How New Legislation Could Impact Your Cross-Border E-Commerce

Machine Automated Transcript: We’re on for a great show, for simply trade podcast, and we are really looking forward to a good discussion today. We’ve got a couple of heavy hitting type things that we’re going to be talking about today, so we’re going to get right into it here in just a second. But with that, I will say, yeah, you I keep saying this over and over, almost like a broken record, but thank you again. Lalo and I are so appreciative of the show is hitting new levels, as far as our expansion of our listenership, y’all are great. Oh man, it’s just fantastic. Hit that like button, hit the subscribe button, or follow whatever it is, because it really does help us in so many ways, I guess is the way to say it, man, I’m stammering and stuttering. I just like my elevators, just not making it all the way up this morning anyway, saying that, okay. Lalo, thank you so much for with where you and I were both at the the GTE conference recently and learning on some new things and all that. We were just in Chicago, and it’s always great to do some public appearances and whatnot. But by the time we have recorded this, we’ve been back all the ways, few days. But man, it’s always good to get, you know, I don’t get to see each other in person very often. So it’s always cool to do thatit is, it is and and we’re also learning, I guess, because when we go we actually hear again this show everyone was started because of the pandemic, eliminating what we actually go to those conferences for which is to have those conversations in the hallways and the dining rooms, etc, you know. And, and that is why this show was created, toopinions on stuff and what’s going on. And, well, yeah,because, because, during the pandemic, we didn’t have conferences anymore, so, so we didn’t have those conversations, you know, just it, it does, went away, you know, obviously, and so I, that’s why I approached me and said, Let’s do that now. We’re having those conversations again in person, but we’re also trying to duplicate that here on our show. So, you know, really glad that you all are enjoying this and continue to enjoy this. But yes, thank you all for your support.

Well, with that, we are bringing on today a discussion regarding digital traffic, I guess, if you would

Well, with that, we are bringing on today a discussion regarding digital traffic, I guess, if you would call it data flows and whatnot, and how governments are eyeing it, in my opinion, to try and hit some tax, you know, generate revenue, I think, or I may have it all screwed up, you know, me. I mean, I’m dumb as a box of rocks. So we have Mary Ann Rowden on today. And Mary Ann used to be with AA, she’s now with a e commerce Association. I’m gonna let you say it, because I’ll butcher it up as far as the name on it, but also has been involved, you know, in the industry for a while and whatnot. And so we’re going to get to talk about, you know, not only the the recent moratorium on how governments are looking at, you know, monitoring and tracking and taxing, I guess, digital traffic, but also we’re going to have a little discussion on the de minimis in the US and some of the things are going on there. But Mary Ann, welcome to the show. It’s good seeing you on online here.

Great to be back.

I wanted to make a quick mention also, it’s just because this is a little not personal, but very close to us here at global Training Center is that we obviously provide training, and we’re looking forward to getting our classes certified once CBP and the the all those details are worked out, but we’re looking forward to getting our classes certified under the new requirements for brokers, but I say certified. It’s more accredited by them, but by this group. So there’s CBP pick five individuals or five organizations to accredit courses that are being offered that will be applied towards continuing education for brokers. And Mary Ann’s group, the emtc and again, emergence Trade Council. They were one of the groups that were selected as one of the accreditors, one of five. Eventually, when they worked through all the details and everything, we’re going to have a panel of all five of them. Hopefully they’ll all come on. I don’t think it’s going to be a problem, but we’ll try to have all five of them and talk about that. But congratulations on that, Marianne, because I know several people that have told me I applied and we didn’t get in. You know, I it must have been a very rigorous screening process at. To get to, to get to that, and congratulations on that. Thanks

so much. And you know, I started emerging straight Council in 2021, and always wanted to do a certification program for trade professionals. And since I was last on the show, we actually did roll out our global trade professional certification program, which is an ISO based program for trade professionals. So we had built in that infrastructure. And so when the RFP came out from CBP, we were happy to apply, because we already had the infrastructure in place. So being an accreditor for the LCB continuing education program is simply an extension of what we’re already doing, but we’ll be updating our website once CBP gives us further information to release, and we’ll have all the information on our education page of our website. Okay?

