(Peter G. Hall, Export Development Canada)
The marketplace is fast realizing that a global economic slowdown is in the works. Everyone seems to be convinced – except those irrepressibly bullish commodity markets. If slowdown is here, and key markets close to recession, why are commodity prices so high?
Not only are prices high, but many are close to peak levels. Oil prices closed at nearly US $108 per barrel two days ago. Gold is pushing US $1000 an ounce. Agricultural prices are soaring to unheard-of heights. Key base metals are hovering at peak levels, and even Dr. Copper, the metal with the PhD in economics, seems oblivious to the slowdown at over US $8500 per tonne.
These higher prices are no accident. The world economy reached the peak of its economic cycle a number of years ago, but a funny thing happened: instead of the typical slowing, world production continued to expand. Freer trade and increased technology opened up markets, like China and India, that formerly were much less involved in global commerce. This went a long way toward alleviating the shortages of labour and physical capital typical at the top of the cycle.
One key problem: production of commodities was not geared for this “extra” growth. A protracted period of low commodity prices actually suppressed investment in the exploration and development of a whole range of resources. Markets were lulled into thinking that supply was no problem. But shortages began to emerge in 2003, and the commodity boom was born.
If this “extra” growth is here to stay, then it is natural to conclude that commodity prices will be permanently higher. But at what level? Short-run price adjustments are almost always exaggerated, and this time is no exception. Perceived shortages lead to overbuying as producers lock in critical supplies. But sustained price increases also prompt producers to pre-buy, as what is bought can be stored and sold later at a higher price or mark-up.
These behaviours over-inflate prices, attracting a wider audience. Eager to ride the wave, speculators get involved, boosting prices even further. This activity has intensified in recent weeks as markets, spooked by troubles in the global financial sector, uncertain performance of equity markets and the eroding US dollar, have increasingly sought refuge in commodities.
At its core, the commotion is largely about perception. But the reality is that global slowdowns affect demand for commodities, and the present is no exception. How much? Consider copper. The US housing and auto sector corrections have chopped US copper usage back by over 10%, and world demand by 1.6%. Slower activity in other developed economies is having a similar effect. Copper demand could easily be off by up to 6% before taking slower emerging market growth into account. Similar logic applies to other base metals and the oil and gas sector. And the logic all suggests that prices are in for a sizable correction.
The bottom line? The recent bull run is delaying the typical effects of slower world growth on commodity prices. Commodities are unusually late in leaving the party this time around, but when they do, they will likely leave noisily, together, and quickly.
Monday, March 17, 2008
Industry Exposure to the Rising Exchange Rate – Study
(Statistics Canada)
Construction profits the most of any industry from the rising loonie, as it reaps the benefit of lower prices for imported inputs while selling its output almost entirely in Canada, according to a new study published today in the Canadian Economic Observer.
Services oriented to domestic demand also stand to benefit from lower import prices. Most resource-based industries have much larger exports than imported inputs, but have been insulated from the negative impact of the rising loonie by stronger commodity prices.
Comparing exports of outputs and imports of inputs by industry yields a measure of the net exposure each industry has to the exchange rate. Industries most vulnerable to a rising dollar are those with a large export dependency but little offset from imported inputs. The best-positioned industries are those that use large amounts of imported inputs and sell mostly in domestic, not export, markets.
This study showed that the net exposure of exported outputs and imported inputs is an important, but not dominant, determinant of industry fortunes. For nearly half the economy, exports are almost irrelevant to demand. Others that have suffered the most, notably forestry products and clothing, have been victims of events specific to those industries.
Overall, Canadian industry earned 20% of its income directly from exports in 2004. Industries vary greatly in their dependence on exports, with manufacturers and commodity producers being the leading exporters. Manufacturers of transportation equipment relied directly on exports for 73% of their output, the most of any industry in 2006.
Several other manufacturers rely on exports for nearly half their output, including machinery and equipment, chemicals, metals, wood and paper, and clothing. Mining and oil and gas directly export about half their output.
But large swathes of the service sector have little dependence on export markets. Together with construction, industries with almost no exposure to exports account for nearly half (48%) of gross domestic product.
Canadian industries imported 10.6% of all their inputs in 2006. Broadly speaking, what emerges for import use by industry is a sharp split between manufacturers and the rest of the economy — most manufacturers import inputs extensively, while other sectors essentially do not.
Comparing exports in output with imports in inputs reveals that among manufacturers, the wood and paper industries had the largest net exposure, with a gap of 36 points between the shares of exported outputs and imported inputs. This helps explain the woeful financial condition of these industries.
However, a large reliance on exports relative to imported inputs does not always imply hard times for an industry as the dollar rises. Oil and gas and mining have the largest net exposure to fluctuations in the dollar, at 46 and 43 points. These industries overall have done well recently, as the US dollar prices of their commodities have risen faster than the loonie has depressed export revenues.
Many manufacturers have a built-in hedge in their cost structure that helps compensate for the depressing effect on revenues of a rising exchange rate. While the soaring loonie has slowed export earnings, this has been partly offset by lower prices for inputs they import. This helps explain how manufacturers have adapted to the stronger exchange rate, maintaining steady output since 2003 while stepping up investment plans into 2008.
Construction stands out as the goods industry with the most to gain from a higher dollar, with a 10-point gap between the share of imported inputs and exported outputs.
Governments import a larger share of inputs than their exported outputs, notably health and education. Most commercial services have a slight excess of imports over exports. This includes business services, finance and recreation.
The study is included in the March 2008 internet edition of Canadian Economic Observer.
Construction profits the most of any industry from the rising loonie, as it reaps the benefit of lower prices for imported inputs while selling its output almost entirely in Canada, according to a new study published today in the Canadian Economic Observer.
Services oriented to domestic demand also stand to benefit from lower import prices. Most resource-based industries have much larger exports than imported inputs, but have been insulated from the negative impact of the rising loonie by stronger commodity prices.
Comparing exports of outputs and imports of inputs by industry yields a measure of the net exposure each industry has to the exchange rate. Industries most vulnerable to a rising dollar are those with a large export dependency but little offset from imported inputs. The best-positioned industries are those that use large amounts of imported inputs and sell mostly in domestic, not export, markets.
This study showed that the net exposure of exported outputs and imported inputs is an important, but not dominant, determinant of industry fortunes. For nearly half the economy, exports are almost irrelevant to demand. Others that have suffered the most, notably forestry products and clothing, have been victims of events specific to those industries.
Overall, Canadian industry earned 20% of its income directly from exports in 2004. Industries vary greatly in their dependence on exports, with manufacturers and commodity producers being the leading exporters. Manufacturers of transportation equipment relied directly on exports for 73% of their output, the most of any industry in 2006.
Several other manufacturers rely on exports for nearly half their output, including machinery and equipment, chemicals, metals, wood and paper, and clothing. Mining and oil and gas directly export about half their output.
But large swathes of the service sector have little dependence on export markets. Together with construction, industries with almost no exposure to exports account for nearly half (48%) of gross domestic product.
Canadian industries imported 10.6% of all their inputs in 2006. Broadly speaking, what emerges for import use by industry is a sharp split between manufacturers and the rest of the economy — most manufacturers import inputs extensively, while other sectors essentially do not.
Comparing exports in output with imports in inputs reveals that among manufacturers, the wood and paper industries had the largest net exposure, with a gap of 36 points between the shares of exported outputs and imported inputs. This helps explain the woeful financial condition of these industries.
However, a large reliance on exports relative to imported inputs does not always imply hard times for an industry as the dollar rises. Oil and gas and mining have the largest net exposure to fluctuations in the dollar, at 46 and 43 points. These industries overall have done well recently, as the US dollar prices of their commodities have risen faster than the loonie has depressed export revenues.
Many manufacturers have a built-in hedge in their cost structure that helps compensate for the depressing effect on revenues of a rising exchange rate. While the soaring loonie has slowed export earnings, this has been partly offset by lower prices for inputs they import. This helps explain how manufacturers have adapted to the stronger exchange rate, maintaining steady output since 2003 while stepping up investment plans into 2008.
Construction stands out as the goods industry with the most to gain from a higher dollar, with a 10-point gap between the share of imported inputs and exported outputs.
Governments import a larger share of inputs than their exported outputs, notably health and education. Most commercial services have a slight excess of imports over exports. This includes business services, finance and recreation.
The study is included in the March 2008 internet edition of Canadian Economic Observer.
New Food and Drugs Act Liaison Office
(Health Canada)
The Government of Canada has announced the official opening of the Food and Drugs Act Liaison Office (FDALO) to deal with issues concerning the Food and Drugs Act.
"The new Food and Drugs Act Liaison Office is part of a series of initiatives designed to modernize and strengthen Canada's safety system for food, health and consumer products," said Minister Clement, Minister of Health. “Like the Food and Consumer Safety Action Plan announced on December 17, 2007, the new office will also serve to fulfil our Government’s commitment to continuously improve its accountability mechanisms when it comes to matters pertaining to the Food and Drugs Act."
The Food and Drugs Act Liaison Office will provide an independent and confidential resource for the public when they are experiencing problems with the regulatory process or with the application of policies or procedures under the Food and Drugs Act. It will also work with departmental and public stakeholders to facilitate early resolution of disputes and work to prevent future disputes of a similar nature from occurring.
The Food and Drugs Act Liaison Office will listen to complaints, offer options, facilitate resolution, make recommendations and examine issues independently and impartially. The Food and Drugs Act Liaison Office can be reached at 1-866-339-4998.
For more information, please visit the Food and Drug Act Liaison Office website. If you are experiencing problems with a specific drug or food product, please contact the Government of Canada’s general inquiry line: 1 800 O-Canada (1 800 622-6232).
The Government of Canada has announced the official opening of the Food and Drugs Act Liaison Office (FDALO) to deal with issues concerning the Food and Drugs Act.
"The new Food and Drugs Act Liaison Office is part of a series of initiatives designed to modernize and strengthen Canada's safety system for food, health and consumer products," said Minister Clement, Minister of Health. “Like the Food and Consumer Safety Action Plan announced on December 17, 2007, the new office will also serve to fulfil our Government’s commitment to continuously improve its accountability mechanisms when it comes to matters pertaining to the Food and Drugs Act."
The Food and Drugs Act Liaison Office will provide an independent and confidential resource for the public when they are experiencing problems with the regulatory process or with the application of policies or procedures under the Food and Drugs Act. It will also work with departmental and public stakeholders to facilitate early resolution of disputes and work to prevent future disputes of a similar nature from occurring.
The Food and Drugs Act Liaison Office will listen to complaints, offer options, facilitate resolution, make recommendations and examine issues independently and impartially. The Food and Drugs Act Liaison Office can be reached at 1-866-339-4998.
For more information, please visit the Food and Drug Act Liaison Office website. If you are experiencing problems with a specific drug or food product, please contact the Government of Canada’s general inquiry line: 1 800 O-Canada (1 800 622-6232).
Manitoba Expected to Lead All Provinces in Economic Growth in 2008
(Conference Board of Canada)
Manitoba’s economy is forecast to expand by 3.7% for the second consecutive year, making it the fastest-growing provincial economy in Canada in 2008, according to the Conference Board’s Provincial Outlook – Winter 2008.
“Boosted by ongoing construction projects, robust domestic spending and an optimistic outlook for manufacturing, the Manitoba economy is firing on all cylinders. Its neighbour, Saskatchewan, is also poised for another year of strong growth,” said Marie-Christine Bernard, Associate Director, Provincial Outlook. “In central Canada, the sombre U.S. outlook will present a challenge for both Ontario and Quebec, but neither province is expected to slide into a recession.”
In spite of the slowing U.S. economy and the high Canadian dollar, the well-diversified manufacturing sector in Manitoba is being fuelled by large, lucrative orders for buses and aircraft parts. As a result, manufacturing in Manitoba is expected to grow by an average of 5.5% over the next two years, two percentage points higher than the national average.
Saskatchewan’s economy is also booming, with growth of 3.6% expected in 2008 – slightly below the province’s 2007 pace. High commodity prices are driving mining activity and boosting construction projects. In addition, new migrants are bolstering Saskatchewan’s domestic economy.
Alberta’s economy is cooling down, due to a five-year low in drilling activity, combined with weaker gains in retail sales and lower population growth. But the service sector is still anticipated to grow strongly, boosting overall economic growth to 3.3% in 2008.
Weakness in the United States is cause for concern for British Columbia’s forestry and manufacturing sectors, but the province’s domestic economy remains strong enough to produce real GDP growth of 3.1% this year.
The weakening trade balance will continue to erode bottom-line growth in Ontario and Quebec, and more manufacturing layoffs are expected. Still, healthy capital spending and decent income growth will support Ontario’s economy, producing growth of 2.1% in 2008. The domestic economy in Quebec is even more of a pillar of growth, thanks to federal and provincial tax cuts that will boost consumption. As a result, Quebec’s real GDP is forecast to grow by 2.4%. Both provinces can expect better performances in 2009.
In Nova Scotia, new private investment in capital projects and stronger manufacturing prospects should add to a vigourous service sector, producing growth of 2.6% this year. New Brunswick will benefit from strong mining and construction activity – offsetting difficulties in the forestry sector – to produce growth of 2.2% in 2008. Following a hiring boom in 2007, Prince Edward Island’s economy will increase by a modest 1.9% this year, although tax reductions over the past 10 months will support income growth.
After growing by 7.3% last year, Newfoundland and Labrador will post growth of just 1.5% in 2008, due to a decline in oil production. Download the forecast here.
Manitoba’s economy is forecast to expand by 3.7% for the second consecutive year, making it the fastest-growing provincial economy in Canada in 2008, according to the Conference Board’s Provincial Outlook – Winter 2008.
“Boosted by ongoing construction projects, robust domestic spending and an optimistic outlook for manufacturing, the Manitoba economy is firing on all cylinders. Its neighbour, Saskatchewan, is also poised for another year of strong growth,” said Marie-Christine Bernard, Associate Director, Provincial Outlook. “In central Canada, the sombre U.S. outlook will present a challenge for both Ontario and Quebec, but neither province is expected to slide into a recession.”
In spite of the slowing U.S. economy and the high Canadian dollar, the well-diversified manufacturing sector in Manitoba is being fuelled by large, lucrative orders for buses and aircraft parts. As a result, manufacturing in Manitoba is expected to grow by an average of 5.5% over the next two years, two percentage points higher than the national average.
Saskatchewan’s economy is also booming, with growth of 3.6% expected in 2008 – slightly below the province’s 2007 pace. High commodity prices are driving mining activity and boosting construction projects. In addition, new migrants are bolstering Saskatchewan’s domestic economy.
Alberta’s economy is cooling down, due to a five-year low in drilling activity, combined with weaker gains in retail sales and lower population growth. But the service sector is still anticipated to grow strongly, boosting overall economic growth to 3.3% in 2008.
Weakness in the United States is cause for concern for British Columbia’s forestry and manufacturing sectors, but the province’s domestic economy remains strong enough to produce real GDP growth of 3.1% this year.
The weakening trade balance will continue to erode bottom-line growth in Ontario and Quebec, and more manufacturing layoffs are expected. Still, healthy capital spending and decent income growth will support Ontario’s economy, producing growth of 2.1% in 2008. The domestic economy in Quebec is even more of a pillar of growth, thanks to federal and provincial tax cuts that will boost consumption. As a result, Quebec’s real GDP is forecast to grow by 2.4%. Both provinces can expect better performances in 2009.
In Nova Scotia, new private investment in capital projects and stronger manufacturing prospects should add to a vigourous service sector, producing growth of 2.6% this year. New Brunswick will benefit from strong mining and construction activity – offsetting difficulties in the forestry sector – to produce growth of 2.2% in 2008. Following a hiring boom in 2007, Prince Edward Island’s economy will increase by a modest 1.9% this year, although tax reductions over the past 10 months will support income growth.
After growing by 7.3% last year, Newfoundland and Labrador will post growth of just 1.5% in 2008, due to a decline in oil production. Download the forecast here.
Profile of Canadian Exporters 1996-2006
(Statistics Canada)
The number of Canadian establishments that export merchandise fell for the second consecutive year in 2006, but the total value of their exports rose to a record high, according to the latest version of the Exporter Register.
In 2006, 45,641 establishments exported merchandise, down 5.0% from 2005. However, this amount was 19% higher than it was in 1996 and slightly higher than in 2000. These establishments exported a record $404.4 billion of merchandise in 2006, a marginal gain of 0.7% from 2005. This was the third consecutive annual increase, following three years of declining exports that began in 2001.
In the manufacturing sector, the number of exporters declined 2.9% to about 21,000. This sector accounted for about one-quarter of the overall decline in the number of exporters. Even so, the value of exports from the manufacturing sector remained steady at $248.4 billion, which represented 61% of total merchandise exports in 2006.
In the wholesale trade industry, the number of exporters fell 5.2% to 10,297. This industry accounted for just under one-quarter (23%) of the overall decline in number of exporters. However, wholesalers represented 58% of the total increase in the value of exports between 2005 and 2006.
The number of exporters fell in every province. Ontario represented 40% of the national decline, followed by British Columbia, which accounted for 27% and Quebec, 16%.
Establishments that export more than $25 million annually continued to account for the majority of merchandise exports.
The largest 4% of exporting establishments accounted for 84% of the total value of merchandise exports in 2006. Those exporting less than $1 million a year represented 72% of all establishments, but only 1.5% of the total value.Establishments with fewer than 50 employees accounted for 73% of all exporting establishments, but only 31% of the total value.
Conversely, only 6% of all exporters employed more than 200 people. However, they represented 43% of the total value. Summary data is on the Statistics Canada website.
