Late last month US Customs and Border Protection indefinitely delayed the most recent release of the Automated Commercial Environment (ACE.) At press time CBP wasn’t been able to say when the last capabilities will be deployed or what the issue is.
ACE is now three years behind schedule and more than $1 billion over budget. Though designed with the intent of streamlining cross-border trade, replacing the antiquated Automated Commercial System (ACS) and allowing shippers to easily transmit documents with government agencies, the system will still not capture all Foreign-Trade Zone transactions, most notably admissions, even after this final release.
This release including the last of the so-called “core” trade capabilities — liquidation, reconciliation, drawback, duty deferral, collections, and the Automated Surety Interface (ASI) — were originally supposed to be deployed this past January.
Tesla has reached an agreement with the Chinese government in Shanghai to build a production facility in the city’s free-trade zone. Details of the deal, reported by the Wall Street Journal, are still being worked out but it is the first of its kind for a foreign car manufacturer – the deal is expected to exclude the kind of technology-sharing agreements that can deter innovative international companies from setting up shop in the world's second-largest economy.
Tesla has been pursuing a Chinese factory for years, and the Shanghai deal followed the announcement that Tesla had accepted a large investment from Tencent Holdings, a technology giant in China.
But Tesla’s progress in China faced a big hurdle – thanks in part to import duties. A Tesla sells for around 50% more in China than in the U.S. A plant in Shanghai’s free-trade zone would reduce labor and transportation costs (though the latter are generally a very small part of the total cost of goods). CEO Elon Musk said in 2015 that a factory in the country could cut the price of vehicles sold in China by a third.
The Journal writes, though, that cars produced under the new factory deal are still likely to be considered “imports” and face a 25% duty. In the past, foreign carmakers have only been able to avoid that tariff by forming joint ventures with local manufacturers, which often include technology-sharing provisions.
President Trump’s threat of unilaterally terminating the Korean FTA appears to have worked. In early October South Korea finally agreed to renegotiate the five-year-old free trade agreement between the two countries.
Earlier this month, the American and South Korean delegations met in Washington for a second round of talks on the deal, known as the KORUS FTA. This change of stance is a small victory for the Trump administration because only a few months ago a South Korean trade ministry official told Reuters that South Korea wasn’t keen on renegotiating the deal.
“The two sides recognized the need to amend the FTA to enhance mutual benefits of the KORUS FTA,” South Korea’s trade minister, Kim Hyun-chong, who had been one the deal’s lead negotiators, said in a statement after the recent round of talks concluded.
Earlier this year, USTR issuing a statement outlining concerns that the U.S. goods deficit with South Korea had more than doubled from the 2012 implementation of the deal through 2016.
CBP has built eight looming prototypes for a border wall with Mexico in the California desert, in keeping with President Trump’s desire for a "physically imposing" barrier between the U.S. and Mexico.
Any meaningful construction is still at least 10 months away,U.S. Customs and Border Protection officials said — and there's another issue: there's no money. This has the trade concerned that without proper allocations, money might be siphoned from other CBP programs to initiate the project while negotiations with Congress continue.
The border wall prototypes were made exactly to specification: Four from concrete and four others from non-concrete materials that could be used for stretches of barrier that can be seen through. First order of business? Letting the samples bake for 30 days as the concrete dries. Then evaluation of each design will begin.
WELCOME TO THE NEW FTZINE!
We’ve redesigned our layout to make the FTZine easier to read than ever before. Still the same piercing analysis of the top news affecting the Foreign-Trade Zone community, and a compendium of the month’s public notices issued by the U.S. Foreign-Trade Zones Board here in Washington. Even better, you can now view current and past issues on the completely redesigned ISCM website: iscm.co/ft-zine/.