Tuesday, March 31, 2009

CTA Voices Concerns About Proposed Customs Changes

(Truck News)

The Canadian Trucking Alliance (CTA) has voiced concern over certain aspects of proposed legislation in Canada that could impact the in-bond inland clearance of goods.

The CTA made its opinion known to a Senate Committee on National Security and Defence this week, which was exploring the possible impacts of Bill S-2, An Act to Amend the Customs Act.

For the most part, CTA supports the bill, which it says would “more fairly distribute the responsibility for gathering and presenting required data on goods entering Canada to all supply chain participants.”

Currently the onus is on the carrier to provide advanced information to Canada Border Services Agency (CBSA) about the truck, driver and goods entering Canada, even though the carrier does not own or package the cargo, and in some cases hasn’t loaded the freight.

This puts the carrier at risk of being held up at the border if there are inaccuracies in the paperwork, even if the incorrect data concerns the cargo. Under Bill S-2, it’s possible the Governor-in-Council could take some of the burden off the carrier, and make other supply chain partners more accountable.

“CTA supports this amendment,” said CTA CEO David Bradley during his testimony. “CTA believes that over time there has been far too much regulatory obligation placed on the carrier community relative to other supply chain partners and the proposed amendment could provide better balance. CTA has advocated that increased responsibility should be placed on all parties in the supply chain that own the information supplied to CBSA.” Read more here.

Monday, March 30, 2009

Canadian Manufacturers, Exporters Gain Optimism

(Trucking News)

The most recent Business Conditions Survey conducted by the Canadian Manufacturers and Exporters indicates there’s growing optimism in the Canadian manufacturing community.

Respondents’ optimism about the next three months was higher than at any other time in 2009, according to the survey.

“It’s a glimmer of hope in an otherwise bleak outlook,” said CME president Jayson Myers. “I believe the real economic impacts are still to be felt, but it is encouraging news that the economic decline appears to be slowing.”

Of the 717 companies that responded, 49% said they expect orders to decrease between March and June. In February, 56% of respondents felt orders would decline.

Another reason for hope was that 13% of companies that responded said they will increase their employment over the next three months, up from 11% in February. The number of companies planning layoffs declined from 45% to 42%.

The survey found the credit crunch remains an important issue for manufacturers and exporters, with 59% of businesses reporting problems acquiring credit.

“Accessing credit continues to be a major hurdle for companies of all sizes to overcome during this major economic downturn,” Myers said. “We need to put pieces of the credit puzzle together quickly or we will see more companies, even very innovative and productive companies, laying off more workers and going out business. If companies cannot access credit soon, the financial meltdown could translate into a Canadian industrial meltdown.” Read more here.

Sunday, March 29, 2009

GM’s Wagoner Steps Aside After Failing Obama Scrutiny

(CBS News Online)

GM’s CEO Rick Wagoner was asked to resign by the White House. As Tony Guida reports, the news comes on the eve of Pres. Obama’s announcement of more bailout funds for the struggling auto industry.

Related: Canada “comfortable” with U.S. plans on auto industry: Harper. Read more.

Saturday, March 28, 2009

Updated IATA E-Freight Handbook Now Available Online

(CIFFA eBulletin)

The latest edition of the IATA e-freight Handbook, published in March 2009, is now available free of charge on the IATA website. The handbook provides a comprehensive guide to IATA e-freight. Main topics include:

• Overall vision and strategy

• Benefits airlines, shippers and freight forwarders can expect from IATA e-freight

• A step-by-step guide to adopting IATA e-freight where customs authorities already accept e-freight shipments

• Business processes, standards and technology supporting IATA e-freight

Friday, March 27, 2009

WTO: New Video Debate on Trade Finance


Trade finance: How to ensure credit during the financial crisis?

One of the side effects of the current financial crisis is its impact on trade finance. This very secure form of credit has become more expensive or dried up completely. The lack of credit lines and trade guarantees is one important reason for the reduction in trade flows, as exporters cannot ship their merchandise without them. The impact is even more severe for developing countries.

Kimberly Wiehl, Secretary-General of the Berne Union, and Steven Beck, Head of Trade Finance at the Asian Development Bank, discuss the issues with Keith Rockwell, WTO Spokesperson. Click here to watch the video debate

U.S. Mulling whether to Revive Dairy Export Subsidy

(FlexNews – Reuters)

The Agriculture Department is in discussions with other U.S. agencies whether it is appropriate to revive dairy export subsidies as a response to U.S. surpluses, said Agriculture Secretary Tom Vilsack on Thursday. Vilsack said consultations included the U.S. trade representative and the State Department and that the ramifications on U.S. trade policy were among the issues. "We are in the process of having discussions with them," said Vilsack during a telephone news conference to announce the donation of surplus dairy products to U.S. feeding programs. He did not say when there would be a decision "if that is a feasible option."

Concern over CARICOM Trade Pact with Canada

(Jamaica Gleaner)

Deputy Prime Minister and Minister of Foreign Affairs and Foreign Trade, Dr Kenneth Baugh, has expressed concerns about the upcoming free trade agreement to be signed between Canada and CARICOM.

Speaking with Canada's Minister of International Cooperation, Beverley Oda, on Monday in Ottawa, Baugh noted that Jamaica would be inundated with Canadian products as a result of the trade agreement. The deputy prime minister said an impact analysis showed that opening up trade with Canada would be detrimental to Jamaica, unless there was a development component.

"We are small countries and we have to be careful how we enter into free-trade agreements. What would make a big difference is technology transfer," said Baugh. He told Oda that the transfer of technologies from Canada to Jamaica would assist the island in building capacities for processing, marketing, sorting, grading and packaging foods. Read more here.

Trade Minister, Industry Wary of Southern Trade Skirmish

(The Canadian Press)

The Canadian government and the export industry are watching nervously as a trade war brews between this country's NAFTA partners.

Mexico slapped hefty tariffs on 90 American products this month, after Washington axed a program that allowed Mexican trucks to bring goods deep into the states – a right outlined the North American Free Trade Agreement. The change was made as part of the Obama administration's stimulus package, the same package that included "Buy American" provisions that have been decried by its northern neighbours.

"I don't want to intervene in their dispute but I'm concerned when I see disputes like that," Trade Minister Stockwell Day said in an interview. "What happens in an economic downturn, various businesses and industries get nervous and succumb to the impulse to build protectionist walls."

While Canadian truckers aren't treated the same way, U.S. Homeland Security Secretary Janet Napolitano said this week that Canada shouldn't get different treatment when it comes to border issues. "One of the things we need to be sensitive to is the very real feelings among southern border states and in Mexico that if things are being done on the Mexican border, they should also be done on the Canadian border," Napolitano said.

The signals are raising concerns.

"I know my colleague, Public Safety Minister Peter Van Loan, will be having a lot to say to and with (Napolitano)," Day said in Vancouver on Thursday. "We have always made the message clear that we take our security obligations seriously but the borders have to be efficient and security can't trump prosperity. And I think once the minister gets here, she'll start to see some of that."

Van Loan, however, said Napolitano's comments had been overblown by the news media. Read more here.

WTO Details Rising Protectionism, Pushes Countries to Reverse Course

(Wall Street Journal – John W. Miller)

A steady buildup of protectionist measures could "slowly strangle" international trade and undercut the effectiveness of national stimulus plans, according to a report the World Trade Organization sent its 153 members on Thursday.

Since early this year, there has been "significant slippage" in the global commitment to free trade due to the global economic crisis, the WTO said. "There have been increases in tariffs, new nontariff measures and more resort to trade defense measures such as antidumping actions."

The WTO added, however, that the world will avoid "an imminent descent into high-intensity protectionism" such as occurred during the Great Depression of the 1930s, thanks to trade treaties that cap tariffs on imports.

The WTO has predicted that global trade will shrink 9% this year. Its director, Pascal Lamy, believes he can shame countries into cutting back protectionist measures, aides say.

The report lists examples of measures countries are taking to protect their companies and economies – from European import tariffs on Asian plastic bags to a ban on Chinese toys in India. In March alone, South Korea raised import tariffs on oil; Mexico raised tariffs on 89 U.S. goods; Ukraine slapped an extra 13% tariff on all imports; the U.S. raised duties on imports of Chinese steel pipes; and Argentina mandated a special license for toy imports. Read more here.

Freight Stabilizes: IATA


The International Air Transport Association (IATA) today announced international traffic statistics for the month of February showing continuing deterioration in demand.

February international freight volumes were 22.1% below 2008 levels. This is the third consecutive month at more than 20% below previous year levels (-23.2% in January and -22.6% in December).

“Gloom continues. The sharp drop in February passenger traffic shows the broadening scope of the crisis. Freight traffic, which began its decline in June 2008 before passenger markets were hit, has now had three consecutive months in the -22% to -23% range. We may have found a bottom to the freight decline, but the magnitude of the drop means that it will take time to recover,” said Giovanni Bisignani, IATA’s Director General and CEO.

