(Foreign Affairs & International Trade Canada)
Secretary of State Guergis signed the Canada-Peru Free Trade Agreement during a ceremony in Lima, Peru, on May 29, 2008. The Canada-Peru FTA will benefit exporters, service providers and investors in several sectors, including mining, manufacturing and agriculture. Complete press release here.
Friday, May 30, 2008
Reviewing Gov’t Policies May Spur International Trade by SMEs, CBOC Report Says
(Canadian Economic Press – Sean McKibbon)
Canadian small and medium size enterprises (SMEs) are not very active in international trade but policy makers can help to change this, says the author of a new report commissioned by the Conference Board of Canada.
“Obviously it’s beyond capability of a lot of SMEs to be engaged in international markets,” says Kathleen Macmillan, the author of the report entitled ‘Canadian SMEs and Globalization: Success Factors and Challenges.’
“But if there are small companies with good ideas and the potential to make it we should look at what kind of obstacles there are holding them back and are they policy accessible? Is there some kind of low hanging fruit there that we can address that would help SMEs?”
Macmillan cites a 2004 survey by the Canadian Federation of Independent business showing that of the 9,577 small business owners surveyed, 51% engaged in some form of trade. Thirty-six percent of those did so through importing or exporting, and 15% by participating in a global supply chain.
Macmillan said that, in her review of research relating to small firms engaged in international trade, she noticed a few emerging trends. She said companies that are “innovation intensive,” tend to become more internationally focused. She also said that newer firms, those younger than three years, were just as likely to find success in foreign markets as more established firms. She added that small firms tend to have less capacity to push back against regulations and trade barriers that hurt their competitiveness.
As a result, Macmillan said governments should try to reduce trade barriers, review their own policies that tend to favor more established firms and attempt to foster innovation through industrial clusters, facilitating networking and information sharing.
“The most surprising thing I found was that small firms that have just begun to exist show similar levels of internationalization as more established firm. So that old notion that you have to establish yourself first in your home country is wrong. You don’t have to graduate to international markets. There are many firms that are ‘born global,’“ she said. The report can be downloaded from the Conference Board of Canada website.
Canadian small and medium size enterprises (SMEs) are not very active in international trade but policy makers can help to change this, says the author of a new report commissioned by the Conference Board of Canada.
“Obviously it’s beyond capability of a lot of SMEs to be engaged in international markets,” says Kathleen Macmillan, the author of the report entitled ‘Canadian SMEs and Globalization: Success Factors and Challenges.’
“But if there are small companies with good ideas and the potential to make it we should look at what kind of obstacles there are holding them back and are they policy accessible? Is there some kind of low hanging fruit there that we can address that would help SMEs?”
Macmillan cites a 2004 survey by the Canadian Federation of Independent business showing that of the 9,577 small business owners surveyed, 51% engaged in some form of trade. Thirty-six percent of those did so through importing or exporting, and 15% by participating in a global supply chain.
Macmillan said that, in her review of research relating to small firms engaged in international trade, she noticed a few emerging trends. She said companies that are “innovation intensive,” tend to become more internationally focused. She also said that newer firms, those younger than three years, were just as likely to find success in foreign markets as more established firms. She added that small firms tend to have less capacity to push back against regulations and trade barriers that hurt their competitiveness.
As a result, Macmillan said governments should try to reduce trade barriers, review their own policies that tend to favor more established firms and attempt to foster innovation through industrial clusters, facilitating networking and information sharing.
“The most surprising thing I found was that small firms that have just begun to exist show similar levels of internationalization as more established firm. So that old notion that you have to establish yourself first in your home country is wrong. You don’t have to graduate to international markets. There are many firms that are ‘born global,’“ she said. The report can be downloaded from the Conference Board of Canada website.
NAFTA Superhighway: The Debate Continues…
(The Ottawa Citizen — Don Butler • Video: CNN)
Are North American governments secretly conspiring to build a “NAFTA superhighway,” four football fields wide, from Mexico to Canada to bypass regulatory controls and whisk goods swiftly to market?
If you believe some right-wing websites in the United States, it’s all but a fait accompli. They insist a gargantuan project is in the works that will carve a 365-metre-wide swath through the continent’s heart, with 10traffic lanes, rail lines for freight and passenger trains, fibre-optic cable lines and pipelines carrying oil, gas and water.
Conservative commentators Pat Buchanan and Phyllis Schlafly and websites such as WorldNetDaily link the supposed superhighway to the Security and Prosperity Partnership (SPP), a series of agreements being negotiated among the United States, Canada and Mexico. They fear the SPP will lead to a North American union similar to the European Union, with a resulting loss of American sovereignty.
If you’ve never heard of the NAFTA superhighway, it may be because no such plan actually exists. The whole idea, one American official recently told a congressional committee, is an “urban myth.”
But some remain unconvinced, in part because the largely secretive SPP process has created an information void that provides oxygen for conspiracy theorists.
Most SPP work is being done by 19 working groups that meet behind closed doors. The project surfaces publicly only when politicians from the three countries gather for periodic updates, like yesterday’s SPP ministerial meetings in Ottawa.So far, anxiety about the purported NAFTA Superhighway has been confined to the United States. Activists in Canada, by and large, don’t quite know what to make of it, although the Sierra Club has expressed concern that NAFTA super-corridors could be used to pipe Canadian water to American markets. Read the complete article.
DOT Moves to Expedite Projects to Relieve U.S. Border Congestion
(WorldTrade Interactive)
The Department of Transportation has announced a new Transportation Border Congestion Relief Program, which is designed to help states identify and implement innovative solutions to the congestion at U.S. land borders. As part of this program the DOT plans to select at least two surface transportation projects, a minimum of one each on the Canadian and Mexican borders, that can serve as models for alleviating current or forecasted border congestion. Applications for such projects are due by June 30.
The DOT states that it has created the TBCRP because of the significance of border transportation to the U.S. economy. More than 17 million truckloads of freight crossed U.S. borders with Canada and Mexico in 2005, carrying over half of the $711 billion in products the U.S. traded with those two countries. The value of freight shipments among the three NAFTA partners has risen by 170 percent since 1990 and is growing by an average of eight percent annually.
“These huge numbers are putting a serious strain on the transportation network at and near our international land border crossings,” the DOT states, “frustrating individuals, families, and commerce with negative impacts on quality of life, efficiency, and prudent use of resources.”
The TBCRP is designed to address these problems by demonstrating how non-traditional transportation project finance, delivery and operation mechanisms can be used to improve land border travel times and facilitate trade and travel without compromising the security of U.S. borders.
The Department of Transportation has announced a new Transportation Border Congestion Relief Program, which is designed to help states identify and implement innovative solutions to the congestion at U.S. land borders. As part of this program the DOT plans to select at least two surface transportation projects, a minimum of one each on the Canadian and Mexican borders, that can serve as models for alleviating current or forecasted border congestion. Applications for such projects are due by June 30.
The DOT states that it has created the TBCRP because of the significance of border transportation to the U.S. economy. More than 17 million truckloads of freight crossed U.S. borders with Canada and Mexico in 2005, carrying over half of the $711 billion in products the U.S. traded with those two countries. The value of freight shipments among the three NAFTA partners has risen by 170 percent since 1990 and is growing by an average of eight percent annually.
“These huge numbers are putting a serious strain on the transportation network at and near our international land border crossings,” the DOT states, “frustrating individuals, families, and commerce with negative impacts on quality of life, efficiency, and prudent use of resources.”
The TBCRP is designed to address these problems by demonstrating how non-traditional transportation project finance, delivery and operation mechanisms can be used to improve land border travel times and facilitate trade and travel without compromising the security of U.S. borders.
Oil Prices: The Complete Q&A
(Daily Telegraph)
At around $130 a barrel, the price has roughly doubled in the past 12 months, making life much tougher for consumers across the world. Oil and gas companies such as BP and Royal Dutch Shell have faced fierce criticism as they rack up profits.
The International Energy Agency has warned that oil is a commodity “under stress” and expects oil prices to continue to climb because there is a fundamental shortage of supply. With demand from India and China expected to rise in coming years, the IEA expects a supply “crunch” to arrive by 2015.
Harry Tchilinguirian, a senior oil analyst at investment bank BNP Paribas in London, explains how oil is traded, who buys oil, why the oil price is spiking and how high oil may go. While Paul Mortimer Lee, global head of market economics at BNP, and strategist Dominic Bryant explains why the oil price matters to us all.
• Who are the winners and losers?
• Who consumes all the oil?
• Why is the oil price spiking now?
• Where is the oil price going?
• Is there really a shortage of supply?
• What are oil futures and how are they traded?
• Alan Duncan: Asking Opec to solve the oil crisis misses the burning point
• Liam Halligan: $100-plus oil will be here for years as China motors ahead
• Louise Armitstead: Slick investors strike riches as they cash in on peak oil
• Mark Kleinman: Credit crisis was crude compared with this oil price surge
• Dan Roberts: Cheap oil is history. But why?
At around $130 a barrel, the price has roughly doubled in the past 12 months, making life much tougher for consumers across the world. Oil and gas companies such as BP and Royal Dutch Shell have faced fierce criticism as they rack up profits.
The International Energy Agency has warned that oil is a commodity “under stress” and expects oil prices to continue to climb because there is a fundamental shortage of supply. With demand from India and China expected to rise in coming years, the IEA expects a supply “crunch” to arrive by 2015.
Harry Tchilinguirian, a senior oil analyst at investment bank BNP Paribas in London, explains how oil is traded, who buys oil, why the oil price is spiking and how high oil may go. While Paul Mortimer Lee, global head of market economics at BNP, and strategist Dominic Bryant explains why the oil price matters to us all.
• Who are the winners and losers?
• Who consumes all the oil?
• Why is the oil price spiking now?
• Where is the oil price going?
• Is there really a shortage of supply?
• What are oil futures and how are they traded?
• Alan Duncan: Asking Opec to solve the oil crisis misses the burning point
• Liam Halligan: $100-plus oil will be here for years as China motors ahead
• Louise Armitstead: Slick investors strike riches as they cash in on peak oil
• Mark Kleinman: Credit crisis was crude compared with this oil price surge
• Dan Roberts: Cheap oil is history. But why?
Tax-Free UAE on Course to Introduce VAT in Gulf
(Agence France-Presse)
The United Arab Emirates is on course to shed its reputation as a tax haven and become the first oil-rich Gulf Arab state to introduce value added tax, marking a step towards diversifying public revenues.
As early as next year, shoppers in the sumptuous malls of Dubai — the city-state whose oil resources are dwindling — could find a VAT [ed. Similar to our GST.] of up to five percent slapped on their receipts.
Dubai Customs is in charge of developing the VAT infrastructure which once imposed will aim to gradually replace customs duties that should be slashed due to commitments made in free trade agreements.
This infrastructure will be “in place by the final quarter of 2008,” Dubai Customs executive director of business support, Abdul Rahman al-Saleh, said this month, adding it will be applied across the seven emirates that make up the UAE federation once the decision is taken.
The UAE has established a reputation of being largely a tax-free country where personal income tax does not exist, while corporate taxation applies only to foreign oil firms and banks, and municipal tax is imposed on house rentals.
Other members of the oil-rich Gulf Cooperation Council (GCC) also do not impose taxes on personal income, while taxation on firms varies from one country to another. None has so far introduced VAT or sales tax.
“VAT is important to diversify the revenue base, especially for places that are less reliant on oil revenues, like Dubai and Bahrain. It is also good for oil exporters to reduce their reliance on oil,” said Monica Malik, senior economist at the Dubai-based EFG-Hermes investment bank.
“It will still be a very small portion of revenues... Three to five percent is still low in international terms,” Malik said.
In an apparent attempt to ease fears of rising taxation among expatriate workers who represent the bulk of the UAE's manpower, Emirati authorities have implied that VAT will not exceed the five percent currently levied through customs duties on imported goods.
However, VAT will go beyond imported goods to include services.
The United Arab Emirates is on course to shed its reputation as a tax haven and become the first oil-rich Gulf Arab state to introduce value added tax, marking a step towards diversifying public revenues.
As early as next year, shoppers in the sumptuous malls of Dubai — the city-state whose oil resources are dwindling — could find a VAT [ed. Similar to our GST.] of up to five percent slapped on their receipts.
Dubai Customs is in charge of developing the VAT infrastructure which once imposed will aim to gradually replace customs duties that should be slashed due to commitments made in free trade agreements.
This infrastructure will be “in place by the final quarter of 2008,” Dubai Customs executive director of business support, Abdul Rahman al-Saleh, said this month, adding it will be applied across the seven emirates that make up the UAE federation once the decision is taken.
The UAE has established a reputation of being largely a tax-free country where personal income tax does not exist, while corporate taxation applies only to foreign oil firms and banks, and municipal tax is imposed on house rentals.
Other members of the oil-rich Gulf Cooperation Council (GCC) also do not impose taxes on personal income, while taxation on firms varies from one country to another. None has so far introduced VAT or sales tax.
“VAT is important to diversify the revenue base, especially for places that are less reliant on oil revenues, like Dubai and Bahrain. It is also good for oil exporters to reduce their reliance on oil,” said Monica Malik, senior economist at the Dubai-based EFG-Hermes investment bank.
“It will still be a very small portion of revenues... Three to five percent is still low in international terms,” Malik said.
In an apparent attempt to ease fears of rising taxation among expatriate workers who represent the bulk of the UAE's manpower, Emirati authorities have implied that VAT will not exceed the five percent currently levied through customs duties on imported goods.
However, VAT will go beyond imported goods to include services.
Thursday, May 29, 2008
Free Trade with Panama (Part 1)
U.S. Ambassador to Panama William Eaton projects benefits for both countries if and when Congress ratifies the free trade agreement signed last year.
The Canadian government has agreed to participate in exploratory discussions on the possibility of free trade agreement (FTA) negotiations with Panama. The initial meeting took place in the first week of May 2008 in Ottawa. Depending on the outcome of the exploratory talks, the government would embark on comprehensive consultations with stakeholders across Canada before any decision is taken on the launch of FTA negotiations. More information at the Foreign Affairs & International Trade website.
The C-TPAT Flaws: Truly Serious, or Just Overblown?
(HS Today — Anthony L. Kimery)
And can they exacerbate the problem of misdeclared cargo
The media frenzy over the new Government Accountability Office (GAO) audit which found gaps in Customs and Border Protection’s (CPB) Customs-Trade Partnership Against Terrorism (C-TPAT) program which terrorists theoretically could exploit to smuggle weapons of mass destruction in cargo containers came as no surprise to anyone who has been following this program.
In 2005 - and earlier, in 2003 - GAO had already identified similar problems with C-TPAT.
The flaws in C-TPAT identified by GAO also, authorities say, can have a direct bearing on the on-going problem of misdeclared and mislabeled cargo, a serious security issue HSToday first disclosed in its January 2007 cover story investigation, “Dangerous Cargo.”
Under the C-TPAT initiative, importers, port authorities and air, sea and land Imagecarriers are granted reduced scrutiny of their cargo in exchange for submitting a security plan that meets CPB’s minimum security standards and allows CPB officials to verify that these security measures are actually in place and are being adhered to.
