(CEP News – Geoff Matthews)
Canada’s economy is faring far better than the country’s gross domestic product numbers suggest, says Desjardins senior economist Benoit P. Durocher.
It is difficult to believe that Canada’s economy is currently on the verge of a recession, Durocher wrote in a research note for publication on the Desjardins website.
“Except for certain manufacturing industries, we get the impression that economic activity across the country is in pretty good shape,” he said. “The unemployment rate is hovering close to its historic low, wages are increasing rapidly, and consumer spending and investment are doing rather well despite a recent slowdown.”
The increase in prices for raw materials exported by Canada is boosting income while lower prices for imports, due in part to the loonie’s rise, are cutting expenses, he said. “In short, Canadians get more while paying less.”
Using gross domestic income (GDI) instead of GDP as the benchmark gives a more realistic view of the strength of the Canadian economy, Durocher said.
The real GDI takes into account changes in purchasing power and production, he said, and corrects exports and imports using the same price index.
This alternative benchmark seems to be gaining in popularity, Durocher said, noting that the most recent Monetary Policy Report Update issued by the Bank of Canada signalled that real gross domestic income increased by an annualized rate of 2.4% in the first quarter, owing to a further 8.1% improvement in Canada’s terms of trade.
Canada’s real GDI has grown by 21.4% since early 2003, compared to only 13.8% growth in the real GDP, he said. “In short, the real GDI has presented a much more positive picture of the Canadian economy for some time now.”
Durocher said Canada can’t abandon GDP as an economic measure, given its widespread global acceptance. However, using real GDI “still allows us to assess the health of Canada’s economy under a different angle that can be particularly useful in a context of widely fluctuating terms of trade, as is currently the case in Canada.”
By taking into account the wealth effect associated with sudden movements in trade terms, GDI “provides a more complete overview of the health of our domestic economy,” he added.
Real GDI also paints a much more optimistic portrait of Canada’s economy and collective well-being than the most recent real GDP would lead one to believe, Durocher said. “This observation does not favour additional key interest rate cuts from the Bank of Canada, unless the economic situation deteriorates further.”
Tuesday, August 26, 2008
Canada Concludes Free Trade Negotiations with Jordan
(DFAIT)
On August 25, 2008, the Government of Canada concluded negotiations on a free trade agreement (FTA) with Jordan, as well as on parallel agreements on labour cooperation and the environment. This year, the Government of Canada has also concluded FTA negotiations with Colombia and Peru.
“We welcome this opportunity to expand Canada-Jordan trade relations,” said the Honourable Michael M Fortier, Minister of International Trade. “This bilateral free trade agreement will open up significant opportunities for Canadian companies in this growing economy, as well as elsewhere in the Middle East and North Africa. It demonstrates our government’s continuing commitment to expand opportunities for Canadian exporters.”
An FTA with Jordan will improve market access for both agricultural products and industrial goods, and help to ensure a level playing field for Canadian exporters vis-à-vis competitors that already have preferential access to Jordan’s markets. Trade between the two countries totalled $76 million last year.
Upon implementation, this FTA will eliminate tariffs on the vast majority of current Canadian exports to Jordan, directly benefiting Canadian exporters. For example, in 2007, electrical machinery was subject to roughly $293,000 in duties (up to 30 percent on some products) on exports of $3 million to Jordan.
The parallel labour and environment agreements will help to ensure progress on labour rights and environmental protection.
“This labour cooperation agreement between Canada and Jordan will ensure that economic progress goes hand in hand with the rights of workers,” said the Honourable Jean-Pierre Blackburn, Minister of Labour and Minister of the Economic Development Agency of Canada for the Regions of Quebec. “The successful conclusion of these negotiations marks the beginning of a long-term cooperative relationship between our two countries.”
“The Canada-Jordan Agreement on the Environment marks another milestone in our two countries’ joint commitment to protecting our most vital of assets, our shared environment,” said the Honourable John Baird, Minister of the Environment. “We see this partnership as an opportunity to create and strengthen environmental laws and policies as a legacy for future generations.”
This FTA also demonstrates Canada’s support for a key partner in the pursuit of regional peace, security and stability. These negotiations follow on the successful conclusion of negotiations for a new bilateral air services agreement and a foreign investment promotion and protection agreement with Jordan.
Prime Minister Stephen Harper committed Canada to exploring the possibility of an FTA with Jordan when he met King Abdullah II in July 2007.
Before signing the agreements and making them public, Canada and Jordan will undertake a detailed legal review of the FTA texts in English, French and Arabic. Following formal signature, the treaties will be tabled in the House of Commons for a period of 21 sitting days for Members of Parliament to review and debate. Following the 21-day period, the Canadian government will introduce draft legislation to implement the agreements.
On August 25, 2008, the Government of Canada concluded negotiations on a free trade agreement (FTA) with Jordan, as well as on parallel agreements on labour cooperation and the environment. This year, the Government of Canada has also concluded FTA negotiations with Colombia and Peru.
“We welcome this opportunity to expand Canada-Jordan trade relations,” said the Honourable Michael M Fortier, Minister of International Trade. “This bilateral free trade agreement will open up significant opportunities for Canadian companies in this growing economy, as well as elsewhere in the Middle East and North Africa. It demonstrates our government’s continuing commitment to expand opportunities for Canadian exporters.”
An FTA with Jordan will improve market access for both agricultural products and industrial goods, and help to ensure a level playing field for Canadian exporters vis-à-vis competitors that already have preferential access to Jordan’s markets. Trade between the two countries totalled $76 million last year.
Upon implementation, this FTA will eliminate tariffs on the vast majority of current Canadian exports to Jordan, directly benefiting Canadian exporters. For example, in 2007, electrical machinery was subject to roughly $293,000 in duties (up to 30 percent on some products) on exports of $3 million to Jordan.
The parallel labour and environment agreements will help to ensure progress on labour rights and environmental protection.
“This labour cooperation agreement between Canada and Jordan will ensure that economic progress goes hand in hand with the rights of workers,” said the Honourable Jean-Pierre Blackburn, Minister of Labour and Minister of the Economic Development Agency of Canada for the Regions of Quebec. “The successful conclusion of these negotiations marks the beginning of a long-term cooperative relationship between our two countries.”
“The Canada-Jordan Agreement on the Environment marks another milestone in our two countries’ joint commitment to protecting our most vital of assets, our shared environment,” said the Honourable John Baird, Minister of the Environment. “We see this partnership as an opportunity to create and strengthen environmental laws and policies as a legacy for future generations.”
This FTA also demonstrates Canada’s support for a key partner in the pursuit of regional peace, security and stability. These negotiations follow on the successful conclusion of negotiations for a new bilateral air services agreement and a foreign investment promotion and protection agreement with Jordan.
Prime Minister Stephen Harper committed Canada to exploring the possibility of an FTA with Jordan when he met King Abdullah II in July 2007.
Before signing the agreements and making them public, Canada and Jordan will undertake a detailed legal review of the FTA texts in English, French and Arabic. Following formal signature, the treaties will be tabled in the House of Commons for a period of 21 sitting days for Members of Parliament to review and debate. Following the 21-day period, the Canadian government will introduce draft legislation to implement the agreements.
Monday, August 25, 2008
Legislation May Have ‘Seller Beware’ Philosophy
(Law Times – Julius Melnitzer)
In its 2007 throne speech, the Conservative government promised to “introduce measures on food and product safety to ensure that families have confidence in the quality and safety of what they buy.”
With the introduction in May of bill C-51, which amends the Food and Drugs Act, and bill C-52, the proposed Consumer Product Safety Act, the government was well on its way to fulfilling that promise – in spades. The legislation, if enacted, will substantially change the regulatory regime for food, therapeutic products (including drugs, natural health products, and medical devices), cosmetics, and other consumer products.
The legislation has a very wide reach, with implications for pharmaceutical, medical-device and other health-product companies, food manufacturers, and anyone that manufactures, imports, advertises, or sells consumer products.