Well, with that, let’s get into talking about the the recent moratorium on the the digital traffic. We had a an article in our Weekly News RoundUp show that had come up where there was a moratorium that had been set a while back the pscg, I think, was part of that. That’s the private sector consulting group that is an advisor role to the WTO, or the World Trade Organization. And with that, it basically had supported the put this moratorium down. Well, what’s a moratorium on it for? It was to not tax digital or E commerce type transactions. We’re talking literally the ability to, I guess, generate revenue for governments. Hence the tax regarding, you know, uploads and downloads of data, of

sending and, you know, I’m doing my shopping. I want to, you know, order up a widget. And so there’s some of that. There’s file transfers, things of that nature. Barry, why don’t you kind of explain a little bit more? What if I got it, if I got it screwed up, or whatever? I think that’s so. So

the World Trade Organization started working on E commerce, I think, in 1995 or 1998 and at that time, they actually instituted a moratorium on customs duties on electronic transmissions. So that’s the pure digital side of it. But if you remember, back in 1998 that was really in the early stages of what we look upon as the digital economy, right? We now have Netflix or you can download games. Those are digital transmissions, okay, but the World Trade Organization has since tried to negotiate a global framework for dealing with the cross border movement of both physical and digital goods, but both goods and services, and that’s what makes this framework unique. So they’ve been negotiating since 1998 but it really didn’t gain steam until 2017 So December of 2017 they started the negotiations with 71 members. So that meant that not all 198 or 200 countries were involved in the negotiations, and that’s because the moratorium was on customs duties on digital transmissions was renewed every two years when the WTO had a ministerial and in the last, I would say decade, that vote has gotten closer and closer and tougher and tougher because countries like India, South Africa and Indonesia, they feel that they’re losing too much revenue on imposing customs duties on digital transmissions. So we always kind of knew that the last one they had to actually stay an extra day in I think it was Abu Dhabi, is where they had it. They actually had to stay an extra day to get the moratorium extended for another two years, so that has put a fire under the negotiators to come out with an agreement. The problem with this agreement and what we have had, what just happened, July 26 was sort. The final, what they call the stabilized text, has been released. In some ways, it’s almost easy to talk about what’s not in the agreement versus what is in the agreement. And so the big thing going to the moratorium, it only gives a moratorium on customs duties for five years after adoption or after the agreement goes into force. So it’s not a permanent moratorium that many people expected. So it doesn’t solve that problem, but they will study it. You know, after that five year moratorium period. So that’s problem number one.

Well, it before you go on further, but it’s, I guess the incentive is, like, you, you mentioned it earlier that these governments feel like they’re losing revenue. To me, I’m like, What do you mean? Feel like whatever they’re, they’re, they’re thinking they are. But there is the the use of digital transmissions of information would be the very thing to help stimulate trade between the countries. Would it not?

Well, I remember when I was the private sector co chair of the WCO e commerce work group that came out with the framework of standards under the WCO Indonesia, made a presentation, and I think they lost. They said that they lost about $5 billion in revenue

based on what

not so not taxing. Now there are some countries, it may be Indonesia, that actually do assess a value added tax. Okay? Now it depends on how countries generate most of their national revenue, and one of the things that I think we need to be sensitive to is the developed world, meaning the United States, Canada, Japan, Europe. Those national governments derive most of their national revenue

from income tax. The rest of world derives most of their national revenue from customs duties in VAT. So they do know how much money that they are losing. The other part of it Andy is that the United States made a very fundamental policy decision back in the 1990s by not taxing internet companies. Okay, the sales tax was the perfect example that’s since been reversed, but and also section 230 and I don’t want to get into the Federal Communications Act that they’re not publishers. So our internet companies grew dramatically, but we have such an advantage against the rest of the world, so that’s the geopolitics of it, and that we have such a big, dominant industry, e commerce, industry and digital industry compared to the rest of the world. And so as that disparity has grown, other countries desire to tax has grown because they feel that they’re really just taxing American companies,

