Since it is “World Trade Month” how about a list of the most important acronyms and abbreviations in the food exporting network? These can be pretty confounding you have to admit.
A: It is true that most export glossaries are not food focused and those few that are can be rather generic. By drilling down a little more we can arrive at an “Export Essential” glossary of terms. Not all of them apply to each type of product or transaction, however recognizing them as required or not helps save time and appreciate the overall scheme of the process. You can learn more about these terms and others in the “Export Essentials” trade tutorials or the archived webinars both located at www.foodexport.org
AES – Automated Export System, used by U.S. exporters to electronically declare their international exports, known as Electronic Export Information (EEI), to the Census Bureau to help compile U.S. export and trade statistics. This information is also shared with the Bureau of Industry and Security, the Directorate of Defense Trade Controls, and other federal agencies involved in monitoring and validating U.S. exports. It is housed in “ACE” which is the Automated Commercial Environment. Formerly this declaration was only made on paper on the Shipper's Export Declaration form
AMS – This is one of the main resources for grading and certification of agricultural products, especially dairy products destined for the European Union (EU) and China. They are now assuming more and more countries and products from APHIS (see below). Focus more on country specific certification and plant registration – includes specialty crops, honey, and organics. www.ams.usda.gov
APHIS – A USDA agency that issues export health certificates for plant and plant products – phytosanitary certificates, some processed plant products. It covers animals and animal products, such as pet food and sometimes dairy products for human consumption. AMS is assuming more and more of the dairy export certification. www.aphis.usda.gov (click on “Imports & Exports”)
ATO – Agricultural Trade Office (or, alternatively, Agricultural Trade Officer) Foreign Agricultural Service (FAS) staff in foreign markets advocating for U.S. food and agricultural exports. They are a bit more “hands on” and practical than “OAA”, Office of Agricultural Affairs which focuses more on diplomacy and negotiating increased access for U.S. products. They work in conjunction with Food Export and their respective In Market Representatives, State Agricultural Promotion Agencies, and trade show event managers. They often refer to themselves as “Post”. They publish most of the invaluable secondary market research reports such as Exporter Guides, Retail Sector reports and Food & Agricultural Import & Standards, also known as “FAIRS”. You can access their overseas directory at: https://www.fas.usda.gov/international-offices
CAFTA-DR: The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR FTA) entered into force for the United States, El Salvador, Guatemala, Honduras, and Nicaragua in 2006, for the Dominican Republic in 2007, and for Costa Rica in 2009. As a result of the FTA, 100 percent of U.S. consumer and industrial goods exports to the CAFTA-DR countries will no longer be subject to tariffs. Tariffs on nearly all U.S. agricultural products were phased out in 2020. To be eligible for tariff-free treatment under the FTA, products must meet the relevant rules of origin. This is one of the top regions for U.S. high value-added food exports. U.S. processed food exports to the CAFTA-DR totaled almost $2 billion in 2021, with growth of 26%. For more detail you can use Trade.Gov located at https://www.trade.gov/us-cafta-dr-free-trade-agreement
CERTS – FAIRS Export Certificate Report Published by Foreign Agricultural Service (FAS) a matrix of documentary requirements for sanitary and phytosanitary (SPS) issues dependent on type of product. This should be standard procedure for any company exporting to a market, especially for the first time. It uses an easy-to-read matrix which from left to right covers the product (s), title of certificate, attestation required on certificate, purpose and requesting ministry such as an overseas equivalent of FDA or USDA. You can locate the search engine which needs then to be programmed to report, market and date range here. https://gain.fas.usda.gov/#/search
CO – Certificate of Origin of manufacture often document used to supplement exports, especially in Free Trade Agreements (FTAs), but also include General Use certificates issued by Chambers of Commerce. Origin of manufacture, not the origin of export, is important to determine the proper duties to be applied by customs at the destination. Depending on the market the CO may need to be notarized by a foreign government agency. Exporters are not allowed to prepare their own general use CO’s but in cases of FTAs it cannot be prepared by anyone but the exporter, certifier or producer. More information on types and uses for CO’s can be located here: https://www.trade.gov/special-documents
COFS - Certificate of Free Sale; is often used in support of export shipments where “health certificate” is not available due to it being a processed food. These are often issued by State Departments of Agriculture or State Departments of Public Health and attest the specific product is safe for human consumption and freely sold in the U.S. Free Sale certificates are often used in conjunction with CO’s and other documents for customs clearance at destination. More information on the COFS is available in the CERTS reports, or from your State’s Agricultural Promotion Agency or the Food & Drug Administration, FDA.
