Saturday, September 27, 2008

American Carriers Urge Financial Bailout

(Video: Reuters • Story: Today’s Trucking)

The Bush administration and Congress need to take quick and decisive action to ease the current financial crisis in the U.S., says the American Trucking Associations.

The country’s largest unified trucking lobby group urged Congress to quickly review and pass the Treasury Department’s $700 billion bailout proposal to rescue Wall Street and work with the Administration to approve a comprehensive plan to stabilize the U.S. financial system.

The bailout plan has been stalled by a group of Republicans. Instead, they proposed their own plan, which would force affected companies to buy premiums instead of having taxpayers foot the entire bill.

ATA President and CEO Bill Graves said the economy, including trucking companies of all sizes, would benefit if legislation to bring stability to the financial system can be agreed upon quickly.

“Without legislation, the credit crunch will continue to worsen for our members, making it difficult for even those carriers with good credit to receive funding for capital expenditures like trucks and other equipment,” Graves said. Read more here.

Prox Lane Can Suddenly Change to All-Traffic

(Doug Millroy — Sault Star)

On July 30, 2007, a press release from the International Bridge administration quoted General Manager Phil Becker as saying, in regard to the newly instituted Prox Card, which was designed to speed up traffic and make things easier for customers:

“Customers pass the new card within six inches of a card-reader device installed in the two dedicated automated lanes: the northbound and southbound lanes. The toll is automatically deducted from their accounts, a gate rises, and drivers are on their way.

“The staffed booths will accept Prox Cards, but these will be processed by a toll attendant, similar to the regular IQ Card. IBA staff will remind customers without Prox Cards to note the signs designating the lanes dedicated exclusively to Prox Card use.”

When Becker talked about dedicated automated lanes for Prox Card holders, I took this to be full-time and purchased one. I learned last week, much to my chagrin, that this is not the case. A lane can be changed from being dedicated to Prox Card holders to all traffic within the blink of an eye.

As a result, a transport truck and I ended up heading for the same toll booth. I suppose you could say I won, since I got there first, but I am also out a $500 insurance deductible to repair my rear right door and rear right fender.

Peter Petainen, finance officer with the International Bridge Authority, told me the Prox Card lanes are no longer dedicated 100 per cent of the time.

“We try to keep them open to the maximum extent possible but now we have variable message signs on the top of the canopy,” he said. “When we have a big influx of cash customers the on-duty shift supervisor has the ability to go to all-cash lanes if necessary.”

He said there are nearly always two Prox lanes for northbound travellers but southbound there is only a Prox lane “between 80 and 90 per cent of the time.” Read more here.

Harper to Limit Bitumen Exports

(Edmonton Journal)

Surprise environmental election promise puts federal Tories on collision course with Alberta jurisdiction, NAFTA rules

Prime Minister Stephen Harper made an election promise Friday to restrict the export of raw bitumen to countries with weaker environmental standards than Canada — a pledge that took the Alberta government by surprise.

Harper promised to halt the flow of bitumen, the tar-like heavy hydro-carbon that is removed from Alberta’s oilsands and upgraded into synthetic crude oil, to countries with weaker greenhouse gas emission reduction standards than Canada.

Harper said the measures would keep the oilpatch from skirting Canadian emission targets by exporting bitumen, while keeping oilsands revenues and jobs in Canada.

The announcement rankled the Alberta government and raised several constitutional questions about which level of government has authority over the oilsands.

Alberta’s resources are owned by the province, but analysts argue that Ottawa has full constitutional authority over exports, while environmental regulations are shared between the governments. Harper and Premier Ed Stelmach each have maintained their environmental regulations will trump those introduced by the other government.

But the federal Tory leader served notice again Friday that Ottawa has the authority to dictate the environmental regulations, and that he expects all provinces to “accept federal targets.”

Harper also insisted the federal government holds the trump card on trade, and can pull “two or three constitutional levers” in case of a fight with the province over who has authority over the oilsands. Read the complete article.

B.C. Premier, Emerson Slam NDP for Promise to Negotiate New Softwood Deal

(Globe & Mail)

NDP Leader Jack Layton was roundly criticized Friday for proposing to tear up the Canada-U.S. softwood lumber agreement, with both B.C. Premier Gordon Campbell and former international trade minister David Emerson saying the idea is preposterous.

The B.C. Premier waded into the federal election campaign for the first time Friday, denouncing Mr. Layton’s stance on softwood. The deal, Mr. Campbell said, has been a lifeline for the hard-hit B.C. forest sector.

“You want to rip up the softwood lumber agreement? Give your head a shake,” Mr. Campbell said in a speech to municipal leaders in Penticton.

Mr. Campbell later acknowledged to reporters that Mr. Layton was the target of his comments

“I think Mr. Layton has shown a profound ignorance, both of the agreement and the impact his statements will have on British Columbia,” Mr. Campbell told reporters. “It would be significantly damaging to British Columbians ... that’s going to cause huge job losses at a time when forestry can’t afford any more challenges.”

Mr. Layton this week promised he would scrap the “sellout” deal, negotiate new lumber deals with the U.S., and restrict raw log exports to encourage local development. He says the deal needs to be reassessed because of mill closures and job losses in the industry despite the deal.

In an interview Friday, Mr. Emerson forecast permanent mill closures and job cuts if Mr. Layton was ever able to act on that idea, adding Canada would “get creamed in a negotiation today on softwood lumber.”

“What is [Mr. Layton] going to put on the table that is going to force the Americans, incent the Americans to come up with a better deal than we have today?” asked Mr. Emerson.

“What is it he’s going to give them? He may have some brilliant idea that has passed me by.”

Mr. Emerson said he expected Canada would end up with an inferior agreement if it took another shot at negotiating one. Read more here.

Conservatives Go it Alone on Free Trade with Colombia

(Dawn Paley — The Dominion)

The Conservative candidate for Vancouver-Centre confirmed Thursday that his party is alone among the four major parties battling it out in Western Canada that supports a free trade agreement between Canada and Colombia.

Trade hasn’t been on the front burner during this campaign, unlike in the US where it is a hot issue. Democratic presidential candidate Barack Obama has stated his opposition to a US-Colombia Free Trade Agreement, while Republican John McCain supports the deal.

Conservative hopeful Lorne Mayencourt said that the Canada-Colombia deal was negotiated in a way that is “beneficial to both countries,” and that free trade agreements “can lead to democracies that are really quite good.”

Mayencourt’s position differs from that of the other candidates, who rejected the deal in a morning debate at the University of British Columbia on Thursday.

“I’m not saying we shouldn’t trade with Colombia at all, I’m saying we need to look at the terms and the conditions of the negotiation that Mr. Emerson did with Colombia,” said Hedy Fry, the Liberal incumbent in Vancouver-Centre, echoing her party’s position on the deal.

Though the Liberals do not specifically mention the Canada-Colombia agreement in their platform, Liberal leader Stéphane Dion spoke against the deal earlier this week.

“The way it was negotiated by the Conservatives we have no guarantee at all that the basic rights will be respected through this agreement, the workers rights, and so on. It [sic] is why we can not accept it,” he said, speaking Tuesday night at the University of British Colombia.

“A free trade agreement between Canada and Colombia would lead to more displacement, more threats and more violence against unionists, Afro-Colombians and Indigenous peoples,” said George Heyman, past president of the BC Government and Service Employees’ Union, who visited Colombia with other Canadian union leaders in July.

The NDP has taken a strong stance against the deal, responding in part to concerns from the Canadian labour movement. Thirty-eight trade unionists have been killed in Colombia this year alone.

“There are some very serious human rights and labour rights issues in Colombia. The Colombian agreement was done without a view to those important concerns, and it should be renounced,” said Michael Byers, a UBC professor and rookie NDP candidate. Read the complete article.

Friday, September 26, 2008

Milk Scandal Sparks Fear of Imports

(The Press Association)

At least nine countries - as far away as Kenya - have banned Chinese dairy imports in response to a widening tainted milk scandal that has claimed the lives of four Chinese babies.

Several more countries, from Canada to Australia, have increased their testing of Chinese food imports amid fears that compromised ingredients may have contaminated other products, like yoghurts, cookies and candies.

The scare has been most acutely felt in Asia, where worried parents on rushed their children to hospitals for check-ups after China said that formula laced with a toxic chemical had sickened 54,000 infants.

As the reports of sick babies multiplied — with at least five reported outside the mainland in the Chinese territories of Hong Kong and Macau — even countries that don't import Chinese dairy began sounding alarms.

The European Union, for instance, urged customs authorities to step up checks on imports of “composite products,” such as bread or chocolate, to ensure they contain no traces of contaminated milk.

The crisis was initially thought to have been limited to Chinese milk powder laced with melamine, an industrial chemical used to make plastics and fertiliser that can cause kidney stones and lead to kidney failure.

But recent testing found melamine in samples of liquid milk taken from 22 Chinese companies — including the country's two largest dairy producers, Mengniu Dairy Group Co. and Yili Industrial Group Co. — and prompted nationwide recalls of milk and dairy products.

Growing public fears led some schools and stores to pull more products as a precaution. Even major international food makers such as Kraft Foods were hit by unconfirmed rumours of recalls of numerous snacks, including Oreo cookies and M&Ms.