right? Well, and I do get that where a lot of countries around the world are looking at it as any American companies, or like the cash cow. So it’s like, you know, here we go. I get it. I understand that. I guess the industry as a whole, then really should be looking at coming up with a particular solution or proposal on how to deal with that. And you’re talking about people you know, negotiating it. Has the private sector offered any proposals that are worth merit.

Well, you have to remember that there are two sides to this coin. There is the direct tax side and the indirect tax side. And the World Trade Organization Agreement that just was released really deals with the indirect tax side, the customs duties, the VAT side, the direct tax side is really through an OECD treaty. You may have heard of pillar two, where they would be a minimum global tax of 15% and so that’s how they’re handling the direct tax side. Now that’s supposed to be a treaty. I don’t even think the Biden administration has presented it to the Senate, but when I’ve been to a conference recently and I went to sessions on this, the tax professionals are already changing. The systems to comply with that pillar, to that 15% global minimum tax, even though it hasn’t even been passed as a treaty in the United States yet. So these things are really in a state of flux, and this it’s the symbiotic relationship between both the direct tax side and the indirect tax side

well. And to your point, it’s like, so the concept is, and I know that there’s support for this through even in the United Nations, there was this. In the UN there was discussion supporting this kind of effort in different things. It’s almost like this flat 15% tax on the transactions. But here’s where a major heartburn of mine is on that that’s, you know, you have that, that tax, but then you also have the VAT and the duties and everything else that are staying in place. They’re not talking about replacing that. They’re talking about adding that. So I’m like, not no, but hell no, that’s, that’s screwball. So it’s like, you know, that’s, that’s where I see some problems with this. Even in the smaller countries that are, they still want to assess their local, you know, duties and taxes, plus add all these other, you know, flat taxes across and we’re not talking just digital now. We’re talking about a flat tax on just about any kind of transaction. So that’s that’s where I guess I’m looking at it going. This is kind of screwball here, but to your point, people are moving forward with their agenda behind the scenes. So the bureaucrats are pushing it. And it hasn’t become reality in anywhere that I know of

well, and what’s happening is other countries. So Canada is a perfect example. The longer the United States waits, the more they’re going to go back to imposing what they call digital services tax. Okay, so those are popping back up, and the OECD treaty was the compromise that we came up with. So I don’t hear anybody really talking about the OECD treaty outside the tax preparers, you know, field. So it’s a concern, and I don’t hear it on the campaign. Nobody’s talking about it. Okay.

Well, it’s, this is getting way down in the weeds, if you will, on that particular thing. So let’s, let’s pull back on this a little bit and to that point. So as importers and exporters, whether you’re a US company, Canadian, European, any companies out there, globally, especially a multinational company this kind of effort, there are two questions here that you can comment. One, what do I need to do to get up to up to speed or proficient on this topic? Where can I get the information? And second, if I want to get somewhat active in this. Do you any recommendations on where or what trade associations or whatever to get involved? To try and say, Hey, here’s our input.

Yeah. So emtc, along with a number of other associations, like the National Foreign Trade Council, the Computer Technology Association. It I see anybody who’s in the technology field have done analyzes as I have done and again, in this agreement, it’s almost just as important of what’s not in it as what is in it. Now our association is different in the sense that we our bylaws cover both cross border movement of physical and digital goods, okay, but also this agreement covers goods and services. So who should care about this agreement? If you are a global company at all that does e commerce, you know sales online, if you do any direct to consumer shipments, you should care about this. If you are facilitator of cross border goods, regardless of the size of the shipments, you really need to know about this agreement, and I would say that those those companies that really have a global presence, you also need to know what countries are not a party to the agreement, because there’s about a 10 of them, including the United States and India hasn’t even participated in recent months. And, you know, it’s a big economy.

