| Free Trade Area of the Americas - FTAA |
|
Declarations |
Committee |
Committees |
Facilitation |
Society |
Database |
Cooperation Program |
||||
|
|||||||||||
|
Public
FTAA - COMMITTEE OF
GOVERNMENT REPRESENTATIVES ON THE PARTICIPATION OF CONTRIBUTION IN RESPONSE TO THE OPEN AND ONGOING INVITATION
Executive Summary The objectives of the agreement are to promote trade liberalization and promote economic growth and prosperity within the region. Additionally, the agreement is to generate increased levels of trade in goods, services and investment by means of market liberalization through clear, transparent and predicable trade rules. I applaud the committee’s efforts to attempt to promote these objectives. I believe the current trade agreement; however, does not promote nor encourage trade directly among members of the territories but will afford extensive duty-free treatment of goods and services by parties who will not be signatories to the agreement. The rules of origin as proposed in the agreement are so broad that I do not know of any good assembled or produced in the region that will not qualify for preferential treatment. The rules of origin will permit parties outside the limitations to sign certificates of origin. Additionally, pricing arrangements for goods assembled or produced in the territories can be sold by enterprises outside the territories with high intercompany prices that will afford the products to be eligible for preferential treatment when in reality very little value added has been incurred in the territories. The agreement should promote extensive use of raw materials grown or produced within the territories if preferential treatment is to be granted to the article. Additionally, specific rules of origin should be developed for agricultural products that are mixed or processed in one country from agricultural products of multiple countries within the territory. The blending of these materials often still results in an unfinished article for which no tariff change has resulted. However, as the article is now a combination of raw materials from multiple countries, how will the country of origin for the article be determined? The agreement should seek to promote expansion of international business activity for small and minority enterprises within the territories. These companies historically create the majority of most new jobs in most economies and the agreement as proposed neither promotes nor faster expansion of international trade for these types of enterprises. Futhermore, clarification is mandatory for which small economies are to be afforded special and differential treatment under the agreement. While this goal is admirable, lowering of the special and differential treatment to small and minority enterprises could significantly lend support to accomplishment of the agreements objectives. Finally, the agreement should
promote an efficient and expeditions method for dispute settlement so
small and minority enterprises and small economies will not be unfairly
punished through extended administrative and judicial process that are
not affordable to them. The process of dispute settlement in most major
trade agreements works against small and minority enterprises and
smaller economies and this methodology must be avoided if the objectives
of the FTAA are to be achieved.
Tariff elimination should proceed in a systematic,
proportional method that will encourage trade between members but avoid
dumping of large quantities of articles on one party by another party.
Non-Tariff measures: Certain countries utilize pesticides and herbicides prohibited for use in other countries. The members should evaluate chemical products used in the agriculture industry and develop a list of prohibited pesticides and herbicides. Chemical inspections of agricultural products should be established within the territories to prohibit sale and shipment of agricultural products that be detrimental to human health. Safeguards: The automatic incorporation of WTO safeguards into the FTAA insures that the agreement will be ever-changing without input by the parties. Action by the WTO affecting countries that are not a part of the territory will automatically be required by parties within the territory. A more reasonable approach would be that safeguards adopted by the WTO will be reviewed by parties and a determination by the parties will be made before implementation occurs within the territories. Export Subsidies: Elimination of export subsidies will occur on a phased in schedule consistent with reductions and elimination’s negotiated through the WTO to insure competitive equality between parties within the territory and parties outside the territory. Notification -Section 12.7: Proposed time frames are too short given ocean shipping timetables. Notification time frames should be expanded in this paragraph to 30 days and 20 days, respectively. Export Credits. Definition and Scope: Definition of “official sources” should be made to identify any governmental or non-governmental source at the federal, state, and local level or private profit or non-profit enterprises. Other: A rule of origin is specifically required for agriculture because most agricultural articles do not result in new or different after blending or mixing. A rule of origin should be
established for agricultural goods allowing commingling of articles
between the parties and within the territories. The rule of origin
should specify percentage inputs allowed or country of commingling to
determine the country of origin for the article. Inventory methods
established and approved in the “Rules of Origin” should be adapted to
account for commingled raw material used to produce an article.