“The breadth of the legislation really does impact on everyone by adding an enormous level of infrastructure throughout the supply chain,” says Martha Healey of Ogilvy Renault LLP’s Ottawa office. “But it also goes so far as to affect individuals to the extent they give away or sell products at garage sales.”
Which means the legislation may be impacting on a host of organizations that don’t realize they’re affected until it’s too late.
“Under the present wording, even a product that is only occasionally used for non-commercial purposes could be covered,” says Elizabeth McNaughton of Blake Cassels & Graydon LLP’s Toronto office. “You could, for example, have a company that sells commercial stoves to restaurants with the occasional sale to a consumer, and that makes the stove a consumer product.”
Doubtless, the fact that product recalls and public notices of voluntary withdrawal are at a record high in Canada has made product safety and quality a leading issue for consumers and retailers.
Yet there are lingering questions about the scope of the legislation, namely whether all these effects were intended or whether the proposed laws are just another instance of legislative overkill.
“Everyone’s for child safety,” Healey says, “But it’s odd that someone could be held liable if they give their neighbour a used baby stroller that turns out to be defective and an injury occurs.”
Indeed, bill C-52 creates a general prohibition on manufacturing, importing, selling, or advertising any “consumer product” that poses a danger to human health or safety. “Consumer product” is very broadly defined as “a product, including its components, parts or accessories, that can reasonably be expected to be obtained by an individual to be used for non-commercial purposes, including for domestic, recreational and sports purposes.” Read the complete article.
In its 2007 throne speech, the Conservative government promised to “introduce measures on food and product safety to ensure that families have confidence in the quality and safety of what they buy.”
With the introduction in May of bill C-51, which amends the Food and Drugs Act, and bill C-52, the proposed Consumer Product Safety Act, the government was well on its way to fulfilling that promise – in spades. The legislation, if enacted, will substantially change the regulatory regime for food, therapeutic products (including drugs, natural health products, and medical devices), cosmetics, and other consumer products.
The legislation has a very wide reach, with implications for pharmaceutical, medical-device and other health-product companies, food manufacturers, and anyone that manufactures, imports, advertises, or sells consumer products.
“The breadth of the legislation really does impact on everyone by adding an enormous level of infrastructure throughout the supply chain,” says Martha Healey of Ogilvy Renault LLP’s Ottawa office. “But it also goes so far as to affect individuals to the extent they give away or sell products at garage sales.”
Which means the legislation may be impacting on a host of organizations that don’t realize they’re affected until it’s too late.
“Under the present wording, even a product that is only occasionally used for non-commercial purposes could be covered,” says Elizabeth McNaughton of Blake Cassels & Graydon LLP’s Toronto office. “You could, for example, have a company that sells commercial stoves to restaurants with the occasional sale to a consumer, and that makes the stove a consumer product.”
Doubtless, the fact that product recalls and public notices of voluntary withdrawal are at a record high in Canada has made product safety and quality a leading issue for consumers and retailers.
Yet there are lingering questions about the scope of the legislation, namely whether all these effects were intended or whether the proposed laws are just another instance of legislative overkill.
“Everyone’s for child safety,” Healey says, “But it’s odd that someone could be held liable if they give their neighbour a used baby stroller that turns out to be defective and an injury occurs.”
Indeed, bill C-52 creates a general prohibition on manufacturing, importing, selling, or advertising any “consumer product” that poses a danger to human health or safety. “Consumer product” is very broadly defined as “a product, including its components, parts or accessories, that can reasonably be expected to be obtained by an individual to be used for non-commercial purposes, including for domestic, recreational and sports purposes.” Read the complete article.
Scrapping Food-Labelling Approval Is Dangerous, Says Food Industry
(Canwest News Service – Sarah Schmidt)
Industry leaders call the move dangerous, but the Conservative government is trying to sell a controversial decision to scrap a food-labelling approvals system as a way to help companies “take the lead in fulfilling their responsibility for consumer protection,” according to internal talking points obtained by Canwest News Service.
The decision to eliminate the Canadian Food Inspection Agency program requiring companies to get all labels approved for meat and processed fruit and vegetable products before they get to market was made quietly last November. Treasury Board also supported changes to the way meat is inspected as part of a strategic review of the agency.
Although no official announcement about eliminating the program was made, the agency in June prepared talking points “for internal distribution only.”
Robert de Valk, a food-regulation consultant specializing in labelling, says the reasoning doesn’t hold up. After reviewing details of the plan supported by Treasury Board, he said the decision to terminate the pre-market label approval for domestic and imported products is the “most dangerous part” because it undermines consumer confidence.
The former member of a food policy group advising the agriculture minister said “we are taking something that works and creating confusion in the consumer’s mind. When you create confusion in the consumer’s mind, their confidence drops, and that’s dangerous.”
De Valk, Canadian representative with the North American Meat Processors Association, joins a growing list of industry leaders opposing the move, even as the government tries to sell it as a business-friendly move to “reduce the regulatory burden by eliminating the requirements for mandatory label registration,” according to the taking points.
The Food Processors of Canada says the decision to cut the program is like “playing Russian roulette with the Canadian public.” President Christopher Kyte said the label review unit is composed of about eight people who play a vital role in food safety.
“They prevent mislabelling and unsafe products from ending up on store shelves. They catch things like illegal chemicals and misleading health claims. What we want to do is prevent these products from reaching the marketplace. To chase down these products in grocery stores doesn’t seem like a good use of our inspectors.”
In the talking points, the agency says ending the label registration program, which is expected to save $87,000 annually, is “in line” with other efforts to “refocus the available resources to ensure a greater level of compliance at distribution or retail level for the investments made.”
De Valk says this is a dubious argument. “It doesn’t make sense to do away with pre-market review to save $87,000,” he said, arguing it’s wiser to employ a handful of people to ensure labels are accurate instead of asking hundreds of frontline inspectors to review labels on store shelves. Read the complete article.
Industry leaders call the move dangerous, but the Conservative government is trying to sell a controversial decision to scrap a food-labelling approvals system as a way to help companies “take the lead in fulfilling their responsibility for consumer protection,” according to internal talking points obtained by Canwest News Service.
The decision to eliminate the Canadian Food Inspection Agency program requiring companies to get all labels approved for meat and processed fruit and vegetable products before they get to market was made quietly last November. Treasury Board also supported changes to the way meat is inspected as part of a strategic review of the agency.
Although no official announcement about eliminating the program was made, the agency in June prepared talking points “for internal distribution only.”
Robert de Valk, a food-regulation consultant specializing in labelling, says the reasoning doesn’t hold up. After reviewing details of the plan supported by Treasury Board, he said the decision to terminate the pre-market label approval for domestic and imported products is the “most dangerous part” because it undermines consumer confidence.
The former member of a food policy group advising the agriculture minister said “we are taking something that works and creating confusion in the consumer’s mind. When you create confusion in the consumer’s mind, their confidence drops, and that’s dangerous.”
De Valk, Canadian representative with the North American Meat Processors Association, joins a growing list of industry leaders opposing the move, even as the government tries to sell it as a business-friendly move to “reduce the regulatory burden by eliminating the requirements for mandatory label registration,” according to the taking points.
The Food Processors of Canada says the decision to cut the program is like “playing Russian roulette with the Canadian public.” President Christopher Kyte said the label review unit is composed of about eight people who play a vital role in food safety.
“They prevent mislabelling and unsafe products from ending up on store shelves. They catch things like illegal chemicals and misleading health claims. What we want to do is prevent these products from reaching the marketplace. To chase down these products in grocery stores doesn’t seem like a good use of our inspectors.”
In the talking points, the agency says ending the label registration program, which is expected to save $87,000 annually, is “in line” with other efforts to “refocus the available resources to ensure a greater level of compliance at distribution or retail level for the investments made.”
De Valk says this is a dubious argument. “It doesn’t make sense to do away with pre-market review to save $87,000,” he said, arguing it’s wiser to employ a handful of people to ensure labels are accurate instead of asking hundreds of frontline inspectors to review labels on store shelves. Read the complete article.
