he United States Mexico Canada Agreement (USMCA) is an updated version of the nearly 25-year-old, trillion-dollar North American Free Trade Agreement (NAFTA). It includes major changes on cars and new policies on labor and environmental standards, intellectual property protections, and some digital trade provisions.

Here’s a brief overview of what’s in it:

Country of origin rules: Automobiles must have 75 %of their components manufactured in Mexico, the US, or Canada to qualify for zero tariffs (was 62.5 % in NAFTA).

Labor provisions: 40 to 45 % of automobile parts must be made by workers who earn at least $16 an hour by 2023.

US farmers get more access to the Canadian dairy market: The US got Canada to open up its dairy market to US farmers.

Intellectual property and digital trade: The deal extends the terms of copyright to 70 years beyond the life of the author (up from 50). It also includes new provisions to deal with the digital economy, such as prohibiting duties on things like music and ebooks, and protections for internet companies.

GB Export Health Certificates (EHCs) for EU and Northern Ireland

The new EU-UK Trade and Cooperation Agreement was not finalised until Christmas Eve, two months after the original deadline for an agreement. This resulted in only a week to implement new export / import processes with the EU.
Not having clearly defined export / import processes with the EU caused unnecessary documentation issues resulting in long delays at the ports and some vehicles being sent back to the UK. Exporters of food products from Great Britain (GB) were especially impacted due to their Export Health Certificates (EHCs) not being compliant with EU import regulations. Food exporters and their Official Veterinarians complete and issued these certificates in compliance with the directives of the Department for Environment Food & Rural Affairs.
EHCs are required for exports of live animals or animal products exported from GB to the EU. This ensures the consignment complies with the quality and health standards of the EU. EHCs are signed by an Official Veterinarian following inspection of the consignment and they are commodity and destination specific.
Exporters must apply for an EHC if they are exporting or moving live animals or animal products from GB (England, Scotland and Wales) to or through the following destinations:
• The EU
• Non-EU countries
• Northern Ireland (NI)
Exporters will also need a Transit EHC to transit through an EU country.
On 19 January 2021, the Animal & Plant Health Agency (APHA) published Briefing Note 02/2021 called ‘Guidance updates for certification of POAO exports to the EU and movement to Northern Ireland.’ APHA is an Executive Agency of the Department for Environment, Food and Rural Affairs. The APHA document provided amendments in relation to the certification of Products of Animal Origin (POAO) for export to the EU or movement to Northern Ireland. Therefore, enabling food exporters to comply with EU import requirements 19 days after Brexit!
The amendments include:
• The agreed method for page numbering.
• The replacement of UK fan stamping by the EU requirement to stamp and sign all pages.
• The stamping and initialling of changes and deletions.
• Permitted paragraphs and sections may be crossed out by applying a ‘Z’ across paragraphs and sections.
• The use of 6-digit Commodity Codes rather than 8 or 10 digits.
• The creation of schedules for multiple commodities.
• There is no requirement to list the time of departure.
• New guidance on composite products.
• More than 5 commodities can be added in a schedule.
If you would like more details, please call +44 (0) 118 932 8447 or email info@icsglobalservices.co.uk

Compared with 7.18 CNY (China Yuan) to 1 USD in May 2020, the appreciation of the CNY against the US Dollar has exceeded 10% in the past 7 months to 6.48 as of January 2021. What does this mean for export trade?

While exports grew rapidly in the second half of 2020, the profits of Chinese export manufacturers have not increased. Instead, many have even suffered heavy losses due to the increase in CNY value.

The plunge in exchange rates, skyrocketing ocean freight, and high material costs are currently the three biggest headaches for Chinese export manufacturers. Similar difficulties exist in other Asian countries such as Vietnam and India.

In the current context, the risks for Asian export businesses are increasing. This creates an uncertain business environment in which suppliers may take measures to cut loss, potentially at the cost of product or material quality.

As per January 2020, a new set of Incoterms® 2020 will become active. This is a set of trade terms which describe:

  • Obligations: Who does what in organizing the carriage, insurance of goods, obtaining shipping documents, arranging for export or import licenses;
  • Risk: Where and when the seller delivers the goods, in other words where does the risk transfers;
  • Costs: Which party is responsible for which costs

The Incoterms® 2020 cover these areas in a set of ten articles for each term, numbered A1/B1, etc. “A” terms for the Seller and “B” terms for the Buyer.

In this article, I do not aim to discuss all the rules, but will focus on answering 7 important questions:

  1. Why better not use EXW or DDP?
  2. Why a change from DAT to DPU?
  3. Why is the use own means of transport relevant for FCA, DAP, DPU, and DDP?
  4. Why do we have different levels of insurance in CIP and CIF?
  5. Why is a “Bill-of-Lading On-board notation” added for FCA?
  6. Why do we still need separate maritime terms like FAS, FOB, CFR, and CIF?
  7. Why is it important how we mention Incoterms®?

By answering the why’s you will get familiar with the differences between the previous version and gain more insight into the updated Incoterms® 2020 framework as well.

For the complete article, click here.

We have been developing contingency plans to ensure our customers’ products are delivered correctly after 1 January 2021. Significant changes will occur once the UK has left the EU. All UK businesses will be required to provide Customs documentation for products exported to, or imported from the EU, even with the ‘EU Deal’ on Brexit.
ICS, as part of our customer services, will be supporting companies with the necessary Customs documentation to comply with the new regulations.
Northern Ireland
Products moving between Great Britain and Northern Ireland will need to comply with the Northern Ireland protocol agreed in October 2019. Products crossing the Irish Sea will need to demonstrate compliance with the new measures. This means that new Customs and regulatory paperwork, checks and processes will be required on goods entering Northern Ireland from Great Britain from 1 January 2021.
ICS has solutions in place to move products between Great Britain and Northern Ireland, or to bring products into Northern Ireland from outside the UK.
Republic of Ireland and Northern Ireland
The movement of products between the Republic of Ireland and Northern Ireland should not require any new Customs declarations, paperwork, duty tariffs, quotas or checks on rules of origin.
If you would like more details, please call +44 (0) 118 932 8447 or email info@icsglobalservices.co.uk