The number of Canadian establishments that export merchandise fell for the second consecutive year in 2006, but the total value of their exports rose to a record high, according to the latest version of the Exporter Register.
In 2006, 45,641 establishments exported merchandise, down 5.0% from 2005. However, this amount was 19% higher than it was in 1996 and slightly higher than in 2000. These establishments exported a record $404.4 billion of merchandise in 2006, a marginal gain of 0.7% from 2005. This was the third consecutive annual increase, following three years of declining exports that began in 2001.
In the manufacturing sector, the number of exporters declined 2.9% to about 21,000. This sector accounted for about one-quarter of the overall decline in the number of exporters. Even so, the value of exports from the manufacturing sector remained steady at $248.4 billion, which represented 61% of total merchandise exports in 2006.
In the wholesale trade industry, the number of exporters fell 5.2% to 10,297. This industry accounted for just under one-quarter (23%) of the overall decline in number of exporters. However, wholesalers represented 58% of the total increase in the value of exports between 2005 and 2006.
The number of exporters fell in every province. Ontario represented 40% of the national decline, followed by British Columbia, which accounted for 27% and Quebec, 16%.
Establishments that export more than $25 million annually continued to account for the majority of merchandise exports.
The largest 4% of exporting establishments accounted for 84% of the total value of merchandise exports in 2006. Those exporting less than $1 million a year represented 72% of all establishments, but only 1.5% of the total value.Establishments with fewer than 50 employees accounted for 73% of all exporting establishments, but only 31% of the total value.
Conversely, only 6% of all exporters employed more than 200 people. However, they represented 43% of the total value. Summary data is on the Statistics Canada website.
Trade Surplus Expands in January
Canada's merchandise trade surplus with the world expanded by about $1 billion in January as exports increased at their fastest pace in more than a year.
Canadian companies exported $38 billion worth of merchandise, a 3.6% increase from December after a downward trend that persisted through most of 2007. Export prices rose 4.2% in constant dollars, while volumes edged down 0.6% in January.
At the same time, the value of merchandise imports rose one per cent to $34.7 billion, the third straight increase. Prices climbed 1.7%, while volumes slipped 0.7%.
As a result, the trade surplus with the world rebounded from a revised $2.3 billion in December, the lowest since November 1998, to $3.3 billion. Summary data, and a link to the report, are on the Statistics Canada website.
Economists welcomed a January improvement in Canada's merchandise trade surplus with the rest of the world, but cautioned that the report's strong results were skewed by rising energy prices. Click here for the complete article.
Canadian companies exported $38 billion worth of merchandise, a 3.6% increase from December after a downward trend that persisted through most of 2007. Export prices rose 4.2% in constant dollars, while volumes edged down 0.6% in January.
At the same time, the value of merchandise imports rose one per cent to $34.7 billion, the third straight increase. Prices climbed 1.7%, while volumes slipped 0.7%.
As a result, the trade surplus with the world rebounded from a revised $2.3 billion in December, the lowest since November 1998, to $3.3 billion. Summary data, and a link to the report, are on the Statistics Canada website.
Economists welcomed a January improvement in Canada's merchandise trade surplus with the rest of the world, but cautioned that the report's strong results were skewed by rising energy prices. Click here for the complete article.
Oil Is Canada’s Ace in Any Revisiting of NAFTA
(Globe & Mail via CSCB)
Both Hillary Clinton and Barack Obama are threatening to opt out of NAFTA if elected, which means re-negotiate, a position that is quite tenable particularly with a protectionist Congress. This really is about more than politics – this threat is genuine.
Negotiating treaties involves horse trading and results are uncertain. In preparation for negotiation of the predecessor 1989 Canada/U.S. Free Trade Agreement, the Hon. Donald MacDonald concluded after exhaustive study that Canada should make a "leap of faith" and plunge in.
Should Canada do so again? There may be no choice. And if that happens, we need to pay heed to at least three key areas.
NAFTA and US AD/CVD Law
A prime objective in negotiating the FTA was to obtain an exemption from U.S. laws against dumping and export subsidies.
U.S. anti-dumping and subsidy laws are regularly used by "injured" U.S. industry associations. The U.S. has a large trade law bar that, some say, encourages (if they needed it) U.S. industries to use these laws as a "sword." Canada hoped, based on our two integrated economies, that the U.S. would be sympathetic to granting the exemption.
What did Canada end up with in the FTA (carried over into NAFTA without the "improvements" to the "temporary" FTA solution)? A "binding" dispute settlement regime with panels of arbitrators reviewing decisions of the imposing country to assess whether its laws, not any objective, international standard, were properly applied. There were more than 20 panel reviews in the most recent case against Canadian softwood lumber (one of four) – and the issue is still unresolved.
But there is an alternative. The 1994 World Trade Organization agreements created the international standard and an enforcement regime. Thereafter, Canada could also go to the WTO for dispute settlement …
NAFTA and energy
… NAFTA's energy section broadly unfetters energy trade between the U.S. and Canada. But it adds a virtual guarantee of U.S. supply. (Mexico got a "pass" on energy.) Neither country may reduce the proportion of its energy exports to the other relative to the "total supply" of the exporting country during the prior 36-month period. The rub is that "total supply" includes shipments to its domestic and foreign users.
But if you look at the current energy landscape, China wants to buy Canadian energy. Canada imports more than 55 per cent of its oil needs. Canada continues to be the largest oil and gas supplier to the U.S. Let's assume Canada continues to consume the same quantities of its own energy production and importation. If so, could Canada sell energy to China, or any country other than the U.S.? No. The proportionality maintenance obligation prevents that.
When negotiating the FTA, Canada's concern was that the U.S., then desiring energy self-sufficiency, might impose restrictions on Canadian energy imports to stimulate U.S. production. Canada won the articles prohibiting restrictions on Canadian exports, and the U.S. won the proportionality maintenance commitment. The U.S. now looks to safe, stable and friendly suppliers, now a good idea considering politics in Venezuela, Iran and Iraq…
… the prospect of the U.S. walking from NAFTA and watching China and others scoop Canada's energy exports is slim to nil…
NAFTA and investment protection
… Foreign investment protection is alive and well world-wide. There are more than 2,000 bilateral investment treaties and they are based on the NAFTA model. Importantly, there is an "manager" for settlement of foreign investment disputes at the World Bank — the International Centre for the Settlement of Investment Disputes, under the ICSID Convention. All 144 signatory countries promise to enforce ICSID awards and not one has gone unsatisfied since the convention was established in 1966…
Both Hillary Clinton and Barack Obama are threatening to opt out of NAFTA if elected, which means re-negotiate, a position that is quite tenable particularly with a protectionist Congress. This really is about more than politics – this threat is genuine.
Negotiating treaties involves horse trading and results are uncertain. In preparation for negotiation of the predecessor 1989 Canada/U.S. Free Trade Agreement, the Hon. Donald MacDonald concluded after exhaustive study that Canada should make a "leap of faith" and plunge in.
Should Canada do so again? There may be no choice. And if that happens, we need to pay heed to at least three key areas.
NAFTA and US AD/CVD Law
A prime objective in negotiating the FTA was to obtain an exemption from U.S. laws against dumping and export subsidies.
U.S. anti-dumping and subsidy laws are regularly used by "injured" U.S. industry associations. The U.S. has a large trade law bar that, some say, encourages (if they needed it) U.S. industries to use these laws as a "sword." Canada hoped, based on our two integrated economies, that the U.S. would be sympathetic to granting the exemption.
What did Canada end up with in the FTA (carried over into NAFTA without the "improvements" to the "temporary" FTA solution)? A "binding" dispute settlement regime with panels of arbitrators reviewing decisions of the imposing country to assess whether its laws, not any objective, international standard, were properly applied. There were more than 20 panel reviews in the most recent case against Canadian softwood lumber (one of four) – and the issue is still unresolved.
But there is an alternative. The 1994 World Trade Organization agreements created the international standard and an enforcement regime. Thereafter, Canada could also go to the WTO for dispute settlement …
NAFTA and energy
… NAFTA's energy section broadly unfetters energy trade between the U.S. and Canada. But it adds a virtual guarantee of U.S. supply. (Mexico got a "pass" on energy.) Neither country may reduce the proportion of its energy exports to the other relative to the "total supply" of the exporting country during the prior 36-month period. The rub is that "total supply" includes shipments to its domestic and foreign users.
But if you look at the current energy landscape, China wants to buy Canadian energy. Canada imports more than 55 per cent of its oil needs. Canada continues to be the largest oil and gas supplier to the U.S. Let's assume Canada continues to consume the same quantities of its own energy production and importation. If so, could Canada sell energy to China, or any country other than the U.S.? No. The proportionality maintenance obligation prevents that.
When negotiating the FTA, Canada's concern was that the U.S., then desiring energy self-sufficiency, might impose restrictions on Canadian energy imports to stimulate U.S. production. Canada won the articles prohibiting restrictions on Canadian exports, and the U.S. won the proportionality maintenance commitment. The U.S. now looks to safe, stable and friendly suppliers, now a good idea considering politics in Venezuela, Iran and Iraq…
… the prospect of the U.S. walking from NAFTA and watching China and others scoop Canada's energy exports is slim to nil…
NAFTA and investment protection
… Foreign investment protection is alive and well world-wide. There are more than 2,000 bilateral investment treaties and they are based on the NAFTA model. Importantly, there is an "manager" for settlement of foreign investment disputes at the World Bank — the International Centre for the Settlement of Investment Disputes, under the ICSID Convention. All 144 signatory countries promise to enforce ICSID awards and not one has gone unsatisfied since the convention was established in 1966…
Sunday, March 9, 2008
Jack Layton Discusses Trade on CNN
Last Thursday, NDP leader Jack Layton appeared on CNN with host Lou Dobbs to discuss NAFTA, globalization and the offshoring of manufacturing jobs to China.
Friday, March 7, 2008
CBS MoneyWatch: Highs and Lows
Home foreclosures and mortgage payments in arrears in the United States are at an all-time high, crude oil topped a $105 per barrel and the U.S. dollar fell to a new low against the Euro.
Canada’s Dollar Gains as Prices of Commodity Exports Advance
(Bloomberg)
The Canadian dollar rose the most in more than a week against its U.S. counterpart as prices of the nation's commodity exports rose, bolstering the currency's appeal.
Canada’s dollar strengthened against 15 of the 16 most- traded currencies as crude oil climbed to a record after the Organization of Petroleum Exporting Countries gave no indication it will increase production. Gold prices also reached a record, and wheat advanced. Commodities account for about half of Canada’s exports.
“The strengthening prices of oil and gold are helping the Canadian dollar,” said David Bradley, a director of foreign exchange trading at Scotia Capital Inc. in Toronto. Click here for the complete article.
The Canadian dollar rose the most in more than a week against its U.S. counterpart as prices of the nation's commodity exports rose, bolstering the currency's appeal.
Canada’s dollar strengthened against 15 of the 16 most- traded currencies as crude oil climbed to a record after the Organization of Petroleum Exporting Countries gave no indication it will increase production. Gold prices also reached a record, and wheat advanced. Commodities account for about half of Canada’s exports.
“The strengthening prices of oil and gold are helping the Canadian dollar,” said David Bradley, a director of foreign exchange trading at Scotia Capital Inc. in Toronto. Click here for the complete article.
Can Profits Weather the Slowdown?
(Stephen Poloz, Export Development Canada)
The profitability of Canadian companies remained strong overall at least until the end of 2007, despite concerns about the economic storm clouds gathering just south of the border. Is the situation unique, and therefore sustainable, or an accident waiting to happen?
Total Canadian corporate profits were up 9.2% in the four quarters ending in 2007Q4. This pace was far in excess of the economy’s growth rate, which means that profits continued to rise as a share of total income. The leading profit-growth sectors were arts and recreation (63%), construction (26%), retail trade (25%) and real estate (19%). In contrast, profits were falling in sectors like agriculture, forestry, fishing and hunting (-32% overall), mining (-6%), oil and gas (-1%) and repair, maintenance and personal services (-6%). Manufacturing profits were up 3.3%.
Some of these results seem surprising, such as the strength in retail trade and weakness in mining and oil and gas, not to mention positive profit growth in manufacturing. But these data can be volatile, even when measured on a year-ago basis. It is helpful to look at profit margins, which are much smoother. The profit margin for the economy as a whole was 8.9% in 2007Q4, a very solid number. This number was as low as 3.3% back in late 1992, in the aftermath of recession, but spent most of the 1990s in the 6-7% range. In 2000 it drifted above 7%, faltered to 5.3% in late 2001, but then recovered steadily. In 2005, the aggregate profit margin moved above 8%, and it has fluctuated in a narrow range between 8.5% and 9.0% since that time.
One might suspect the oil and gas sector was behind this trend, but not so. Profitability in that sector peaked in 2005, and has been declining since. Even so, its five-year average profit margin is about 19%, more than double the economy average. In fact, the uptrend in overall profitability is mainly due to mining, where the margin has more than doubled since 2001-02 to around 18%, and finance and insurance, where margins have risen from 15-16% to about 27% in the same period. Real estate has moved up a little, too, to almost 20% most recently.
As for manufacturing, its overall profit margin at the end of 2007 was 6.3%, still in a range that has been typical for much of the past decade, except during the 2001-02 slowdown. Sub-sectors of rising profitability include non-metallic mineral products (15.8% most recently), computers and electronics (10.7%), and alcoholic beverages and tobacco products (25.0%).
Many other manufacturing sub-sectors are being squeezed, including motor vehicles (-1.2%, although parts manufacturers are still doing better overall, at 7.3%), wood and paper (1.1%), clothing and textiles (1.2%), furniture (3.6%) and primary metals (5.7%). But there is also a group that is showing relatively stable profitability, so far: transportation equipment; fabricated metal and machinery; chemicals, plastics and rubber; petroleum and coal products; food and soft drinks.
The bottom line? So far, the profit damage from the U.S. slowdown has been limited to a few sectors. This puts extra weight behind the recent survey of investment intentions by Statistics Canada, which indicated that investment will be a positive for the Canadian economy in 2008.
The profitability of Canadian companies remained strong overall at least until the end of 2007, despite concerns about the economic storm clouds gathering just south of the border. Is the situation unique, and therefore sustainable, or an accident waiting to happen?
Total Canadian corporate profits were up 9.2% in the four quarters ending in 2007Q4. This pace was far in excess of the economy’s growth rate, which means that profits continued to rise as a share of total income. The leading profit-growth sectors were arts and recreation (63%), construction (26%), retail trade (25%) and real estate (19%). In contrast, profits were falling in sectors like agriculture, forestry, fishing and hunting (-32% overall), mining (-6%), oil and gas (-1%) and repair, maintenance and personal services (-6%). Manufacturing profits were up 3.3%.
Some of these results seem surprising, such as the strength in retail trade and weakness in mining and oil and gas, not to mention positive profit growth in manufacturing. But these data can be volatile, even when measured on a year-ago basis. It is helpful to look at profit margins, which are much smoother. The profit margin for the economy as a whole was 8.9% in 2007Q4, a very solid number. This number was as low as 3.3% back in late 1992, in the aftermath of recession, but spent most of the 1990s in the 6-7% range. In 2000 it drifted above 7%, faltered to 5.3% in late 2001, but then recovered steadily. In 2005, the aggregate profit margin moved above 8%, and it has fluctuated in a narrow range between 8.5% and 9.0% since that time.
One might suspect the oil and gas sector was behind this trend, but not so. Profitability in that sector peaked in 2005, and has been declining since. Even so, its five-year average profit margin is about 19%, more than double the economy average. In fact, the uptrend in overall profitability is mainly due to mining, where the margin has more than doubled since 2001-02 to around 18%, and finance and insurance, where margins have risen from 15-16% to about 27% in the same period. Real estate has moved up a little, too, to almost 20% most recently.
As for manufacturing, its overall profit margin at the end of 2007 was 6.3%, still in a range that has been typical for much of the past decade, except during the 2001-02 slowdown. Sub-sectors of rising profitability include non-metallic mineral products (15.8% most recently), computers and electronics (10.7%), and alcoholic beverages and tobacco products (25.0%).
Many other manufacturing sub-sectors are being squeezed, including motor vehicles (-1.2%, although parts manufacturers are still doing better overall, at 7.3%), wood and paper (1.1%), clothing and textiles (1.2%), furniture (3.6%) and primary metals (5.7%). But there is also a group that is showing relatively stable profitability, so far: transportation equipment; fabricated metal and machinery; chemicals, plastics and rubber; petroleum and coal products; food and soft drinks.
The bottom line? So far, the profit damage from the U.S. slowdown has been limited to a few sectors. This puts extra weight behind the recent survey of investment intentions by Statistics Canada, which indicated that investment will be a positive for the Canadian economy in 2008.
Wednesday, March 5, 2008
Industry Week Poll on NAFTA
Industry Week is running an online poll on the home page of its website.
Which of the following actions should the U.S. take on NAFTA?
• Withdraw from NAFTA immediately.
• Try to renegotiate NAFTA in the next 6 months, and withdraw if more favorable terms are not met.
• Keep NAFTA as it is.
Current results indicate almost even three-way split between the various choices.
Update 03-07-08: Current results trending towards renegotiation (38%) with the other two options at approx. 31% each.
Which of the following actions should the U.S. take on NAFTA?
• Withdraw from NAFTA immediately.
• Try to renegotiate NAFTA in the next 6 months, and withdraw if more favorable terms are not met.
• Keep NAFTA as it is.
Current results indicate almost even three-way split between the various choices.
Update 03-07-08: Current results trending towards renegotiation (38%) with the other two options at approx. 31% each.