Turnabout on the Atlantic: As Volumes Soar, Exporters Pay More
(Shipping Digest – Peter T. Leach)
Freight rates on imports fall as volumes drop
The dramatic decline of the U.S. dollar against the currencies of its major trading partners in Europe over the last year continues to drive the reversal of fortune on the trans-Atlantic trade lanes, as U.S. products become more competitive in Europe, while European products grow more expensive in the U.S.
Eastbound ships are stacked to capacity with containers filled with U.S. goods bound for Europe, while westbound ships are only running a little more than 80% full. But the dollar’s decline appears to be leveling off, as major European economies stutter and the euro and the pound begin to lose steam. That could stem the decline in U.S. imports in the next year and slow U.S. export growth, but forecasters’ crystal balls are still a bit murky on this point.
The space shortage has eased a bit this month because much of Europe is on vacation. “So there’s not a lot of cargo moving in mid-August,” said Ron Bailey, manger of Brewster Lines, a St. Louis-based non-vessel-operating common carrier. In addition, the dollar has been getting stronger – on August 13, the exchange rate was $1.49 to the euro, compared to $1.59 at its weakest point.
“That’s starting to take a hit. So as a result, there’s more space available, more equipment, less demand,” Bailey said. That translates into shorter waiting times, but shippers may have to wait several weeks for a booking, depending on the origin and destination ports.
Beset by declining volumes and freight rates on the westbound leg of the trade in the first few months of the year, carriers have largely completed the reductions in vessel capacity they thought necessary to stabilize rates. They expect no further cuts. But even in the face of tight capacity on the eastbound, or backhaul leg, and expectations of some improvement in westbound volumes by the fourth quarter, carriers don’t plan to add capacity. Carriers plan further rate increases in the eastbound trade where demand is strong and supply is limited. Read the complete article.
Freight rates on imports fall as volumes drop
The dramatic decline of the U.S. dollar against the currencies of its major trading partners in Europe over the last year continues to drive the reversal of fortune on the trans-Atlantic trade lanes, as U.S. products become more competitive in Europe, while European products grow more expensive in the U.S.
Eastbound ships are stacked to capacity with containers filled with U.S. goods bound for Europe, while westbound ships are only running a little more than 80% full. But the dollar’s decline appears to be leveling off, as major European economies stutter and the euro and the pound begin to lose steam. That could stem the decline in U.S. imports in the next year and slow U.S. export growth, but forecasters’ crystal balls are still a bit murky on this point.
The space shortage has eased a bit this month because much of Europe is on vacation. “So there’s not a lot of cargo moving in mid-August,” said Ron Bailey, manger of Brewster Lines, a St. Louis-based non-vessel-operating common carrier. In addition, the dollar has been getting stronger – on August 13, the exchange rate was $1.49 to the euro, compared to $1.59 at its weakest point.
“That’s starting to take a hit. So as a result, there’s more space available, more equipment, less demand,” Bailey said. That translates into shorter waiting times, but shippers may have to wait several weeks for a booking, depending on the origin and destination ports.
Beset by declining volumes and freight rates on the westbound leg of the trade in the first few months of the year, carriers have largely completed the reductions in vessel capacity they thought necessary to stabilize rates. They expect no further cuts. But even in the face of tight capacity on the eastbound, or backhaul leg, and expectations of some improvement in westbound volumes by the fourth quarter, carriers don’t plan to add capacity. Carriers plan further rate increases in the eastbound trade where demand is strong and supply is limited. Read the complete article.
Doha Post-Mortem: The Outlook for Trade After the Collapse of the WTO Talks
(World Trade Interactive)
Since the most recent collapse of the World Trade Organization’s Doha Round negotiations in late July, there has been much speculation about how the failure to secure a new trade liberalization agreement will affect the future of global commerce. Some say the talks effectively died years ago and that there are simply too many fundamental differences to overcome to achieve any type of meaningful agreement. The fallout, they say, could be a rise in anti-globalization sentiment that translates into not only greater economic protectionism but also a decline in international cooperation in general. Others counter that the talks merely faltered in Geneva over a technical issue, that a breakthrough agreement is in fact closer than ever, and that much like the Uruguay Round before it the Doha Round will pick up again in a year or two and come to a successful conclusion. The real news, they say, is how the rise of the advanced developing countries will affect trade policymaking in the years ahead.
Despite the hand-wringing over the outcome of the July 21-29 ministerial meeting, many participants said negotiators were close to a breakthrough on agriculture and non-agricultural market access that could have paved the way for a final agreement covering issues such as services, trade remedies and intellectual property rights as well. “We really made tremendous progress” during the meeting, U.S. Trade Representative Susan Schwab said as the ministerial ended. “We probably moved the ball further forward in the last 10 days than we have in the last eight years.” Virtually all involved have expressed an interest in preserving that progress somehow in hopes that formal negotiations will resume sooner rather than later. Click here for the complete article.
Since the most recent collapse of the World Trade Organization’s Doha Round negotiations in late July, there has been much speculation about how the failure to secure a new trade liberalization agreement will affect the future of global commerce. Some say the talks effectively died years ago and that there are simply too many fundamental differences to overcome to achieve any type of meaningful agreement. The fallout, they say, could be a rise in anti-globalization sentiment that translates into not only greater economic protectionism but also a decline in international cooperation in general. Others counter that the talks merely faltered in Geneva over a technical issue, that a breakthrough agreement is in fact closer than ever, and that much like the Uruguay Round before it the Doha Round will pick up again in a year or two and come to a successful conclusion. The real news, they say, is how the rise of the advanced developing countries will affect trade policymaking in the years ahead.
Despite the hand-wringing over the outcome of the July 21-29 ministerial meeting, many participants said negotiators were close to a breakthrough on agriculture and non-agricultural market access that could have paved the way for a final agreement covering issues such as services, trade remedies and intellectual property rights as well. “We really made tremendous progress” during the meeting, U.S. Trade Representative Susan Schwab said as the ministerial ended. “We probably moved the ball further forward in the last 10 days than we have in the last eight years.” Virtually all involved have expressed an interest in preserving that progress somehow in hopes that formal negotiations will resume sooner rather than later. Click here for the complete article.
Saturday, August 23, 2008
Government Takes Further Action on Substances as Part of World-Leading Chemicals Management Plan
(Health Canada)
The Honourable Tony Clement, Minister of Health, and the Honourable John Baird, Minister of the Environment, today [Saturday] released preliminary findings for 19 chemical substances identified as high priorities for action under Batch 3 of the Chemicals Management Plan.
Out of the 19 substances assessed, four are proposed “toxic” to human health. In addition, the Government is also proposing to create a provision for four other substances so that any proposed new use of these substances (which are no longer used or are used in extremely low quantities in Canada) would be subject to notification of the federal government. With this provision the government would be able to set conditions or prohibit the use of these substances if their use would increase exposure to Canadians or environmental organisms.
Following the extensive assessment, the 11 remaining substances are proposed “not toxic.”
The notices containing summaries of draft screening assessment reports for all Batch 3 substances will be published in Canada Gazette, Part I on August 23.
Public summaries, which contain information about how all Batch 3 substances are used in Canada are available on the new Chemicals At A Glance Web page. draft screening assessments as well as risk management scope documents for Batch 3 substances proposed “toxic” can be found on the Chemicals Management Plan website. Interested parties can submit comments on these documents until October 23, 2008. Final screening assessments for Batch 3 substances will be published on or before February 21, 2009.
The Honourable Tony Clement, Minister of Health, and the Honourable John Baird, Minister of the Environment, today [Saturday] released preliminary findings for 19 chemical substances identified as high priorities for action under Batch 3 of the Chemicals Management Plan.
Out of the 19 substances assessed, four are proposed “toxic” to human health. In addition, the Government is also proposing to create a provision for four other substances so that any proposed new use of these substances (which are no longer used or are used in extremely low quantities in Canada) would be subject to notification of the federal government. With this provision the government would be able to set conditions or prohibit the use of these substances if their use would increase exposure to Canadians or environmental organisms.
Following the extensive assessment, the 11 remaining substances are proposed “not toxic.”
