTA, but didn’t put forth a definitive threshold, a trade lobbyist said. U.S. negotiators have bandied about the possibility of a 35 percent to 50 percent requirement for U.S. automobile content, and are likely to go to the third round in Ottawa with a more specific proposal, the lobbyist said.
International Trade Today is providing readers with some of the top stories for Aug. 28 - Sept. 1 in case they were missed.
Mexico and Canada are resisting a U.S. push to raise their de minimis levels to the U.S.’s $800 threshold, and the U.S. faces time pressures on other NAFTA issues, including dispute settlement and rules of origin, unofficial advisers involved in NAFTA negotiations said in recent interviews. The U.S. and Mexico, in particular, are hoping to conclude NAFTA renegotiations by the end of 2017, with three weeks between rounds, a comparatively short timeline for trade agreement talks that also demands negotiators act more quickly than in past U.S. negotiations, the advisers said. The three NAFTA parties are undertaking the second round of renegotiations in Mexico City Sept. 1-5.
International Trade Today is providing readers with some of the top stories for Aug. 21-25 in case they were missed.
Among the express industry’s hopes for CBP regulatory reforms is elimination of rules governing importer storage of records of a non-original format, and switching from a district permit structure to a “customs territory permit structure,” according to a list of recommendations provided by the Express Association of America to Tim Skud, Treasury Department deputy assistant secretary for tax, trade. Skud mentioned the recommendations at the Aug. 23 meeting of the Commercial Customs Operations Advisory Committee, and said the EAA's were the only ones he had received so far. CBP is in the process of compiling an "inventory" of deregulatory actions to comply with Trump administration initiatives including the two-for-one rule, officials have said (see 1705090020).
Multiple recommendations submitted by the Commercial Customs Operations Advisory Committee (COAC) for Section 321 entries proved to be contentious, eliciting disagreement among members during the Aug. 23 COAC meeting in San Diego. The presentation of the recommendations at the meeting included the unusual step of votes and discussions on each individual recommendation. While some of the recommendations faced opposition, all were ultimately approved by the COAC. "There's a lot of uncertainty in this area because it's a new and different model that was not necessarily envisioned or anticipated by the market, by those that are participating in it or by our government partners," said Cindy Allen, the co-chair of the Trade Modernization Subcommittee.