• All cargo markets saw extremely weak demand continue as a result of the collapse in international trade in goods and the much lower shipment of components by manufacturers. However, the level of air freight appears to have found a floor over the past three months. The recently released Eurozone Purchase Managers Indices, being useful forward looking indicators for cargo traffic, showed a slight and unexpected improvement in March – although it remained in negative territory.

• Middle Eastern carriers experienced the smallest fall in demand (-4.8%). They were also the only region to increase capacity (+5.4%).

• African carriers had the worst performance with a 30.7% drop in international freight traffic due to a loss of market share on long-haul routes combined with the impact of the economic downturn.

• Asian carriers – the largest players in cargo – saw demand fall by 24.7% as the region’s high-value export-dependant industries were hard hit by falling consumer demand in the major markets of Europe, the U.S. and Japan. Japanese exports have almost halved from February 2008 levels.

• European and North American carriers saw cargo demand decline 23.1% and 21.8% respectively. Government stimulus plans have not yet rekindled consumer demand.

• Latin American carriers experienced a demand drop of 22.8% driven by weakening demand for the region’s commodities.

Bisignani reminded governments that air transport is a catalyst for economic activity and called for policy changes to help them to stimulate economies by playing this role effectively. “Governments are spending trillions to bailout the banks and trillions more to stimulate economies. By comparison, our requests to governments are cost-effective and cheap. First, air transport needs a tax structure that will help preserve industry jobs and allow air transport to play its role as a catalyst for broad economic activity.

Governments must repeal the US$6.9 billion in new taxes put on the industry in 2009 to help pay for banking bailouts - despite being branded as environmental measures. More broadly governments must replace the mindset of taxing aviation as a luxury or a sin with a strategic approach that recognises and fosters the industry’s critical economic role in connecting people to business and products to markets. Second, airlines need the commercial freedoms to be able to merge or consolidate where it makes business sense - even across national borders,” said Bisignani.

View full February traffic results here.

Thursday, March 26, 2009

Ontario Sales Tax Reform: Small Pain for (Hopefully) Longer Term Gain

(CBC News)

Ontario’s budgetary move to blend its provincial sales tax with the federal goods and services tax might have some political watchers puzzled.

After all, Ontario has been hard hit by a manufacturing meltdown, especially in the auto sector. Thus, provincial unemployment is rising, making Ontario residents particularly crabby these days.

To analysts, boosting prices on household goods does not seem the best way for Ontario’s premier, Dalton McGuinty, to wiggle his way into voters’ good graces.

But, most economists sing in unison when it comes to tax harmonization.

These practitioners of the dismal science generally agree that, when a province adds its sales tax, eight per cent in Ontario’s case, to the current five per cent national GST, the region and the country as a whole win in terms of economic expansion and increased productivity.

“This tax reform is long overdue as Ontario struggles to put its economy on a better growth path,” wrote Jack Mintz, a University of Calgary economics professor and former president of the C.D. Howe Institute recently. Read more here.

Minister Day Introduces Legislation to Implement Colombia and Peru Free Trade Agreements

(Minister of International Trade)

The Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, today announced that legislation has been introduced in the House of Commons for the free trade agreements (FTAs) Canada recently signed with Colombia and Peru. These agreements will open new doors for Canadian companies doing business in Colombia and Peru by expanding market access in key sectors such as extractive industries, manufacturing, agriculture and financial services.

“Canada is taking action during these difficult economic times by reaching out to our trading partners and reducing the barriers that undermine our mutual prosperity,” said Minister Day. “These agreements provide our companies with a competitive edge in many sectors, including wheat, paper products, mining, oil and gas, engineering and information technology. This is another example of the government’s efforts to deepen Canada’s presence in Latin America.” […]

In 2008, two-way merchandise trade between Canada and Colombia totalled more than $1.3 billion, while two-way merchandise trade between Canada and Peru reached $2.8 billion. Read more here.

Canadian Business Optimism Rises from Cyclical Low

(CEP News – Sarah Sussman)

Optimism among owners of Canada’s small- and mid-sized businesses climbed slightly in March, according to a survey by the Canadian Federation of Independent Business.

“Canadian small- and mid-sized business confidence has held firm in light of having to deal with significant levels of economic uncertainty through the early months of 2009,” CFIB’s chief economist Ted Mallett said in a press release.

The March Business Barometer index rose slightly to 87.3 from a cyclical low of 86.1 reached in December.

Obama’s Message: Glory Days of Open Border Are Gone

(Globe & Mail – John Ibbitson)

Janet Napolitano has a message for Canadians: It’s a border. Get used to it.

The new Homeland Security Secretary had only stern comments yesterday about the state and future of the Canada-U.S. border, at a symposium hosted by the Brookings Institution.

Her goal seemed to be to throw a bucket of reality on anyone who hoped that the arrival of Barack Obama’s new administration would herald a loosening of new restrictions on cross-border traffic. The days when Canadians and Americans moved back and forth across the border – “it’s as though there’s not a border at all,” as she put it – are over. “It’s a real border, and we need to address it as a real border,” Ms. Napolitano said, calling on both Americans and Canadians to accept this “change of culture.”

That culture changes most emphatically June 1, when the United States will require anyone entering from Canada to produce a passport or its equivalent.

Congresswoman Louise Slaughter, whose district encompasses Rochester, Buffalo and Niagara Falls, believes she knows what will happen that day. “There will be pure chaos,” she predicted. Lines will lengthen, people will be denied entry, tourism and business will suffer. And with the addition of the Olympics it’s going to be even more so.” […]

Ms. Napolitano confessed that, having lived most of her life in either New Mexico, where she was raised, or Arizona, where she was governor, “I’ve never actually spent much time on the Canadian border,” though she plans to visit it later this spring and this summer. To educate herself, she commissioned a study of the border, chastising Canadian journalists who speculated that this was an ominous sign. Read more here.

Senate Confirms Locke as Commerce Chief

(CQ Politics – Adrianne Kroepsch)

Two months after President Obama’s inauguration and after two withdrawn nominations, the Senate confirmed Gary Locke as Commerce secretary by voice vote Tuesday.

Locke, 59, enjoyed a friendly reception from Democrats and Republicans on the Commerce, Science and Transportation Committee at his March 19 confirmation hearing. The panel approved the former Democratic governor of Washington for the job, 25-0.

During the vetting, he appeared to satisfy panel members of both parties with his positions on the wide range of issues and programs managed by the Commerce Department. In particular, he assured senators that the Commerce Department will run an open and independent 2010 census, beating back suggestions that the White House would control and politicize the population count. Census results are used to determine the distribution of congressional districts and the apportionment of House lawmakers.

Locke also took an aggressive stance on trade during his confirmation hearing. A free-trade supporter, he said he would work to open markets for American-made goods and would take a tough stance on enforcement of U.S. trade laws.

Chemical Companies Must Lift Trade Compliance Standards

(ICIS.com – Thomas Cook, American River International)

All companies that operate global supply chains need to be sensitive to trade compliance within their import/export operations. And chemical firms need to raise the bar here because of the nature of their products and the scrutiny that government agencies bring to bear on them.

There are six areas critical to best practice in global trade compliance: senior management engagement; point person; evaluation; standard operating procedures (SOPs); training and education; and Customs Trade Partnership Against Terrorism (C-TPAT). […]

Chemical companies need to raise the bar of trade compliance management as the industry is targeted by government agencies that manage supply chain operations.A prudent company will seriously consider joining the C-TPAT program managed by U.S. Customs and Border Protection (CBP). To receive C-TPAT certification, which gives companies a favorable disposition by CBP on how they move freight across the border, companies inform CBP how their supply chain operates.

Chemical companies can go even further by achieving Importer’s Self Assessment (ISA) status, which eliminates a substantial portion of Customs scrutiny for companies that meet high standards in operation, business process and SOPs.

Other C-TPAT benefits include expedited clearances, mitigation of fines and penalties, access to CBP programs that offer competitive advantages, and help in maintaining supply chains in the event of terrorist acts.

Trade compliance will not only keep chemical companies out of trouble, but will also assist them in running their export and import trade lanes better, more cost-effectively and more securely.

Read the complete article here.

TSN Plenary Session Executive Summary


The Trade Support Network (“TSN”) Plenary session was held at the Hyatt Regency Hotel in Reston, Virginia on March 4, 2009. Highlights of the plenary session included an overview of the progress of the ACE project as well as updates on future functionality related to Entry Summary, Accounts, & Revenue and Cargo Control and Release. In all, there were 146 attendees (inclusive of trade, PGA, CBP and ACE Support Staff).

The TSN has been extremely active in helping to push CBP to build the best system possible and to keep the agency focused on what is important from the trade’s perspective. The TSN is unique because it allows the regulators to be informed and advised by the regulated. First created in the 1990s during the earlier ill-fated ACE years, it was revitalized in 2001 after funding was restored and contractors were selected.

First created in the 1990s during the earlier ill-fated ACE years, the TSN was revitalized in 2001 after funding was restored and contractors were selected. Today, the TSN is active in helping to push CBP to build the best system possible and to keep the agency focused on what is important from the trade’s perspective. The TSN is unique because it allows the regulators to be informed and advised by the regulated.

