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Free trade agreements create compliance headaches

Jaclyn Jaeger | August 22, 2016

The overall concept is simple enough: Fair Trade Agreements (FTAs) open up market access between signatory countries by reducing barriers to trade. The reduction of trade barriers—such as custom duties—effectively makes it easier and more cost effective for U.S. companies to export their products and services to trading partner markets.

“The benefit to taking advantage of a free trade agreement is not only market access, but if your products qualify for reduced-duty or duty-free treatment, that will translate into lower landed costs for the company’s imports into those countries,” explains Richard Mojica, who focuses on international trade and customs compliance counseling at law firm Miller & Chevalier. “With this benefit comes the compliance challenges.”

For many trade compliance professionals, the most complex challenge posed by FTAs is understanding and navigating the various “rules of origin,” which are highly complex and technical rules that describe how... To get the full story, subscribe now.