Okay? Well, with that, is there anything else you want to add on that before we start? Talking about de minimis,

yes, very important. One of the problems that we had is several months ago, the United States Trade Representative announced that they were withdrawing support for three important digital trade policies that were really at the heart of this agreement, but also has been US policy for about at least 10 years. That’s the free flow of cross border data flows, meaning you can just have data flows go across border without any restrictions, prohibiting national data localization requirements and prohibiting the force access to source code, which is really important for American companies with they have their trade secrets and the algorithms, those three important trade policies are not in the agreement, and as a result, it’s almost like taking the heart Out of the digital side of this agreement. So that’s really important for people to know. The other thing I would say is I have sort of a checklist of things that people should be aware of and solely in the trade space. So one of those is E invoicing. So the framework does work, typically like a framework, where it encourages it doesn’t make absolute requirements. So talks about single window, but it also talks about E invoicing. Again, in the United States, we don’t see it as much, but Latin American countries and more and more countries are starting to opt for E invoicing. What that means is that you issue an electronic invoice to the taxing authority, and more and more countries that have that are actually assessing that at that transactional level. So be aware that, again, the United States is the largest country that doesn’t have event and we really don’t have an E invoicing system yet. But I would not be surprised that that’s coming soon. And if you do business in Latin America and other countries, you’ve probably seen this already. The other issue I would take, you know you should keep an eye on is both the privacy of data submitted to governments and transmitted, you know, cross border, versus the what they call open

government data. And the reason this matters for us is because of manifest data. So for example, because of a court case, right? The United States does release ocean manifest data, and that’s been used for a variety of purposes. There is a bill, I think it was Senator Cassidy, introduced a bill that would actually require all modes of transportation their manifest data to be released, you know, and that’s kind of proprietary data. You can find out a lot of information, competitive wise, using that manifest data. So there is some tension between different provisions in this agreement. It seems to suggest that such data, you know, should be released to the public for no charge. Okay? And then the other big thing that I would touch on is, you know, the personal data protection that’s largely silent, and it leaves to the national government to come up with a law protecting personal data the United States, we do not have a national data privacy law. It’s really the states have filled in there. And this has been a battle that’s been waged for like, 30 years. And so what has ended up happening to us, corporations that are global, is we end up defaulting to the EU’s GDPR, their global data privacy standard. So those are the highlights that I think people should be aware of well

and all right. So to your point here, let’s, let’s talk about this. Just a little bit though, is on this, where the governments are going for taxing, you know, some of these digital transactions, the only way for them to really do that is this idea of, you know, privacy and all that. Well, guess what the government is going to see and have access to all of your data that you transmit, either sending or receiving, all of it, and in this scenario, so stop and think if you were in charge of setting up a an infrastructure on what to charge. Let’s say it’s a tax per data, byte per megabyte, per transaction, per whatever. So you’re going to have to have access to these data lines, and those data lines are going to be going and so the first place that they’re going to look at is any and all internet service providers. That’s first and foremost. And then secondly is then you, if any, by chance, locations that have companies that may be trying to transmit using their completely their own network, which actually some of it goes through other, you know, rented wires, if you will. When I say wires, rented networks, but all of those type of transaction the government is going to put some kind of thing in the midst of that, if you will, so that the data is going to flow through a government entity box, somehow, some way,