Canada Scores Victory in Softwood Fight
(Globe & Mail via CSCB)
Canada won a sizeable legal victory today over the United States Tuesday after a private court settled the first dispute to flare up over the 2006 softwood lumber deal between Ottawa and Washington.
The decision is expected to infuriate the hard-line U.S. softwood lumber lobby, which will likely push for a judicial review of the ruling…
… the point Canada won – whether Alberta and B.C. producers should have been paying higher export taxes in the months after the deal was inked – will save those provinces as much as $75-million in export levies…
International Trade Minister David Emerson, said: “We are pleased that the tribunal agreed with our interpretation that the adjustment factor is not applicable to British Columbia and Alberta. However, we are disappointed that the tribunal did not agree with our position that adjustments were to commence as of July 1, 2007.”
The compete statement from the minister regarding the decision can be found here.
Canada won a sizeable legal victory today over the United States Tuesday after a private court settled the first dispute to flare up over the 2006 softwood lumber deal between Ottawa and Washington.
The decision is expected to infuriate the hard-line U.S. softwood lumber lobby, which will likely push for a judicial review of the ruling…
… the point Canada won – whether Alberta and B.C. producers should have been paying higher export taxes in the months after the deal was inked – will save those provinces as much as $75-million in export levies…
International Trade Minister David Emerson, said: “We are pleased that the tribunal agreed with our interpretation that the adjustment factor is not applicable to British Columbia and Alberta. However, we are disappointed that the tribunal did not agree with our position that adjustments were to commence as of July 1, 2007.”
The compete statement from the minister regarding the decision can be found here.
China to Enact New Product Safety Rules in Bid to Restore Reputation
(The Canadian Press)
The Chinese premier said Wednesday that Beijing is taking steps to ensure its product safety regulations meet international standards, signalling another phase in China's wide-ranging campaign to repair its battered reputation as an exporter.
China's exports have come under heavy scrutiny in the last year after potentially deadly levels of chemicals were found in goods ranging from toothpaste to toys to a pet food ingredient.
“It is imperative that the people feel confident about the safety of food and other consumer goods and that our exports have a good reputation,” Premier Wen Jiabao said Wednesday during an address to the National People's Congress, China's legislature.
Measures to ensure the quality of products for both domestic and international consumption will include creating or updating 7,700 national safety standards, he said.
Requirements and testing methods related to food and product safety will meet international standards, Wen said.
Wen also said co-ordination between law enforcement and prosecutors needs to be improved to increase penalties for guilty producers.
China last year announced a series of measures to boost product supervision and declared as a success a four-month quality and safety campaign that ended in December.
With the Beijing Olympic Games less than 200 days away, authorities have pledged to take rigorous measures to ensure food safety.
The Chinese premier said Wednesday that Beijing is taking steps to ensure its product safety regulations meet international standards, signalling another phase in China's wide-ranging campaign to repair its battered reputation as an exporter.
China's exports have come under heavy scrutiny in the last year after potentially deadly levels of chemicals were found in goods ranging from toothpaste to toys to a pet food ingredient.
“It is imperative that the people feel confident about the safety of food and other consumer goods and that our exports have a good reputation,” Premier Wen Jiabao said Wednesday during an address to the National People's Congress, China's legislature.
Measures to ensure the quality of products for both domestic and international consumption will include creating or updating 7,700 national safety standards, he said.
Requirements and testing methods related to food and product safety will meet international standards, Wen said.
Wen also said co-ordination between law enforcement and prosecutors needs to be improved to increase penalties for guilty producers.
China last year announced a series of measures to boost product supervision and declared as a success a four-month quality and safety campaign that ended in December.
With the Beijing Olympic Games less than 200 days away, authorities have pledged to take rigorous measures to ensure food safety.
Tuesday, March 4, 2008
CBC National: Obama Campaign, NAFTA & the Canadian Government
Further clarification on the nature of the disucssions between Obama's presential campaign and the Canadian Embassy.
CTV on Obama, Clinton and NAFTA
CTV News reports on communications between the Obama campaign and the Canadian government regarding NAFTA and campaign rhetoric.
Candidates’ NAFTA Stance Stirs Canada
(Financial Times)
Canada has warned that the U.S.’s privileged access to its oil and natural gas could be in jeopardy if a Democratic administration backtracks on the North American Free Trade Agreement.
Canada is the U.S.’s biggest foreign oil supplier, exporting close to 1.8m barrels a day - more than 10 per cent of U.S. consumption. NAFTA provisions make it difficult for Canada to restrict oil shipments to the U.S.
“If NAFTA is ripped up then the Chinese can buy more of our oil; there’s no further obligation on the part of Canada to sell its oil to the U.S.,” a Canadian diplomat told the Financial Times.
He was responding to statements this week by Barack Obama and Hillary Clinton, the two Democratic presidential hopefuls, that they would be prepared to pull out of NAFTA it was not renegotiated.
“We will opt out of NAFTA unless we renegotiate it and we renegotiate on terms that are favourable to all of America,” Mrs Clinton said in her debate with Mr Obama in Ohio.
George W. Bush, U.S. president, criticised the Democratic rivals for “trying to score political points” at NAFTA ‘s expense and said the U.S. had benefited from the deal.
“One statistic I think people need to know is there’s roughly like $380bn worth of goods that we ship to our NAFTA partners on an annual basis,” he said, in a White House press conference.
“There’s a lot of farmers and businesses, large and small, who are benefiting from having amarket in our neighbourhood.”
Although Mexico, the third signatory to the treaty, is the overwhelming focus of much of the U.S. disquiet about NAFTA, Canada would also be affected by a renegotiation and has signalled that it would have demands of its own.
“NAFTA has been kind of a foundation of integrating the North American energy market,” David Emerson, Canada’s trade minister, said in Ottawa. “If you reopen [NAFTA] for one or two issues, you cannot avoid reopening it across a range of issues.” Click here for the complete article.
Canada has warned that the U.S.’s privileged access to its oil and natural gas could be in jeopardy if a Democratic administration backtracks on the North American Free Trade Agreement.
Canada is the U.S.’s biggest foreign oil supplier, exporting close to 1.8m barrels a day - more than 10 per cent of U.S. consumption. NAFTA provisions make it difficult for Canada to restrict oil shipments to the U.S.
“If NAFTA is ripped up then the Chinese can buy more of our oil; there’s no further obligation on the part of Canada to sell its oil to the U.S.,” a Canadian diplomat told the Financial Times.
He was responding to statements this week by Barack Obama and Hillary Clinton, the two Democratic presidential hopefuls, that they would be prepared to pull out of NAFTA it was not renegotiated.
“We will opt out of NAFTA unless we renegotiate it and we renegotiate on terms that are favourable to all of America,” Mrs Clinton said in her debate with Mr Obama in Ohio.
George W. Bush, U.S. president, criticised the Democratic rivals for “trying to score political points” at NAFTA ‘s expense and said the U.S. had benefited from the deal.
“One statistic I think people need to know is there’s roughly like $380bn worth of goods that we ship to our NAFTA partners on an annual basis,” he said, in a White House press conference.
“There’s a lot of farmers and businesses, large and small, who are benefiting from having amarket in our neighbourhood.”
Although Mexico, the third signatory to the treaty, is the overwhelming focus of much of the U.S. disquiet about NAFTA, Canada would also be affected by a renegotiation and has signalled that it would have demands of its own.
“NAFTA has been kind of a foundation of integrating the North American energy market,” David Emerson, Canada’s trade minister, said in Ottawa. “If you reopen [NAFTA] for one or two issues, you cannot avoid reopening it across a range of issues.” Click here for the complete article.
Meet The Press: NAFTA & the U.S. Economy
Political advisers for both the Democrats and Republicans discuss the presidential candidates’ positions on NAFTA and the U.S. economy.
Clinton Obama Cleveland debate: Is NAFTA Good Or Bad?
Democratic presidential candidates Hillary Rodham Clinton and Barack Obama debate NAFTA -North American Free Trade Agreement.
Monday, March 3, 2008
NAFTA Ministers Direct Further Efforts on Border Security, Food Safety, IPR
U.S., Canadian and Mexican officials met last week to discuss efforts under the trilateral Security and Prosperity Partnership. A joint statement issued at the conclusion of the meeting indicated that the officials have directed their appropriate agencies to take the following actions, and to consider innovative ways to advance the priorities indicated, ahead of a NAFTA leaders’ summit in New Orleans April 21-22.
Competitiveness
• continue to implement the strategy to combat piracy and counterfeiting
• build on the Regulatory Cooperation Framework by pursuing collaboration through sectoral initiatives, with an emphasis on the automotive sector
Food and Product Safety
• strengthen cooperation to better identify, assess and manage unsafe food and products before they enter North America
• collaborate to promote the compatibility of the countries’ related regulatory and inspection regimes
Energy and Environment
• develop projects under the newly signed Agreement on Science and Technology
• cooperate on auto fuel efficiency, energy efficiency standards and moving new technologies to the marketplace
Border Security
• strengthen cooperation protocols and create new mechanisms to secure common borders while facilitating legitimate travel and trade in the North American region
Emergency Management and Preparedness
• strengthen capacity for emergency management cooperation in the region before, during and after disasters
In addition, the statement said, the three NAFTA partners will explore new avenues of cooperation and convergence to address issues such as arms trafficking, terrorism, money laundering, counterfeiting, trafficking of people and smuggling, and border violence.
Competitiveness
• continue to implement the strategy to combat piracy and counterfeiting
• build on the Regulatory Cooperation Framework by pursuing collaboration through sectoral initiatives, with an emphasis on the automotive sector
Food and Product Safety
• strengthen cooperation to better identify, assess and manage unsafe food and products before they enter North America
• collaborate to promote the compatibility of the countries’ related regulatory and inspection regimes
Energy and Environment
• develop projects under the newly signed Agreement on Science and Technology
• cooperate on auto fuel efficiency, energy efficiency standards and moving new technologies to the marketplace
Border Security
• strengthen cooperation protocols and create new mechanisms to secure common borders while facilitating legitimate travel and trade in the North American region
Emergency Management and Preparedness
• strengthen capacity for emergency management cooperation in the region before, during and after disasters
In addition, the statement said, the three NAFTA partners will explore new avenues of cooperation and convergence to address issues such as arms trafficking, terrorism, money laundering, counterfeiting, trafficking of people and smuggling, and border violence.
Exporting: It’s Time to Swim
(Canadian Business – Megan Harman)
Canadian manufacturers treading water might have to start swimming across the Pacific Ocean to keep afloat. And their destination need not be just China. The United Arab Emirates and India are also big markets where Canadian products should have a greater presence, says Harinder Takhar, Ontario’s minister of small business and entrepreneurship. “There are tremendous opportunities in both these countries,” he said at a Toronto roundtable event in January, where small and medium-sized manufacturers pitched ways the government can help the industry.
Between the strong Canadian dollar, a skilled-labour shortage and a U.S. economic downturn hampering the one market that exporters depend on most, the manufacturing outlook for the foreseeable future is the dimmest in years. No wonder companies might feel they have enough to handle without tackling new markets. “We’re a manufacturer. We’re not in the business of finding global markets,” says Jason Galamaga, co-owner of Modern Age Plastics Inc., a Toronto producer of signs and displays. Modern Age Plastics has fewer than 100 workers and lacks the resources to expand abroad, a problem facing most Ontario manufacturers since 99.5% of them have fewer than 500 employees. Read the entire article.
Canadian manufacturers treading water might have to start swimming across the Pacific Ocean to keep afloat. And their destination need not be just China. The United Arab Emirates and India are also big markets where Canadian products should have a greater presence, says Harinder Takhar, Ontario’s minister of small business and entrepreneurship. “There are tremendous opportunities in both these countries,” he said at a Toronto roundtable event in January, where small and medium-sized manufacturers pitched ways the government can help the industry.
Between the strong Canadian dollar, a skilled-labour shortage and a U.S. economic downturn hampering the one market that exporters depend on most, the manufacturing outlook for the foreseeable future is the dimmest in years. No wonder companies might feel they have enough to handle without tackling new markets. “We’re a manufacturer. We’re not in the business of finding global markets,” says Jason Galamaga, co-owner of Modern Age Plastics Inc., a Toronto producer of signs and displays. Modern Age Plastics has fewer than 100 workers and lacks the resources to expand abroad, a problem facing most Ontario manufacturers since 99.5% of them have fewer than 500 employees. Read the entire article.
Courier Low Value Shipment (LVS) Program Review
(IE Canada)
The Canada Border Services Agency (CBSA) is undertaking a Courier Low Value Shipment (LVS) Program Review. The Review team is taking a comprehensive approach, consulting not only internally within the CBSA but also widely within the industry and with other government departments and stakeholders.
Since the inception of the Courier Low Value Shipment (LVS) Program in the early 1990s, volumes in the courier stream have risen by approximately 433% from 6 million to over 26 million shipments annually. As well, there is an increasing emphasis on securing the trade supply chain through the use of advance information and modern contraband detection technology.
The purpose of the Courier LVS Program Review is to re-examine and re-evaluate the program in light of the current environment with the objectives of identifying present and future model flows; best industry practices both nationally and internationally; co-operative risk management measures; and opportunities for automation and the streamlining of processes. The review team will identify short, medium, and long-term goals for process improvement.
The Canada Border Services Agency (CBSA) is undertaking a Courier Low Value Shipment (LVS) Program Review. The Review team is taking a comprehensive approach, consulting not only internally within the CBSA but also widely within the industry and with other government departments and stakeholders.
Since the inception of the Courier Low Value Shipment (LVS) Program in the early 1990s, volumes in the courier stream have risen by approximately 433% from 6 million to over 26 million shipments annually. As well, there is an increasing emphasis on securing the trade supply chain through the use of advance information and modern contraband detection technology.
The purpose of the Courier LVS Program Review is to re-examine and re-evaluate the program in light of the current environment with the objectives of identifying present and future model flows; best industry practices both nationally and internationally; co-operative risk management measures; and opportunities for automation and the streamlining of processes. The review team will identify short, medium, and long-term goals for process improvement.
CBS MoneyWatch: Buffet Says U.S. in Recession
Billionaire investor Warren Buffett says that the United States is in a recession. And the auto industry continues to suffer from sluggish sales.
Government of Canada to Fund Expansion at Border Crossing Facility in Lacolle, Quebec
(Transport Canada)
The Government of Canada will commit $10 million to expand the Canada Border Services Agency (CBSA) facilities at the Lacolle-Champlain border crossing, one of the ten busiest Canada-United States border crossings. The Honourable Stockwell Day, Minister of Public Safety, made the announcement today on behalf of the Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities.
Funded through the Gateways and Border Crossings Fund, the project consists primarily of the expansion of commercial and bus processing facilities. The project is designed to improve border infrastructure along the Canadian side of the corridor, enhance safety, and relieve traffic congestion. More information here.
The Government of Canada will commit $10 million to expand the Canada Border Services Agency (CBSA) facilities at the Lacolle-Champlain border crossing, one of the ten busiest Canada-United States border crossings. The Honourable Stockwell Day, Minister of Public Safety, made the announcement today on behalf of the Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities.
Funded through the Gateways and Border Crossings Fund, the project consists primarily of the expansion of commercial and bus processing facilities. The project is designed to improve border infrastructure along the Canadian side of the corridor, enhance safety, and relieve traffic congestion. More information here.
Is the Slowdown Spreading? Ask Producers
(Peter G. Hall, Vice-President and Deputy Chief Economist, Export Development Canada)
Last year, decoupling was all the rage. Sure, the U.S. economy was going flat, but many asserted that the malaise was more or less confined within US borders. But what was loudly proclaimed mere weeks ago has now gone strangely silent. Is decoupling dead, or has it just gone dormant?
The debate centers around sequencing. Our increasingly synchronized, just-in-time world likely led many economy-watchers to expect a more simultaneous slowdown. And when the largest single economy began to falter in mid-2006 with no immediate external effects, hopes of a confined slowdown were kindled. The more optimistic pundits were even more hopeful, confining the slowdown to just one sector of the U.S. economy. But slowdown has spread to other parts of the U.S. economy, perhaps more gradually than expected, casting increasing doubt on decoupling.
Is the slowdown spreading internationally? Industrial production data give us a clue. In the U.S., industrial production has been roughly flat for 6 months. Not only is this further evidence of a generalized slowdown within the U.S., but it comes in spite of a weak-currency-inspired resurgence in exports. But as the U.S. malaise is already well-digested, this is not really a surprise.
What of other countries? First, the developed world. Eurozone production declined in three of the last four months, and between August and December 2007, year-over-year growth fell from 4.6% to just 1.3%. Deceleration is evident in Germany, where growth stalled late last year. Annual growth in France is a fraction of Germany’s, and recent monthly performance has been spotty. Output has been flat in the UK for seven months, while Spain and Italy have recently slid into deep decline. Industrial production in Japan is still growing, but the pace has diminished steadily, to about one-third of its late-2006 rate. This sounds like a lot more than a U.S.-only phenomenon.
The case is less clear in the rest of the world. Some economies appear to be immune to the slowdown. Production seems to be gaining momentum in Korea, Thailand and Taiwan, where annual increases rose through 2007 to a comfortable double-digit pace. But others are clearly sliding. Singapore, a bellwether economy for global trade, saw year-to-year industrial production plummet from the 15-20% growth pace to zero in the final half of last year. Things are worse in the Philippines, where declines persisted for most of 2007. India is down from double-digit growth a year ago, to the 7-8% range.
Other economies are somewhere in the middle. Brazil slowed in recent months, although growth is still decent. Malaysia’s production has improved consistently since early 2007, but sales aren’t keeping up: export growth has slowed rapidly, from 10% a year ago to just 3% last December. In China, the same trend may be developing. Production is growing steadily at over 17%. But exports to the U.S., up by a hefty pace in each of the last three years, are just 6% higher. China’s yearly exports to the EU look more respectable, but the trend in recent months has slowed.
