UPS The Trans-Pacific Partnership (TPP) Webinar

UPS Global Customs Webinar 30 June 2016

The Trans-Pacific Partnership

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Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and reflects prevailing conditions and our opinions

and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. SCS accepts no liability for the content of

this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.


• Panelist

• Shiumei Lin

• Public Affairs Vice President

• Panelist

• Stuart Schmidt

• Trade Compliance Manager

• Host

• Greg Maddaleni, LCB

• Customs Brokerage Manager

Presenters

Changing the global trade landscape

• Panelist

• Bill Ansley

• Vice President, UPS Trade

Management Services





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Agenda

Setting the stage

The TPP “Integrated market place”

Trade in goods

Rules of origin

Trade facilitation

UPS® Tradenomics viewpoint






$34.6 Billion (+18.7%)

US Exports to new FTA partners*

$57 BillionUS Real income increase (by 2030)*

$94 Billion/year**Opportunity LOSS due to delay in

implementation

$23.4 Billion (+10.4%)

US Imports from new FTA partners*

TPP Area

• 800 million people

• 12 markets

• 36% of global GDP

• 1/4 of world’s trade**

Source:*International Trade Commission (ITC) – May 2016 **Peterson Institute – Jan. 2016

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and

reflects prevailing conditions and our opinions and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public

sources or which was otherwise reviewed by us. SCS accepts no liability for the content of this presentation, or for the consequences of any actions taken on the basis of the information provided.


Setting the stage

• Currently pending ratification by national parliaments including United States

Congress prior to entry into force.

• The TPP establishes a platform for other economies to join in the future, towards

a free trade agreement of the Asia Pacific.

• New FTAs among some countries established

• E.g., US now has FTAs with Brunei, Japan, Malaysia, New Zealand, and Vietnam.

• Existing FTAs have been upgraded.

• E.g. Between US and Singapore, there are practically no more tariffs. Singapore exports

to Japan now have lower duties and faster phase-outs for elimination, as compared to the

existing Singapore-Japan FTA.

Source: TPP Agreement – Nov. 2016; Asia Trade Centre – Jan. 2016

Implications:

How might your company shift your buying / selling patterns to take advantage of

the new country pairings?





Integrated market place

Accumulation

• US and other TPP partners have agreed to ‘accumulation of origin’ - allowing the

sourcing of raw materials, parts & components to count towards content to qualify

for preferential duties.

• E.g., yarn from the US + Design in Singapore + Fabric from Japan + Cut & Sew in

Vietnam to qualify for preferential duties offered by the United States, traditionally as high

as 15-20%.


Implications:

How might your company align its supply chain to maximize this opportunity?





Trade in goods

• Reduction in tariffs (period).

• Effectively eliminate all duties across member countries with few exceptions

– A much deeper commitment to eliminate tariffs across the board, but with a maximum

time from (30 years) to complete them

• Significant impact in areas such as food products, automotive, apparel and footwear,

where tariffs have traditionally been high

Source: ITC – May 2016; TPP Agreement – Nov. 2016; Asia Trade Centre – Jan. 2016

Implications:

How can your company prepare now in order to be a “first mover” in adapting to

these changes?





Trade in goods

• Provisions for goods re-entered for repair/alteration and temporary imports

• No duty, regardless of origin

• Remanufactured goods

• In the past not allowed at all or only at a high duty

• With TPP, classify like the corresponding “new” product

Source: TPP Agreement – Nov. 2016

Implications:

What adjustments to your repair / alteration process do you need in order to

benefit most from these changes?





Rules of origin

• Self-certification process

• Avoid a lengthy and expensive certificate of origin issuance process

• TPP Committees on Trade in Goods and on Agriculture

• To assure adherence to TPP rules


Implications:

Will you be reviewing the origin of the goods your company currently procures to

estimate the immediate and potential benefit?





Trade facilitation issues

Address barriers to small/medium businesses

• TPP intended to address barriers that pose disproportionate challenges:

• Inaccessible or overly complex trade paperwork

• Opaque regulatory processes with risk of corruption

• Inefficiency within a local customs administration

• Each country required to create and maintain website with TPP requirements

• TPP provision establishes SME* committee to ensure ongoing representation

Source: TPP Agreement – Nov. 2016; Asia Trade Centre – Jan. 2016; USTR.org

Implications:

How can addressing trade facilitation issues open up new markets?

*SME: small/medium enterprise





Trade facilitation

• Expedited (express) customs procedures

• Six hour time window

• Advance rulings / response to requests for advice

• Each country required to issue responses to both

• Binding, therefore greater predictability and clarity

• Penalty administration

• Emphasis on fairness and clarity

• Government to provide written explanations of infractions

• Importers can voluntarily disclose with the possibility to mitigate fines

• Adjustments to MPF


Implications:

How to prioritize obtaining specific advance rulings on specific lanes?





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Putting it all together

Reduced tariffs

Simple COO rules

Accumulation

Advance rulings

Express clearance

Broad repair/ alteration rules





• With TPP in place, how would you choose which available free trade agreement to use?

• How could TPP rules of accumulation possibly change your supply chain?

• Will TPP create new markets for your company?





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Questions and answers

UPS Trade Management Services – when you join forces with an expert

UPS TMS consulting services UPS TMS managed services

Improve compliance and reduce the possibility of errors Improve processing and reduce your exposure to issues

of noncompliance

Minimize the chance of costly delays Simplify broker management with one point of contact

and greater consistency

Decrease time spent on customs issues Increase time to focus on business growth

Reduce the risk of violating government regulations for

trade programs

Decrease the chance of post-entry penalties due to

incorrect filings

Capitalize on accurate classifications

to reduce tariffs

Streamline data management to maximize filing

efficiency





The Transpacific Partnership

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• The Trans-Pacific Partnership will reshape a quarter of the world’s trade

• Please consult the Trans-Pacific Partnership: Benefits for Business ePaper

• Ask today upon checking out

• Inquire about your own Tradenomics discussion

• Inquire upon checkout

• Upcoming webinar topics:

• Global Trade Compliance (July 28th)

• Global Visibility Management (Aug 25th)

The material and information contained in this document is for general information purposes only. UPS does not act as a customs law adviser. You

should not rely upon this material or information as a basis for making any business, legal or any other decisions. UPS makes no representations or warranties

of any kind, express or implied about the completeness, accuracy, reliability, suitability or availability with respect to the material and information contained in

this document for any purpose. UPS will not be liable for any false, inaccurate, inappropriate or incomplete information presented in the document.





Polling questions & Result

1. When is the earliest likely timeframe that

your company can take advantage of

accumulation (after TPP ratification)?

a) Immediately 31%

b) Within 1 year 40%

c) Within 2 years 17%

d) Within 3 years 4%

e) More than 3 years 4%

f) Never 4%

2. How significant are the likely savings for your

company from the implementation of TPP?

a) No savings 4%

b) Marginal savings 54%

c) Significant savings 33%

d) Very significant savings 9%





Polling questions & Result

3. Do you expect the countries that you source

from / or sell to will change with TPP?

a)No - we will continue to work

with the same countries38%

b)Yes - but it will consist of only

minor amounts of our business43%

c)Yes - this will cause a significant

shift for us15%

d)Yes - this will cause an very

significant shift for us4%

4. How significant do you expect the compliance

challenges to be, caused by TPP?

a) None 4%

b) Minimal challenges 59%

c) Significant challenges 37%

d) Very significant challenges 0%

Thank you

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UPS The Trans-Pacific Partnership (TPP) Webinar

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Transcript of UPS The Trans-Pacific Partnership (TPP) Webinar