U.S. companies skirted billions in tax liabilities in recent years by inflating the costs of imported products, according to a study (here) from Florida International University College of Business professor John Zdanowicz. Zdanowicz, who also runs an international trade consultancy called International Trade Alert, reviewed all transactions from 2003 through 2014 to seek out abnormal pricing of imports or exports potentially used to reduce tax exposure. Between those years, overvalued imports cost the U.S. more than $900 billion in missed tax revenue, the study said. "The inclusion of over-invoiced imports and under-invoiced exports in business or individual tax returns artificially lowers taxable income and federal income tax liability," the study said. While the customs duties paid on imports might offset some of that, the U.S. corporate tax rate is usually far higher than the duty rate, Zdanowicz said in an interview. Such pricing can also provide for criminal money laundering in addition to tax evasion, he said. Zdanowicz analyzed transactions that include quantifiable products with units of measure and used Internal Revenue Service regulations to determine abnormality and the amount of tax revenue lost. Based on the data, "abnormal pricing in international trade grew from $168.31 billion in 2003 to $230.58 billion in 2014, a more than 30 percent increase," an FIU press release on the study said (here). The efforts by CBP and the IRS to go after such misreporting are inefficient and a lowered tax rate in the U.S. will be the only way to really address this problem, Zdanowicz said. CBP didn't comment.

The Obama administration should continue to consider China a non-market economy for antidumping purposes beyond Dec. 11, the 15th anniversary of its accession to the World Trade Organization and the date that Beijing claims it should no longer be subject to such a status, the National Council of Textile Organizations said (here). “China’s chronic misallocation of investment to expand its state-owned enterprises in the textile supply chain and in other industrial sectors where there is an excess of global capacity invariably leads to Chinese dumping and other non-free-market economic practices,” NCTO CEO Augustine Tantillo said in a statement. The Commerce Department didn't comment.

U.S., Canadian and Mexican officials attending the North American Leaders’ Summit in Ottawa June 29 should work to dismantle onerous customs procedures that can slow automobile and auto parts commerce between the three nations, vehicle associations from the three countries said in a June 28 statement (here). The call came more than a month after the groups -- the American Automotive Policy Council, the Canadian Vehicle Manufacturers’ Association, and the Mexican Automotive Industry Association -- sent a letter to the governments’ top trade ministers calling for closer trade policy coordination, as all three countries negotiate separate trade agreements with the EU (here). The groups in their statement also urged attending officials to discuss non-tariff barriers and rules of origin, including "cumulation," to ensure trade agreements strengthen the North American automotive supply chain and boost North American vehicle exports. The Office of the U.S. Trade Representative did not comment.

The Trans-Pacific Partnership would lead to new markets for e-commerce and improved customs processing, said Brian Huseman, vice president of public policy at Amazon, in a June 23 blog post (here). "That's why we support the Trans Pacific Partnership trade agreement and encourage Congress to approve it," he said. "The agreement makes important progress on areas such as business localization, cross-border data flows, intermediary liability and customs simplification." As Amazon grows, "we want reasonable policies that allow for the movement of goods across borders and that enable anyone in the world to have access to a unique and vast selection," he said. "We also want policies that do not unduly limit the growth of cloud computing by erecting digital trade barriers." Still, TPP is imperfect and the administration and Congress should work to improve provisions on cross-border data flows and copyright, he said.

The National Association of Manufacturers (NAM) and Coalition for Green Trade are attending the 14th Round of World Trade Organization Environmental Goods Agreement (EGA) negotiations in Geneva this week to push all sides to develop a lofty agreement that eliminates tariffs on a wide range of environmental goods and technologies by the September G-20 Summit in Hangzhou, China, NAM said (here). NAM pointed out that the Organization for Economic Cooperation and Development (OECD) ministers called for this ambitious timeline, singling out China as being particularly important to securing any meaningful progress. The manufacturing association is seeking tariff elimination on products including air pollution equipment, catalytic incinerators, energy efficiency materials, environmental monitoring equipment, renewable energy products and equipment, turbines for electrical power generation and water treatment equipment, it said. “An ambitious EGA is a high priority for the global business community,” NAM said. “The NAM urges all 17 WTO negotiating members to roll up their sleeves this week and forge a path to enable a successful September conclusion of this no-brainer agreement.”

