FTZ’ine August 2019
August 1, 2019
FTZ’ine October 2019
October 1, 2019
ISCM Welcomes Melissa Irmen!
Decades of trade technology experience. Leading industry expert on FTZ PGA filing. Officer of the National Association of Foreign-Trade Zones. Process and change management consultant. Integration Point employee #3. Noted author and speaker on issues regarding ACE implementation. Trainer sought after on a broad range of issues related to trade compliance and the use of technology to manage it. Industry liaison to CBP and other government agencies regulating international trade.
You may know Melissa Irmen for one or all of these industry accomplishments. For these reasons and more, ISCM is very excited to announce that Melissa has joined the firm as Senior Vice President and can now share that experience with the firm’s clients across the United States and abroad.
Melissa has a deep background in global trade and Foreign-Trade Zone management with a specialty in technology and implementation. While perhaps best known for her founding role in the development of Integration Point, Melissa has worked with companies in all industries to automate their import/export operations and find savings in their trade compliance function. Congratulate her with an email or LinkedIn post!
Top Story: The Race To See Who Blinks First
Last month U.S. factory activity contracted for the first time in three years as shrinking orders, production and hiring pushed manufacturing output to its lowest level since January 2016.
China’s yuan currency sank to fresh 11-year lows when new U.S. tariffs went into effect just as the Labor Day Weekend was starting. Overall economic growth in China has slumped to its lowest level in 27 years.
The depreciation of China’s currency and a softening of U.S. manufacturing activity confirms that both economies are feeling the effects of the trade dispute between them. Delegations from both countries are scheduled to meet next October, but neither side appears ready to blink and make the concessions that will be necessary for a deal.
FTZs must adapt to both an increase in existing tariffs on Chinese goods from 25% to 30%, and to a new list of $100 million in Chinese imports where a 15% tariff was added just this past weekend.
Chinese Vice Premier Liu He is said to have held a phone call with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin – where both parties agreed to hold what will be the thirteenth round of high-level economic talks.
The two sides will hold consultations in mid-September to prepare.
However, experts believe China could be prepared to play the long-game as the trade war drags on. “We think China is neither aiming to quickly reach a trade deal, nor trying to hit back at the U.S. as hard as it can,” Deutsche Bank China Economist Yi Xiong wrote in a report. “Rather, China seems to have internalized the trade war as a given fact, and is trying to preserve China's economic resilience under rising tariffs.”
The Institute for Supply Management’s purchasing managers index fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists, data released Sept. 3 showed. Figures below 50 signal the manufacturing economy is generally contracting. The group’s gauge of new orders dropped to a more than seven-year low, while the production index shrank to the weakest level since the end of 2015.
US and Japan Announce Landmark Trade Deal
While trade tensions with China continue to have a marked impact on the U.S. economy, there was some surprising positive news on the trade front last month.
At the G-7 Summit in Biarritz, France, the US and Japan agreed in principle to core elements of a trade deal that President Donald Trump and Prime Minister Shinzo Abe said they hoped to sign at the U.N. General Assembly this month.
Ever since the collapse of U.S. participation in the Trans-Pacific Partnership, foreign-trade zones have been watching to see if the world’s #1 and #3 economies could come to a seprate, bilateral agreement on trade. The goals of the free-trade agreement appear to be modest, and FTZs can note that handling of auto and auto part imports are not changing based on the information released so far.
The agreement would cool a trade dispute between the two allies as a trade war between the US and China escalates. US trade representative Robert Lighthizer said the deal covered agriculture, industrial tariffs and digital trade. Auto tariffs would remain unchanged.
“It’s a very big transaction, and we’ve agreed in principle. It’s billions and billions of dollars. Tremendous for the farmers,” President Trump told reporters during a joint announcement with Prime Minister Abe at the G7 meeting in France.
The Japanese leader said more work remained, but expressed optimism that it would be finished by the time of the United Nations General Assembly next month.
“We still have some remaining work that has to be done at the working level, namely finalizing the wording of the trade agreement and also finalizing the content of the agreement itself,” he said, through an interpreter.