The notices containing summaries of draft screening assessment reports for all Batch 3 substances will be published in Canada Gazette, Part I on August 23.
Public summaries, which contain information about how all Batch 3 substances are used in Canada are available on the new Chemicals At A Glance Web page. draft screening assessments as well as risk management scope documents for Batch 3 substances proposed “toxic” can be found on the Chemicals Management Plan website. Interested parties can submit comments on these documents until October 23, 2008. Final screening assessments for Batch 3 substances will be published on or before February 21, 2009.
Friday, August 22, 2008
Restocking the Loading Dock
(Traffic World – John Gallagher)
Truckload carriers forced to reassess their business as they work through one of the longest freight downturns in decades are finding renewed appreciation for the non-asset side of the trucking industry.
A stronger focus on dedicated fleet operations, more reliance on intermodal rail, and freight brokering are keeping big and small fleets from skidding too far off the road as fuel costs continue to take a large bite out of profits.
“We’re seeing some of the freight indicators going up slightly, and at the same time there’s the impact of carriers going out of business” on capacity, said Duff Swain, president of Trincon Group, an industry consulting firm.
“In dry freight, we’re seeing dedicated continue to grow. It’s very strong right now, because shippers are moving into more stable relationships with their carriers. They realize that when the economy comes back there’s going to be less capacity in the marketplace, as well as a shortage of drivers. If the economy improves by the fourth quarter, there’s going to be an upswing in supply and demand as we move from a buyer’s to a seller’s market.” Read the complete article.
Truckload carriers forced to reassess their business as they work through one of the longest freight downturns in decades are finding renewed appreciation for the non-asset side of the trucking industry.
A stronger focus on dedicated fleet operations, more reliance on intermodal rail, and freight brokering are keeping big and small fleets from skidding too far off the road as fuel costs continue to take a large bite out of profits.
“We’re seeing some of the freight indicators going up slightly, and at the same time there’s the impact of carriers going out of business” on capacity, said Duff Swain, president of Trincon Group, an industry consulting firm.
“In dry freight, we’re seeing dedicated continue to grow. It’s very strong right now, because shippers are moving into more stable relationships with their carriers. They realize that when the economy comes back there’s going to be less capacity in the marketplace, as well as a shortage of drivers. If the economy improves by the fourth quarter, there’s going to be an upswing in supply and demand as we move from a buyer’s to a seller’s market.” Read the complete article.
Revised Memorandum: D15-2-35
(CBSA)
Memorandum D15-2-35: Certain waterproof footwear and bottoms of plastic or rubber originating in or exported from the People’s Republic of ChinaApplication of anti-dumping duty
1. This memorandum refers to the application of anti-dumping duty to importations of certain waterproof footwear and bottoms of plastic or rubber originating in or exported from the People’s Republic of China.
2. The memorandum is divided into 12 sections under “Guidelines and General Information.”
3. A description of the goods is provided.
4. The milestone dates of the investigation are provided, along with the applicable classification numbers.
5. Information regarding the normal value of subject goods and anti-dumping duties is provided.
6. This memorandum replaces and supersedes Memorandum D15-2-35, dated February 20, 2007.
Full Document available here.
Memorandum D15-2-35: Certain waterproof footwear and bottoms of plastic or rubber originating in or exported from the People’s Republic of ChinaApplication of anti-dumping duty
1. This memorandum refers to the application of anti-dumping duty to importations of certain waterproof footwear and bottoms of plastic or rubber originating in or exported from the People’s Republic of China.
2. The memorandum is divided into 12 sections under “Guidelines and General Information.”
3. A description of the goods is provided.
4. The milestone dates of the investigation are provided, along with the applicable classification numbers.
5. Information regarding the normal value of subject goods and anti-dumping duties is provided.
6. This memorandum replaces and supersedes Memorandum D15-2-35, dated February 20, 2007.
Full Document available here.
First Sale Declaration Requirement
(CBP)
U.S. Customs and Border Protection’s trade office on Thursday advised the trade community of new reporting requirements to ensure that importers comply with the new declaration requirements passed in the Farm Bill related to transaction value of imported merchandise.
Effective August 20, importers are required to provide CBP with an “F” indicator next to the declared value at the line level on CBP Form 7501, or the electronic equivalent, when the declared transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in a sale occurring earlier than the last sale prior to the introduction of the merchandise into the United States. This element must be submitted for each line on the entry summary, CBP form 7501. Under the Farm Bill, the declaration requirement is effective for a one year period.
Due to the complexity of the programming changes required, CBP is delaying the reporting of the First Sale Declaration Requirement for 30 days to allow the Trade time for software programming changes. However, entries subject to the First Sale Declaration Requirement that were not reported between August 20 and September 19, will require amendment. CBP will provide further guidance describing the amendments shortly. Additional information is available here.
U.S. Customs and Border Protection’s trade office on Thursday advised the trade community of new reporting requirements to ensure that importers comply with the new declaration requirements passed in the Farm Bill related to transaction value of imported merchandise.
Effective August 20, importers are required to provide CBP with an “F” indicator next to the declared value at the line level on CBP Form 7501, or the electronic equivalent, when the declared transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in a sale occurring earlier than the last sale prior to the introduction of the merchandise into the United States. This element must be submitted for each line on the entry summary, CBP form 7501. Under the Farm Bill, the declaration requirement is effective for a one year period.
Due to the complexity of the programming changes required, CBP is delaying the reporting of the First Sale Declaration Requirement for 30 days to allow the Trade time for software programming changes. However, entries subject to the First Sale Declaration Requirement that were not reported between August 20 and September 19, will require amendment. CBP will provide further guidance describing the amendments shortly. Additional information is available here.
Japan to Mandate Carbon Labelling
(The Age, Melbourne)
Japan is to enforce carbon footprint labelling on food packaging and other products in an ambitious scheme to persuade companies and consumers to do more to reduce their greenhouse gas emissions.
The labels will appear on food, drink, detergents and electrical appliances from next year, providing detailed breakdowns of each product’s carbon footprint under a calculation and labelling system being formulated by the Trade Ministry.The ministry said the labels would show emissions produced by the manufacture, distribution and disposal of each product.
To promote the scheme, the ministry released details of the carbon footprint of a packet of chips. One bag produces 75 grams of carbon dioxide: 44% from growing potatoes, 30% in production, 15% from the packaging, 9% during delivery and 2% from disposal.
Last month, the Government vowed to reduce total carbon emissions by up to 80% by 2050.
Japan is to enforce carbon footprint labelling on food packaging and other products in an ambitious scheme to persuade companies and consumers to do more to reduce their greenhouse gas emissions.
The labels will appear on food, drink, detergents and electrical appliances from next year, providing detailed breakdowns of each product’s carbon footprint under a calculation and labelling system being formulated by the Trade Ministry.The ministry said the labels would show emissions produced by the manufacture, distribution and disposal of each product.
To promote the scheme, the ministry released details of the carbon footprint of a packet of chips. One bag produces 75 grams of carbon dioxide: 44% from growing potatoes, 30% in production, 15% from the packaging, 9% during delivery and 2% from disposal.
Last month, the Government vowed to reduce total carbon emissions by up to 80% by 2050.
RAND: Railroads May Not Be Able to Handle Increased Freight
(American Shipper)
The volume of U.S. freight is expected to double over the next 30 years, and a new study said while railroads have improved productivity in recent decades, continued incremental improvements may be insufficient to handle freight volume increases.
The study by nonprofit research organization RAND Corp. said, “Increased use of rail freight is seen as a way to accommodate increased volumes while minimizing congestion on the highway system. However, the U.S. railroad network consists of many fewer track miles than it did several decades ago, and there is concern that it has become congested and incapable of handling additional volume.”
“Concern about railroad capacity constraints appears to be justified. However, capacity is determined by many factors, including operating practices, signaling technology, and car availability, in addition to miles of track,” RAND said. “Given the complexity of the system, there isn’t enough information available today to determine whether rail performance is now stable, declining or improving.”
