Trade FAQs

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Some of your Questions:

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Q. Who benefits from the lower duty rates negotiated under the U.S.-Korea FTA?

In general, it is the importer that pays the duties in order to clear the goods through customs. So the importer benefits from lower tariffs and the exporter benefits because U.S. products can more readily compete in the Korean market.

Q. Who can certify origin to obtain preferential treatment under the U.S.-Korea FTA?

The information can be provided by any party including producer, exporter, buyer, importer or broker. The actual certification can be provided to the customs authorities of the destination country on a company letterhead or using your broker or freight forwarder software. You can visit export.gov/fta and click on Korea to learn more about documenting origin. There is no mandated format for certification. Also, certification or notarization by a local chamber is not required. Finally, FTA certification is optional and is not required to clear customs. However, if originating is not claimed, your product may be subject to a standard (MFN) duty rate which the importer must pay. Detailed Information on how to claim preferential tariff treatment can be found in Article 6.15, Chapter 6 of the FTA Agreement. If the good meets the required Rules of Origin, preferential tariff treatment can be obtained when the product is imported into either the U.S. or Korea.

Q. Why do I need to go through the process of qualifying my good under the U.S.-Australia FTA if I don't even need a Certificate of Origin?

Any claim for preferential treatment under the U.S.-Australia FTA is a declaration whose truthfulness may be verified or audited by Australian customs. If a preference has been claimed and the goods are found not to qualify, the duty benefit will be lost and penalties may be assessed. Declarations that are found after the fact to be deliberately false may result in significant penalties.

Q. Why do I need to go through the process of qualifying my good under CAFTA-DR if I don't even need a certificate of origin?

Any claim for preferential treatment under the CAFTA-DR is a declaration whose truthfulness may be verified or audited by a customs authority. If a preference has been claimed and the goods are found not to qualify, the duty benefit will be lost and penalties may be assessed. Declarations that are found after the fact to be deliberately false may result in significant penalties.

Q. Why do I need to go through the process of qualifying my good under the U.S.-Korea FTA if I don't even need a certificate of origin?

The statement of eligibility for preferential duty rates is a declaration whose truthfulness may be verified by Korean customs. Declarations found after the fact to deliberately make false statements may result in significant penalties.

Q. Why is Singapore considered a good trading partner?

Singapore maintains one of the most liberal trading regimes in the world. It is extremely easy to export to Singapore. All U.S. exports now enter the country duty free and documentation is minimal. Singapore is a highly developed, English-speaking nation, and maintains a high standard of living. Singapore's government is considered to be efficient, effective, and relatively free of corruption. It is one of the most sophisticated industrial, commercial, financial, and consumer economies in the world. It is an excellent market and test market for U.S. products and services. Singapore is a principal gateway to Southeast Asia, which means that American manufacturers can find interested local buyers or regional ones as most of Singapore's distributors sell to other Southeast Asian countries.