COOL: Ag Secretary Admits Changes Needed, Rule Set To Go Into Effect Sept. 30

(Cattle Network)

Senator Tom Harkin (D-IA) today joined a bipartisan group of 30 Senators in urging the U.S. Department of Agriculture (USDA) to make modifications to its interim final rule for implementing Country of Origin Labeling (COOL). COOL is slated to go into effect September 30. Harkin is Chairman of the Senate Committee on Agriculture, Nutrition and Forestry, the Committee that ushered the new farm bill into law.

“People want to know where their food comes from,” said Harkin. “Yet, USDA appears to be taking an overly broad approach to implementing this program, allowing certain food products to not be labeled as required by the farm bill. USDA’s rule also allows packers to just label all U.S. products jointly with other countries, limiting consumer choice. People are expecting to find meat labeled as exclusively U.S. product, not just hidden with everything else.

“I am encouraged by statements made by Agriculture Secretary Schafer that this implementation needed additional work, but with such a short amount of time left before this rule goes into effect, I am hopeful USDA will act quickly to implement these changes.” Find out more here.

CN Found in Breach of Service to Grain Shippers

(Today’s Trucking)

Four out of six grain shippers have been vindicated in their cases against CN Railway, which they claim has not been providing a adequate and reasonable level of service for the movement of Western grain for crop in 2007 and 2008.

The Canadian Transportation Agency ruled that CN did not fail to meet its obligations under the Canada Transportation Act for services to Canadian Wheat Board and Providence Grain Group Inc.

However, the CTA did side with North East Terminal Ltd., Paterson Grain, Parrish and Heimbecker Limited, and North West Terminal Ltd. in similar complaints.

“Our grain terminals are now struggling to get rail cars when we need them for our markets because CN’s program requirements have been so rigid and unworkable for us,” said GNP Transportation & Logistics manager Perry Pellerin. “As a result, none but the largest grain handlers with multiple elevators could fit within CN’s service model, which strongly favored those who can ship in large rail car blocks, week after week, to a single destination.”

In its ruling, the quasi-judicial agency determined that a performance benchmark should be applied as a basis for determining whether CN is providing the shippers proper levels of service, including the confirmation of the number of rail cars requested by the shipper, as the timeliness and predictability of railcar delivery. Read more here.

Canada Enjoys Global Advantage From Financial Turmoil: BoC Governor

(The Canadian Press)

The Canadian economy may get shaken by turmoil gripping the United States, but the stronger financial system here may prove to be a global advantage, the country’s top central banker said Thursday.

Bank of Canada governor Mark Carney said loans by Canadian banks have remained surprisingly robust, while foreign banks have been forced to restrict their leverage.

“Canadian banks could modestly increase leverage by growing their lending relative to their current capital base and this flexibility give our economy a rare advantage,” Carney said in an afternoon speech.

The stronger financial position of Canadian banks means they can borrow on capital markets at considerably lower rates than their American counterparts, he said.

Carney said the cleansing nature of the “ferocious storm” and a decisive policy response from the U.S. government could mark the beginning of the end of the crisis that has gripped the global financial system for 14 months.

He said the “bold and timely” US$700-billion bailout of the U.S. financial sector could reduce lost output and employment in the United States and minimize the spillover to the rest of the world.

“Nonetheless, the months ahead will bring more financial losses, significant consolidation in the financial industry and further increases in the cost of capital. The eventual reordering of the financial system will be historic.” Read more here.

Growing Majority of Canadians Agree with Obama: Renegotiate NAFTA

(CNW Telbec)

The Council of Canadians has found that 58% of Canadians agree with U.S. presidential candidate Barack Obama that NAFTA should be renegotiated to include enforceable labour and environmental standards, in a poll commissioned from Environics. The finding follows those of earlier polls and demonstrates a steady growth in Canadians' support for renegotiating NAFTA - from 45% in March to 52% in July (Angus Reid).

“Whichever parties win the U.S. and Canadian elections, the concerns of Canadians over the impact of NAFTA on jobs and the environment aren't going away,” says John Urquhart, Executive Director of the Council of Canadians.

“Canadians need to think very carefully before October 14 about who will best represent their concerns on the environment and jobs, should Barack Obama become U.S. president and new NAFTA talks begin in 2009,” he added. “And, even more urgently, Canadians need to think about who should represent our interests in talks with the European Union that are scheduled to begin a mere three days after the election, on October 17.”

“The fact that Stephen Harper hasn't uttered a single word about this new proposed Canada-EU trade deal before or during this election, and which promises to be more sweeping than NAFTA, should raise serious doubts in Canadians’ minds about his appropriateness to lead us in new international trade talks," adds Maude Barlow, national chairperson of the Council of Canadians. “He sees nothing wrong with NAFTA, which most Canadians want renegotiated. And NAFTA is exactly the wrong model on which an EU-Canada trade deal should be negotiated. It will only worsen the impact on jobs, the environment and public services, especially health care.” Read more here.

Update: Following is a video of Democratic Senate challenger Bob Conley speaking to a group of taxpayers in Greenville, SC yesterday about free trade agreements.

EU-Canada Free Trade Could Change U.S.-Canada Relations

(Matthew Little — Epoch Times Toronto Staff)

Canada is moving toward a far-reaching free trade agreement with the European Union that advocates say will end a long-standing dependency on the U.S. market.

While the specifics of the agreement haven’t been discussed, Canadian and European officials could begin negotiating as soon as October 17, just three days after Canada’s federal election.

Canada’s Trade Minister, Michael Fortier and his staff have been in talks with EU Trade Commissioner Peter Mandelson and European government officials for the past two months. Recently a senior EU official involved said the talks aimed at starting “deep economic integration negotiations,” reported the Globe and Mail.

If the deal goes ahead, Canada would be the first developed country outside the EU to have the kind of access to those markets normally reserved for EU members.

“Its one of the best things we could do, the best thing we could do for our country,” said Jason Langrish, executive director of the Canada Europe Roundtable, a group working to promote Canada-Europe trade.

While critics of NAFTA, the free trade agreement Canada already has with the U.S., may denounce the agreement as only furthering the interests of large corporations, Langrish said that opposition will likely be less than there was to NAFTA.

“This is a very good way for us to offset our relationship with the U.S.” Read the complete article.

Proposal to Eliminate Some MFN Duty Rates – Deadline Tuesday

(IE Canada)

The Government of Canada’s Department of Finance has proposed that Most-Favoured-Nation (MFN) duty rates on almost 240 items in the machinery and equipment sector be eliminated. In proposing this change, the government’s stated goal is to help Canadian manufacturers remain competitive in the global economy.

The items selected for possible tariff elimination were chosen based on the following criteria: (1) whether the goods covered by these tariff items are used in the production of other goods; (2) whether tariff elimination could reduce the cost of imported machinery and equipment; and (3) whether the proposed tariff eliminations could impact Canadian businesses producing similar or substitutable goods.

The government is soliciting feedback – in writing – on its proposal from interested parties, and the submission deadline is September 30, 2008.

Draft D-Memorandum 17-1-5: Registration, Accounting and Payment for Commercial Goods


The Canada Border Services Agency has redrafted D-Memorandum 17-1-5: Registration, Accounting and Payment for Commercial Goods as part of the Business Simplification Initiative (Paper Business Reduction Initiative).

Copies of the draft memorandum in English (30 page PDF) and French (33 pages PDF) are attached. Please send your comments on the draft memorandum to Amesika Baeta at IE Canada by Wednesday, October 1, 2008 at

Canadian Truckers Oppose Carbon Tax

(Employment Crossing News • Global TV)

A nationwide carbon tax proposed by the Liberal Party of Canada is strongly opposed by the transportation industry, farmers and fishermen. Conservative Prime Minister Stephen Harper has called the plan “crazy” given the current downturn in the economy.

The Green Shift, an environmental and economic policy strongly backed by federal Liberal leader Stéphane Dion, is a key policy plank for the Liberal Party in the upcoming October national election.

The trucking industry claims the carbon tax, which affects industries that burn oil-based fuels for transportation, will spur the loss of tens of thousands of jobs.

Liberals have offered an olive branch to the plan’s opponents — $900 million in tax breaks to farmers, fishermen and truckers. They have also proposed a $250-million fund for fisheries and transportation firms to help deal with the impact of the proposed carbon tax.

Bailing Out Wall Street

(Real News)

According to economist and historian Michael Hudson, the bailout is a “once in a century rip-off” that will cause hyperinflation and dollar collapse...

Portal Tests Must Justify Costs

(HS Today)

The US Domestic Nuclear Detection Office (DNDO) should conduct more rigorous testing of its next generation of radiation portal monitors and make better use of simulations in determining their effectiveness, congressional investigators reported Thursday.

The new advanced spectroscopic portal (AS) monitors would replace nuclear detection equipment in use at US ports of entry. DNDO is testing new portals to gain improvements in the detection of nuclear material and to trigger fewer false alarms.

But the cost of the ASPs is significantly higher and the testing requirements set by DNDO do not necessarily justify those costs, said Gene Aloise, director of Natural Resources and Environment at the US Government Accountability Office (GAO) before the Senate Committee on Homeland Security and Governmental Affairs.

DNDO expects to complete ASP testing and certify successful portals in November. Read more here.

Buying Winter Tires in U.S. Presents Slippery Questions

(Montreal Gazette – Anne Sutherland)

Tempted to buy your tires in the United States? The prices are lower in many cases but there are legalities to be observed. And where the tires you buy were made makes a big difference.