“But we would like to make sure that our teams … accelerate the remaining work for us to achieve this goal of realizing the signing of the agreement on the margins of the UN General Assembly at the end of September.”
Lighthizer noted that Japan imports about $14B worth of US agricultural products and said the agreement would open up markets to more than $7B of such products. He said beef, pork, wheat, dairy products, wine and ethanol would benefit.
“It will lead to substantial reductions in tariffs and non-tariff barriers across the board,” he said. He did not go into detail about the industrial and e-commerce aspects of the deal.
On a Roll – Could U.S. Trade Deal With Britain Be Next?
Last month Dominic Raab made his first trip to Washington as UK Foreign Secretary, part of the new administration of Boris Johnson. “It was amazing to hear an American president talk about our country in such warm terms,” Secretary Raab said, adding that there was “huge appetite on both sides” for achieving a trade deal between the two countries at the earliest possible moment.
The UK is prohibited from entering into an actual trade agreement with outside countries while it remains part of the EU.
After meeting last week at the State Department, Secretary of State Pompeo said: “We support the United Kingdom’s sovereign choice, however Brexit ultimately shakes out. And the we’ll be at the doorstep, pen in hand, ready to sign a new free trade agreement at the earliest possible time.”
That could mean yet another free trade agreement made by the United States in 2019.
“Of course, America is our single largest bilateral trading partner,” Secretary Raab said. “President Trump has made clear again that he wants an ambitious free trade agreement with UK. So I hope we can make that happen as soon as possible after we leave the EU on 31 October.”
He said he was confident that the manner of the UK’s departure from the EU would safeguard the principles of the Good Friday agreement in Northern Ireland.
A no-deal Brexit without any resolution to what would happen to the border between the two Irelands is likely to jeopardize the 1998 peace agreement, which relies on the unrestricted flow of people and goods.
Any US trade deal with the UK would have to be approved by Congress and the Democratic leadership in the House. It would also need approval from the Irish American Republicans in the House of Representatives who have warned that they would block a deal if Brexit affects the Irish border, and therefore the Good Friday peace agreement.
In the Senate, 45 Republicans have signed a letter pledging unconditional support for a US-UK trade deal, but that still falls short of the majority required for passage.
And Another One: U.S. Strikes Trade Deal with Mexico (Tomato Anyone?)
In yet another sign of improving trade relations between the countries, the U.S. reached a deal to suspend tariffs on tomatoes from Mexico.
The agreement, which also ends an Anti-Dumping probe by the Department of Commerce, is expected to head off disaster for the Mexican tomato export industry, the world’s largest. That will also avert major price increases in U.S. supermarkets and restaurants.
The pact pledges to lift a 17.6% provisional tariff that went into effect in May and implements import restrictions demanded by Florida growers.
It will allow Mexican producers to get back money that had already been deposited, sets reference prices on tomato imports, and includes a requirement that organic tomatoes be priced 40% higher than varieties that aren’t.
Making the duties permanent threatened to hit the Mexican agriculture industry, which ships about $2 billion of tomatoes to the U.S. annually, one of its biggest fruit and vegetable exports.
Heated Battle Over Brexit Takes Unexpected Turns
Britain’s election this summer of Boris Johnson as Prime Minister seemed to cement the idea that Britain was going to leave the European Union on October 31st of this year, with or without an agreement on exit terms.
The concept had been a major pillar of Mr. Johnson’s campaign to become Prime Minister in the first place. And yet, British lawmakers voted in favor of a bill to avert a no-deal Brexit, handing the new Prime Minister his third major loss at the hands of Parliament in just two days.
First, Tory rebel MPs joined forces with opposition parties to approve a Brexit delay bill, aimed at blocking a no-deal exit at the end of October.
That prompted the Prime Minister to purge 21 Members of Parliament from his own party, irritating his coalition.
The Prime Minister immediately introduced a measure to hold a general election on October 15, claiming it would allow the public to decide who would conclude Brexit negotiations.
That measure was also defeated.
Michel Barnier, the EU’s chief Brexit negotiator, told EU27 ambassadors in Brussels that talks with the British government were “in a state of paralysis”.
