If you ship goods Down Under, we have good news and bad news for you. The good news is that a free trade agreement between the United States and Australia took effect in January. The bad news is there's a good chance you're not taking full advantage of the program. A recent study commissioned by Vastera, a global trade management firm, questioned 60 U.S. companies that export goods to Australia about their trade practices. The conclusion: Millions of dollars worth of duty savings are going unclaimed.
The reasons have largely to do with a lack of expertise and resources. "The complexity associated with understanding and leveraging free trade agreements is beyond the scope of many companies because they either lack the expertise, resources, [or] technology—or all of the above—to do it efficiently and cost-effectively," says Adrian Gonzalez, director of ARC Advisory Group's Logistics Executive Council. And the problem isn't limited to companies selling to Australia. The U.S.-Australia Free Trade Agreement is just one of dozens of trade pacts the United States has negotiated in the past two decades. For many companies, keeping track of each agreement's details presents an overwhelming challenge. "Many companies eventually come to a decision point," says Gonzalez, "either invest internally or outsource."
It may not come as a complete surprise that a report commissioned by a global trade management firm wraps up with an account of a company that has hired a global trade management specialist to help with its claims, with stellar results. By outsourcing its duty minimization program, the report says, the global manufacturer will save more than $3 million annually by certifying its goods against the rules of origin and properly qualifying for the U.S.-Australia Free Trade Agreement.