The TSN is comprised of several committees, each devoted to certain aspects of ACE or the project as a whole. For example, there are committees devoted to legal and policy issues, as well as those issues that will arise in the transition from ACS to ACE. There are also committees focused on operational parts of ACE, such as entry, finance, manifests, and the implementation of the International Trade Data System, or ITDS. ITDS will eventually exist within ACE as a single interface (also known as the “single window” between the trade community, Customs, and the many other government agencies (OGAs) involved in the administration of trade.

All of the TSN Plenary session presentations can be found at the CBP website here.

CTF and Business Debate Ontario Tax Harmonization

(Canadian Taxpayers Federation)

Kevin Gaudet of the Canadian Taxpayers Federation and and Len Crispino of the Ontario Chamber of Commerce discuss the merits and drawbacks of Ontario's plan to harmonize the PST with the GST on the CTV program Canada AM.

Wednesday, March 25, 2009

The Growing Importance of Mexico

(Embassy – David Crane)

Ever since Mexico signalled its desire to be a North American nation by joining the North American Free Trade Agreement in 1994, Canada has had a distinctly mixed, uneasy response. While officially welcoming Mexico, many of those who advocate much closer Canada-U.S. ties appear to resent Mexico’s joining the club.

One reason would seem to be that Canada and Mexico are now in competition for U.S. attention – hence the jockeying over who has the first meeting with a new U.S. president – or that Americans would favour Mexico over Canada.

When president Vicente Fox visited George W. Bush in the White House in 2001, Bush declared that “the U.S. has no more important relationship in the world” than the one with Mexico. This was quickly misinterpreted by paranoid Canadians as meaning Mexico, in fact, had become more important than Canada in the eyes of the new U.S. administration.

This fear can be found more recently in a report of the Carleton University Canada-U.S. Project, which argues for much greater focus on Canada-U.S. relations. It sees Mexico as a distraction and little value for Canada from trilateral summits. “There is much more common ground between Canada and the United States – i.e. ‘Upper North America’ – than there is between Mexico and either of its northern partners,” the report argues. Read more here.

U.S. Tightens Border Security as Clinton Heads to Mexico

(World Focus Online)

On Tuesday, the Obama administration announced that the U.S. would send more federal agents and high-tech equipment to the Mexican border to help fight drug violence. The spiraling drug violence tops Secretary of State Hilary Clinton’s agenda as she heads to Mexico.

Christopher Sabatini, the senior director of policy for the Council of the Americas and an expert on Latin American affairs, joins Martin Savidge to discuss Secretary of State Clinton’s visit to Mexico, whether the newly announced initiative to increase security along the U.S.-Mexico border will help end the drug violence and if talk of Mexico becoming a failed state helps or hurts the situation.

2009 Trade Agenda: Emphasis on Enforcement, Changes in Trade Policy

(World Trade Interactive)

A new U.S. trade representative is in place and the congressional committees that oversee trade policy are already moving forward on issues affecting global commerce. Following our recent articles on the 2009 trade agenda for the Obama administration and the House Ways and Means Committee, this article provides additional details on the trade issues likely to be in play this year, based on recent comments by administration officials and key lawmakers. This is the first in a three-part series and focuses on the priority being given to trade enforcement as well as possible changes in trade policy. Read the complete article here.

Bid to Delay Border Rules Dropped

(Embassy – Lee Bethiaume)

The government has largely given up on trying to secure another delay of the Western Hemisphere Travel Initiative and is instead counting on the Obama administration showing flexibility in implementation of the new rules.

This has prompted concern from opposition critics and business groups, who worry the new regulations will exacerbate the effects of the current economic recession, and create problems during the Vancouver Olympics.

In an interview Monday, Public Safety Minister Peter Van Loan said the issue of pushing for a delay became “moot” after Secretary of State Hillary Clinton and Homeland Security Secretary Janet Napolitano said the U.S. is WHTI-ready. “That decision’s done,” Mr. Van Loan said. “So there is no mechanism for further extensions. We are thus working with them on implementation.” Read more here.

Canadians Among Most Optimistic Globally About Economy: Report

(CBC News)

Amid pervasive doom and gloom about the global economic crisis, Canadians are among the most optimistic worldwide when it comes to their financial futures, according to a report released Wednesday.

Not unlike people elsewhere, Canadians have deep concerns about the economy and lowered consumer confidence, but they tend to have a rosier view of the future, Tony Coulson, vice-president of Environics Research Group in Ottawa, told the CBC in an interview.

“It’s sort of a glass half-full mentality,” Coulson said. “It says, ‘This is a recession in the stock market rather than on the streets for Canadians,’ so they’re not feeling the pinch as much and are looking forward to better times ahead.”

By comparison, Ireland appears to have a glass half-empty perspective, the Environics study found. “Ireland is definitely the country where there’s the most worry about the economy and the least optimism about the timing of the recovery,” Coulson said. Read more here.

Port Slowdown Idles Trucks, Ships

(Surrey Leader – Jeff Nagel)

Slowing international trade due to the global recession is translating into fewer cargo ships calling on Vancouver-area harbours and more port workers and truckers being sidelined. Port Metro Vancouver reported a 22% drop in the number of containers it handled in February compared to a year ago. And shipments of other types of bulk cargo are down 44% so far in the first two months of the year.

“The number of vessels is down,” said Port Metro Vancouver Chief Operating Officer Chris Badger. “Clearly if the consumer is not buying, the demand drops,” he said, adding that’s playing out in reduced imports of containerized goods from Asia.

There’s also been less demand for Canada’s outgoing commodities. The biggest declines so far in 2008 are exports of logs – down 62% – and bulk potash, off 80%.Grain and food exports through the port are bucking the downward trend so far, up 18% in the first two months of the year. “People still need to eat,” Badger said.

The port authority is projecting the decline will moderate later in the year, ending 2009 down about four per cent in general cargo and seven per cent for containers compared to 2008.

Badger says the drop this year doesn’t change the port’s long-term outlook or its need to expand to satisfy future projected demand. “The world will come out of this,” he said. “It’s about being positioned to take advantage of the uptake when it happens.” Read more here.

Ontario to Merge Sales Tax with Federal Tax: Reports


The government of Ontario will unveil tentative plans to harmonize its provincial sales tax with the federal sales tax in its budget on Thursday as it tries to help businesses weather the recession, several newspapers reported on Wednesday. The proposed reforms would see Ontario merge its 8% sales tax with the 5% federal good and services tax.

The reports said the changes are designed to help make businesses more competitive since the new harmonized system would allow companies a refund on taxes paid on goods and services to run their operations.

The move might anger consumers, however, as they may see increased taxes on items such as heating oil, diapers and children’s clothing, all which are now exempt from the provincial sales tax.

Earlier this month the province’s finance minister said Ontario would run a deficit of around C$18 billion ($14.6 billion) over the next two years as it spends money to try to stimulate the economy.

The Globe and Mail said the tax reforms are part of a move by the province to address its reversal of fortunes as the economy of Ontario, once the country’s richest province, has been one of the hardest hit by the recession. Read more here.

NAM Calls for Action to Fix New Product Safety Law

(Reliable Plant)

Yesterday, National Association of Manufacturers (NAM) president John Engler issued the following statement commenting on the March 20 letter from the Consumer Product Safety Commission (CPSC) to Congress in response to questions posed by Rep. John Dingell (D-Michigan).

The CPSC letter noted that implementation of the 2008 Consumer Product Safety Commission Improvement Act banning lead and phthalates from children’s toys has “impacted our ongoing safety mission by delaying and deferring work in many other areas.”

“The CPSC response to Congress clearly indicates that legislative changes are necessary to fix the flaws in the Consumer Product Safety Improvement Act,” said Engler.

By the CPSC’s own account, implementation of the new law has overwhelmed the agency and jeopardized its ability to meet safety priorities. The law’s overly broad approach applies to products that that should not be evaluated using the same safety criteria as products that do pose a risk. It is critical that the CPSC focus on improving safety. The law’s unrealistic compliance deadlines made it impossible for industry or the CPSC to adequately prepare before the law went into effect. Its unprecedented decision to retroactively apply the new lead standards and phthalates ban to inventory already sitting in stores and warehouses is causing massive disruptions to industries across the board, particularly small and medium-sized companies.

Implementation has also followed a worst case scenario for manufacturers and their employees. This misguided law has triggered the destruction of millions of safe products, costing businesses billions of dollars during one of the worst economic crises in U.S. history. Youth model All Terrain Vehicles (ATVs) and dirt bikes are no longer available because of their lead content, even though they pose no risk to riders.

The CPSC staff agrees that banning these products will result in more children using adult-size ATVs as a substitute, which will pose ‘far graver and more immediate risk.’ Ballpoint pens, bicycles, safe apparel, older library books and other products will also be unnecessarily banned if Congress does not act. Congress can no longer ignore the calls of thousands of small businesses and companies of all sizes to hold public hearings on this problem and fix the law.