For purposes of comparison, we looked at new winter tires for a 2000 Nissan Maxima, a sedan.

Sears Automotive on Dorset St. in Burlington, Vt., quoted $99 U.S. apiece for Michelin X-Ice winter tires. Installation is extra, said Sears employee Joe Warner. “About 25% of our customers are Canadians because the prices there are so high,” Warner said.

Merson Automotive on St. Jacques St. in Notre Dame de Grâce quotes the same tires at $166.50 each, but that includes installation and balancing.

Now comes the tricky part: declaring your purchases at the border.

Under the North American Free Trade Agreement, tires made in Canada, the United States or Mexico are duty-free. (The Michelins in our comparison are manufactured in Canada and the U.S., so there is no duty to be paid.) Federal and provincial sales taxes, however, must be paid on tires bought in the U.S.

Duty must be paid on tires from other countries such as Japan or Chile. Customs duties vary with the goods you are buying and the country of origin, but expect to pay at least seven per cent.

If you take a day trip to the United States and buy four tires with a total bill of $400, you would spend about $28 in duty plus both taxes upon declaring your purchase.

Failure to declare purchases can lead to the seizing of merchandise and fines, according to the website of the Canadian Border Services Agency.

You must spend 24 hours in the United States to earn a goods exemption of $50. To qualify for a goods exemption of $400, you must be out of the country for 48 hours. Seven days and you can bring back $750 worth of goods.

Thursday, September 25, 2008

American Durable Goods Orders Drop 4.5% in August

(Canadian Business – Associated Press)

U.S. government data show the number of new applications for unemployment benefits jumped last week to its highest level in seven years due to the impact of hurricanes Ike and Gustav and a weak economy.

The U.S. Labour Department reported Thursday that new requests for jobless benefits increased by 32,000 to a seasonally-adjusted 493,000, much higher than analysts' expectations of 445,000.

The two hurricanes added about 50,000 new claims in Louisiana and Texas, the department said. The four-week moving average, which smooths out fluctuations, rose to 462,500.

Meanwhile, orders for American big-ticket manufactured goods plunged in August by the largest amount in seven months as demand for both airplanes and autos fell sharply.

The Commerce Department reported Thursday that orders for durable goods fell by 4.5% last month, far worse than the 1.6% decline that economists expected. It was the biggest setback since a 4.7% fall in January and came after modest increases in the past three months.

The widespread weakness was led by a 38.1% fall in orders for commercial aircraft, the biggest drop in this category in a year. Demand for autos fell by 8.1% – the biggest drop in 19 months – as automakers struggle with the weak economy and falling demand for once-popular trucks and sport utility vehicles.

While manufacturers have struggled with weak domestic demand, especially in sectors linked to housing and autos, some of that drop-off has been offset by strong sales to foreign countries. However, there are concerns that exports could start to falter given spreading weakness in such big overseas markets as Europe and Japan.

For August, the 4.5% drop in orders for durable goods, items expected to last at least three years, left demand at a total $208.5 billion, 1.6% below the year-ago level.

Demand for heavy machinery fell by 6.2% while orders for primary metals such as steel fell by 9.3%, the biggest drop in the metals category in 15 years.

Orders for non-defence capital goods excluding aircraft, considered a proxy for business investment plans, fell by two per cent, a possible sign that businesses, worried by the weak economy, are cutting back on their plans to expand and modernize.

Excluding transportation, orders were down three per cent, much worse than the 0.5% drop that had been expected.

Wednesday, September 24, 2008

U.S. Moves to Lay Groundwork for Asia-Pacific FTA

(World Trade Interactive)

The U.S. announced September 22 that it will launch in early 2009 talks on joining an existing free trade agreement among New Zealand, Chile, Singapore and Brunei. U.S. officials made clear that this initiative is intended to be the foundation for a broader Asia-Pacific free trade area that includes the U.S., as opposed to the many regional agreements now being negotiated that do not.

The Office of the U.S. Trade Representative indicated that the United States’ primary motivation in joining the so-called P-4 agreement is to strengthen its economic ties to the Asia-Pacific region. This region is a key driver of global economic growth, a USTR press release stated, representing nearly 60% of global gross domestic product and roughly 50% of international trade. The average GDP growth rate in the rapidly growing and dynamic countries in this region was 5.3% in 2007, compared with the world average of 3.8%, and the International Monetary Fund estimates that it will remain higher through at least 2013. Since 1990, Asia-Pacific goods trade has increased by 300% and global investment in the region has increased by over 400%.

In recent years, however, the U.S. has been excluded from most of the trade liberalization efforts that have proliferated throughout Asia, which the USTR states “will increasingly hurt U.S. manufacturers, agricultural producers, services providers and workers.” The U.S. has been looking for ways to counter this situation, working primarily through the Asia-Pacific Economic Cooperation forum of which it is a member. While APEC has agreed to consider the U.S. idea of a Free Trade Area of the Asia-Pacific, it has been understood that this is more of a long-term effort, given among other things the wide differences in economic development levels among APEC member countries. Click here for the complete article.

U.S. Trade Policies Hurting Manufacturing States, Says Industry Group

(Industry Week – Adrienne Selko)

A new study, by the U.S. Business and Industry Council (USBIC), looking at 10-year growth rates for eight industrial states looming large in this year’s national elections – Illinois, Indiana, Michigan, Missouri, North Carolina, Ohio, Pennsylvania and Wisconsin, found that the slowest growers by far were industries most heavily exposed to global economic opportunities and challenges – the manufacturing sector.

Manufacturing was also the single slowest-growing sector in the nation as a whole during this period, with current-dollar output rising by a mere 26.25% – barely a third of the overall 66.82% national growth rate, according the study released on September 23.
Moreover, manufacturing’s job-creation performance badly lagged that of the rest of the economy as well, indicating that its slow growth as well as its improving productivity were responsible for its 20.3% job loss during the decade.

By contrast, the fastest-growing sectors in these states’ economies and the U.S. economy from 1997 to 2007 were sectors with little or virtually no exposure to global economic conditions. Industries in the “partly exposed” sector included finance, retail trade, educational services, and information services. Industries in the “virtually unexposed” sector included health care and social assistance, real estate, construction, administrative and waste services and government.

“With America’s most trade-sensitive sectors exposed as growth as well as jobs laggards, it’s clear that current U.S. trade policies are failing the national economy and the economies of politically crucial industrial states,” said Alan Tonelson of USBIC. “The concentration of rapid growth in sectors largely unaffected by the international economy tells us that the nation and the industrial battlegrounds have grown in spite of current U.S. trade policies, not because of them.” Read the complete article.

Tuesday, September 23, 2008

Back to Basics for ACE

(American Shipper – Eric Kulisch)

Delays and costs associated with the development of the Automated Commercial Environment next-generation trade processing system have forced U.S. Customs to scale back programming to meet the most essential needs of government and the import-export community, according to industry representatives collaborating on the project.

Customs and Border Protection officials have concluded that they need to prioritize the most important missions for ACE in order to get the massive computer system operating sooner after many years of planning and development.

That means getting rid of the bells and whistles many stakeholders kept layering on the project.

ACE is a $3.5 billion advanced information system designed to monitor, control and analyze commercial import and export transactions.

The agency revealed in late July that it plans to delay by at least six months deployment of an ACE electronic manifest function for ocean and rail carriers because of software glitches and extra testing requirements. Programming has taken longer too because of ever increasing security requirements for additional data fields to handle the pending 10+2 rulemaking and inadvertent releases of containers by marine terminals before they have been cleared by Customs. As a result of the manifest schedule slip, an additional four to six month delay is projected for the early 2009 deployment of initial ACE entry summary capabilities.

Kenneth Ritchhart, deputy assistant commissioner for information technology, delivered the news about the new ACE expectations at the mid-September meeting of the Trade Support Network (TSN) in Tysons Corner, Va., Cindy Allen, vice president customs for Argents Air Express in Detroit, told reporters on a conference call last week. Read the complete article. Read the complete article.

Monday, September 22, 2008

Tougher CFIA Standards Don’t Include Imports

(Canwest News Service – Sarah Schmidt)

Ready-to-eat meats can be imported without new, rigourous CFIA requirements

Importers of ready-to-eat meats can continue to ship their products into Canada without having to disassemble and “aggressively clean” their meat slicers to check for listeria - a directive that Canadian operators now face.

The Canadian Food Inspection Agency issued the advisory earlier this month to federally registered ready-to-eat meat plants operating in Canada after Maple Leaf Foods announced listeria building up “deep inside” two slicing machines at its Toronto plant was the most likely source of the deadly listeriosis outbreak.

The company made the discovery after completely disassembling the machines, where the bacteria had accumulated and eluded Maple Leaf’s “rigorous sanitization procedures.”

Importers of ready-to-eat meats are not required to follow the same protocol to maintain access to the Canadian market, a spokeswoman for the Food Safety and Inspection Service of the U.S. Department of Agriculture confirmed Thursday.

The CFIA is not “requiring us to do anything additional. We have controls in place and we verify them. They are not requiring anything of us.”

The spokeswoman also confirmed that the sanitation protocols in the United States are not prescriptive and do not require the complete disassembly of meat slicers. Formax Inc., the manufacturer of the meat slicers at the Maple Leaf plant, also does not prescribe complete disassembly of the equipment on a periodic or annual basis.