The bottom line? The evidence is not complete, but what we do have makes a compelling case for a more staggered slowdown. Given the evidence, there is potentially a lot more slowing up ahead. These days, even the decouplers seem to agree.
Last year, decoupling was all the rage. Sure, the U.S. economy was going flat, but many asserted that the malaise was more or less confined within US borders. But what was loudly proclaimed mere weeks ago has now gone strangely silent. Is decoupling dead, or has it just gone dormant?
The debate centers around sequencing. Our increasingly synchronized, just-in-time world likely led many economy-watchers to expect a more simultaneous slowdown. And when the largest single economy began to falter in mid-2006 with no immediate external effects, hopes of a confined slowdown were kindled. The more optimistic pundits were even more hopeful, confining the slowdown to just one sector of the U.S. economy. But slowdown has spread to other parts of the U.S. economy, perhaps more gradually than expected, casting increasing doubt on decoupling.
Is the slowdown spreading internationally? Industrial production data give us a clue. In the U.S., industrial production has been roughly flat for 6 months. Not only is this further evidence of a generalized slowdown within the U.S., but it comes in spite of a weak-currency-inspired resurgence in exports. But as the U.S. malaise is already well-digested, this is not really a surprise.
What of other countries? First, the developed world. Eurozone production declined in three of the last four months, and between August and December 2007, year-over-year growth fell from 4.6% to just 1.3%. Deceleration is evident in Germany, where growth stalled late last year. Annual growth in France is a fraction of Germany’s, and recent monthly performance has been spotty. Output has been flat in the UK for seven months, while Spain and Italy have recently slid into deep decline. Industrial production in Japan is still growing, but the pace has diminished steadily, to about one-third of its late-2006 rate. This sounds like a lot more than a U.S.-only phenomenon.
The case is less clear in the rest of the world. Some economies appear to be immune to the slowdown. Production seems to be gaining momentum in Korea, Thailand and Taiwan, where annual increases rose through 2007 to a comfortable double-digit pace. But others are clearly sliding. Singapore, a bellwether economy for global trade, saw year-to-year industrial production plummet from the 15-20% growth pace to zero in the final half of last year. Things are worse in the Philippines, where declines persisted for most of 2007. India is down from double-digit growth a year ago, to the 7-8% range.
Other economies are somewhere in the middle. Brazil slowed in recent months, although growth is still decent. Malaysia’s production has improved consistently since early 2007, but sales aren’t keeping up: export growth has slowed rapidly, from 10% a year ago to just 3% last December. In China, the same trend may be developing. Production is growing steadily at over 17%. But exports to the U.S., up by a hefty pace in each of the last three years, are just 6% higher. China’s yearly exports to the EU look more respectable, but the trend in recent months has slowed.
The bottom line? The evidence is not complete, but what we do have makes a compelling case for a more staggered slowdown. Given the evidence, there is potentially a lot more slowing up ahead. These days, even the decouplers seem to agree.
Exporters Beware - The Outlook According to Housing is Gloomy
The following article, by Peter Hall of Export Development Canada, is excerpted from “Canadian Transportation & Logistics”
Housing markets have once again proven their economic prowess. U.S. housing starts fell sharply in mid-2006, fully 18 months ahead of the softening in the broader U.S. economy – a remarkable lead on an economic slowdown that most agree is now going global. So given its foresight, is this keen sage saying anything about impending recovery?
Initially, the plunge in U.S. housing starts was not so bad. From just over 2 million units in 2005, starts fell to the 1.5 million-unit level in late 2006.
That’s a big tumble, but it marked a return to long-term trend levels – an unusually stable outcome…. But the tumble resumed in mid-2007, and by the end of the year had sunk to 1 million units. No sign of a rebound here.
There is some solace in this quick plunge. It stands to reason that the sharper the correction, the quicker the recovery. True, but U.S. housing markets became steadily more bloated in the 2002-06 period. Starts exceeded the population’s basic requirement for new housing by roughly 1.4 million units in five short years. Working this off could easily take another 18 months, even at the current slow pace of building activity...
Other housing activity measures are even less comforting…. As such, the U.S. market now has over 10 months’ supply of houses on the market, a far cry from the stable level of 4.5 months’ supply, last seen in late 2005. Again, not a happy result.
Calculated another way, this is equivalent to over 7 million surplus units on the market – a year’s worth of sales, and in a good year, no less. Given this situation, it is no wonder that the U.S. market is facing the first nationwide decline in housing prices in recent memory.
What is more, there is no clear indication that the U.S. housing market has hit bottom. U.S. consumers were lured into sub-prime mortgages with temporary ‘teaser’ interest rates which upon expiry were reset to higher levels. For the market as a whole, the peak of these resets occurs in the first quarter of this year – suggesting strongly that further fallout is likely.
The implications are gloomy. U.S. consumers are accustomed to using home equity as a ready source of cash. With the housing market in a funk and prices swooning, this pool of liquidity is fast drying up. Other sources of savings – equity markets and bank accounts – have also been found wanting, so the consumer’s only option appears to be curtailed spending, not a pleasant prospect for the world economy. Closer to home, the message for Canadian exporters – particularly of wood products, who face an 11% decline in activity this year alone – is sobering.
The bottom line? The numbers suggest it will be at least mid-2009 before U.S. housing markets begin a meaningful rebound. If this indicator is right yet again, 2008 and 2009 will see slower global growth. Let’s just hope that in the recovery cycle, this sage is not quite so forward-looking.
Housing markets have once again proven their economic prowess. U.S. housing starts fell sharply in mid-2006, fully 18 months ahead of the softening in the broader U.S. economy – a remarkable lead on an economic slowdown that most agree is now going global. So given its foresight, is this keen sage saying anything about impending recovery?
Initially, the plunge in U.S. housing starts was not so bad. From just over 2 million units in 2005, starts fell to the 1.5 million-unit level in late 2006.
That’s a big tumble, but it marked a return to long-term trend levels – an unusually stable outcome…. But the tumble resumed in mid-2007, and by the end of the year had sunk to 1 million units. No sign of a rebound here.
There is some solace in this quick plunge. It stands to reason that the sharper the correction, the quicker the recovery. True, but U.S. housing markets became steadily more bloated in the 2002-06 period. Starts exceeded the population’s basic requirement for new housing by roughly 1.4 million units in five short years. Working this off could easily take another 18 months, even at the current slow pace of building activity...
Other housing activity measures are even less comforting…. As such, the U.S. market now has over 10 months’ supply of houses on the market, a far cry from the stable level of 4.5 months’ supply, last seen in late 2005. Again, not a happy result.
Calculated another way, this is equivalent to over 7 million surplus units on the market – a year’s worth of sales, and in a good year, no less. Given this situation, it is no wonder that the U.S. market is facing the first nationwide decline in housing prices in recent memory.
What is more, there is no clear indication that the U.S. housing market has hit bottom. U.S. consumers were lured into sub-prime mortgages with temporary ‘teaser’ interest rates which upon expiry were reset to higher levels. For the market as a whole, the peak of these resets occurs in the first quarter of this year – suggesting strongly that further fallout is likely.
The implications are gloomy. U.S. consumers are accustomed to using home equity as a ready source of cash. With the housing market in a funk and prices swooning, this pool of liquidity is fast drying up. Other sources of savings – equity markets and bank accounts – have also been found wanting, so the consumer’s only option appears to be curtailed spending, not a pleasant prospect for the world economy. Closer to home, the message for Canadian exporters – particularly of wood products, who face an 11% decline in activity this year alone – is sobering.
The bottom line? The numbers suggest it will be at least mid-2009 before U.S. housing markets begin a meaningful rebound. If this indicator is right yet again, 2008 and 2009 will see slower global growth. Let’s just hope that in the recovery cycle, this sage is not quite so forward-looking.
Farmers Should Get $72M Break on Freight Costs: CTA
(CBC)
The Canadian Transportation Agency has ordered a big change to the regulation of freight costs – a change that could mean $72 million in savings for Prairie farmers.
The change announced Tuesday to “revenue caps” – the maximum amounts that CP Rail and CN Rail can earn from grain shipping – means farmers will now pay $2.59 less for every tonne of grain they send to the port of Vancouver.
Biggar, Sask.-area farmer Rene de Moissac calculated that he’ll save about $5,000 this year on freight rates, but he also said he wonders how many years he was paying too much. De Moissac thinks farmers should lobby to get some of that money back.
Other observers, like Saskatoon-based commodity analyst Larry Weber, think farmers and grain companies should now lobby for an improvement in rail service. “My main concern is by lowering the rates, are we going to get any better service than we’re getting today?” he asked. “The service today is already dismal.”
The change reflects the fact that railways’ maintenance costs for hopper cars have decreased, the transportation agency said.
The president of the Farmer Rail Car Coalition, Sinclair Harrison, said years of lobbying by his group has finally paid off. “We felt that farmers were paying an excess of $3,000 per car too much,” he said. “This announcement by the CTA backs up everything we said for 12 years.”
The railways have said they will appeal the ruling.
The Canadian Transportation Agency has ordered a big change to the regulation of freight costs – a change that could mean $72 million in savings for Prairie farmers.
The change announced Tuesday to “revenue caps” – the maximum amounts that CP Rail and CN Rail can earn from grain shipping – means farmers will now pay $2.59 less for every tonne of grain they send to the port of Vancouver.
Biggar, Sask.-area farmer Rene de Moissac calculated that he’ll save about $5,000 this year on freight rates, but he also said he wonders how many years he was paying too much. De Moissac thinks farmers should lobby to get some of that money back.
Other observers, like Saskatoon-based commodity analyst Larry Weber, think farmers and grain companies should now lobby for an improvement in rail service. “My main concern is by lowering the rates, are we going to get any better service than we’re getting today?” he asked. “The service today is already dismal.”
The change reflects the fact that railways’ maintenance costs for hopper cars have decreased, the transportation agency said.
The president of the Farmer Rail Car Coalition, Sinclair Harrison, said years of lobbying by his group has finally paid off. “We felt that farmers were paying an excess of $3,000 per car too much,” he said. “This announcement by the CTA backs up everything we said for 12 years.”
The railways have said they will appeal the ruling.
Canada, U.S. Chambers Call for Lower Cost, More Efficient Border
(The Canadian Press via CCLA)
The Canadian and U.S. chambers of commerce are sounding the alarm on the mounting costs and delays encountered by companies trying to do business in both countries, saying some of the barriers are unreasonable and hurting the economy.
The two countries’ largest business lobby groups, with over three million member firms, issued 17 recommendations Wednesday on how to improve efficiency while maintaining security at what was once called the world’s longest undefended border.
But the chambers agree that one of the key changes needed – an attitudinal shift back to the good old days – is not in the offing for now, at least not on the part of the U.S. government following the terrorist attacks experienced on Sept. 11, 2001.
“Obviously, the events of 9-11 changed a whole lot,” said Canadian chamber policy head Mike Murphy. “We used to have a different attitude about the border . . . I just think it is going to take some time.”
Since the attacks, the U.S. has created a new government Department of Homeland Security and has erected increasingly layered and complex barriers of regulations and inspections.
That has increased wait times for Canadian shippers moving cargo into the U.S., as well as costs.
The report cites several examples of how the regulations have added to costs, including a 2005 U.S. requirement that health certificate numbers be printed on each case of meat and poultry shipped into the U.S., which is estimated to cost one food exporter about $700,000 a year.
“The reality is every incremental cost does filter down to the individual consumer and it makes North American businesses less competitive globally,” said Adrean Scheid Rothkopf of the U.S. chamber.
One of the problems, say businesses, is that neither the U.S. nor Canadian governments have hired and trained sufficient staff to administer the new security and safety regulations they have imposed.
One businessman, Robert Kee of Canadian corn products maker Casco Inc., said his company’s shipments are “held on a regular basis” simply because the trucks sometime arrive at the border when food inspectors are not present, or not working during a weekend.
The two chambers recommended that the two governments establish “trusted shipper and credentialing programs” for frequent low-risk shippers, mutually recognized pre-clearance, increase staffing to ensure 24/7 service at all major crossings, establish a “trusted traveller program” for executives, technical and professionals who frequently cross the border on business, and establish enhanced drivers’ licenses that citizens of each country could use in place of passports.
Murphy said the recommendations do not require large outlays of government funds, and many have been under discussion between the two governments for years. What is needed, he said, is an infusion of trust on the part of both governments that the other side is equally vigilant.
But trust may be in short supply in Washington, says Peter Morici, a University of Maryland School of Business professor and former chief economist that the U.S. trade commission.
“The perception here is that Canada has more porous borders,” he said. “So it’s not going to be satisfactory to us unless we have an integrated system so we are very knowledgeable about what goes in and out of Canada, and that raises very understandable sovereignty issues for you.”
Jason Conley, who specializes on security issues for the American chamber, said the U.S. administration is aware of the impact a tight border has on the economies of both countries, and that while some progress has been made, security trumps trade on the issue.
“It is a challenge because at the end of the day, they (homeland security) will be judged on how well they secure the border,” he said.
The joint press release is on the website of the Canadian Chamber of Commerce is here and the more lengthy report is here. Both are in PDF format.
The Canadian and U.S. chambers of commerce are sounding the alarm on the mounting costs and delays encountered by companies trying to do business in both countries, saying some of the barriers are unreasonable and hurting the economy.
The two countries’ largest business lobby groups, with over three million member firms, issued 17 recommendations Wednesday on how to improve efficiency while maintaining security at what was once called the world’s longest undefended border.
But the chambers agree that one of the key changes needed – an attitudinal shift back to the good old days – is not in the offing for now, at least not on the part of the U.S. government following the terrorist attacks experienced on Sept. 11, 2001.
“Obviously, the events of 9-11 changed a whole lot,” said Canadian chamber policy head Mike Murphy. “We used to have a different attitude about the border . . . I just think it is going to take some time.”
Since the attacks, the U.S. has created a new government Department of Homeland Security and has erected increasingly layered and complex barriers of regulations and inspections.
That has increased wait times for Canadian shippers moving cargo into the U.S., as well as costs.
The report cites several examples of how the regulations have added to costs, including a 2005 U.S. requirement that health certificate numbers be printed on each case of meat and poultry shipped into the U.S., which is estimated to cost one food exporter about $700,000 a year.
“The reality is every incremental cost does filter down to the individual consumer and it makes North American businesses less competitive globally,” said Adrean Scheid Rothkopf of the U.S. chamber.
One of the problems, say businesses, is that neither the U.S. nor Canadian governments have hired and trained sufficient staff to administer the new security and safety regulations they have imposed.
One businessman, Robert Kee of Canadian corn products maker Casco Inc., said his company’s shipments are “held on a regular basis” simply because the trucks sometime arrive at the border when food inspectors are not present, or not working during a weekend.
The two chambers recommended that the two governments establish “trusted shipper and credentialing programs” for frequent low-risk shippers, mutually recognized pre-clearance, increase staffing to ensure 24/7 service at all major crossings, establish a “trusted traveller program” for executives, technical and professionals who frequently cross the border on business, and establish enhanced drivers’ licenses that citizens of each country could use in place of passports.
Murphy said the recommendations do not require large outlays of government funds, and many have been under discussion between the two governments for years. What is needed, he said, is an infusion of trust on the part of both governments that the other side is equally vigilant.
But trust may be in short supply in Washington, says Peter Morici, a University of Maryland School of Business professor and former chief economist that the U.S. trade commission.
“The perception here is that Canada has more porous borders,” he said. “So it’s not going to be satisfactory to us unless we have an integrated system so we are very knowledgeable about what goes in and out of Canada, and that raises very understandable sovereignty issues for you.”
Jason Conley, who specializes on security issues for the American chamber, said the U.S. administration is aware of the impact a tight border has on the economies of both countries, and that while some progress has been made, security trumps trade on the issue.
“It is a challenge because at the end of the day, they (homeland security) will be judged on how well they secure the border,” he said.
The joint press release is on the website of the Canadian Chamber of Commerce is here and the more lengthy report is here. Both are in PDF format.
Sunday, March 2, 2008
New on CBSA Website: FAST Commercial Driver Program
New FAST program information posted at the CBSA website.
As an approved participant of the FAST program, you will receive:
• the participant’s guide;
• a FAST Commercial Driver card with photo identification;
• for Canadian residents, a copy of the Canada Border Services Agency (CBSA) publication called, I Declare, and the United States Customs and Border Protection (CBP) publication called, Visiting the United States, and if applicable, Traveller Declaration Cards for declaring goods;
• for United States residents, a copy of the CBSA publication called, Information for Visitors to Canada and Seasonal Residents, and the CBP publication called, Know Before You Go; and
• information on Canadian and American immigration rules related to cabotage.
As an approved participant of the FAST program, you will receive:
• the participant’s guide;
• a FAST Commercial Driver card with photo identification;
• for Canadian residents, a copy of the Canada Border Services Agency (CBSA) publication called, I Declare, and the United States Customs and Border Protection (CBP) publication called, Visiting the United States, and if applicable, Traveller Declaration Cards for declaring goods;
• for United States residents, a copy of the CBSA publication called, Information for Visitors to Canada and Seasonal Residents, and the CBP publication called, Know Before You Go; and
• information on Canadian and American immigration rules related to cabotage.
Tuesday, February 19, 2008
Change in Senior Ranks of the CBSA
Effective March 3, 2008, Stephen Rigby, currently Executive Vice-President of the Canada Border Services Agency, becomes Associate Deputy Minister of Foreign Affairs. His place will be taken by Greta Bossenmaier who is currently Vice-President of the Innovation, Science and Technology Branch at the CBSA.
