Drilling Down Through Quotas In Int'l Trade

On Aug 21, 2014, at 6:41 PM, Steve wrote:

Dear John,

I was reading chapter 21 of the HTS schedule and I found this statement:

"The aggregate quantity of mixed condiments and mixed seasonings described in additional U.S. note 3 to this chapter and entered under

subheading 2103.90.74 during the 12-month period from October 1 in any year to the following September 30, inclusive, shall not exceed

689 metric tons (articles the product of Mexico shall not be permitted or included in the aforementioned quantitative limitation and no

such articles shall be classifiable therein)."

Here's how I am interpreting this. The US is limiting imports of 'mixed condiments' and such by a certain amount (689 metric tons).

***Yes, but those are usually country specific, can you tell if this is the case, or is it all countries (excepting Mexico).?***

Which means that if things were to go well with me working with supplier/customer regarding a sauce import I would probably want this to happen October 1st and closer to the first half of this 'year' to guarantee that my import of sauce would not be held up at a port and disallowed entry into US. 

***Well, as I understand it, most of these ar epolitical grandstanding, they never fill...  Some do, the day they open...  so it could be on Oct 1, customs entires for 1000 metric tones are submitted, USCustoms rejects them all and permits each to resubmit at 68.9% of their original application...  (1000 MT applied for, 689 allowed, reject and let various resubmit at 68.9%...

What you have to do is inquire of the manager at customs on this particular number to find out how the game is played currently, or if there is evena  game to play.***

However, since I really am not focusing on import but export, I am not necessarily concerned at this limitation. Yet, it raises my alert to the fact that whatever country that I may want to export a BBQ sauce into may have responded politically to the US limit. 

***Perzactly!***

Therefore, this becomes important to me for my awareness and timing of import/export. Additionally, Mexico has been excluded from this limitation. 

***Politics...***

The US continues... "Of the quantitative limitations provided for in this note, the countries listed below shall have access to not less than the quantities

specified below:

Quantity

(liters)

Belgium 922,315

Denmark 13,059

Jamaica 3,596

Netherlands 104,477

New Zealand  58 9,312"

***The mind boggles...***

So, If I were to import from the forementioned countries, there is a guaranteed minimum allowance out of the overall 689 metric tons which means that there is a protected import of products already from these countries based on some diplomatic arrangements between countries. These may prove to be items worth researching if I seek to become an expert in this HTS area as it may impact BBQ sauces.

***Yes... another reason for specialization...  ***

Am I correct in my assessment? Anything that I should really watch out in regard to this that I am missing or may miss?

*** You can never know the whole picture nor have all of your permits...  you simply manage risk by doing many small shipments.... and search and learn...***

Also, In the research stage of this item (BBQ Sauce), what may be some places that I could research the diplomatic arrangements. I know I can google it, but are there any websites that you routinely find provide valuable information/news that directly speaks of export?

***Probably ask the person inside USA customs (and he may refer you on to someone at USITC)  that manages this HTS number...  the info will be fairly arcane and probably obscure.  This is the "immersion" thing, the part where your joy in working on the particular problem that causes you passion (suffering), gives you the advantage....

You know you are on the right project when you find you love this stuff, it gives you joy to immerse yourself...

Everyone has been assigned passions and the joy behind it...

John

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If You Videotape Police Wrongdoing...

Remember the fellow July in New York who was killed by police in a chokehold?  The fellow who filmed that has been arrested on a "weapons charge."  He says it is retribution for filming the execution.  Who knows?  Could be a coincidence.  O yes, his wife has been arrested too. Different time, different charge.  Could be a coincidence.

If you videotape police wrongdoing, bring it to a lawyer who can turn it in as evidence and make copies to be sold to the media while keeping your identity secret.

Naughty language, but a funny critique of the Ferguson debacle....


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Austrian Vs All Other Economic Schools

If you see a formula offered by an economist, then whatever precedes of follows is nonsense.  It is just an argument for rent-seeking one way or another, obscured by incomprehensible mathematical formulae.

Indeed, the Austrian school has no formulae, and apparently only one graph, the supply demand curve.

imf.org

And the current debate is the ABCT.

Here is a brief critique explicating the difference between Walrus/Jevons and Menger, the Austrian.

