In late 2019, I predicted 2020 would be the year of data, and I still see data as being the key to 2021. How the data that is attached to trade transactions moves, who sends it, who needs it, who sees it, and when it becomes available, and to whom, will continue to dominate our discussions in 2021. In addition to collecting and using data to facilitate trade, data is also being used to predict future activities based on trends and more complex analysis and modeling.
Traders should ask, how can we make all this data work for us? How will this assist us in our decision-making about where to trade and with whom? Governments are also asking the same questions, but for different purposes.
Regardless of the change in administration in 2021, I expect we will still see a heavy focus on trade enforcement in general. As USMCA is fully implemented, expect to see verifications in early 2021 continuing throughout the year. As with any free trade agreement, knowing the country of origin, once a more straightforward determination, has become increasingly complex, yet so much depends on a proper origin determination. With global trade and global sourcing of components, when does a good substantially transform to become a product of one country? How will USMCA, trade remedies, anti-dumping, and countervailing duties be applied to products that consist of components from various countries? Do additional duties apply based on sourcing of component parts? How does the somewhat subjective origin determination become more predictable and uniform? As tariffs, quotas and trade wars continue, in addition to origin -determination, proper -classification and valuation are of utmost importance. Intellectual property right protections and forced labor concerns will add to the increased complexities of who is responsible and accountable. CBP and all agencies with import and export oversight are getting better and better at using the vast amount of data they currently receive to both help facilitate compliant importers and exporters, and ferret out those who, wittingly or unwittingly, are not following all these complex rules.
As we move into increased automation and data visibility, new concerns will be: Who provides the data? Where does it come from? Who’s responsible for the accuracy and correctness of the data? Who suffers the consequences when the data is fraudulent? In the US, Customs and Border Protection and partnering government agencies are reliant on the advanced transmission of data to make their decisions. Who will they hold accountable if the data they use to make their decisions turns out to be misleading or just plain false? Will other parties to the transaction be held accountable as the Importer of Record now is under the Customs Modernization Act? Will we see a new Customs Modernization Act in 2021, recognizing the new business patterns we are now seeing, especially those emerging with e-commerce? Will more information be available to the enforcement agencies earlier in the supply chain to monitor sourcing, pricing, and product classification?
Who is in control? Prepare for a future around data. Know the importance of your data, know who has it, and how it is being used. Is more information about your imports and exports shared with the government going to help facilitate your shipments, or create more questions? You are your data. Do you know where your data is now?