The report three areas for further research:
• Improved reporting and public dissemination of railroad system and performance statistics to support transportation policy.
• Continued examination of public and private cost tradeoffs between shipping freight by truck and by rail.
• Development of a national freight strategy that balances the private interests of the shippers and the railroads with the public interest associated with the relative social costs of different modes of freight transportation.
The study, The State of U.S. Railroads: A Review of Capacity and Performance Data, is available online at the RAND website.
The volume of U.S. freight is expected to double over the next 30 years, and a new study said while railroads have improved productivity in recent decades, continued incremental improvements may be insufficient to handle freight volume increases.
The study by nonprofit research organization RAND Corp. said, “Increased use of rail freight is seen as a way to accommodate increased volumes while minimizing congestion on the highway system. However, the U.S. railroad network consists of many fewer track miles than it did several decades ago, and there is concern that it has become congested and incapable of handling additional volume.”
“Concern about railroad capacity constraints appears to be justified. However, capacity is determined by many factors, including operating practices, signaling technology, and car availability, in addition to miles of track,” RAND said. “Given the complexity of the system, there isn’t enough information available today to determine whether rail performance is now stable, declining or improving.”
The report three areas for further research:
• Improved reporting and public dissemination of railroad system and performance statistics to support transportation policy.
• Continued examination of public and private cost tradeoffs between shipping freight by truck and by rail.
• Development of a national freight strategy that balances the private interests of the shippers and the railroads with the public interest associated with the relative social costs of different modes of freight transportation.
The study, The State of U.S. Railroads: A Review of Capacity and Performance Data, is available online at the RAND website.
Customs Clearance to be Simplified in Japan
(CIFFA eBulletin – ITJ)
The Japanese ministry of Finance is currently holding discussions with the USA and the European Union. The talks aim to simplify customs clearance procedures for all participants that have been granted the internationally valid status of authorized economic operator (AEO).
Japan hopes to come to an agreement with the USA and EU by March next year. Such a pact could accelerate European exporters’ traffic with Japan by a day.
The Japanese ministry of Finance is currently holding discussions with the USA and the European Union. The talks aim to simplify customs clearance procedures for all participants that have been granted the internationally valid status of authorized economic operator (AEO).
Japan hopes to come to an agreement with the USA and EU by March next year. Such a pact could accelerate European exporters’ traffic with Japan by a day.
Weakness from Within in South Korea
(Export Development Canada – Peter G. Hall)
The story is getting all too familiar: yet another economy joining the ranks of those succumbing to the slowdown that began in the large economies. Scoping the reach of the slowdown has turned a lot of attention to bellwether trading economies in the Asia-Pacific zone. In this context, recent softening in South Korea shouldn’t be surprising – is it just a rerun of the unfolding global story?
Trade plays a huge role in the South Korean economy. Exports accounted for 61% of economy-wide output in 2007, a share that has swelled in recent years from just 24% in the mid-1990s. Imports are also a large share of activity, but South Korea’s real trade surplus has surged from a deficit position in the mid-1990s to a whopping 11% of economic output in 2007. The bulk of the surge occurred in the post-2002 period, when trade chipped in half of the economy’s total growth.
Such trade-dependence sounds like a prescription for a shake-up in today’s environment. But so far, South Korea is bucking the global trend in a big way. Real export growth has risen steadily since 2005, clocking 16% annualized growth in the April-June period. Monthly exports were up 37% in July compared with a year ago, in spite of much slower activity to the US and Eurozone markets. Surging shipments to top customer China, and also Japan, Southeast Asia and the GCC region, more than made up for the weaker destinations. In sum, export activity remains robust.
Even so, trade’s overall contribution seems to be faltering. Recent import growth has also accelerated, knocking South Korea’s nominal trade balance into deficit last December, where it remained in July. Normally an indication of potentially dangerous red-hot growth in the domestic economy, this turn of events is more about high commodity prices. As a large importer of commodities, South Korea’s import tab has taken a big bite out of the export bonanza.
Oddly, South Korea’s internal economy is where the key concern lies. Domestic demand slowed to a crawl in the second quarter as plunging consumer confidence halted spending activity abruptly. Moreover, difficulties in the housing market put the brakes on investment spending. Increased government outlays were not significant enough to offset weakness in the other categories. As such, in spite of the vigorous export picture, overall growth slowed to a 3.4% annualized pace in the second quarter, down from 5% in 2007.
The mix of growth is not comforting. It has become increasingly difficult for larger economies – particularly trade-dependent ones – to dodge the bullet of slowing global growth. While the spread of weakness has been more protracted than expected, it has been persistent. And the wave now seems to be hitting Japan, China and other key South Korean customers. With the bulk of pundits now expecting world economic problems to continue in 2009, hopes for a timely, rapid reversal of the current trend are fading. In this context, South Korean exporters will find it difficult to pass on rising input costs to customers, putting the squeeze on corporate profits.
The bottom line? The current source of South Korean weakness is surprising. With export activity soon likely to feel the effects of the softer global slowdown, and no domestic economy to fall back on, South Korea’s economy is highly vulnerable to a swift change in its fortunes.
The story is getting all too familiar: yet another economy joining the ranks of those succumbing to the slowdown that began in the large economies. Scoping the reach of the slowdown has turned a lot of attention to bellwether trading economies in the Asia-Pacific zone. In this context, recent softening in South Korea shouldn’t be surprising – is it just a rerun of the unfolding global story?
Trade plays a huge role in the South Korean economy. Exports accounted for 61% of economy-wide output in 2007, a share that has swelled in recent years from just 24% in the mid-1990s. Imports are also a large share of activity, but South Korea’s real trade surplus has surged from a deficit position in the mid-1990s to a whopping 11% of economic output in 2007. The bulk of the surge occurred in the post-2002 period, when trade chipped in half of the economy’s total growth.
Such trade-dependence sounds like a prescription for a shake-up in today’s environment. But so far, South Korea is bucking the global trend in a big way. Real export growth has risen steadily since 2005, clocking 16% annualized growth in the April-June period. Monthly exports were up 37% in July compared with a year ago, in spite of much slower activity to the US and Eurozone markets. Surging shipments to top customer China, and also Japan, Southeast Asia and the GCC region, more than made up for the weaker destinations. In sum, export activity remains robust.
Even so, trade’s overall contribution seems to be faltering. Recent import growth has also accelerated, knocking South Korea’s nominal trade balance into deficit last December, where it remained in July. Normally an indication of potentially dangerous red-hot growth in the domestic economy, this turn of events is more about high commodity prices. As a large importer of commodities, South Korea’s import tab has taken a big bite out of the export bonanza.
Oddly, South Korea’s internal economy is where the key concern lies. Domestic demand slowed to a crawl in the second quarter as plunging consumer confidence halted spending activity abruptly. Moreover, difficulties in the housing market put the brakes on investment spending. Increased government outlays were not significant enough to offset weakness in the other categories. As such, in spite of the vigorous export picture, overall growth slowed to a 3.4% annualized pace in the second quarter, down from 5% in 2007.
The mix of growth is not comforting. It has become increasingly difficult for larger economies – particularly trade-dependent ones – to dodge the bullet of slowing global growth. While the spread of weakness has been more protracted than expected, it has been persistent. And the wave now seems to be hitting Japan, China and other key South Korean customers. With the bulk of pundits now expecting world economic problems to continue in 2009, hopes for a timely, rapid reversal of the current trend are fading. In this context, South Korean exporters will find it difficult to pass on rising input costs to customers, putting the squeeze on corporate profits.
The bottom line? The current source of South Korean weakness is surprising. With export activity soon likely to feel the effects of the softer global slowdown, and no domestic economy to fall back on, South Korea’s economy is highly vulnerable to a swift change in its fortunes.
Politics Builds a Border Roadblock
(Detroit Free Press – Steve Tobocman)
Steve Tobocman of Detroit represents the 12th District in the Michigan House and is the majority floor leader.