Tracking Value-Added Trade: Examining Global Inputs to Exports
(Statistics Canada)
Canadian industries have sharply lowered their use of imported inputs to produce exports, according to a new study published today in Canadian Economic Observer.
The lower use of imported inputs sheds light on several widely discussed trends. It contradicts fears of a widespread offshoring of domestic production as firms adopt global supply chains.
It also suggests that firms in Canada have ample room to import more inputs as the soaring loonie increases competitive pressures, something they began to do in 2004.
Finally, removing the import content from exports reveals Canada's true exposure to export demand. This is an important piece of knowledge as analysts debate whether other countries can "decouple" from the current slowdown in the US economy. Since 2000, changes in exports have had less of an influence on the course of gross domestic product (GDP).
Comparing gross exports to GDP has always resulted in misleading analysis. Exports are the equivalent of gross sales, while GDP is measured on a value-added basis. Removing the import content of exports puts them on the same value-added basis, revealing the true exposure of GDP to external demand.
This paper shows that 27.9% of GDP came from value-added exports in 2004. This was down from its peak of 31.4% in 2000, and close to its recent low in 1997. It is well below the often-quoted but misleading share of gross exports in GDP, which peaked at 46% in 2000 before settling at about 38% in 2003 and 2004.
With exports to the United States currently accounting for 75% of all Canada's exports, this implies that just over 20% of Canada's output is exposed to the risk from the slowdown in US growth. The share of jobs exposed to exports would be even lower, as exports remain a sector with above-average output-per-worker. Complete press release here.
Canadian industries have sharply lowered their use of imported inputs to produce exports, according to a new study published today in Canadian Economic Observer.
The lower use of imported inputs sheds light on several widely discussed trends. It contradicts fears of a widespread offshoring of domestic production as firms adopt global supply chains.
It also suggests that firms in Canada have ample room to import more inputs as the soaring loonie increases competitive pressures, something they began to do in 2004.
Finally, removing the import content from exports reveals Canada's true exposure to export demand. This is an important piece of knowledge as analysts debate whether other countries can "decouple" from the current slowdown in the US economy. Since 2000, changes in exports have had less of an influence on the course of gross domestic product (GDP).
Comparing gross exports to GDP has always resulted in misleading analysis. Exports are the equivalent of gross sales, while GDP is measured on a value-added basis. Removing the import content of exports puts them on the same value-added basis, revealing the true exposure of GDP to external demand.
This paper shows that 27.9% of GDP came from value-added exports in 2004. This was down from its peak of 31.4% in 2000, and close to its recent low in 1997. It is well below the often-quoted but misleading share of gross exports in GDP, which peaked at 46% in 2000 before settling at about 38% in 2003 and 2004.
With exports to the United States currently accounting for 75% of all Canada's exports, this implies that just over 20% of Canada's output is exposed to the risk from the slowdown in US growth. The share of jobs exposed to exports would be even lower, as exports remain a sector with above-average output-per-worker. Complete press release here.
Wednesday, February 13, 2008
CBSA Message: Provincial Holiday, February 18
(CBSA)
Message EDI08-016
The following is information concerning this year’s Provincial Holiday in the provinces of Alberta, Manitoba, Ontario and Saskatchewan on Monday, February 18, 2008. For all clients, overnight reports will run the evenings of Friday, February 15 and Monday February 18, as usual. Daily notices/statements covering B3 entry data Friday, February 15 will be generated with a statement date of Tuesday, February 19, if the accounting office is in the province of Alberta, Manitoba, Ontario or Saskatchewan. In all other provinces, these K84’s will be statement dated Monday, February 18, 2008.
Goods released on Monday, February 18 in the provinces of Alberta, Manitoba, Ontario and Saskatchewan will be deemed to be released on Tuesday, February 19, 2008. Goods released in all other provinces on February 18 will be deemed to be released on February 18 , 2008. Any late accounting penalties will be waived without the client having to submit an application. This applies to transactions released from February 11, 2008 to February 18, 2008 that were accounted for in the affected provinces.
Should you have any questions concerning late accounting penalties, please contact Bob Ellah at 613-954-7120.
Message EDI08-016
The following is information concerning this year’s Provincial Holiday in the provinces of Alberta, Manitoba, Ontario and Saskatchewan on Monday, February 18, 2008. For all clients, overnight reports will run the evenings of Friday, February 15 and Monday February 18, as usual. Daily notices/statements covering B3 entry data Friday, February 15 will be generated with a statement date of Tuesday, February 19, if the accounting office is in the province of Alberta, Manitoba, Ontario or Saskatchewan. In all other provinces, these K84’s will be statement dated Monday, February 18, 2008.
Goods released on Monday, February 18 in the provinces of Alberta, Manitoba, Ontario and Saskatchewan will be deemed to be released on Tuesday, February 19, 2008. Goods released in all other provinces on February 18 will be deemed to be released on February 18 , 2008. Any late accounting penalties will be waived without the client having to submit an application. This applies to transactions released from February 11, 2008 to February 18, 2008 that were accounted for in the affected provinces.
Should you have any questions concerning late accounting penalties, please contact Bob Ellah at 613-954-7120.
Confidence in the Economy Plummets
(Nanos Research)
The percentage of Canadians who think the economy will get stronger in 2008 has plummeted an astounding 24 points in 90 days (from 49% in November 2007 to 25% as of last week).
On the personal finance side - there has been a marginal decrease in the percentage of Canadians who think they are better off compared to a year ago (drop from 29% to 24%).
With a perceived downturn in the US economy and volatile markets in Canada, Canadians are basically waiting for the bad economic news even though it hasn’t hit them personally at this time.
Shifting perceptions related to economic confidence may explain the appetite the Conservative government currently has for a federal election.
Canadians were also asked [unprompted] what they would like to see the Government of Canada do to help make the Canadian economy stronger. One in three Canadians were either unsure or thought nothing should be done. The top unprompted response was lower taxes (14%) followed by create jobs/encourage job creation (8%) and invest in key industries (5%). The full list with questions has been posted on the Nanos website as part of the release.
For more detailed information on the methodology and the statistical results visit the Nanos website.
Methodology
Polling was conducted between February 2nd and February 4th, 2008 (Random Telephone Survey of 1,002 Canadians, 18 years of age and older). The aggregate survey results are accurate ±3.1%, 19 times out of 20. Readers should note that the data was weighted for age to match the latest Canadian census results. Results should be considered representative of the Canadian population. Results may not add up to 100% due to rounding.
Results
Question: Thinking of the upcoming year, do you think the Canadian economy will become stronger, weaker or will there be no change?
The numbers in parenthesis denote the change from the previous Nanos Research Survey completed in November, 2007.
Stronger 25% (-24) Weaker 33% (+13) No change 36% (+11) Unsure 6% (NC)
Question: Thinking of your personal finances, are you better off, worse off or has there been no change over the past year?
The numbers in parenthesis denote the change from the previous Nanos Research Survey completed in November, 2007.
Better off 24% (-5) Worse off 16% (NC) No change 58% (+6) Unsure 2% (-1)
The percentage of Canadians who think the economy will get stronger in 2008 has plummeted an astounding 24 points in 90 days (from 49% in November 2007 to 25% as of last week).
On the personal finance side - there has been a marginal decrease in the percentage of Canadians who think they are better off compared to a year ago (drop from 29% to 24%).
With a perceived downturn in the US economy and volatile markets in Canada, Canadians are basically waiting for the bad economic news even though it hasn’t hit them personally at this time.
Shifting perceptions related to economic confidence may explain the appetite the Conservative government currently has for a federal election.
Canadians were also asked [unprompted] what they would like to see the Government of Canada do to help make the Canadian economy stronger. One in three Canadians were either unsure or thought nothing should be done. The top unprompted response was lower taxes (14%) followed by create jobs/encourage job creation (8%) and invest in key industries (5%). The full list with questions has been posted on the Nanos website as part of the release.
For more detailed information on the methodology and the statistical results visit the Nanos website.
Methodology
Polling was conducted between February 2nd and February 4th, 2008 (Random Telephone Survey of 1,002 Canadians, 18 years of age and older). The aggregate survey results are accurate ±3.1%, 19 times out of 20. Readers should note that the data was weighted for age to match the latest Canadian census results. Results should be considered representative of the Canadian population. Results may not add up to 100% due to rounding.
Results
Question: Thinking of the upcoming year, do you think the Canadian economy will become stronger, weaker or will there be no change?
The numbers in parenthesis denote the change from the previous Nanos Research Survey completed in November, 2007.
Stronger 25% (-24) Weaker 33% (+13) No change 36% (+11) Unsure 6% (NC)
Question: Thinking of your personal finances, are you better off, worse off or has there been no change over the past year?
The numbers in parenthesis denote the change from the previous Nanos Research Survey completed in November, 2007.
Better off 24% (-5) Worse off 16% (NC) No change 58% (+6) Unsure 2% (-1)
Emerson Announces Legislative Review of Export Development Canada
(Foreign Affairs and International Trade Canada)
The Honourable David Emerson, Minister of International Trade and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics, today announced that International Financial Consulting Ltd. has been selected to conduct the 2008 legislative review of the Export Development Act.
The Act requires that the Minister undertake a review of Export Development Canada (EDC) every 10 years in order to provide advice and recommendations to the government and to Parliament on how EDC can best assist Canadian exporters and investors in international commerce.
“EDC plays an important role in supporting Canadian competitiveness in the global marketplace,” said Minister Emerson. “This review provides an opportunity to examine how EDC is evolving, and should continue to evolve, in order to best support Canadian companies that operate internationally.”
International Financial Consulting Ltd. will conduct research and analysis, as well as consult with a broad range of stakeholders, for example, through town hall meetings in major Canadian cities. The final report will be submitted directly to the Minister of International Trade and will inform the Minister’s subsequent advice to the government and to Parliament, expected in the fall of 2008.
International Financial Consulting Ltd. is a leading international consulting firm. Based in Ottawa, the firm specializes in financial services in support of trade, investment and development, with a focus on strategic planning, institutional development and the interface between the public and private financial sectors. The contract for this legislative review was awarded following a competitive bidding process.
For further information on the review, to make a submission, or to participate in the consultations, please visit http://www.EDCReview2008.ca.
The Honourable David Emerson, Minister of International Trade and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics, today announced that International Financial Consulting Ltd. has been selected to conduct the 2008 legislative review of the Export Development Act.
The Act requires that the Minister undertake a review of Export Development Canada (EDC) every 10 years in order to provide advice and recommendations to the government and to Parliament on how EDC can best assist Canadian exporters and investors in international commerce.
“EDC plays an important role in supporting Canadian competitiveness in the global marketplace,” said Minister Emerson. “This review provides an opportunity to examine how EDC is evolving, and should continue to evolve, in order to best support Canadian companies that operate internationally.”
International Financial Consulting Ltd. will conduct research and analysis, as well as consult with a broad range of stakeholders, for example, through town hall meetings in major Canadian cities. The final report will be submitted directly to the Minister of International Trade and will inform the Minister’s subsequent advice to the government and to Parliament, expected in the fall of 2008.
International Financial Consulting Ltd. is a leading international consulting firm. Based in Ottawa, the firm specializes in financial services in support of trade, investment and development, with a focus on strategic planning, institutional development and the interface between the public and private financial sectors. The contract for this legislative review was awarded following a competitive bidding process.
For further information on the review, to make a submission, or to participate in the consultations, please visit http://www.EDCReview2008.ca.
ACE e-Manifest Updates
(U.S. Customs and Border Protection)
The following updates (in PDF format) are now available:
QP in-bond to post to PAPS shipment release type, scheduled implementation date February 2, 2008.
Carriers to report arrival and export of I.E.s, I.Ts & T&Es, scheduled implementation date March, 2008.
Conveyance Harmonization, scheduled implementation date February 2, 2008.
The following updates (in PDF format) are now available:
QP in-bond to post to PAPS shipment release type, scheduled implementation date February 2, 2008.
Carriers to report arrival and export of I.E.s, I.Ts & T&Es, scheduled implementation date March, 2008.
Conveyance Harmonization, scheduled implementation date February 2, 2008.
Sunday, February 10, 2008
D8-2-8: Samples of Negligible Value
(CBSA)
The following is now available on the CBSA Web site: D8-2-8, Samples of Negligible Value (Tariff Item Nos. 9990.00.00 and 9991.00.00)
This memorandum has been entirely revised. Information about tariff item Nos. 9990.00.00, and 9991.00.00, samples of negligible value, value for duty of mutilated samples, and the Samples of Negligible Value Remission Order has been incorporated into the memorandum.
The following is now available on the CBSA Web site: D8-2-8, Samples of Negligible Value (Tariff Item Nos. 9990.00.00 and 9991.00.00)
This memorandum has been entirely revised. Information about tariff item Nos. 9990.00.00, and 9991.00.00, samples of negligible value, value for duty of mutilated samples, and the Samples of Negligible Value Remission Order has been incorporated into the memorandum.
Government of Canada Moving Forward on WTO Special Agricultural Safeguard
(Agriculture and Agri-Food Canada)
The Honourable Gerry Ritz, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board, today announced the Government of Canada’s intention to proceed with finalizing the operationalization of the World Trade Organization (WTO) Special Agricultural Safeguard for supply-managed goods.
“This is another example of the Government listening to supply-managed groups and delivering real action for them,” said Minister Ritz. “Our decision to finalize the operationalization of the Special Agricultural Safeguard is important, as it will ensure that we can stay in position to support supply management sectors, and keep them strong.”
The WTO Special Agricultural Safeguard allows WTO members to provide stability for sensitive industries by imposing temporary surtaxes in response to sudden over-quota import surges, or unexpected decreases in certain agricultural commodity prices.
The Honourable Gerry Ritz, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board, today announced the Government of Canada’s intention to proceed with finalizing the operationalization of the World Trade Organization (WTO) Special Agricultural Safeguard for supply-managed goods.
“This is another example of the Government listening to supply-managed groups and delivering real action for them,” said Minister Ritz. “Our decision to finalize the operationalization of the Special Agricultural Safeguard is important, as it will ensure that we can stay in position to support supply management sectors, and keep them strong.”
The WTO Special Agricultural Safeguard allows WTO members to provide stability for sensitive industries by imposing temporary surtaxes in response to sudden over-quota import surges, or unexpected decreases in certain agricultural commodity prices.
Republican Presidential Candidates’ Views on U.S. Trade Policy
The remaining Republican candidates in this year’s presidential campaign have limited their public discussion of their views on U.S. trade policy. However, based on information gathered from press reports, the candidates’ Web sites and a Brookings Institution report, Sen. John McCain, R-Ariz. and former Arkansas Gov. Mike Huckabee generally support free trade but seem willing to limit it or make policy changes to compensate for any possible negative effects it may have on U.S. industries and workers.
Due to his service in the Senate, McCain has the most comprehensive record on trade policy. He supports free trade and open markets and views globalization as an opportunity that the U.S. should capitalize on in several ways. For example, he has voted for trade promotion authority, NAFTA and permanent normal trade relations with China. He also supports the recently negotiated free trade agreements with South Korea, Peru and Colombia. McCain has stated that as president he will “aggressively promote” trade liberalization at the WTO. With respect to China, while others have expressed concern over Beijing’s currency policies, McCain cautions against responding in a way that would trouble the U.S.-China relationship. And although he is a supporter of free trade, McCain also backs particular policies that would assist domestic industries that may be harmed by it. For example, he has supported the expansion of unemployment insurance and training programs as well as the possibility of a wage insurance provision under the Trade Adjustment Assistance legislation.
Huckabee also believes in free trade – his stated support for NAFTA being one example – but he has emphasized that free trade must be “fair trade.” Specifically, he speaks to his concern over free trade’s possible domestic impact, including the movement of jobs and industries overseas. Huckabee has also said that action should be taken to address China’s alleged manipulation of the value of its currency, which he feels is done to artificially lower the prices of Chinese exports. Huckabee would also support tax cuts to assuage the negative effects of globalization, an Inside US Trade article notes, and in fact has stated that he would revamp the U.S. tax structure to better enable the U.S. to compete in a globalized world.
Due to his service in the Senate, McCain has the most comprehensive record on trade policy. He supports free trade and open markets and views globalization as an opportunity that the U.S. should capitalize on in several ways. For example, he has voted for trade promotion authority, NAFTA and permanent normal trade relations with China. He also supports the recently negotiated free trade agreements with South Korea, Peru and Colombia. McCain has stated that as president he will “aggressively promote” trade liberalization at the WTO. With respect to China, while others have expressed concern over Beijing’s currency policies, McCain cautions against responding in a way that would trouble the U.S.-China relationship. And although he is a supporter of free trade, McCain also backs particular policies that would assist domestic industries that may be harmed by it. For example, he has supported the expansion of unemployment insurance and training programs as well as the possibility of a wage insurance provision under the Trade Adjustment Assistance legislation.
Huckabee also believes in free trade – his stated support for NAFTA being one example – but he has emphasized that free trade must be “fair trade.” Specifically, he speaks to his concern over free trade’s possible domestic impact, including the movement of jobs and industries overseas. Huckabee has also said that action should be taken to address China’s alleged manipulation of the value of its currency, which he feels is done to artificially lower the prices of Chinese exports. Huckabee would also support tax cuts to assuage the negative effects of globalization, an Inside US Trade article notes, and in fact has stated that he would revamp the U.S. tax structure to better enable the U.S. to compete in a globalized world.
Border Security Dominates DHS Technology Budget Request
(GovExec.com – Jill R. Aitoro)
Roughly half of the Homeland Security Department's $5.4 billion information technology budget will go to ongoing system development and modernization programs for border control and protection.