The whole purpose of C-TPAT is to improve the security of the international supply chain. But it is a cooperative program between CBP and members of the international trade community in which private companies agree to improve the security of their supply chains in return for a reduced likelihood that their containers will be inspected. C-TPAT membership is open to US- and foreign-based companies whose goods are shipped to the United States via air, rail, ocean and truck carriers.
A C-TPAT Tier III certification, for example – which is given to a limited number of companies – is supposed to mean businesses have comprehensive programs in place to secure their facilities and supply chain from terrorists, smuggling, and narcotics.
CBP granted Tier III status to 17 companies in 2007. There are approximately 6,000 importing companies in the US. As of January, CBP had performed more than 6,900 total C-TPAT validations since 2003.
“In order to maintain our Tier III benefits, we must continue to maintain and improve our supply chain security practices,” explained Kathleen Neal, director of trade compliance for A. O. Smith, which earlier this month received Tier III certification.
As GAO explained in its 2005 report, “Homeland Security: Key Cargo Security Programs Can Be Improved,” “in return for committing to making improvements to the security of their shipments, C-TPAT members receive a range of benefits that may change the risk characterization of their shipments, thereby reducing the probability of extensive inspection.”
But “before providing benefits,” GAO explained, “CBP reviews the self-reported information contained in applicants’ membership agreements and security profiles. Also, CBP assesses the compliance history of importers before granting them benefits.”
“However,” GAO determined, “CBP grants benefits before members undergo the validation process, which is CBP’s method to verify that their security measures are reliable, accurate, and effective.”
From the beginning, this approach has been a bone of contention for security experts.
Furthermore, GAO reported, “although CBP’s goal was to validate members within three years, to date it has validated 11 percent of them. Further, the validation process is not rigorous, as the objectives, scope and methodology of validations are jointly agreed upon with the member, and CBP has no written guidelines to indicate what scope of effort is adequate for the validation. Also, although CBP has recently moved to a risk-based approach to selecting members for validation, it has not determined the number and types of validations that are needed to manage security risks or the CBP staff required to complete them.
“Further,” GAO found, “CBP has not developed a comprehensive set of performance measures for the program, and key program decisions are not always documented and programmatic information is not updated regularly or accurately.”
GAO identified specific measures CBP could take to improve record-keeping and validation of the security practices of US importers.
CBP generally concurred with GAO’s findings and recommendations and outlined the corrective actions it was taking to respond to the deficiencies GAO identified. Moreover, a port security bill passed by Congress also was supposed to strengthen the C-TPAT program, although authorities expressed reservations at the time about whether the efforts would effectively address the problems GAO outlined. Read the complete article.
And can they exacerbate the problem of misdeclared cargo
The media frenzy over the new Government Accountability Office (GAO) audit which found gaps in Customs and Border Protection’s (CPB) Customs-Trade Partnership Against Terrorism (C-TPAT) program which terrorists theoretically could exploit to smuggle weapons of mass destruction in cargo containers came as no surprise to anyone who has been following this program.
In 2005 - and earlier, in 2003 - GAO had already identified similar problems with C-TPAT.
The flaws in C-TPAT identified by GAO also, authorities say, can have a direct bearing on the on-going problem of misdeclared and mislabeled cargo, a serious security issue HSToday first disclosed in its January 2007 cover story investigation, “Dangerous Cargo.”
Under the C-TPAT initiative, importers, port authorities and air, sea and land Imagecarriers are granted reduced scrutiny of their cargo in exchange for submitting a security plan that meets CPB’s minimum security standards and allows CPB officials to verify that these security measures are actually in place and are being adhered to.
The whole purpose of C-TPAT is to improve the security of the international supply chain. But it is a cooperative program between CBP and members of the international trade community in which private companies agree to improve the security of their supply chains in return for a reduced likelihood that their containers will be inspected. C-TPAT membership is open to US- and foreign-based companies whose goods are shipped to the United States via air, rail, ocean and truck carriers.
A C-TPAT Tier III certification, for example – which is given to a limited number of companies – is supposed to mean businesses have comprehensive programs in place to secure their facilities and supply chain from terrorists, smuggling, and narcotics.
CBP granted Tier III status to 17 companies in 2007. There are approximately 6,000 importing companies in the US. As of January, CBP had performed more than 6,900 total C-TPAT validations since 2003.
“In order to maintain our Tier III benefits, we must continue to maintain and improve our supply chain security practices,” explained Kathleen Neal, director of trade compliance for A. O. Smith, which earlier this month received Tier III certification.
As GAO explained in its 2005 report, “Homeland Security: Key Cargo Security Programs Can Be Improved,” “in return for committing to making improvements to the security of their shipments, C-TPAT members receive a range of benefits that may change the risk characterization of their shipments, thereby reducing the probability of extensive inspection.”
But “before providing benefits,” GAO explained, “CBP reviews the self-reported information contained in applicants’ membership agreements and security profiles. Also, CBP assesses the compliance history of importers before granting them benefits.”
“However,” GAO determined, “CBP grants benefits before members undergo the validation process, which is CBP’s method to verify that their security measures are reliable, accurate, and effective.”
From the beginning, this approach has been a bone of contention for security experts.
Furthermore, GAO reported, “although CBP’s goal was to validate members within three years, to date it has validated 11 percent of them. Further, the validation process is not rigorous, as the objectives, scope and methodology of validations are jointly agreed upon with the member, and CBP has no written guidelines to indicate what scope of effort is adequate for the validation. Also, although CBP has recently moved to a risk-based approach to selecting members for validation, it has not determined the number and types of validations that are needed to manage security risks or the CBP staff required to complete them.
“Further,” GAO found, “CBP has not developed a comprehensive set of performance measures for the program, and key program decisions are not always documented and programmatic information is not updated regularly or accurately.”
GAO identified specific measures CBP could take to improve record-keeping and validation of the security practices of US importers.
CBP generally concurred with GAO’s findings and recommendations and outlined the corrective actions it was taking to respond to the deficiencies GAO identified. Moreover, a port security bill passed by Congress also was supposed to strengthen the C-TPAT program, although authorities expressed reservations at the time about whether the efforts would effectively address the problems GAO outlined. Read the complete article.
Durable Goods Excluding Transport Rises Much More than Expected
(Bloomberg News — Bob Willis)
Orders for U.S. durable goods excluding cars and planes unexpectedly rose in April, signaling that international customers are helping factories ride out the economic slowdown.
Excluding transportation orders that tend to be volatile, bookings for goods meant to last several years rose 2.5 percent, the most since July, the Commerce Department said today in Washington. Total orders fell a less-than-forecast 0.5 percent.
Exports are keeping the economy from shrinking as American manufacturers grapple with the slowest economic growth in seven years and oil costs that have doubled in the past 12 months. Dow Chemical Co., the largest U.S. chemical maker and a producer of plastics and fluids for the global automotive industry, said today that surging expenses mean it will raise prices by as much as 20 percent.
Economists forecast orders would decline 1.5 percent, according to the median of 72 projections in a Bloomberg News survey. Estimates ranged from a drop of 5 percent to a gain of 0.6 percent.
Excluding transportation equipment, orders were projected to drop 0.5 percent, after a previously reported 1.5 percent gain for March, according to a Bloomberg News survey. Forecasts ranged from a decline of 1.5 percent to a gain of 0.8 percent.
A rebound in demand for electrical equipment and appliances, along with gains in machinery and metals, paced the increase. Orders for electrical equipment jumped a record 28 percent after falling 19 percent in March.
Bookings for non-defense capital goods excluding aircraft, a measure of future business investment, climbed 4.2 percent, the most this year. Shipments of those items, a number used in calculating gross domestic product, increased 0.5 percent.
Among the biggest costs to manufacturers, oil rose to more than $135 a barrel last week, the highest ever.
Still, manufacturing has done better than in past downturns. While the Institute for Supply Management's factory index fell to a five-year low of 48.3 in February and moved up to 48.6 in the following two months, it was still well above the 42.1 reading reached in February 2001, a month before the start of the 2001 recession. A figure of 50 is the dividing line between growth and contraction.
Companies that export have continued to grow during the current slowdown in growth. A shrinking trade gap added 0.2 percentage point to first-quarter economic growth, according to Commerce Department figures. Read the full article here.
Orders for U.S. durable goods excluding cars and planes unexpectedly rose in April, signaling that international customers are helping factories ride out the economic slowdown.
Excluding transportation orders that tend to be volatile, bookings for goods meant to last several years rose 2.5 percent, the most since July, the Commerce Department said today in Washington. Total orders fell a less-than-forecast 0.5 percent.
Exports are keeping the economy from shrinking as American manufacturers grapple with the slowest economic growth in seven years and oil costs that have doubled in the past 12 months. Dow Chemical Co., the largest U.S. chemical maker and a producer of plastics and fluids for the global automotive industry, said today that surging expenses mean it will raise prices by as much as 20 percent.
Economists forecast orders would decline 1.5 percent, according to the median of 72 projections in a Bloomberg News survey. Estimates ranged from a drop of 5 percent to a gain of 0.6 percent.
Excluding transportation equipment, orders were projected to drop 0.5 percent, after a previously reported 1.5 percent gain for March, according to a Bloomberg News survey. Forecasts ranged from a decline of 1.5 percent to a gain of 0.8 percent.
A rebound in demand for electrical equipment and appliances, along with gains in machinery and metals, paced the increase. Orders for electrical equipment jumped a record 28 percent after falling 19 percent in March.
Bookings for non-defense capital goods excluding aircraft, a measure of future business investment, climbed 4.2 percent, the most this year. Shipments of those items, a number used in calculating gross domestic product, increased 0.5 percent.
Among the biggest costs to manufacturers, oil rose to more than $135 a barrel last week, the highest ever.
Still, manufacturing has done better than in past downturns. While the Institute for Supply Management's factory index fell to a five-year low of 48.3 in February and moved up to 48.6 in the following two months, it was still well above the 42.1 reading reached in February 2001, a month before the start of the 2001 recession. A figure of 50 is the dividing line between growth and contraction.
Companies that export have continued to grow during the current slowdown in growth. A shrinking trade gap added 0.2 percentage point to first-quarter economic growth, according to Commerce Department figures. Read the full article here.
British Truckers Protest Rising Cost of Fuel; France Demands Fuel Tax Reduction
(AP/Press Association)
Hundreds of trucks rolled into central London on Tuesday to jam a major route into the capital to protest the rising price of fuel.
Around 300 truck drivers honked their horns and parked on a highway on the edge of the city, forcing police to close off a section of road and divert hundreds of motorists during the busy morning rush hour.
Truckers protesting the soaring cost of fuel in Britain — where diesel now costs more than $9 a gallon — called for Prime Minister Gordon Brown’s government to lower fuel taxes for trucking companies.
“It’s getting to a point of being ridiculous. We simply can’t keep pace with the rising costs,” Peter Carroll, who owns a 51-truck hauling firm in Maidstone in southern England, told The Associated Press by telephone as he joined the protest in London.
Truckers say thousands of jobs in their industry are in jeopardy.
In France, the government of President Nicolas Sarkozy is calling for a Europe-wide cut in VAT to reduce fuel prices, a move that he said would help offset high prices at the pump.
“If the barrel continues to rise must we maintain a VAT rate that is proportional to the price in the same conditions?” he asked.
The price of a barrel has risen above 133 dollars.
The decision on lowering the VAT “must be European,” Mr Sarkozy said on French RTL radio, adding that he was “launching the proposal.” He said he was also looking at creating a fund to French people in need, such as fishermen, with the revenue generated by the rising tax on oil prices.
Fishermen have blocked French ports for more than a week to protest at rising fuel prices, which they say risk putting them out of business. Some look to extend the action to a Europe-wide level.
Finance Minister Christine Lagarde said that consumer nations must ask oil producers to do something about the rising prices. She said she had already asked counterparts within the Group of 7 richest nations to “discuss this issue among consumer nations” so it can be presented to producing countries.
“We cannot eternally be in a market mode where the price climbs endlessly to the benefit of producers,” she said.
Port Security: Guarding America’s Front Door
An overview of the issue of U.S. port security and the C-TPAT program via the California State University Long Beach Center for International Trade and Transportation.
High Oil Prices Curb April Air Traffic Growth
(IATA)
High oil prices and economic worries damped demand for international air traffic last month, and cross-border cargo shipment growth was sluggish, the airline industry body IATA said on Thursday.
In its monthly traffic report, the International Air Transport Association said air passenger demand rose just 3% in April on a year-on-year basis, while freight demand growth was 3.7% up on the same month in 2007.
“The impact of skyrocketing oil prices and weaker economies has made its way to traffic growth,” IATA President Giovanni Bisignani said in a statement. “Combine slowing growth with skyrocketing oil prices, and the industry outlook is grim at best,” Bisignani said.
Cross-border air shipments, which IATA measures in freight tonne kilometres, are considered a prime indicator of the health of world trade.
In the first four months of 2008, demand for such cargo shipments was up 3.4% compared with the same period of 2007, a much slower growth rate than in past years. “There has been a step change downwards,” Bisignani said.
IATA represents 240 airlines operating 94% of all international passenger and cargo flights. Domestic flights are excluded from its data. Go here for the IATA report.
High oil prices and economic worries damped demand for international air traffic last month, and cross-border cargo shipment growth was sluggish, the airline industry body IATA said on Thursday.
In its monthly traffic report, the International Air Transport Association said air passenger demand rose just 3% in April on a year-on-year basis, while freight demand growth was 3.7% up on the same month in 2007.
“The impact of skyrocketing oil prices and weaker economies has made its way to traffic growth,” IATA President Giovanni Bisignani said in a statement. “Combine slowing growth with skyrocketing oil prices, and the industry outlook is grim at best,” Bisignani said.
Cross-border air shipments, which IATA measures in freight tonne kilometres, are considered a prime indicator of the health of world trade.
In the first four months of 2008, demand for such cargo shipments was up 3.4% compared with the same period of 2007, a much slower growth rate than in past years. “There has been a step change downwards,” Bisignani said.
IATA represents 240 airlines operating 94% of all international passenger and cargo flights. Domestic flights are excluded from its data. Go here for the IATA report.
FDA Won’t Meet Deadline for Food Safety Registry
(GovExec.com – Anna Edney, CongressDaily)
The Food and Drug Administration will not meet the September deadline that Congress imposed last year to have a registry up and running to help the agency track food contamination and better understand where to focus its limited resources. FDA’s decision to operate the system using its so-called business enterprise system – which is still under construction – has hampered the implementation of the registry, according to a document the agency placed in an online database of all federal rule-making Tuesday.
The document did not explain what the enterprise business system is, and FDA did not respond to inquiries about the system. A search of the agency’s Web site also produced no mention of the system before Tuesday’s announcement. The document states only that FDA believes the system is the most effective and cost-efficient way to implement the registry.
Congress required the food adulteration registry in a comprehensive bill that reauthorized the agency’s user fee programs and gave FDA more authority to oversee the safety of pharmaceuticals, devices and food. Lawmakers allowed FDA one year from the bill’s September passage to jumpstart the registry. But now, FDA expects to implement the portal, dubbed the Reportable Food Registry, around spring 2009 at the earliest. Under the registry, food firms and federal, state and local public health officials would be required to report tainted food incidents to the electronic portal. FDA uses a disconnected reporting system operated through the agency’s district offices around the country.
FDA has talked about using risk-based inspection methods because funding has not kept pace quickly enough for the agency to inspect food facilities at regular intervals.
