Preparing for 2016 Trade Developments - Global Trade Magazine
New Articles
  January 20th, 2016 | Written by

Preparing for 2016 Trade Developments

[shareaholic app="share_buttons" id="13106399"]


  • Several trade developments will change the way importers, exporters, and customs brokers do business in 2016.
  • Information Technology Agreement will eliminate tariffs on 200 IT products, valued at $1.3 trillion in annual trade.
  • As of February 28, 2016, ACE will be the only way to submit U.S. electronic cargo release information.
  • Maquiladoras allows companies to export from Mexico without paying customs duties on imported raw materials.

As the trade landscape continues to evolve, companies that are already global as well as those looking to expand their global market in 2016 will encounter important changes. Several trade developments, including the Information Technology Agreement (ITA), Automated Commercial Environment (ACE) and IMMEX (Maquiladora) Program will likely change the way importers, exporters, and customs brokers conduct business in 2016.

Here is a high-level breakdown of what each of these developments and initiatives mean and how to best prepare for them.

Information Technology Agreement (ITA). Finalized in December 2015, the ITA is the first tariff-cutting agreement in the World Trade Organization in 18 years. It will eliminate tariffs on roughly 200 IT products, valued at approximately $1.3 trillion in annual trade. More than 80 countries, including the U.S., Canada, and China, representing 97 percent of world trade in information technology products, have agreed to participate in the ITA. The agreement will offer trade opportunities that weren’t originally available and increase competition for U.S. tech manufacturers by opening the U.S. market to similar products from other countries.

Automated Commercial Environment (ACE). Beginning February 2016, filers are required to transmit cargo release and entry summaries for U.S. imports, as well as data sets required by the Food and Drug Administration, the Animal and Plant Health Inspection Service, and the National Highway Traffic Safety Administration, following ACE processes and technical requirements. The U.S. Customs and Border Protection updates aim to streamline and leverage more current technologies and process changes, improving the exchange of information between the trade, CBP, and 47 different federal agencies through a single government window. Every U.S. company that imports and exports is required to update its systems and protocols to comply with ACE by February 28, 2016. As of that date ACE will be the only way to submit electronic cargo release information.

IMMEX (Maquiladora) Program. This trade agreement allows companies to import raw goods and services to Mexico to be manufactured and re-exported without paying customs duties, along with other benefits. Although more than 6,000 companies are approved by Mexican authorities and participating in IMMEX, many of them may have their VAT exemption at risk if they don’t have the necessary controls to cover the requirements to obtain the proper VAT certification. Due to changes in regulations since 2014, the Mexican government eliminated the automatic 16 percent value-added tax (VAT) exemption for temporary imports of goods unless companies obtain a specific VAT certification. Companies taking part in the IMMEX Program should make sure they have obtained a certification.

How can you prepare?

Once you understand how these changes could affect your company, take the following steps.

Know your capabilities. Conduct a comparative analysis of your business to evaluate its potential for trade in emerging markets.

Make a compliance strategy. Implement a trade compliance program based on the rules of each applicable regulation or trade agreement. As part of this process, you can determine how to best work with foreign suppliers and choose the right supply chain to align with your business strategy.

Don’t be afraid to ask for help. If you’re short on time and resources, partner with a customs broker or compliance expert to simplify the process and provide assistance with data analytics, classification, rules of origin and other services.

Bernie Hart is vice president for global trade management sales at Livingston International.