General Principles: Include an item C. as follows:
Expansion of international trade opportunities for
small or minority business. Article III, 2. Include item C as follows:
Discriminate against a small or minority
enterprises in favor of a large enterprises Scope of Applications - h. Item should be modified
to small, or medium or minority enterprises. Definitions of small, medium and minority
enterprises should be established. Criteria could be sales based and/ or
ownership based.
Article 5 - 5.1.1: Include a statement allowing refund of customs
duties paid on articles imported and subsequently destroyed within the
territories. Article 7 - Customs Valuation - 7.3: Add the word “uniform” prior to appropriate
documentation to insure consistent data requirements are necessitated
and acceptable within the territories. Section Three - Article 8- Article
8.2: Quantitative restrictions on
imports should be permitted to insure fair equitable allocable of market
shore between countries of different size economies within the
territory. Restrictions of this type will insure equal market access to
all enterprises of each party of the agreement to every other party. Article 11- Export taxes -11.2.
Debts this section. Export taxes
are taxes that raise the cost of goods and services within the territory
and could effectively make goods and services sold within the territory
non-competitive with goods imported into the territories. Article 17- Definitions: The definition of identical or
similar goods should be expanded to include either industry or
government standards must be used to determine commercial
interchangeability. Accordingly, the parties must develop uniform
government standards and recognized industry standards to insure
consistency within the territory. Article 17- Definitions: The definition for
remanufactured goods should be combined with the definition of
repair or alteration. Alternatively, remanufactured goods should
only include rework of existing component parts. Replacement component
parts is traditionally a repair process and the integrity of the repair
or alteration definition should be maintained and include the definition
of remanufactured goods. Additional Definition: A definition for recycling should be added.
Drawback, rebates or remission of duty should be permitted for
destruction of an article through a recycling process as long as a new
and different article by name, character or use results from the
recycling process. Article 3- Item 3.1: Safeguards should include tariff rate quotas and
or quantitative restrictions in order to insure equal access by tall
parties to all market within the territory. Failure to provide some defined volume level could
result in unequal access to large economies by small economies.
Additionally, small economies need the protection from large economies
potential for dumping products into a small economy to eliminate
domestic competition. Chapter on Origin Regime In general, the rules of origin
proposed in the 2nd draft of the FTAA are
so broad that virtually any company anywhere in the world should be able
to find a rule of origin that would permit eligibility for preferential
treatment of goods imported and exported within the community with minor
vale added within the territory. The rules should be strengthened to
preserve the prefer of good imported and exported will only receive
preferential treatment if significant value is added to an article
within the territory. This principle is the fundamental objective of the
FTAA. Specific issues follow. Article 1.3: The article needs to be modified to eliminate a
good produced “exclusively from non-originating material.” All article
that are to receive preferential treatment within the territory must
include a portion of materials that are originating in nature and are a
direct material or component of the article. The inclusion of such a
requirement is fundamental to insure expansion of production or raw
materials or components occurs within the territory thereby fastering
growth of business with the territory. Option 1 - 1.3.1:
(a) The transformation process
within the territory must include a change to a different
classification within the Harmonized System and may not include
merely transformation from a parts provision under the Harmonized
System to a finished goods provision under the Harmonized System
for non-originating materials unless substantial direct
materials and direct conversion cost (direct labor and direct
factory overhead) that are originating in nature also used in the
article.