The CPSC letter is available here.

Tuesday, March 24, 2009

The World's 20 Largest Importers and Exporters

(The Canadian Press – Associated Press)

Canada ranked #11 on the list of the world's 20 largest importing and exporting nations, according to the World Trade 2008 report published Monday by the World Trade Organization.

CPSC Wants More Flexibility to Exempt Products, Extend Compliance Under Product Safety Law

(World Trade Interactive)

The head of the Consumer Product Safety Commission told Congress last week that the CPSC needs more flexibility in its ability to implement the numerous requirements under the Consumer Product Safety Improvement Act of 2008.

In a letter to Rep. John Dingell, D-Mich., Acting CPSC Chair Nancy Nord said the agency has been confronted with three major issues in implementing the CPSIA:

(1) the retroactive application of requirements to inventory;

(2) the broad coverage of the law, which applies to all products for children 12 years or age or younger; and

(3) the impact of new testing and certification requirements for all consumer products and the third-party testing requirements for children’s products.

Nord said that while more funding and staffing would help, granting the CPSC more autonomy to implement the CPSIA would be the best way to ease the burdens on both government and industry while ensuring compliance with the law. Read more here.

Monday, March 23, 2009

World Markets Rally in Response to U.S. Bank Rescue Plan

(World Focus Online)

On Monday, the financial world was largely focused on the Obama administrations bank rescue plan, under which the government would offer subsidies to private investors who buy up trouble assets from banks, and taxpayers would share in any gains — or losses.

The president says he is very confident the plan would help to ease credit. The plan was greeted with enthusiasm on Wall Street, where the Dow and Nasdaq were up sharply, and major markets made big gains in Asia and Europe.

Peter Coy, economics editor of BusinessWeek magazine, joins Martin Savidge to discuss world stock markets, how Western European banks will be impacted by the plan and foreign banks being bailed out by U.S. taxpayers.

Canada’s Leading Economic Indicator Falls in February

(CBC News)

Statistics Canada’s leading economic indicator continued its southward march in February as nine of the 10 economic components that make up the measure lost ground in the month. Statistics Canada said Monday that the composite leading index – which is made up of 10 different economic figures – dropped by 1.1% in the second month of the year. That weak showing followed a tumble of 0.9% in January.

“The housing and stock markets continued to post the largest declines, while losses in manufacturing steepened as the auto industry began to implement extensive shutdowns at the turn of the year,” said Canada’s statistical agency in a statement.

The composite index is a figure in which the year 1992 equals 100 and is designed to show where the national economy is headed in future months. February’s reading stood at 221, down from September’s 229.5.

Summary statistics for leading indicators are on the Statistics Canada website.

U.S. Moves to Patch Mexico Rift

(Wall Street Journal – Christopher Conkey)

The Obama administration began efforts Friday to ease an erupting trade dispute with Mexico by starting work on a new program to give Mexican truckers broader access to U.S. highways.

Transportation Secretary Ray LaHood met with officials from the State Department and the Office of the U.S. Trade Representative to design a cross-border trucking program “that will meet the legitimate concerns of Congress and our [North American Free Trade Agreement] commitments,” said a White House spokesman.

A person familiar with the meeting said the participants “are going to work to get a proposal everyone likes before [President Barack] Obama’s trip to Mexico in April.”

The administration’s move comes after Mexico earlier this week slapped tariffs on $2.4 billion in U.S. goods ranging from grapes to toilet paper. Mexico said its action was retaliation for a provision in a budget bill Mr. Obama signed earlier this month that effectively shut down a pilot program that had allowed some Mexican truckers to transport cargo beyond a 25-mile commercial zone inside the U.S. border. Mexico says the U.S. is failing to meet its obligations to cut barriers under NAFTA.

Business interests ranging from Pennsylvania-based Hershey Co. to the USA Rice Federation are urging the White House to permit qualified Mexican truckers to drive on U.S. roads.

Exporters affected by the tariffs say the government is causing economic damage by catering to unions that are more concerned with protecting jobs than improving safety. Read more here.

Friday, March 20, 2009

Ministers Clement and Day Welcome U.S. Government Support Program for Auto Suppliers

(Industry Canada)

Today [Thursday], the Honourable Tony Clement, Minister of Industry, and the Honourable Stockwell Day, Minister of International Trade, welcomed the creation of the Auto Supplier Support Program, announced by the U.S. Department of the Treasury.

Similar to the U.S. Auto Supplier Support Program, Canada already has an Accounts Receivable Insurance (ARI) program, provided by Export Development Canada (EDC), which may be used by parts suppliers to the domestic auto industry.

“Through EDC, I am proud to say that we addressed this concern early and continue to be there for auto suppliers across the country,” said Minister Clement. “As the fortunes of the Canadian auto industry are linked to the recovery of the U.S. economy, we see today’s announcement as a positive step toward restoring confidence in the supplier base at a critical time for the industry.”

In 2008, EDC provided a total of $4.2 billion in commercial facilitation to 595 Canadian companies in the auto industry through its financing and insurance products and services. Of this amount, $3.2 billion was in the form of ARI.

For more information on EDC and the ARI program is available here.

Mexico’s Retaliation List

(American Association of Importers & Exporters)

AAEI is calling on the Obama Administration to negotiate an acceptable compromise with Mexico to avoid higher duties on 90 U.S. export products.

This week, Mexico announced its intention to raise duty fees in response to the passage of the Omnibus bill, which eliminates funding for a NAFTA pilot program for Mexican cross-border trucking. The retaliatory tariffs add up to $2.4 billion. The list is available in English and Spanish on the AAEI website.

AAEI supports the free flow of trade. Blocking compliant Mexican carriers from the U.S. border impedes the free flow of trade. Retaliatory duties imposed on U.S. exporters hurts U.S. workers. Most of the products on the retaliatory list are agricultural produce.

If you have any comments or questions, contact AAEI at feedback@aaei.org

Thursday, March 19, 2009

Canada’s Public Safety Minister Discusses Border Security with U.S. Officials

(Canadian Press)

Persistent Canadian attempts to get the United States to help ease long lines and congestion at Canada-U.S. border crossings are finally getting a hearing under President Barack Obama’s administration, Canada’s public safety minister said Wednesday.

In a meeting with Obama’s homeland security secretary, Peter Van Loan said he suggested a pilot project that would allow commercial vehicles hauling goods to the U.S. to clear American customs before arriving at the border.

The idea, known as land pre-clearance and repeatedly dismissed by the previous George W. Bush administration, would be similar to the way air passengers at some Canadian airports clear customs before arriving in the United States.

“We did gain a commitment today to examine that issue again,” Van Loan said after his meeting with Janet Napolitano.

“I suggested the Detroit-Windsor corridor, which is a particular choke point where we’ve got pressures on resources - that might be a good place to examine for a pilot project,” he said.

“They did agree to go back and our officials will work on it with their officials and see if there are ways of achieving some success on land pre-clearance.’’

In 2007 alone, the annual two-way trade in goods and services between Canada and the United States was over $576 billion. Trucks carry approximately 80 per cent of Canada’s trade with the U.S., with one truck crossing the U.S. border every two seconds.

But beefed-up security measures in the aftermath of the Sept. 11, 2001 terrorist attacks have resulted in slowdowns and congestion at many border points that persist eight years after 9-11. Read more here.

CN Message: Lacey Act Requirements

(CN via CSCB)

Reminder to all customers shipping plants and plant products to the U.S.: As previously communicated, the U.S. Animal and Plant Health Inspection Service (APHIS) announced an amendment to the Lacey Act, part of the 2008 Farm Bill (also known as the Food, Conservation, and Energy Act of 2008), the enforcement of which will be phased in beginning April 2009.

The Lacey Act now makes it unlawful to:

• import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce any plant, with some limited exceptions, taken in violation of the laws of a U.S. state or any foreign law that protects plants.

• make or submit any false record, account, or label for, or any false identification of, any plant.• import certain plants and plant products without an import declaration. The declaration must contain, among other things, the scientific name of the plant, value of the importation, quantity of the plant, and name of the country from where the plant was harvested. For paper and paperboard products containing recycled content, the declaration also must include the average percent of recycled content without regard for species or country of harvest.

Please ensure you review Lacey Act requirements with your U.S. customs broker. It is your customs broker’s role to ensure all information pertinent to the Lacey Act declaration is provided to U.S. Customs and Border Protection (CBP) at the time that release entry is filed.

Commodities affected by the Lacey Act requirements are broad in scope and include any level of plant product that may be part of the commodity or manufactured into the components of the commodity with no minimum amount exempt.

Preventable customs holds or set-outs at the border due to non-regulatory compliance will be subject to applicable CN tariff items.

The notice is available on the CN website (PDF).

Government of Canada to Evaluate 17 Additional Substances Under the Chemicals Management Plan

(Health Canada)

Canada’s Minister of Health, Leona Aglukkaq, and Minister of the Environment, Jim Prentice, announced [March 13] that the Government of Canada is beginning to assess 17 substances included in batch 9 of its Chemicals Management Plan. Of the 17 substances, 12 were identified as being of possible concern to the environment and five were identified as being of possible concern to human health.