In Canada, federally registered plants are required, at their next scheduled line sanitation, to disassemble and perform a “systematic and thorough aggressive cleaning and sanitation procedure” of all meat slicing equipment, including all internal parts, “to address this potential risk factor,” according to CFIA’s advisory, issued September 5.

Operators in Canada must also review their sanitation procedures of meat slicers with CFIA inspectors to ensure that the “internal working parts are being suitably cleaned and disinfected on an ongoing basis.”

Maple Leaf Foods on Thursday confirmed that it had never completely disassembled the meat slicers since they became operational nearly 11 years ago; spokeswoman Linda Smith said the company followed the manufacturer’s recommendations, which included the daily removal of some parts to get at and sanitize all surfaces that come into contact with food.

As a result of the outbreak, Maple Leaf will now completely disassemble its 84 meat slicers at the plant on the weekly basis “for the foreseeable future,” said Smith.

According to Statistics Canada, more than 86 million kilograms of processed meats, worth about $403 million, were imported into Canada last year.

The United States is the single largest importer. Since the beginning of 2008, about 38.3 million kilograms of meats – worth US $173.6 million – have been imported, according to the U.S. Meat Export Federation.

It’s not uncommon for foreign governments to slap restrictions on countries that import foods out of safety concerns. In the past week, for example, the CFIA has directed border officials to refer any shipments of baby formula or yogurt from China to its Import Service Unit for further inspection and testing amid a growing scandal in China involving contaminated formula.

The U.S. government temporarily ramped up testing last November for listeria and salmonella in ready-to-eat deli meat imports from Canada after an annual audit by its Food Safety and Inspection Service showed multiple violations of food-safety protocols at Canadian meat plants.

The increased product exams – at the rate of about double that of the past year – was in place for a few weeks before the U.S. agency returned to normal levels of testing.

In Canada, the CFIA advisory only applies to federally registered meat plants in the country, and cannot be enforced at provincially registered facilities, which outnumber federal ones.

The CFIA declined requests to explain its decision to limit its advisory to disassemble meat slicers to domestic plants.

Saturday, September 20, 2008

Canada Proposes to Eliminate Industrial Tariffs

(Blake, Cassels & Graydon LLP - Greg Kanargelidis et al.)

On August 30, 2008, the Canadian government invited submissions from the public on its proposal to eliminate the Most-Favoured-Nation (MFN) tariff on certain types of machinery and equipment. This initiative is in response to a report that was produced by the House of Commons Standing Committee on International Trade in April 2007, entitled Ten Steps To a Better Trade Policy. The report recommended that the feasibility and consequences of unilaterally eliminating industrial tariffs should be studied. Shortly after the report was released, the government began reviewing Canadian tariff policy with a view to enhancing the competitiveness of Canadian exporters in the global economy.

The government has since identified several opportunities for Canadian manufacturers to maintain or improve their competitiveness, including the proposed elimination of MFN tariffs. The government has worked alongside a number of stakeholders to create a list of proposed machinery and equipment for tariff elimination.

The particular tariff items were selected based on several criteria, such as whether the goods covered by these tariff items are used in the production of other goods, whether tariff elimination could reduce the cost of imported machinery and equipment as well as the impact on Canadian businesses producing similar or substitute goods.
The proposed tariff elimination will affect some 239 tariff items found among more than 50 tariff headings in Chapters 84 and 85 of Canada’s List of Tariff Provisions. These items include: steam and other vapour boilers and turbines; industry or lab furnaces and ovens; weighing machines; fork lifts; mechanical appliances; printing machinery; electrical transformers, static converters and inductors; electric, laser or photon beams; electrical apparatus for circuits; and insulated wire or cable and other insulated electrical conductors. The current tariff rates on these items range from 2% to 11%. The average rate is 5.2%.

This government initiative is a positive step for Canadian manufacturers. Even so, the manufacturers of similar or competing goods may have some concerns about the potential loss of a protective tariff barrier. The government is welcoming the comments and concerns of interested parties. In addition, the government will consider new proposals for further tariff elimination initiatives that may assist Canadian industry.

Interested parties should act quickly as written submissions are requested by September 30, 2008. The tariff elimination initiative should be welcome by manufacturers in Canada, whose costs of production will be reduced by the elimination of the tariffs thereby allowing such manufacturers to become more competitive, both within Canada as well as in export markets. On the other hand, machinery and equipment companies in Canada who produce identical or similar goods should review the detailed list carefully with a view to determining whether the protection afforded by the existing tariff barriers should be continued despite the tariff elimination initiative.

Editorial: Free Trade with Europe Is Worth Some Concessions

(National Post – Kelly McParland)

Yesterday’s revelation that Canada and the European Union will shortly begin negotiations on a plan for “deep economic integration” was buried under news of two election campaigns and a financial meltdown. But it deserves attention.

For decades now, the idea of a Canada-Europe free trade agreement has been knocking around our halls of power. But until now, the first and in some ways most formidable barrier to progress has been getting the EU interested. If this week’s reports are to be believed, that problem now appears to be solved.

There are obvious geographical limits to EU-Canada trade, even under the most liberal trade regime imaginable. For many years, moreover, we proved hard to take seriously as a partner because our own interprovincial trade barriers have remained high (a situation recently remedied). Nor has it helped impress anyone with our commitment to globalization that a huge chunk of our economy has remained subject to old-fashioned nationalist limits on foreign direct investment.

But with the collapse this summer of the Doha Round of World Trade Organization negotiations, Canada has suddenly been thrust into the EU spotlight. EU trade experts, led by new Trade Commissioner Peter Mandelson, are coming to grips with the notion that the continued expansion of free trade will have to be carried out in painful bilateral steps, rather than in one orgasmic, globe-girdling moment of concord.

As a bonus, much of the underlying econometric study has already commenced as part of the carefully circumscribed, Doha-friendly talks toward a Canada-EU Trade and Investment Enhancement Agreement, which began in 2004. All 10 premiers are said to be on board, provisionally, with getting a deal done.

Former French prime minister Edouard Balladur, an old political mentor to current President Nicolas Sarkozy, has been a major voice promoting Canada as a good place to construct an initial model for bilateral progress. Indeed, he has spoken of a Canada-EU agreement as a potential foundation for the eventual rebuilding of the now-fractured U.S.-EU relationship. Direct free-trade negotiations between America and Europe are currently impossible to contemplate, given the mood of the European public, but the idea is that Canada could serve as a sort of rope line around which a bridge can later be built.

Probably no one in Canada needs to be talked into seeing the advantages of a solid labour-mobility deal with the Continent. With the U.S. dollar and the Euro now established as the world’s two overwhelmingly significant stores of value, increasing the share of our international trade destined for Europe, which has dwindled in the NAFTA era, would provide a useful hedge against relative fluctuations in the two currencies.

And symbolically, it already seems some Canadian nationalists like the idea of having a heavier counterbalance against the perennial threat of U.S. encroachment on Canadian sovereignty. The concept is especially popular in Quebec, where Premier Jean Charest has been pounding the pulpit for it.

Once the full details are known, the price of EU integration is likely to prove higher than the Canadian left, and indeed some on the right, would like.

Effectively joining the EU as a satellite participant would probably mean heavy concessions in such areas as labour standards and product labelling. But becoming the world’s main conduit between its two largest free trade areas is worth a few sacrifices – especially since the protectionist policies to be sacrificed do us no good anyway, but are in fact sentimental vestiges of a Trudeauvian era of command-and-control. And those who suffer continual nightmares about the increasing competitiveness of China and India should not be afraid of taking bold steps to keep pace with the Asian giants.

Free trade has lifted the fortunes of nations around the world – including Canada, which has benefitted greatly under NAFTA and the Canada-U.S. Free Trade Agreement before it. There is no reason that a free trade agreement with Europe would not also be beneficial. We urge our government to do everything in its power to make it reality.

Friday, September 19, 2008

New Declaration Requirement for Imported Goods of Wood or Plants to be Delayed

(World Trade Interactive)

Congressional staff said this week that enforcement of a sweeping new requirement for importers of plants or plant products, including wood and wood products, to bring their goods into the U.S. will be delayed past the statutory December 15 deadline. Under provisions in the 2008 Farm Bill that amended the Lacey Act, such importers must submit upon entry a declaration that includes the genus and species of the plant(s) used, the value and quantity of the importation, and the country of origin of the imported product. Industry representatives as well as federal agencies have expressed concern about the scope and implementation of this new requirement, and there have been numerous discussions and meetings in recent weeks in an effort to determine the details.

Delayed Enforcement. At a September 17 meeting with industry and environmental groups that followed a September 15 meeting with the affected federal agencies, congressional staff indicated that Congress appears to have given its blessing to the delayed implementation of the declaration requirement. As a result, while the statutory enforcement date is December 15, neither U.S. Customs and Border Protection nor the Department of Justice will enforce the requirement until April 1, 2009. The interim period will be considered an “education period,” and CBP is contemplating the use of a voluntary paper declaration during this time, but details of this provision still need to be worked out.

There also appears to be an agreement that implementation of the declaration requirement will be phased in, but it remains in draft form. The concept is that CBP will begin requiring declarations for core timber products first, then over time work its way out to other plant and wood products. There is still discussion about whether the phases will go HTSUS chapter by chapter or line by line. In addition, the schedule of the phased-in implementation has not been determined, nor is there agreement on the list of products and when/if they will be phased in. Click here for the complete article.