EEI - Electronic Export Information; the “EEI” is the most common of all export control documents. It is required for shipments above $2,500 (with the exception of Canada) and for shipments of any value requiring an export license. It has to be electronically filed via the AES Direct online system, which is a free service from Census and Customs. Census uses the date to provide us with export statistics such as we use in “GATS” or “UTO” which will be pointed out below. Use the AES link for further details.
EXW: “Ex Works” (named place of origin) is an Incoterm® 2020. It is the term of sale which has the least amount of cost and risk for the seller, and it often mistakenly referred to as “FOB Factory” or just “FOB”. The seller still needs to provide customs clearance documents to the buyer if they request it, so it is not a “way out” of any responsibility. All charges and risk and loss pass to the buyer when they pick up the shipment, and it moves on a “collect” basis to the destination.
FAIRS – Food & Agricultural Import Regulations & Standards published by Foreign Agricultural Service; complimentary to the CERTS in analyzing regulatory and documentary requirements for a market. Also referred to as the “Narrative” it is located in the GAIN database at FAS same as the “CERTS” but in this case you need to program date, country and “FAIRS” - https://gain.fas.usda.gov/#/search
FAS – Foreign Agricultural Service division of USDA; main portal for information on exporting food and agricultural products from the U.S. Estimates are about 80% or more of what food exporters need as far as secondary market research and regulations such as “FAIRS” and “CERTS” are located in the website. This should be a favorite for any company that exports food, and can be located at www.fas.usda.gov
FCA: “Free Carrier” (named place) is an Incoterm® 2020. It is to be used for shipping multi-modal shipments to a named place, such as a consolidator, freight forwarder or port prior to the departure. It is used in 40% of exports worldwide yet in the U.S. many do not even know it exists. This is the correct term to use when a buyer often says “FOB”. Many buyers are also unaware that this is the correct term to use. For the seller, they bear the cost, loss and risk until the shipment has been delivered at the named point.
FOB: This is also an Incoterm® 2020 but should only be used for bulk inland waterway or sea freight only. If you use it for any other purpose, it is not an Incoterm, but perhaps one of the other trade terms being bandied about since 1941. The recommendation is to avoid its use to help from making mistakes in quoting, since it means different things to different parties, especially when there is no named place after it.
FSIS – Food Safety Inspection Service (USDA). Main responsibilities including issuing export certificates for meat and egg products. You can use their export library to review the export requirements for these products. You can also subscribe to their daily updates on changes in regulations around the world, which for meat exporters is invaluable. The website is www.fsis.gov
GAIN: This is an acronym for “Global Agricultural Information Network”. It is the database of reports coming in from FAS offices around the world. The “FAIRS” and “CERTS” reports are found in the GAIN database, both in programmable fashion for date range, market and type of reporting.
GATS: Another acronym from FAS for “Global Agricultural Trade System”. This is where you can run export data on agricultural totals, bulk, intermediate and consumer oriented (BICO), and processed foods. It also sorts by state and port of departure. This is a very useful tool, a tree for breaking down product specifics which are based on Harmonized System (HS), or Schedule B numbers. For details on how to navigate this system, listen to Food Export’s recorded webinar on "How to Use Data to Support Your Export Strategy".
Incoterms® 2020: The term, Incoterms®, is an abbreviation for International Commercial Terms. They are a set of rules which define the responsibilities of sellers and buyers for the delivery of goods under sales contracts for domestic and international trade. Published by the ICC, or International Chamber of Commerce, and are widely used in export transactions. The most recent version of Incoterms®, Incoterms® 2020 is available at www.icbwbo.org Food Export also has a recorded webinar on the subject “What's New? Incoterms 2020” in order to learn how to properly use Incoterms.