Through finite marginal units, Menger firmly opens the door for the explanation of how various units of goods are being monetarily appraised by acting individuals. If marginal units are scatters of Walrasian equations they do not have to be appraised by entrepreneurs — the mathematical function is in a way doing it for them. It is no surprise that Menger’s heir, Mises, was the one to build a theory of entrepreneurship and demonstrate entrepreneurial roles in solving problems of proper allocations for consumer satisfaction. It also comes as no surprise that Walras’s successors did not see the strength of Mises’s theory of entrepreneurship, because for them the process of optimal allocation can be simply solved by maximization of functions. Mengerian marginal units need to be acted upon and selectively valued. The driving force for their valuation is human choice. Their value is not pre-determined. Walrasian marginal units, on the contrary, are part of valuation equations, therefore they are already appraised once we mathematically describe their economic place. There is no room left for choice. Why bother then with examining the personal valuations of entrepreneurs if marginal units have already assigned roles?

I part ways with most of the Austrian school as far as they assign usury a morally neutral rating (although all economic systems, while insisting on economics as a morally neutral science, like mathematics, recognize the term "moral hazard."  Has anyone every used the term "moral hazard" in mathematics? Only an ethical system can have a moral hazard.)

But the genius of the Austrian school is praxeology, it studies what people do (not what formulae say they should do) it is grounded in human action.  Thus it excels in explanation and prediction.

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Brian Inspires a New Tactic

On Aug 19, 2014, at 8:18 AM, Brian wrote:

Hi John,

I did give a small loan(KivaZip) donation to the Devil’s Gulch Ranch that you recently blogged about. Do you know of any good small businesses that are working in seafood that seek the same assistance?

***Not off hand, but let me blog your post and see who pops up.  But you got me thinking.... find a seafood company with such a request, make  donation PLUS offer to rep their product overseas...  Brian, you may be on to something...

John

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Usury and Anarchy

You know someone understands what the is doing is wrong when he hides the activity.  A porn addict will try to hide the fact, fo course, because he knows it is wrong.  Now some porn consumers make no effort to hide the fact, simply becuase they have no sense it is wrong.

We see this with capitalists.  They try to hide the fact they are capitalists.  They usually conflate capitalism with free markets, trying to hide the evil of capitalism by draping free markets over the crime.

Capitalism by definition is grounded in usury (interest).  Usury does damage by concentrating economic power in ever fewer hands.  At some point the concentration of power is irresistible. 

In a capitalist system, of which democracy is a most suitable polity, politics is disputing the distribution of the spoils of usury.  The children get to play at influencing a decision. Legislation is what the powers that be, the usurers, decide how the spoils will be distributed.

If usury is absent, anarchy is possible, since there are no concentations of exceptional wealth to distort markets, misallocate resources, or malinvest.  Usury and anarchy are mutually exclusive.

The Jews could go 400 years with no king or goverment (plenty of governance, but voluntary, as is the case in anarchy) because they had no usury.  Problems were sorted out by prophets.

Governments and kings emerge with usury since there needs to be a decision process for distributing the spoils of usury.  That, in a nutshell, is mdern economics.

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Online Export Food Seminar

Correction:  Wednesdays!

If you are looking for customers overseas for food and beverage products now, I have just added another summer session for the online course.  The feedback rates the course highly and expect to be pushed with the cohort.

Here are the dates - 

Summer Session III 2014

Wednesdays 8/27-9/17/2014 Four Sessions

Section One ~ 6 PM to 7 PM Pacific Time

(This would be 7 PM to 8 PM Mountain, 8 PM to 9 PM Central, 9 PM to 10 PM Eastern)

and you may get more info and enroll here...

http://seattleteacherscollege.net/exfoassmbu.html

Email me if you have any questions....

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Homer Alaska

May I recommend Homer Alaska as a destination?  Check it out on Google Maps.  People camp out on that Spit. I had the occasion to be there to advance the MOQ FOB project.  If that does not ring a bell, the search the term on this blog.

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Divine Economy & Usury

The idea of interest -taking or giving being an inherent crime  is capturing my imagination. It is a theme common to all major religions and ethical systems, except capitalism, indeed, capitalism is grounded in usury by definition,

I heard a preacher man talk on the radio bout Exodus 20:

4“You shall not make for yourself an image in the form of anything in heaven above or on the earth beneath or in the waters below. 5You shall not bow down to them or worship them; for I, the Lord your God, am a jealous God, punishing the children for the sin of the parents to the third and fourth generation of those who hate me, 6but showing love to a thousand generations of those who love me and keep my commandments.