With the completion of this batch of chemicals, the Government of Canada will have completed two-thirds of its commitment to review 200 substances in 12 batches identified as high-priorities for action. The Government continues to meet its commitment to Canadians by reviewing a new batch of substances every three months.

Public summaries, which contain information about the substances in Batch 9, including where they are found and how they are used in Canada, are available on the new Chemicals at a Glance page. For more information, please visit the Chemical Substances website.

Wednesday, March 18, 2009

Revised Canadian Import Requirements for Wood Packaging Material from China: IPPC Mark Soon Mandatory


In September 2008, the Canada’s Forestry Delegation met with China’s General Administration for Quality Supervision, Inspection and Quarantine (AQSIQ) to discuss the repeated occurrence of counterfeited Chinese Phytosanitary Certificates for wood packaging materials destined to Canada.

In agreement with AQSIQ officials, Canada will discontinue recognition of Chinese Phytosanitary Certificates and will only accept the IPPC mark in verifying China’s compliance with Canada’s phytosanitary import requirements for wood packaging materials. Please note that these new requirements will be in place for shipments originating from the People’s Republic of China and will not affect shipments from Hong Kong, Macau and Taiwan.

For more information regarding the phase-in approach, please consult the Canada Border Services Agency’s Customs Notice. For more information on rules and regulations governing the import of wood packaging, please visit the Canadian Food Inspection Agency website or contact the CFIA at 1-800-442-2342.

Tuesday, March 17, 2009

New-home Construction Logs Unexpected Gain

(Associated Press)

The number of new housing projects that builders broke ground on in February rose sharply, defying economists' forecasts for yet another drop in activity.

Study: TSA May Come Up Short on Cargo Checks

(USA Today – Thomas Frank)

A plan to check every package of business cargo for explosives before it is loaded onto passenger airplanes faces major obstacles, according to a government report scheduled for release Wednesday.

The report by Congress’ Government Accountability Office says the Transportation Security Administration (TSA) may not have enough inspectors nor adequate equipment to guarantee all cargo is checked for bombs.

The report, scheduled to be presented at a hearing Wednesday, raises questions about whether TSA will meet an August 2010 deadline set by Congress to guarantee that all cargo carried on passenger planes is being screened. The TSA and cargo groups “face a number of challenges in meeting the screening mandate,” the report says.

Most cargo screening will be done by private entities at warehouses and plants where goods are loaded into boxes. TSA inspection teams will oversee the screening, but the agency may not have enough inspectors by August 2010, the report says. Read more here.

Monday, March 16, 2009

Changes for Food Labels

(CBS News Online)

For years, consumer groups have fought for new food labels listing the product's country of origin. As Ben Tracy reports, this rule has now taken effect for most fresh meat and some produce products.

Friday, March 13, 2009

New Canadian Export Control Handbook Should Be Carefully Reviewed

(Mondaq – John W. Boscariol, McCarthy Tétrault)

Foreign Affairs and International Trade Canada (FAITC) has just amended its Guide to Canada’s Export Controls (June 2006) by removing the Introduction section which contained administrative information on the export permit process. There has been no change to items covered under the Export Control List, so the Guide remains dated June 2006.

Apparently as a replacement for the old Guide’s Introduction, FAITC has separately published the Export Controls Handbook (dated February 2009). It’s worth a few minutes of your time to carefully review it. Read more here.

Exporting: Buy American

(Canadian Business – Rachel Pulfer)

New rules make it harder, but not impossible, for Canadian exporters to fight to the end and win

Just before his trip to Canada, United States President Barack Obama signed the US$787-billion American Recovery and Reinvestment Act into law. The act represents billions of dollars in government spending, but it also carries a Buy American rider stating that funds spent on iron, steel and manufactured goods will go to U.S. suppliers only.

Buy American won’t stop trucks at the border or apply new tariffs, but it will restrict Canadian access to business opportunities opened up by new stimulus funding. Judy Bradt, a U.S. trade consultant based in Washington, D.C., believes that Buy American will apply to the approximately US$35 billion slated for projects that could be considered construction and public works.

“If the prime contract is worth more than $8.8 million,” says Bradt, “then Canadian firms may supply products as prime or subcontractors without any special permissions or waivers,” as protected under NAFTA. If the value of the contract is less, however, Canadian firms will need to negotiate a waiver in advance.

Procurement rules under NAFTA prevent government discrimination in favour of local suppliers, but only when it affects bidding on federal contracts, explains Chris Cochlin, an international-trade lawyer with the Ottawa office of Fraser Milner Casgrain LLP. When it comes to selling to state and local governments, it’s a different story.

At the lower levels, Canadians are not protected by NAFTA and never have been. That, says Cochlin, means Buy American can be enforced by state and local officials in a manner that is entirely consistent with America’s obligations under international treaties.

Unfortunately for Canadian exporters, Buy American rules also have another catch that circumvents such treaties. “If one dollar of federal funding with Buy American provisions is used for a state or local project, all the dollars spent on that project must comply with the Buy American provisions,” Bradt explains.

That means it’ll be up to governors and mayors to decide how to apply Buy American since much of the stimulus will not flow directly from the feds. As has always been the case, Canadian companies can apply for waivers to access those opportunities. “But those waivers will be more difficult to get,” says Bradt. Read the complete article here.

Exports Plunge By 9%

(Virginia Galt — Globe & Mail)

Canada’s trade deficit widened to a record $993-million in January, leaving no industry sector unscathed, as Canadian exporters were hammered by the collapse in global demand.

Exports fell 9 per cent to $31.7-billion, led by a sharp decline in automotive products trade, while imports fell 7.9 per cent $32.7-billion, Statistics Canada reported. Prior to December, Canada had not run a trade deficit in 33 years.

“Nobody is exempt. All industries are involved in this global situation right now,” Peter Hall, chief economist at Export Development Canada, said in an interview after Statistics Canada reported a double dose of bad news – the January trade statistics, and the loss of 82,600 jobs in February as falling demand forced more businesses to scale back.

“Much of what is happening is imported. It’s not a made-in-Canada event. It’s something that is washing onto our shores from outside.” Read more here.

Thursday, March 12, 2009

Committee Makes Case for International Trade Corridor

(Rose Sanchez — Prairie Post)

There has been an increase in initiatives to get expanded border crossing hours and more ports in both southwestern Saskatchewan, and even in southeastern Alberta, but officials with the North/South Trade Corridor Committee, believe Highway 4, running through Val Marie and the Port of Monchy/Morgan, provides the best option for the creation of an international trade corridor.

The committee was first struck in the early 1990s, but Ervin Carlier, the Saskatchewan co-chair, says once Senator Max Baucus endorsed the route from Billings to the Canadian border as a designated primary arterial highway, the committee “went home”.

“We thought ... that Canada and the (Saskatchewan) government would do their part and we would soon have our 24-hour port,” says Carlier.

In a letter sent out in January of this year, committee members said the Saskatchewan economy went into a tailspin and highways worsened.

“Not surprisingly talk of an extended hours customs port fell by the wayside.”

As the economy began to boom once again, political attitudes changed and it became apparent Saskatchewan is an exporting province, the committee decided to re-form and again lobby for the Port of Monchy to become an international trade corridor for Saskatchewan. Read more here.

Canadian Small Businesses See Their Future in Foreign Markets

(Canada NewsWire)

A recent survey conducted for HSBC Bank Canada found that the majority of Canadian small and mid-sized businesses see the benefits of doing business in international markets. According to the survey, 45% per cent of small businesses are currently conducting some business outside of Canada while an additional 8% intend to develop some involvement in international markets over the next two years.

Jon Hountalas, Executive Vice President, Commercial Banking, HSBC Bank Canada, said: "These findings show that even in the current challenging economic times Canadian businesses understand that their future lies not in retreating into our home market but in continuing to look beyond our borders for new growth opportunities."

The HSBC survey was conducted with 250 small and mid-sized business owners and managers across the country whose businesses produced between $1 million and $20 million in annual revenues. It determined that the sectors most likely to be currently doing business abroad are those in the information services and manufacturing industries. Of the companies surveyed who are currently doing business outside of Canada, 72% sell their products and services abroad while 28% source some of their products from outside the country.

While this openness to expanding outside the country bodes well for the future of Canadian small and mid sized businesses, Mr. Hountalas notes that entering new offshore markets under current economic conditions may entail additional risks that many business owners may not have considered. Read more here.

Labour Peace Secured with B.C. Port Workers; Truckers Still Negotiating

(Canadian Transportation & Logistics)

Labour peace has been achieved between the B.C. Maritime Employers Association (BCMEA) and the International Longshore and Warehouse Union (ILWU) Local 514, after a tentative agreement reached last month was signed by both parties.