Lawmakers felt a comprehensive registry would produce data necessary to maximize a risk-based approach, although draft legislation proposed by House Energy and Commerce Committee Democrats would go further by requiring food plant inspections every four years, without wiggle room for risk adjusting. A similar draft measure being crafted by Senate Health, Education, Labor and Pensions Committee Democratic staff would allow for a risk-based approach if funds run low. Full story here.
The Food and Drug Administration will not meet the September deadline that Congress imposed last year to have a registry up and running to help the agency track food contamination and better understand where to focus its limited resources. FDA’s decision to operate the system using its so-called business enterprise system – which is still under construction – has hampered the implementation of the registry, according to a document the agency placed in an online database of all federal rule-making Tuesday.
The document did not explain what the enterprise business system is, and FDA did not respond to inquiries about the system. A search of the agency’s Web site also produced no mention of the system before Tuesday’s announcement. The document states only that FDA believes the system is the most effective and cost-efficient way to implement the registry.
Congress required the food adulteration registry in a comprehensive bill that reauthorized the agency’s user fee programs and gave FDA more authority to oversee the safety of pharmaceuticals, devices and food. Lawmakers allowed FDA one year from the bill’s September passage to jumpstart the registry. But now, FDA expects to implement the portal, dubbed the Reportable Food Registry, around spring 2009 at the earliest. Under the registry, food firms and federal, state and local public health officials would be required to report tainted food incidents to the electronic portal. FDA uses a disconnected reporting system operated through the agency’s district offices around the country.
FDA has talked about using risk-based inspection methods because funding has not kept pace quickly enough for the agency to inspect food facilities at regular intervals.
Lawmakers felt a comprehensive registry would produce data necessary to maximize a risk-based approach, although draft legislation proposed by House Energy and Commerce Committee Democrats would go further by requiring food plant inspections every four years, without wiggle room for risk adjusting. A similar draft measure being crafted by Senate Health, Education, Labor and Pensions Committee Democratic staff would allow for a risk-based approach if funds run low. Full story here.
C-TPAT: Requirements & Advantages (Part 3)
How C-TPAT and FAST offer competitive advantages to North American manufacturers over Chinese counterparts. Discussion also briefly touches on ACE and the e-manifest system and the Security & Prosperity Partnership (SPP) as it relates to expanding the range of goods included under the NAFTA and its Rules of Origin.
Related: Part 1, Part 2
Get Ready To Pay More for Everyday Items, Especially Imported Ones: Report
(PRNewswire-FirstCall/ - CIBC)
Exploding transport costs are driving up prices and could force some manufacturing to move closer to home, says CIBC World Markets
The soaring price of oil has dramatically increased the cost of moving goods around the globe, posing a major threat to price stability and overseas manufacturing, finds a new report from CIBC World Markets.
“Exploding transport costs may soon remove the single most important brake on inflation over the last decade – wage arbitrage with China,” says Jeff Rubin, chief economist and chief strategist at CIBC World Markets. “Not that Chinese manufacturing wages won’t still warrant arbitrage. But in today’s world of triple-digit oil prices, distance costs money.”
The report finds that the cost of shipping a standard 40-ft. container from East Asia to the North American east coast has already tripled since 2000 and will double again as oil prices head towards US$200 per barrel. These soaring energy costs are threatening to offset decades of trade liberalization and force some overseas manufacturing to return closer to home.
“Unless that container is chock full of diamonds, its shipping costs have suddenly inflated the cost of whatever is inside,” adds Rubin. “And those inflated costs get passed onto the Consumer Price Index when you buy that good at your local retailer. As oil prices keep rising, pretty soon those transport costs start cancelling out the East Asian wage advantage.”
Rubin says that these forces may reverse the impact of globalization.
“Higher energy prices are impacting transport costs at an unprecedented rate. So much so, that the cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today.”
The report notes that it currently costs US$8,000 to ship a standard 40-ft. container from Shanghai to the North American east coast, including in-land transportation. That’s up from just US$3,000 in 2000 when oil was US$20 per barrel. At US$200 per barrel of oil, the cost to ship the same container is likely to reach US $15,000.
The impacts of these rising costs are already being seen in capital intensive manufacturing that carry a high ratio of freight costs to the final sale price, such as steel production. Soaring transport costs, first on importing coal and iron to China and then exporting finished steel overseas, have more than eroded the wage advantage and suddenly rendered Chinese-made steel uncompetitive in the U.S. market. Underscoring this is the fact that China’s steel exports to the U.S. are falling by more than 20% year over year, while US domestic steel production has risen by almost 10%.
“That’s great news if you are the United Steelworkers of America,” Rubin says. “Long lost jobs will soon be coming home. And the more that oil and transport costs rise for Chinese steel exporters, the more that North American steel wage rates can grow. But if you’re a steel buyer, your costs are going up regardless of whether you’re sourcing from China or Pittsburgh.”
Converting transport costs into tariff equivalents shows how disruptive soaring energy prices can be. Rubin notes that oil at US$150 per barrel equates to an 11% tariff rate – a level last seen in the 1970s. At $200 per barrel of oil, “We are back at tariff rates even prior to the Kennedy Round GATT negotiations of the mid-1960s,” he says. “Even at US$100 per barrel of oil, transport costs outweigh the impact of tariffs for all of America’s trading partners, including Canada and Mexico.”
Rubin points to history to show how higher energy and transport costs serve to dampen trade and force markets to seek shorter, and cheaper supply lines. Global exports have soared in all periods over the last 50 years when trade barriers were reduced and oil prices were low, his analysis shows. But he says exports “went absolutely nowhere” during the oil and energy crises of the 1970s, and for several years after despite reductions in global tariffs and healthy recoveries from recessionary periods.
“It’s relatively easy to see why North American importers shifted to regional trading during that time,” Rubin says. “Trans-oceanic transport costs literally exploded during the two oil price shocks. The cost of shipping a standard cargo load overseas almost tripled, just as it (has) over the past few years. Ultimately, soaring transport costs were borne by consumers and markets responded accordingly, substituting goods that could be sourced from closer locations than half way around the world carrying hugely inflated freight costs.” Read the complete article.
Related: CIBC World Markets report (PDF format).
Exploding transport costs are driving up prices and could force some manufacturing to move closer to home, says CIBC World Markets
The soaring price of oil has dramatically increased the cost of moving goods around the globe, posing a major threat to price stability and overseas manufacturing, finds a new report from CIBC World Markets.
“Exploding transport costs may soon remove the single most important brake on inflation over the last decade – wage arbitrage with China,” says Jeff Rubin, chief economist and chief strategist at CIBC World Markets. “Not that Chinese manufacturing wages won’t still warrant arbitrage. But in today’s world of triple-digit oil prices, distance costs money.”
The report finds that the cost of shipping a standard 40-ft. container from East Asia to the North American east coast has already tripled since 2000 and will double again as oil prices head towards US$200 per barrel. These soaring energy costs are threatening to offset decades of trade liberalization and force some overseas manufacturing to return closer to home.
“Unless that container is chock full of diamonds, its shipping costs have suddenly inflated the cost of whatever is inside,” adds Rubin. “And those inflated costs get passed onto the Consumer Price Index when you buy that good at your local retailer. As oil prices keep rising, pretty soon those transport costs start cancelling out the East Asian wage advantage.”
Rubin says that these forces may reverse the impact of globalization.
“Higher energy prices are impacting transport costs at an unprecedented rate. So much so, that the cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today.”
The report notes that it currently costs US$8,000 to ship a standard 40-ft. container from Shanghai to the North American east coast, including in-land transportation. That’s up from just US$3,000 in 2000 when oil was US$20 per barrel. At US$200 per barrel of oil, the cost to ship the same container is likely to reach US $15,000.
The impacts of these rising costs are already being seen in capital intensive manufacturing that carry a high ratio of freight costs to the final sale price, such as steel production. Soaring transport costs, first on importing coal and iron to China and then exporting finished steel overseas, have more than eroded the wage advantage and suddenly rendered Chinese-made steel uncompetitive in the U.S. market. Underscoring this is the fact that China’s steel exports to the U.S. are falling by more than 20% year over year, while US domestic steel production has risen by almost 10%.
“That’s great news if you are the United Steelworkers of America,” Rubin says. “Long lost jobs will soon be coming home. And the more that oil and transport costs rise for Chinese steel exporters, the more that North American steel wage rates can grow. But if you’re a steel buyer, your costs are going up regardless of whether you’re sourcing from China or Pittsburgh.”
Converting transport costs into tariff equivalents shows how disruptive soaring energy prices can be. Rubin notes that oil at US$150 per barrel equates to an 11% tariff rate – a level last seen in the 1970s. At $200 per barrel of oil, “We are back at tariff rates even prior to the Kennedy Round GATT negotiations of the mid-1960s,” he says. “Even at US$100 per barrel of oil, transport costs outweigh the impact of tariffs for all of America’s trading partners, including Canada and Mexico.”
Rubin points to history to show how higher energy and transport costs serve to dampen trade and force markets to seek shorter, and cheaper supply lines. Global exports have soared in all periods over the last 50 years when trade barriers were reduced and oil prices were low, his analysis shows. But he says exports “went absolutely nowhere” during the oil and energy crises of the 1970s, and for several years after despite reductions in global tariffs and healthy recoveries from recessionary periods.
“It’s relatively easy to see why North American importers shifted to regional trading during that time,” Rubin says. “Trans-oceanic transport costs literally exploded during the two oil price shocks. The cost of shipping a standard cargo load overseas almost tripled, just as it (has) over the past few years. Ultimately, soaring transport costs were borne by consumers and markets responded accordingly, substituting goods that could be sourced from closer locations than half way around the world carrying hugely inflated freight costs.” Read the complete article.
Related: CIBC World Markets report (PDF format).
Study: The Year in Review for Wholesale Trade, 2007
(Statistics Canada)
The wholesale trade sector expanded for a fourth consecutive year in 2007.Wholesale sales amounted to $517.8 billion in 2007, up 5.5% from 2006, a slightly faster pace than the growth the year before. It was the fourth year in a row that the rate of growth surpassed 5.0%, according to a year-end review published today in the Analysis in Brief series.
Provincially, the rate of growth accelerated in Saskatchewan, Newfoundland and Labrador, and Manitoba. Sales in Saskatchewan rose 19.6%, the fastest rate of growth since the start of this statistical series in 1993 and the best performance among the provinces.
Alberta wholesalers had a growth rate below the national average for the first time since 2002.
While slightly higher than 2006 levels, the rate of growth for wholesalers in Ontario was below the national average for the fifth consecutive year. As a result, Ontario’s share of national sales continued to slide, although it still represented just over half of the total.
Quebec wholesalers experienced a slight recovery in 2007, with the pharmaceuticals trade group still the main source of growth.
Nationally, this performance in 2007 was due, among other factors, to the “other products” sector, which posted the strongest growth in wholesale trade and had its best performance since 2003. Sales in this sector grew partly because of increased sales of agricultural chemicals and other farm supplies, as well as sales of animal feed.
This study reviews the performance of the wholesale trade sector nationally and regionally, along with some of the key factors affecting last year’s performance. The report is available on Statistics Canada website.
The wholesale trade sector expanded for a fourth consecutive year in 2007.Wholesale sales amounted to $517.8 billion in 2007, up 5.5% from 2006, a slightly faster pace than the growth the year before. It was the fourth year in a row that the rate of growth surpassed 5.0%, according to a year-end review published today in the Analysis in Brief series.
Provincially, the rate of growth accelerated in Saskatchewan, Newfoundland and Labrador, and Manitoba. Sales in Saskatchewan rose 19.6%, the fastest rate of growth since the start of this statistical series in 1993 and the best performance among the provinces.
Alberta wholesalers had a growth rate below the national average for the first time since 2002.
While slightly higher than 2006 levels, the rate of growth for wholesalers in Ontario was below the national average for the fifth consecutive year. As a result, Ontario’s share of national sales continued to slide, although it still represented just over half of the total.
Quebec wholesalers experienced a slight recovery in 2007, with the pharmaceuticals trade group still the main source of growth.
Nationally, this performance in 2007 was due, among other factors, to the “other products” sector, which posted the strongest growth in wholesale trade and had its best performance since 2003. Sales in this sector grew partly because of increased sales of agricultural chemicals and other farm supplies, as well as sales of animal feed.
This study reviews the performance of the wholesale trade sector nationally and regionally, along with some of the key factors affecting last year’s performance. The report is available on Statistics Canada website.
Wednesday, May 28, 2008
C-TPAT: Requirements & Advantages (Part 2)
More information on some of the basic requirements of the C-TPAT program related to hardening of the physical supply chain. These include measures such as the inspection and sealing of containers by authorized employees under documented procedures, security measures such as lighting, fencing and locks to restrict access to cargo, and technology in the form of alarm systems and surveillance cameras to monitor cargo areas.
Related: Part 1
Another Softwood Lumber Crisis Looming?
(Embassy – Teresa Hille)
Two American senators managed to sneak controversial amendments into that country’s Farm Aid bill before it was approved by Congress on May 7. Now U.S. importers will have to certify that tariffs and duties have been added to the price of lumber before it is exported.
The move has prompted concern Canada is facing another softwood lumber war less than two years after the Conservative government proudly said it had resolved the conflict. While a clerical error means the bill has to be voted on again, Embassy asked:
“What do you make of the fact that two American senators inserted into this month’s U.S. Farm Bill a requirement that will force U.S. importers of Canadian lumber to certify that the appropriate tariffs and duties have been added to the lumber’s price before it is exported?”
David Emerson, minister of international trade – “Well, it’s something that we’re strongly opposed to. We actually think that it’s counter to the softwood lumber agreement. The U.S. trade representative was opposed to it as well. This is something that Congress is doing and the president has vetoed. We’ll see what happens next week when it goes back for a revote in Congress.”
Brenda Swick, Ottawa-based lawyer with McCarthy Tétrault – “These new requirements are illegal under the 2006 agreement, which gives Canada the sole authority to impose and administer export taxes on shipments to the U.S. They give the U.S. the unilateral authority to expand the scope of the products covered under the agreement. They impose costs unforeseen under the agreement on Canadian exporters. And if imposed, they ought to be immediately challenged by Canada under the dispute settlement provisions in the agreement.”
Debra Steger, University of Ottawa professor of international trade – “I think it’s adding another barrier to exports of softwood lumber into the U.S. that is not a necessary barrier. It shows a lack of trust on the part of the U.S. Congress and certainly in the administration of the softwood lumber agreement. It’s not one of the criteria set out in the softwood lumber agreement.”
Elliot Feldman, Washington-based lawyer at Baker and Hostetler – “Now this act I believe...probably violates NAFTA the same way the Byrd Amendment did. I don’t believe there was notice. I don’t believe there were consultations. I don’t believe therefore that the passage of [the Farm Bill] conforms with the NAFTA requirements. And I haven’t heard any Canadian protest – it should have come from the government.”
More responses in the complete article. Additional information on the Import Declaration amendments in the Farm Bill is available here.
Two American senators managed to sneak controversial amendments into that country’s Farm Aid bill before it was approved by Congress on May 7. Now U.S. importers will have to certify that tariffs and duties have been added to the price of lumber before it is exported.