Q. Why is Morocco considered a good trading partner?

The U.S. private sector supports the Agreement because it: (1) evens the playing field with European competitors; (2) expands market access; (3) bolsters economic reforms already underway in Morocco; (4) builds on a long history of close U.S.-Moroccan relations; (5) promotes jobs, democracy, and stability; and (6) furthers President Bush's goal of a broader United States-Middle East Free Trade Agreement. The Agreement reinforces many of the economic reforms undertaken by Morocco in the past five years. King Mohamed VI has moved his country away from economic central planning. Morocco has already begun to liberalize its telecommunications sector, reform its audio/visual industry, modernize its financial sector, and enact strong legislation to protect intellectual property rights ("IPR"). The Agreement helps solidify and expand these benefits, enhancing prospects for US companies. Other countries in the Middle East, also interested in free trade agreements with the United States, are looking at this Agreement as an example for their own economic restructuring and development. The Agreement will promote job growth, stability, and democracy in Morocco, a close Arab ally of the United States, as well as here at home. Job creation is one of the United States and Morocco's highest priorities. The Agreement creates opportunities for new U.S.-Moroccan business partnerships that can, in turn, spur employment gains in both our countries. Finally, increased trade will support Morocco's move toward greater democracy. Morocco's October 2002 parliamentary elections were widely hailed as free and fair. In those elections, Morocco permanently reserved more than 10 percent of Parliament's seats for female lawmakers. Morocco has been a steadfast ally in the war against terror. The United States and Morocco have maintained a long, cooperative relationship. Morocco was the first country to recognize the independent United States and the country with which we have the longest treaty relationship. The Agreement is the capstone of a bilateral relationship that dates back more than two centuries. Parity with the European Union: The European Union and Morocco implemented a free trade agreement ("Association Agreement") in March 2000. Over the last 10 years, EU exports to Morocco have doubled. Between 1999 and 2001, European goods accounted for nearly 60 percent of Moroccan imports, while U.S. goods accounted for less than 6 percent. The Agreement levels the playing field for U.S. companies vis--vis their European competitors and helps increase U.S. market share in the North African market. In short, the Agreement provides parity for U.S. export priorities with the European Union. In addition, the design of the Agreement is comprehensive; it includes services and investments, as well as goods and commodities. For U.S. service providers, this means that existing barriers to services trade (i.e., capital requirements and regulatory frameworks have been made more transparent, been decreased, or will be phased-out completely). By contrast, the EU-Morocco Association Agreement contains more limited, less comprehensive services commitments and does not contain the high-standard investment protections available to U.S. investors under the Agreement. Middle East Free Trade Area: Morocco is the North African pillar in a U.S.-Middle East Free Trade Agreement (MEFTA), as announced by President Bush in May 2003. MEFTA reflects the U.S. government's long-term commitment to promoting economic growth, expanding opportunities, and ensuring stability in the region. The region-wide free trade agreement, to be completed by 2013, will provide new export opportunities to U.S. farmers, ranchers, and manufacturers. Jordan and Israel are already FTA partners; negotiations with Bahrain were recently concluded.

Q. Will U.S.-Australia FTA create new opportunities in electronic commerce?

The Agreement ensures that digital products, including software, music, video, and text, will receive non-discriminatory treatment and makes permanent the current practice of not subjecting such transmissions to customs duties. This is the first Agreement to include provisions on facilitating authentication of electronic signatures, encouraging paperless trade and establishing a program for cooperation on other e-commerce issues.

Q. Will there be new arbitration procedures for investment disputes under the U.S.-Australia FTA?

In recognition of the unique circumstances of this Agreement - including, for example, the longstanding economic ties between the United States and Australia, their shared legal traditions, and the confidence of their investors in operating in each others' markets - the two countries agreed not to adopt procedures in the Agreement that would allow investors to arbitrate disputes with governments.

Q. Will this require additional documentation for all of my shipments to Australia?

First, you do not need to provide any additional information if the importer does not claim preferential treatment under the Agreement. U.S. goods can still enter Australia without FTA benefits. If your goods qualify, however, your importer will want to claim FTA duty benefits. The importer will need to be able to supply a statement of why the goods qualify. So your importer may ask you for proof of qualification, such as a Certificate of Origin or another statement.

Q. Will this require additional paperwork for all of my shipments to Korea?

No. The U.S.-Korea FTA only applies to goods that are deemed to be originating and claim eligibility for lower preferential rates of duty. No special certificate of origin is needed unless requested by your buyer.

Q. Will U.S. companies be able to sell to the Australian government?

Under the Agreement, U.S. suppliers are granted non-discriminatory rights to bid on contracts to supply Australian Government entities, including all major procuring entities and administrative and public bodies. Commonwealth (federal), state and territory government agencies are included. The Australian Government will eliminate its industry development programs, under which suppliers have had to meet various types of local content or local manufacturing requirements as conditions of their contracts. The Australian Government also will restrict its use of selective tendering, which will ensure that U.S. suppliers have a fair opportunity to compete for government contracts.

