U.S. Requires Air Cargo Screening by end of 2012
The U.S. Transportation Security Administration (TSA) mandates that all cargo on U.S.-bound passenger flights will need to be screened for explosives as of December 3, 2012. This initiative helps address a requirement of the "H.R. 1 Implementing Recommendations of the 9/11 Commission Act of 2007" signed by President George W. Bush in August 2007. Originally slated for implementation in December 2011, the cargo screening initiative was pushed back due to industry concerns regarding their ability to meet the initial deadline. The challenge is increasing the security of air cargo without restricting the movement of goods and commerce.
WTO Complaints Against Argentina Import Restrictions
Since June, Argentina has received complaints from the European Union, Japan, United States and now Mexico regarding import restrictions. The complaints stem from the February 2012 announcement requiring permits for all imports, and continued with a requirement for importers to balance their imports with an equal amount of exports. These paper-intensive requirements caused a backlog at ports of entry while importers waited for government-issued paperwork.
Argentina's intention is to shore up foreign currency reserves to pay off foreign debt by reining in the money used to pay for imports, an effective short-term policy. The long-term impact is expected to make growth more difficult as these trading partners are growing more irritated as Argentina is restricting the import of goods and discriminating between national and imported goods.
Brazil Reviews South Korea's Export Processing Zones
Brazil's Ministry of Development, Industry and Trade (MDIC) announced the signing of a memorandum of understanding with South Korea's Ministry of Strategy and Finance allowing the review of South Korea's Export Processing Zones (EPZ). Signed June 2, this agreement will help strengthen bilateral economic cooperation and promote better understanding of South Korea's model for promoting the development of micro-, small- and medium-sized businesses, a model set up in the 1970s that have spurred economic development. Plans are underway to set up a similar EPZ in Brazil.
Russia Joins World Trade Organization
On August 22, Russia formally joined the World Trade Organization (WTO) after 19 years of negotiations. Becoming the 157th member, Russia is the last major trading nation to join, and is required to reduce import tariffs, especially those for vehicles. The WTO aims to create a more even international trade environment by restricting the use of import duties and subsidies. Russia is expected to reduce tariffs by almost 6% making foreign-made goods more accessible and stimulating consumer spending and higher income. Exporters to Russia will now be able to access the $2 trillion economy and offer goods at more competitive prices.
China Reforms Foreign Exchange Management for Trade
According to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), China's renminbi is the third biggest currency by value for the China's State Administration of Foreign Exchange (SAFE) announced reforms to the foreign exchange regime in regards to merchandize trade, not service trade transactions. The reforms aim to significantly simplify import and export foreign currency (FCY) payment practices and drive trade with China, and marks a significant step towards gradually lifting the strict foreign exchange control environment and migrating onsite transaction level checking into offsite monitoring and periodic review.
As of August 1, E, import and export FCY payment practices will be simplified, including:
Trade Documentation Fraud in Chinese Exporters & West African Importers
The International Chamber of Commerce's (ICC) International Maritime Bureau IMB) has noticed an uptick in trade documentation fraud involving Chinese exporters and West African importers attempting to secure financing before goods are shipped.
Exporters are requiring payment of goods before release, an uncommon practice in international trade. Someone (the exporter or importer) is generating false documentation so that funds are released to the exporter, who can then ship the goods. Upon formal shipment, the true (and valid) documents are generated — meaning there are two sets of documentation in circulation