The move has prompted concern Canada is facing another softwood lumber war less than two years after the Conservative government proudly said it had resolved the conflict. While a clerical error means the bill has to be voted on again, Embassy asked:
“What do you make of the fact that two American senators inserted into this month’s U.S. Farm Bill a requirement that will force U.S. importers of Canadian lumber to certify that the appropriate tariffs and duties have been added to the lumber’s price before it is exported?”
David Emerson, minister of international trade – “Well, it’s something that we’re strongly opposed to. We actually think that it’s counter to the softwood lumber agreement. The U.S. trade representative was opposed to it as well. This is something that Congress is doing and the president has vetoed. We’ll see what happens next week when it goes back for a revote in Congress.”
Brenda Swick, Ottawa-based lawyer with McCarthy Tétrault – “These new requirements are illegal under the 2006 agreement, which gives Canada the sole authority to impose and administer export taxes on shipments to the U.S. They give the U.S. the unilateral authority to expand the scope of the products covered under the agreement. They impose costs unforeseen under the agreement on Canadian exporters. And if imposed, they ought to be immediately challenged by Canada under the dispute settlement provisions in the agreement.”
Debra Steger, University of Ottawa professor of international trade – “I think it’s adding another barrier to exports of softwood lumber into the U.S. that is not a necessary barrier. It shows a lack of trust on the part of the U.S. Congress and certainly in the administration of the softwood lumber agreement. It’s not one of the criteria set out in the softwood lumber agreement.”
Elliot Feldman, Washington-based lawyer at Baker and Hostetler – “Now this act I believe...probably violates NAFTA the same way the Byrd Amendment did. I don’t believe there was notice. I don’t believe there were consultations. I don’t believe therefore that the passage of [the Farm Bill] conforms with the NAFTA requirements. And I haven’t heard any Canadian protest – it should have come from the government.”
More responses in the complete article. Additional information on the Import Declaration amendments in the Farm Bill is available here.
More Truckers Selling Their Rigs, NYT Says
(Transport Topics)
High fuel prices driving companies out of business
Thousands of U.S. truckers unable to make money because of rising fuel prices are selling their trucks, in what may be the biggest cut in the U.S. trucking fleet since trucking deregulation in 1980, The New York Times reported Tuesday.
More than 45,000 vehicles – about 3% of the U.S. trucking fleet – have been taken out of service since early last year, the Times said, citing America’s Commercial Transportation Research Co., based in Columbus, Ind.
Although small operators have been the most affected, 935 larger trucking businesses shut down in the first quarter compared with 385 last year, marking the highest quarterly failure rate since 2001, the Times said, citing American Trucking Associations data.
Some trucks are also being sold abroad, the paper said. Nearly 24,000 used tractors have been exported since early last year, according to Commerce Department data, the Times reported. That was three times the number in 2006.
Truckers also said that deregulation, which increased competition and allowed thousands of small operators to enter the market, has made it harder to pass on added costs, the Times said.
High fuel prices driving companies out of business
Thousands of U.S. truckers unable to make money because of rising fuel prices are selling their trucks, in what may be the biggest cut in the U.S. trucking fleet since trucking deregulation in 1980, The New York Times reported Tuesday.
More than 45,000 vehicles – about 3% of the U.S. trucking fleet – have been taken out of service since early last year, the Times said, citing America’s Commercial Transportation Research Co., based in Columbus, Ind.
Although small operators have been the most affected, 935 larger trucking businesses shut down in the first quarter compared with 385 last year, marking the highest quarterly failure rate since 2001, the Times said, citing American Trucking Associations data.
Some trucks are also being sold abroad, the paper said. Nearly 24,000 used tractors have been exported since early last year, according to Commerce Department data, the Times reported. That was three times the number in 2006.
Truckers also said that deregulation, which increased competition and allowed thousands of small operators to enter the market, has made it harder to pass on added costs, the Times said.
Revised: D11-4-4, Rules of Origin Respecting the General Preferential Tariff and Least Developed Country Tariff
(CBSA)
The revision of this memorandum is part of an overall revision of the D11-4 and D11-5 Memoranda series. Changes have been made to the “Guidelines and General Information” section to clarify policy or procedural issues.
This memorandum contains the General Preferential Tariff and Least Developed Country Tariff Rules of Origin Regulations and outlines the guidelines for the determination of the origin of goods for purposes of the General Preferential Tariff (GPT) and Least Developed Country Tariff (LDCT) treatment, enacted pursuant to the Customs Tariff.
The revised D11-4-4 is available on the CBSA website.
The revision of this memorandum is part of an overall revision of the D11-4 and D11-5 Memoranda series. Changes have been made to the “Guidelines and General Information” section to clarify policy or procedural issues.
This memorandum contains the General Preferential Tariff and Least Developed Country Tariff Rules of Origin Regulations and outlines the guidelines for the determination of the origin of goods for purposes of the General Preferential Tariff (GPT) and Least Developed Country Tariff (LDCT) treatment, enacted pursuant to the Customs Tariff.
The revised D11-4-4 is available on the CBSA website.
Tuesday, May 27, 2008
ACE Status Report to Congress, 2nd Quarter 2008
(CBP)
On February 14, 2008, CBP completed the Critical Design Review (CDR) for Entry Summary, Accounts, and Revenue (ESAR): Initial Entry Summary Types (A2.2), indicating design work is complete for A2.2 capabilities that will enable entry summary processing in ACE for the most common entry types.
Beginning February 11, 2008, truck carriers were required to file Electronic Manifests (e-Manifests) at all land border ports in Alaska, marking the implementation of mandatory e-Manifest filing at all 99 U.S. land border ports of entry (POEs).
The number of ITDS Participating Government Agencies (PGAs) has expanded from 40 to 42 with the inclusion of the U.S. Coast Guard and the U.S. Agency for International Development.
CBP successfully provided a demonstration of User Defined Rules (UDR), Impact Assessment (IA), and Advanced Targeting (S3) reporting functionality to the Office of International Trade (OT) National Targeting and Analysis Groups (NTAG) through an online collaborative meeting tool to reach CBP International Trade Specialists in Long Beach, California; Chicago, Illinois; South Florida; New York, New York; Dallas, Texas; and Washington, D.C. on January 5, 2008. In addition, CBP successfully provided a real-time demonstration of the Targeting Framework (TF) to the Advanced Targeting Unit (ATU) at the San Ysidro POE, California, on February 7, 2008.
These demonstrations allowed CBP officers and CBP International Trade Specialists a real-time view of mission-critical capabilities, which will allow them to conduct better screening and targeting.
CBP is focused on developing ACE entry summary processing capabilities that will streamline business processes and ACE capabilities that will ultimately allow CBP to consolidate multiple systems and use only one system to process cargo across all modes of transportation. Notwithstanding the challenges and complexities associated with developing new ACE capabilities that will process 52,000 rail and sea bills of lading each day, CBP is working diligently to prepare for the planned Fall 2008 deployment of M1.
Recognizing that industry input is critical to the success of ACE, CBP continues to ensure that the trade community is not only aware of forthcoming ACE capabilities but is also providing input into ACE development plans. Through its partnership with the trade community, CBP will continue to develop new ACE capabilities and enhance those already deployed to facilitate legitimate trade and ensure the safety and security of America’s supply chain.
Complete report available here (PDF format).
On February 14, 2008, CBP completed the Critical Design Review (CDR) for Entry Summary, Accounts, and Revenue (ESAR): Initial Entry Summary Types (A2.2), indicating design work is complete for A2.2 capabilities that will enable entry summary processing in ACE for the most common entry types.
Beginning February 11, 2008, truck carriers were required to file Electronic Manifests (e-Manifests) at all land border ports in Alaska, marking the implementation of mandatory e-Manifest filing at all 99 U.S. land border ports of entry (POEs).
The number of ITDS Participating Government Agencies (PGAs) has expanded from 40 to 42 with the inclusion of the U.S. Coast Guard and the U.S. Agency for International Development.
CBP successfully provided a demonstration of User Defined Rules (UDR), Impact Assessment (IA), and Advanced Targeting (S3) reporting functionality to the Office of International Trade (OT) National Targeting and Analysis Groups (NTAG) through an online collaborative meeting tool to reach CBP International Trade Specialists in Long Beach, California; Chicago, Illinois; South Florida; New York, New York; Dallas, Texas; and Washington, D.C. on January 5, 2008. In addition, CBP successfully provided a real-time demonstration of the Targeting Framework (TF) to the Advanced Targeting Unit (ATU) at the San Ysidro POE, California, on February 7, 2008.
These demonstrations allowed CBP officers and CBP International Trade Specialists a real-time view of mission-critical capabilities, which will allow them to conduct better screening and targeting.
CBP is focused on developing ACE entry summary processing capabilities that will streamline business processes and ACE capabilities that will ultimately allow CBP to consolidate multiple systems and use only one system to process cargo across all modes of transportation. Notwithstanding the challenges and complexities associated with developing new ACE capabilities that will process 52,000 rail and sea bills of lading each day, CBP is working diligently to prepare for the planned Fall 2008 deployment of M1.
Recognizing that industry input is critical to the success of ACE, CBP continues to ensure that the trade community is not only aware of forthcoming ACE capabilities but is also providing input into ACE development plans. Through its partnership with the trade community, CBP will continue to develop new ACE capabilities and enhance those already deployed to facilitate legitimate trade and ensure the safety and security of America’s supply chain.
Complete report available here (PDF format).
C-TPAT: Requirements & Advantages (Part 1)
Les Glick, esq., of Porter Wright Morris & Arthur LLP, addresses attendees at The Offshore Group’s Manufacturing in Mexico Summit. The event took place in Saltillo, Coahuila in October of 2007.
An overview of benefits and competitive advantages of the U.S. Customs C-TPAT program (much of this will also apply to the modernized version of the CBSA’s Partners in Protection program).
Just In Time – If Supply Chain Management is the Answer, What’s the Question?
(Industry Week – David Blanchard)
May 2008 was supposed to be the month when aerospace giant Boeing Co. debuted its “game-changing” 787 Dreamliner, the month when supply chain management as we know it would take that next evolutionary step forward and prove that an extended enterprise – in Boeing’s case, outsourcing the entire production of its new aircraft to suppliers, with Boeing itself finishing the plane at the final assembly stage – was an idea whose time had finally come. But a funny thing happened on the way to Boeing’s coronation as a game-changer: The roll-out of the first Dreamliner got postponed, not once, not twice, but three times, with the program now delayed a good 15 months.
In a sense, Boeing has succeeded in changing the way we think about supply chain management, but unfortunately, not in a good way – the Dreamliner nightmare is threatening to set back the cause of supply chain management by several years at least. I’m not referring to the production problems, parts shortages or even technological snafus that have derailed the project. What troubles me the most is how quick Boeing has been to blame its suppliers for every missed deadline, insisting that the suppliers weren’t up to the task of delivering components and finished sections on time (or ever), leaving unanswered the question, “So who exactly is managing Boeing’s extended supply chain, then?”
Emblematic of Boeing’s patchwork approach to the Dreamliner project was its recent decision to acquire Vought Aircraft Industries’ interest in Global Aeronautica, a move that signaled that Boeing’s goal of jobbing out key assembly tasks to suppliers wasn’t working, so they might as well just go back and do it themselves. Not exactly a ringing endorsement of supply chain management, is it?
And then we have the U.S. automotive industry, which keeps shooting itself in the foot every time it seems like maybe, just maybe, they’ve finally figured out what they’ve been doing wrong. In Detroit, the idea of collaboration between the OEMs and suppliers usually boils down to: “If you’ll keep your prices as low as we want, then we’ll continue to buy from you.” Certainly, that’s not the way it always works, but for the most part, the idea of working closely with suppliers seems to be completely foreign to their standard operating procedures. “Foreign” is the operative word in that sentence, since some Japanese automakers have done quite well with that type of win-win relationship, often symbolized by the idea of the keiretsu, or joint partnership. The Detroit Three automakers, on the other hand, apparently see greater promise in pursuing lose-lose relationships. Read the complete article.
Transport Minister Tables Amendments to the Transportation of Dangerous Goods Act, 1992 in Parliament
(Transport Canada)
The Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities, today tabled amendments to the Transportation of Dangerous Goods Act, 1992 in the House of Commons. The amendments would enhance security and safety in the transport of dangerous goods.
“Our government is committed to ensuring public safety and security when dangerous goods are imported, handled or transported in Canada,” said Minister Cannon. “The proposed amendments would make it possible for Transport Canada to prevent and respond to security threats while still maintaining access to markets for Canadians involved in the cross-border transportation of dangerous goods.”
The proposed amendments would introduce a number of changes, including the following:
• They would reinforce the existing Emergency Response Assistance Program, which requires emergency response assistance plans to be in place in the event of safety incidents involving dangerous goods. It would also make it possible for Transport Canada to request the implementation of such plans in the case of a terrorist or other security incident.
• The amendments would require security training and screening of personnel working with dangerous goods.
• The changes would enable the drafting of regulations requiring that dangerous goods be tracked during transport and that incidents involving loss or theft be reported. The amendments would enable the use of security measures and interim orders, in accordance with the Public Safety Act and other legislation.
• The proposed amendments would enable the development of a program to require a transportation security clearance for dangerous goods, including an appeals process that would operate like the existing Aeronautics Act clearance program.
• The proposed changes would also amend the concept of “importer” to clarify who in Canada is subject to the requirements of the Act and its regulations with respect to the importing of dangerous goods.
The updated Act would remain focused on the prevention of incidents when dangerous goods are offered, handled, transported or imported. Following the coming into force of the amended legislation, Transport Canada would continue to consult the public, industry, first responders, and provincial and territorial governments as the department drafts the security regulations necessary to support its new authorities.
A backgrounder with more information is attached is available here. For additional information about the review of the Transportation of Dangerous Goods Act, 1992, visit the Transport Canada website.
The Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities, today tabled amendments to the Transportation of Dangerous Goods Act, 1992 in the House of Commons. The amendments would enhance security and safety in the transport of dangerous goods.
“Our government is committed to ensuring public safety and security when dangerous goods are imported, handled or transported in Canada,” said Minister Cannon. “The proposed amendments would make it possible for Transport Canada to prevent and respond to security threats while still maintaining access to markets for Canadians involved in the cross-border transportation of dangerous goods.”
The proposed amendments would introduce a number of changes, including the following:
• They would reinforce the existing Emergency Response Assistance Program, which requires emergency response assistance plans to be in place in the event of safety incidents involving dangerous goods. It would also make it possible for Transport Canada to request the implementation of such plans in the case of a terrorist or other security incident.
• The amendments would require security training and screening of personnel working with dangerous goods.
• The changes would enable the drafting of regulations requiring that dangerous goods be tracked during transport and that incidents involving loss or theft be reported. The amendments would enable the use of security measures and interim orders, in accordance with the Public Safety Act and other legislation.
• The proposed amendments would enable the development of a program to require a transportation security clearance for dangerous goods, including an appeals process that would operate like the existing Aeronautics Act clearance program.
• The proposed changes would also amend the concept of “importer” to clarify who in Canada is subject to the requirements of the Act and its regulations with respect to the importing of dangerous goods.
