Inside World Trade

Trade News Tidbits for 2009

International trade finds itself in a deepening slump as the global economy remains depressed and credit continues to be squeezed. U.S. and European companies that have outsourced their production to such markets as China and eastern Europe may experience a major disruption in their supply chain as manufacturers in these countries find it difficult to get credit. Banks are hesitant to take on new credit risks and unless a supplier has a long credit history, it will not be able to get new letters of credit. This means that many U.S. importers may face shortages in supplies of their parts and products as the foreign producers are unable to continue to operate.

The decline in world trade has had a ripple effect on the shipping industry. Both the container shipping industry and global air cargo have experienced drops in cargo volume. Sea vessels have not been able to fill to capacity and thus freight rates are low. Some shipping lines will have to consolidate, removing a third of their container lines from service or canceling orders for more.

Smaller lines, it is predicted will not survive or will merge with larger shipping companies. Container terminals will also experience declining container volumes and ports and carriers may find that the terminals have been overbuilt.

There are some bright spots for the Port of Houston. Gulf ports are expected to benefit from the north-south shipping lanes as South American trade grows. Vehicle exports are on the rise at the Port as Toyota Tundra pickups assembled in San Antonio are exported from Houston. Steel imports also have increased as well as automobile imports. According to Gulf Shipper, grain exports from Gulf ports have been robust this year and lower freight rates have helped costs.

Government Seizes Millions in Counterfeit Imports in 2008

U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement announced fiscal year 2008 seizures totaled more than $272.7 million in counterfeit and pirated goods, a 38 percent increase in domestic value over FY 2007. The statistics reveal a dramatic rise in seizures of counterfeit products potentially threatening the health, safety and security of Americans.

Among the products seized for intellectual property rights violations that might also pose health, safety or security risks were electrical articles, semiconductors, computer network hardware, sunglasses, pharmaceuticals, and perfume. The domestic value of such seizures jumped more than 120 percent to $62.5 million and the number of these seizures climbed 50 percent to 1,950. In FY 2007, CBP and ICE made 1,295 seizures of potentially dangerous counterfeit goods valued at almost $28 million.

Customs Stops Border Crossers with Prohibited Food Items

U.S. Customs and Border Protection officers performing anti-terrorism inspections at El Paso area ports of entry made 32 seizures of undeclared prohibited agricultural items during the first seven days of 2009. An influx of people returning to the U.S. after spending the holiday in Mexico most likely contributed to the dramatic increase in the seizure of undeclared agricultural items during that week. Prohibited agricultural items seized this week included pork, bologna, ham, lard, chorizo, pork skins, raw poultry, guavas, sugar cane, avocados, pears, apples, tangerines, oranges, potatoes, sweet potatoes, mangos, limes, mamey fruit, hawthorn fruit and live plants.

Frances Allday was a specialist in commercial trade with U.S. Customs and Border Protection for 25 years