(b) And (c) The FOB expert value
must be a value established between parties residing in the
territory in order to prevent enterprises from using artificial
transfer values established by selling offices in countries not
within the territory to insure a significantly high value for the
exported article that would insure the CIF value of
non-originating materials is less than the stated percentage. Option 2 - 1.3.2: Percentage of non-originating
materials used in an article should be set at an extremely low
percentage to insure that substantial manufacturing or production
efforts are performed by parties within the territory. These low
non-originating percentages will insure expansion of manufacturing and
production of raw materials within the territory in order that the raw
materials will be originating in nature. Option 3 - 1.3.2: Change to a good is produced entirely in the
territory of a Party if the final process(es) of production of the
article are incurred in the territory of a single Party
and regional value content requirements are met. Option 4 - Item 1.4- Option
1-1.4.1: The methods prescribed under this
option are cumbersome and burdensome and will require extensive
paperwork flow between parties within the territory section should be
deleted and methods used to calculate regional value should be
simplified to Option 2 which utilizes more commercial documentation for
calculation regional value content. If the section is maintained, No
calculation based on Non-Originating materials should exist. The
objectives of the agreement are to expand trade within the territory and
any regional value content calculation that encourages use of
non-originating materials violates those objectives. Item 1.4.4.a)(iii) of the section,
if maintained, should not include a deduction for renewable scrap.
Renewable scrap should be deleted. Authority should be granted that
does not include a deduction if the scrap is recyclable and the
recycling process results in the creation of a new and different article
by name, character or use. Item 1.4.4 b) (iii) same comment as 1.4.4 a)(iii)
above. Option 2 - 1.4.2 - TV. FOB value must be a value
establish between enterprises within the territory in order to avoid
price manipulation by enterprises in countries located outside the
territories. Item 1.4.4. a) Item must be
modified to state a sale “by enterprises within the territory”. To omit
this requirement subject articles to price manipulation by enterprises
in countries not located within the territory. Item 1.4.5 Net Cost should be
defined as direct cost (material, labor and overhead) used to produce an
article not solely on exclusion of items not to be included. 4.1 “De Minimis” 4.1 “De Minimis” calculation may
only include activities of parties located within the territories. To
include other parties to manipulate prices or values from activities
outside the territory fails to meet the objectives of the agreement. 4.1.2 Non-originating material
percentages should be set extremely low to faster expansion of business
within the territories as set forth in the objectives of the FTAA. 4.1.4 Same comment as 4.1.2 above 4.2 The entire section on fungible
materials should specific whether the inventory methods are base on
inventory value or quantity. Significant variances can exist and
specificity would eliminate confusion. Indirect Materials Option 1 - 4.8.1 All intermediate materials should
be required to contain a percentage of originating material that is at
least equal or greater in share than the non-originating material
5) Operations that do non confirm
origin 5.1 Items shall not be considered
as originating by reason if a tariff classection add (d) A change
to a finish article from parts of the article if the parts are
non-originating. 6) Direct Shipment 6.1 Return of goods exported from
one party of the territory should be permitted to be returned to another
party of the territory if documentation can be presented that the goods
were originally exported from the territory and the goods have not been
used outside the territory. 7) Invoicing- Origination goods should only
receive preferential treatment is done between parties existing within
the territory. To permit invoice pricing by a third party that is not a
member of the Agreement encourages price manipulation and will afford
goods preferential treatment based on artificial or manipulated prices
when very little or not value was added within the territory. 10 Definitions Net Cost
should emphasize also what is included (i.e. direct
materials, direct labor, and direct factory overhead) as well as what is
excluded in the definition Producer
in addition to the phrase add “within the territory” in order to avoid
manipulation by parties not subject to the Agreement. Transaction Value
in addition to the definition presented must specify
that the Transaction Value is established between parties within the
territory in order to avoid manipulation of the rules of origin by
parties not subject to the Agreement.
