Trade Agreement Tuesday

Welcome to Trade Agreement Tuesdays! For the next 15 or so weeks, we will review the various free trade agreements and preferential programs.

Organizations often need to find ways to reduce costs involved in importing. One of the most obvious ways of reducing costs is finding lower-priced goods; however, there are other avenues to explore. The United States is a party to several programs designed to reduce and/or eliminate duties on certain merchandise from designated countries as well as provide benefits for exported products. Trade agreements are usually bilateral or multilateral. Bilateral agreements involve two countries, such as the U.S. - Chile, U.S. - Bahrain and U.S. Peru Free Trade Agreements. Multilateral agreements include more than two countries, such as NAFTA and DR-CAFTA.

Each program has different requirements regarding allowance of the special duty treatment. Some of these programs are subject to change. The potential for importing goods free of duty and saving your company money by using one of the free trade agreements sounds like a great solution. However, the agreements are quite complex and products must meet certain rules in order to qualify. It’s important for importers to understand the requirements for special treatment before making the claim. Making incorrect claims for duty-free treatment could result in unexpected costs, such as payment of additional duties and penalties.

Click HERE to view a timeline containing the various trade agreements and the dates of implementation.

We will take each agreement/program in order of implementation. Next week, we will begin our study with the Generalized System of Preferences.