The Trans-Pacific Partnership promotes the free flow of information in “unprecedented” ways for a binding international trade agreement, balances the interests of copyright holders and the public’s interest of creative works, and bans discrimination against foreign internet services, Google Senior Vice President Kent Walker said in a blog post (here). Small businesses will especially benefit from these elements of the agreement, but future agreements should include more “balancing provisions,” and “all stakeholders” should be allowed to provide input in future trade negotiations, Walker said.

Footwear producer trade associations expressed support for optimized customs procedures, immediate reciprocal tariff elimination, rules of origin flexibility, mutual recognition, and an end to other non-tariff barriers within the Transatlantic Trade and Investment Partnership framework, according to a joint statement from the groups (here). Quantities of EU shoe exports to the U.S. increased 9 percent, and values climbed 19 percent, between 2014 and 2015; additionally, quantities of U.S. exports to the EU rose 14 percent and values spiked by 27 percent in the same time frame, said the leaders of the American Apparel and Footwear Association, the European Confederation of the Footwear Industry, and the Footwear Distributors and Retailers of America. “The T-TIP can foster greater footwear industry partnerships, consumer value, and job creation by eliminating high footwear tariffs (which can range up to 67.5 percent),” the groups’ presidents said. “In addition, the T-TIP provides an opportunity to streamline customs procedures and harmonize product safety and labelling regulations, which will confer important trade benefits as well.”

The U.S. should work toward removing Burmese individuals and entities from the Specially Designated Nationals and Blocked Persons List (SDN List), add Myanmar to its Generalized System of Preferences (GSP) program, and launch dialogue on concluding a bilateral investment treaty between the two countries, a white paper released by the U.S. Chamber of Commerce said (here). “The initial U.S. easing of sanctions has encouraged a small number of U.S. businesses to invest or consider investing in Myanmar after a prolonged absence,” the paper says. “In the last four years, trade with Myanmar has increased to its highest levels in decades, and U.S. companies, brands, and products have provided both jobs and training opportunities and their goods and services now line store shelves and are available throughout the country.” U.S. companies are worried about doing even legitimate business in the country because of existing sanctions, and Burmese citizens are frustrated with low U.S. commercial investment and limited export opportunities, attributing these situations to restrictive U.S. sanctions and tax and tariff policies, the paper says.

In anticipation of the upcoming July 1 deadline for implementation of amendments to the Safety of the Life at Sea (SOLAS) Convention, the FMC should facilitate stakeholder conversations to reach agreement on matters including verified gross mass (VGM) calculation costs, VGM protocols, and international, federal or state VGM requirements, the National Customs Brokers & Forwarders Association of America said in a letter to FMC (here). The letter was written in response to an agreement filed with the commission on May 18, which NCBFAA says pertains to creating a pre-load process for VGM data submissions to carriers. NCBFAA supports the agreement, saying it “appears to set a goal of alleviating at least some of the concerns associated with the unilateral imposition of the VGM guidelines by the carriers” currently happening at the Gulf and South Atlantic ports. Per the agreement, marine terminal operators, not shippers, as previously suggested, would be responsible for providing the tare weight of a container to be used in the VGM, NCBFAA said.

More than 400 companies and associations wrote letters to the U.S. Congressional delegations of 10 states urging passage of the Trans-Pacific Partnership as soon as possible, the U.S. Coalition for TPP said (here). Groups active in California, Florida, Georgia, Illinois, New York, Oregon, South Carolina, Texas, Virginia, and Washington state joined to write letters to each delegation that all contained over 100 signatures. “The signatories to the letters note that the United States continues to fall behind as other countries negotiate trade agreements that put our businesses and workers at a competitive disadvantage,” the coalition said. “They urge Congress to pass TPP this year.”