and in some ways, Andy, that’s already set up under like I can, you know, each country has a national authority that governs the internet. Okay, then the assignment, you know, ICANN does the assignment of URLs and things like that, but each country does have a national authority to do that. I think where people are going to see it first is, I bet more and more countries are going to start assessing GST or VAT on, let’s say download of games, download of movies, you know? And then the issue is, if you’re using a VPN, and you can switch with country that your your IP address, right? So, so it’s going to be really interesting. And I think the other thing to talk about is, when did this agreement go into effect? Well, typically what happens in WTO, and this is why this agreement is unique, because it is not all the countries involved in the negotiations. There’s about 91 involved in the negotiations, and only about 80 have indicated that they’re going to adopt it. So typically, there is a little bit of a battle at the WTO whether all the members have to agree to an agreement like the Trade Facilitation Agreement, or can this be just a plurilateral agreement? And that’s being hashed out now. But typically what happens is once about a majority of countries adopted, which is usually around 110 113 countries adopted. It is considered, an effect. Okay, so that’s the number that we will kind of track and see how many countries adopt by depositing their instrument at the WTO. And obviously we’ll monitor what the United States is going to do. And the reason that the United States didn’t sign on to it is because I think the administration, at least this administration wants to regulate artificial intelligence, and they’re rethinking their policies.

Well this and then there’s not, there’s not been anything definitive this coming out. It’s just that the US is not supporting certain aspects of it, but it’s where are you going? What are you doing, and all that. So anyway, we’ll see. All right, so let’s talk about de minimis. And de minimis is one where there’s been a lot of issues going on. The volume of de minimis shipments into the US has just mushroomed, and a lot of folks have been looking at this deal where it moved from $200 and below to $800 and below and saying, Okay, well that’s that’s what’s driving now everybody’s getting away with, well, actually, the average value of de minimis shipments is still less than $60 we

just 50, actually, when we do

so, the raising of the de minimis up to $800 has had actually no effect. That’s not where the issue is. The issue is is that the volume of shipments coming in under the de minimis has mushroomed so much that let’s look at it. You know, you have the postal post office or postal shipments that benefit from it, and the Express carriers, I was part of the group that actually pushed for that. But those volumes are not where the mushrooming has come from it is, you know, the E read, the E commerce, if you will, the E retailers and all that, where there’s been a lot and there’s been a few, they’re bringing over containers full of, and I’m talking ocean containers full of these de minimis shipment. US, and customs is overwhelmed by it, and, and there’s some people, you know, struggling with that. And, I mean, I have my opinion on some things, but there’s, you know, there’s a lot of talk about, well, what is coming in and, and there’s some bad stuff coming in, or there are people not adhering to certain things. So what’s the latest on some of the regulations that are going down this road here? So

I would say there are four major bills, and I’ll just go through really quick. The House of Representatives actually has passed a bill in China’s de minimis abuse act. It’s HR, 7979 so that passed the House of Representatives, and it has a number of provisions part of the package, and it basically restricts the use of de minimis. So if you have an item that would be subject to section 301 section 201 you know, and other additional duties that would be ineligible. It does have a few additional data requirements that it you know, the government would collect. So that’s passed the house. Now that legislation is pending in the Senate before the Senate Finance Committee, and so just recently, last week, Senator Wyden, who is Chair of the Senate Finance Committee, came out with his bill called fighting illicit goods, helping trustworthy importers and many gains for America Act of 2024 they’re coming up with such absurd names. So this is called the fighting for America Act, and that was just introduced. So it does like a church 7979 it restricts certain types of articles, import sensitive goods, items subject to anti dumping, countervailing duties, subject to special tariff investigations under 201301 and 232, the bill also requires the 10 digit Harmonized Tariff Schedule number and the country of origin. It also increases penalties for violations. The first offense is $5,000 the second offense, or subsequent event violations, $10,000 but then it brings you very quickly into a fraud scenario. The other thing that’s unique about the Senate Bill compared to the House bill is it charges $2 per shipment fee. Okay, so every de minimis shipment would be subject to the $2 fee. And I would say that the reason this is ramped up is because, as you stated, you know, the increase in de minimis, if you look at those numbers on the CBP website, what really happened that we didn’t anticipate was the pandemic, because the E commerce supply chain was the only thing that really kind of withstood the pandemic, but also the section 301 duties imposed on Chinese goods and those kind of conflated at the same time. But I think Congress has been very concerned about this area, primarily because of Timu and Sheehan. Now, the House Committee on the CCP did a report, and the chairman at the time, Mike Gallagher, sent letters to Sheehan and Timu. He came out with a statistic

