Commerce Secretary Ross Wants NAFTA Renegotiation by January

June 1, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

U.S. Secretary of Commerce Wilbur Ross indicated Wednesday that the best time period to complete the North American Free Trade Agreement’s negotiation is by early January. By setting this window, the Trump Administration hopes to have the renegotiation done before both Mexico’s general elections and the 2018 U.S. Congressional elections (Reuters).

According to Ross, Mexico’s elections will make the approval of NAFTA more complicated because it needs Mexican congressional approval. Mexican Economy Minister Ildefonso Guajardo also urged for a final deal by the end of this year (Bloomberg). In the U.S., presidential powers to negotiate trade deals that can accepted or rejected by Congress without amendments expires in July 2018, justifying the urgency of the Trump Administration

Ross also said Wednesday that the Commerce Department would impose anti-dumping and anti-subsidy duties on Mexican sugar and Canadian softwood lumber as part of the renegotiations if settlements over the disputes are not achieved. The Mexican government subsidies sugar companies and Canadian lumber producers utilize government-owned land to produce, making it difficult for U.S. competitors to compete in both industries. Ross hopes to resolve both of these issues before the official modernization of NAFTA.

NAFTA negotiations will formally begin around August 16, following a 90-day period of domestic consultations with U.S. lawmakers, industry, and the public.

Stay up to date with all trade news, including updates on NAFTA, by following Mercatura Global on Twitter. As an advocate of free trade, Mercatura Global can counsel your company on how best to enter international markets and increase your export revenue. To develop your market entry strategy and identify strategic partners, contact Mercatura Global today.

What are the Benefits of a 11-Country TPP Deal?

May 8, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

Politico recently released new details on a study conducted by the CanadaWest Foundation that is scheduled to be published next month. The study predicts the benefits of a TPP deal without the U.S. and what the other 11 countries should expect if it were to come to fruition.

While the deal would strength intra-regional exports by 2.43%, this increase in only two-fifths of the TPP’s full impact with U.S. involvement. The 11-country deal could raise real GDP by around 0.074%, and the 11 countries involved would gain an additional $16.6 billion in 2017 (compared to $40.7 billion with the U.S.).

Exports from the automotive products and business services sectors would benefit the most from the deal, with Western Hemisphere countries to see the biggest gains. For Canada, the deal would cause a boost in beef, fruits, vegetables, pork, and canola oil exports.

For the U.S., an 11-country TPP deal would transform the country’s projected $12.7 billion gain to TPP countries into a $3 billion loss.

This month, the Asia-Pacific Economic Cooperation (APEC) nations will have a series of meetings in Hanoi beginning on May 9th (Bloomberg). TPP delegates from involved countries are expected to discuss the future of the deal.

To stay up to date with the future of the TPP, follow Mercatura Global on Twitter, and keep an eye out for CanadaWest’s report that is set to come out later this month.

Will New Tariffs on Canadian Softwood Lumber Cause U.S.-Canada Trade War?

April 26, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

On Monday, U.S. President Donald Trump announced an increase in tariffs from 3% to 24% on softwood lumber imports from Canada. Most lumber companies in Canada are state-owned and subsidized by the Canadian government, and the U.S.-Canada dispute over softwood lumber is decades old (The New York Times). American mills recently filed a complaint, and the U.S. Commerce department responded by imposing a tariff equivalent to the subsidy amount (24%) on five Canadian companies. For all other Canadian lumber companies, the tariff rate was set at 20%.

According to the Wall Street Journal, Commerce Secretary Wilbur Ross claimed it had been a “bad week for U.S.-Canada trade relations.” This statement also reflects President Trump’s complaints about Canada’s system of protections on its dairy industry, leading to unfair treatment of American dairy farm workers.

Both softwood lumber and the dairy industry were left out of the initial North American Free Trade Agreement in 1994, so it is easy for the U.S. to bring up the issues without formal negotiations (Reuters).

In Canada, the country is considering some sort of aid package to the companies that will be hit by the tariff (Bloomberg). In Quebec, 60,000 people work in the forest-products industry, and the province is putting in place a program of loan and loan guarantees that is expected to be worth 300 million Canadian dollars.

In the past, disputes around the softwood lumber industry were always won be Canada. However, if it becomes a legal fight, it is likely that the process will take a few years to be settled. Stay up to date with current U.S.-Canada trade relations by following Mercatura Global on Twitter.

E.U. Parliament Approves Free Trade Agreement with Canada

February 15, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

The European Parliament has approved the Comprehensive Economic and Trade Agreement (CETA), a landmark free trade deal between the European Union and Canada. According to the European Commission, the deal will get rid of almost 99% of tariffs within seven years, boosting the E.U. bloc’s economics output by about 12 billion euros per year (Bloomberg).

The deal was signed by both parties in October, and it now requires ratification by the Canadian Parliament. Additionally, more contentious aspects of the deal, such as the investor-state dispute settlement mechanism, will need to be ratified by each of the EU member states and is expected to take years. This aspect of the deal would allow companies to sue countries over a new law or policy that they may consider discriminatory to their investments. Critics of this mechanism suggest it will undermine both national governments and public interest in favor of big multinational corporations.