Cybersecurity funds largely will come from alternative sources, said DHS Secretary Michael Chertoff, who described the budget as a whole as “strong and fiscally sound.”
DHS divided spending in its IT budget into four parts: IT investments by mission; IT infrastructure and office automation; enterprise architecture and planning; and grants management. The bulk of IT funds ($3.7 billion) were allocated to investments by mission.
Full story here. Remarks of Homeland Security Secretary Michael Chertoff regarding the budget for DHS are here.
Roughly half of the Homeland Security Department's $5.4 billion information technology budget will go to ongoing system development and modernization programs for border control and protection.
Cybersecurity funds largely will come from alternative sources, said DHS Secretary Michael Chertoff, who described the budget as a whole as “strong and fiscally sound.”
DHS divided spending in its IT budget into four parts: IT investments by mission; IT infrastructure and office automation; enterprise architecture and planning; and grants management. The bulk of IT funds ($3.7 billion) were allocated to investments by mission.
Full story here. Remarks of Homeland Security Secretary Michael Chertoff regarding the budget for DHS are here.
Saturday, February 9, 2008
Air Shipping: Politicans Ask GAO to Review Air Cargo Screening Requirements
(Logistics Management)
With a keen eye on the steps being taken to ensure the 100 percent screening of air cargo on passenger planes, politicians are asking the Government Accountability Office (GAO) to review the 100 percent cargo screening requirement on passenger planes by 2010 as outlined in “H.R. 1 Implementing Recommendations of the 9/11 Commission Act of 2007,” which was passed last August and signed into law by President Bush. Read the complete article.
With a keen eye on the steps being taken to ensure the 100 percent screening of air cargo on passenger planes, politicians are asking the Government Accountability Office (GAO) to review the 100 percent cargo screening requirement on passenger planes by 2010 as outlined in “H.R. 1 Implementing Recommendations of the 9/11 Commission Act of 2007,” which was passed last August and signed into law by President Bush. Read the complete article.
Friday, February 8, 2008
Minister of Finance Announces Two Appointments to the Canadian International Trade Tribunal
(Department of Finance)
The Honourable Jim Flaherty, Minister of Finance, has announced the appointment of André F. Scott as Chair of the Canadian International Trade Tribunal (CITT) and Pasquale Michaele Saroli as a full-time member.
Mr. Scott, currently Vice-President Corporate Affairs, General Counsel and Secretary of Polycor Inc., is a lawyer with 25 years of senior executive and managerial experience in both the public and private sectors. He has an extensive background in arbitration and negotiation.
Mr. Saroli, also a lawyer, has been an employee of the Department of Finance since 1989, and has taken on a number of increasingly senior roles in trade remedies, policy development and negotiations. He has a solid grounding in both administrative and international economic law.
“Both Mr. Scott and Mr. Saroli have extensive international trade experience and will make a valuable contribution to the important work of the CITT,” said Minister Flaherty. “I wish them both well in their new duties.”
The Honourable Jim Flaherty, Minister of Finance, has announced the appointment of André F. Scott as Chair of the Canadian International Trade Tribunal (CITT) and Pasquale Michaele Saroli as a full-time member.
Mr. Scott, currently Vice-President Corporate Affairs, General Counsel and Secretary of Polycor Inc., is a lawyer with 25 years of senior executive and managerial experience in both the public and private sectors. He has an extensive background in arbitration and negotiation.
Mr. Saroli, also a lawyer, has been an employee of the Department of Finance since 1989, and has taken on a number of increasingly senior roles in trade remedies, policy development and negotiations. He has a solid grounding in both administrative and international economic law.
“Both Mr. Scott and Mr. Saroli have extensive international trade experience and will make a valuable contribution to the important work of the CITT,” said Minister Flaherty. “I wish them both well in their new duties.”
U.S. Customs: Are Your Textiles Subject to Quota?
U.S. Customs and Border Protection (Customs, CBP) has published a web page titled, “Are My Goods Subject to Quota?” under the Textiles and Quota section of the agency’s web site.
Customs noted on the webpage that import quotas control the amount or volume of various commodities that can be imported into the United States during a specified period of time, adding that quotas are established by legislation and Presidential proclamations issued pursuant to specific legislation and provided for in the Harmonized Tariff Schedule of the United States (HTSUS).
“Absolute quotas strictly limit the quantity of goods that may enter the commerce of the United States for a specific period. Tariff rate quotas permit a specified quantity of imported merchandise to be entered at a reduced rate of duty during the quota period,” Customs stated.
“Once the tariff-rate quota limit is reached, goods may still be entered but at a higher rate of duty. Many free trade agreements and special trade legislation establish tariff preference levels (TPL), which CBP administers like tariff rate quotas.”
Customs stated on the new page that several key factors determine whether a shipment is subject to quota requirements:
• Harmonized Tariff Schedule (HTS) classification (based on merchandise description)
• Textile category number (also known as a “visa” category)
• HTSUS chapter note (for agricultural products)
• Country of origin (where the goods were grown, produced, or manufactured)
To determine the HTS number (classification) of the goods, Customs recommended the following:
• Contacting an Import Specialist at a CBP port of entry.
• Requesting a binding ruling from the Office of Regulations and Rulings, National Commodity Specialist Division.
• Querying the Customs Rulings On-line Search System (CROSS) for binding rulings previously issued for similar merchandise.
• Reviewing the Harmonized Tariff Schedule
“Determine the textile category number (if applicable),” Customs stated.
“The category is a three-digit number listed in parentheses next to the HTS number. Refer to the Daily Textile Status Report for Absolute Quotas, which lists categories subject to quota and fill status (percentage of the quota that is used) by country. Currently absolute quota and/or visa requirements exist for textiles from China, Vietnam, Russia and Ukraine.”
Customs added that if the country of origin and/or the textile category of the goods is not listed on this report, then the merchandise is not subject to absolute quota or visa requirements.
“Determine whether the merchandise qualifies for preferential treatment under a Free Trade Agreement or other special trade program,” Customs stated. “If the merchandise qualifies for preferential treatment, refer to the Commodity Status Report for Tariff Rate Quotas. This weekly report provides information on imported merchandise subject to Tariff Rate Quotas.”
Customs noted that if the merchandise is subject to quota/visa restrictions, there may be additional information for a particular quota listed on Customs’ website in the form of Quota Book Transmittals (QBTs) or Textile Book Transmittals (TBTs).
The “Are My Goods Subject to Quota?” web page, which provides links to the resources listed, can be accessed on-line here.
Customs noted on the webpage that import quotas control the amount or volume of various commodities that can be imported into the United States during a specified period of time, adding that quotas are established by legislation and Presidential proclamations issued pursuant to specific legislation and provided for in the Harmonized Tariff Schedule of the United States (HTSUS).
“Absolute quotas strictly limit the quantity of goods that may enter the commerce of the United States for a specific period. Tariff rate quotas permit a specified quantity of imported merchandise to be entered at a reduced rate of duty during the quota period,” Customs stated.
“Once the tariff-rate quota limit is reached, goods may still be entered but at a higher rate of duty. Many free trade agreements and special trade legislation establish tariff preference levels (TPL), which CBP administers like tariff rate quotas.”
Customs stated on the new page that several key factors determine whether a shipment is subject to quota requirements:
• Harmonized Tariff Schedule (HTS) classification (based on merchandise description)
• Textile category number (also known as a “visa” category)
• HTSUS chapter note (for agricultural products)
• Country of origin (where the goods were grown, produced, or manufactured)
To determine the HTS number (classification) of the goods, Customs recommended the following:
• Contacting an Import Specialist at a CBP port of entry.
• Requesting a binding ruling from the Office of Regulations and Rulings, National Commodity Specialist Division.
• Querying the Customs Rulings On-line Search System (CROSS) for binding rulings previously issued for similar merchandise.
• Reviewing the Harmonized Tariff Schedule
“Determine the textile category number (if applicable),” Customs stated.
“The category is a three-digit number listed in parentheses next to the HTS number. Refer to the Daily Textile Status Report for Absolute Quotas, which lists categories subject to quota and fill status (percentage of the quota that is used) by country. Currently absolute quota and/or visa requirements exist for textiles from China, Vietnam, Russia and Ukraine.”
Customs added that if the country of origin and/or the textile category of the goods is not listed on this report, then the merchandise is not subject to absolute quota or visa requirements.
“Determine whether the merchandise qualifies for preferential treatment under a Free Trade Agreement or other special trade program,” Customs stated. “If the merchandise qualifies for preferential treatment, refer to the Commodity Status Report for Tariff Rate Quotas. This weekly report provides information on imported merchandise subject to Tariff Rate Quotas.”
Customs noted that if the merchandise is subject to quota/visa restrictions, there may be additional information for a particular quota listed on Customs’ website in the form of Quota Book Transmittals (QBTs) or Textile Book Transmittals (TBTs).
The “Are My Goods Subject to Quota?” web page, which provides links to the resources listed, can be accessed on-line here.
Monday, February 4, 2008
Customs-Trade Partnership Against Terrorism: A Year in Review
(U.S. Customs and Border Protection)
The Customs-Trade Partnership Against Terrorism (C-TPAT) and its focus on strengthening supply chain security is an important layer in U.S. Customs and Border Protection’s (CBP) cargo enforcement strategy. Through this initiative, CBP is asking businesses to ensure the integrity of their security practices and communicate and verify the security guidelines of their business partners within the supply chain.
The partnership, referred to as C-TPAT, has performed more than 6,900 total validations since 2003.
“Our supply chain specialists are traveling throughout the world, working with C-TPAT members to protect international commerce from the risk of terrorist incident,” said C-TPAT Director Bradd Skinner.
C-TPAT accomplishments during calendar year 2007 include:
• Supply chain security specialist visited manufacturing and logistics facilities in 79 countries, representing some of the most terrorist prone and high risk areas of the world.
• C-TPAT validated 3,011 supply chains, representing a 27 percent increase from 2006. Of the 3,011 validations conducted, 601 or 20 percent were revalidations. This was the first year that C-TPAT began re-verifying supply chains.
• C-TPAT certified 2,601 new members in accordance with SAFE Port Act requirements.
• C-TPAT Tier III status was granted to 17 companies as a result of the validation process.
• C-TPAT suspended or removed 112 companies from the program for security breeches or failure to meet C-TPAT’s minimum security criteria as revealed in the validation process. Of the 112 companies, 47 were either conditionally or fully reinstated in the C-TPAT program after they demonstrated to CBP’s satisfaction that immediate and sustained corrective action had been taken.
Supply chain security specialists conducted on-site visits to review the security practices of those members that were involved in a security breech. Without exception no additional security breeches occurred once these companies were reinstated.
• C-TPAT made progress on additional SAFE Port Act mandates including the development of a 3rd Party Validation pilot program.
• To enhance the supply chain security processes and procedures of its members, minimum-security criteria were issued for Mexican long haul carriers, U.S. and foreign-based marine port authority and terminal operators, foreign manufacturers and air carriers. These criteria were developed in close consultation with the trade community and other US agencies where appropriate.
• C-TPAT signed a mutual recognition agreement with New Zealand’s Customs Service and established work plans with several other countries to achieve similar arrangements.
• With respect to outreach, C-TPAT conducted enrollment seminars along the southwest border, in Mexico City and during its annual trade conference. Additionally, C-TPAT participated in more than 100 conferences and seminars throughout the world.
The University of Virginia conducted a survey on behalf of CBP to determine member’s perceptions regarding the cost, benefits and motivations to join the program. The results demonstrated that C-TPAT has moved thousands of companies to provide closer scrutiny to the security of the goods they handle and to ensure that their overseas suppliers have implemented sound security practices. C-TPAT will undertake future studies of this sort to assess its effectiveness.
“When you consider what C-TPAT accomplished in 2007, you can see that we are producing solid results” said Skinner. “We met the SAFE Port Act’s certification and validation requirements and that is a key metric for us. We are holding members accountable to meet their commitments to the program but doing so in the spirit of collaboration.”
The Customs-Trade Partnership Against Terrorism (C-TPAT) and its focus on strengthening supply chain security is an important layer in U.S. Customs and Border Protection’s (CBP) cargo enforcement strategy. Through this initiative, CBP is asking businesses to ensure the integrity of their security practices and communicate and verify the security guidelines of their business partners within the supply chain.
The partnership, referred to as C-TPAT, has performed more than 6,900 total validations since 2003.
“Our supply chain specialists are traveling throughout the world, working with C-TPAT members to protect international commerce from the risk of terrorist incident,” said C-TPAT Director Bradd Skinner.
C-TPAT accomplishments during calendar year 2007 include:
• Supply chain security specialist visited manufacturing and logistics facilities in 79 countries, representing some of the most terrorist prone and high risk areas of the world.
• C-TPAT validated 3,011 supply chains, representing a 27 percent increase from 2006. Of the 3,011 validations conducted, 601 or 20 percent were revalidations. This was the first year that C-TPAT began re-verifying supply chains.
• C-TPAT certified 2,601 new members in accordance with SAFE Port Act requirements.
• C-TPAT Tier III status was granted to 17 companies as a result of the validation process.
• C-TPAT suspended or removed 112 companies from the program for security breeches or failure to meet C-TPAT’s minimum security criteria as revealed in the validation process. Of the 112 companies, 47 were either conditionally or fully reinstated in the C-TPAT program after they demonstrated to CBP’s satisfaction that immediate and sustained corrective action had been taken.
Supply chain security specialists conducted on-site visits to review the security practices of those members that were involved in a security breech. Without exception no additional security breeches occurred once these companies were reinstated.
• C-TPAT made progress on additional SAFE Port Act mandates including the development of a 3rd Party Validation pilot program.
• To enhance the supply chain security processes and procedures of its members, minimum-security criteria were issued for Mexican long haul carriers, U.S. and foreign-based marine port authority and terminal operators, foreign manufacturers and air carriers. These criteria were developed in close consultation with the trade community and other US agencies where appropriate.
• C-TPAT signed a mutual recognition agreement with New Zealand’s Customs Service and established work plans with several other countries to achieve similar arrangements.
• With respect to outreach, C-TPAT conducted enrollment seminars along the southwest border, in Mexico City and during its annual trade conference. Additionally, C-TPAT participated in more than 100 conferences and seminars throughout the world.
The University of Virginia conducted a survey on behalf of CBP to determine member’s perceptions regarding the cost, benefits and motivations to join the program. The results demonstrated that C-TPAT has moved thousands of companies to provide closer scrutiny to the security of the goods they handle and to ensure that their overseas suppliers have implemented sound security practices. C-TPAT will undertake future studies of this sort to assess its effectiveness.
“When you consider what C-TPAT accomplished in 2007, you can see that we are producing solid results” said Skinner. “We met the SAFE Port Act’s certification and validation requirements and that is a key metric for us. We are holding members accountable to meet their commitments to the program but doing so in the spirit of collaboration.”
Learn About Best Practices for Importing Safe Food Products from China and Emerging Markets
I.E.Canada, along with its Food Committee, is inviting members of the food industry to attend I.E.Canada’s 3rd Annual Food Forum. The Food Forum is Canada’s premier event for members of the government and industry to share knowledge and exchange information. Building on the success of previous years, this event will offer opportunities for education, knowledge sharing, and networking.
Food safety compliance will be to focus of this year’s Forum. Import product safety has become one of the priorities for governments and businesses world wide. The need for systems that both ensure the integrity of Canada’s food supply and protect consumers from any mishaps that could occur has come into sharp focus. Ensuring that our processes ensure imported foods are safe is critical to maintaining Canadian consumer confidence in our food industries.
One of the key sessions is “Practices for Importing Safe Products from China and Emerging Markets”, a panel discussion with:
Christine Lowry, Vice President, Nutrition and Corporate Affairs, Kellogg Canada Inc. (invited), Mark FeDuke, Traffic Manager, VLM Food Trading International Inc., John Kukoly, Product Manager, Food Safety and Organic Certification, QMI
When: Wednesday, February 20, 2008
Where: Hilton Toronto Airport, 5875 Airport Road, Mississauga, Ontario
Registration information is available here. For further information on the conference, please call Jason at 416-595-5333 ext 37
Food safety compliance will be to focus of this year’s Forum. Import product safety has become one of the priorities for governments and businesses world wide. The need for systems that both ensure the integrity of Canada’s food supply and protect consumers from any mishaps that could occur has come into sharp focus. Ensuring that our processes ensure imported foods are safe is critical to maintaining Canadian consumer confidence in our food industries.
One of the key sessions is “Practices for Importing Safe Products from China and Emerging Markets”, a panel discussion with:
Christine Lowry, Vice President, Nutrition and Corporate Affairs, Kellogg Canada Inc. (invited), Mark FeDuke, Traffic Manager, VLM Food Trading International Inc., John Kukoly, Product Manager, Food Safety and Organic Certification, QMI
When: Wednesday, February 20, 2008
Where: Hilton Toronto Airport, 5875 Airport Road, Mississauga, Ontario
Registration information is available here. For further information on the conference, please call Jason at 416-595-5333 ext 37
It’s the Border, Stupid
Extract of a speech by Liberal Deputy Leader Michael Ignatieff last week at the University of Alberta
I want to start with Canada/US relations because it’s so much the centre of any foreign policy. I want to talk to you about security, economic issues, military issues, diplomatic issues and finally some political issues.
Let me start with the US/Canada relationship. I had a funny thing happen to me in politics. I sat down with a very wealthy Canadian who shall remain nameless (you can probably guess who he might have been). I said to him, “sir,” in my earnest way, “what is the biggest issue you confront as a billionaire businessman?”
