An update from MGTA

Midwest Global Trade Association

World Trader

From the President: Give a Gift to Yourself

By Jason Lloyd, MGTA President

Jason LloydI am happy to be your new MGTA president; we will have an exciting year in front of us. We held our annual meeting January 16, at the Metropolitan Ballroom with great attendance.  The silent auction was a success raising money for our scholarship fund. Our focus for 2014 is on continued quality education programs, networking and growing our membership. With a new year upon us, it is important to get involved and maximize your membership, the networking and volunteer opportunities are endless. Please feel free to reach out to me with any questions.

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Upcoming Events

MGTA Seminar: The Fundamentals of Importing

This event has limited space available and will sell out very soon.

March 27, 2013
8:30 a.m. – 4:30 p.m.
ME Elecmetal
Minneapolis, MN
Details and online registration

Valuation, classification, country of origin, duty determination and record keeping are the mainstay of an importer’s daily compliance diet! These building blocks form the foundation of a healthy and vibrant trade compliance program. Our speakers will highlight what makes these areas so critical, and how they can be managed to the benefit of your company or client.

We hope you join us for an informative overview of import fundamentals. This course is designed for newcomers to trade compliance, but also will provide a fresh perspective to seasoned veterans!

MGTA Seminar: Basic Exports: Deconstructing your export through the lens of the SLI

April 24, 2014
8:30 a.m. – 4:00 p.m.
C.H. Robinson
Eden Prairie, MN
Details and Online Registration

MGTA Golf Tournament: Now Accepting Sponsors

August 13, 2014
Noon
Crystal Lake Golf Course
Lakeville, MN
Download the Sponsor Form

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2013 Importer/Exporter of the Year Award

The Donaldson Company was awarded with the 2013 Importer/Exporter of the Year Award at the annual dinner for achievements in global trade compliance. Donaldson is committed to global growth and has set a goal of doubling revenue by 2021. To support this growth strategy and ensure that trade compliance standards continue to be met, the Global Trade Compliance department has made tremendous strides over the last year. The department embodies true team work, commitment, and drive for excellence. Their effort and focus has resulted in enhanced procedures, greater company awareness of trade compliance, and collaboration across business teams. Donaldson’s leaders continually demonstrate their commitment to trade compliance and actively support the Global Trade Compliance department.

The Global Trade Compliance department kicked off their enhancement activities with working sessions to identify strengths and weaknesses. A week-long Strategy Deployment session followed. The outcome was a five (5) year road map that has allowed for prioritization and forward looking goals.

On the import side, one important accomplishment this year is the successful implementation of import process enhancements for Donaldson’s US/MX border transactions. This effort included process flows of current state, documenting gaps, identifying desired state, close partnering with our broker and implementing change. This process occurred over several months and has resulted in fewer cross border delays, daily shipment visibility, and regular metric reporting.
On the export side, the Global Trade Compliance department successfully managed the implementation of the Export Control Reform Initiative. All ITAR parts were reviewed and reclassified prior to the effective date of the impacted categories. New procedures were created, trainings executed, and the ERP updated.

The Global Trade Compliance department implemented a free trade tool to better support Customers and Donaldson’s global growth. The tool enhances free trade compliance through automation and helps Donaldson realize additional duty savings.

Given Donaldson’s focus on global growth, commitment to trade compliance initiatives, and the dedication of its Global Trade Compliance staff, for these reasons we awarded Donaldson with the MGTA 2013 Exporter/Importer of the year award.

 

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2013 In the Rearview, 2014 Going Fast

By Hillary Drake, Sr. Transportation Analyst, Andersen Windows

2013 was a volatile year in the business world. We’ve seen mixed signals all year – strong manufacturing demand with weak consumer confidence, increasing mortgage rates and housing starts, and a stock market growing while unemployment is persistently high.

This volatility played out in the transportation sector all year. Spot rate volatility was high in the truckload and ocean markets and there were questions about peak season surcharges until Thanksgiving. The changes in hours of service for CDL drivers increased costs, equipment costs increased, but fuel was steadier than it’s been in years. All in all, 2013 has left the business community cautiously optimistic for 2014.

There are headwinds: major labor contracts are up, holiday retail results are disappointing, and consumer demand is still low. But employment is improving and demand is improving with it. We’re poised for economic growth and the pains that come with it.

The holiday season demonstrated how little slack there is in the U.S. transportation system. UPS and FedEx didn’t have enough capacity for holiday deliveries and most of the LTL carriers are still recovering from the busy December and weather challenges of January. When the economy expands, the industry may not be able to cover demand. Shippers are locking in capacity for the year — are you doing the same?

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China’s Rejection of U.S. Corn and Dried Distillers Grains (DDGs)

On Dec. 20, 2013, 545,000 tonnes of U.S. corn and corn by-products were refused by China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ). China's quality watchdog stated that the discovery of a specific genetically-modified strain of corn in the shipments is what caused the rejection - as it had not been approved by Beijing. That specific strain was the MIR 162 variety developed by Syngenta AG.  The AQSIQ also issued a notice to local authorities and asked them to increase testing of U.S. DDG shipments after the GMO strain was detected in two batches of shipments totalling 758 tonnes on Dec. 23. Then on Dec. 26, China turned away about 2,000 tonnes of U.S. DDGs.

