Midwest Global Trade Association

World Trader

From the President: Give a Gift to Yourself

By John Wilson, MGTA President

John WilsonMGTAers,

On behalf of our fine organization, I’d like to wish you and your families a very happy holiday season! All of the retailers’ goods have long been booked, crated, freighted, and delivered (hopefully!) for purchase. In this season of giving, don’t forget to think about what YOU want in the upcoming year and set a goal to get it.

Goals are among the most powerful gifts you can give to yourself. A specific, measurable, attainable, relevant, time-bound goal will reward you with achievements in the New Year you may find unimaginable right now. The right goal and a plan to achieve the goal are almost unstoppable. American entrepreneur, author and motivational speaker Jim Rohn has said, "If you go to work on your goals, your goals will go to work on you. If you go to work on your plan, your plan will go to work on you. Whatever good things we build end up building us.”

MGTA is here to help you achieve your goals if they include personal or professional development in global trade knowledge, networking, or leadership. Involvement in MGTA is a means to your goals that may result in superior work performance, a promotion, or new job opportunities. Whatever your goals are, MGTA involvement is always a good plan!

In this season of giving, give yourself the gift of goal setting and let MGTA help you reach it!

P.S. Don’t forget to register your attendance now at mgta.org for the Annual Meeting and Dinner on January 16. This year’s small registration fee will help MGTA more accurately predict attendance and defray a small portion of the cost. There are a few surprises planned – so don’t miss out!

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"The happiest people are those who think the most interesting thoughts. Those who decide to use leisure as a means of mental development, who love good music, good books, good pictures, good company, good conversation, are the happiest people in the world. And they are not only happy in themselves, they are the cause of happiness in others." – William Phelps

Upcoming Events

MGTA Event: Trade Buzz From the Beltway: U.S. Legislative and Regulatory Update

Early rates end Monday, Dec. 9!

Monday, December 16, 2013
1:30 – 5:00 p.m.
Ewald Conference Center
1000 Westgate Drive
Saint Paul, MN 55114
Details and online registration

MGTA Annual Meeting & Dinner

Thursday, January 16, 2014
Metropolitan Ballroom
Golden Valley, MN
Details and Online Registration

Network with old friends, meet new ones, receive MGTA updates while celebrating the New Year!

Cost

$15 for MGTA Members, $55/Non-members & Guests

Ticket includes:

  • A reserved spot at the 2014 Annual Meeting & Dinner
  • A drink ticket
  • An entry for a chance to win a variety door prizes (ranging from $50 gift cards to an annual MGTA membership)

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Deadline Approaching for 2013 MGTA Importer/Exporter of the Year

Who should be nominated?
We’re looking for a story demonstrating why your company should be MGTA’s 2013 Exporter/Importer of the year. Please provide details supporting the candidate company’s case for recognition. Describe how the enterprise, over the past year, has been successful entering or developing Export markets or how your nominee has succeeded with Importing procurement of materials, components and/or end products for domestic and/or export markets. Please provide any financials or other relevant metrics demonstrating your nominee’s performance in the Export or Import marketplaces. Any nominated company must be a MGTA member to qualify for this award.

When are nominations due?
December 15, 2013

All submissions must include completion of this nomination form in addition to an attached Word file of "your story” and any financials or other metrics you can provide.

When will the 2013 MGTA Exporter/Importer of the Year be Awarded?
The award will be presented at MGTA’s January Annual Meeting and Dinner. We request that a representative of the awarded company be present at the annual meeting and dinner to receive the award.

Complete a nominartion form today

Canada to Consider Significant Tariffs on Wide Range of U.S. Goods

By Kylle Jordan

The issue of mandatory country-of-origin labeling (COOL) has – until now – mainly affected the beef and pork industries. However, a pending decision by the WTO may allow Canada and Mexico to retaliate against the U.S. for lost trade by increasing tariffs on a wide range of products by as much as 100%.

For a bit of background, COOL is a mandatory labeling requirement for agricultural goods sold at large U.S. retail outlets. COOL requires that beef and pork derived from animals born and/or raised in Canada and Mexico but slaughtered in the U.S. be sold under a label different than that for beef or pork from animals born, raised and slaughtered in the U.S. As such, it requires complete segregation of foreign and domestic livestock – and the meat derived from it – at each step of the production process, driving up costs for producers, processors, distributors and retailers.

The origin of COOL was not consumer groups, but certain protectionist components of the cattle sector who want to eliminate competition from foreign livestock in the U.S. market in an effort to increase cattle prices. Today, the main supporters of COOL in the U.S. are the Ranchers-Cattlemen Action Legal Fund (R-CALF), the National Farmers’ Union and consumer organizations.

