(S) UK and EU firms don’t have to wait for a trade deal before doing business in the US. Let's find out what is needed and access a 200+ page guide.
Should I wait for a trade deal?
Businesses here shouldn’t wait until the UK or the EU secures a free trade agreement with America before exporting there. As we know from Brexit, a trading settlement doesn’t guarantee less hassle or even tariff-free trade – far from it.
Even though we have negotiated a trade agreement with the EU, exporting to the bloc can be fraught with challenges. Many businesses struggle with EU red tape, including complex rules of origin, and face hefty financial penalties if they get the paperwork wrong.
You still need to complete complicated customs declarations and provide health certificates if you export certain products. Many firms require the professional services of customs agents and specialists to help them navigate the new trading arrangements with the EU.
Trading on WTO terms
So how much more difficult can it be to trade without any free trade agreement, known to us as trading on “World Trade Organisation (WTO) terms”? After all, we already do business with several countries on WTO terms including China, India and Saudi Arabia and there’s no reason why we can’t do the same with the US and other countries.
It’s complicated but no longer overwhelming
Importing into the USA can be as complicated of a process as importing to the EU can be now. The good news is, thanks to the UK's steep learning of EU import requirements, trading with the US doesn't have to be so overwhelming anymore. Once businesses in the EU or the UK figure out how to do it with the EU or UK, the US will be more straightforward.
Being forced to deal with import procedures into the EU or the UK, means that the numerous elaborate particulars that you will find with U.S. Customs processes are much easier to digest than before. Yet, like with the EU, without a good understanding of the process, you may still suffer delays and costs just because a single stamp is missing a box of a document. Trade deal or not, there are some fundamental details that UK exporters need to get right to ensure success in the U.S.
Top US tips to ensure a smooth import process into the US
The single most important suggestion to make is to consider enlisting the services of a licensed Customs Broker. They have the proper experience and knowledge of U.S. Customs to help you overcome border issues, of which there can be many.
For example, where you are "importer of record" and mentioned on the customs entry, you’d also be legally responsible in the eyes of.U.S. Customs and Border Protection (CBP). As a responsible party, you better understand the U.S. import processes thoroughly. You need to know, for example:
what commercial invoices and packing lists should look like to satisfy requirements
where and how to get a U.S. Customs bond for your shipment
how many duties and tariffs and other fees are applicable and how you can pay them
how your packages, pallets, boxes etc must be labelled and treated
if prior notice of shipment is required, to give authorities sufficient time to intercept and inspect your goods
what standards the customer expects you to adhere to
what conformity assessments with technical product regulation you need to carry out prior to exporting
how your product must be labelled for the US market to meet legal requirements and meet consumer’s expectations
if you need a specific license, permit or certification (risk an outright rejection without them)
if an import control on the volume of your commodity is in place, known as a quota
essential nitty-gritty to help your broker make a successful entry into the electronic entry into the U.S. e-customs clearance system ACE and complete the necessary CBP forms, such as the HTS code, the customs value and the country of origin to apply
if you can save a buck or two by importing goods at a reduced rate of duty under a Free Trade Agreement.
what requirements do you have under the US’s Importer Security Filing (ISF/10+2) laws for ocean vessel shipments
if your measurements and weights are correct
if you are keeping an adequate and complete set of records proving you used “Reasonable Care”.
With the excitement of large, new export markets for your products, please do not underestimate the high number of requirements that importers have under U.S. customs law. Even with the best broker in the world, providing incomplete or wrong information to them may lead to delays and expose you to the risk of non-compliance with U.S. importing regulations and laws.
It’s gone wrong
Prepare yourself if things do go pear-shaped. Nobody wants to receive a CBP Form 28: Request for Information, or worse, a CBP Form 29: Notice of Action. But with awareness and preparation, its half as bad and with the right expert support, you can successfully appeal penalties and liquidated damage claims, if even you are exposed to them. Contact Customs Manager Ltd for support
Reaching a settlement with the US may make things easier for some UK exporters, but free trade agreements aren’t a panacea, as our experience with Europe has demonstrated.
If you do your homework and have the right supply chain and support in place, however, you can navigate the complexities of global commerce without one and still trade profitably. And once you have mastered the intricacies of trading on WTO terms, the world is your oyster.
About the author
Arne Mielken is a leading global trade expert in the UK and the EU, and founder of the customs and training consultancy Customs Manager Ltd. Arne supports businesses to reach their international customers faster, by cutting costs, red tape and paperwork. He assists and trains companies to de-risk their supply chain and stay compliant, enabling them to grow globally.