“Representatives from the BCMEA and ILWU Local 514 met (on Friday), confirming their respective memberships have ratified the collective agreement in effect between April 01, 2007 and March 31, 2010,” said Greg Vurdela, vice-president marketing and information services, BCMEA.

The 450 ship and dock foremen with ILWU have been without a contract since March 31, 2007. There has been no comment by ILWU Local 514 during the negotiation process, or since the ratification vote. According to BCMEA, the main issue has been the cost of the contract.

However, labour peace has not yet been fully realized at Vancouver ports. Unionized truckers who haul freight at the Port of Vancouver have been without a contract since December 31, 2008, and negotiations have not been smooth. Read more here.

Wednesday, March 11, 2009

Shipping Industry Left With an Empty Feeling

(Chris Sorensen — Toronto Star)

Companies struggle as cargo transport demand sinks so soon after a remarkable boom period

After years straining to keep pace with rising demand, the global shipping industry is suddenly facing a new problem: finding places to park empty planes, trains and ships.

From railroad boxcars to giant container ships, the global economic downturn has forced transportation companies to shrink capacity in response to declining demand for raw materials and manufactured goods.

In Canada, both of the country’s major railways are being affected by fewer shipments of everything from iron ore to automobiles. […]

Eivind Kolding, the CEO of Maersk Line, the world’s largest container shipper with 15 per cent of the global market, predicted yesterday that the container business would take longer to recover from the economic downturn than other sectors precisely because of the surplus of new ships that will soon be plying the seas.

“More likely than not we will see all liner companies in red (ink) territory in 2009,” Kolding said in an interview with Reuters. “Most likely, some liner companies will have to cease business if freight rates do not come up.” Read more here.

RCMP Calls for Increased Border Presence

(The Canadian Press)

A senior Mountie says the RCMP needs a more visible presence along the Canada-U.S. border to bolster security.

Assistant Commissioner Mike Cabana said Tuesday the stronger presence would help the force gather information from people in border communities about criminal threats.

Cabana, the senior officer responsible for border integrity issues, told the House of Commons committee on public safety it’s a missing piece of the border policing puzzle.

“What we recognize now is the community involvement is missing,” he said after the meeting. “We realize that we need to go back to the community and initiate discussions with them.”

Cabana said it would not necessarily mean hiring additional personnel or opening new detachments.

“The investigative capability is there. But we need to do a better job at co-ordinating with the community and reaching out for the community’s involvement in securing the border. And the best way to do that is through a visible presence,” he said.

“We need to have a look at the different programs that we have now. We need to have a look at what other agencies are bringing to the table and make a determination of what is required at the border.”

Committee MPs grilled Cabana and a panel of federal security officials on the flood of American handguns spilling onto Canadian streets - and later said they were unhappy with the answers. Read more here.

Canadian Firm Cries Foul Over Buy American Provision on State Contract

(The Canadian Press – Julian Beltrame)

A Canadian manufacturer says his company is being shut out of a bidding process in Maryland by the same “Buy American’’ policies that President Obama has assured Canada is not protectionist. Now the Toronto-area company which does a majority of its sales with the United States says it may have to move operations south of the border to save the business.

And what is occurring in Maryland may only be the tip of the iceberg given the current protectionist sentiment in the U.S. Congress, says the president of Hayward Gordon Ltd., a Toronto-area company that produces industrial-grade water pumping and mixing equipment. “This is shutting out any non-American company from doing business on any public infrastructure,” said John Hayward, whose Halton Hills, Ont. company employs 75 people.

Hayward said he had been working for two years to bid on the Maryland water treatment project, which he believes was potentially worth about $200,000 for his company. Now he’s been shut out.

The Maryland sanitary bid document calls on contractors to “provide a list of all iron, steel, and manufactured goods not produced in the United States to be precluded from the (federal) funding.’’ Hayward said no contractor would stand a chance of winning the bid if they included any non-American suppliers.

More importantly, he says, he may have to shift production south of the border to keep selling to U.S. markets which represent about 75 per cent of his water pump sales. “We just spent $7 million on a brand new factory two years ago that’s going to be gutted as a result of this,” he explained. Read more here.

New Labelling Rules UnCOOL

(Embassy Magazine)

U.S. Agriculture Secretary Thomas Vilsack’s efforts to tighten up American country-of-origin labelling rules for livestock provoked strong reactions from farmers and meat industry officials during appearances before the [Canadian] Commons’ Agriculture committee last week.

A number of industry representatives said exports to the U.S. have already slowed by as much as two-thirds for some products, and once the final rules are in place this month, Canadian farmers will be hit even harder.

Some witnesses called on the Canadian government to relaunch its WTO challenge of the rules, which was put on hold in January. Others, however, said getting a ruling will take too long and the government – including Prime Minister Stephen Harper himself – must work American legislators and the Obama administration now.

“The White House really has to be alerted to this grim situation,” Martin Rice, executive director of the Canadian Pork Council, told committee members on March 5. “And in terms of getting their attention, our view is that it really has to come from our central agency, the Prime Minister’s Office in particular, to alert the White House that this is a problem that’s not just going to affect Canadians, it’s going to affect U.S., because if you take away 10% more of U.S. processors’ raw material, they are not going to be able to continue in business as they are.” Read more here.

CPSC Outlines Procedures for Lead Content Determinations, Exclusions

(World Trade Interactive)

The Consumer Product Safety Commission has issued a final rule, effective March 11, that sets forth certain procedures and requirements concerning the lead content limits for certain children’s products under the Consumer Product Safety Improvement Act of 2008.

Specifically, this rule addresses:

(a) CPSC determinations that a commodity or class of materials, or a specific material or product, does not exceed the lead content limits, and

(b) exclusions from the lead content testing and certification requirements of a commodity or class of materials, or a specific material or product, that exceeds the lead content limits but will not result in the absorption of any lead into the human body or have any other adverse impact on public health or safety. Read more here.

IMF Praises Canada’s Prudence and Response to Financial Crisis

(CEP News – Megan Ainscow)

The International Monetary Fund said Wednesday that while Canada faces tough times ahead, sound government fiscal policy and a stable banking system have made the country one of the best-equipped to weather the global recession.

The statement by IMF Mission Chief Charles Kramer following his visit to Canada said the government has managed its budget well over the last 10 years, cutting the federal debt in half, which “has left the country in prime form at the beginning of the global turmoil.”

He said official response to the crisis – namely the fiscal package announced in January – was well-timed and well-planned. He also praised the Bank of Canada, which has cut its target rate by 400 basis points since December 2007 to a record low of 0.5%.

Looking ahead, “the authorities have expanded their toolbox for dealing with the possible emergence of more severe financial strains. These tools include capital injections and other policy measures that, while not needed now, are prudently being developed should the need arise,” he said. Read more here.

Tuesday, March 10, 2009

Stakeholders Pitch ‘Border Ambassadors’ Idea

(Today’s Trucking)

Once upon a time, the purpose of NAFTA meant reducing barriers for freer flowing trade. It’s debatable, though – considering the alphabet soup of security acronyms shippers and carriers face daily – whether that’s still true.

That’s why a group of Canadian stakeholders – led by Ken James, former MPP who’s now chairman of Blue Water Bridge Canada – want to make sure governments on both sides of the border don’t lose sight of NAFTA’s original mandate.

According to the Times Herald of Port Huron, the group is proposing that ‘special ambassadors’ for the U.S. and Canada are appointed to specifically address longstanding issues that lead to “thickening” trade at international crossings. The ambassadors, the group suggests, would report directly to Prime Minister Stephen Harper and President Barack Obama and would be charged with auditing whether all the new rules related to the border are reasonable or redundant.

James outlined the plan in a letter to Harper last year and more recently unveiled the details to U.S. Rep. Candice Miller, R-Harrison Township, during a meeting in Sarnia. “This thickening situation is getting worse,” James said. The issue “has to rise to the top of the heap.” Read more here.

A New Route to Finding Backhauls

(DC Velocity)

New “Empty Miles Service” matches empty trailers with backhaul loads

Load-matching services that bring empty trailers and backhaul loads together typically are the province of transportation brokers and online freight exchanges. Soon there will be some new players in the game: the Voluntary Interindustry Commerce Solutions Association (VICS), GS1 Canada, and GS1 US. (VICS is best known for its collaborative forecasting, planning, and replenishment standards. The GS1 organization oversees global standards for identification of goods and locations for electronic commerce.)

Retailers, consumer goods manufacturers, and motor carriers have been testing the new Empty Miles Service using real shipment data, and they say it’s ready to roll. VICS members can sign up for $1,600 annually; non-members pay $1,850. Pricing the service per year rather than by shipment or by mile will encourage more companies to use it, the organizers say. The service is available in both the United States and Canada.

GS1 has developed a calculator that measures the program’s financial benefits as well as the reduction in carbon dioxide emissions that will result from eliminating empty hauls. For more information, go to http://www.emptymiles.org.