Canada is the E.U.’s 12th greatest trading partner, and the E.U. is Canada’s 2nd greatest trading partner, just after the United States. CETA is forecasted to increase bilateral trade in goods and services between the regions by over 20% (Reuters). Carmakers in EU textile sector are expected to benefit from the deal, in addition to Canadian maple syrup producers and EU dairy producers.

Mercatura Global is a supporter of free trade agreements that help level the playing field for small- and medium-sized businesses. If you are an SME interested in developing an export strategy and finding potential buyers abroad, contact Mercatura Global today.

How to Gain Competitive Advantage by Becoming a Non-Resident Importer

January 17, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

If you currently do business with Canada or are interested in starting, you may be interested in becoming a Non-Resident Importer (NRI). NRIs are organizations that do not have physical presence within Canada but are able to act as both the exporter of goods from the U.S. and the importer of shipments into Canada (FedEx).

The NRI program allows U.S. companies to include shipping, customs clearances, duties, and taxes in the shipping fees charged to the consumer, and the product may even be charged in Canadian dollars (U.S. Commercial Service). Costs are reduced through the consolidation of shipments, allowing savings to be passed along to the Canadian consumer and making him more inclined to buy your product. Essentially, the Canadian customer will perceive the transaction as a domestic transaction, benefiting both the U.S. exporter as well as the Canadian costumer.

Canada currently accounts for 19% of total U.S. exports, and the U.S. and Canada share the world’s largest comprehensive trade relationship (Pacific Customs Brokers Ltd). The NRI program gives its participants a competitive advantage over U.S. companies that simply export to Canada. If you are interested in learning more about exporting to Canada as a Non-Resident Importer, contact Mercatura Global today.

EU-Canada Trade Deal Could Have Implications for the U.S.

November 1, 2016  |  No Comments  |  by Nicole àBeckett  |  Blog

After seven years of negotiation, the Comprehensive and Economic Trade Agreement (CETA) between Canada and the EU was finally signed on October 30th in Brussels. The EU claims that the agreement will remove 99% of tariffs between Canada and the 28 EU nations, and it is expected to boost trade with Canada by $13.2 billion a year (USA Today). Though CETA met harsh opposition from the Wallonia region of Belgium, world leaders assert that the agreement’s eventual success will show the world the benefit of FTAs.

According to Canadian prime minister Justin Trudeau, the agreement will benefit both economies and act as a “good example to the world” (The New York Times).President of the EU, Jean-Claude Juncker, claims that the agreement will set the standards that will determine globalization in coming years, with free trade being the determining factor (The Guardian). Now that CETA has proven it can get approval, the Trans-Atlantic Trade and Investment Partnership (TTIP) may have a fighting chance. 

The TTIP is a trade deal primarily intended to cut both tariffs and regulatory barriers to trade between the US and EU countries, making trade more accessible on either end of the market. Now that a successful FTA has been reached between Canada and the EU, the future of the TTIP looking brighter. The EU Trade Commissioner, Cecilia Malmstrom, claimed that the “TTIP is not dead” and that negotiations of the deal will continue after the U.S. presidential election (Reuters). Further, she asserted that the negotiations surrounding the CETA deal will be reflected in negotiations on the TTIP. The CETA deal has demonstrated that even in the face of opposition, free trade agreements (like the TTIP) can be successful. 

Female Entrepreneurs in Africa Find Growth in Exporting

March 10, 2016  |  No Comments  |  by Nicole àBeckett  |  Blog

Despite the usual headlines, Africa is a continent with tremendous potential for female entrepreneurs. In fact, Africa has the highest growth rate of female-run enterprises in the world (World Bank). In recent years, Sub-Saharan Africa has seen an increase in the number of  businesswomen which has helped the economy and led to a reduction in poverty

Some success can be attributed to the International Trade Centre’s ACCESS!, an export trading program that equips African women exporters with the skills to overcome trade barriers such as market information and finance. Three of Africa’s Regional Economic Communities – the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of Central African States (ECCAS) and the Economic Community of West African States (ECOWAS) – forged strategic partnerships with the International Trade Centre under the Programme for building African Capacity for Trade (PACT II) to support Africa’s regional integration agenda and efforts. Funded by the Foreign Affairs, Trade and Development Canada , PACT II seeks to strengthen the support capacity of African regional and national institutions to enhance export competitiveness, market linkages and export revenues of African small and medium-size enterprises.

ACCESS! has helped numerous women expand their businesses abroad. In South Africa, entrepreneur Bernadette Zeiler utilized ACCESS! to grow her business beyond South Africa. Bernadette is the owner of BMZ Import and Export Agencies, a medical device technology business that allows healthcare providers in South Africa to buy medical and dental equipment from a single source rather than multiple specialized manufacturers. After becoming extremely successful in the South African market, Bernadette turned to ACCESS! and expanded her services to Tanzania and Uganda. Her business now is mainly supported by international clients, and she has plans to trade with Europe and the United States.

