Free trade agreements (FTAs) open up market access between signatory countries by reducing barriers to trade, which makes it easier and more cost effective for U.S. companies to export their products and services to trading partner markets. However, this process isn't always that easy. For many trade compliance professionals, the most complex challenge is understanding and navigating the various “rules of origin.” Rules of origin are highly complex and technical rules that describe how exported goods shipped to a country or region may qualify for duty-free or reduced-duty benefits under the applicable trade agreement.

Let’s say you’ve just imported a shipment of hoverboards to sell in the United States. You have screened all trading partners, tracked your shipment, ensured import compliance, and minimized your duty payments. However, your hoverboard isn’t legal to sell in the US just yet – it needs a label, and the guidelines surrounding packaging can be just as complicated as all the other steps you just completed.

Consumer Product Safety regulations and other OGAs exist to prevent customer deception (or facilitate value comparisons) about package contents, ingredients, size, manufacturer, and other concerns.  Any deception or non-compliance can result in heavy fines, revoked license to sell, and unflattering brand attention. So how does a company ensure that it remains compliant?

We’ve all seen the statistics on how much global trade is expected to grow in the next few years. With that growth comes a multitude of free trade agreements: there are more than 500 FTAs today. William Methenitis, Global Director of Customs and International Trade at Ernst & Young, told Treasury & Risk this week that the pace at which new agreements are being put in place is accelerating.

Manufacturers can spend almost 50 percent of revenue on purchasing parts alone, which places low-cost sourcing at the top of any business strategy. To maximize your company’s savings, look no further than free trade agreements (FTAs).

Are you interested in learning about the best practices of firms qualifying product for NAFTA and other Free Trade Agreements?

In Part 2 of my "Made in America" feature, let's take a look into the requirements for a product to be considered "Made in America."

The following information is courtesy of Sandler, Travis & Rosenberg, PA.

Importers Have Short Time to Comment
Before Retaliation List Finalized

The Brazilian Chamber of Foreign Trade (CAMEX) published Nov. 9 a list of 222 items (click here for full list [PDF]) of U.S.-origin products that may be subject to retaliatory duties of up to 100% beginning in January 2010. The World Trade Organization ruled in August that Brazil may impose these duties because the U.S. has failed to comply with an earlier WTO ruling against subsidies provided to U.S. cotton growers. Brazil is now claiming the right to retaliate against up to US$900 million in U.S. goods and services.

Brazilian imports of the U.S. goods on the CAMEX list are valued at US$2.7 billion, representing 10.6% of all goods imported from the U.S. in 2008. Industry and commercial associations and other entities now have until Nov. 30 to provide input on the listed products. After considering domestic industry and consumer interests, CAMEX will develop a final list of about US$450 million worth of U.S. goods and present it to the WTO for approval. These products will then be subject to import duties of up to 100%.