The sins of the fathers, unto the 3rd and 4th generation, is well known passage and if you study a concordance you'll sell several instances over several books of the bible.

So the economics of divine justice are sins are visited unto the 3rd and 4th generation, but blessing unto the 100th.  A father sinning has been told: it will affect 3 or 4 more generations.  When one decides to do so, he is condemning his kids.  On the other hand the goods people do goes onto 1000th generations.  This sounds about right.... roughly 250 to one.....  a little bit of good goes a long way, becuase it is rare, and wickedness is limited, since there is so much.  Preacher men work this theme regularly.

But look at this, Ezekial 18,  13-23:

 ⁸ does not lend at interest or take any increase, withholds his hand from iniquity, executes true justice between man and man, ⁹ walks in my statutes, and is careful to observe my ordinances^[a]—he is righteous, he shall surely live, says the Lord God. ¹³ lends at interest, and takes increase; shall he then live? He shall not live. He has done all these abominable things; he shall surely die; his blood shall be upon himself.......takes no interest or increase, observes my ordinances, and walks in my statutes; he shall not die for his father’s iniquity; he shall surely live. ¹⁸ As for his father, because he practiced extortion, robbed his brother, and did what is not good among his people, behold, he shall die for his iniquity.¹⁹ “Yet you say, ‘Why should not the son suffer for the iniquity of the father?’ When the son has done what is lawful and right, and has been careful to observe all my statutes, he shall surely live. ²⁰ The soul that sins shall die. The son shall not suffer for the iniquity of the father, nor the father suffer for the iniquity of the son; the righteousness of the righteous shall be upon himself, and the wickedness of the wicked shall be upon himself.²¹ “But if a wicked man turns away from all his sins which he has committed and keeps all my statutes and does what is lawful and right, he shall surely live; he shall not die. ²² None of the transgressions which he has committed shall be remembered against him; for the righteousness which he has done he shall live. ²³ Have I any pleasure in the death of the wicked, says the Lord God, and not rather that he should turn from his way and live? ²⁴ But when a righteous man turns away from his righteousness and commits iniquity and does the same abominable things that the wicked man does, shall he live? None of the righteous deeds which he has done shall be remembered; for the treachery of which he is guilty and the sin he has committed, he shall die....

I edited to take out some mention of other sins, but the passage turns on usury and how it is particularly evil, so that who does it does not pass on the sin to his kids.  Pretty seriouse not for a particular sin.  Wonder why?

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More Approach Tactics

Hey John,

Just have a question as I continue to create supplier inquiries for foods that I am passionate about. The matter is obtaining the decision maker's name so that I can send out the letter/request. When the company is big enough that their web presence only provides a general 'contact us' form. What are some tactics and methods at discovering a company's owner / sales manager.

***My most  successful tactic is to put in google the name of the company and then search after page one for human interest stories....  company leaders love press and end up in articles:

1. Johnny Saltine, and his company, is listed on the board of advisors to the Local College entrepreneurs program.

2. Johnny Saltine of  Target Company donated $5 per mile in the “Cure for Cancer” walk.

3. Johnny Saltine of Target Company leased 3000 more feet of production space and will hire 12 more bakers, according to local  biz journal.

In each case your search of the company produces the name of a person associated with a company.  BUT, these lower interest hits are usually buried in google page 5 or 6 say.  When looking, try digging deeper in the google searches.***

Would it be advisable simply to send an email to the 'contact us' email address and ask who is in charge of exporting product?

***You could, but you will probably get ignored...  you could also apply for an account as a customer of the company, and either get turned down or approved.  If turned down, ask to appeal to a decision maker.  If approved, approach your new account  manager***

Or how might I best go about it?

***Keep in mind that succeeding in getting a name or getting shot down are both tradable.  If the company is impenetrable for you, it is for others.  Then the tactic of contract baking becomes a noption.***

Thanks for exporting expertise and common sense from your brain to mine!

