Accurately track purchased part information such as the country of origin, as well as special program or trade program indicators

Have tools and a system in place to obtain parts information from suppliers and collaborate with them to improve data accuracy and timeliness.

Collect the duty savings “post transformation” by qualifying each saleable good against the country’s rules of origin. Failure to do so can run the risk of being non-compliant and can lead to fines and other penalties.

Four best practices to take advantage of CETA

Establish a Supplier Management Program

To effectively utilize CETA you need to have a supplier management program to collect information supporting a preferential status claim, such as a certificate of origin and a trade program certificate. To consistently collect this information your supplier management program should have an established communication protocol; clearly explain the reason and benefits of the program; and include training on your systemized response mechanism and format.

Implement Multi-sourcing Data Visibility

Multi-sourcing data visibility is a must for your CETA qualification process. Supply chains are setup to run efficiently, meaning shorter lead times, optimal safety stock, and low cost sourcing. As a result, a company could source one product from many different countries to achieve varying degrees of each. Understanding where a part came from dictates eligibility.  You will need to keep separate information for each part and individual supplier to make sure the part is eligible for CETA.

Automate the Solicitation and Qualification Process

Automating the solicitation and qualification process allows you to support high volumes of supplier solicitations, rules of origin content information, analysis and certifications without manual intervention. A campaign management tool allows you to create mass solicitations using purchased part data for many suppliers at once and for any given trade program. Your campaign management process should allow you to target the correct suppliers; request only what is relevant; streamline the response process; and check and validate responses. Automating the qualification process allows you to analyze the bill of material against the rules of origin and available certificates to determine whether the item is eligible without classifying or managing certificates for parts not affected by the qualification process.

Use CETA as a Springboard to Expand your Free Trade Agreement (FTA) Portfolio

Once you have a compliance program in place for CETA, you can use it as a base for rapidly supporting other trade agreements. Often the only primary difference between FTAs is the rule of origin content - the bill of material information and supporting business data can be fully reused. Repurposing data for other FTAs allows companies to extend the qualification process across a number of FTAs with a declining margin cost per agreement.

Final Thoughts

Utilizing CETA can enable you to have the ability to improve profit margins by three to seven percent on exported product. However, capturing the full potential of this agreement requires systems and processes to identify the best sourcing strategies and synthesize the rules of origin.  By establishing a supplier management program, implementing visibility across your supply chain, automating the solicitation and qualification process you will be ready to take advantage of CETA when it is fully ratified in 2015. And by using your CETA program as a base for supporting other trade agreements you will be ready to take advantage of the anticipated European Union – United States Transatlantic Trade and Investment Partnership.