The strict inspections triggered Chinese buyers to cancel their largest U.S. corn purchases in 14 months, while several more cargoes of the grain initially bound for China were diverted to other Asian nations (mostly Japan and South Korea). Further, the U.S. price of DDGs slid 20 percent in a week as exporters shied away from selling the corn-based feed grain to China after Beijing rejected shipments containing the strain. 

The rejection is especially disturbing as China is the world's top buyer of U.S. DDGs, accounting for about 40 percent of U.S. exports during the 2012/13 marketing season. Strict testing for MIR 162 comes as Beijing seeks to curb cheap corn imports and support domestic prices for the grain, industry sources have said.  Cargoes are still leaving the United States, albeit at a slower pace.  The final week of December, U.S. exporters shipped 204,600 tonnes of corn to China, down 17 percent from the previous week.

Last week Beijing renewed expired import certificates of several biotech corn strains - an encouraging sign that the U.S. and China will soon resolve the import dispute over the unapproved corn variety. "These were renewals, so it's not new, but it's comforting to the companies who had been waiting for quite some time for this," said U.S. Agriculture Secretary Tom Vilsack. Though the variety is approved for import by all other major global buyers, Syngenta AG's MIR 162 corn continues to await approval from Beijing.

Also encouraging is the fact that an increasing amount of DDGs are passing Chinese quarantine inspections. In the first week of January, "there was 20-25 percent of imported DDGs passing the customs inspection and the passing rate has increased to 40-50 percent this week," said Shanghai-based analyst firm, JC Intelligence Co..  JCI also reported that the Chinese grain inspection authorities in Guangdong and Shanghai are meeting with industry participants this week to discuss the inspection process.

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Country of the Month: China

China has been a member of the World Trade Organisation (WTO) since 2001 and a member of the 21-member Asia-Pacific Economic Cooperation (APEC) since 1991.

In October 2008, China entered into its first bilateral trade agreement with an Asian country, when it signed an agreement with Singapore. In January 2010 a major trade agreement between China and the Association of South East Asian Nations (ASEAN) came into effect, eliminating 90% of tariffs and investment barriers with ASEAN’s six richest member states (Thailand, Indonesia, Malaysia, Singapore, the Philippines and Brunei) and committing the remaining four (Vietnam, Cambodia, Laos and Myanmar) to the same levels by 2015. The deal is the world’s third-largest regional trade agreement. China has also entered into bilateral trade agreements with Chile, Pakistan, Jordan, Thailand, Senegal, Peru, Costa Rica, Switzerland and New Zealand and is currently negotiating free trade agreements with Sri Lanka, Australia, Norway, Iceland, India, the Gulf Cooperation Council and the European Union.

Since joining, China has gradually been reforming its trade regulations to comply with WTO standards. Despite these reforms, there are still some barriers to trade. Most notably, companies must be registered with the Administration for Industry and Commerce and authorised by the Foreign Trade Administration before they are permitted to enter into import or export trade.

China maintains 13 approved free trade zones for imports and 64 processing zones for exports.

In 2013 China opened the China (Shanghai) Pilot Free Trade Zone, which ties together four pre-existing trade zones. The zone focuses on six key areas (banking, shipping commercial professional cultural, social services and investment), with foreign and domestic entities operating from the zone in these sectors treated equally for investment purposes.

Main trading partners for imports and exports:
Imports (European Union 11.7%), Japan 9.8%, South Korea 9.3%, Taiwan 7.9%, United States 7.4%.
Exports United States 17.2%, (European Union 16.3%), Hong Kong 15.8%, Japan 7.4%, South Korea 4.3%.

Main traded products / sectors – share of total imports and exports
Imports Manufactures 50.4%, fuels and mining products 25.5%, agricultural products 7.5%, travel 4.9%, commercial services (excl. travel and transportation) 4.4%, transportation 4.1%.

Exports Manufactures 86.0%, commercial services (excl. travel and transportation) 4.5%, agricultural products 2.9%, fuels and mining products 2.5%, travel 2.2%, transportation 1.7%.

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.

March-April 2014

From the President

Upcoming Events

2013 Importer/Exporter of the Year Award

2013 In the Rearview, 2014 Going Fast
By Hillary Drake, Sr. Transportation Analyst, Andersen Windows

China’s Rejection of U.S. Corn and Dried Distillers Grains (DDGs)
By Kylle Jordan, Consulate General of Canada in Minneapolis

Country of the Month: China

Annual Sponsors

Gold
Bremer Bank


Gold
Focus Solutions


Silver
CH Robinson


Silver
Drinker, Biddle, and Reath


Silver
HMM


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King Solutions


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Neville Peterson, LLP


Silver
Zepol


Bronze
Bennett Jones


Bronze
Williams Mullen