IFF – International Freight Forwarder; Agent for moving cargo to an overseas destination. These agents are familiar with the import rules and regulations of foreign countries, the export regulations of the U.S. government, the methods of shipping, and the documents related to foreign trade. For the latest update on freight forwarders and the supply chain challenge, watch the Food Export recorded webinar “Questions You Should be asking: Global Logistics and why it Matters”
HS – Harmonized System codes for import/export classification and statistical purposes. Schedule B is the 4-digit extension to the 6 digit HS code. Exporters can use the “3CE” Commodity Code Classification Engine for intuitive classifications. You can also get up to date on the changes to the HS in 2022 by listening to Food Export’s recorded webinar “HS 2022: New Changes to the Harmonized System” The 3CE can be located at http://www.census.gov/foreign-trade/schedules/b/index.html
NOAA – National Oceanic & Atmospheric Administration part of Dept. of Commerce & issues export certificates for fish & seafood products. This is because these products are not considered agricultural for trade purposes, although they are listed in export data as processed or prepared/preserved seafood. More information on regulations and documentation for seafood products is available at www.noaa.gov
Phyto – Phytosanitary certificate issued by USDA for fresh plants and plant products; See “APHIS” for details. Many buyers describe their documentary requirements by saying “Phyto” for processed food products which APHIS does not cover, so it is always important to clarify which products require a phyto. You can learn more at www.aphis.usda.gov
Pro Forma - Invoice prepared by the exporter before shipping the goods, informing the buyer of the goods to be sent, their value, and other key speciﬁcations. This is essentially a quotation from seller to buyer. Examples and instructions are available in Export Essentials Module 5 “Price Your Products for International Markets” located at https://www.foodexport.org/our-programs/exporter-education/export-essentials-online
SLI - Shipper’s Letter of Instruction - The “SLI” is issued by the exporter to the forwarding agent and includes shipping instructions for air or ocean shipment, whether the terms are pre-paid or collect, and whether or not the shipper requests marine cargo insurance coverage. The shipper’s signature also provides power of attorney to the forwarder to complete the EEI on their behalf. This topic is explored further in the Food Export recorded webinar “Questions You Should be asking: Global Logistics and why it Matters”
TRQ: Tariff Rate Quota; an import system established a quota and a two-tier tariff regime for affected commodities. Imports within the quota enter at a lower (in-quota) tariff rate while a higher (out- of-quota) tariff rate is used for imports above the concessionary access level. FAS have a database that illustrates TRQ’s for FTA countries. It is located at https://apps.fas.usda.gov/agtarifftracker/Home/Search
USMCA: “You-Sem-Ka” is the acronym for the United States, Mexico and Canada Free Trade Agreement. For food products it is quite similar to NAFTA which is replaces. There is no official certificate of origin requirement with USMCA though. You can learn all about how to take advantage of USMCA by viewing the Food Export recorded webinar “"Dynamics of USMCA Origin Certification" which provides links to other USMCA resources.
UTO: The abbreviation for “USA Trade Online” an export statistical database with additional software capabilities over GATS, including a “unit price” per kilo to provide cost estimates. You can also save searches and they update automatically each month. Food Export has a recorded webinar on how to navigate this system, called “You Can't Manage What You Can't Measure: Market Research Using USA Trade Online” The website for UTO is https://usatrade.census.gov/
VAT – Value Added Tax often charged with duty on products; aggregated on top of CIF + Duty + taxes and charges. The VAT in many countries is actually higher than the duty on the product. The best way to evaluate duties, taxes and other fees is by using CustomsInfo. A recorded webinar on how to navigate CustomsInfo is available from Food Export and is called “Tracking Tariffs: The True Cost of Customs Clearance”. The website itself can be located at https://www.customsinfo.com/trade-gov/
Happy World Trade Month!
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