Keeping Logistics Costs in Check

(Jorina Fontelera — Thomas Net)

Logistics costs have skyrocketed over the last few years as fuel prices increased and the United States economy spiraled downward. A study by the Council of Supply Chain Professionals (CSCMP) found that logistics costs in the U.S. alone rose by $91 billion in 2007, an increase of 7 percent over the previous year. According to the CSCMP’s 19th annual State of Logistics Report, logistics costs accounted for more than 10 percent of the country’s gross domestic product.

Higher interest rates, the deflating dollar and increased customs and warehousing costs in addition to fuel prices have contributed to the high costs of logistics. In 2007, U.S. businesses spent more than $1.4 trillion on transportation, storage and distribution of goods, according to CSCMP estimates.

“Clearly, there is a cause for concern,” says a new white paper from LTL trucking company Purolator USA Inc. “[B]usinesses cannot exist without logistics, but at the current rate, businesses can’t really afford to exist with them either.”

To combat the rising costs of logistics, companies should reassess each aspect of their transportation and logistics strategy. Here are six factors to consider.

Monday, March 9, 2009

BC Ports Workers, Employers Ratify Collective Agreement

(Greg Joyce — Globe & Mail)

Negotiations were long and hard but there is now labour peace that will keep goods flowing at British Columbia ports.

The B.C. Maritime Employers Association and the International Longshore and Warehouse Union ratified a collective agreement that averted a costly strike threat.

“From our perspective clearly we had a majority of employers in favour of ratifying the agreement,” Greg Vurdela, spokesman for the employers association, said Saturday.

He didn't release voting figures and no one from the union was immediately available to comment.

“(Economic) figures released earlier indicate that for every day of a work stoppage in the ports of B.C. it is a cost of $124-million to the Canadian economy,” said Mr. Vurdela.

While the dispute involved only 450 workers, there were fears that as many as 5,000 other workers would walk off the job in support.

That could have crippled ports along Canada's Pacific Coast, and had already prompted as much as a fifth of shipping traffic to be diverted through the U.S. Read more here.

Friday, March 6, 2009

Minister Day Announces Crucial Step Forward on Canada-EU Comprehensive Economic Agreement

(Minister of International Trade)

The Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, today announced that Canada and the European Union have agreed on the areas to be negotiated in a possible comprehensive economic agreement, which are outlined in a joint report. These areas include trade in goods and services, as well as areas such as investment, technical barriers to trade and regulatory cooperation.

“I am pleased with the tremendous progress we have made with the EU,” said Minister Day.

“This agreement puts us in a position to launch comprehensive negotiations as early as possible. The EU is our second-largest trading partner, and the Canada-EU relationship holds great potential. During times of economic uncertainty, it is more important than ever for Canadians to seek out new trade and investment opportunities abroad.”

Minister Day also stated that the Government of Canada will continue to work closely with all provinces and territories, and is pleased to have found a way to directly involve them in the negotiations. Minister Day thanked the members of the Council of the Federation for their recent declaration of support, and said that this effort is also strongly supported by the Canadian business community.For the full text of the joint report, please visit the international trade website.

Cargo Sealing Guidelines for PIP Members


This document provides guidelines for Partners in Protection (PIP) members on the use of high-security mechanical seals on containers and trailers for imported, exported and in-transit cargo. This document should be used in conjunction with the Security Profile as it applies to the applicable industry sector, shipment or conveyance.

• Scope • Background • Terms and Definitions • Seal Authentication • Supply Chain and Business Partners • PIP Member Responsibilities • LTL, LCL and P & D • Seal Application and Control • Failure to Meet/Maintain PIP Seal Requirements

Thursday, March 5, 2009

Canadian Trade Tumbles

(Export Development Canada – Peter G. Hall)

For world GDP, the fourth quarter of 2008 was ugly. Canada was no exception, as our economy fell into recession, shrinking by an annualized 3.4% in the quarter. But Canada suffered a lot less than most other large economies – strange, given our greater dependence on international trade. Has our resilient domestic economy helped us to sidestep the worst of the global gloom?

Far from it. Domestic demand shrunk by an annualized 5.1% in the quarter, while net trade flows actually boosted growth – substantially. How? Exports fell, but at the same time, imports were down by even more. Absent the effect of lower imports, Canada’s GDP would have contracted by about 5.8% in the final three months of 2008, much closer to the US and pan-European declines.

Many may be assuaged by the arithmetic magic, but the overall story is not good. While shrinking imports might shore up the bottom line temporarily, they speak volumes about the economy’s ills. Consumers import heavily, and their spending was down sharply in the quarter. At the same time, business spending on equipment – most of which is imported – plunged. And globalisation of our production has in 20 years ramped up the import content of exports, so lower imports are actually highlighting the pain that exporters are currently feeling. And don’t forget, imports create jobs too. Read more here.

CTA Tells Feds to Avoid Duplication with Transportation Security Programs

(Canadian Transportation & Logistics)

The Canadian Trucking Alliance is pushing for the federal government to avoid “further duplication and overlap” as Canada considers adding further transportation security measures to an already long list.

CTA officials pleaded their case in an appearance before the House of Commons Standing Committee on Transport, Infrastructure and Communities, as stakeholders were called to present views on Bill C-9, An Act to Amend the Transportation of Dangerous Goods Act, 1992.

The bill has been tabled in so that several technical amendments can be made to the current Act, but also to serve as a launching point for regulations governing the security of dangerous goods during transport. Of particular interest to CTA are provisions in the draft bill dealing with background security checks for drivers, and requirements for security plans, driver training, and route tracking of dangerous goods.

In its presentation, CTA noted that carriers and drivers are already subject to security requirements under programs such as Partners in Protection, the Customs-Trade Partnership Against Terrorism, and the Free and Secure Trade Program. Port security requirements impacting motor carriers are also in place in both Canada and the US, and both governments are rolling out measures to deal with the land transportation movement of cargo destined for a passenger aircraft. Read more here.

Food Safety Reform Bill Includes New Fees, Importer Requirements

(World Trade Interactive)

New legislation introduced in the Senate March 3 would overhaul federal efforts to ensure the safety of imported and domestic food. A joint press release from the bill’s Republican and Democratic sponsors states that the FDA Food Safety Modernization Act responds to recent outbreaks of food-borne illness and nationwide recalls of contaminated food from both foreign and domestic sources. The bill includes numerous provisions including the requirement that importers to verify the safety of foreign suppliers and imported food. Read more here.

New Canadian Requirements for Wood Packaging Material from China


Customs Notice CN09-002: New Canadian requirements for wood packaging material from China

1. The purpose of this customs notice is to inform importers about a change to the Canadian Food Inspection Agency’s (CFIA) wood packaging policy. Starting September 1, 2009, phytosanitary certificates from China for wood packaging material will no longer be accepted in Canada due to high rates of non-compliance from China. A valid International Plant Protection Convention (IPPC) mark will be the only accepted treatment certification method.

2. Beginning June 1, 2009, importers will be granted a three-month grace period whereby wood packaging material accompanied by a Chinese phytosanitary certificate in lieu of an IPPC mark will be allowed to enter Canada, subject to a verification of the certificate’s authenticity by the CFIA and China’s General Administration of Quality Supervision, Inspection and Quarantine.

3. The CFIA has advised China’s General Administration of Quality Supervision, Inspection and Quarantine of the phased-in approach that will be used to implement this policy change:

a. Phase I: The CFIA is now notifying Canadian importers that as of September 1, 2009, a valid IPPC mark is the only accepted treatment certification method for wood packaging material from China.

b. Phase II: Starting June 1 and until September 1, 2009, phytosanitary certificates that are presented in lieu of valid IPPC marks will be verified.

c. Phase III: Starting September 1, 2009, the new policy change will be fully enforced. The Canada Border Services Agency will refuse the entry of any wood packaging material certified with a Chinese phytosanitary certificate in lieu of a valid IPPC mark.

4. For examples of valid IPPC marks, please consult the IPPC’s Web site at http://www.ippc.int.

Wednesday, March 4, 2009

Border Rules Could Gum up Flow of Trade

(Barrie McKenna — Globe & Mail)

The fuss over the Buy American provision in the monster U.S. stimulus package has faded a bit, but not Canadian fears about protectionism.

Just ask David Bradley, chief executive officer of the Canadian Trucking Alliance. The chief lobbyist for Canada’s trucking industry is always on the lookout for new rules and legislation that could gum up the flow of trade across the Canada-U.S. border.

And these days, he doesn’t have to look very far.

His latest headache is the innocuously named Our Nation’s Trade Infrastructure, Mobility and Efficiency Act of 2009 – ON TIME for short.

The bill, co-sponsored by California Republican Ken Calvert and Illinois Democrat Jesse Jackson Jr., would slap a levy on every shipment in – and out – of the United States to help pay for “transportation trade corridors” – roads, ports and the like. The fee would be set at 0.075 per cent of the market value of all traded goods, up to a maximum of $500 (U.S.) a shipment.

The bill would raise as much as $5-billion a year for infrastructure projects.

Based on Canada’s historic share of two-way trade, Canadian importers and exporters would have to pay roughly 20 per cent of those fees. (In 2008, Canada accounted for 18 per cent of U.S. imports and 20 per cent of U.S. exports).