indicating that 60% or 66% of the shipments coming in on de minimis, or she and atimo, I don’t know how he could come up with that number, unless they really analyze the data. And I’m not so sure. I’m not so sure CBP has that data, but that’s what they indicated. So I think they’re trying to craft these bills in a way that deals with those issues, those deals with those companies. The original bill that sort of kicked off thinking about de minimis is Errol bloom and ours bill. Earl Blumenauer is chairman of the Trade Subcommittee of house based and means, and he’s from Oregon, and he introduced it last Congress, reintroduced it again this Congress. His bill would use a criteria for countries that were ineligible. So would be if you’re on the special 301 list, you violate IPR, things like that, and the only country that satisfies all that criteria is China. So his bill would really basically block all the minimum shipments from China. So. And then there is a third bill, which is kind of interesting. Uh, from Senator Cassidy, uh co sponsored by uh Senator Baldwin, but also Senator JD Vance. You know who’s our Vice President, Joe, candidate for the Republicans. His is called the de minimis reciprocity reciprocity act, and this would direct the Secretary of Treasury to establish the de minimis of goods coming into the country based on the de minimis threshold of that other country. And the problem with this is it would be very hard for CBP, I think, to administer just to code that into the ACE system, and it also would include any other threshold, including VAT, okay, so if you charged a country card to VAT, you know that would take be taken into consideration. The other thing that makes it interesting is that it would establish a reshoring and near shoring account, so any revenue equivalent to what they would collect for de minimis would be used into a reshoring and near shoring account to bring businesses back from China. China and Russia are excluded, and they have some other criteria, but they also have additional data requirements that not are that are not as explicit or as refined as Senator wyden’s bill.

Well, let me stop for a second from a reciprocal agreement scenario here on the de minimis, I will say, in my personal opinion, is that could be set up, in a sense, pretty easily, to say, you know, basically, you know, in some of these countries, they’re only offering, you know, $50 or $40 or even $20 in some cases, like, Okay, you’re coming into ours, it’s going to be, we’ll lower it down to that, because here’s, here’s where I take the stance all these countries, all these companies around the world, want access to the US market. Why? Well, we’re the largest economy in the world. It’s it’s massive and all that. And I don’t have a problem with that. But when we US goods are not treated fairly abroad, and so when the US is wanting to compete or go in and re you know, send their goods to other countries. There’s all kinds of barriers that seem to be put up, especially for us products. And you know, you’ve traveled around the world. I’ve traveled around the world. I’ve seen it firsthand. And as I’m looking at this going well, now wait a minute, we want fair trade. You know, everybody talks about free trade. Free trade means your market is free. You know, to get into it as well as trying to make it a duty free type scenario is the context. But the free trade is more of like, Hey, you have access to my market. I have access to yours. And in reality, what happens, and has happened for decades is, again, people are, you know us is economy is consumed so much. But the one thing is that we are sacrificing goods that are imported at the the at the cost of US jobs for exports. US exports are down because we don’t it makes it so difficult. So I would say on that realm, we’re not even talking about duties, for example, we’re just talking about the de minimis going back and forth. So I see great opportunity there.

I’m glad you mentioned that, because it’s I have a little schizophrenia, because on the one hand, I’m dealing with customs and other agencies on the import side, but I’m also talking to the Department of Commerce, because the European Union, as part of its customs reform package is eliminating de minimis customs duties, de minimis for low value shipments for E commerce. Now they had a limited they had eliminated their de minimis for that several years ago. And what they had to do is create what’s called these importer one stop shops, where you register with one company for your tax ID. And they will, you know, remit the VAT to the country that the shipment is going to. They have 150