The updated Act would remain focused on the prevention of incidents when dangerous goods are offered, handled, transported or imported. Following the coming into force of the amended legislation, Transport Canada would continue to consult the public, industry, first responders, and provincial and territorial governments as the department drafts the security regulations necessary to support its new authorities.
A backgrounder with more information is attached is available here. For additional information about the review of the Transportation of Dangerous Goods Act, 1992, visit the Transport Canada website.
Unease as Truckers Not Included in Security Net
(Cargonews Asia – Ian Putzger)
With a deadline of having to screen all bellyhold air cargo by the summer of 2010 looming, the U.S. Transportation Security Agency (TSA) has begun to flesh out details of its air freight security strategy. Some of the elements, plus the absence of any government funding for operators’ efforts to comply, have forwarders worried.
At first glance, the TSA’s strategy came as a relief for industry executives who had warned about bottlenecks at airports as a result of mandatory screening. “We’re moving screening back into the supply chain,” the TSA announced, a strategy that is in line with calls from the industry for a multi-layered security regime. “The focus is on shippers and warehousing,” specified Ed Kelly, the TSA’s general manager for cargo, transportation sector network management.
Trucking companies, on the other hand, are left out of the picture. The TSA cited time constraints for its decision not to include the road aspect into the regime. This has forwarders wondering how much responsibility they are going to shoulder once they get certified. Even if they invested in screening equipment for their own facilities, they would have to find ways to ensure that the cargo is secure on the truck from their warehouse to the airline.
“This is something you would certainly want your lawyers to look into very closely,” said Dave Wirsing, president of industry consulting firm Phoenix Marketing, who had previously headed the U.S. Airforwarders Association and has been involved in negotiations with the TSA since the agency’s inception. Wirsing welcomed the TSA’s strategy as a move in the right direction but voiced strong reservations about the decision to leave truckers out of the loop. “You can’t exclude any part of the supply chain in that process and certify only certain elements of it,” he said.
Shipper clearance is another element that has seen some progress but still faces hurdles. The TSA has confirmed that it is moving towards a certified shipper programme in the long run, but as an interim solution it is tweaking the current known shipper regime. Read the complete article.
With a deadline of having to screen all bellyhold air cargo by the summer of 2010 looming, the U.S. Transportation Security Agency (TSA) has begun to flesh out details of its air freight security strategy. Some of the elements, plus the absence of any government funding for operators’ efforts to comply, have forwarders worried.
At first glance, the TSA’s strategy came as a relief for industry executives who had warned about bottlenecks at airports as a result of mandatory screening. “We’re moving screening back into the supply chain,” the TSA announced, a strategy that is in line with calls from the industry for a multi-layered security regime. “The focus is on shippers and warehousing,” specified Ed Kelly, the TSA’s general manager for cargo, transportation sector network management.
Trucking companies, on the other hand, are left out of the picture. The TSA cited time constraints for its decision not to include the road aspect into the regime. This has forwarders wondering how much responsibility they are going to shoulder once they get certified. Even if they invested in screening equipment for their own facilities, they would have to find ways to ensure that the cargo is secure on the truck from their warehouse to the airline.
“This is something you would certainly want your lawyers to look into very closely,” said Dave Wirsing, president of industry consulting firm Phoenix Marketing, who had previously headed the U.S. Airforwarders Association and has been involved in negotiations with the TSA since the agency’s inception. Wirsing welcomed the TSA’s strategy as a move in the right direction but voiced strong reservations about the decision to leave truckers out of the loop. “You can’t exclude any part of the supply chain in that process and certify only certain elements of it,” he said.
Shipper clearance is another element that has seen some progress but still faces hurdles. The TSA has confirmed that it is moving towards a certified shipper programme in the long run, but as an interim solution it is tweaking the current known shipper regime. Read the complete article.
Food Prices Remain High Despite Higher Output
High food prices have particularly hit vulnerable populations in many countries that spend a substantial part of their income on food, according to a report released today by the UN Food and Agriculture Organization (FAO).
The latest Food Outlook indicates that the food import bill of the Low Income Food Deficit Countries (LIFDCs) is expected to reach US$169 billion in 2008, 40% more than in 2007. FAO calls the sustained rise in imported food expenditures for vulnerable country groups “a worrying development,” and says that by the end of 2008 their annual food import basket could cost four times as much as it did in 2000.
International prices of most agricultural commodities have started to decline, but they are unlikely to return to the low price levels of previous years, Food Outlook reports. The FAO food price index has remained stable since February 2008, but the average of the first four months of 2008 is still 53% higher when compared to the same period a year ago.
“Food is no longer the cheap commodity that it once was. Rising food prices are bound to worsen the already unacceptable level of food deprivation suffered by 854 million people,” said FAO Assistant Director-General Hafez Ghanem . “We are facing the risk that the number of hungry will increase by many more millions of people.”
Despite a favourable global production outlook, the expected price decline in many basic agricultural commodities during the new 2008/2009 season is likely to be limited, because of the need to replenish stocks and an increase in utilization. Due to rising utilization, more than one good season is required to replenish stocks and reduce price volatility. Read the complete article.
The latest Food Outlook indicates that the food import bill of the Low Income Food Deficit Countries (LIFDCs) is expected to reach US$169 billion in 2008, 40% more than in 2007. FAO calls the sustained rise in imported food expenditures for vulnerable country groups “a worrying development,” and says that by the end of 2008 their annual food import basket could cost four times as much as it did in 2000.
International prices of most agricultural commodities have started to decline, but they are unlikely to return to the low price levels of previous years, Food Outlook reports. The FAO food price index has remained stable since February 2008, but the average of the first four months of 2008 is still 53% higher when compared to the same period a year ago.
“Food is no longer the cheap commodity that it once was. Rising food prices are bound to worsen the already unacceptable level of food deprivation suffered by 854 million people,” said FAO Assistant Director-General Hafez Ghanem . “We are facing the risk that the number of hungry will increase by many more millions of people.”
Despite a favourable global production outlook, the expected price decline in many basic agricultural commodities during the new 2008/2009 season is likely to be limited, because of the need to replenish stocks and an increase in utilization. Due to rising utilization, more than one good season is required to replenish stocks and reduce price volatility. Read the complete article.
Monday, May 26, 2008
Transport Canada Air Cargo Security Program
Transport Canada has announced the launch and implementation of its Secure Supply Chain Management System (SSCMS) as of June 2, 2008, which is a Known Shipper data base for air cargo purposes. Air carriers and freight forwarders participating in Transport Canada’s Air Cargo Security Program (ACSP) will be able to use SSCMS to determine a shipper’s status (ie. whether the shipper is a “known” shipper) and whether and how the shipper’s cargo may be transported by air.
Processing to achieve Registered or Conditionally Registered status for shippers normally takes up to thirty (30) days from the date the shipper’s data is received from a participating air carrier or freight forwarder. In the interim, cargo from shippers who are Not Registered will be subject to air transportation limitations and additional security processes. For example, the cargo may have to be transported on all cargo aircraft or subjected to a search before being transported on a passenger aircraft.
Shippers should check with their air carriers and freight forwarders to determine whether the air carrier or freight forwarder is participating in the ACSP and whether the carrier or freight forwarder has included the shipper in the SSCMS data base.
Air carriers and freight forwarders not participating in the ACSP will not have access to SSCMS or be able to submit companies for inclusion as Registered Shippers.
SSCMS will continue to be populated with shipper and other data after June 2nd in order to allow ACSP participants to submit additional information and accommodate new clients.
Participants will also be permitted to use their existing known shipper lists, until the department makes changes to the Air Carrier Security Measures, to allow them sufficient time to submit their current known shippers for registration.
For more information, you may consult the Air Cargo Security Bulletins on the Transport Canada website here and here.
Processing to achieve Registered or Conditionally Registered status for shippers normally takes up to thirty (30) days from the date the shipper’s data is received from a participating air carrier or freight forwarder. In the interim, cargo from shippers who are Not Registered will be subject to air transportation limitations and additional security processes. For example, the cargo may have to be transported on all cargo aircraft or subjected to a search before being transported on a passenger aircraft.
Shippers should check with their air carriers and freight forwarders to determine whether the air carrier or freight forwarder is participating in the ACSP and whether the carrier or freight forwarder has included the shipper in the SSCMS data base.
Air carriers and freight forwarders not participating in the ACSP will not have access to SSCMS or be able to submit companies for inclusion as Registered Shippers.
SSCMS will continue to be populated with shipper and other data after June 2nd in order to allow ACSP participants to submit additional information and accommodate new clients.
Participants will also be permitted to use their existing known shipper lists, until the department makes changes to the Air Carrier Security Measures, to allow them sufficient time to submit their current known shippers for registration.
For more information, you may consult the Air Cargo Security Bulletins on the Transport Canada website here and here.
Saturday, May 24, 2008
Study: Outsourcing and Offshoring in Canada 1961 to 2003
(Statistics Canada)
Canadian industries steadily increased their levels of both “outsourcing” and “offshoring” from 1961 to 2003, according to a new research paper that assesses trends in international trading patterns.
Outsourcing involves moving production outside a firm. Offshoring occurs when Canadian-based companies buy foreign-produced goods or services as production inputs.
The study found that between 1961 and 2003, there was a strong shift towards the offshoring of both goods and services, which increased in almost all industries. The rate of growth of offshoring has been highest in service industries.
The study suggests that offshoring in goods has been positively related to multifactor productivity growth. Service offshoring has been associated with a shift towards higher value-added activities in Canadian industries.
The study found that neither offshoring in goods nor services is associated with a change in employment in Canadian industries. While material offshoring was not related to wage growth, service offshoring was negatively associated with wage growth in the service sector.
Growth in the offshoring of both services and materials reflects the continuing trend towards economic globalization and integration of world economies. Most of Canada’s offshoring is with the United States, although there is some increase over the last decade with developing countries. Recent interest in outsourcing and offshoring has intensified with rapid economic development in China and India.
Share of imported material inputs nearly doubles in 40 years
The growth in services and material offshoring reflects two distinct aspects of globalization. These are, first, the changes that have occurred as trade increased with developing countries, and secondly, the gains associated with exploiting economies of scale in differentiated product lines.Canadian industries have purchased an increasing share of material and service inputs from abroad, a trend that has been pervasive across industries.
Between 1961 and 2003, the share of imports in material inputs almost doubled from 20.5% to 38.0%. The share of imports in service inputs almost tripled from 2.6% to 7.6%.
Business services (e.g., high-tech services, research and development, and consulting and design services) represent the largest category of service inputs that Canadian industries have offshored. They are followed by financial services.
Goods and services offshoring have different effects
The study found that the economic effects of service offshoring have differed from those of material offshoring.
Material offshoring has been positively related to multifactor productivity growth over the 40 year period, while service offshoring has not.
Between 1961 and 2003, the study suggested that the increase in material offshoring contributed 0.2 percentage points a year to growth in multifactor productivity. This increase represented about 8% of multifactor productivity growth during this period.
Industries that increased their service offshoring activities also increased their investments in information and communications technologies (ICT), as well as the share of value-added in their shipments. The intensive use of ICT inputs served to reduce the distance barriers associated with trade in services.
The study also found that neither form of offshoring, goods or services, was related to employment in Canadian industries. However, the two had differing effects on the growth in wages.
Service offshoring has had a small negative effect on worker wages in the services-producing sector, but little effect on wages for workers in goods-producing sector. Cor complete story with graphs and links to actual research paper go here.
Canadian industries steadily increased their levels of both “outsourcing” and “offshoring” from 1961 to 2003, according to a new research paper that assesses trends in international trading patterns.
Outsourcing involves moving production outside a firm. Offshoring occurs when Canadian-based companies buy foreign-produced goods or services as production inputs.
The study found that between 1961 and 2003, there was a strong shift towards the offshoring of both goods and services, which increased in almost all industries. The rate of growth of offshoring has been highest in service industries.
The study suggests that offshoring in goods has been positively related to multifactor productivity growth. Service offshoring has been associated with a shift towards higher value-added activities in Canadian industries.
The study found that neither offshoring in goods nor services is associated with a change in employment in Canadian industries. While material offshoring was not related to wage growth, service offshoring was negatively associated with wage growth in the service sector.
Growth in the offshoring of both services and materials reflects the continuing trend towards economic globalization and integration of world economies. Most of Canada’s offshoring is with the United States, although there is some increase over the last decade with developing countries. Recent interest in outsourcing and offshoring has intensified with rapid economic development in China and India.
Share of imported material inputs nearly doubles in 40 years
The growth in services and material offshoring reflects two distinct aspects of globalization. These are, first, the changes that have occurred as trade increased with developing countries, and secondly, the gains associated with exploiting economies of scale in differentiated product lines.Canadian industries have purchased an increasing share of material and service inputs from abroad, a trend that has been pervasive across industries.
Between 1961 and 2003, the share of imports in material inputs almost doubled from 20.5% to 38.0%. The share of imports in service inputs almost tripled from 2.6% to 7.6%.
Business services (e.g., high-tech services, research and development, and consulting and design services) represent the largest category of service inputs that Canadian industries have offshored. They are followed by financial services.
Goods and services offshoring have different effects
The study found that the economic effects of service offshoring have differed from those of material offshoring.
Material offshoring has been positively related to multifactor productivity growth over the 40 year period, while service offshoring has not.
Between 1961 and 2003, the study suggested that the increase in material offshoring contributed 0.2 percentage points a year to growth in multifactor productivity. This increase represented about 8% of multifactor productivity growth during this period.
Industries that increased their service offshoring activities also increased their investments in information and communications technologies (ICT), as well as the share of value-added in their shipments. The intensive use of ICT inputs served to reduce the distance barriers associated with trade in services.
The study also found that neither form of offshoring, goods or services, was related to employment in Canadian industries. However, the two had differing effects on the growth in wages.
Service offshoring has had a small negative effect on worker wages in the services-producing sector, but little effect on wages for workers in goods-producing sector. Cor complete story with graphs and links to actual research paper go here.
Thursday, May 22, 2008
New PIP “Security Profile” Delayed
Under modernization changes to the CBSA Partners in Protection (PIP) program the current Security Questionnaire is being replaced by an industry-specific Security Profile that all participants will need to complete.
The CBSA had indicated several months ago that the Security Profile would be provided online so that companies could get a head-start in meeting new security requirements. However, the CBSA now advises that posting of the Security Profile online has been temporarily delayed but will soon be available.
Program changes are still scheduled to take effect on June 30, 2008. On this date, the CBSA will begin to accept applications under the modernized program.
The CBSA had indicated several months ago that the Security Profile would be provided online so that companies could get a head-start in meeting new security requirements. However, the CBSA now advises that posting of the Security Profile online has been temporarily delayed but will soon be available.
Program changes are still scheduled to take effect on June 30, 2008. On this date, the CBSA will begin to accept applications under the modernized program.
Prairie Exports Buck the Trend
(Export Development Canada)
Canada’s exports are in recession this year, putting a tight squeeze on the economy. But not all exporters are sharing the pain. While many are seeing double-digit declines in orders, certain others can barely keep up with demand. These contrasts have a strong regional slant that has led to a quick role reversal, turning “have” provinces into have-not’s, and vice versa. Will it last?
