26 January 2018

Port of Entry NAFTA

Lorraine Rivera gets an inside look at the role NAFTA plays at the Ports of Entry in Nogales, which are the busiest in Arizona. This comes as renegotiations over ...

>>> DID NOT STOP NAFTA RENEGOTIATIONS FROM HAPPENING IN

RENEGOTIATIONS FROM HAPPENING IN MONTREAL THAT WILL DETERMINE THE MONTREAL THAT WILL DETERMINE THE FUTURE OF HUNDREDS OF BILLIONS FUTURE OF HUNDREDS OF BILLIONS OF DOLLARS OF TRADE BETWEEN THE OF DOLLARS OF TRADE BETWEEN THE U.S., CANADA, AND MEXICO. U.S., CANADA, AND MEXICO. THE THREE PORTS OF ENTRY IN THE THREE PORTS OF ENTRY IN NOGALES ARE THE BUSIEST IN THE NOGALES ARE THE BUSIEST IN THE STATE AND ONE OF THE LEADING IN STATE AND ONE OF THE LEADING IN THE COUNTRY. THE COUNTRY. PROCESSING MORE THAN 1,300 PROCESSING MORE THAN 1,300 TRUCKS A DAY AND YEARLY ABOUT 3 TRUCKS A DAY AND YEARLY ABOUT 3 MILLION CARS AND 7 MILLION MILLION CARS AND 7 MILLION PEOPLE. PEOPLE. AT THE PORTS OF ENTRY IN AT THE PORTS OF ENTRY IN NOGALES, CUSTOMS AND BORDER NOGALES, CUSTOMS AND BORDER PROTECTION OVERSEES ABOUT PROTECTION OVERSEES ABOUT $16 BILLION PORT OF $16 BILLION PORT OF NAFTA-QUALIFIED GOODS A YEAR. NAFTA-QUALIFIED GOODS A YEAR. ANOTHER $17 MILLION A YEAR IS ANOTHER $17 MILLION A YEAR IS NON-NAFTA TRADE. NON-NAFTA TRADE. THIS IS THE IMPORT SPECIALIST IN THIS IS THE IMPORT SPECIALIST IN NOGALES. NOGALES. >> THE CARGO DOCK, THIS IS WHERE >> THE CARGO DOCK, THIS IS WHERE EXAMS OCCUR FOR SHIPMENTS THAT EXAMS OCCUR FOR SHIPMENTS THAT HAVE BEEN DIRECTED TO GO IN FOR HAVE BEEN DIRECTED TO GO IN FOR EXAM. EXAM. OBVIOUSLY NOT ALL SHIPMENTS THAT OBVIOUSLY NOT ALL SHIPMENTS THAT GO ACROSS THE BORDER ARE BEING GO ACROSS THE BORDER ARE BEING EXAMINED. EXAMINED. WE HAVE TO USE SOME DISCRETION WE HAVE TO USE SOME DISCRETION IN WHAT WE EXAMINE AND TARGET IF