Thursday, September 18, 2008

Wholesale Trade: July

(Statistics Canada)

Wholesale sales rose 2.3% in July to $46.2 billion as increases across a number of sectors contributed to a fifth consecutive monthly gain. Price effects were minimal in July, as sales in volume terms rose 2.2%.

July’s gains were spread across six of the seven wholesale sectors, with food, beverages and tobacco products the only sector reporting lower sales.

The largest contribution came from the "other products" sector, which rebounded from a 3.4% drop in June to post a 6.0% rise in July. Sales in this sector have increased significantly over the past year, mostly as a result of higher global demand for agricultural supplies. Exports of fertilizers and fertilizer material rose by more than 30% in July and have more than doubled over the past year.

The building materials sector also made a significant contribution (+4.8%) to July’s increase, as all three components of this sector reported higher sales. Wholesalers of metal products registered the largest increase, gaining 10.8% in July after a 7.9% rise in June. The value of metal products sales has risen sharply since the end of 2007, mostly due to higher world prices.
The other increase (+3.1%) of note was observed in the machinery and electronic equipment sector and was largely the result of higher sales (+5.1%) in the machinery and equipment trade group, which accounts for half of all sales in this sector. This was the seventh consecutive rise for this trade group, which in recent months has benefited from strong demand for agricultural machinery as well as sales to the oil and gas sector.

Overall, six provinces reported higher sales in July. Summary statistics and a link to the data set are on the Statistics Canada website.

Leading Indicator Climbs in August

(Reuters – Louise Egan)

Canada’s composite leading indicator climbed 0.2% in August from July, Statistics Canada said on Thursday, correcting its report of a 0.3% rise earlier in the day.

Statscan said there was no change in the indicator in July, rather than the 0.1% increase it had originally reported.

The agency is still looking over the numbers provided for the specific components of the index and will publish corrected figures as soon as possible, an official said.

Summary statistics and a link to the data set are on the Statistics Canada website.

Canada-EU Trade Proposal Rivals Scope of NAFTA

(Doug Saunders — Globe & Mail)

Plan to lift barriers for goods and labour to be discussed at summit after election

Canadian and European officials say they plan to begin negotiating a massive agreement to integrate Canada's economy with the 27 nations of the European Union, with preliminary talks to be launched at an Oct. 17 summit in Montreal three days after the federal election.

Trade Minister Michael Fortier and his staff have been engaged for the past two months with EU Trade Commissioner Peter Mandelson and the representatives of European governments in an effort to begin what a senior EU official involved in the talks described in an interview yesterday as “deep economic integration negotiations.”

If successful, Canada would be the first developed nation to have open trade relations with the EU, which has completely open borders between its members but imposes steep trade and investment barriers on outsiders.

The proposed pact would far exceed the scope of older agreements such as NAFTA by encompassing not only unrestricted trade in goods, services and investment and the removal of tariffs, but also the free movement of skilled people and an open market in government services and procurement – which would require that Canadian governments allow European companies to bid as equals on government contracts for both goods and services and end the favouring of local or national providers of public-sector services.

Previous efforts to reach a trade pact with Europe have failed, most recently in 2005 with the collapse of the proposed Trade and Investment Enhancement Agreement.

But with the breakdown of World Trade Organization talks in July, European officials have become much more interested in opening a bilateral trade and economic integration deal with North America.

A pact with the United States would be politically impossible in Europe, senior European Commission officials said.

A newly completed study of the proposed deal, which European officials said Prime Minister Stephen Harper decided not to release until after the election, concludes that the pact would increase bilateral trade and investment by at least $40-billion a year, mainly in trade in services. Read the complete article.

Wednesday, September 17, 2008

CBP Withdraws Proposal to Eliminate First Sale Rule

(Vicki DeLuca — VP Operations, GHY USA, Inc.)

Attention: GHY Customers

The First Sale option for Valuation will stay in effect — nothing changes as far as the regulations for using the First Sale and the required back up to prove it if customs comes calling.

Keep in mind that the litmus test for sales qualifying under the “First or Earlier Sale Rule” is that the material must be sourced by the middleman in accordance with a predetermined sales agreement with the U.S. buyer, that the articles were made for the U.S. buyer (supported by a P.O. from the buyer to the middleman dated prior to the middleman’s P.O. to the source), with shipping documents from the source supporting that the articles are being shipped direct to the middleman’s buyer or the buyer’s designated consignee. It’s advisable to secure an acceptance of such pricing from CBP before filing entries in this manner.

It will be more important than ever to have supporting documents and ensure all is in order if you are using this method — as effective YESTERDAY (only US Customs can get away with making something effective yesterday and publishing it this coming Monday) — if you are using the First Sale Method it must be clearly marked on your US Customs Invoice so the Customs Broker can clearly see that you want that method reported to CBP. We now have to flag an indicator in the US Customs entry. Which ultimately means they can now run reports on importers - the # of shipments, values, origins etc that are using First Sale method of valuation and send out requests and audit those importers. They are very aggressive with issuing penalties for non-compliance.

Click here to view a Trade Notice regarding this issue from one of our trade associates, the U.S. trade law firm of Sandler, Travis & Rosenberg, P.A.

If you have any questions about this, on’t hesitate to contact Joan Studeny in Pembina or Bob Cowie in Winnipeg.

Latest Quarterly Shippers’ Survey

(Supply Chain Digest)

Some Signs of Truckload Capacity Tightening, Continued Move of Freight from Truck to Rail

With the collapse of Bear Stearns, we were glad to see top-notch transportation industry analyst Ed Wolfe move forward with his own firm, Wolfe Research, and that he is continuing the always informative Shippers Survey he published for many years at his old firm. It is now called The State of the Freight, and the results from the Q2 2008 survey of some 200 shippers is now out.

One of the more interesting findings is that shippers perceive tightening in terms of truckload carrier capacity, after almost two years of increasing perceptions of overcapacity that reached record levels for the 7+ year history of the report.

Now, Wolfe Research says, “the truckload market has reached a state of equilibrium… and expectations are for further tightening.” Only 38% of shippers said they thought the TL market was characterized by “overcapacity,” versus an amazing 75% who said the same in Q1. 35% see tight TL capacity, while 27% saw balanced supply and demand.It appears quite likely that the substantial number of carriers and independents exiting the market is having an impact on bringing capacity back into balance even in the face of a slow growth economy, and “after two years of a TL market awash with trucks.” Read more here.

A Long Period of Slow Growth Bigger Worry Than Recession for Ontario: Duncan

(The Canadian Press)

Ontario’s finance minister says people should be more concerned about a long period of slow growth rather than the possibility of a recession amid turbulence in U.S. financial markets.

Dwight Duncan says financial uncertainty south of the border will continue to provide challenges for Ontario as weak economic conditions carry over into next year.

While there’s no data to show the province is headed into a recession, Duncan says he’s more worried about a protracted period of relatively modest growth.

He says a few negative quarters wouldn’t be as bad as a slowdown in real growth.

Premier Dalton McGuinty says Ontario is inextricably linked to the U.S. and has no way of completely shielding itself from that country’s challenges.

But McGuinty says that doesn’t make Ontario helpless and points out that, for the first quarter of the year, the province’s numbers are on budget.

Tuesday, September 16, 2008

Trade Group Optimistic About ACE System Development

(Journal of Commerce via CSCB)

Customs and Border Protection is regrouping and re-prioritizing development of the Automated Commercial Environment, members of the Trade Support Network said Monday.

During a telephone news conference, TSN representatives said Customs ordered a review of ACE to identify “core functions” of the new system. The high-level objectives for ACE that had been laid out seven years ago had been lost in a sea of details that bogged down progress.

The network is Customs’ trade advisory group for ACE development.

By focusing on the basics, Customs will be able to turn off the Eighties-vintage Automated Commercial System earlier than planned, and also save the government money, the group said.

Cindy Allen, vice president of customs compliance for Argents Air Express, said that ACE development will become more process-oriented.

“It’s going to more clearly mirror how trade works in the private sector. When we develop software, we don’t look at each individual function that the system is going to do. We look at how we do our work, and develop our systems around that.”

Users also will be able to customize reports…

With ACS, Customs issued standardized reports, and importers would have to order several different reports to get the information they needed.

Customs also reported, however, that there would be about a six-month delay in switching two manifest systems, ocean vessels and rail, from ACS to ACE. Originally scheduled for the end of 2008, ACE vessel and rail manifest systems will be available between March and June, 2009.

Members of TSN said that they were satisfied with the overall progress Customs is making, even though the agency won’t deliver the perfect system once hoped for by traders….

Beginning next year, importers, brokers and others stakeholders in the international supply chain will finally be able to use ACE the way it was intended – to file cargo manifests and Customs entries, manage accounts, pay duties, and secure bonds…

WCO – Percentage of National Revenue Represented by Customs Duties

(CIFFA eBulletin)

This WCO publication provides information about the share of national revenues represented by Customs duties. The survey is based on information obtained mainly from publications issued by other international organizations such as the IMF (International Monetary Fund) and the European Union, and the governments of some countries. The survey covers 142 countries, territories and economic unions using the Harmonized System for whom published data were available from the above referenced sources. The document can be viewed here (6 pages PDF).