The provincial contrasts are striking. Weighed down by the high Canadian dollar and weakening US demand, Ontario and Quebec will see exports tumble 7% and 4.5% this year, respectively. British Columbia, already in decline in the last two years, will see a further 3% drop this year. Three other provinces will hug the zero-line. Swing to the Prairies, and the story is very different. Manitoba and Alberta exports will jump by 6% this year, and Saskatchewan will see a whopping 13% gain. New Brunswick will join the party, rising 6% this year and a red-hot 20% in 2009.
Why the differences? It’s largely about what’s for sale. Central Canada has the automobile and auto parts industries, machinery and equipment, and a range of primary and consumer products. Demand for these products has faltered across the board, with key industries suffering double-digit declines. Forestry, critical to British Columbia’s exports, is suffering as the US housing market implodes. In contrast, searing global demand for energy, agri-food products and fertilizer are a boon for the oil-and-gas and bread-basket provinces.
These days, it’s also about who is buying. With the US economy leading the global slowdown, exporters in provinces that are more highly exposed to the US market–like Quebec and Ontario–are seeing a lot of red ink. And this year, selling into other developed markets will not prove much of an antidote. Collectively, industrialized economies will see economic growth slow from 2.6% in 2007 to just 1.6% this year, not much different than US performance.
And then there are emerging markets. True, growth is slowing there as well, but it will still be more than four times the growth in developed markets this year. Ontario is the province least diversified into emerging markets, shipping just 4.9% of its goods there in 2007. Many provinces are at the national average of 8%. The top two are Saskatchewan, at 25.3%, and Manitoba, at 14.5% of total goods shipped. In this light, it’s hardly surprising that among the provinces, these two top the export growth rankings this year.
Will this turning of the provincial growth tables persist? The boom in the Prairies will not fade fast. Energy prices are forecast to fall to more reasonable levels later this year, but strong investment will, on balance, ensure higher export volumes. Prices for wheat and other coarse grains will continue to rise as global food supplies remain stretched, ensuring strong export activity. Fertilizer shipments, another key growth source, will continue to expand as food shortages bring more marginal arable land into production worldwide.
The bottom line? The shift in global demand to certain key products and markets has created a boom in Prairie exports. There is a permanence to these shifts that will extend the good times, but revived global growth should realign the provincial distribution of export growth by 2010.
Canada’s exports are in recession this year, putting a tight squeeze on the economy. But not all exporters are sharing the pain. While many are seeing double-digit declines in orders, certain others can barely keep up with demand. These contrasts have a strong regional slant that has led to a quick role reversal, turning “have” provinces into have-not’s, and vice versa. Will it last?
The provincial contrasts are striking. Weighed down by the high Canadian dollar and weakening US demand, Ontario and Quebec will see exports tumble 7% and 4.5% this year, respectively. British Columbia, already in decline in the last two years, will see a further 3% drop this year. Three other provinces will hug the zero-line. Swing to the Prairies, and the story is very different. Manitoba and Alberta exports will jump by 6% this year, and Saskatchewan will see a whopping 13% gain. New Brunswick will join the party, rising 6% this year and a red-hot 20% in 2009.
Why the differences? It’s largely about what’s for sale. Central Canada has the automobile and auto parts industries, machinery and equipment, and a range of primary and consumer products. Demand for these products has faltered across the board, with key industries suffering double-digit declines. Forestry, critical to British Columbia’s exports, is suffering as the US housing market implodes. In contrast, searing global demand for energy, agri-food products and fertilizer are a boon for the oil-and-gas and bread-basket provinces.
These days, it’s also about who is buying. With the US economy leading the global slowdown, exporters in provinces that are more highly exposed to the US market–like Quebec and Ontario–are seeing a lot of red ink. And this year, selling into other developed markets will not prove much of an antidote. Collectively, industrialized economies will see economic growth slow from 2.6% in 2007 to just 1.6% this year, not much different than US performance.
And then there are emerging markets. True, growth is slowing there as well, but it will still be more than four times the growth in developed markets this year. Ontario is the province least diversified into emerging markets, shipping just 4.9% of its goods there in 2007. Many provinces are at the national average of 8%. The top two are Saskatchewan, at 25.3%, and Manitoba, at 14.5% of total goods shipped. In this light, it’s hardly surprising that among the provinces, these two top the export growth rankings this year.
Will this turning of the provincial growth tables persist? The boom in the Prairies will not fade fast. Energy prices are forecast to fall to more reasonable levels later this year, but strong investment will, on balance, ensure higher export volumes. Prices for wheat and other coarse grains will continue to rise as global food supplies remain stretched, ensuring strong export activity. Fertilizer shipments, another key growth source, will continue to expand as food shortages bring more marginal arable land into production worldwide.
The bottom line? The shift in global demand to certain key products and markets has created a boom in Prairie exports. There is a permanence to these shifts that will extend the good times, but revived global growth should realign the provincial distribution of export growth by 2010.
Wednesday, May 21, 2008
Oil Execs Tell Congress: Don’t Blame Us
On a day that crude crossed $130 a barrel, executives from the top U.S. oil companies say they are not to blame for rising prices at the pump and offer an array of reasons why gas costs more and offer some ideas on how to solve the problem. More at CNN.
PM Announces Changes to Canadian Food Label Laws
(CTV News)
The “made in Canada” label is about to become a lot more Canadian, Prime Minister Stephen Harper announced Wednesday.
Ottawa is introducing new laws so that food products processed in Canada, but made with foreign ingredients, will have to say so on the label, Harper told reporters in Vineland, Ont.
“The truth is, foods marked ‘product of Canada’ or ‘made in Canada’ actually may not be very Canadian at all,” he said. “Our new guidelines are designed to redefine Canadian food content labels to better reflect the true origins of products in today’s global marketplace”
Under current laws, Harper said, it’s legal to call a product “made in Canada” if 51 per cent of production costs were incurred here and the final transformation of the product was in Canada.
The current laws are largely unchanged since the 1980s — before the rapid globalization of food production changed the origin of many of the products in grocery stores.
“A bottle of apple juice could have a ‘made in Canada’ label in it and be made from apples grown in China. A bar of chocolate might say ‘product of Canada,’ but the cocoa beans could come from the Ivory Coast,’’ Harper said.
Under the new rules, a “product of Canada” label will mean that virtually all of the contents are Canadian in origin.
A consumer advocate says the changes are long overdue. Read the complete article.
The “made in Canada” label is about to become a lot more Canadian, Prime Minister Stephen Harper announced Wednesday.
Ottawa is introducing new laws so that food products processed in Canada, but made with foreign ingredients, will have to say so on the label, Harper told reporters in Vineland, Ont.
“The truth is, foods marked ‘product of Canada’ or ‘made in Canada’ actually may not be very Canadian at all,” he said. “Our new guidelines are designed to redefine Canadian food content labels to better reflect the true origins of products in today’s global marketplace”
Under current laws, Harper said, it’s legal to call a product “made in Canada” if 51 per cent of production costs were incurred here and the final transformation of the product was in Canada.
The current laws are largely unchanged since the 1980s — before the rapid globalization of food production changed the origin of many of the products in grocery stores.
“A bottle of apple juice could have a ‘made in Canada’ label in it and be made from apples grown in China. A bar of chocolate might say ‘product of Canada,’ but the cocoa beans could come from the Ivory Coast,’’ Harper said.
Under the new rules, a “product of Canada” label will mean that virtually all of the contents are Canadian in origin.
A consumer advocate says the changes are long overdue. Read the complete article.
Canada’s Food Safety Ranking Surprises Researchers
(CBC News)
Canada ranks fifth for food safety in a survey comparing 17 industrial countries, says a University of Regina study released Wednesday.
The study’s authors, marketing professor Sylvain Charlebois and microbiology professor Chris Yost, say they were surprised to learn that Canada’s food safety systems are among the most thorough and effective in the world.
“I was expecting Canada to be deemed an average country,” said Charlebois.
“I’ve been studying food safety practices in our country awhile and I’ve been quite critical, especially with respect to mad cow. But when you compare Canada to other countries, it’s quite good.”
The report ranks Organization for Economic Co-operation and Development countries based on 45 indicators, including hygiene practices, ability to contain risks, recalls and traceability.
The top ranking went to the United Kingdom, a country that has suffered from two recent and significant food scares — mad cow disease and foot and mouth disease.
Japan ranked second, followed by Denmark, Australia and Canada. Ireland came out on the bottom of the list, just below Belgium and France.
The researchers say Canada got most of its brownie points for its system of inspections of food imports, restaurants, food retailers, distributors and processors. It also has an effective system for food recalls and educating consumers about food safety.
Canada fell down in its ability to trace food across the supply chain. “Consumers should care about this,” said Charlebois. “If there’s a recall of a food in a grocery store, it’s super important to trace back that food to its source of origin.”
Canada also fell down in labelling, including labelling for food allergies, and in its significant use of pesticides.
“The more a country uses pesticides, the less likely food will be safe for consumers,” said Charlebois, calling for more research into safe substitutes for pesticides.
The researchers noted there was very little correlation between a country’s wealth and its ranking, pointing out the wealthiest country in the world, the United States, ranked seventh.
Charlebois and Yost say they hope their food safety report card will become an annual publication.
Canada ranks fifth for food safety in a survey comparing 17 industrial countries, says a University of Regina study released Wednesday.
The study’s authors, marketing professor Sylvain Charlebois and microbiology professor Chris Yost, say they were surprised to learn that Canada’s food safety systems are among the most thorough and effective in the world.
“I was expecting Canada to be deemed an average country,” said Charlebois.
“I’ve been studying food safety practices in our country awhile and I’ve been quite critical, especially with respect to mad cow. But when you compare Canada to other countries, it’s quite good.”
The report ranks Organization for Economic Co-operation and Development countries based on 45 indicators, including hygiene practices, ability to contain risks, recalls and traceability.
The top ranking went to the United Kingdom, a country that has suffered from two recent and significant food scares — mad cow disease and foot and mouth disease.
Japan ranked second, followed by Denmark, Australia and Canada. Ireland came out on the bottom of the list, just below Belgium and France.
The researchers say Canada got most of its brownie points for its system of inspections of food imports, restaurants, food retailers, distributors and processors. It also has an effective system for food recalls and educating consumers about food safety.
Canada fell down in its ability to trace food across the supply chain. “Consumers should care about this,” said Charlebois. “If there’s a recall of a food in a grocery store, it’s super important to trace back that food to its source of origin.”
Canada also fell down in labelling, including labelling for food allergies, and in its significant use of pesticides.
“The more a country uses pesticides, the less likely food will be safe for consumers,” said Charlebois, calling for more research into safe substitutes for pesticides.
The researchers noted there was very little correlation between a country’s wealth and its ranking, pointing out the wealthiest country in the world, the United States, ranked seventh.
Charlebois and Yost say they hope their food safety report card will become an annual publication.
U.S. Farm Bill Addresses Transaction Value Interpretation
(Expeditors Newsflash)
On May 15, 2008, House Bill H.R. 2419, commonly known as the Food, Conservation, and Energy Act of 2008 or “Farm Bill”, passed the House and Senate and is now cleared for submission to the President. Language in the bill addresses U.S. Customs and Border Protection’s (CBP, Customs) January 24, 2008 proposal regarding transaction value of imported merchandise.
According to the bill, Customs will require importers to report, at the time of entry, “whether the transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in the first or earlier sale occurring prior to introduction of the merchandise into the United States.”
This requirement would be effective for one year beginning 90 days after the date of the enactment of the Food, Conservation, and Energy Act. On a monthly basis during the one-year period, Customs would report the information provided by importers to the International Trade Commission (ITC). The report would include:
• the number of importers that declare the transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in the first or earlier sale
• the tariff classification of imported merchandise
• the transaction value of the imported merchandise.
After the one-year reporting period, the ITC would report to Congress the following:
• the aggregate number of importers that declare the transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in the first or earlier sale
• a description of the frequency of the use of the “first or earlier sale” determination method
• the tariff classification of imported merchandise, and an analysis on a sectoral basis
• the aggregate transaction value imported merchandise, and an analysis on a sectoral basis.
In a section of the bill titled “Sense of Congress Regarding Prohibition on Proposed Interpretation of the Term ‘Sold For Exportation to the United States’”, Congress noted that the Customs Commissioner should not implement a change to Customs’ interpretation of the term “sold for exportation to the United States,” as it relates to determining transaction value, before January 1, 2011, unless the Commissioner consults with, and provides notice to Congressional committees, the Commercial Operations Advisory Committee (COAC) and receives approval of the Secretary of the Treasury.
The full text of H.R. 2419, the Food, Conservation, and Energy Act of 2008 or “Farm Bill”, can be accessed online here (PDF format).
On May 15, 2008, House Bill H.R. 2419, commonly known as the Food, Conservation, and Energy Act of 2008 or “Farm Bill”, passed the House and Senate and is now cleared for submission to the President. Language in the bill addresses U.S. Customs and Border Protection’s (CBP, Customs) January 24, 2008 proposal regarding transaction value of imported merchandise.
According to the bill, Customs will require importers to report, at the time of entry, “whether the transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in the first or earlier sale occurring prior to introduction of the merchandise into the United States.”
This requirement would be effective for one year beginning 90 days after the date of the enactment of the Food, Conservation, and Energy Act. On a monthly basis during the one-year period, Customs would report the information provided by importers to the International Trade Commission (ITC). The report would include:
• the number of importers that declare the transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in the first or earlier sale
• the tariff classification of imported merchandise
• the transaction value of the imported merchandise.
After the one-year reporting period, the ITC would report to Congress the following:
• the aggregate number of importers that declare the transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in the first or earlier sale
• a description of the frequency of the use of the “first or earlier sale” determination method
• the tariff classification of imported merchandise, and an analysis on a sectoral basis
• the aggregate transaction value imported merchandise, and an analysis on a sectoral basis.
In a section of the bill titled “Sense of Congress Regarding Prohibition on Proposed Interpretation of the Term ‘Sold For Exportation to the United States’”, Congress noted that the Customs Commissioner should not implement a change to Customs’ interpretation of the term “sold for exportation to the United States,” as it relates to determining transaction value, before January 1, 2011, unless the Commissioner consults with, and provides notice to Congressional committees, the Commercial Operations Advisory Committee (COAC) and receives approval of the Secretary of the Treasury.
The full text of H.R. 2419, the Food, Conservation, and Energy Act of 2008 or “Farm Bill”, can be accessed online here (PDF format).
Dead End for Free Trade
(Globe & Mail — Barrie McKenna)
Peter Durant is getting edgy. The 41-year-old Ontario trucker should be on his way to Toledo, Ohio, to pick up a load of Oreo cookies for Kraft Canada.
Instead, he’s stuck at a truck stop outside Windsor, Ont. The U.S. Customs computer system that handles freight has crashed and can’t read his electronic manifest.
By the time the all-clear sign comes from his dispatcher an hour later, about 100 trucks are lined up on the U.S. side of the Ambassador Bridge. It will take him another 11/2 hours to navigate the 13-kilometre drive through Windsor and clear customs on the U.S. side.
It’s another day at the busiest trade gateway on the planet – not a bad day; not a particularly good day. Just thick. Dense layers of security, designed to shield Americans from a world full of threats, have conspired to make life enduringly less predictable for everyone else.
“I can’t see this is an efficient way to move things across the border,” observed Mr. Durant, who has hauled cargo across the border once or twice a week for the past 14 years. “This isn’t it,” he said as he guided his rig through winding, rutted lanes beneath the bridge.