It’s too early to tell whether the legislation has momentum. It’s been sent to the ways and means and foreign affairs committees in the U.S. House of Representatives for further study. Many pieces of legislation die in committee. Read more here.

Canada Feeling Backlash from EU Trade Deal with CARICOM

(Embassy – Lee Berthiaume)

Canada’s chances of securing a free trade agreement with the Caribbean Community may have been inadvertently damaged by fallout over a similar deal the European Union signed with the 15-nation bloc last year.

Last month, Peter Kent, Canada’s minister of state for the Americas, toured Guyana, Suriname and Trinidad and Tobago, the latter of which will host April’s Summit of the Americas. Mr. Kent met senior officials from all three countries as well as Organization of American States Secretary-General José Miguel Insulza and the secretary-general of CARICOM, Edwin Carrington.

In a teleconference call from the capital of Trinidad and Tobago on February 18, the minister said he impressed upon all those he met “that the time is right to engage in, at least before the summit, a preliminary round of negotiations on the free trade agreement.”

Prime Minister Stephen Harper announced the launch of negotiations in July 2007 during a trip to the region, but they have since stalled, with no formal round of talks actually held. The EU, meanwhile, managed to secure what an Economic Partnership Agreement last year with the CARICOM nations and the Dominican Republic.

That EPA, however, caused a split within CARICOM. Large portions of the private sector felt the Caribbean countries gave away more than they gained, while even some government officials in various member states questioned the deal. Read more here.

ITC’s New HTS Online Reference Tool


The U.S. International Trade Commission (ITC) today released its new HTS Online Reference Tool, a comprehensive website for users of the Harmonized Tariff Schedule of the United States (HTS).

The ITC is mandated by Congress to maintain the HTS, which provides the tariff rates and statistical categories for all merchandise imported into the United States. The tariff schedule is a vital tool for importers, customs brokers, carriers, the government, and the public.

The new HTS Online Reference Tool provides a web-based source for HTS-related information and offers current, accurate, and user-friendly electronic access to the 3,000-page HTS.

The HTS Online Reference Tool features direct links to:

• classification rulings by Customs and Border Protection (CBP) users will be able to jump directly from a specific HTS item to the Customs Ruling Online Search System (CROSS) for determinations on product classification for that HTS item, and users will be able to access the most current ruling for any product;

• HTS Chapter 99, enabling users to move from an HTS item in chapters 1-97 to the temporary, seasonal, or special situation tariff that applies for that item as listed in chapter 99; and

• footnotes, allowing users to move from the footnote number in the text directly to the footnote itself. In addition, users can now search the HTS by word, word combinations, or HTS number, and they can use common terminology to do so. The HTS Online Reference Tool includes an expanding thesaurus that will help users search the HTS and locate an item even if they don’t know the precise classification language used in the document. For example, users will be able to search the word “cars,” which does not exist in the HTS, and be directed automatically to the HTS provisions covering “motor vehicles.” The thesaurus is in its early stages and will be enriched continually to reflect common terminology if a user searches on a term that is not currently included, that term will be added to the thesaurus. Over time, this regular updating will result in a rich, complex search engine that will make the HTS Online Reference Tool even more user-friendly.

“We’re excited to bring this comprehensive HTS tool to the trade community and the public,” said ITC Chairman Shara L. Aranoff. “The HTS Online Reference tool has been well-received by our colleagues at Customs as well as customs brokers and other users who have seen it demonstrated. It meets a long-standing need for easier, electronic access to the HTS, and we look forward to user review and input to keep it as useful and up-to-date as possible.”

Built by the ITC, the system is still evolving. Future enhancements include electronic access to the complete legal text and notes of the HTS and the ability for the ITC and CBP to convert the HTS to formats necessary for computerized operations at the borders and elsewhere.

The ITC’s HTS Online Reference Tool can be found at http://hts.usitc.gov.

Tuesday, March 3, 2009

USTR Lays Out Obama’s Agenda for `Free and Fair’ Trade

(EasyBourse – Tom Barkley, Dow Jones Newswires)

The U.S. Trade Representative’s office said Monday that President Barack Obama would pursue an agenda of “free and fair trade,” with plans to consider changes to pending free trade agreements, the North American Free Trade Agreement and the Doha trade talks.

In its first annual trade policy agenda report to Congress, USTR signaled a shift from the Bush administration’s primary focus on expanding free trade agreements, giving greater emphasis to protecting workers rights and the environment.

“If we work together, free and fair trade with a proper regard for social and environmental goals and appropriate political accountability will be a powerful contributor to the national and global well being,” the report said.

The administration plans “extensive outreach and discourse with the public” to determine whether three holdover trade pacts – with Colombia, Korea and Panama – are in the best interest of the U.S. and its trading partners. While planning to move on Panama “relatively quickly,” USTR plans to set up benchmarks for progress on the other two.

The administration also reaffirmed its intention to make good on Obama’s campaign pledge to push Canada and Mexico to agree to stronger worker and environmental protections in NAFTA “without having an adverse effect on trade.” Read more here.

Monday, March 2, 2009

Report Says Canada’s Border Too Porous, Cites Nuclear Exports

(The Canadian Press)

Canada’s border agency allows some strategic nuclear and military equipment to leave the country without checking whether rogue countries or terrorists are the buyers, a new report suggests. The finding comes shortly after Prime Minister Stephen Harper assured U.S. President Barack Obama that Canada takes border security seriously.

The internal evaluation found that exporters of strategic equipment that’s subject to strict controls too often file their own paperwork after hours at border crossings – without inspections by the Canada Border Services Agency.

“Exporters continue to have a choice of submitting their export declaration in paper format,” says the document, dated November 2008. “Paper . . . forms are reported at a CBSA-designated export office where exporters use a self-serve stamp machine and reports are left unsecured after-hours at certain offices . ...” “If a declaration was submitted outside the CBSA’s hours of operation, there will have been no verification.”

Since the terrorist attacks of September 11, 2001, trading nations such as Canada have taken more responsibility for vetting their exports to identify potentially dangerous goods, rather than leaving the problem to importing countries.

Most exporters in Canada file their declarations electronically ahead of shipping, allowing the border agency to better manage inspections and to red-flag suspicious cargo. But about 15% of all exports from Canada are reported on a paper form, which hobbles the inspection process. The United States and the European Union, on the other hand, require all export declarations to be made electronically in advance of shipping.

“The CBSA has yet to develop a plan for implementing mandatory pre-departure electronic reporting of exports,” says the document. The report calls for an end to antiquated paper forms, just as paper forms have been eliminated for import declarations in Canada since 2004. Read more here.

Canada’s GDP Drops 3.4% in Q4 from Last Year

(The Canadian Press)

Canada’s economy shrank by 3.4% cent in the fourth quarter from the same period a year before. That compares with a 6.2% decline in the U.S. economy during the same period, a 5.9% drop in the European Union and a 12.7% plunge in Japan.

Canada’s gross domestic product declined 0.8% from the previous quarter, weakening progressively each month for the sharpest quarterly decline since 1991. Statistics Canada reports declines in exports, capital investment and personal expenditures all contributed to the economic contraction.

The agency says the GDP declined one per cent in December from the month previous. GDP growth for the year was positive at 0.5%, a sharp deceleration from 2.7% in 2007.

The volume of imports fell faster than exports but both registered their largest quarterly decline since 1982. Prices of imports climbed, notably because the Canadian dollar depreciated 14% in the quarter relative to its U.S. counterpart, its largest quarterly depreciation since Canada returned to a floating exchange rate in 1970.

Declines in the production of goods, down 2.4% were widespread as domestic and foreign demand weakened. Except for agriculture, all other goods-producing sectors receded. At -4.3%, manufacturing led the downturn, its sixth straight quarterly decline.

Exports of goods and services were down 4.7%, their sixth consecutive quarterly decline and a first in Canada since quarterly estimates began over 60 years ago. Automotive products were down 19%, accounting for nearly half of the quarterly decline in total exports. Industrial goods and materials also decreased significantly in the fourth quarter.

Imports dropped 6.4% in the fourth quarter. Declines were registered for both goods and services imports, as domestic demand faltered and prices for imported goods and services rose.

Imports of automotive products declined 16% while other consumer goods were down nine per cent, reflecting a downturn in consumer spending.

After decelerating since the start of the year, personal spending fell for the first time since the fourth quarter of 1995. Both goods and services contributed to the 0.8% decline.

Read more here. Summary statistics and a link to the data files are on the Statistics Canada website at Statistics Canada website.

Sunday, March 1, 2009

Harper in New York: Interview with Fox Business

(Video: Fox Business • Story: Canadian Press)

Prime Minister Stephen Harper was in the Big Apple on Monday [February 23], capitalizing on the goodwill from last week's presidential visit to extol Canada's virtues to American business representatives.

Harper began his day with an interview with Fox News, where he reminded an American audience of the value of the relationship between the two countries - even if one of them isn't prone to blowing its own horn very much. Read more here.