A Government of the People, for the People

Remember back in high school when we all had to take a government or civics class?  As teenagers, we probably saw the class as mundane or thought it useless.  But what we often overlooked was its purpose of showing us how laws are made and implemented in our country and the importance of our contribution to that process.  Now, many moons later, I was once again reminded of that importance as I walked down the hallowed halls of congress during the 2014 NCBFAA Government Affairs Conference (GAC) this past week.


The mission of the GAC is to allow representatives of the association to have face-to-face time with the legislators whose functions affect the industry.  I also must stress how important that in person connection is since it is crucial that congressmen and women who make the laws affect our business hear in person from us the issues that matters to us.


On the first day of the GAC, the NCBFAA prepped attendees on the critical issues of the year so that the following day, they would arrive to the offices of their respective representatives with a clear voice and agenda.  This year, we brought the following issues up to the hill:

  • The Export-Import Bank
  • The Trade Agenda
    • Customs Reauthorization
    • Water Resources Bill and Harbor Maintenance Fee
    • Generalized System Preferences (GSP) Renewal
    • Miscellaneous Tariff Bill
    • Trade Promotion Authority (TPA) Renewal
  • Modernizing the Logistics of Trade

This year’s GAC was also extra special, because the NCBFAA delegation was able to sit down with the Congressional Port Caucus, an ad hoc group in Congress that promotes the interests of local ports and those engaged in international trade who do business in them.


For me, it was a great experience to be able to voice my concerns as both the NEI Executive Director and as a global logistics practitioner.   It is so important that we understand how Congress works, just like in high school, but now more so because it affects the industry and our jobs.  We here at the NEI are always working hard to deliver to you valuable content to enrich your knowledge base and I am proud to say that many of the people who develop our content continue to be involved through events such as the GAC in contributing to our country’s complex yet prodigious legislative process.


Antidumping Duties (ADD) and Countervailing Duties (CVD): Do we really understand the process?

Through the assessment of ADD/CVD, the U.S. government seeks to ensure a level playing field for U.S. manufacturers and suppliers who may be hurt by importers receiving subsidies from a foreign government, or who are selling their products at artificially low prices in the United States.

Many participants of international trade take this subject very lightly, but ADD/CVD cases may present themselves at any time and cause great financial burden on those dealing with products affected by these duties.  If we as trade professionals maintain our awareness of the process and the underlying causes of Anti-dumping and Countervailing Duties, we can provide the best recommendations on how to deal with this issue and avoid financial hardships caused by our involvement with items affected by ADD/CVD cases.

The first step is to fully understand the definition of ADD and CVD.

According to the NEI Certified Customs Specialist (CCS) Course, Antidumping Duties are additional duties that may be assessed and collected on imported goods that are found to be dumped in the U.S. market.   The amount is generally calculated to offset the dumping margin. Dumping involves selling imported goods at a price that is less than the price used to sell the same goods in the exporter’s home market, or at a price that is lower than the goods’ cost of production.   To be unlawful, dumping must threaten or cause material injury to an industry in the United States.   Dumping is recognized by most of the trading world as an unfair practice.

Countervailing Duty is another additional duty that may be collected by the United States to offset an amount offered by a foreign government to subsidize a local industry.   The foreign government provides financial assistance in the form of loans at a preferential rate, tax exemptions, and/or indirect cash payments.   For goods that are subsidized in this manner, and exported to the United States, an additional duty is assessed after an investigation and process has taken place.

Under the Antidumping and Countervailing Duty Laws written in the Tariff Act of 1930, there is a two-step process: The International Trade Administration of the U.S. Department of Commerce determines whether the dumping or subsidizing exists and, if so, the margin of dumping or amount of the subsidy; the United States International Trade Commission (USITC), determines whether there is material injury or threat of material injury to the domestic industry by reason of the dumped or subsidized imports. For industries not yet established, the USITC may also be asked to determine whether the establishment of an industry is being materially retarded by reason of the dumped or subsidized imports. If the findings are positive they will assess ADD or CVD and ask Customs and Border Protection (CBP) to enforce the collection of the additional duties.

What causes so much concern to our industry is the process and uncertainty of the final determination of the level of harm and the amount of additional duties in these cases. There has been a long-standing debate on the merits of changing the process to a prospective instead of a retrospective collection process.  At this time, the process is retrospective, where CBP is asked to collect additional ADD/CVD deposits at the time of importation of goods.  Since CBP is only collecting a deposit, which is an estimated additional duty, this amount can change once the final determination on the ADD/CVD case is reached.  In many cases, this process can take much longer than the normal business cycle of an international trade transaction. Thus, you may find yourself at a loss on the transaction due to a final determination of an ADD/CVD case.  The process is also a problem for the government because in many cases the final determination is much higher than what was originally collected. Then, when CBP goes out to collect the difference, the company is out of business or in bankruptcy due to the losses created by the final determination and the bond amount on the underlying entries is usually not sufficient to cover the liability created by the change in the ADD/CVD duty.

On a post written by Devon Sefton, Attorney, from Braumiller Law Group, PLLC.  Mr. Sefton lays out several strategies importers can adopt to help avoid the application of ADD/CVD in the first place.

What I think is important for the industry to understand is that ADD/CVD cases are not going away. If anything, with the increased openness of the international market we are bound to see more and more of these types of cases. The only way to keep on top of the situation is by continuing to stay updated with the constant changes to regulations such as ADD/CVD.  We at the NEI feel very strongly about this and provide many opportunities to learn about changes to the laws, which govern our practices.

Sources: http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm8_e.htm

Money Speaks: Education is Worth It

A few weeks ago, I stumbled upon a very interesting article entitled  “Further Confirmation That Education Pays For Logistics & Supply Chain Professionals” written by Patrick Burnson.   The article well-articulated how undergraduate supply chain programs at  colleges are growing at an exponential rate, as well as the payoff for graduates studying in the field.  According to Burnson, students who are majoring in the field of supply chain management are finding themselves placed on a path to success, even more so than other, more recognized professions.  “Top students from top programs can command a 50% premium over the average and, in many programs, new supply chain graduates handily out earn finance and accounting majors.”   Furthermore, Burnson reports that salaries are roughly up 10% over 2011 with undergraduates averaging a starting salary of $53,584. Top students are commanding premiums $25,000 or more beyond that.

As many who’ve been in the industry for quite sometime can attest, supply chain professionals are worth every penny they’re paid because of the robust  skill set they develop from the extensive work they do.  Now imagine if those professionals entered the industry with a solid educational foundation putting them steps ahead of their colleagues; they would be extremely effective employees and practitioners in international trade. 

With that said, the NEI is working tirelessly to continue developing programs to provide that solid foundation for supply chain professionals.  We are optimistic that our programs will one day reach the caliber of many of the universities you see listed at the end of Burnson’s article.  I think to it’s safe to say that pursuing an education in supply chain management is well worth it and as you can see from the data provided, there has never been a better time to be part of this industry than now!