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Yusen, We Have a Problem!: In The News Round-up

Posted By Administration, Thursday, March 9, 2017
Updated: Wednesday, March 8, 2017

by Mark Kopp, Yusen Logistics (Americas) Inc.

Trade Deals
Cancelled? Renegotiated? New? Take your pick. The new administration has been very busy with trade pronouncements. But what do we really know?

Trans-Pacific Partnership (TPP)
This one is pretty clear. The United States will not pursue membership in this 12 nation multilateral agreement. The President signed an executive order to that effect on January 23rd. In a New York Times article of the same day, Australian Trade Minister, Steven Ciobo, stated there were benefits for all parties that were part of the deal and it would be a shame to lose those benefits. On the other hand, James P. Hoffa, General President of the Teamsters Union, said this was "the first step toward fixing 30 years of bad trade policies."1

So it depends on your point of view. As a retailer, any trade deal that opens markets to give retailers access to new sourcing opportunities, should be a good one. Retailers are constantly searching for new sources of quality product at the lowest price. Any elimination of trade barriers or tariff reductions should be viewed as positive from a retail point of view.

Will withdrawing from the TPP help or harm retailers? Only time will tell.

NAFTA – Rumors Abound
This will be an interesting one to watch. During the campaign, the President referred to NAFTA as one of the worst trade deals ever made. Now the rhetoric from the White House is about renegotiating and tweaking. Word on the street is Canada is open to modifications and Mexico will walk out of negotiations if tariff increases are involved.

The program could be modified to include new technologies such as e-commerce. It could also be expanded to include energy, not part of the original program. NAFTA could be scrapped altogether.

There has been talk of a 20% increase on all Mexican made goods, but that could be accomplished by a "border adjustment tax," which would be part of a change in overall corporate tax policy.

What to believe? Look at your supply chain. How will your company be impacted by any changes in NAFTA? Would your company benefit by some "tweaking"? Now is the time to let your Senators and Congress know how your company will be affected. Will your company be hiring or laying off if there are changes to NAFTA? Will your company have to pay more or less? And, most important, how will changes in NAFTA ultimately affect your customers? Let your representatives know where you stand.

U.S. – U.K. Bilateral Trade Agreement
During a recent meeting President Trump and Britain's Prime Minister May announced plans to work on a bilateral trade agreement. However, this may be harder and take longer to complete than it appears. A recent article in POLITICO states it could be months if not years before formal negotiations begin.2 This is largely due to the constraints Britain will be under until it formally leaves the European Union not before 2019.

However long this trade deal may take, expect bilateral negotiations to become the norm under this administration as opposed to the multilateral deals of the past several administrations.

This column has often urged readers to examine their compliance procedures. The Department of Justice announced on their website on February 2nd, the conviction of an auto parts executive for obstruction of justice. Along with the $7,500 fine will be a 14 month prison sentence.

Are all of your employees, including those working overseas, up to speed on all anti-corruption and anti-bribery policies? Is everyone aware of the U.S. Foreign Corrupt Practices Act (FCPA)? We have seen an increase in enforcement of these actions over the last few months. Make sure you and your company are in full compliance – unless, of course, you have nothing better to do for the next 14 months.


Mark Kopp is currently the Senior Manager for Import Compliance for Yusen Logistics (Americas) Inc. Mark has over 30 years experience in all aspects of supply chain management and compliance - from product development and buying, cargo management and shipping, customs brokerage, to warehousing, distribution and retail sales. He has managed/directed imports for Kinney Shoe Corporation, Woolworth Corporation, Russ Berrie & Co. and DHL. He has also served on the Footwear Distributors & Retailers of America government customs council, been a member of the Board of Directors for the Toy Shippers Association, and been an instructor at The World Trade Institute in New York. Currently, he is a member of the NY/NJ Freight Forwarders & Brokers Association and serves on the American Apparel & Footwear Association Government Relations Committee. Mark graduated from Franklin & Marshall College in Lancaster, PA with a B.A. in Political Science.

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Tags:  Foreign Corrupt Practices Act  NAFTA  Trans Pacific Partnership  US UK Bilateral Trade Agreement 

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