Canada: FAIRS Country Report

(USDA Foreign Agricultural Service)

Summary of food importing regulations in Canada. Updates to the following sections were made in August 2008: Food Allergen Labeling, Guide to Food Labeling, Import Safety Legislation,

Compositional Standards for Cheese, Organic Food, Benzene, Canada’s Enhanced Feed Ban, and the GOC Policy on Trans Fats. All website links were refreshed. The report is available here (PDF format – 31 pages).

Canada’s Financial Firewall: The Border

(James Bagnall — The Ottawa Citizen)

Analysis: An awful lot of things will have to go wrong — a string of financial bankruptcies, a plunge in spending — before we find ourselves in the same leaky boat as the U.S.

Should we be concerned when two of the United States' largest investment banks -- Lehman Brothers and Merrill Lynch — disappear in a single day, and when stock markets collapse another four per cent in the same 24-hour period after an already abysmal year?

To put it another way, is Canada about to lose its immunity from the financial contagion spreading out of Manhattan?

The answers, unfortunately, are simply unknowable at the moment because so much depends on psychology. If enough people become concerned about the stability of the financial system itself, and move to protect their own interests, no amount of reassurance by central bankers would be enough to stem that awful tide.

But this remains a worst-case kind of thing, requiring an awful lot of things to go wrong -- a string of financial bankruptcies, accompanied by an abrupt decline in consumer spending. And this sort of cascade seems highly improbable in Canada.

… There are a number of explanations for this state of affairs, but a key one is that Canada’s bankers have resisted copying the more aggressive U.S. financial institutions.

This stance might have been much more difficult had Canadian trade negotiators not consistently opposed the idea of opening up our financial services industry to greater foreign ownership.

For instance, had Lehman Brothers acquired control of a major Canadian bank under relaxed ownership rules, the ripple effect of its demise yesterday would now be a scary thing.

As it is, less than a handful of Canadian firms with direct links to Lehman have been caught short by the investment bank’s troubles. These include: Sun Life Financial, which said yesterday it holds more than $300 million worth of Lehman’s bonds; and Canadian Imperial Bank of Commerce, which owns $25 million worth of Lehman securities.

This counts as relatively minor exposure, especially in relation to CIBC’s market capitalization of more than $23.3 billion.

No foreign individual or institution can acquire more than 10 per cent of a major Canadian bank, without the blessing of Canada’s minister of finance.

As of June, the single biggest investor in Canada’s big banks has been a mutual fund owned by one of the other banks — usually no more than five per cent of total equity.

It’s a family compact, in other words. And while this cozy reality has driven free traders to distraction, it also created a risk-averse culture. Read the complete article.

US Customs and Border Protection Launches WHTI Advertising Campaign in Canada

(Adam Ledlow — Truck News)

The US Department of Homeland Security’s Customs and Border Protection is launching a television and print advertising campaign in Canada today to remind the Canadian public about travel document requirements for entry into the US that go into effect on June 1.

The Western Hemisphere Travel Initiative establishes document requirements for travellers entering the US who were previously exempt, including citizens of the US, Canada, and Bermuda. This phase of CBP’s WHTI outreach efforts will include French and English-language advertising on Canadian television and in newspapers and magazines; advertising on the Web; public service announcements; the launch of new Web sites ( and and interactive widget; as well as distribution of related information through the media and various travel stakeholders.

“We take seriously the obligation to inform travellers on both sides of the border of the change in procedures,” stated CBP Commissioner W. Ralph Basham. “This multi-faceted campaign is designed to reach frequent as well as infrequent border crossers. A well-informed traveller plays an active role in contributing to the security as well as the efficiency of our shared borders.”

WHTI was implemented for air travellers in January 2007. On June 1, travellers will need to present a valid, acceptable document that denotes both identity and citizenship when entering the US by land or sea. Most travellers will be able to select from one of several different document options, based upon their individual travel needs. Read more.

Monday, September 15, 2008

Border Wait Times

(The Canadian Press)

Internal documents confirm what union officials have been saying for years – the wait times for travellers that Canada’s border agency posts on the Internet may not be reliable.

The agency claims it meets its target of “10 minutes or less” Monday through Thursday and “20 minutes” Friday through Sunday, at least 90% of the time. But an agency briefing note from April of this year acknowledges there is no standard measurement of wait times, which it says are based on personal judgment.

The document was obtained by The Canadian Press under the Access to Information Act, and says methods of estimating wait times are specific to each of the 22 border stations, and involve only a visual inspection. The note adds the data cannot be used as a predictor of exactly what the real-time wait will be.

A 2004 check of wait times by front-line officers found widespread under-reporting – in some cases by as much as two hours.

A spokeswoman for Canada Border Services Agency says it has launched a project to find a way to produce more reliable numbers.

Border Problems Hurt Trade

(Diane Francis — Financial Post)

The United States-Canada “frontier” is not the world’s longest undefended border any more. Right after 9/11, it was obvious the United States’ borders were shutting tight and that Canada and Mexico should have become part of a three-country perimeter. Under the North American Free Trade Agreement, this is the case involving economic goods. Product origins are checked because they cannot be back-doored through one of the three countries into another.

But the movement of people, tourism and immigration, should also be a jointly-managed affair. It isn’t. And in the absence of that, the Americans have erected fences along portions of the Mexican border and red tape and hassles along the northern border.

Mexico has a huge illegal migration and drug smuggling problem, but Americans are also not convinced Canada is doing a good job patrolling its side of the border. They are partly correct, says John Johnston, a retired Canadian customs official, now a consultant. U. S. security concerns and Canadian border problems should be cause for concern in the business community — a problem he dubs the “thickening border” issue.

Johnston is former regional director of Canada Customs for Southern Ontario and retired from the civil service in 2003. He now helps countries fix their border problems around the world. He says Canadians see the border from a trade and tourism viewpoint while Americans are focused on security. (Americans see Mexico as a criminal issue.)

Most egregious, he said, is the failure of Canada Border Services Agency to develop protocols to deal with terrorist incidents, the failure to investigate immigrants on “expedited import programs” and failure to catch smugglers.

Among the problems:

• There is a high-risk rate of 1.5% of traffic — that is, of the 100 million seeking entry into Canada each year 1.5 million are high-risk individuals;

• About $600-million in drugs are seized at the border annually;

• Poor border enforcement is not stopping the import of handguns;

• Each year there are up to 100 major child-porn seizures at the border.

“The major impediment to achieving an improved flow of people and goods at the border is the casual attitude of senior government officials towards security and protection,” he said. “Few of the agency’s senior executives have relevant experience in the areas for which they are responsible. The head of the Canada Border Services Agency is a meteorologist, not from customs, immigration or law enforcement.

Gun smuggling by criminal gangs in Canada is a huge issue for police but not the CBSA. (The gangs are often immigrants whom Canada has unfortunately allowed into the country or they are smuggling drugs southward.) “It appears that no one is in charge of the store,” he said.

Sunday, September 14, 2008

Modernized PIP Program


As you know, the modernized PIP program was successfully launched on June 30th, 2008, following the signing of a mutual recognition arrangement between the PIP and C-TPAT programs.

All legacy members must submit a completed Security Profile before midnight on December 31, 2008 to retain their PIP membership status and benefits until the CBSA has approved or denied their application.

Failure to re-apply before the deadline will result in the cancellation of a company’s PIP membership on January 01, 2009. As PIP membership is mandatory to participate in FAST into Canada, this will affect FAST privileges.

We encourage legacy members to begin completing the Security Profile as soon as possible, allowing enough time to answer all questions thoroughly. Applications with insufficient information may be rejected.

If you have not already received a Security Profile, you can request one by sending an email to

More information is available at the CBSA’s PIP website.

Friday, September 12, 2008

Regulators Near Compromise on Lacey Act Enforcement

(American Shipper – Eric Kulisch)

Situation still fluid as agencies still taking feedback and hashing out details on new wood product regulations.

Federal agencies involved in implementing a new requirement for documenting all wood or plant-based imports have reached preliminary consensus with industry groups on a compromise intended to calm the fears of importers nervous about their ability to comply, according to a U.S. Department of Agriculture official.

Lawmakers included a provision in this summer’s Farm Bill amending the Lacey Act, which regulates trade in fish and wildlife, designed to stem the flow of goods made from illegally harvested wood. Under the law, importers face a December 15 deadline to begin filing declarations specifying the scientific name and species of any wood or plant material contained in a product, and the country of harvest.

The broad nature of the act has many international traders worried that even products with trace amounts of wood byproduct would be covered, leaving them flailing for ways to obtain the information from their overseas suppliers. They envision an administrative nightmare heightened by the prospect that U.S. Customs and the USDA were prepared to require the use of paper documents, erasing the benefit of the efficient electronic process most importers use to file their customs entries.

Customs and Border Protection and the Agriculture Department’s Animal Plant Health Inspection Service (APHIS) have nearly completed an implementation plan that would phase in the requirements for the production of the declaration, officials at both agencies said.

Under the preliminary plan, which still needed to be signed off on by key lawmakers and committees on Capitol Hill, the act would be implemented in stages. During the first phase, covering the period between December 15 and April 1, 2009, submission of the paper plant declaration will be voluntary. Importers will be required to file the information after April 1, but in electronic form – although the paper option will remain available.

“We realize that trade is done electronically and that analysis of the data is best done electronically. We’re working hard to make that available on April 1,” Alex Belano, assistant branch chief for commodity, import and analysis at APHIS, told American Shipper.

