Issue link: http://digital.nexsitepublishing.com/i/42918
By Neil LENOK, American River Int'l, Nlenok@americanriverintl.com Export reform is… moving along Earlier in the year I wrote an article on President Obama's intention for export reform. I am pleased to report that there has been some progress made in this most sensitive area, and U.S. exporters are starting to benefit from this progress. This past June, BIS (Bureau of Industry and Security) which is controlled by the Department of Commerce, came out with a ruling that permits U.S. exporters to export certain commodities to a limited number of countries without obtaining a federal license. This initiative, called The Security Trade Authorization, only deals with items controlled by Department of Commerce on the CCL (Commerce Control List) and does not address the many items that are regulated by the Department of State on the Munitions List (USML). Prior to STA, exporters were required to obtain an export license for any product on the CCL, regardless of what country it was being exported to. The CCL includes commodities that can be used for civilian or military purposes. This new license exception is designed for the BIS to focus its attention and resources on items of national interest and allow U.S. exporters to be more engaged in international trade, as has been promised with export reform. While this rule is limited, as there are only 44 countries on the list of approved countries (there were originally 125 countries being considered), it is a step in the right direction. The list of approved countries is composed of those that are part of NAFTA and those that have signed on to international arms control agreements. Most of the original 125 countries were eliminated, due to insignificant export volume currently being transacted from the U.S. By Josh GREEN, CEO, Panjiva, josh@panjiva.com Solid, seasonal growth in August In August, the number of waterborne shipments coming through U.S. ports grew at a solid rate. Specifically, we saw a 4 percent month-over-month increase. This is consistent with last year's month-over-month increase. And it compares favorably with month-over-month changes from years past: three percent in 2009 and flat in 2008, and down 2 percent in 2007. In terms of absolute level of trade activity, we're continuing to run about 1 percent behind where we were this time last year. Pretty good news, particularly given the various pieces of economic bad news that are circulating. How do we make sense of this, given all the doom and gloom from analysts? Well, the most important takeaway is that, amazingly, retailers have bet on a reasonably healthy holiday season. This is good news, to be sure. However, if the holiday season is not as healthy as expected, we're going to be faced with an ugly first half of 2012, as retailers — and their supply chain partners — will be coping with way too much inventory. Expect seasonal declines in the months ahead, and buckle your seatbelts for the holiday season. It will tell us a lot about what we can expect in the first half of 2012. www.cargobusinessnews.com September 2011 Supply Chain 15 COMPLIANCE While this is looked upon as a good first step, the goal is to have thousands of more benign, less significant defense items removed from the USML and moved to the CCL. Some of the items that will be eligible for STA are cameras for search and rescue efforts for fire departments, components for civil aviation navigation systems for commercial aircraft, airport scanners, and toxins for vaccine research. While License Exception STA will take effect immediately for eligible products, software and technology, there is concern it will take some time before the Automated Export System (AES) is modified by the Census Bureau to add the appropriate code for license exception STA in AES. While many exporters are still waiting for more significant export reforms to be introduced, this is indeed a start. The strategic concept is that many companies would benefit in export market growth if they were allowed to ship goods and technology that currently are prohibited or under stiff license scrutiny. The current administration is making progress at having the various government agencies engaged in export control review all their current regulations to see which ones could be modified to allow more products or technologies to be exported… obviously in balancing national security interests. This author is a proponent of export reform as more exports mean a more favorable balance of trade, more jobs and an overall stronger economy. We all need to do our part to voice our concerns over faster export reform and all reach out in advocacy to our representatives in Washington DC. C CORNER