He looked at me in the way that businessmen sometimes do to politicians, like “where do I start with this guy?”, with this look in his eyes and said, “It’s the border, stupid.”
He has businesses that cross the border. Maintaining a strong border, defending our border, investing in the capabilities to defend our border, equally to defending our sovereignty.
We have to enhance our border infrastructure. You can’t go to Windsor, you can’t go to many of our border crossings without being concerned that the border’s going to become a choke chain.
We don’t want a choke chain.
We’re just to be proud of having the longest undefended border in the world. It’s become stickier, and stickier and stickier since 9/11. But the thing we have to do is be a competent, capable, credible security partner with the United States while maintaining an absolute control over our sovereignty and our border. That’s a very, very difficult trick and important that we have to get right.
But our border is not just on the 49th. We now have an enormous sense of the salience of the arctic frontier. Our arctic border, and the immense importance of protecting and investing in our sovereignty as climate change literally changes the geographical dimensions of our country.
I’m a strong defender of investment in sovereignty and our border. But I’ll make another point: we have to invest in international law here. There is a lot that is unclear and obscure in who owns what and who does what there. You can’t fix this stuff just with icebreakers and overflights and patrols, although they’re enhancements I support. You have to sit down with our partners and work out a stable long-term legal framework for the development of the north for those who live there and for developing those resources. The last thing we want is a sovereignty complex up there.
I want you all to go out and study arctic law, the law of the sea, and who owns the undershelf stuff and all of that. That’s a challenge for you. Someone needs to become Canada’s expert on arctic international law.
It’s crucial to our future as a country. So those are a few thoughts about our security relationship across the border with the United States.
Let me say a little bit about our economic relations.
One of the things that I see happening is that NAFTA has been very good for our country. But I see it creating an Atlantic Canadian economy, a central Canadian economy and a western economy.
One of the questions we’ve not been asking, I think, as clearly as we should, is whether we’re still maintaining a national economy, from coast to coast to coast.
The north-south linkages in our economic system, I think, are now stronger than our east-west ones. When I was in Edmonton recently someone showed me a map of the pipelines and the natural gas pipelines. Much stronger north-south than east-west. No problem with north-south, that’s our chief market.
My concern is to strengthen the east-west spine of our country. Energy cooridors. Pipelines. The national economic space is not as unified as it should be. BC and Alberta have set a good model for the rest of the country by sitting down and working to reduce the friction in the labour markets between Alberta and British Columbia. This is good.
We need federal leadership to strengthen the ties that bind. What’s what the federal government of Canada for? It’s to maintain common economic space and common citizenship.
The north-south pull fostered by the post-NAFTA world is great, provided that we don’t splinter and fragment into increasingly separate economic spaces. That, it seems to me, to be the challenge that is at the center of Canadian economic policy.
It’s also one of the biggest puzzles in our relationship with the Americans. I’m not an economist. What is the nature of the linkage between our economy and theirs?
In the old days we used to say “they get a cold, we get pneumonia.” Right now, they’ve got a cold. They’ve got a nice, big bronchial infection right now.
And nobody rejoices over their unhappiness, least of all me. One of the themes of our economy, we’re unclear about that. We need to have much better economic analysis right now, but all I know that we can do is keep our fiscal fundamentals sound.
Sound fiscal discipline. No deficits. Management of our economy. Those fundamentals are thing we can do do maintain our economic sovereignty.
But the other thing we have to do in this context is understand the tremendous importance of investing in you. The future of our country is in this room. We have to bet the store in investing in training in education in science and technology. If we continue to be an economy based on hewers of wood and drawers of water, exporters of untreated natural resources, increasingly integrated into the American economy, I don’t like what I see for you in 25-30 years, because I don’t think our economy the gets the value out of the high-end of the economy. We get the untreated, raw end of the economy, not the high-value end.
So invest, invest, invest and invest in what? Invest in you.
The other thing I feel very strongly about and I know we’ve been saying it for 30 years: diversify, diversify, diversify. 86% of our economy is integrated with the Americans. That’s a good thing. It’s natural. It’s the market, it’s close. We’re the largest investor in the United States by a considerable margin.
But I would hope in the next generation, it’s China, it’s India. We start putting our eggs in a bunch of baskets. My instinct tells me that builds a stronger and safer economic foundation for your future.
I want to start with Canada/US relations because it’s so much the centre of any foreign policy. I want to talk to you about security, economic issues, military issues, diplomatic issues and finally some political issues.
Let me start with the US/Canada relationship. I had a funny thing happen to me in politics. I sat down with a very wealthy Canadian who shall remain nameless (you can probably guess who he might have been). I said to him, “sir,” in my earnest way, “what is the biggest issue you confront as a billionaire businessman?”
He looked at me in the way that businessmen sometimes do to politicians, like “where do I start with this guy?”, with this look in his eyes and said, “It’s the border, stupid.”
He has businesses that cross the border. Maintaining a strong border, defending our border, investing in the capabilities to defend our border, equally to defending our sovereignty.
We have to enhance our border infrastructure. You can’t go to Windsor, you can’t go to many of our border crossings without being concerned that the border’s going to become a choke chain.
We don’t want a choke chain.
We’re just to be proud of having the longest undefended border in the world. It’s become stickier, and stickier and stickier since 9/11. But the thing we have to do is be a competent, capable, credible security partner with the United States while maintaining an absolute control over our sovereignty and our border. That’s a very, very difficult trick and important that we have to get right.
But our border is not just on the 49th. We now have an enormous sense of the salience of the arctic frontier. Our arctic border, and the immense importance of protecting and investing in our sovereignty as climate change literally changes the geographical dimensions of our country.
I’m a strong defender of investment in sovereignty and our border. But I’ll make another point: we have to invest in international law here. There is a lot that is unclear and obscure in who owns what and who does what there. You can’t fix this stuff just with icebreakers and overflights and patrols, although they’re enhancements I support. You have to sit down with our partners and work out a stable long-term legal framework for the development of the north for those who live there and for developing those resources. The last thing we want is a sovereignty complex up there.
I want you all to go out and study arctic law, the law of the sea, and who owns the undershelf stuff and all of that. That’s a challenge for you. Someone needs to become Canada’s expert on arctic international law.
It’s crucial to our future as a country. So those are a few thoughts about our security relationship across the border with the United States.
Let me say a little bit about our economic relations.
One of the things that I see happening is that NAFTA has been very good for our country. But I see it creating an Atlantic Canadian economy, a central Canadian economy and a western economy.
One of the questions we’ve not been asking, I think, as clearly as we should, is whether we’re still maintaining a national economy, from coast to coast to coast.
The north-south linkages in our economic system, I think, are now stronger than our east-west ones. When I was in Edmonton recently someone showed me a map of the pipelines and the natural gas pipelines. Much stronger north-south than east-west. No problem with north-south, that’s our chief market.
My concern is to strengthen the east-west spine of our country. Energy cooridors. Pipelines. The national economic space is not as unified as it should be. BC and Alberta have set a good model for the rest of the country by sitting down and working to reduce the friction in the labour markets between Alberta and British Columbia. This is good.
We need federal leadership to strengthen the ties that bind. What’s what the federal government of Canada for? It’s to maintain common economic space and common citizenship.
The north-south pull fostered by the post-NAFTA world is great, provided that we don’t splinter and fragment into increasingly separate economic spaces. That, it seems to me, to be the challenge that is at the center of Canadian economic policy.
It’s also one of the biggest puzzles in our relationship with the Americans. I’m not an economist. What is the nature of the linkage between our economy and theirs?
In the old days we used to say “they get a cold, we get pneumonia.” Right now, they’ve got a cold. They’ve got a nice, big bronchial infection right now.
And nobody rejoices over their unhappiness, least of all me. One of the themes of our economy, we’re unclear about that. We need to have much better economic analysis right now, but all I know that we can do is keep our fiscal fundamentals sound.
Sound fiscal discipline. No deficits. Management of our economy. Those fundamentals are thing we can do do maintain our economic sovereignty.
But the other thing we have to do in this context is understand the tremendous importance of investing in you. The future of our country is in this room. We have to bet the store in investing in training in education in science and technology. If we continue to be an economy based on hewers of wood and drawers of water, exporters of untreated natural resources, increasingly integrated into the American economy, I don’t like what I see for you in 25-30 years, because I don’t think our economy the gets the value out of the high-end of the economy. We get the untreated, raw end of the economy, not the high-value end.
So invest, invest, invest and invest in what? Invest in you.
The other thing I feel very strongly about and I know we’ve been saying it for 30 years: diversify, diversify, diversify. 86% of our economy is integrated with the Americans. That’s a good thing. It’s natural. It’s the market, it’s close. We’re the largest investor in the United States by a considerable margin.
But I would hope in the next generation, it’s China, it’s India. We start putting our eggs in a bunch of baskets. My instinct tells me that builds a stronger and safer economic foundation for your future.
Exporters More Brave than Resilient
(Stephen Poloz — Export Development Canada)
Canada’s exporters were hit with the perfect storm in 2007. Yet the value of exports rose by more than 2% during the year, suggesting an unexpected degree of exporter resilience. EDC’s latest exporter survey shows, however, that exporter confidence wilted in the final weeks of the year.
EDC’s survey of 1,000 exporting companies shows that expectations have deteriorated markedly in the past six months. The Trade Confidence Index fell from 72.9 to 67.4, which is even lower than in the wake of the terrorist attacks of 2001. The number of companies expecting export sales to decrease rose from 12% to 25%. Some 38% of companies expect trade opportunities to decline (up from 22%), and 30% expect global economic conditions to deteriorate (up from 20%).
The drop in confidence is across the board, touching all sectors of the economy and all regions of the country. The drop occurred regardless of the age of the company, and regardless of size. In fact, the older the firm, and the larger, the more pessimistic it is, according to the survey.
The rise of the Canadian dollar to well above U.S. dollar parity in the weeks just before the survey clearly played a big role in this outcome. Some respondents expressed disbelief that the dollar could remain so strong, but 41% were still expecting the dollar to appreciate further. Although this was down from 52% six months earlier, only 23% were forecasting that the dollar would decline – up from 17% six months earlier, but still a small number.
Nor is the domestic economy offering much solace. The survey recorded very large drops in expectations for domestic economic conditions and domestic sales. Hiring intentions also moderated, although still only 11% of surveyed companies expect to actually cut staff.
There are some positive aspects to the report. First, although there was a large drop in confidence, it was still much smaller than the drop that occurred during the winter of 2000-01, when the global economy was flirting with recession. Second, although 25% of surveyed companies expect export sales to decline, 75% expect sales to rise or remain the same – down from 89%, but still a healthy level. Third, exporters perceive increased risk but almost entirely in the U.S. economy. Risk perceptions declined for Europe, Asia, Africa and South America.
EDC’s latest forecast for exports is broadly in line with exporter sentiment. An outright decline in both export volumes and export values is forecast for 2008, even if the U.S. economy skirts recession. Nevertheless, we expect solid growth in exports to emerging markets, which will moderate in the face of the U.S. slowdown but retain good momentum. Export strength will be seen in the agri-food, fertilizer, farm machinery, aerospace and other equipment sectors.
The bottom line? According to our models, exports should have been much weaker in 2007. What the additional colour from our survey suggests is that exports held up not because exporters were resilient, but because they were brave, choosing to protect their foreign customers from price increases. And, the outlook is for an even more challenging year in 2008.
Canada’s exporters were hit with the perfect storm in 2007. Yet the value of exports rose by more than 2% during the year, suggesting an unexpected degree of exporter resilience. EDC’s latest exporter survey shows, however, that exporter confidence wilted in the final weeks of the year.
EDC’s survey of 1,000 exporting companies shows that expectations have deteriorated markedly in the past six months. The Trade Confidence Index fell from 72.9 to 67.4, which is even lower than in the wake of the terrorist attacks of 2001. The number of companies expecting export sales to decrease rose from 12% to 25%. Some 38% of companies expect trade opportunities to decline (up from 22%), and 30% expect global economic conditions to deteriorate (up from 20%).
The drop in confidence is across the board, touching all sectors of the economy and all regions of the country. The drop occurred regardless of the age of the company, and regardless of size. In fact, the older the firm, and the larger, the more pessimistic it is, according to the survey.
The rise of the Canadian dollar to well above U.S. dollar parity in the weeks just before the survey clearly played a big role in this outcome. Some respondents expressed disbelief that the dollar could remain so strong, but 41% were still expecting the dollar to appreciate further. Although this was down from 52% six months earlier, only 23% were forecasting that the dollar would decline – up from 17% six months earlier, but still a small number.
Nor is the domestic economy offering much solace. The survey recorded very large drops in expectations for domestic economic conditions and domestic sales. Hiring intentions also moderated, although still only 11% of surveyed companies expect to actually cut staff.
There are some positive aspects to the report. First, although there was a large drop in confidence, it was still much smaller than the drop that occurred during the winter of 2000-01, when the global economy was flirting with recession. Second, although 25% of surveyed companies expect export sales to decline, 75% expect sales to rise or remain the same – down from 89%, but still a healthy level. Third, exporters perceive increased risk but almost entirely in the U.S. economy. Risk perceptions declined for Europe, Asia, Africa and South America.
EDC’s latest forecast for exports is broadly in line with exporter sentiment. An outright decline in both export volumes and export values is forecast for 2008, even if the U.S. economy skirts recession. Nevertheless, we expect solid growth in exports to emerging markets, which will moderate in the face of the U.S. slowdown but retain good momentum. Export strength will be seen in the agri-food, fertilizer, farm machinery, aerospace and other equipment sectors.
The bottom line? According to our models, exports should have been much weaker in 2007. What the additional colour from our survey suggests is that exports held up not because exporters were resilient, but because they were brave, choosing to protect their foreign customers from price increases. And, the outlook is for an even more challenging year in 2008.
Thursday, January 31, 2008
Border Crossing: NEXUS Users Reminded to File Renewals on Time
The Department of Customs and Border Protection has issued a reminder for NEXUS participants to renew their enrollments on time.
Many NEXUS enrollments began expiring in June and Customs officials are asking that NEXUS members begin their application renewal 90 days prior to their expiration date.
To continue their membership in the program, applicants must:
• Submit an application and go through a registration process
• Satisfy the eligibility criteria
• Be admissible to United States and Canada
• Pass risk assessments by both countries
Members may apply on-line at http://www.cbp.gov, by clicking on Travel at the top of the screen and then clicking on Trusted Traveler Programs on the left-hand side of the Web page.
Participants without computer access can submit their application by mail to: NEXUS Program, P.O. Box 126, Niagara Falls, ONL2E 6T1, CANADA.
The application processing fee of $50 (U.S. or Canadian funds) and is non-refundable. Children under the age of 18 must also apply but are free of charge.
The renewed membership will be valid for another five years.
Many NEXUS enrollments began expiring in June and Customs officials are asking that NEXUS members begin their application renewal 90 days prior to their expiration date.
To continue their membership in the program, applicants must:
• Submit an application and go through a registration process
• Satisfy the eligibility criteria
• Be admissible to United States and Canada
• Pass risk assessments by both countries
Members may apply on-line at http://www.cbp.gov, by clicking on Travel at the top of the screen and then clicking on Trusted Traveler Programs on the left-hand side of the Web page.
Participants without computer access can submit their application by mail to: NEXUS Program, P.O. Box 126, Niagara Falls, ONL2E 6T1, CANADA.
The application processing fee of $50 (U.S. or Canadian funds) and is non-refundable. Children under the age of 18 must also apply but are free of charge.
The renewed membership will be valid for another five years.
U.S. DOT Updates Regulations on Transporting Hazardous Materials
(World Trade Interactive)
The Department of Transportation’s Pipeline and Hazardous Materials Safety Administration has issued a final rule, effective Oct. 1, amending the Hazardous Materials Regulations to update, clarify or provide relief from certain requirements governing the classification, packaging or labeling of hazardous materials transported in commerce. PHMSA’s amendments include:
• adding a new entry to the Hazardous Materials Table for ethanol and gasoline blends with more than 10 percent alcohol;
• expanding the exceptions from regulation for small quantities of hazardous materials;
• updating provisions incorporating consensus standards issued by the Chlorine Institute and the Compressed Gas Association;
• adding a definition for “household wastes” to clarify the current exception in the HMR for transportation of such materials;
• revising the HMT to harmonize certain entries with international standards by removing, adding and revising certain proper shipping names;
• revising certain hazard communication provisions to address shipping paper requirements for marine pollutants, marking requirements for limited quantities, proper shipping name markings on packages and labeling of intermediate bulk containers;
• clarifying requirements applicable to the transportation of dry ice on aircraft, detonator assemblies and packagings authorized for the transportation of certain explosives;
• clarifying that a shipper must use a carrier with a safety permit to transport hazardous materials for which safety permits are required as specified under the federal motor carrier safety regulations; and
• clarifying segregation requirements for hazardous materials transported by motor carrier.
The Federal Register notice is available here.
The Department of Transportation’s Pipeline and Hazardous Materials Safety Administration has issued a final rule, effective Oct. 1, amending the Hazardous Materials Regulations to update, clarify or provide relief from certain requirements governing the classification, packaging or labeling of hazardous materials transported in commerce. PHMSA’s amendments include:
• adding a new entry to the Hazardous Materials Table for ethanol and gasoline blends with more than 10 percent alcohol;
• expanding the exceptions from regulation for small quantities of hazardous materials;
• updating provisions incorporating consensus standards issued by the Chlorine Institute and the Compressed Gas Association;
• adding a definition for “household wastes” to clarify the current exception in the HMR for transportation of such materials;
• revising the HMT to harmonize certain entries with international standards by removing, adding and revising certain proper shipping names;
• revising certain hazard communication provisions to address shipping paper requirements for marine pollutants, marking requirements for limited quantities, proper shipping name markings on packages and labeling of intermediate bulk containers;
• clarifying requirements applicable to the transportation of dry ice on aircraft, detonator assemblies and packagings authorized for the transportation of certain explosives;
• clarifying that a shipper must use a carrier with a safety permit to transport hazardous materials for which safety permits are required as specified under the federal motor carrier safety regulations; and
• clarifying segregation requirements for hazardous materials transported by motor carrier.
