Issue 428, February 2, 2003
Two new trade agreements became effective December 30th, 2003. The Singapore Free Trade Agreement and the Chile Free Trade Agreement are similar and far reaching, called by some "The new generation of Trade Agreements" because they try to avoid the mistakes of earlier agreements. Several important points:

Duty Rates
All shipments exported from the U.S. to both Singapore and Chile can now enter those countries duty free. Up to 80% of shipments imported from Singapore and Chile are now duty free with the other 20% scheduled to be phased in over ten years.

The two new trade agreements bear many resemblances to the NAFTA agreement in that "non-originating" commodities can qualify for the FTA benefits as they undergo substantial transformations in the manufacturing country. Detailed changes are shown in the HTS-USA. GN25 covers the Singapore FTA and GN 26 covers the Chile FTA.

Certificates of Origin
Both agreements will require documentation as proof of country of origin. GN26, Section L(i) of the Chile FTA, says that "An importer? shall make a written declaration that the good qualifies as originating?and shall be prepared to submit... a certificate of origin demonstrating that the good qualifies as originating..." No specific form is provided for this purpose. The Shipper should provide this statement along with the other shipping documents.

The Singapore Agreement in GN25, Section L(i) says that "A statement setting forth the reasons that a good qualifies," can be requested of the importer. This statement would include "pertinent cost and manufacturing information." There is no prescribed form.

Special Program Indicators
Trade Agreements all have their special symbols by which Customs knows them. The Singapore FTA has been given the letters, "SG." The Chile FTA has been given, "CL."

Customs' summarizes the main qualifications for the agreements by saying that to qualify for the Agreements, shipments must be:

C/O = SG or CL
C/E = SG or CL
SG or CL must be in the HTS "Special" column on the tariff number line.
SG or CL must be transmitted to Customs with the entry

The Chile FTA processing got off to a slow start when US Customs announced that CL entries cannot be filed electronically through ABI, but must be hand carried to the Customs' counter. Speculation is that it may be April before the problem is corrected.

Our contributing writer, Karl Krueger is the Technical Advisor for DHL Danzas Air & Ocean in Port Huron, Michigan. If you have any questions or require further information, please contact Mr. Krueger at Karl.Krueger@dhl.com or 810 987-0567.

Please note that due to the complex nature of the subject matter, DHL Danzas Air & Ocean cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with DHL Danzas Air & Ocean.