Euro de minimis now, but that will be gone by, I think may of 2028, I think is the implementation date. So we’ve talked to the European Union about this. We’ve sent a letter. We’re also dealing with the International Affairs Office of us, Department of Commerce, and saying, This is a real problem, if they eliminate, you know, diminish for US exports and the. One of the issues I have is the US, the way it collects data, the electronic export information, only kicks in at the value of $2,500 or above. So we’re only estimating what those low value shipments are for shipments below that $2,500 threshold. So it’s a real problem, and the government is aware, yeah,

well, to your point, and here’s I guess where I’m going is that all these governments keep looking at it, and de minimis means that it is a value so low it’s not worth going through an entry process. Why? Because the cost for processing and entry, preparing it and transmitting it on the importers part, as well as the government’s part to process that is such that you’re going to offset any revenue that you get generate from it. So here’s the thing that I guess I look at in that as we go through that, is that there are all these governments looking at and folks, you need to understand this when you’re looking and talking about this, oh, well, you know, we’re losing all this revenue. We’ll stop a minute. What is the cost? You got to look at it holistically. What is the cost of processing that from an entry perspective? We’re not talking physical clearance from an entry perspective, to collect that revenue. And quite frankly, every time it’s looked at, all right, you’re going to get, let’s say, $2 in revenue for a shipment, but it cost you three, four or $5 to process it on on the government side. So it’s like they eliminate this stuff. It’s like they’re cutting their nose off to spite their face in that it’s like you’re going through this. You’re gonna eliminate it. We’re gonna, hey, we’re gonna crack down and look at all this revenue we’re gonna be able to collect, but then it’s gonna cost you, in the long run, more money. That’s one thing,

and that’s why we submitted comments to Congress saying, Before you make any change to de minimis, have the General Accountability Office that reports directly to Congress conduct a study with CBP as to what the cost is to process an entry and how many additional full time staffers CBP offices they would need, you know, if you adjusted de minimis or restricted its use,

remember, yes, all right, you’re transmitting electronic data, so it’s more cost effective in today’s world. Yes. And your system would set flags to say what could go through and what doesn’t. Um, here’s the ones we need to look at. You’ve got to have, and you just hit it, what’s the staffing that customs would need, whether it’s in the US or anywhere else, to look at an on screen, review of the information, and then go from there to say, Okay, I’m going to examine it. I need to select it. All those kinds of things that come into play. Now I’m a big proponent of there needs to be a surcharge, if you will, $2 per shipment you mentioned earlier, for processing the de minimis. I am. I’m a big supporter of it, provided that that $2 goes to customs, not in the general fund, so that there are staffing and their own facilities and equipment are paid for. That’s one thing. The second thing is, any and all of these locations that are processing de minimis. It could be a truckload, it could be a rail car load. It could be an ocean container. It could be, you know, air cargo, whatever that there needs to be facilities and systems set up so that every shipment comes through and electronically is accounted for. And then it’s like, oh, you know what? That flag for inspection. And then they can, they can pull it out. The justification right now is a container comes in from the ocean, 20 footer, 40 footer, and customs wants to look at some specific shipments in there. Oh, well, I don’t have anywhere, you know, we’re gonna have to take this into the warehouse. We’re gonna have to unload all that. And what, you know, what? That’s the problem of the carrier and the people that are importing that dog

on it. It’s like, you need to have the facilities. You want to use the de minimis value and use that and sell to the market, then this is what it takes to handle it. The Express carriers all have to do that, and they’re charged reimbursables, as it’s called, and they have to pay for the facilities and all that. To me, if you’re going to utilize that same process, then you need to step up and have the facilities pay the surcharges and make sure that customs and the other agencies then are staff. The only way to do that is through what I was just thinking, that $2 per shipment, or whatever it is, is appropriate. We