IN WHAT WE EXAMINE AND TARGET IF YOU WILL BASED ON THE DATA THAT YOU WILL BASED ON THE DATA THAT WE GET PRIOR TO ARRIVAL, BASED WE GET PRIOR TO ARRIVAL, BASED OFF THE INTUITION OF THE OFFICER OFF THE INTUITION OF THE OFFICER SITTING IN THAT PRIMARY SITTING IN THAT PRIMARY PROCESSING BOOTH. PROCESSING BOOTH. BASED ON AGRICULTURE ISSUES, A BASED ON AGRICULTURE ISSUES, A LOT OF AGRICULTURE IS REQUIRED LOT OF AGRICULTURE IS REQUIRED TO COME IN FOR MANDATORY CHECKS TO COME IN FOR MANDATORY CHECKS FOR PESTS AND THINGS LIKE THAT FOR PESTS AND THINGS LIKE THAT TO PROTECT THE DOMESTIC TO PROTECT THE DOMESTIC AGRICULTURE IN THIS COUNTRY. AGRICULTURE IN THIS COUNTRY. >> 60% OF WHAT WE SEE HERE IS >> 60% OF WHAT WE SEE HERE IS RELATED TO NAFTA? RELATED TO NAFTA? >> ROUGHLY. >> ROUGHLY. THAT'S THE FIGURE THAT'S BEEN THAT'S THE FIGURE THAT'S BEEN TOSSED AROUND IN THE PAST. TOSSED AROUND IN THE PAST. IT'S A LOGICAL FIGURE WHEN YOU IT'S A LOGICAL FIGURE WHEN YOU CONSIDER WHAT IS COMING ACROSS CONSIDER WHAT IS COMING ACROSS THE BORDER. THE BORDER. MANUFACTURED GOODS FROM MEXICO, MANUFACTURED GOODS FROM MEXICO, PRODUCE FROM THIS AREA. PRODUCE FROM THIS AREA. PRODUCE IS GOING TO QUALIFY FOR PRODUCE IS GOING TO QUALIFY FOR NAFTA PRETTY MUCH REGARDLESS. NAFTA PRETTY MUCH REGARDLESS. ANYTHING THAT'S GROWN OR ANYTHING THAT'S GROWN OR HARVESTED OR MINED IS GOING TO HARVESTED OR MINED IS GOING TO QUALIFY FOR NAFTA. QUALIFY FOR NAFTA. MANUFACTURED GOODS, A LITTLE MANUFACTURED GOODS, A LITTLE MORE DIFFICULT. MORE DIFFICULT. YEAH, IT IS A HIGH VOLUME OF YEAH, IT IS A HIGH VOLUME OF NAFTA COMING THROUGH THIS PORT.

NAFTA COMING THROUGH THIS PORT. >> IT IS FAIR TO SAY THIS IS A >> IT IS FAIR TO SAY THIS IS A BY-PRODUCT, THIS EXPANSION, BY-PRODUCT, THIS EXPANSION, BECAUSE OF NAFTA. BECAUSE OF NAFTA. >> SURE. >> SURE. WELL, AND IT'S OBVIOUS YOU HAVE WELL, AND IT'S OBVIOUS YOU HAVE A CORRIDOR THAT SPEAKS TO NAFTA. A CORRIDOR THAT SPEAKS TO NAFTA. TRADE HAS FLOURISHED BECAUSE OF TRADE HAS FLOURISHED BECAUSE OF NAFTA IN THAT CORRIDOR. NAFTA IN THAT CORRIDOR. THERE'S BEEN A LOT OF EMPHASIS THERE'S BEEN A LOT OF EMPHASIS ON THIS PORT OF ENTRY. ON THIS PORT OF ENTRY. THIS IS THE BIGGEST CORRIDOR. THIS IS THE BIGGEST CORRIDOR. >> INSIDE THE FACILITY, HE >> INSIDE THE FACILITY, HE EXPLAINS HOW MANUFACTURED GOODS EXPLAINS HOW MANUFACTURED GOODS QUALIFY FOR NAFTA. QUALIFY FOR NAFTA. >> THIS IS THE DOCUMENT THAT WE >> THIS IS THE DOCUMENT THAT WE USE TO VERIFY THE LEGITIMACY OF USE TO VERIFY THE LEGITIMACY OF NAFTA CLAIMS. NAFTA CLAIMS. THIS IS THE DOCUMENT THAT THE THIS IS THE DOCUMENT THAT THE TRADE HAS TO USE, THOSE CUSTOMS TRADE HAS TO USE, THOSE CUSTOMS CONSULTANTS, THE IMPORTING CONSULTANTS, THE IMPORTING COMMUNITY, THE EXPORTERS, COMMUNITY, THE EXPORTERS, EVERYBODY THAT TOUCHES NAFTA HAS EVERYBODY THAT TOUCHES NAFTA HAS TO UNDERSTAND THE CONTENTS OF TO UNDERSTAND THE CONTENTS OF THIS BOOK. THIS BOOK. >> WHAT SORTS OF HOOPS WILL A >> WHAT SORTS OF HOOPS WILL A BROKER HAVE TO JUMP THROUGH BROKER HAVE TO JUMP THROUGH ALONGSIDE THE COMPANY IN MEXICO ALONGSIDE THE COMPANY IN MEXICO TO BECOME A NAFTA CLIENT? TO BECOME A NAFTA CLIENT? >> NAFTA IS A CLAIM THAT'S MADE >> NAFTA IS A CLAIM THAT'S MADE BY THE IMPORTER OF RECORD.