Call it thick, sticky or whatever you like. For the people and companies who ply the border trade, the new reality is an increasingly complex, time-consuming and costly experience. And we’re all paying the price.
The long-ago promise of the Canada-U.S. free-trade deal was about dismantling barriers – tariff and otherwise – along the world’s longest undefended border. But those benefits are being slowly eroded as companies absorb ever greater costs – anything and everything to keep trade moving.
Just-in-time inventory management has evolved into just-in-case.
Companies are stockpiling inventory in both countries to cope with the increasingly unpredictable border, wiping out many of the efficiencies of integrated supply chains, according to recent studies by the Conference Board of Canada as well as the Canadian and U.S. Chambers of Commerce.
Stockpiling isn’t the only coping mechanism seeping into everyday business. Disturbingly, businesses are reverting to behaviour that was common before free trade, a trend that is eroding the benefits of Canada’s open access to the U.S. market, the Conference Board concluded.
Companies now routinely preship orders, cross at night or on weekends, send empty trucks to make pick-ups or ship duplicate orders – anything to make sure a delivery arrives on time. All at a cost.
A load that doesn’t get to a customer can shut down a manufacturing plant, explained Robert Kee, managing director of Casco Inc., a Canadian-based maker of corn-based sweeteners.
“It’s a big deal,” he explained. “A customer isn’t going to shut down their plant just because they feel bad for us. They are not going to tolerate that.”
So when a shipment occasionally gets hung up en route by an inspection or some other glitch, Casco sends a second one, while eating the extra cost.
Casco was an early poster child of free trade. The U.S.-owned maker of corn-based feed, starch and sweeteners saw its tariffs go from nearly 20 per cent in the late 1980s to zero. During the 1990s, the company expanded from one to three plants in Ontario – in Brockville, Port Colborne and London – to tap burgeoning opportunities in the U.S. Northeast. Exports soared and the company prospered.
But the dream for Casco, and many others, may be silently slipping away. Longer and more frequent inspections, duplication, border congestion, mounting fees and rising shipping costs are chipping away at the company’s once impressive competitive edge (and that was before the Canadian dollar rocketed to parity). It’s U.S. Homeland Security, the U.S. Food and Drug Administration, the U.S. Department of Agriculture – part of a mushrooming security and safety bureaucracy at the border. Read the complete article.
Peter Durant is getting edgy. The 41-year-old Ontario trucker should be on his way to Toledo, Ohio, to pick up a load of Oreo cookies for Kraft Canada.
Instead, he’s stuck at a truck stop outside Windsor, Ont. The U.S. Customs computer system that handles freight has crashed and can’t read his electronic manifest.
By the time the all-clear sign comes from his dispatcher an hour later, about 100 trucks are lined up on the U.S. side of the Ambassador Bridge. It will take him another 11/2 hours to navigate the 13-kilometre drive through Windsor and clear customs on the U.S. side.
It’s another day at the busiest trade gateway on the planet – not a bad day; not a particularly good day. Just thick. Dense layers of security, designed to shield Americans from a world full of threats, have conspired to make life enduringly less predictable for everyone else.
“I can’t see this is an efficient way to move things across the border,” observed Mr. Durant, who has hauled cargo across the border once or twice a week for the past 14 years. “This isn’t it,” he said as he guided his rig through winding, rutted lanes beneath the bridge.
Call it thick, sticky or whatever you like. For the people and companies who ply the border trade, the new reality is an increasingly complex, time-consuming and costly experience. And we’re all paying the price.
The long-ago promise of the Canada-U.S. free-trade deal was about dismantling barriers – tariff and otherwise – along the world’s longest undefended border. But those benefits are being slowly eroded as companies absorb ever greater costs – anything and everything to keep trade moving.
Just-in-time inventory management has evolved into just-in-case.
Companies are stockpiling inventory in both countries to cope with the increasingly unpredictable border, wiping out many of the efficiencies of integrated supply chains, according to recent studies by the Conference Board of Canada as well as the Canadian and U.S. Chambers of Commerce.
Stockpiling isn’t the only coping mechanism seeping into everyday business. Disturbingly, businesses are reverting to behaviour that was common before free trade, a trend that is eroding the benefits of Canada’s open access to the U.S. market, the Conference Board concluded.
Companies now routinely preship orders, cross at night or on weekends, send empty trucks to make pick-ups or ship duplicate orders – anything to make sure a delivery arrives on time. All at a cost.
A load that doesn’t get to a customer can shut down a manufacturing plant, explained Robert Kee, managing director of Casco Inc., a Canadian-based maker of corn-based sweeteners.
“It’s a big deal,” he explained. “A customer isn’t going to shut down their plant just because they feel bad for us. They are not going to tolerate that.”
So when a shipment occasionally gets hung up en route by an inspection or some other glitch, Casco sends a second one, while eating the extra cost.
Casco was an early poster child of free trade. The U.S.-owned maker of corn-based feed, starch and sweeteners saw its tariffs go from nearly 20 per cent in the late 1980s to zero. During the 1990s, the company expanded from one to three plants in Ontario – in Brockville, Port Colborne and London – to tap burgeoning opportunities in the U.S. Northeast. Exports soared and the company prospered.
But the dream for Casco, and many others, may be silently slipping away. Longer and more frequent inspections, duplication, border congestion, mounting fees and rising shipping costs are chipping away at the company’s once impressive competitive edge (and that was before the Canadian dollar rocketed to parity). It’s U.S. Homeland Security, the U.S. Food and Drug Administration, the U.S. Department of Agriculture – part of a mushrooming security and safety bureaucracy at the border. Read the complete article.
Economy Showing Signs That Worst Is Already Past: Economists
(The Canadian Press)
The loonie once again worth about the same as the U.S. greenback, employment, exports and consumer spending continuing strong – what is happening to Canada’s year of economic discontent?
Just as the Canadian and U.S. economies were expected to be at their gloomiest – falling into negative numbers or close to it in the second quarter – some economists are entertaining the notion that the worst may already be in the past.
“What’s with the doom and gloom in Canada lately?” asked BMO deputy chief economist Doug Porter this week in a list of 10 reasons to feel good about the economy.
Among the categories – strong income growth and employment, no real credit crunch, rising equity prices, a surprising trade surplus and a healthy housing market.
“We know that bad news sells, but this is ridiculous,” Porter said of the hand-wringing in face of the positives.
Even in the U.S. – which is the real threat to the Canadian economy in terms of falling exports – the news has not been as uniformly bad as most economists had been forecasting for months, and the talk that the U.S. had already dipped into recession has not been supported by the numbers.
Growth in the U.S. has been tepid at best at 0.6% the past two quarters, but it has remained above the line. And while many had pointed to the second quarter as the time the American economy would cross the line, the early numbers are at best mixed.
This week saw another “surprise” when the U.S. Commerce Department reported retail sales had actually risen 0.2% in April, or 0.5% if auto sales are excluded. Read the complete article.
The loonie once again worth about the same as the U.S. greenback, employment, exports and consumer spending continuing strong – what is happening to Canada’s year of economic discontent?
Just as the Canadian and U.S. economies were expected to be at their gloomiest – falling into negative numbers or close to it in the second quarter – some economists are entertaining the notion that the worst may already be in the past.
“What’s with the doom and gloom in Canada lately?” asked BMO deputy chief economist Doug Porter this week in a list of 10 reasons to feel good about the economy.
Among the categories – strong income growth and employment, no real credit crunch, rising equity prices, a surprising trade surplus and a healthy housing market.
“We know that bad news sells, but this is ridiculous,” Porter said of the hand-wringing in face of the positives.
Even in the U.S. – which is the real threat to the Canadian economy in terms of falling exports – the news has not been as uniformly bad as most economists had been forecasting for months, and the talk that the U.S. had already dipped into recession has not been supported by the numbers.
Growth in the U.S. has been tepid at best at 0.6% the past two quarters, but it has remained above the line. And while many had pointed to the second quarter as the time the American economy would cross the line, the early numbers are at best mixed.
This week saw another “surprise” when the U.S. Commerce Department reported retail sales had actually risen 0.2% in April, or 0.5% if auto sales are excluded. Read the complete article.
Panama Next Stop on Canadian Trade Agreement Agenda
(Embassy – Michelle Collins)
Officials from the Central American country were in Ottawa last week as the two countries prepare for trade talks
As negotiations for a trade agreement with Colombia face critical opposition in both the U.S. and Canada, exploratory discussions about initiating free trade negotiations with Panama are being taken up in Ottawa.
In the Capital last week for a first meeting with Canadian trade officials, Panama’s chief trade negotiator Leroy Sheffer described the talks as “absolutely positive.” “We’re working to make Panama one of the top sectors in the world,” Mr. Sheffer said. “Panama is a main platform Canada can use to distribute to the Latin American market.”
With its strategic location in Central America and the Panama Canal free trade zone, Mr. Sheffer said the opportunities for Canadian businesses to expand services and exports in the region are immense.
He said a deal between Panama and Canada would serve to complement the two countries’ economies since both are largely service-based with important agricultural sectors. In addition, he said, Panama and Canada share similar views at the World Trade Organization in the service, financial and tourism areas.
Mr. Sheffer said Panama is especially keen to expand relations in some of the areas where Canada excels, such as bio-technology and mining, the industry in which Canada is a world leader. “Panama wants to connect with countries at a certain level of success, Canada has done well and Panama would like to be partners with the right trade partners that Canada has.”
A Foreign Investment Protection and Promotion Agreement was signed with Panama in 1998, and last year bilateral trade between the countries totalled $115.1 million. In its assessment of the country, Export Development Canada described Panama as very attractive to investors. However, the report also stated that there is rampant corruption and cronyism among businesspeople, though the government has set up a dispute mechanism to address the delays and lack of independence in the judicial system.
Since 2005, Canadian exports to Panama, such as pharmaceuticals, machinery, electronics, meat and vegetables, have grown by nearly 44 per cent. Imports from Panama to Canada are mainly mineral fuels, fruits and nuts, seafood, spices and coffee, teas and wood products.
In Export Development Canada’s analysis of Panama’s political situation, the report states that “There is little chance that a party with leftist tendencies will form a majority government or take [the] Presidency in 2009,” because the opposition received little public support in the 2004 elections.
“There’s tremendous opportunity in Panama to expand trade, especially as a portal to go into Latin America as a logistical hub,” Mr. Bains said. “Portal investment is increasing, trade is improving, there are a lot of synergies, a lot of commonalities.”
Leading the charge for an agreement since arriving in Ottawa in 2005 has been Panamanian Ambassador Romy Vásquez. Ms. Vásquez said she has been a non-stop promoter of a trade agreement between the countries because there are enormous market opportunities for both Panama and Canada.
“I’m a business person, and I do believe there are opportunities,” Ms. Vásquez said. “We are a hub for products and services because we are geographically positioned in the centre of the Americas. If Canadian companies would like to have more access, we are in a perfect position.” She said relations between the two countries have been rapidly expanding over the last few years, particularly in tourism. In 2004, Panama saw about 7,500 Canadian tourists a year. Today that number has grown to 55,000 a year, with five chartered flights leaving for Panama each week, she said.
The United Nations’ Economist Intelligence Unit has recently ranked Panama as the second-fastest growing economy in the world.
According to the Department of Foreign Affairs and International Trade, depending on the outcome of the initial talks, the government will embark on comprehensive consultations with stakeholders across Canada before making a decision on whether to launch negotiations.
Mr. Sheffer said he understands Canada has an extensive internal process to follow before moving forward with any agreements, but said he is very encouraged by Canada’s “amazing” commitment to corporate social responsibility. “There’s a need to create necessary synergies to provide benefits for Canada and Panama,” Mr. Sheffer said. “The opportunities Panama offers to Canadian firms are immense.” Read the entire article.
Panama Canal Next Stop on Canadian Trade Agreement Agenda
(Embassy – Michelle Collins)
Officials from the Central American country were in Ottawa last week as the two countries prepare for trade talks
As negotiations for a trade agreement with Colombia face critical opposition in both the U.S. and Canada, exploratory discussions about initiating free trade negotiations with Panama are being taken up in Ottawa.
In the Capital last week for a first meeting with Canadian trade officials, Panama’s chief trade negotiator Leroy Sheffer described the talks as “absolutely positive.” “We’re working to make Panama one of the top sectors in the world,” Mr. Sheffer said. “Panama is a main platform Canada can use to distribute to the Latin American market.”
With its strategic location in Central America and the Panama Canal free trade zone, Mr. Sheffer said the opportunities for Canadian businesses to expand services and exports in the region are immense.
He said a deal between Panama and Canada would serve to complement the two countries’ economies since both are largely service-based with important agricultural sectors. In addition, he said, Panama and Canada share similar views at the World Trade Organization in the service, financial and tourism areas.
Mr. Sheffer said Panama is especially keen to expand relations in some of the areas where Canada excels, such as bio-technology and mining, the industry in which Canada is a world leader. “Panama wants to connect with countries at a certain level of success, Canada has done well and Panama would like to be partners with the right trade partners that Canada has.”
A Foreign Investment Protection and Promotion Agreement was signed with Panama in 1998, and last year bilateral trade between the countries totalled $115.1 million. In its assessment of the country, Export Development Canada described Panama as very attractive to investors. However, the report also stated that there is rampant corruption and cronyism among businesspeople, though the government has set up a dispute mechanism to address the delays and lack of independence in the judicial system.
Since 2005, Canadian exports to Panama, such as pharmaceuticals, machinery, electronics, meat and vegetables, have grown by nearly 44 per cent. Imports from Panama to Canada are mainly mineral fuels, fruits and nuts, seafood, spices and coffee, teas and wood products.
In Export Development Canada’s analysis of Panama’s political situation, the report states that “There is little chance that a party with leftist tendencies will form a majority government or take [the] Presidency in 2009,” because the opposition received little public support in the 2004 elections.
“There’s tremendous opportunity in Panama to expand trade, especially as a portal to go into Latin America as a logistical hub,” Mr. Bains said. “Portal investment is increasing, trade is improving, there are a lot of synergies, a lot of commonalities.”
Leading the charge for an agreement since arriving in Ottawa in 2005 has been Panamanian Ambassador Romy Vásquez. Ms. Vásquez said she has been a non-stop promoter of a trade agreement between the countries because there are enormous market opportunities for both Panama and Canada.
“I’m a business person, and I do believe there are opportunities,” Ms. Vásquez said. “We are a hub for products and services because we are geographically positioned in the centre of the Americas. If Canadian companies would like to have more access, we are in a perfect position.” She said relations between the two countries have been rapidly expanding over the last few years, particularly in tourism. In 2004, Panama saw about 7,500 Canadian tourists a year. Today that number has grown to 55,000 a year, with five chartered flights leaving for Panama each week, she said.
The United Nations’ Economist Intelligence Unit has recently ranked Panama as the second-fastest growing economy in the world.
According to the Department of Foreign Affairs and International Trade, depending on the outcome of the initial talks, the government will embark on comprehensive consultations with stakeholders across Canada before making a decision on whether to launch negotiations.
Mr. Sheffer said he understands Canada has an extensive internal process to follow before moving forward with any agreements, but said he is very encouraged by Canada’s “amazing” commitment to corporate social responsibility. “There’s a need to create necessary synergies to provide benefits for Canada and Panama,” Mr. Sheffer said. “The opportunities Panama offers to Canadian firms are immense.” Read the entire article.