A WTO compliance panel on U.S. Country of Origin labeling was constituted on September 25, 2013. If they decide that COOL violates the United States’ international trade obligations under the WTO Agreement, Canada and Mexico could request authorization from the WTO to impose retaliatory measures on goods from the U.S. In anticipation of a ruling in their favor, Canada published a list of products exported from the United States that may be targeted for retaliation.

If Canada were to successfully complete the compliance proceedings, it could impose retaliatory tariffs commensurate with the damages to Canadian industry (which industry estimates to be more than $1 billion annually since 2009) and place U.S. exports to Canada in jeopardy. These tariffs could be imposed across any number of sectors, not just agriculture. Mexico could impose retaliatory tariffs commensurate to the damages to their industry.

Many U.S. products unaffected directly by COOL have already been listed by Canada as potential targets for retaliatory tariffs if the issue is not resolved. Items include ethyl alcohol, chocolate, pasta, corn, mattresses, office furniture and jewelry, among others. If and when authorized by the WTO, Canada intends to levy a 100% surtax on imports of selected products from the United States. The full list of proposed products against which Canada may retaliate can be found here: www.gazette.gc.ca/rp-pr/p1/2013/2013-06-15/html/notice-avis-eng.html#d115.

For context, the total cost of Minnesota exports threatened by COOL retaliation is $267M. The top Minnesota exports that would be threatened by COOL retaliation are ethyl alcohol and other denatured spirits (HS220720 - $105 million), corn (HS1005 - $35 million) and certain beef and pork products (HS160249 - $22 million).

Avoidance of the retaliatory effects could be guaranteed through a timely legislative fix. A legislative repeal of COOL in the Farm Bill being conferenced beginning the week of October 28, 2013 would prevent many consequences for producers and consumers as well as retaliation from trading partners (NOTE: at the time of this writing, no progress has been made on the issue of COOL in the Farm Bill negotiations).

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"Men never plan to be failures; they simply fail to plan to be successful." – William A. Ward

Do You Know Where Your Freight Is?

By Hillary Drake, Sr. Transportation Analyst, Andersen Windows

Happy Holidays! Do you know where your freight is? As I write this, we’re in the thick of the holiday peak season, the busiest time of the year for our transportation partners. Harvest is wrapping up late this year and holiday retail activity is in full force. October and November were challenging months if you were looking for trucks, especially hoppers and other specialized equipment.

The good news is that the economic indicators are favorable. Retail sales are up from 2012, truck tonnage is up from 2012, and Class 8 orders are strong. The big news in trucking lately has been the Hours of Service changes and their impact on supply chains. Drivers now need to take a half-hour break in their first 8 hours of driving and a 34-hour break is required to complete a work week and start a new one. That restart has to include two periods between 1:00 and 5:00 a.m.

As the economy continues to pick up steam in 2014, we’re going to move into a challenging environment. The average truck driver in the US is in his 50s. It’s arguable whether there’s a driver shortage and how large that shortage might be, but the industry is operating close to capacity now. I’m looking forward to the challenges next year will bring.

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"I keep my ideals, because in spite of everything, I still believe that people are really good at heart."
- Anne Frank

Eastbound Pacific Carriers Seek 2-Stage Rate Increase

Container shipping lines operating from Asia to the U.S. intend to restore baseline freight rates for late holiday season shipments in December and the pre-Lunar New Year period in January.

Member lines in the Transpacific Stabilization Agreement have plans to collectively adopt general rate increases of $200 per 40-foot container, effective Dec. 20, 2013, and $300 per 40-foot container, beginning Jan. 15, 2014, for the Asia-to-U.S. trade lane. The carriers hope the two-stage increase in freight rates will capitalize on "pockets of particular strength” in the eastbound route and will take advantage of the opportunity for a "badly needed” revenue recovery, according to the TSA.

Freight rate levels in the trade are "still well below sustainable levels,” even after achieving partial success with a previous Nov. 15 increase, the TSA said. Spot container rates from Asia to the U.S. East and West coasts measured by the Shanghai Containerized Freight Index increased more than $100 per 40-foot container in the week of Nov. 15, but the TSA had recommended an increase of $400 in all Asia-U.S. lanes.

"The central truth in this market is that every carrier is operating at a loss,” said Brian Conrad, TSA executive administrator, in a written statement. "Some may achieve net profit from cost-cutting, but the revenue line in each case is lower, and that has long-term service implications for customers.”

Conrad acknowledged the difficulty of raising rates in a highly competitive market, but said that pressures on carriers from capital markets and parent companies to improve profitability are gradually overtaking supply-demand considerations.

"There is an unrealistic perception that we have a huge capacity gap from Asia to the U.S. and therefore that rates charged in the short-term transactional market should serve as benchmarks for the entire trade in 12-month contracts,” Conrad said. "This thinking devalues the service provided, ignores rising fuel, equipment and operating costs, and has now begun to affect the ability of container lines to access capital markets and even government support for the future.”