Michigan’s economic recovery is not just one of the top issues facing our state; it’s the only issue. The Detroit-Windsor international trade route represents one of our state’s most important assets in growing our economy. With more than $160 billion in annual cross-border trade, the Michigan-Ontario connection is twice as valuable as all U.S. exports to Japan. No other land border in the United States is even half as valuable as Detroit-Windsor.
When it comes to fighting for special interests and political donors, however, U.S. Reps. Joe Knollenberg, R-Bloomfield Township, and Carolyn Cheeks Kilpatrick, D-Detroit, have put helping their friends and donors at the Ambassador Bridge ahead of growing the Michigan economy.
On July 13, 2007; April 21, 2008; and May 30, 2008, the Kilpatrick-Knollenberg duo weighed in with letters to U.S. Secretary of Transportation Mary Peters on the Detroit River International Crossing (DRIC) study without checking in with southeast Michigan’s businesses and job producers.
In short, the Kilpatrick-Knollenberg team has joined forces to ensure that the Ambassador Bridge’s monopoly on Detroit-Windsor international trade’s truck traffic is continued. Reps. Kilpatrick and Knollenberg appear committed to protecting this monopoly no matter how much it hurts job growth in Michigan.
Given the critical nature of international border trade, it is shocking that the July 2007 Kilpatrick-Knollenberg letter would demand that Secretary Peters direct the Federal Highway Administration and the Michigan Department of Transportation “to cease participation in the DRIC (study),” while the April and May 2008 joint letters would seek a six-month delay in the study.
The Michigan-Canadian border is our nation’s and continent’s most important international trade infrastructure asset. That is why every single U.S. private sector advocacy organization that has weighed in on the matter, except for the Ambassador Bridge, supports completing the DRIC study and moving forward with a plan to ensure Michigan has adequate capacity to facilitate growing international trade and to meet the homeland security needs of a post-9/11 world.
In fact, according to Sen. Michael Fortier, Canada’s Minister for International Trade, the DRIC study represents the most important infrastructure investment for economic development in Canada.
It could be the isolation of working inside the Beltway that is affecting Knollenberg and Kilpatrick. Or it could be the thousands of dollars of personal political donations they have received from executives of the privately owned Ambassador Bridge. But Knollenberg and Cheeks-Kilpatrick forgot to ask the Detroit Regional Chamber of Commerce, Automation Alley, Ford, Chrysler, General Motors, the United Auto Workers, the Michigan Department of Transportation, the Michigan Manufacturing Association, the Automotive Alliance or, even, Oakland County Executive L. Brooks Patterson, Michigan’s most ardent private sector business advocate, for their thoughts on the matter.
Let’s hope that Knollenberg and Kilpatrick use this current in-district work period to talk to the job makers in southeast Michigan and get the straight story on the DRIC.
Steve Tobocman of Detroit represents the 12th District in the Michigan House and is the majority floor leader.
Michigan’s economic recovery is not just one of the top issues facing our state; it’s the only issue. The Detroit-Windsor international trade route represents one of our state’s most important assets in growing our economy. With more than $160 billion in annual cross-border trade, the Michigan-Ontario connection is twice as valuable as all U.S. exports to Japan. No other land border in the United States is even half as valuable as Detroit-Windsor.
When it comes to fighting for special interests and political donors, however, U.S. Reps. Joe Knollenberg, R-Bloomfield Township, and Carolyn Cheeks Kilpatrick, D-Detroit, have put helping their friends and donors at the Ambassador Bridge ahead of growing the Michigan economy.
On July 13, 2007; April 21, 2008; and May 30, 2008, the Kilpatrick-Knollenberg duo weighed in with letters to U.S. Secretary of Transportation Mary Peters on the Detroit River International Crossing (DRIC) study without checking in with southeast Michigan’s businesses and job producers.
In short, the Kilpatrick-Knollenberg team has joined forces to ensure that the Ambassador Bridge’s monopoly on Detroit-Windsor international trade’s truck traffic is continued. Reps. Kilpatrick and Knollenberg appear committed to protecting this monopoly no matter how much it hurts job growth in Michigan.
Given the critical nature of international border trade, it is shocking that the July 2007 Kilpatrick-Knollenberg letter would demand that Secretary Peters direct the Federal Highway Administration and the Michigan Department of Transportation “to cease participation in the DRIC (study),” while the April and May 2008 joint letters would seek a six-month delay in the study.
The Michigan-Canadian border is our nation’s and continent’s most important international trade infrastructure asset. That is why every single U.S. private sector advocacy organization that has weighed in on the matter, except for the Ambassador Bridge, supports completing the DRIC study and moving forward with a plan to ensure Michigan has adequate capacity to facilitate growing international trade and to meet the homeland security needs of a post-9/11 world.
In fact, according to Sen. Michael Fortier, Canada’s Minister for International Trade, the DRIC study represents the most important infrastructure investment for economic development in Canada.
It could be the isolation of working inside the Beltway that is affecting Knollenberg and Kilpatrick. Or it could be the thousands of dollars of personal political donations they have received from executives of the privately owned Ambassador Bridge. But Knollenberg and Cheeks-Kilpatrick forgot to ask the Detroit Regional Chamber of Commerce, Automation Alley, Ford, Chrysler, General Motors, the United Auto Workers, the Michigan Department of Transportation, the Michigan Manufacturing Association, the Automotive Alliance or, even, Oakland County Executive L. Brooks Patterson, Michigan’s most ardent private sector business advocate, for their thoughts on the matter.
Let’s hope that Knollenberg and Kilpatrick use this current in-district work period to talk to the job makers in southeast Michigan and get the straight story on the DRIC.
‘The Longer We Put It Off,’ the Worse Things Will Get
(New Brunswick Business Journal – Matt McCann)
Key pieces of Canada’s infrastructure are crumbling, and a $200-billion investment is needed to maintain our standard of living, says a public policy researcher.
In a paper released today by the Institute for Research in Public Policy, James Brox, an economics professor at the University of Waterloo, said facilities such as roads, highways, bridges, ports, and water systems need the money – $72 billion for new facilities and $123 billion to repair and upgrade those already built – as soon as possible.
Add to that a sustained, 10% annual increase in infrastructure spending, and manufacturing unit production costs could be reduced by five per cent per year, he said, the equivalent of a five per cent increase in productivity.
The funding increase, Brox said, would help narrow the Canada-U.S. manufacturing productivity gap, and enhance the manufacturing sector’s competitive profile.
“New Brunswick’s a bit better off because the infrastructure is more recent, but in a few years it’ll be in the same position Ontario’s in,” Brox said. “The longer we put it off, the worse things are going to get,” he said, adding that the more systems wear down, the more they cost to repair.
Since the 1970s, responsibility for these infrastructure projects has gradually been shifted down to the municipal level.
But cities, Brox said, rely heavily on property taxes for money, an area that’s difficult to increase, and as such, infrastructure has gone neglected or is not even built in the first place.
“Right now, the municipalities don’t have a stable, long-term source of revenue that’s sufficient to fund the infrastructure that they’re really required to provide if we’re going to effect the productivity of the country,” he said.
In addition to lower costs and higher productivity, Brox said infrastructure investments could also translate into a 0.6% increase in jobs relative to baseline trends. David Plante, vice-president of Canadian Manufacturers and Exporters for New Brunswick and Prince Edward Island, said investments in infrastructure are essential to New Brunswick. It is the most export-dependent province, with 75% of its GDP relying on domestic and international exports.
“We’re in a situation where some of our existing infrastructure is deteriorating, but by the same token, we don’t have the same level of infrastructure in much of the rest of Canada and in the United States.” Plante said that every $1 spent on public infrastructure equals 17 cents in cost savings for manufacturers. Those savings translate into a 0.2% increase in GDP.
Citing figures from Statistics Canada, Plante said that all of the money spent on public infrastructure between 1961 and 2000 was responsible for 18% of all business productivity gains. “Infrastructure has to be a clear priority for the federal government,” he said.
Key pieces of Canada’s infrastructure are crumbling, and a $200-billion investment is needed to maintain our standard of living, says a public policy researcher.