BY THE IMPORTER OF RECORD. IN ORDER TO DO THAT, THEY HAVE IN ORDER TO DO THAT, THEY HAVE TO HAVE A CERTIFICATE OF ORIGIN TO HAVE A CERTIFICATE OF ORIGIN FROM THE EXPORTER OF THE GOODS. FROM THE EXPORTER OF THE GOODS. SO IF YOU WANT TO IMPORT SO IF YOU WANT TO IMPORT NAFTA-QUALIFYING MACHINERY, FOR NAFTA-QUALIFYING MACHINERY, FOR EXAMPLE, FROM MEXICO, YOU NEED EXAMPLE, FROM MEXICO, YOU NEED TO FIND YOURSELF AN EXPORTER IN TO FIND YOURSELF AN EXPORTER IN MEXICO OF NAFTA QUALIFIED MEXICO OF NAFTA QUALIFIED MACHINERY. MACHINERY. A LOT OF TIMES THAT RELATIONSHIP A LOT OF TIMES THAT RELATIONSHIP IS ONE TO ONE. IS ONE TO ONE. IT'S A U.S. PARENT COMPANY WHO IT'S A U.S. PARENT COMPANY WHO ESTABLISHED A MEXICAN ESTABLISHED A MEXICAN MANUFACTURING FACILITY, AND MANUFACTURING FACILITY, AND THEREFORE THERE IS NO ISSUE WITH THEREFORE THERE IS NO ISSUE WITH THAT. THAT. SO WHAT I HAVE IS AN EXAMPLE OF SO WHAT I HAVE IS AN EXAMPLE OF AN IMPORTED GOOD THAT COMES AN IMPORTED GOOD THAT COMES THROUGH THIS PORT CERTIFIED THROUGH THIS PORT CERTIFIED THROUGH AND A HALF SA. THROUGH AND A HALF SA. THE DUTY RATE, IF YOU'RE NOT THE DUTY RATE, IF YOU'RE NOT CLAIMING A SPECIAL TRADE CLAIMING A SPECIAL TRADE AGREEMENT, IS 5.3%. AGREEMENT, IS 5.3%. 5.3% OF THE DECLARED VALUE. 5.3% OF THE DECLARED VALUE. NOW, THE NEXT QUESTION IS, OKAY, NOW, THE NEXT QUESTION IS, OKAY, I'M GETTING THIS FROM CHINA. I'M GETTING THIS FROM CHINA. I'M PAYING 5.3% DUTY. I'M PAYING 5.3% DUTY. WHAT IF I WANT TO IMPORT THIS WHAT IF I WANT TO IMPORT THIS FROM MEXICO? FROM MEXICO? I'M GOING TO BE PAYING ZERO