TSA container lines said they cannot accept contract demands for 2014-15 rates that are based on, or below, current short-term levels, and they cannot agree to provisions that extend free-time allowances, absorb a portion of chassis-related costs as carriers are exiting that business or mitigate fuel surcharges. As a result, TSA container lines said they see the scheduled December and January rate adjustments as "setting the table” for "significant” additional increases contained in 2014-15 contracts.

The Transpacific Stabilization Agreement, a forum for container lines serving trade from Asia to ports and inland points in the U.S., includes APL, China Shipping Container Lines, CMA CGM, Cosco Container Lines, Evergreen Line, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, "K” Line, Maersk Line, Mediterranean Shipping Co., NYK Line, OOCL, Yang Ming Marine Transport and Zim Integrated Shipping Services.

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Do you know an MGTA member who was recently promoted or hired to an import/export company? Know of a member who recently got married or had a new addition to the family? Share the good news with your industry colleagues by emailing jlloyd@scoular.com.

Country of the Month: France

France

  • Full name: French Republic
  • Population: 63.5 million (UN, 2012)
  • Capital: Paris
  • Area: 543,965 sq km (210,026 sq miles)
  • Major language: French
  • Major religion: Christianity
  • Life expectancy: 78 years (men), 85 years (women) (UN)
  • Monetary unit: 1 euro = 100 cents
  • Main exports: Machinery and transport equipment, agricultural products, including wine
  • GNI per capital: US $42,420 (World Bank, 2011)
  • Internet domain: .fr
  • International dialing code: +33

A key player on the world stage and a country at the political heart of Europe, France paid a high price in both economic and human terms during the two world wars.

The years which followed saw protracted conflicts culminating in independence for Algeria and most other French colonies in Africa as well as decolonization in south-east Asia.

France was one of the founding fathers of European integration as the continent sought to rebuild after the devastation of World War II.

In the 1990s Franco-German cooperation was central to European economic integration. The bond between the two countries was again to the fore in the new millennium when their leaders voiced strong opposition as the US-led campaign in Iraq began.

But France sent shockwaves through European Union capitals when its voters rejected the proposed EU constitution in a referendum in May 2005.

France's colonial past is a major contributing factor in the presence of a diverse multicultural population. It is home to more than five million people of Arab and African descent.

It has a number of territories overseas which, together with mainland France and Corsica, go to make up the 26 regions which the country comprises. It is further divided into 100 departments, five of which - French Guiana, Guadeloupe, Martinique, Reunion and Mayotte - are geographically distant from Europe.

U.S.-FRANCE RELATIONS

The United States and France established diplomatic relations in 1778 following the United States' declaration of independence from Great Britain, and France provided key assistance to the United States as an ally during its war of independence. The Vichy Government of France severed diplomatic relations with the United States in 1942 during World War II; relations were normalized in 1944. The United States and France are among the five permanent members of the UN Security Council (P5).

Relations between the United States and France are active and friendly. The two countries share common values and have parallel policies on most political, economic, and security issues. Differences are discussed frankly and have not generally been allowed to impair the pattern of close cooperation that characterizes relations between the two countries.

The U.S. and France work closely on many issues, most notably in combating terrorism, efforts to stem the proliferation of weapons of mass destruction, and on regional problems, including in Africa, the Middle East, the Balkans, and Central Asia. As one of the P5+1 powers and as a leader of the European Union, France is working to prevent Iran from developing nuclear weapons. In the Israeli-Palestinian conflict, France fully supports U.S. engagement in the peace process. France is one of the North Atlantic Treaty Organization's (NATO) top five troop contributors. The French support NATO modernization efforts and are leading contributors to the NATO Response Force.

Bilateral Economic Relations
France is a member of the European Union and is the United States’ third-largest trading partner in Europe (after Germany and the U.K.). Trade and investment between the United States and France are strong. On average, over $1 billion in commercial transactions, including sales of U.S. and French foreign affiliates, take place every day. U.S. exports to France include industrial chemicals, aircraft and engines, electronic components, telecommunications, computer software, computers and peripherals, analytical and scientific instrumentation, medical instruments and supplies, and broadcasting equipment. The United States is the top destination for French investment and the United States is the largest foreign investor in France. The United States and France have a bilateral convention on investment and a bilateral tax treaty addressing, among other things, double taxation and tax evasion.

 

December 2013
Volume 10, Issue 6

From the President: Give a Gift to Yourself

Upcoming Events

Deadline Approaching for 2013 MGTA Importer/Exporter of the Year

Canada to Consider Significant Tariffs on Wide Range of U.S. Goods
By Kylle Jordan

Do You Know Where Your Freight Is?
By Hillary Drake, Andersen Windows

Eastbound Pacific Carriers Seek 2-Stage Rate Increase

Country of the Month: France
By Thierry Ajas, Executive Recruiter, Randstad Professionals


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