That makes the likelihood of an exit deal with the EU by October slim, at the same time the ability to leave with no-deal has been rejected by Parliament.
FTZ Board Activity
- EBI, LLC received authorization of production activity for mattresses and sofas within Subzone 238C in Danville, Virgina with restrictions requiring admission in privileged-foreign status for several raw materials. MORE
- Samsung Electronics America, Inc. received authorization of production activity for packaging for mobiles and tablets within FTZ 168 in Coppell, Texas. MORE
- ProAmpac Holdings, Inc. submitted a Notification of Proposed Production Activity for flexible packaging applications in a new site of FTZ 201 in Westfield, Massachusetts. MORE
- Abbott Laboratories submitted an application to expand Subzone 22F in Elk Grove Village, Illinois by adding 0,7 acres to one of its sites. MORE
- Amcor Flexibles L.L.C. submitted a Notification of Proposed Production Activity for additional components and finished products of flexible packaging in FTZ 29 in Shelbyville, Kentucky. MORE
- Airbus OneWeb Satellites, LLC received authorization of production activity for satellites and satellite systems in Foreign-Trade Zone 136 on Merritt Island, Florida. MORE
- Syngenta Crop Protection, Inc. submitted a Notification of Proposed Production Activity for additional components and finished products of herbicides, fungicides and insecticides in FTZ 19 in Omaha. Nebraska. MORE
- Syngenta Crop Protection, Inc. submitted a Notification of Proposed Production Activity for additional components and finished products of herbicides, fungicides and insecticides in FTZ 154 in Baton Rouge, Louisiana. MORE
- Patheon Puerto Rico, Inc. submitted a Notification of Proposed Production Activity for additional components and finished products of pharmaceutical products in FTZ 7 in Manati, Puerto Rico. MORE
- Michelin North America, Inc., received authorization of production activity for tire assemblies, wheel assemblies, and tire pressure monitoring systems in Site #5 of Foreign-Trade Zone 38 and Subzone 38L in Woodruff and Laurens, South Carolina. MORE
- CGT U.S., Ltd. received authorization of production activity for polyvinyl chloride coated upholstery fabric cover stock in Subzone 80E in New Braunfels, Texas. MORE
- ProAmpac Holdings, Inc. received approval for production of flexible packaging applications in FTZ 167 in Neenah and Appleton, Wisconsin. MORE
- Adams Warehousing, LLC. received approval to operate its facility in Sidney, Nebraska as Subzone 59D. MORE
- ProAmpac Holdings, Inc. submitted an application to operate its Westfield, Massachusetts facilities as a subzone of FTZ 201. MORE
- Offshore Energy Services, Inc. received approval to operate its facility in Broussard, Louisiana as Subzone 124T. MORE
- Motorambar, Inc. submitted an application to operate its Cataño, Puerto Rico facility as a subzone of FTZ 7. MORE
- Café Oro de Puerto Rico, Inc. submitted an application to operate its Lares, Puerto Rico facility as a subzone of FTZ 7. MORE
- Lam Research Corporation received authorization of production activity for wafer fabrication equipment, subassemblies and related parts in Foreign-Trade Zone 18 in Fremont, Livermore and Newark, California. MORE
ISCM Welcomes Melissa Irmen!
Decades of trade technology experience. Leading industry expert on FTZ PGA filing. Officer of the National Association of Foreign-Trade Zones. Process and change management consultant. Integration Point employee #3. Noted author and speaker on issues regarding ACE implementation. Trainer sought after on a broad range of issues related to trade compliance and the use of technology to manage it. Industry liaison to CBP and other government agencies regulating international trade.
You may know Melissa Irmen for one or all of these industry accomplishments. For these reasons and more, ISCM is very excited to announce that Melissa has joined the firm as Senior Vice President and can now share that experience with the firm’s clients across the United States and abroad.
Melissa has a deep background in global trade and Foreign-Trade Zone management with a specialty in technology and implementation. While perhaps best known for her founding role in the development of Integration Point, Melissa has worked with companies in all industries to automate their import/export operations and find savings in their trade compliance function.
Congratulate her with an email or LinkedIn post!