I'M GOING TO BE PAYING ZERO PERCENT DUTY. PERCENT DUTY. IF YOU WANT TO QUALIFY FOR NAFTA IF YOU WANT TO QUALIFY FOR NAFTA FOR THIS PRODUCT, YOU HAVE TO FOR THIS PRODUCT, YOU HAVE TO HAVE NAFTA ORIGINATING COPPER OR HAVE NAFTA ORIGINATING COPPER OR ALUMINUM WIRE USED IN THIS GOOD. ALUMINUM WIRE USED IN THIS GOOD. >> TO GET NAFTA'S STAMP OF >> TO GET NAFTA'S STAMP OF APPROVAL, THE PRODUCER OF THE APPROVAL, THE PRODUCER OF THE WIRE NEEDS DOCUMENTED PROOF THE WIRE NEEDS DOCUMENTED PROOF THE COPPER ROD IT CAME FROM COPPER ROD IT CAME FROM ORIGINATED IN A NORTH AMERICAN ORIGINATED IN A NORTH AMERICAN COUNTRY. COUNTRY. IT'S JUST ONE EXAMPLE OF HOW THE IT'S JUST ONE EXAMPLE OF HOW THE TREATY WORKS. TREATY WORKS. SO WHAT HAPPENS IF A COMMODITY SO WHAT HAPPENS IF A COMMODITY COMES THROUGH AND IT DOES NOT COMES THROUGH AND IT DOES NOT MEET ANY OF THE CRITERIA? MEET ANY OF THE CRITERIA? WHAT'S THE PENALTY? WHAT'S THE PENALTY? >> IN THIS PARTICULAR CASE, >> IN THIS PARTICULAR CASE, THAT'S EXACTLY WHAT HAPPENED. THAT'S EXACTLY WHAT HAPPENED. WE HAD AN ISSUE. WE HAD AN ISSUE. BEASKED THEM TO PRODUCE BEASKED THEM TO PRODUCE DOCUMENTATION, RECORDS THAT CAN DOCUMENTATION, RECORDS THAT CAN PROVE THAT THE CABLE THAT WAS IN PROVE THAT THE CABLE THAT WAS IN THE NAFTA-QUALIFIED IMPORTATIONS THE NAFTA-QUALIFIED IMPORTATIONS WAS IN FACT NAFTA QUALIFYING WAS IN FACT NAFTA QUALIFYING CABLE, AND THEY HAD A PROBLEM. CABLE, AND THEY HAD A PROBLEM. THEY COULDN'T DO THAT. THEY COULDN'T DO THAT. AND SO THEY DID THE RIGHT THING. AND SO THEY DID THE RIGHT THING. THEY SAID, WELL, WE WILL ASSUME THEY SAID, WELL, WE WILL ASSUME THAT NONE OF IT WAS NAFTA

THAT NONE OF IT WAS NAFTA QUALIFYING, AND THEY PAID US THE QUALIFYING, AND THEY PAID US THE DUTIES, TAXES AND FEES AS IF DUTIES, TAXES AND FEES AS IF NONE OF IT HAD BEEN CLAIMED IN NONE OF IT HAD BEEN CLAIMED IN THE NAFTA. THE NAFTA. THAT'S WHAT RESPONSIBLE THAT'S WHAT RESPONSIBLE COMPANIES DO. COMPANIES DO. AND IN EXCHANGE FOR BEING OPEN AND IN EXCHANGE FOR BEING OPEN WITH US, THEN WE ARE LESS LIKELY WITH US, THEN WE ARE LESS LIKELY TO PENALIZE THEM, FOR EXAMPLE. TO PENALIZE THEM, FOR EXAMPLE. IF WE FIND OUT THROUGH OTHER IF WE FIND OUT THROUGH OTHER MEANS THAT THIS HAS BEEN GOING MEANS THAT THIS HAS BEEN GOING ON, MAYBE AN EMPLOYEE CALLS US ON, MAYBE AN EMPLOYEE CALLS US UP AND SAYS, WE UNDERSTAND UP AND SAYS, WE UNDERSTAND THERE'S A PROBLEM. THERE'S A PROBLEM. I'M MAKING YOU AWARE OF THIS. I'M MAKING YOU AWARE OF THIS. A WHISTLE-BLOWER, THAT'S A A WHISTLE-BLOWER, THAT'S A DIFFERENT SCENARIO. DIFFERENT SCENARIO. NOW WE'RE INTO NEGLIGENCE, NOW WE'RE INTO NEGLIGENCE, POTENTIAL FRAUD, AND THEY HAVE POTENTIAL FRAUD, AND THEY HAVE SIGNIFICANT PENALTIES SIGNIFICANT PENALTIES ASSOCIATED. ASSOCIATED. >> I IMAGINE YOU HAVE SEEN >> I IMAGINE YOU HAVE SEEN CONTRABAND IN NAFTA PACKAGES, SO CONTRABAND IN NAFTA PACKAGES, SO WHAT HAPPENS THEN? WHAT HAPPENS THEN? >> BASICALLY TWO SCENARIOS. >> BASICALLY TWO SCENARIOS. WE HAVE COMPANIES WHO ARE LOW WE HAVE COMPANIES WHO ARE LOW RISK CERTIFIED WITH CUSTOMS. RISK CERTIFIED WITH CUSTOMS. THE PROGRAM IS CALLED CTPAT. THE PROGRAM IS CALLED CTPAT. IT'S A PRODUCT OF 9/11. IT'S A PRODUCT OF 9/11. IT WAS A MECHANISM THAT WE