Steve

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Love Of Money is the Root of All Evil

If the Bible said "love of Disco is the root of all evil" I could relate to that.  Those were some very fun times, some wicked things were done, and it was a lot of fun.  I loved it.  But that is not what the Bible says.  The Bible says "love of money is the root of all evil."

I guess if you have the gift of ADD/ADHD, making money is never a problem, and if something is never a problem, you don't worry about it.  Certainly people around me worry about me and money, just not me.

But that love of money quote got me thinking, the ban on usury provided a negative hint, and how usury concentrates power in ever fewer hands to the point it takes extremely few people to "call the shots" is clear.

When world problems come to mind, they can all be understood as love of money at the root, and usury as the means to the present end.  Iraq, Ferguson, the coming stock market crash, any and all problems can be traced to too much power in too few hands, effected by usury.  Do I believe usury (taking or giving interest on a loan) should be outlawed?  No!  Just make it unenforceable in law.  End of that regime.

I've been reading much on this, and this week can across a book online on the topic...  S C Mooney, Usury, Destroyer of Nations.  Mooney does yeoman work carefully taking down every religious and social argument pro-usury.  Very good stuff.  I cite Dr. Gary North here often, since his stuff is good, but North is pro-usury, with which I obviously disagree.  North has made a lifelong concerted effort to critique the entire Bible for economic wisdom, and it is good stuff, but he gets something central, usury, wrong.    This blindness put him on the losing side of an argument with Mish on hyperinflation, North and Mish being of the same school of economics, the Austrian, and Mish gets it right.  Mish just yesterday returned to the topic and this is a good summary of the right side of the debate.  His foil this time is a Forbes writer, it is sad to see Forbes go so downhill so fast.  Ironic, a magazine that promoted usury sells out due to usury.  (Forbes sold out to a Hong Kong outfit.)  One point Mooney concedes is there will never be business loans at no interest.  (I'll say it again, all loans are charitable events, if you have money with which to make more money, invest as a co-owner, not take a (relatively) sure thing from someone taking a risk.  )

Looking around the world where USA is failing to a degree it cannot be blamed on Obama (no one can do this much damage) it looks pretty grim.

So I was astonished to see, unbidden, with no particular impetus, business loans at no interest, crowdfunded by Kiva.  Now, when Kiva first came out, it was micro-finance at interest crowdsourced.  So I could see it was the evil Grameen Bank Mohammed Yunis look-alike bringing micro-evil to Islam, the last bastion of usury-free business.  But Kiva-zip is crowdsourced loans at no interest!  I (and other on this list) jumped in to make small loans at no interest, and the borrower picked up $10,000 total well within the timeline.  I am very keen to find out the metrics... do no-usury loans subscribe faster better?  What is the average loan size?  What was the impetus for this effort? And so on and so on.

Now, this new thing is immediately contrary to patterns and practices of this corporation we call the USA.  You cannot make charitable loans in USA to businesses without someone imputing interest and paying taxes on the imputed income.  So either the giver or the beneficiary will be in trouble with the IRS.  That is just how capitalism works, and the USA as a corporation has over the centuries taken on patterns and practices of capitalism, which is "love of money" above all else.

Good on Kiva for offering this...  the people making the loans will have to fork over more money to the IRS for having done so, or more likely, the beneficiaries will become targets of the IRS, but either way,  we are now designed to crush good things before they get started.  In capitalism, the IRS works for the bankers, and to the degree no-usury loans displease some banker, business loans at no interest will be crushed.

But started it did.  When the market gets wiped out in the next couple of months, just recall in the chaos there are good systems we can adopt.  ( http://www.lewrockwell.com/2014/08/david-stockman/does-the-wall-street-casino-seem-dangerous/  This too...  http://armstrongeconomics.com/2014/08/19/crisis-collapse-in-world-capital-flows/ Remember, just like last time, 2008, and every time before, the powers that be will tell you "no one saw this coming."  Plenty of people saw it coming.  Just no one will do the right thing.)

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More on Interaction as an Agent

Hey John,

I am writing up a mock discussion that I would have with the supplier of the pastries to flesh out any flaws in my thinking and to refine my approach so that I may not be surprised in my first conversation.

So here are a few thoughts/questions that came up in that process.

