Navigating Ever-Changing International Trade Regulations: a Guide for Freight Forwarders

 Key Takeaways

• The United States-Mexico-Canada Agreement (USMCA) replaced the North American Free Trade Agreement (NAFTA) in 2020. It aims to modernize trade between the United States, Mexico, and Canada.
• In Europe, Brexit has created new trade rules and tariffs for freight forwarders shipping goods between the UK and the EU.

• To ensure compliance with the latest regulations, freight forwarders need to stay informed about changes to international trade rules and tariffs. They should also have systems in place to track and manage compliance with new regulations, such as electronic customs declarations for the USMCA and new tariffs for Brexit.

• When researching new software, it’s important to ask if the vendor regularly updates the system as tariffs and regulations evolve.

What are some of the most recent changes to international trade regulations that freight forwarders need to be aware of?

Moving from NAFTA to USMCA

One of the most significant changes to international trade law in recent years is the United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA) in 2020. The USMCA aims to modernize trade between the United States, Mexico, and Canada, and includes new rules and provisions in several areas that will impact the way that freight forwarders do business with these countries.

One of the key changes under the USMCA is the introduction of new rules for digital trade. This includes provisions to ensure that cross-border data flows are protected, and to prevent the forced localization of data storage. This will have a significant impact on freight forwarders who operate in the digital trade space, as they will need to ensure that they comply with these new rules in order to continue to do business with Mexico and Canada.

The USMCA also includes new provisions on intellectual property, which are designed to provide stronger protection for intellectual property rights and to ensure that these rights are enforced effectively. This will have implications for freight forwarders who deal with goods that are protected by intellectual property rights, such as copyrighted materials, trademarks, and patents.

Finally, the USMCA includes new labor standards, which are designed to improve working conditions and wages for workers in Mexico and Canada. This includes provisions to ensure that workers have the right to form and join independent unions as well as to bargain collectively. Freight forwarders that operate in Mexico and Canada will need to ensure that their operations comply with these new labor standards in order to continue to do business under the USMCA.

Overall, the USMCA brings significant changes to the trade relationship between the United States, Mexico, and Canada and freight forwarders need to be aware of these changes and adapt accordingly to ensure compliance and keep their business running smoothly.

Brexit

Another recent change to foreign trade regulations is the United Kingdom’s withdrawal from the European Union, commonly known as Brexit. This has created new trade rules and tariffs for freight forwarders shipping goods between the UK and the EU.

One of the main impacts of Brexit on freight forwarders is the need to comply with new customs procedures and paperwork. This includes obtaining and submitting new documentation, such as customs declarations and export/import licenses, in order to clear goods through customs. This can add complexity to the shipping process and may lead to delays if the paperwork is not completed correctly.

Another impact of Brexit on freight forwarders is the new tariffs that have been put in place for goods moving between the UK and the EU. These tariffs, which vary depending on the type of goods being shipped, can increase the cost of shipping and make it more difficult for freight forwarders to compete on price with other shipping providers.

Freight forwarders will also be impacted by changes to regulations on goods such as food, animal, and plant products. They will need to comply with new rules and regulations on these goods to be able to move them between the UK and the EU.

In addition, freight forwarders may also need to adapt to changes in the supply chain, as companies may decide to move their operations from the UK to EU countries or vice versa, depending on the trade agreements that will be negotiated.

How have these changes impacted the way freight forwarders do business?

The USMCA has created new requirements for digital trade, such as the need for customs declarations to be submitted electronically. This has required some freight forwarders to update their technology systems in order to comply. Freight forwarders who use Magaya Customs Compliance for US imports and exports, on the other hand, benefit from regular updates to the system to ensure compliance, even as trade regulations evolve.

Brexit has created new trade rules and tariffs for freight forwarders shipping goods between the UK and the EU. This has required them to navigate new procedures and paperwork as well as to keep track of changes to tariffs and rules as they evolve.

The ongoing trade tensions between the US and China have also led to tariffs on certain goods and changes to customs clearance procedures. This has added complexity and uncertainty for freight forwarders, in many cases making it more difficult to plan and organize shipments.

What steps do freight forwarders need to take in order to ensure compliance with the latest regulations?

To ensure compliance with the latest regulations, freight forwarders need to stay informed about changes to international trade rules and tariffs. They should also have systems in place to track and manage compliance with new regulations, such as electronic customs declarations for the USMCA and new tariffs for Brexit.

Freight forwarders should also work closely with their customers and suppliers to ensure that all necessary paperwork and documentation is in order. This includes obtaining the necessary licenses and permits as well as submitting the correct forms and declarations.

Are there any potential pitfalls or challenges associated with complying with new trade regulations?

Keeping up with constantly-changing regulations and tariffs can be difficult and time-consuming, and failure to comply with new rules can result in penalties or delays.

Another potential pitfall is the possibility of confusion or errors in paperwork and documentation. This can lead to delays in customs clearance and additional costs for freight forwarders and their customers.

How can freight forwarders stay up-to-date on changing trade regulations and keep their businesses compliant?

To stay up-to-date on changing trade regulations, freight forwarders can stay informed through trade associations and industry groups, as well as through government and news sources. They can also work closely with customs brokers, who can provide guidance and support in navigating new regulations.

Freight forwarders can also invest in software and technology systems that can help them manage compliance with new regulations, such as electronic customs declaration systems. When researching new software, it’s important to ask if the vendor regularly updates the system as tariffs and regulations evolve.

It’s also important for freight forwarders to develop a comprehensive compliance program that includes regular training for employees on the latest regulations, regular internal audits to ensure compliance, and a process for identifying and addressing non-compliance issues.

Some freight forwarders will also benefit from seeking out professional help such as legal and compliance consulting services that specialize in international trade regulations. This can provide valuable support and guidance in navigating new regulations and avoiding potential pitfalls.

In conclusion, international trade regulations are constantly evolving and freight forwarders need to stay informed in order to ensure compliance and avoid potential pitfalls. By staying informed, taking the necessary steps to ensure compliance, and seeking out professional help, freight forwarders can navigate the ever-changing landscape of international trade regulations and continue to operate their businesses successfully. At Magaya, we have the experience and knowledge to guide you along the way, even as regulations evolve.