IT WAS A MECHANISM THAT WE OFFERED TO THE TRADE. OFFERED TO THE TRADE. WE SAID IF YOU EMPLOY THESE WE SAID IF YOU EMPLOY THESE RECOMMENDED SECURITY PROCEDURES, RECOMMENDED SECURITY PROCEDURES, VETTING OF YOUR EMPLOYEES, DRUG VETTING OF YOUR EMPLOYEES, DRUG TESTING, MAKING SURE THAT YOU TESTING, MAKING SURE THAT YOU USE TRANSPORTATION COMPANIES WHO USE TRANSPORTATION COMPANIES WHO HAVE GPS TRACKING, WHO HAVE HAVE GPS TRACKING, WHO HAVE SECURITY OF THEIR EQUIPMENT SECURITY OF THEIR EQUIPMENT OVERNIGHT IN THE FENCED YARDS, OVERNIGHT IN THE FENCED YARDS, THINGS LIKE THAT, IF YOU EMPLOY THINGS LIKE THAT, IF YOU EMPLOY ALL THESE PROCEDURES, WE'RE ALL THESE PROCEDURES, WE'RE GOING TO GIVE YOU A LOW RISK GOING TO GIVE YOU A LOW RISK CERTIFICATION. CERTIFICATION. WHAT THAT MEANS IS THE WHAT THAT MEANS IS THE INFORMATION THEY PROVIDE TO US INFORMATION THEY PROVIDE TO US ELECTRONICALLY PRIOR TO THE ELECTRONICALLY PRIOR TO THE ARRIVAL OF THE CARGO IS GOING TO ARRIVAL OF THE CARGO IS GOING TO BE LOOKED AT SCORED DIFFERENTLY. BE LOOKED AT SCORED DIFFERENTLY. SO IN A SCENARIO WHERE YOU HAVE SO IN A SCENARIO WHERE YOU HAVE A COMPROMISED SHIPMENT INVOLVING A COMPROMISED SHIPMENT INVOLVING A LOW RISK CERTIFIED COMPANY, A LOW RISK CERTIFIED COMPANY, THE RULES ARE A LITTLE THE RULES ARE A LITTLE DIFFERENT. DIFFERENT. WE PRESUME THAT YOU HAVE TAKEN WE PRESUME THAT YOU HAVE TAKEN SECURITY MEASURES THAT YOU HAD SECURITY MEASURES THAT YOU HAD AGREED TO PREVIOUSLY. AGREED TO PREVIOUSLY. THE CTPAT HEADQUARTERS IS GOING THE CTPAT HEADQUARTERS IS GOING TO TALK WITH THAT COMPANY AND TO TALK WITH THAT COMPANY AND SAY, PROVE TO US THAT YOU HAVE SAY, PROVE TO US THAT YOU HAVE THOSE SECURITY MEASURES IN