In a paper released today by the Institute for Research in Public Policy, James Brox, an economics professor at the University of Waterloo, said facilities such as roads, highways, bridges, ports, and water systems need the money – $72 billion for new facilities and $123 billion to repair and upgrade those already built – as soon as possible.
Add to that a sustained, 10% annual increase in infrastructure spending, and manufacturing unit production costs could be reduced by five per cent per year, he said, the equivalent of a five per cent increase in productivity.
The funding increase, Brox said, would help narrow the Canada-U.S. manufacturing productivity gap, and enhance the manufacturing sector’s competitive profile.
“New Brunswick’s a bit better off because the infrastructure is more recent, but in a few years it’ll be in the same position Ontario’s in,” Brox said. “The longer we put it off, the worse things are going to get,” he said, adding that the more systems wear down, the more they cost to repair.
Since the 1970s, responsibility for these infrastructure projects has gradually been shifted down to the municipal level.
But cities, Brox said, rely heavily on property taxes for money, an area that’s difficult to increase, and as such, infrastructure has gone neglected or is not even built in the first place.
“Right now, the municipalities don’t have a stable, long-term source of revenue that’s sufficient to fund the infrastructure that they’re really required to provide if we’re going to effect the productivity of the country,” he said.
In addition to lower costs and higher productivity, Brox said infrastructure investments could also translate into a 0.6% increase in jobs relative to baseline trends. David Plante, vice-president of Canadian Manufacturers and Exporters for New Brunswick and Prince Edward Island, said investments in infrastructure are essential to New Brunswick. It is the most export-dependent province, with 75% of its GDP relying on domestic and international exports.
“We’re in a situation where some of our existing infrastructure is deteriorating, but by the same token, we don’t have the same level of infrastructure in much of the rest of Canada and in the United States.” Plante said that every $1 spent on public infrastructure equals 17 cents in cost savings for manufacturers. Those savings translate into a 0.2% increase in GDP.
Citing figures from Statistics Canada, Plante said that all of the money spent on public infrastructure between 1961 and 2000 was responsible for 18% of all business productivity gains. “Infrastructure has to be a clear priority for the federal government,” he said.
Thursday, August 21, 2008
It’s Time to Strengthen the Ties That Bind Us – EU Commissioner
(Embassy – Benita Ferrero-Waldner, European Commission)
Benita Ferrero-Waldner is the member of the European Commission in charge of external relations and European neighbourhood policy.
The next EU-Canada Summit, which will be held in Montreal on October 17, will be an opportunity for the leaders of Canada and the EU, represented by the Presidency, currently France, and the European Commission and Council, to agree to move forward in a number of areas, such as trade and investment, where both sides want to strengthen our economic partnership.
In preparation, we have undertaken a joint study to set out the parameters of such an economic partnership. If we decide to launch a new economic agreement with Canada, the EU would hope for an ambitious agenda going far beyond a classic trade agreement – one that can help us both address the challenges of the new globalized economy of the 21st century.
As a first step towards strengthening our bilateral economic relations, at the end of last year we launched negotiations for an EU-Canada “Open Skies” Air Services Agreement. Our goal is to sign an agreement with Canada whereby any airline could fly from anywhere in Canada to anywhere in the European Union, and vice versa. Our experience within Europe has demonstrated that such an agreement would open up new destinations and routes to both EU and Canadian airlines, while increasing efficiency and reducing fares.
The EU is fully committed to this process and we are prepared to conclude the Open Skies Agreement as soon as possible. It is an agreement where the travelling public will see immediate and tangible results.
At the summit in Montreal, we will also compare notes on climate change, one of the big challenges of our time, which must be addressed – and with all countries on board. Despite the high costs and the sacrifices, we have made significant progress in Europe, and we have an exemplary and operational carbon-trading scheme in place.
As well, we will discuss global stability, security and our military missions, including Afghanistan, where both the EU and Canada are working closely to bring peace, stability and prosperity to the region. In addition to the military missions, under NATO, the EU – in close co-operation with Canada – is actively engaged in the reconstruction of Afghanistan, as well as in humanitarian endeavours, in order to improve the lives of the people of Afghanistan.
I would like to express our appreciation to Canada, which provides the largest contingent of police to the EU-led police mission to Afghanistan, which is training and assisting the local Afghan police forces.
Our efforts to bring peace, security and prosperity to Afghanistan come naturally, as that has been our goal in Europe since we established our common institutions and policies in Europe in the period after the Second World War.
From six countries in the early 1950s, the European Union has now grown to 27 Member States, in the process creating not just peace, security, stability and prosperity, but an integrated economic and political entity. Also, the European Union as such has gradually become a major international actor, both economically as the largest trading bloc and politically.
We act in partnership with countries such as Canada, which share our values of democracy, freedom, economic enterprise, justice and the rule of law.
Lastly, I would like to emphasize how much the European Union appreciates Canada lifting the visa requirements for our new Member States in Central and Eastern Europe. These countries suffered much during the Second World War and were then subjected to a totalitarian Communist regime behind the Iron Curtain for 40 years. Today they are free, members of the EU, and have the highest growth rates in Europe. I hope the citizens of Bulgaria and Romania too will soon also enjoy visa free travel to Canada.
In conclusion let me extend my congratulations on the 400th anniversary of the founding of Quebec City this year. Mes sincères félicitations!
Benita Ferrero-Waldner is the member of the European Commission in charge of external relations and European neighbourhood policy.
The next EU-Canada Summit, which will be held in Montreal on October 17, will be an opportunity for the leaders of Canada and the EU, represented by the Presidency, currently France, and the European Commission and Council, to agree to move forward in a number of areas, such as trade and investment, where both sides want to strengthen our economic partnership.
In preparation, we have undertaken a joint study to set out the parameters of such an economic partnership. If we decide to launch a new economic agreement with Canada, the EU would hope for an ambitious agenda going far beyond a classic trade agreement – one that can help us both address the challenges of the new globalized economy of the 21st century.
As a first step towards strengthening our bilateral economic relations, at the end of last year we launched negotiations for an EU-Canada “Open Skies” Air Services Agreement. Our goal is to sign an agreement with Canada whereby any airline could fly from anywhere in Canada to anywhere in the European Union, and vice versa. Our experience within Europe has demonstrated that such an agreement would open up new destinations and routes to both EU and Canadian airlines, while increasing efficiency and reducing fares.
The EU is fully committed to this process and we are prepared to conclude the Open Skies Agreement as soon as possible. It is an agreement where the travelling public will see immediate and tangible results.
At the summit in Montreal, we will also compare notes on climate change, one of the big challenges of our time, which must be addressed – and with all countries on board. Despite the high costs and the sacrifices, we have made significant progress in Europe, and we have an exemplary and operational carbon-trading scheme in place.
As well, we will discuss global stability, security and our military missions, including Afghanistan, where both the EU and Canada are working closely to bring peace, stability and prosperity to the region. In addition to the military missions, under NATO, the EU – in close co-operation with Canada – is actively engaged in the reconstruction of Afghanistan, as well as in humanitarian endeavours, in order to improve the lives of the people of Afghanistan.
I would like to express our appreciation to Canada, which provides the largest contingent of police to the EU-led police mission to Afghanistan, which is training and assisting the local Afghan police forces.
Our efforts to bring peace, security and prosperity to Afghanistan come naturally, as that has been our goal in Europe since we established our common institutions and policies in Europe in the period after the Second World War.
From six countries in the early 1950s, the European Union has now grown to 27 Member States, in the process creating not just peace, security, stability and prosperity, but an integrated economic and political entity. Also, the European Union as such has gradually become a major international actor, both economically as the largest trading bloc and politically.
We act in partnership with countries such as Canada, which share our values of democracy, freedom, economic enterprise, justice and the rule of law.
Lastly, I would like to emphasize how much the European Union appreciates Canada lifting the visa requirements for our new Member States in Central and Eastern Europe. These countries suffered much during the Second World War and were then subjected to a totalitarian Communist regime behind the Iron Curtain for 40 years. Today they are free, members of the EU, and have the highest growth rates in Europe. I hope the citizens of Bulgaria and Romania too will soon also enjoy visa free travel to Canada.