Q. Is there someone who can help me get paid?

In international trade, problems involving bad debts are more easily avoided than rectified after they occur. Credit checks and services such as the international company profile can also limit the risks. Export.gov has a section on payment disputes that can assist in locating the proper assistance center.

Q. What prudent credit practices should I follow?

There are a number of prudent credit practices. The common practices are listed below in the order of most secure to least secure: 1. Cash in advance; 2. Documentary letter of credit; 3. Documentary collection or draft; 4. Open account; and 5. Other payment mechanisms, such as consignment sales. The Basic Guide to Exporting describes each of these practices in greater detail.

Q. Are there special requirements for shipping textile items?

Shipping textile items in small quantities (i.e. gifts) usually does not pose a challenge. However, large shipments of textile items may require certificate of origin signed by manufacturer. Some countries also have restrictions on used clothing or may require fumigation. Get more information on exporting textiles, including information on used clothing, labeling, HS numbers for textiles and tariffs.

Q. Can I still use the Incoterms 2000?

According to the International Chamber of Commerce, all contracts made under Incoterms; 2000 remain valid even after 2011. In addition, although the ICC recommends using Incoterms; 2010 from January 2011 onward, parties to a sales contract can agree to use any version of Incoterms after 2011. It is important, however, to clearly specify the chosen version of incoterms being used(i.e. Incoterms; 2010, Incoterms; 2000, or any earlier version).

Q. Do I need to fill out a Shipper Export Declaration (an EEI) form when making a private shipment?

If your shipment value is greater or equal to $2,500 (of one HS/product category), then you need a Shippers Export Declaration (SED). Your shipper can fill out one on your behalf (with power of attorney) or you can do it yourself by going to aesdirect.gov. For assistance with SED you may call 1-800-549-0595 (US Census). You will need the SED form regardless of the value of the shipment when an export license is required.

Q. Does the Schedule B search look for data over the entire U.S. International Trade Statistics web site?

No. This search ONLY LOOKS FOR SCHEDULE B CODES. You cannot search for trade balances with other countries using this site.

Q. How can I determine the tariff rate for my product?

Step 1: Determine your HS or Schedule B Number The first step in determining duty and tax information is to identify the Harmonized System or Schedule B number for your product. The duty amount will also depend on the trade terms you have negotiated with your buyer. Step 2: Determine Tariff Rates Once you know your products Schedule B number, you will be able to determine the applicable tariff and tax rates in a particular foreign country. The following links can help you locate specific tariff and tax rates for your product. Country Specific Tariff and Tax Information: Tariff and tax information for exporting to 97 countries. U.S. Government Tariff Resources for Agricultural Exports Online Tariff Database provided by Traffic International Tariff and Tax Information for U.S. Territories Sending Gifts Additional Tariff Resources (including information for importing into the U.S.) For Assistance After you have identified the Schedule B number, if you need assistance obtaining foreign import fee, duty, and tax information please call the Trade Information Center at 1-800-USA-TRADE. To obtain duty and tax information, you may also e-mail a tariff inquiry (you must include the HS number) to the Trade Information Center at [email protected] or fax us at (202) 482-4473.

Q. How do I find the duty that applies to my personal shipment?

Most countries have allowances for personal shipments within a certain value, or certain item quantity. Prohibited items vary by country, as do postage prices and mailing conditions. Contact your shipper for clarification. Should your shipment be subject to an import duty, it is collected at time of customs clearance or when the recipient takes possession of the package. Some shippers may also allow prepaying duties and taxes at the time of shipment. To determine the import duty, first confirm your product Harmonized System (HS)/Schedule B number. This HS number can then be referenced against specific countrys tariff schedule. Major shippers should have this information available. Please note that only a licensed Customs broker or foreign customs are permitted to make a definitive classification determination. In addition, various sources such as FedExs WorldTariff (EuroTariff in Europe) research and provide duty and tariff rates for over 160 countries for a nominal fee ($7 per query). There are many additional private sector tariff resources.

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