THOSE SECURITY MEASURES IN PLACE. PLACE. TELL US WHAT YOU'RE GOING TO DO TELL US WHAT YOU'RE GOING TO DO TO FIX THAT SCENARIO. TO FIX THAT SCENARIO. >> COMPANIES THAT ARE NOT CTPAT >> COMPANIES THAT ARE NOT CTPAT CERTIFIED AND THEREFORE AREN'T CERTIFIED AND THEREFORE AREN'T CONSIDERED LOW RISK GO THROUGH A CONSIDERED LOW RISK GO THROUGH A SIMILAR PROCESS WITH CUSTOMS IF SIMILAR PROCESS WITH CUSTOMS IF ONE OF SHR SHIPMENTS IS DEEMED ONE OF SHR SHIPMENTS IS DEEMED COMPROMISED. COMPROMISED. >> THE EXPECTATION IS GOING TO >> THE EXPECTATION IS GOING TO BE THAT YOU AS A TRADE PARTNER, BE THAT YOU AS A TRADE PARTNER, YOU'RE GOING TO DO THE YOU'RE GOING TO DO THE RESPONSIBLE THING AND WORK WITH RESPONSIBLE THING AND WORK WITH US TO DETERMINE WHERE THE US TO DETERMINE WHERE THE PROBLEM HAPPENED. PROBLEM HAPPENED. WAS IT THE TRANSPORTATION WAS IT THE TRANSPORTATION COMPANY, THE DRIVER ALLOWING THE COMPANY, THE DRIVER ALLOWING THE GOODS TO BE DIVERTED? GOODS TO BE DIVERTED? WAS IT THE MANUFACTURING WAS IT THE MANUFACTURING FACILITY ALLOWING THE GOODS TO FACILITY ALLOWING THE GOODS TO BE LOADED INSIDE THEIR FACILITY, BE LOADED INSIDE THEIR FACILITY, THOSE SORTS OF THINGS? THOSE SORTS OF THINGS? SO REGARDLESS OF THE SCENARIO, SO REGARDLESS OF THE SCENARIO, THE CUSTOMS EXPECTATION IS THE CUSTOMS EXPECTATION IS YOU'RE GOING TO WORK WITH US TO YOU'RE GOING TO WORK WITH US TO SOLVE THIS PROBLEM. SOLVE THIS PROBLEM. >> NAFTA IS NOT AS SIMPLE TO >> NAFTA IS NOT AS SIMPLE TO UNDERSTAND AS MANY PEOPLE THINK UNDERSTAND AS MANY PEOPLE THINK THAT IT IS. THAT IT IS. IT'S NOT SOME SWITCH THAT YOU

IT'S NOT SOME SWITCH THAT YOU CAN JUST FLIP. CAN JUST FLIP. >> I THINK THERE'S A >> I THINK THERE'S A MISCONCEPTION THAT NAFTA IS JUST MISCONCEPTION THAT NAFTA IS JUST A CARTE BLANCHE TO IMPORT GOODS A CARTE BLANCHE TO IMPORT GOODS WITH ZERO DUTY. WITH ZERO DUTY. THAT'S NOT THE CASE. THAT'S NOT THE CASE. IT'S FAIRLY COMPLICATED. IT'S FAIRLY COMPLICATED. IT WAS A NEGOTIATED PROGRAM. IT WAS A NEGOTIATED PROGRAM. IT HAS RULES. IT HAS RULES. THE RULES HAVE TO BE OBEYED. THE RULES HAVE TO BE OBEYED. IF CUSTOMS FINDS OUT THAT YOU IF CUSTOMS FINDS OUT THAT YOU HAVE NOT OBEYED THOSE RULES, THE HAVE NOT OBEYED THOSE RULES, THE CONSEQUENCES ARE PRETTY SEVERE CONSEQUENCES ARE PRETTY SEVERE DEPENDING ON THE DUTY RATE DEPENDING ON THE DUTY RATE INVOLVED. INVOLVED. >> LEADERS IN ARIZONA REMAIN