The goal of the conversation is to determine the supplier's intention and orientation toward exporting their products and then sell the supplier on testing an overseas market making it no more difficult than a domestic sale. So, at the point the supplier may identify that he/she has no intention or desire to get into exporting and I have sold them on testing the market, I now want to go for the MOQ. 

***Good set up...***

So, my difficulty now is how to find the facts needed to construct the MOQ FOB within my conversation with the supplier.

1. Do I thank him for his time and ask for email address to follow up with him to obtain the needed facts to construct the MOQ FOB? or do I simply get the info on the line at that moment (my preference)? 

***He probably does not have that at hand, plus you need not the smallest order possible, but the smallest order rational (given logistics, etc).  YOu start is whatever their minimum order requirement is normally, and then make that at least a 1.2 pallet, and go fr, there.. that is back and forth discussion, with a sales manager or someone else, normally..***

2. When asking for MOQ, my thought would be to ask for a pricing schedule as I already know that he ships out domestically just one package of the pastry or a case (at 20% off). 

***Sure, but no need to be so price conscisious yet...  people are testing at thsi stage, buyer and sellers, not makign money...***

3. As I see it, here is the following facts necessary: pricing schedule for various quantities, 

***No... just one QTY***

size of package/case/pallet, 

***No, just one...***

lead time for each aspect of pricing schedule, ingredients list (do I need percentages?), 

***Yes...***

shelf life (best by/good until dates), weights - anything else necessary?

***Your broker may tell you more...  but keep in mind..

1.  A clerk gives you this info...

2.  It is all based on one inalterable offer (tos tart)

3. The freight forwarder will in serial say “o yea, this too...”

so it is a process that takes a week or two...***

4. Since I want to make this easy, how much of this should I discover on my own? 

***  Sure, prime the pump, fill in qhat you can, and let them correct...***

How far do I go with those sorts of questions?

***Whatever is necesary and sufficient to create a MOQ FOB  

http://josephawodutire.ca/yomm-beverages/

***

5. When looking at the ingredients list (as I am certain that this impacts the defining of the HTS number) is that a freight forwarder's work based on a food label? 

***You can do that step..***

6. I know this prospective supplier would sell a case of 6 pkgs and ship it out. That seems rather small to be a true, reasonable test. So if he were to respond to my MOQ request with, I would go 'minimum of a case' what would be my approach....is that tooooooo small? me thinks so, but am interested in your response. 

***What is the price of a half-pallet (prolly still too small) vs full pallet...  about 3.5 feet high vs 7 feet high...?***

7.  I also am concerned that in discussion with the prospective supplier about ingredients that he may become skeptical as to me trying to steal a recipe. How might I overcome/preclude that possibility? Or do I need to?

***Ingredients one thing, production is another...  his ingredients are permanent public record somewhere anyways...  research this question first so you know what you need to know...  if you are nervous on this point, you’ll probably fumble the ball...

buy a pack, study it, take it to a FF, and ask them what you need... start with that, later if a customer wants more,  you will then say “The customer needs....”  not “I need...”

Then you’ll know...  make sense?

John

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Outsourcing Anti-Corruption

We've outsourced so much to China, how about outsourcing some law enforcement?

Their breaches included violating workplace rules, using public funds for expensive entertainment activities or tours, being lazy at work, hosting extravagant wedding banquets or funerals, indiscreet use of public vehicles and receiving gifts at festivals.

How about having ChiCom Disciplinary Enforcement haul off lazy government workers?  Ship them off to China to serve their time.  You gotta love China!  Busted over 6000 in July alone...  and they have cool badges, strike fear into the hearts of bureaucrats everywhere.



Shiver me timbers!

Falco captured them in 1982...




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China Bans Some USA Pork

China follows my family decisions, bans Tyson pork:

China's decision to bar the import of pork products from a dozen US facilities is "certainly a shock to the market", according to one analyst.  ...
The pork restrictions stem from the presence of ractopamine, a common non-hormonal feed additive that slows animals' metabolism of fat.
Included among the processing plants affected are: two Tyson Foods Inc facilities, one in Iowa and one in Indiana; a Hormel Foods Corp plant in Fremont, Nebraska; Triumph Foods in St Joseph, Missouri; and Quality Pork Processors Inc in Austin, Minnesota.

No way I'll introduce ractopamine to my family and friends...  and China agrees.  the good news is this makes more market for hippie-style pork in China, at higher prices... higher prices signals demand and calls forth more production.