Belano said the USDA and CBP will use the time until April to meet with industry groups and disseminate information about the compliance program as it is developed.

Phase two is also limited to the most obvious wood and plant-related items, such as flooring, furniture, paperboard and plywood, while deferring enforcement of gray areas involving processed wood byproducts until the scope of the Lacey Act can be administratively or legislatively narrowed a bit, Belano said. Read the complete article.

Shipments of Radioactive Materials Requiring DOT Placarding

(CBP — U.S. Customs)

Due to the significant hazards that may be posed to the traveling public, port personnel, and the disruption of the importation of other commercial shipments, the Area Service Port of Champlain is instituting the following requirements for the importation of radioactive materials requiring placarding under U.S. DOT regulations:

1) Carriers must notify the Commercial Operations Duty Supervisor at least 8 hours prior to the projected arrival of the conveyance at the port.

2) Copies of US State Department Licenses and shipping documents must be faxed to the Radiation Determination Office (VACIS) at least 8 hours prior to the projected arrival.

3) The Commercial Operations Duty Supervisor and/or the Non-Invasive Inspection (NII) Supervisor will determine the actual allowable arrival time of the conveyance within the confines of the port.

4) Carriers not adhering to this timeframe may be denied clearance and returned to Canada.

5) Circumstances that make it impossible for a carrier to adhere to this timetable must be fully explained – in detail – to the Commercial Operations Duty Supervisor. Such circumstances will be considered on a case-by-case basis.

The authority and rationale to institute this policy is found in the CBP Hazardous Materials Handbook, CIS HB 5200-18, Chapter 5 and is cited below:

“Port Directors may limit the importation and/or exportation of dangerous cargo to a specified location within the port, and to specify the hours of service for the importation and exportation of hazardous or dangerous goods based on availability of properly trained personnel, and/or in the interest of the safety of Customs employees and the traveling public. Other considerations are the port’s or facility’s ability to properly and safely inspect shipments of hazardous materials or dangerous goods without adversely affecting the importation or exportation of other commercial shipments.”

WTO Chief Aims to Restart Trade Talks

(CBC News)

The World Trade Organization can revive its defunct Doha round of negotiations as long as major countries can see eye to eye on a crucial agricultural issue, the group’s director-general, Pascal Lamy, said Thursday.

“My sense today is that there is scope for renewed engagement over the coming weeks, as confirmed by the technical discussions that have been held here in Geneva these past two days,” Lamy said at a speech in Geneva, according to the Reuters news agency.

Lamy has been on a globe-trotting tour since a series of world trade talks, begun seven years ago in Doha, Qatar, collapsed in July. The WTO chief has been pressing for compromise, principally between major players India and the United States.

The talks among the WTO’s 158 members were aiming to reduce and eliminate duties on trade in agricultural and industrial goods and services, and to establish international rules for intellectual property.

But before they were willing to lower trade tariffs, India and a majority of developing countries wanted protections for their farmers so they wouldn’t be battered by volatile global commodity prices. India, which has hundreds of millions of poor farmers, sought to be able to raise protective tariffs if food imports suddenly surged 15% or if global prices collapsed. The United States was adamant that special duties should only be allowed if a country’s agricultural market faces a 40% jump in imports.

Other outstanding issues simmered below the surface, including the sometimes lavish subsidies many developed countries hand out to their farmers – subsidies that are seen to undermine the competitiveness of agricultural producers in poor countries.

But if member states can compromise on the issue of the special protective duties, then the Doha round can move forward to discuss the few remaining items on its agenda, Lamy said Thursday.
“If we cannot complete the Doha round by the end of the year, let’s at least aim to complete these modalities that would take us 80 to 90% of the way in 2008 so as to conclude the round in 2009,” he said.

The talks over trade in industrial goods were being moderated by Donald Stephenson, Canada’s ambassador to the WTO, but will need a new chair as he is returning to Ottawa.

Dion Pledges $50M to Bolster Food Inspection Agency

(CBC News)

A Liberal government will invest an additional $50 million to build a more robust food inspection system in Canada in the wake of a listeriosis outbreak across the country, Stéphane Dion said Wednesday.

The boost in funding will allow the hiring of 100 additional Canadian Food Inspection Agency inspectors, an eight per cent increase of those working “on the ground,” he said during a campaign stop in Walkerton, Ont., for the October 14 federal election. “Canadians have been alarmed by recent revelations about unsafe food making it to our store shelves,” Dion said.

The Liberal leader added that Walkerton, where seven people lost their lives in 2000 during an E. coli outbreak in the community’s water supply, served as a tragic reminder to all parties. “A government cannot cut corners when it comes time to protecting the health and safety of Canadians for the sake of so-called efficiencies,” he said.

The listeriosis outbreak has killed 14 people across Canada and been linked to tainted meat products processed at a Maple Leaf Foods plant in Toronto. Conservative Leader Stephen Harper has promised an investigation into the outbreak. Maple Leaf has said the most likely cause of the outbreak was bacteria embedded deep inside meat slicing equipment at the plant.

Critics have increasingly voiced their concerns over the Conservatives’ plans for food inspection reform, while opposition members have accused the Tories of downloading responsibility for food inspection onto the industry. But Agriculture Minister Gerry Ritz has said the federal inspectors in charge of overseeing health standards at the plant were doing their job properly.

Canadian Industries Operate at Lower Capacity in Second Quarter as Demand Stalls

(The Canadian Press)

Canadian industries operated at 78.9% of their capacity in the second quarter of 2008, down from 79.6% in the first quarter. It was the fourth straight quarterly drop as the automotive and forestry sectors saw a continued drop in demand from abroad, Statistics Canada said Friday.
The drop, which affected all sectors in the second quarter, was less pronounced than in the two previous quarters, the agency noted.

“The decline in the utilization rate, while general, was especially pronounced in the forestry, mining and electrical power sectors,” Statistics Canada said. Manufacturers reduced production capacity utilization, operating at 76.7% compared with 77.2% in the first quarter, mostly due to reductions in the transportation equipment, wood products and plastic and rubber products industries. Transportation equipment manufacturing industry utilization fell 2.4 points to 74.5% on a slowdown in U.S. demand for automobile products. Wood products makers saw production capacity fall to 65% from 66.8%, also on weaker U.S. demand.

Increases were seen in machinery manufacture and the petroleum and coal products industries. Machinery manufacturers boosted production capacity utilization four points to 84.5% on increased production of machinery for agriculture, construction and mining extraction. Oil and gas and coal products sharply increased capacity utilization 5.2 points to 82.9%. Output rose 5.9%.

The forestry sector’s dismal performance continued, with output down 4.3% and capacity utilization falling to 74.8% from 76.8%, the lowest rate since the first quarter of 2002.
Summary statistics and a link to the data file are on the Statistics Canada website.

Canada’s Trade Surplus to Trend Lower in Coming Months

(CEP News)

Economists say Canada’s trade surplus with the rest of the world is likely to shrink further from July’s $4.85 billion figure reported Thursday by Statistics Canada.

The July reading was well below the $5.6 billion consensus estimate of analysts and the previous month’s revised surplus of $5.6 billion, which was originally reported as $5.8 billion.

Exports were 2.2% higher than in the previous month at $44.3 billion on stronger volumes and increased prices. Meanwhile, imports rose 4.5% to $39.4 billion. Both figures represent records for a single month.

Canada’s trade surplus has remained above $4 billion for six consecutive months after falling to $2.1 billion in December 2007 and $2.5 billion in January 2008. The monthly surplus hit a record high of $8.6 billion in January 2001.

Energy exports slipped 1.5% in July to $12.8 billion, but were 76% higher on an annual basis. Exports of industrial goods and materials rose 5% month-over-month and 10.6% on an annual basis to $10.1 billion. Exports of automotive products were up 2.4% from June but down 17% on an annual basis at $5.4 billion.

BMO deputy chief economist Doug Porter said the August swoon in commodity prices will see the merchandise trade surplus narrow more sharply in the months ahead, “probably to below the $3 billion mark in short order.”

The surplus on energy imports and exports dipped to $7.2 billion from the record high of $7.5 billion in the two prior months, Porter said, while the trade deficit on auto products hit a record high of $1.6 billion. “As recently as the start of 2007, Canada was still running a trade surplus on autos,” he said. Read the complete article.

Thursday, September 11, 2008

Canada Ranks 8th in Ease of Doing Business

(Globe & Mail via CSCB)

The World Bank ranked Singapore as the easiest country to do business, followed by New Zealand and the U.S. for the third year in a row. The top eight countries – Hong Kong, Denmark, United Kingdom, Ireland and Canada – were also unchanged from the previous report.

The bank ranks economies based on 10 indicators that measure the time and cost of government requirements in starting, operating and closing a business, trading across borders and paying taxes. The rankings don’t reflect macroeconomic policy, infrastructure, currency volatility, investor perceptions or crime rates.

Large economies that fell in the rankings include Germany, which dropped to 25 from 20, Mexico, to 56 from 42, and Russia, to 120 from 112.

“Economies need rules that are efficient, easy to use, and accessible to all,” Michael Klein, a World Bank vice president, said in a statement. “Otherwise, businesses get trapped in the unregulated, informal economy.”