The Federal Register notice is available here.
Nutrition Labelling Transition Period
(Canadian Food Inspection Agency)
As of December 12, 2007, the nutrition labelling transition period has passed. The CFIA website has been updated to reflect these changes in the following documents:
Chapter 5 of the 2003 Guide to Food Labelling and Advertising [nutrition labelling]
Chapter 7 of the 2003 Guide to Food Labelling and Advertising [nutrient content claims]
Chapter 12 of the 2003 Guide to Food Labelling and Advertising [honey]
Chapter 13 of the 2003 Guide to Food Labelling and Advertising [maple products]
Chapter 15 of the 2003 Guide to Food Labelling and Advertising [fish and fish products]
Section J of the Nutrition Labelling Toolkit [evaluation standard – introduction]
Section J2 of the Nutrition Labelling Toolkit [evaluation standard – label]
Section B of the Nutrition Labelling Toolkit [What Products May Carry a Nutrition Facts Table?]
Information Letter: Carbohydrate Claims on Foods Sold in Canada
Information Bulletin: Nutrition Labelling Regulations and Foods Sold in Restaurants and Food Service Establishments
As of December 12, 2007, the nutrition labelling transition period has passed. The CFIA website has been updated to reflect these changes in the following documents:
Chapter 5 of the 2003 Guide to Food Labelling and Advertising [nutrition labelling]
Chapter 7 of the 2003 Guide to Food Labelling and Advertising [nutrient content claims]
Chapter 12 of the 2003 Guide to Food Labelling and Advertising [honey]
Chapter 13 of the 2003 Guide to Food Labelling and Advertising [maple products]
Chapter 15 of the 2003 Guide to Food Labelling and Advertising [fish and fish products]
Section J of the Nutrition Labelling Toolkit [evaluation standard – introduction]
Section J2 of the Nutrition Labelling Toolkit [evaluation standard – label]
Section B of the Nutrition Labelling Toolkit [What Products May Carry a Nutrition Facts Table?]
Information Letter: Carbohydrate Claims on Foods Sold in Canada
Information Bulletin: Nutrition Labelling Regulations and Foods Sold in Restaurants and Food Service Establishments
Canadian Border and Trade Agencies Investigate Allegations of China Steel Dumping
(The Canadian Press)
The Canada Border Services Agency said Thursday it is investigating allegations of dumping and subsidizing of certain carbon steel welded pipe from China after a complaint was made by ArcelorMittal out of Montreal.
Also Thursday, the Canadian International Trade Tribunal said it will look into the complaints and decide by March 25 if the alleged dumping and subsidizing has injured the domestic steel industry.
“If there is a large increase in harmful imports and the Tribunal decides that retroactive application of anti-dumping or countervailing duty is justified, duty could be levied on the goods brought into Canada as of today,’’ the tribunal said in a statement.
According to the border agency, ArcelorMittal alleges that the dumping is creating “price erosion, price suppression, lost sales, reduced market share, lost revenues, reduced profitability, reduced production and overcapacity, lost employment and plant shut downs, increased inventory levels and impairment to make future investments.’’
Dumping occurs when goods are sold to importers in Canada at prices that are less than their selling prices in the exporter’s domestic market or at unprofitable prices. Subsidizing occurs when goods imported into Canada benefit from foreign government financial assistance. The Special Import Measures Act protects Canadian producers from the damaging effects of such unfair trade.
Officials at ArcelorMittal could not immediately be reached for comment.
Arcelor SA acquired Hamilton-based Dofasco in 2006, and in 2007 Dofasco became a part of ArcelorMittal after Mittal Steel bought Arcelor, to create the world’s largest steelmaker.
The Canada Border Services Agency said Thursday it is investigating allegations of dumping and subsidizing of certain carbon steel welded pipe from China after a complaint was made by ArcelorMittal out of Montreal.
Also Thursday, the Canadian International Trade Tribunal said it will look into the complaints and decide by March 25 if the alleged dumping and subsidizing has injured the domestic steel industry.
“If there is a large increase in harmful imports and the Tribunal decides that retroactive application of anti-dumping or countervailing duty is justified, duty could be levied on the goods brought into Canada as of today,’’ the tribunal said in a statement.
According to the border agency, ArcelorMittal alleges that the dumping is creating “price erosion, price suppression, lost sales, reduced market share, lost revenues, reduced profitability, reduced production and overcapacity, lost employment and plant shut downs, increased inventory levels and impairment to make future investments.’’
Dumping occurs when goods are sold to importers in Canada at prices that are less than their selling prices in the exporter’s domestic market or at unprofitable prices. Subsidizing occurs when goods imported into Canada benefit from foreign government financial assistance. The Special Import Measures Act protects Canadian producers from the damaging effects of such unfair trade.
Officials at ArcelorMittal could not immediately be reached for comment.
Arcelor SA acquired Hamilton-based Dofasco in 2006, and in 2007 Dofasco became a part of ArcelorMittal after Mittal Steel bought Arcelor, to create the world’s largest steelmaker.
Wednesday, January 30, 2008
How Low Can Oil Prices Go?
(Stephen Poloz, Export Development Canada)
Oil prices have broken below the psychologically-important $90 level, leading speculators who have bet heavily on $100-plus oil to consider bailing out of the market. For real consumers, in contrast, this is good news – and the question is, how much better can it get?
There is a wide dispersion of views on the future. Just a year ago many thought oil prices were headed below $50, while today some believe they are headed above $100. A non-economist might wonder what changed during the past 12 months to account for such shifts. Certainly, the arguments that are made to support forecasts are not new – rapid growth in Asia, political risk in the Middle East, a perception that conventional sources of oil are drying up, and the like.
Consider the connection between economic growth and oil demand, which is not as tight as one might expect. The world economy grew by nearly 5% in 2007, but the demand for oil rose by only 1%. Fact is, since 1975 the world has nearly doubled its ratio of GDP to oil consumption. This is partly due to switches to other energy sources. But even if we use a broader measure of energy use, taking all sources into account, the world has seen a 50% improvement in the last 30 years. For the U.S., overall energy efficiency has doubled, while for China it has almost quadrupled!
Of course, a big part of the downshift in oil use over the past 30 years happened in the early 1980s, after the oil price shocks of the late 1970s. In the U.S. there was a 60% increase in the fuel efficiency of vehicles between 1975 and 1982. Consumers switched from large cars to mid-size cars, and to a lesser extent to small cars. Large cars fell from around 30% of sales to 18% during 1975-80. But then oil prices eased, and the pressure to conserve eased as well. By 2007, 35% of the vehicles sold in America were large. Vehicle weights have moved back up to 1970s levels, horsepower is up and truck sales as a share of the total are up significantly. Nevertheless, anecdotal evidence suggests that consumers are once again shifting toward fuel efficiency.
Such consumer shifts can have a big impact on the demand for oil, but they take time, especially now that the importance of the U.S. to this equation is lower. Back in 1975, the U.S. had 40% of the world’s cars, and now that number is around 20%. China and India only account for 3-4% of the world’s vehicle population. They are rising fast, but at least those cars are small.
Oil production analysis only complicates the forecast. Old fields see declining yields, but new technologies permit increased recovery. New discoveries from deep offshore exploration have added considerably to long-term capacity. The IEA estimates that non-OPEC suppliers alone will manage to raise production by about 1 million barrels per day in 2008 – enough to satisfy the global increase in demand, according to our forecast. And Saudi Arabia is boosting output, too.
The bottom line? There are a lot of unknowns buried in every oil price forecast. But it looks like production capacity is rising faster than demand, consumers are adjusting to high prices, and speculation and leverage have played a big role in the latest run-up. This makes the risks for 2008 look decidedly asymmetric – oil prices are likely to trend lower, at least for now.
Oil prices have broken below the psychologically-important $90 level, leading speculators who have bet heavily on $100-plus oil to consider bailing out of the market. For real consumers, in contrast, this is good news – and the question is, how much better can it get?
There is a wide dispersion of views on the future. Just a year ago many thought oil prices were headed below $50, while today some believe they are headed above $100. A non-economist might wonder what changed during the past 12 months to account for such shifts. Certainly, the arguments that are made to support forecasts are not new – rapid growth in Asia, political risk in the Middle East, a perception that conventional sources of oil are drying up, and the like.
Consider the connection between economic growth and oil demand, which is not as tight as one might expect. The world economy grew by nearly 5% in 2007, but the demand for oil rose by only 1%. Fact is, since 1975 the world has nearly doubled its ratio of GDP to oil consumption. This is partly due to switches to other energy sources. But even if we use a broader measure of energy use, taking all sources into account, the world has seen a 50% improvement in the last 30 years. For the U.S., overall energy efficiency has doubled, while for China it has almost quadrupled!
Of course, a big part of the downshift in oil use over the past 30 years happened in the early 1980s, after the oil price shocks of the late 1970s. In the U.S. there was a 60% increase in the fuel efficiency of vehicles between 1975 and 1982. Consumers switched from large cars to mid-size cars, and to a lesser extent to small cars. Large cars fell from around 30% of sales to 18% during 1975-80. But then oil prices eased, and the pressure to conserve eased as well. By 2007, 35% of the vehicles sold in America were large. Vehicle weights have moved back up to 1970s levels, horsepower is up and truck sales as a share of the total are up significantly. Nevertheless, anecdotal evidence suggests that consumers are once again shifting toward fuel efficiency.
Such consumer shifts can have a big impact on the demand for oil, but they take time, especially now that the importance of the U.S. to this equation is lower. Back in 1975, the U.S. had 40% of the world’s cars, and now that number is around 20%. China and India only account for 3-4% of the world’s vehicle population. They are rising fast, but at least those cars are small.
Oil production analysis only complicates the forecast. Old fields see declining yields, but new technologies permit increased recovery. New discoveries from deep offshore exploration have added considerably to long-term capacity. The IEA estimates that non-OPEC suppliers alone will manage to raise production by about 1 million barrels per day in 2008 – enough to satisfy the global increase in demand, according to our forecast. And Saudi Arabia is boosting output, too.
The bottom line? There are a lot of unknowns buried in every oil price forecast. But it looks like production capacity is rising faster than demand, consumers are adjusting to high prices, and speculation and leverage have played a big role in the latest run-up. This makes the risks for 2008 look decidedly asymmetric – oil prices are likely to trend lower, at least for now.
Thursday, January 10, 2008
UPS Expanding Global Service in Wake of US Economic Downturn
(Canadian Transportation Logistics)
United Parcel Service (UPS) is expanding an international air-freight service that guarantees delivery dates in the wake of a slowing US economy, the Toronto Star reports.
The UPS Express Freight service will more than triple the amount of express lanes currently served, UPS officials said.
The service, which now reaches 52 countries, is designed to provide guaranteed time-definite, overnight-to-three day door-to-door delivery including routine customs clearance to major global metropolitan areas.
UPS has been boosting international revenue at a faster rate than in the US, where the economic expansion is waning, according to the Toronto Star. The report said UPS international operations accounted for 28% of the company's total revenue in 2006.
United Parcel Service (UPS) is expanding an international air-freight service that guarantees delivery dates in the wake of a slowing US economy, the Toronto Star reports.
The UPS Express Freight service will more than triple the amount of express lanes currently served, UPS officials said.
The service, which now reaches 52 countries, is designed to provide guaranteed time-definite, overnight-to-three day door-to-door delivery including routine customs clearance to major global metropolitan areas.
UPS has been boosting international revenue at a faster rate than in the US, where the economic expansion is waning, according to the Toronto Star. The report said UPS international operations accounted for 28% of the company's total revenue in 2006.
Wednesday, January 9, 2008
Consumer Safety Agency to Post Inspectors at Biggest Ports
(GovExec.com)
The federal agency that polices children’s toys and other consumer goods will permanently station employees at the nation’s largest ports for the first time in response to congressional and public outcry over recalls. Acting Consumer Product Safety Commission Chairwoman Nancy Nord said she is coordinating an effort to focus CPSC employees on suspect shipments and high-risk products. ‘We will be starting at the busiest ports, the ports where the most products come in. That’s Long Beach, that’s Seattle, there are a number of other ones,’ Nord said. Staffing for the permanent port presence is undetermined since CPSC received a $17 million budget bump when Congress approved $80 million for the agency last month.
CPSC staff at ports will not be authorized to turn away dangerous cargo, but it can advise U.S. Customs and Border Protection officials who have the power to deny unsafe products entry into the country. CPSC employees are posted near ports and sometimes conduct inspections, but they also are assigned other duties. The permanent port staff will have access to information on recalls and high-risk products through a tracking system CPSC is developing, Nord said.
The House passed a consumer product safety bill before recess. Nord praised the bipartisan bill that requires third-party certification of children’s toys, reduces the allowable lead level in toys and implements a tracking system to aid store-owners during recalls, but she is not as amenable to a more stringent Senate bill crafted by Democrats. Read the full story.
The federal agency that polices children’s toys and other consumer goods will permanently station employees at the nation’s largest ports for the first time in response to congressional and public outcry over recalls. Acting Consumer Product Safety Commission Chairwoman Nancy Nord said she is coordinating an effort to focus CPSC employees on suspect shipments and high-risk products. ‘We will be starting at the busiest ports, the ports where the most products come in. That’s Long Beach, that’s Seattle, there are a number of other ones,’ Nord said. Staffing for the permanent port presence is undetermined since CPSC received a $17 million budget bump when Congress approved $80 million for the agency last month.
CPSC staff at ports will not be authorized to turn away dangerous cargo, but it can advise U.S. Customs and Border Protection officials who have the power to deny unsafe products entry into the country. CPSC employees are posted near ports and sometimes conduct inspections, but they also are assigned other duties. The permanent port staff will have access to information on recalls and high-risk products through a tracking system CPSC is developing, Nord said.
The House passed a consumer product safety bill before recess. Nord praised the bipartisan bill that requires third-party certification of children’s toys, reduces the allowable lead level in toys and implements a tracking system to aid store-owners during recalls, but she is not as amenable to a more stringent Senate bill crafted by Democrats. Read the full story.
NAFTA Surface Trade Gains
(The Journal of Commerce)
Trade using surface transportation between the United States and North American Free Trade Agreement partners Canada and Mexico hit a new monthly high in October.
The record $74.2 billion in goods carried by truck, rail and pipeline in October topped the previous monthly high of $69.8 billion, set in March 2007, by 6.4 percent….
The value of North American surface trade was 11.1-percent higher than in October a year ago. The value of U.S. trade with Canada and Mexico has grown steadily since NAFTA went into effect in January, 1994…
Surface transportation trade with Canada in October totaled $47.7 billion, up 14.1 percent on-year. U.S.-Mexico surface transportation climbed 6 percent to $26.6 billion.
Trade using surface transportation between the United States and North American Free Trade Agreement partners Canada and Mexico hit a new monthly high in October.
The record $74.2 billion in goods carried by truck, rail and pipeline in October topped the previous monthly high of $69.8 billion, set in March 2007, by 6.4 percent….
The value of North American surface trade was 11.1-percent higher than in October a year ago. The value of U.S. trade with Canada and Mexico has grown steadily since NAFTA went into effect in January, 1994…
Surface transportation trade with Canada in October totaled $47.7 billion, up 14.1 percent on-year. U.S.-Mexico surface transportation climbed 6 percent to $26.6 billion.
Staffing Shortages at U.S. Border Jeopardize Security, Economy
(GovExec.com)
Both national security and economic growth are jeopardized by an overtaxed and dysfunctional system for inspecting people and goods at U.S. land ports of entry. That was the picture painted by government officials, federal employee representatives and business leaders testifying Thursday at a House Homeland Security Committee field hearing in El Paso, Texas.
Staffing shortages and poor training among border personnel, along with outdated facilities, an overwhelming workload, and the absence of standardized, tamperproof travel document requirements are contributing to long wait times and security lapses at U.S. borders, officials said.
Thomas Winkowski, assistant commissioner for field operations at Customs and Border Protection, the Homeland Security bureau directly responsible for vetting people and goods entering the country, said CBP is counting on implementation of the repeatedly-delayed Western Hemisphere Travel Initiative to both improve security and facilitate legitimate cross-border trade. U.S., Canadian and Bermudian citizens now entering the United States across land and sea borders are not required to present any specific set of identity or citizenship documents. Read the full story.
Both national security and economic growth are jeopardized by an overtaxed and dysfunctional system for inspecting people and goods at U.S. land ports of entry. That was the picture painted by government officials, federal employee representatives and business leaders testifying Thursday at a House Homeland Security Committee field hearing in El Paso, Texas.
Staffing shortages and poor training among border personnel, along with outdated facilities, an overwhelming workload, and the absence of standardized, tamperproof travel document requirements are contributing to long wait times and security lapses at U.S. borders, officials said.
Thomas Winkowski, assistant commissioner for field operations at Customs and Border Protection, the Homeland Security bureau directly responsible for vetting people and goods entering the country, said CBP is counting on implementation of the repeatedly-delayed Western Hemisphere Travel Initiative to both improve security and facilitate legitimate cross-border trade. U.S., Canadian and Bermudian citizens now entering the United States across land and sea borders are not required to present any specific set of identity or citizenship documents. Read the full story.
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