have proposed to CBP to conduct a pilot program that’s fairly unusual and. That’s to flip this on its head, to come up with a risk management model, and the way to do that pilot is to work with the US Postal Service to get a risk private file on us e sellers who are exporting and that way we can gather data, but also entice other countries to do risk profiles on their E sellers in their jurisdiction, because the problem that we have is we don’t have any traditional importer of record, okay? So CBP and other customs administrations don’t have a risk model that scales for the number of V sellers and the volume of shipments in the E commerce space. And that’s why we thought, if we did something unorthodox in the United States, using the Postal Service to gather data on our exporters, we can then show what’s possible to other countries as an enticement of exchanging data on those risk profiles. We really haven’t gotten response from CBP, but they’re really behind the eight ball. And the final thing I want to mention, just so people are aware of this, there is a proposed rule on low value shipments winding its way through the Office of Management and Budget. It’s at the last interagency process discussion at our Association, National Foreign Trade Council, EAA and a number of associations submitted requests and got meetings with the interagency group. And it’s very strange because we can only present arguments. They don’t. They may ask for clarification, but it’s not really a dialog. So there is a proposed regulation that may be coming out, and so we had our meeting probably a month ago now, and it’s very strange, because we know that they have conducted pilots, right? The 321, pilot, the type 86 under this proposed rule, type 86 would go away, type 86 entry. And so we really don’t know what’s in the proposed regulation. So, and we don’t know what the final policy choice and policy recommendation. Treasury is on that interagency CBP, USTR, but Small Business Administration is not, and that’s a difference from when we dealt with this and the latter days of the Trump administration, because I think SBA was far more sensitive to the impact that this will have on small business. So we’re waiting to see if that shoe drops as well.

Okay, we’ve talked about a whole heck of a lot again on this particular issue. Then obviously your association is very involved on the E commerce front. G, surprise, surprise, since it’s focused on E commerce. But with that, what is your website? So that folks can,

if they’re interested, just go to emtc.org

emtc.org folks, I’m going to tell you that is one thing is that if you are doing you may not be a full fledged tea seller. It may be a side deal for your company. That’s fine. It’s still you’re involved. If you’ve you’re taking orders electronically. You’re submitting them electronically to your distribution centers, and all of that, all of that comes into play. And that’s e commerce, guess what? So you need to get involved with it to stay up to speed. The ET, or if I got an E commerce, the EC,

what is it? Emtc.org, emtc,

what is it? Emtc.org, emtc,

oh, God, I tell you what my memories as long as a turtle, stale, EMC, TC, whatever it is. Okay, we’ll have the connect folks. We’ll have the connection or the contact information in the show notes. But reach out, get up to speed on this, because it affects more than just, you know, e retailers, it’s big companies, small companies, all that kind of stuff. With what we’ve talked about, the digital taxing to the de minimis, if you’re utilizing that, there’s opportunity also on to me, I see it, whether it’s some people think it’s good or not. It just it needed to look at that last bill you talked about is a reciprocal agreement with other countries regarding the de minimis value that has some phenomenal potential for US companies. Again, we’ve had a lot of people hitting the US. It’s like, Hey, if you want to generate some sales in other markets, I think it’s fair. We still have to compete on. Price to the end consumer cycle, times and quality and all that. So to me, Hey, let’s just play on the same rules. If you, if we’re giving you 800 you give us 800 or whatever it may be. So Mary Ann, thank you so much for joining our show. Once again, we’ve gotten into some really good, deep stuff. So this is not one of those feel good shows. This is a very detailed learning show, and

it requires real input from the trade community, because e commerce is a growing percentage of global trade. I think it’s up to 20% now. So it’s getting there. It’s it’s huge.

Thank you so much. We appreciate you. Lalo, any last comments from your end?

No, let’s just thank you all for joining us and looking forward to getting some more feedback. If

you have any on, any comments on on LinkedIn, when, whenever we post this episode on our or on our YouTube channel. Thank

you so much.

If you’ve got any issues on de minimis and you want to add some input to it, please reach out to us, because I’d love to engage in more discussion on it as we try and understand what’s going on and what we should do about it with all of that folks again, please hit the Follow button, subscribe button, like us, share us all that, and we hope you have a great day. Thank you. Bye.