Eastern Europe and Central Asia, led by Azerbaijan, made more changes than any other region to make doing business easier over the past year, according to annual rankings of 181 countries by the World Bank. The bank heralded the 28 countries in the two regions for streamlining regulations, boosting property rights and widening access to credit.

Azerbaijan jumped 64 spots from last year to 33 by cutting bureaucratic delays to start a business and sell property, making employment laws more flexible and simplifying tax payment. Albania, the Kyrgyz Republic and Belarus were other top reformers, the bank said….

Venezuela was the lowest-ranked Latin American country at 174 and the only country in the bottom 10 not in Africa, the bank said. Venezuelan companies must pay more than 50 taxes during the year. Read the complete article here and view the World Bank report here.

Wednesday, September 10, 2008

‘No Paper, Thanks’

(Air Cargo News)

Swiss WorldCargo has been selected by IATA to pioneer the introduction of a new ‘e-freight’ facility. To recognise its status, Swiss is introducing a new motto: ‘No paper, thanks!’ From the beginning of 2009 Swiss will record and handle cargo consignments in electronic form.

“We are honoured to be chosen by IATA to trial e-freight in a practical working environment and help this new facility achieve its worldwide breakthrough as swiftly as possible,” said Markus Loeffler, senior manager e-freight, Swiss WorldCargo.

“We see our selection as a ‘paperless pioneer’ by the airline sector’s umbrella organisation as a clear confirmation that Swiss WorldCargo is one of our industry’s most innovative cargo service providers. But we also view it as an incentive and a commitment to further refine this forward-looking cargo handling approach.”

The new e-freight facility will initially be introduced at Zurich Airport – again on IATA’s initiative. In practical terms, this means that not only Swiss WorldCargo, but all the parties involved in the local logistics chain will exchange their consignment details online.

IATA’s overall aim is to ensure that air cargo consignments are handled electronically as extensively as possible by the end of 2010.

“E-freight represents a quantum leap in the air cargo sector,” said Oliver Evans, chief cargo officer at Swiss International Air Lines. “And as one of its pioneering practitioners, Swiss WorldCargo will be playing a key role in ushering-in this new paperless era.”

Start Talking Free Trade Deal with India: CEOs

(Embassy – Michelle Collins)

With the rest of the world already knocking on India’s door for trade and economic partnerships, Canadian business leaders are calling for trade negotiations with the emerging Asian economic power and for the prime minister to meet with India’s prime minister – on the double.

Over the last year, Canadian and Indian CEOs have met and studied the feasibility of launching free trade negotiations in response to a request from the countries’ trade ministers in June 2007.

In report released September 2, the Canadian Council of Chief Executives and its Indian counterpart, the Confederation of Indian Industry, make several recommendations and strongly endorse advancing economic and political ties far beyond current levels.

This would include annual meetings between the prime ministers, more active private sector engagement, increased educational exchanges and augmenting those agreements already in place into a “modern, high-quality and comprehensive Free Trade Agreement.”

In a letter sent to International Trade Minister Michael Fortier last week, the president of the Canadian Council, Thomas D’Aquino, and chief mentor of the Indian Confederation, Tarun Das, encouraged the minister to “seek a mandate” from the prime minister to begin discussions.

Indeed, throughout the report, considerable emphasis is placed on the need for meetings between the countries’ leaders, stating that “the robustness of our relationship” will depend on the commitment of political, business and non-governmental leaders.

“Canada and India should enter into a new era of co-operation, and should move quickly to deepen and accelerate the growing ties between our countries,” the report states. It goes on to declare: “Our Ministers should begin negotiations as soon as possible but should be mindful that more study will be needed in a number of sensitive sectors, including the agriculture and culture sectors.”

Both Canada and India are sensitive about opening the agricultural and film and television industries to foreign trade.

The agreements off which Canada and India should build include the recently concluded foreign investment protection and promotion agreement and a 2005 scientific and technological co-operation deal the report said. The two countries are also working on a forum for environmental collaboration and to share educational exchanges through forums such as the Shastri Indo-Canadian Institute in Calgary.

Liberal Trade critic Navdeep Bains, who travelled to India three years ago with then-prime minister Paul Martin for the signing of the science and technology agreement, said he is very supportive of launching a trade agreement with India.

Mr. Bains said the trip to meet with high-level officials in India, including the prime minister, “spoke volumes,” and he was critical of the Conservatives’ lack of leadership on the file.

“[Mr. Martin’s visit] sent a clear signal right from the top of our government, and the fact that Mr. Harper hasn’t travelled there sends, in my opinion, the wrong signal,” Mr. Bains said. “It indicates that it’s not a priority, and I genuinely believe that it’s a lot of window dressing that they’ve just been working on smaller agreements, and trade in general, they’ve really taken a step back.”

Indeed, the scope in which to advance bilateral relations is described as “limitless” in the report, and there is value given to the vibrant Indo-Canadian community as an untapped potential in the relationship.

Notably, Canadian business leaders in particular appear to be driven by an urgency to reach out to India. As stated in the report, a Canadian participant declared in one meeting that “India may not need Canada, but Canada certainly needs India.”

With an enormous need for developing its infrastructure, one official at the Canadian Council of Chief Executives told Embassy he expects the Indian government would welcome greater private sector involvement in this area, and that Canada’s private sector would greatly benefit.

“India has huge requirements for infrastructure development, in particular in transportation and telecommunications, and Canadian business is there and interested,” the official said.

The official said there has been no response to the report yet from the government, and with an election underway, it is unlikely one will come anytime soon. He said he hopes that the next government, whichever party it may be, will take the recommendations seriously, and act immediately. Read the complete article.

Manitoba Designates Land in Winnipeg as Proposed Location of Inland Port

(The Canadian Press – Winnipeg Free Press)

The Manitoba government has identified a chunk of land in northwest Winnipeg as the location of a proposed inland port for Manitoba. The designation was made Wednesday under the CentrePort Canada Act, which also establishes a non-profit corporation to promote and administer the proposed port.

The plan is to use the airport and its geographic location in North America as a hub to import goods from Asia and Europe, then distribute those goods throughout the rest of Canada and parts of the United States by air, rail and truck.

The inland port designation also helps qualify the province and city for millions more in federal money to build new roads, rail lines and add new infrastructure like sewers and utilities around the airport.

Dave Angus, president of the Winnipeg Chamber of Commerce, says this is the best economic opportunity for the province.

But critics say the plan is out of touch with economic and geographic reality. They say Minneapolis-St. Paul is better suited as a distribution hub, as it’s closer to major markets and also connected by rail to ports on the West Coast.

“All they’re doing is banging their head against the wall,” trucker George Smith said, adding higher Canadian fuel prices means more goods go through the U.S. rather than Canada. “There are not enough loads,” Smith said. “There isn’t an intermodal hub for that.”

Premier Gary Doer said this project won’t be Winnport, a similar plan 20 years ago that never got off the ground. “We have everyone working together now. Why didn’t past endeavours work? I don’t think everyone was at the table,” he said.

Last week, Ottawa and Manitoba pledged $85 million to fixing up Highway 75 from Emerson at the U.S. border north to Morris. The project is also being done, in part, to deal with heavier truck traffic heading north and south.

Bob Silver, co-chair of Doer’s Economic Advisory Council, said the hope is that when these things start coming together, more private investment will follow. That, in turn, creates jobs.

“Government will not build a building that says, ‘CentrePort’,” said Silver, president of Western Glove Works. “Private business will build the buildings when the infrastructure is there, the roads and sewers.”

Tory Opposition Leader Hugh McFayden said he supports the project, but want to examine the province’s plan to use tax-increment financing to fund it.

The TIF legislation, introduced on the last day of the spring session, is designed to create “tax-increment financing zones,” which are areas where increased tax revenue from improved properties are shovelled straight back into the same few city blocks.

CBP Rules of Origin Proposal Could Mean Compliance Headaches

(World Trade Interactive)

Importers are faced with a number of potential problems from a recent U.S. Customs and Border Protection proposal to change the way the country of origin of most imported goods is determined. CBP recently extended the comment period on the proposed rule to October 23, leaving importers just over a month to review the rule’s impact on their operations and notify CBP of any recommended changes.

At present, the origin of non-NAFTA goods is determined by the case-by-case application of a “substantial transformation” test under which a good is considered to be a product of a particular country if the processing in that country is sufficient to substantially transform that good into one having a new name, character and use. Under the proposed rule, however, CBP intends to extend the “tariff shift” rules applicable to virtually all non-textile/apparel goods under NAFTA to imports from all countries. This approach would require companies to classify foreign inputs used in the manufacture of a finished product and then apply sometimes complicated tariff shift rules to determine the origin of that good. (The proposed rule would also amend the tariff shift rules relating to specific products (e.g., pipe fittings and flanges) and make corrections to the rules of origin for textile and apparel goods of HTSUS chapter 59 and heading 6212.)

There are a number of compliance concerns associated with CBP’s proposal.

• Depending on your supply chain, it may be difficult to obtain information relating to the origin of various inputs and/or information sufficient to classify those inputs in order to apply the proposed rules of origin to the finished product.

• Although the origin of many products may remain the same under the new rules, it is likely that there will be a number of changes as well.

• Qualification for trade preference programs such as the Generalized System of Preferences, as well as certain duty preferences available under HTSUS chapter 98, could be affected.

Accordingly, importers should quickly review the rules applicable to their products to determine their impact and submit comments to CBP if warranted.