Food scientist Paully Appiah Kubi’s business idea began after she witnessed quality produce being wasted due to a lack of storage and processing facilities in rural Ghana. She realized that with simple drying technologies, she could save large quantities of quality produce from waste, while boosting exports and offering farmers a buffer against the seasonality of their business. Ebenut Ghana Limited began in 1996 as a small, local workshop with only one dryer processing 20 pieces of fruit or vegetables at a time. Ebenut grew during a boom period for Ghana’s exports. Between 2003 and 2007, Ghana’s exports of fresh fruit such as pineapples grew by 45%, with Ghana becoming the third largest exporter to the EU. Ebenut grew to 47 employees and purchased from 21 farmers. Currently, Ebenut processes, packages and sells three tonnes of dried produce per month.

Capacity building in trade and exporting will help entrepreneurial African women develop greater opportunities for their communities and greater Africa.  At Mercatura Global, we support the empowerment of women exporters globally and encourage all women to find new growth for their businesses through trade in international markets. Contact us for more information on how you can connect to these opportunities. 

Also – check out our #womenwhoexport hashtag on Twitter to find more inspiring stories of women seizing economic opportunities.

Trade Experts Share Thoughts on TPP Future

January 15, 2014  |  No Comments  |  by Nicole àBeckett  |  Blog

“Why not China? Why not Korea? Why not Taiwan?”

These were the words of former United States Trade Representative Mickey Kantor on Tuesday at the US-Australia Bilateral Dialogues when asked if the Trans Pacific Partnership (TPP) was just a starting point for a broader agreement that would open trade to the entire Asia-Pacific region. While that may still be far off, there is a sense of urgency to get this agreement completed in 2014.

The TPP is a massive trade agreement between Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. Called a 21st century trade agreement, the TPP intends to move beyond policies of the traditional free trade agreements (tariff reductions, market access) and instead looks to harmonize digital property protections, promoting innovation, and environmental alignments among other regulations.

Kantor warned that the agreement, in its current state without China, was serving to alienate the country even further and would not advance an agenda of pushing China to enter into fair trade and transparent currency regulations.

Claude Barfield, a Resident Scholar at the American Enterprise Institute and former consultant to the US Trade Representative, opined that the agreement should be enacted with its current partners but should also be an ongoing and open agreement that allows further countries such as China, India, Indonesia to join down the road when they have demonstrated they meet the expectations of the pact. He also warned that missing the December 2013 completion deadline was a blow to the partnership and warned that President Obama must line up Democratic support now in order to get it across the finish line.

The two points that all panelists agreed on was that, first, completing the agreement this year is critical if it is to be completed at all. And second, that policymakers and the general public should look at this agreement not as a forthcoming hit to domestic industries but rather in the context of how it will make our economies more competitive, more innovative and revitalize the global economy.

Advanced Goods Manufacturing Exports Benefits Service Industries

November 11, 2013  |  No Comments  |  by Nicole àBeckett  |  Blog

Delving further into the Brookings report discussed last week shows how important advanced manufacturing has become to North American trade. The NAFTA trade bloc exported over $1.2 trillion to the rest of the world last year with the bulk of exports represented by advanced industries such as electronics ($115 billion), transportation equipment ($100 billion), pharmaceuticals ($39 billion) and medical devices ($26 billion). Advanced industries accounted for 35% of all U.S. exports in 2011.

While it is difficult for the NAFTA countries to compete on cost vs other regions, particularly the U.S. and Canada, there is tremendous advantage in offering superior quality and value-added in advanced industries. Brookings states that for every dollar of manufacturing output, 19 cents of services such as logistics, advertising and engineering are required. In 2012, the U.S. economy realized a $200 billion trade surplus in services. Combined with lower wages in Mexico than China, according to BofA Merrill Lynch economist Carlos Capistran, the NAFTA zone is back on a cyclical upturn to make it more competitive than ever in global trade.

Brookings Illustrates Importance of Trade Among North American Neighbors

November 9, 2013  |  No Comments  |  by Nicole àBeckett  |  Blog

The 20 year anniversary of the ratification of NAFTA will take place next month and Brookings has just released a report expertly illustrating the impact of trade among the neighbors.

Key findings focused on the importance of cross-border trade between metropolitan areas. LA-Mexico City led the way between US & Mexico metros with $2.2 billion in trade and New York-Toronto led US-Canada trade with $3.7 billion.  In total, $884+ billion was traded between North American countries in 2010 with $512 billion (58%) derived from metropolitan areas.

What is even more significant  is the shared value in finished products added through co-production. The Woodrow Wilson Center for International Scholars states that 40% of the content the US imports from Mexico is produced in the US vs 4% from China. That represents a return of 40 cents on every dollar spent on imports from Mexico.

As China loses competitiveness from increased labor wages and transportation costs the importance of exploiting the virtues of NAFTA becomes even greater.

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