Add
definition for Exporter: exporter is a person or enterprise with
physical and legal presence within a party (ies) of the
territory. This definition will result in parties not subject to the
Agreement to establishing a presence within the territory in order to
obtain preferential treatment as identified on the objectives. Customs Procedures Article 2: 2.5 all administrative rulings
issued prospective to the agreement are to be disseminated in broad
means and/or on the Internet once the agreement is in force. This
modified requirement will insure compliance by persons and enterprises
within the territory at the earliest possible date. Other Customs Procedures General All rulings and revocation of
rulings must be published within at least 30 days of their affective
date in order to incur timely compliance. All rulings and revocations
must be published using broad means and the Internet in order to provide
adequate information to persons or enterprises affected by the matter. Article 14.7 Parties not with a physical or
legal presence within the territory should be required to provide a
higher amount of security on their transactions in order to (1) promote
investment and business expansion within the territory, and (2) insure
parties within the territory will not be formed to compensate for
default by parties not subject to the Agreement. Article 19 Reimportation of goods should
cover goods exported by one party within the territory imported by
another party within the territory. Proof of export must be required in
order to obtain preferential treatment upon importation. Article 24 - Definitions
Definition of “Low Value
Shipments” must be uniform within the territory in order to simplify
Customs procedure and afford consistency and uniform treatment by
parties within the territory. Procedures Related to Rules of
Origin. Section 1.2.1 Certification must be signed by
Party having legal and physical presence within the territory to
insure Customs authority may verify authenticity of Party signing
certificate. Persons located within the
territory but not within the country of final production can sign the
certificate if they control production in the country of
production. 1.4 Issuance of Certificate Issuance of a certificate of
origin may only be preformed by a party located within the territory in
order to insure Customs officials’ ability to authenticate the
certificate. 1.5.1 Add an article that the
certificate and all supporting data be submitted to the cognizant
Customs authority within one year of the date of importation of the
subject articles. 1.10.3 Retention of certificates
should be no more than 5 years in order to simplify recordkeeping
requirements. 1.10.4 Period for past importation
of preferential claim should be one year from the dated of importation. 1.12.1 Recordkeeping limitation
should be no more than 5 years in order to avoid costly and burdensome
requirements on enterprises, persons, and Custom officials. 1.12. New. Add a section that
permits importers and exporters to refer Customs authorities to
producers who issue certificates. Producers may be unwilling to share
confidential sourcing and pricing information with producers or
exporters but these parties should not be denied preferential treatment
if verification can be done through the Producer. The producer must be
located within the territory. 2.4 Advance Rulings - Option 1 A
ruling on origin may be obtained by any party exporter, producer or
importer located in territory. The ruling must be issued by a Customs
authority in either the country of importation or exportation.
Additionally, any entities have a legal presence within either the
country of importation or exportation may also obtain a ruling on
origin. Section 2.4.5 All advance rulings and revocations
must be published in a broad manner and on the Internet within 30 days
of their effective date. 6 Definitions Producer. Definition should be modified to include only
entities with a physical and legal presence within the territory. Chapter on Standards 2.4 Standards adopted by any party
should be uniformly adopted by all parties whenever possible. Varying
standards between parties is the significant most single issue that
discourages international trade by small and minority businesses. Article 9-9.2 Clear definition of
countries with smaller economies must be defined for purposes of the
Agreement. Article 3 -3.3 Definition of small economy is
mandatory. 3.7 Additionally requirement to proof dumped or
subsidized imports constitute the principal or document cause of the
industry is burdensome and costly should be deleted. Article 6 Linkage to WTO and
choice of WTO or FTAA settlement of disputes would almost assure
disputes would not be settled in a timely and efficient matter. Disputes
arising under the FTAA should be limited to FTAA resolution. Mechanisms
for efficient, quick settlement of disputes should be developed to
insure that small and minority enterprises receive fair and equal
treatment under the Agreement as do large enterprises under the
Agreement. 49. Consultation should commerce
as early as possible to insure efficient quick settlement occurs. 57. Same comment as 49 above. Item
a. no more than 30 days Item b no more than 5 days. 65. Roster members must have
technical or industry experience. 172. Reasonable period of time
must be defined as “short time”, hopefully within 30 days. A temporary
correction of the problem should be made pending final resolution of the
dispute. Temporary relief will insure equal access to justice and fair
treatment for small and minority enterprises. Alternative Dispute Resolution 228. Arbitration should be
encouraged whenever possible. Arbitration cases must be quick and
efficient, no more than 30 days, in order to timely resolve disputes,
especially for small and minority enterprises. Arbitrators should be
randomly selected from lists of qualified individuals within the party.
Results of arbitration shall be binding on the parties. Market Access Criteria should be added to
authorize special priority be given to small and minority enterprises
from all economies within the territory in the implantation of 7.2 and
7.3. Expansion of small and minority business opportunities should be a
priority under the Agreement. |
 countries |
sitemap |
a-z list |
governmental contact points |
|
|