I wonder if there is Chinese-Russia coordination on these various bans.

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Visa/MasterCard Drop to Second Place on Sanctions

Lenin said of capitalism, "They will sell us the rope by which we will hang them."  It took a while,  but with these idiotic sanctions based on nonsense USA claims about Putin, the Chinese have moved ahead in Credit Card issuance.

There are already 20,000 cards in circulation in Russia, and a second order of 100,000 cards is planned for September. In Russia many banks accept UnionPay cards, but not merchants, that’s the next step...
In terms of total world trade turnover, China UnionPay is the leader in debt cards, with over $5.3 trillion in payments, or about 47 percent of the market share, whereas Visa has 40.6 percent, and MasterCard only 12.2 percent, according to the Nilson Report.

At the same time, as Argentina decides to default rather than endure whimsical USA rules, the Chinese and Russians help out by buying in.  The USA federal policy is to "bankrupt and control" countries which is not unattractive to people who want to "lead" countries which the USA bankrupts then controls.  Maliki had a fun time for a few years, and made the news.  Better than being an under secretary at some ministry in a peaceful Islamic republic.

Stable prosperous independent countries make for more long term relationships.  Let's see how the Russians and Chinese do in South America.

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San Francisco Food Export Seminar

See yourself needed at a trade show overseas meeting buyers and peers worldwide. If you could not make the live seminar on Exporting Food last Friday, you have another chance this November 17, in San Francisco.  UC Berkeley is the only place I teach this live, the school issues a certificate and CEU credits with the course.  This makes for a great opportunity to have your employer pay for the course and the travel to and from wherever you are in the USA, or for that matter, the world.

Start working the boss now for the educational credits and budget for you to attend.

Date/Time:	Mon 8:30AM - 5:00PM 17 Nov 2014
Building:	San Francisco Campus
Room:	Classroom 503
Location:	San Francisco

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More on Garcia

 Anonymous said...
If you are the only one that does what you do, how do you know if you are the best? There is nobody else for comparison.
Still, if you are the only one that does something, but you are not the best or you make a deficient product or service that does not satisfy people, this would invite competition that is the best or better than you at making the product.

As to the first question, I let Prince handle it, as interpreted by Sinead.

As to the second point, competition means to "strive with", not "do same."  How did you get to be the only one?  By customer acclaim.  Do you not notice people rather like the Grateful Dead, or at least their customers?  Enough customers to keep them rolling on clover.

Your comment suffers an internal contradiction, as if being the only one cannot be also satisfactory, as if the process in becoming the only one is possible for another to copy, or improve upon.  Name who has improved upon the Grateful Dead, or Apple, or me?  It cannot be done.  You need to make it true for you, then you won't be anonymous anymore.




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Jerry Garcia On Excellence

I've been quoting liberally essentially this, attributed to Jerry Garcia:

You do not merely want to be considered just the best of the best. You want to be considered the only ones who do what you do.
Jerry Garcia

But then I read this...

"They're not the best at what they do, they are the only ones who do what they do." Bill Graham 

You know, the first quote does not sound like Garcia, and the second quote sounds like Graham.

So I think from now on I'll say, Bill Graham said about the Dead, they are not the best, they are the only one.

It is still good, and it will still refocus the deadheads in my classes...




They do great covers too...


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Blending Graphic Arts & Theatre

Not enough to be the best, you have to be the only one...  it's only 2 minutes, but watch till the end...



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The Pope Over China

Flying home over China, Francis sent down this message:

 "Upon entering Chinese air space, I extend best wishes to your Excellency and your fellow citizens and I invoke the divine blessing of peace and well-being upon the nation," he said in a radio message to Xi as he flew over the country, according to Reuters.

And the Chinese responded:

"We have noticed the remarks of Pope Francis. China has always been sincere in improving relations with the Vatican and has been making positive efforts for that,” the ministry’s Hua Chunying said.

Protestants complain the Catholics never really worked at proselytizing the Chinese.  Just so.  Human freedom forbids it, so the Catholic Church never pushed it.  Perhaps China is taking a second look at freedom and religion.  In any event, as far as reforms go, this Pope and the Chinese president are probably to two most active reformers working today.  Maybe they will compare notes on bankers.

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