Friday, May 16, 2008
Trade surplus expands for the third straight month in March
Canada’s merchandise trade surplus with the world expanded for the third straight month in March as exports grew and imports declined.
The trade surplus jumped to $5.5 billion, its highest level since May 2007.
Exports to the United States climbed for the third straight month while U.S. imports decreased as the trade surplus with the United States rose to $8.6 billion, its highest level since April 2006.
The trade deficit with countries other than the United States fell to $3.1 billion, contracting for the third straight month, largely due to increased exports to Mexico and Norway.
Canada’s exports rose for the third straight month, increasing 1.6 per cent to $40.1 billion in March, largely on the strength of energy products.
The trade surplus jumped to $5.5 billion, its highest level since May 2007.
Exports to the United States climbed for the third straight month while U.S. imports decreased as the trade surplus with the United States rose to $8.6 billion, its highest level since April 2006.
The trade deficit with countries other than the United States fell to $3.1 billion, contracting for the third straight month, largely due to increased exports to Mexico and Norway.
Canada’s exports rose for the third straight month, increasing 1.6 per cent to $40.1 billion in March, largely on the strength of energy products.
Border Measures Boosting Costs - Canadian Report Cites Security, Infrastructure Issues
(Transport Topics Online)
Security measures at the Canada-U.S. border introduced since 9/11 have not slowed the flow of goods into the United States but have added to costs for Canadian companies, according to a report released Monday, the Ottawa Citizen newspaper reported.The Conference Board of Canada report called for a series of steps to improve cross-border trade, including pre-clearance of shipments, simplified security rules and improved border infrastructure, the paper reported.
“Contrary to the images of trucks lined up at the border, new border security policies introduced since 9/11 have not reduced Canadian export volumes to the United States,” a summary the report said, the Citizen reported. “The new border security environment, however, has raised the cost of access to the U.S. market for many companies.”The report said Canada could be a preferred place for companies to serve the U.S. market if pre-approval security programs were implemented more effectively, the paper said.
Security measures at the Canada-U.S. border introduced since 9/11 have not slowed the flow of goods into the United States but have added to costs for Canadian companies, according to a report released Monday, the Ottawa Citizen newspaper reported.The Conference Board of Canada report called for a series of steps to improve cross-border trade, including pre-clearance of shipments, simplified security rules and improved border infrastructure, the paper reported.
“Contrary to the images of trucks lined up at the border, new border security policies introduced since 9/11 have not reduced Canadian export volumes to the United States,” a summary the report said, the Citizen reported. “The new border security environment, however, has raised the cost of access to the U.S. market for many companies.”The report said Canada could be a preferred place for companies to serve the U.S. market if pre-approval security programs were implemented more effectively, the paper said.
Canada Seen Slipping in Global Supply Chains
(Globe & Mail via CSCB)
Canadian businesses are falling behind on participation in the global supply chains that are becoming key drivers of international trade and national economies, a new report from the Conference Board of Canada says.
The Conference Board study found Canadian businesses did a generally good job of integrating into the continental economy in the 1990s under the North American free-trade agreement, but supply chain participation has stagnated since. The performance is even worse with the rest of the world, the 20-page report “Stuck in Neutral” says, finding that Canada has mostly failed to take advantage of the quickly expanding economies in Asia and South America.
Although volumes of commodity exports to Asia have accelerated in recent years, Canada's share in the faster-growing “parts and final goods” segments of the production chain to the region have fallen back since 2000.
“This suggests that Canada may not have been taking sufficient advantage of opportunities to supply inputs into Asian supply chains, despite the rapid growth in this region post-2000,” the report concludes.
Report authors Danielle Goldfarb and Doris Chu explain that supply chains are the result of splicing the development, production and assembly of any product into tiny segments that could emanate from many different countries. They cite Toronto-based Samco Machinery Ltd. supplying India's Tata Motors with steel-bending machines for the new Nano car as entering the supply chain at an early or medium stage.
The Conference Board concludes that Canada is falling behind in integrating into global chains, particularly the fastest-growing chains in Asia, and that the failure will have implications on the country's future prosperity.
“Canadian leaders need to do a better job of seizing opportunities, adapting to rapid change and attracting high-value mobile activities,” the authors write.
Related: The Conference Board report (subscription required).
Canadian businesses are falling behind on participation in the global supply chains that are becoming key drivers of international trade and national economies, a new report from the Conference Board of Canada says.
The Conference Board study found Canadian businesses did a generally good job of integrating into the continental economy in the 1990s under the North American free-trade agreement, but supply chain participation has stagnated since. The performance is even worse with the rest of the world, the 20-page report “Stuck in Neutral” says, finding that Canada has mostly failed to take advantage of the quickly expanding economies in Asia and South America.
Although volumes of commodity exports to Asia have accelerated in recent years, Canada's share in the faster-growing “parts and final goods” segments of the production chain to the region have fallen back since 2000.
“This suggests that Canada may not have been taking sufficient advantage of opportunities to supply inputs into Asian supply chains, despite the rapid growth in this region post-2000,” the report concludes.
Report authors Danielle Goldfarb and Doris Chu explain that supply chains are the result of splicing the development, production and assembly of any product into tiny segments that could emanate from many different countries. They cite Toronto-based Samco Machinery Ltd. supplying India's Tata Motors with steel-bending machines for the new Nano car as entering the supply chain at an early or medium stage.
The Conference Board concludes that Canada is falling behind in integrating into global chains, particularly the fastest-growing chains in Asia, and that the failure will have implications on the country's future prosperity.
“Canadian leaders need to do a better job of seizing opportunities, adapting to rapid change and attracting high-value mobile activities,” the authors write.
Related: The Conference Board report (subscription required).
Tuesday, May 6, 2008
Government Tables Bill to Approve First Free Trade Deal in Six Years
(The Canadian Press)
The federal government says it will introduce legislation today [Monday] to approve a free trade agreement with four small European nations. The deal, the first comprehensive free trade agreement Canada has negotiated in six years, was negotiated last year and went through a 21-day opening for debate in the House of Commons without discussion.
Canadian two-way trade with the countries that make up the European Free Trade Association – Iceland, Liechtenstein, Norway and Switzerland – is estimated at $11 billion annually.
Trade Minister David Emerson trumpeted the deal last summer as a directional change for Canada, and vowed more deals in the future. But although the government has pursued negotiations with several countries, including Colombia and South Korea, none have been concluded since. The talks with Colombia and South Korea have met stiff resistance from opposition parties and affected industries and unions.
The federal government says it will introduce legislation today [Monday] to approve a free trade agreement with four small European nations. The deal, the first comprehensive free trade agreement Canada has negotiated in six years, was negotiated last year and went through a 21-day opening for debate in the House of Commons without discussion.
Canadian two-way trade with the countries that make up the European Free Trade Association – Iceland, Liechtenstein, Norway and Switzerland – is estimated at $11 billion annually.
Trade Minister David Emerson trumpeted the deal last summer as a directional change for Canada, and vowed more deals in the future. But although the government has pursued negotiations with several countries, including Colombia and South Korea, none have been concluded since. The talks with Colombia and South Korea have met stiff resistance from opposition parties and affected industries and unions.
Semiannual Regulatory Agendas Include Rules Affecting Trade
(World Trade Interactive)
The May 5 issue of the Federal Register will include the semiannual regulatory agendas of a number of federal agencies. These agendas include updates on various rulemaking activities of interest to the trade community, as indicated below.
Department of Agriculture
• Country of origin labeling – The Agricultural Marketing Service expects to finalize in September regulations on the mandatory country of origin labeling of beef, pork, lamb, fish, perishable agricultural commodities and peanuts.
• Cattle imports – The Animal and Plant Health Inspection Service expects to issue in July a proposed rule designed to help ensure that cattle and captive bison infected with tuberculosis are not imported into the U.S. This rule will establish several levels of risk classifications to be applied to foreign regions with regard to tuberculosis and establish requirements governing the importation of cattle and captive bison based on each risk classification.
A related proposed rule expected in December would amend the animal importation regulations to require that steers and spayed heifers with more than three inches of horn growth (which can be used as rodeo cattle, which are often maintained longer than feeder cattle) that are entering the U.S. from Mexico meet more stringent tuberculosis testing requirements than those with three inches or less. This rulemaking will replace a previously published proposed rule, which APHIS will withdraw.
• Plant imports – APHIS plans to issue in August a proposed rule that would establish a new category in the regulations governing the importation of nursery stock, also known as plants for planting. This category would list taxa of plants for planting whose importation is not authorized pending risk assessment.
• Fruit and vegetable imports – APHIS plans to issue in October a final rule requiring that a phytosanitary certificate accompany all non-commercial shipments of fruits and vegetables imported into the U.S. by air passengers.
• Imports from Canada – APHIS expects to finalize in June an August 2006 interim rule that amended the foreign quarantine and user fee regulations by eliminating (a) the exemptions from inspection for imported fruits and vegetables grown in Canada and (b) the exemptions from user fees for commercial vessels, trucks, railroad cars and aircraft (and international air passengers) entering the U.S from Canada.
• Export certification – APHIS anticipates issuing in September a final rule that increases the user fees charged for export certification of plants and plant products and adds a new user fee for federal export certificates for plants and plant products that an exporter obtains from a state or county cooperator.
• Bird and poultry imports – APHIS plans to issue this month an interim rule prohibiting or restricting the importation of birds, poultry and bird and poultry products from regions that have reported the presence in commercial birds or poultry of highly pathogenic avian influenza other than subtype H5N1. The new restrictions will be almost identical to those imposed on articles from regions with exotic Newcastle disease.
• Fish imports – APHIS expects to issue this month an interim final rule restricting the importation of live fish that are susceptible to viral hemorrhagic septicemia, a highly contagious disease of certain freshwater and saltwater fish.
Department of Health and Human Services
• Food labeling – The Food and Drug Administration plans to issue in July a proposed rule that would require imported food that is refused entry into the U.S. to be labeled “UNITED STATES: REFUSED ENTRY” by its owners or consignees.
Department of Homeland Security
• Security filing – U.S. Customs and Border Protection anticipates that it will issue in September a final “10+2” rule requiring additional data elements from importers and ocean carriers before oceanborne cargo is brought into the U.S.
• Air cargo screening – The Transportation Security Administration plans to issue in August an interim final rule establishing the Certified Cargo Screening Program, which will certify shippers, manufacturers and other entities to screen air cargo intended for transport on passenger aircraft. The CCSP will be the primary means through which the TSA will meet the statutory requirement for 100 percent of air cargo transported on passenger aircraft operated by an air carrier or foreign air carrier in air transportation or intrastate air transportation to be screened by August 2010. The TSA is currently pilot testing the CCSP in San Francisco, Chicago, Philadelphia, Atlanta, Dallas, Los Angeles, Miami, New York and Seattle.
Department of Transportation
• Intermodal equipment – The Federal Motor Carrier Safety Administration expects to issue in September a final rule making intermodal equipment providers subject to the Federal Motor Carrier Safety Regulations for the first time. The pending regulations are intended to ensure that intermodal container chassis and trailers tendered to motor carriers by steamship lines, railroads, terminal operators, chassis pools, etc., are safe and systematically maintained.
The May 5 issue of the Federal Register will include the semiannual regulatory agendas of a number of federal agencies. These agendas include updates on various rulemaking activities of interest to the trade community, as indicated below.
Department of Agriculture
• Country of origin labeling – The Agricultural Marketing Service expects to finalize in September regulations on the mandatory country of origin labeling of beef, pork, lamb, fish, perishable agricultural commodities and peanuts.
• Cattle imports – The Animal and Plant Health Inspection Service expects to issue in July a proposed rule designed to help ensure that cattle and captive bison infected with tuberculosis are not imported into the U.S. This rule will establish several levels of risk classifications to be applied to foreign regions with regard to tuberculosis and establish requirements governing the importation of cattle and captive bison based on each risk classification.
A related proposed rule expected in December would amend the animal importation regulations to require that steers and spayed heifers with more than three inches of horn growth (which can be used as rodeo cattle, which are often maintained longer than feeder cattle) that are entering the U.S. from Mexico meet more stringent tuberculosis testing requirements than those with three inches or less. This rulemaking will replace a previously published proposed rule, which APHIS will withdraw.
• Plant imports – APHIS plans to issue in August a proposed rule that would establish a new category in the regulations governing the importation of nursery stock, also known as plants for planting. This category would list taxa of plants for planting whose importation is not authorized pending risk assessment.
• Fruit and vegetable imports – APHIS plans to issue in October a final rule requiring that a phytosanitary certificate accompany all non-commercial shipments of fruits and vegetables imported into the U.S. by air passengers.
• Imports from Canada – APHIS expects to finalize in June an August 2006 interim rule that amended the foreign quarantine and user fee regulations by eliminating (a) the exemptions from inspection for imported fruits and vegetables grown in Canada and (b) the exemptions from user fees for commercial vessels, trucks, railroad cars and aircraft (and international air passengers) entering the U.S from Canada.
• Export certification – APHIS anticipates issuing in September a final rule that increases the user fees charged for export certification of plants and plant products and adds a new user fee for federal export certificates for plants and plant products that an exporter obtains from a state or county cooperator.
• Bird and poultry imports – APHIS plans to issue this month an interim rule prohibiting or restricting the importation of birds, poultry and bird and poultry products from regions that have reported the presence in commercial birds or poultry of highly pathogenic avian influenza other than subtype H5N1. The new restrictions will be almost identical to those imposed on articles from regions with exotic Newcastle disease.
• Fish imports – APHIS expects to issue this month an interim final rule restricting the importation of live fish that are susceptible to viral hemorrhagic septicemia, a highly contagious disease of certain freshwater and saltwater fish.
Department of Health and Human Services
• Food labeling – The Food and Drug Administration plans to issue in July a proposed rule that would require imported food that is refused entry into the U.S. to be labeled “UNITED STATES: REFUSED ENTRY” by its owners or consignees.
Department of Homeland Security
• Security filing – U.S. Customs and Border Protection anticipates that it will issue in September a final “10+2” rule requiring additional data elements from importers and ocean carriers before oceanborne cargo is brought into the U.S.
• Air cargo screening – The Transportation Security Administration plans to issue in August an interim final rule establishing the Certified Cargo Screening Program, which will certify shippers, manufacturers and other entities to screen air cargo intended for transport on passenger aircraft. The CCSP will be the primary means through which the TSA will meet the statutory requirement for 100 percent of air cargo transported on passenger aircraft operated by an air carrier or foreign air carrier in air transportation or intrastate air transportation to be screened by August 2010. The TSA is currently pilot testing the CCSP in San Francisco, Chicago, Philadelphia, Atlanta, Dallas, Los Angeles, Miami, New York and Seattle.
Department of Transportation
• Intermodal equipment – The Federal Motor Carrier Safety Administration expects to issue in September a final rule making intermodal equipment providers subject to the Federal Motor Carrier Safety Regulations for the first time. The pending regulations are intended to ensure that intermodal container chassis and trailers tendered to motor carriers by steamship lines, railroads, terminal operators, chassis pools, etc., are safe and systematically maintained.
Subscribe to:
Posts (Atom)