In conclusion let me extend my congratulations on the 400th anniversary of the founding of Quebec City this year. Mes sincères félicitations!
Wednesday, August 20, 2008
GAO Says 100% Scanning Threatens Global Cargo Security Efforts
(World Trade Interactive)
A new Government Accountability Office report argues that the statutory requirement for 100% scanning of U.S.-bound container cargo by 2012 could threaten efforts to fashion international supply chain security standards and may actually provide a lower level of security than the current risk management approach.
According to the report, U.S. Customs and Border Protection has been at the forefront of efforts to develop and implement the World Customs Organization’s Safe Framework of Standards to Secure and Facilitate Global Trade. The SAFE Framework in large part internationalizes the concepts first promulgated under CBP’s Container Security Initiative and Customs-Trade Partnership Against Terrorism. As in CSI, the standards in the customs-to-customs pillar of the SAFE Framework state that members should use a risk-management system to target and identify potentially high-risk cargo. Member customs administrations are urged to provide for joint targeting and screening, the use of standardized sets of targeting criteria and compatible communication and information-exchange mechanisms. In addition, as with C-TPAT, the WCO customs-to-business pillar provides that customs administrations should design validation processes for their respective authorized economic operator programs that offer incentives to participating businesses.
Widespread acceptance of the core principles of the SAFE Framework and implementation of its standards could have numerous benefits, the report states.
• the focus of international customs administrations would be shifted from primarily revenue collection to include enhanced security
• cooperation between customs administrations would be strengthened, improving their capability to detect high-risk cargo
• port shopping by terrorists or smugglers looking for seaports with more lax or nonexistent security standards could be reduced
• programs for ensuring that customs administrations are free of corruption could be improved
• CSI-like customs security practices could be implemented at non-CSI foreign seaports and customs administration reform and modernization could be enhanced
• companies could avoid the burden of addressing different sets of requirements as a shipment moves through the supply chain in different countries
However, the report warns, these benefits are being threatened because of the focus on 100% scanning under the 9/11 Commission Act of 2007, which runs counter to the risk management approach employed by the SAFE Framework, CSI and C-TPAT. WCO officials are concerned that 100% scanning could have an adverse impact on several of the organization’s core instruments, which include not only the SAFE Framework but also the Revised Kyoto Convention, an international customs agreement to which the U.S., the European Union and 52 others have acceded. Some countries are reluctant to implement AEO programs since they believe such programs would not be necessary with 100 percent scanning, and some companies are reluctant to join AEO programs since one of the main benefits of membership, a reduced likelihood of examination, would no longer apply if all containers are required to be scanned.
In addition, the report states, CBP, WCO and EU officials assert that 100% scanning may actually provide a lower level of security than existing programs. The risk management approach directs resources to where they are most needed, officials say, whereas 100% scanning directs too many resources to one activity and diminishes the focus on those container shipments that pose the highest risk. Customs officers currently review the scanned images of high-risk containers in a very thorough and detailed manner, one WCO official said, but reviews may not be as thorough if all containers are scanned due simply to the sheer volume of work, leading to a degradation of security. In addition, a European customs official noted, 100% scanning could have a negative impact on the flow of international commerce, which under the 9/11 Act may be grounds for granting a two-year, renewable extension to the 100% scanning requirement at individual seaports.
A new Government Accountability Office report argues that the statutory requirement for 100% scanning of U.S.-bound container cargo by 2012 could threaten efforts to fashion international supply chain security standards and may actually provide a lower level of security than the current risk management approach.
According to the report, U.S. Customs and Border Protection has been at the forefront of efforts to develop and implement the World Customs Organization’s Safe Framework of Standards to Secure and Facilitate Global Trade. The SAFE Framework in large part internationalizes the concepts first promulgated under CBP’s Container Security Initiative and Customs-Trade Partnership Against Terrorism. As in CSI, the standards in the customs-to-customs pillar of the SAFE Framework state that members should use a risk-management system to target and identify potentially high-risk cargo. Member customs administrations are urged to provide for joint targeting and screening, the use of standardized sets of targeting criteria and compatible communication and information-exchange mechanisms. In addition, as with C-TPAT, the WCO customs-to-business pillar provides that customs administrations should design validation processes for their respective authorized economic operator programs that offer incentives to participating businesses.
Widespread acceptance of the core principles of the SAFE Framework and implementation of its standards could have numerous benefits, the report states.
• the focus of international customs administrations would be shifted from primarily revenue collection to include enhanced security
• cooperation between customs administrations would be strengthened, improving their capability to detect high-risk cargo
• port shopping by terrorists or smugglers looking for seaports with more lax or nonexistent security standards could be reduced
• programs for ensuring that customs administrations are free of corruption could be improved
• CSI-like customs security practices could be implemented at non-CSI foreign seaports and customs administration reform and modernization could be enhanced
• companies could avoid the burden of addressing different sets of requirements as a shipment moves through the supply chain in different countries
However, the report warns, these benefits are being threatened because of the focus on 100% scanning under the 9/11 Commission Act of 2007, which runs counter to the risk management approach employed by the SAFE Framework, CSI and C-TPAT. WCO officials are concerned that 100% scanning could have an adverse impact on several of the organization’s core instruments, which include not only the SAFE Framework but also the Revised Kyoto Convention, an international customs agreement to which the U.S., the European Union and 52 others have acceded. Some countries are reluctant to implement AEO programs since they believe such programs would not be necessary with 100 percent scanning, and some companies are reluctant to join AEO programs since one of the main benefits of membership, a reduced likelihood of examination, would no longer apply if all containers are required to be scanned.
In addition, the report states, CBP, WCO and EU officials assert that 100% scanning may actually provide a lower level of security than existing programs. The risk management approach directs resources to where they are most needed, officials say, whereas 100% scanning directs too many resources to one activity and diminishes the focus on those container shipments that pose the highest risk. Customs officers currently review the scanned images of high-risk containers in a very thorough and detailed manner, one WCO official said, but reviews may not be as thorough if all containers are scanned due simply to the sheer volume of work, leading to a degradation of security. In addition, a European customs official noted, 100% scanning could have a negative impact on the flow of international commerce, which under the 9/11 Act may be grounds for granting a two-year, renewable extension to the 100% scanning requirement at individual seaports.
WTO Case Against EU Duties on High-Tech Products Advances
(World Trade Interactive)
A World Trade Organization case against the European Union’s tariffs on certain information technology products moved forward this week when the U.S., Japan and Taiwan requested that the WTO establish a dispute settlement panel to examine the matter. The Office of the U.S. Trade Representative reports that the three countries took this step after consultations with the EU in June and July failed to resolve the dispute. The panel request will be taken up by the WTO Dispute Settlement Body at its next meeting Aug. 29.
The U.S. case alleges that the EU has violated its obligations under the WTO’s Information Technology Agreement by imposing new duties on cable boxes that can access the Internet, flat-panel computer monitors and certain computer printers that can also scan, fax and/or copy. The U.S. believes these products are covered under the ITA and should therefore receive duty-free treatment when imported into the EU. However, the USTR states, the EU “claims it can now charge duties on these products simply because they incorporate technologies or features that did not exist when the ITA was concluded.” This approach threatens to “impair continued technological development in the information technology industry and raise prices for millions of businesses and consumers,” the USTR adds.
A World Trade Organization case against the European Union’s tariffs on certain information technology products moved forward this week when the U.S., Japan and Taiwan requested that the WTO establish a dispute settlement panel to examine the matter. The Office of the U.S. Trade Representative reports that the three countries took this step after consultations with the EU in June and July failed to resolve the dispute. The panel request will be taken up by the WTO Dispute Settlement Body at its next meeting Aug. 29.
The U.S. case alleges that the EU has violated its obligations under the WTO’s Information Technology Agreement by imposing new duties on cable boxes that can access the Internet, flat-panel computer monitors and certain computer printers that can also scan, fax and/or copy. The U.S. believes these products are covered under the ITA and should therefore receive duty-free treatment when imported into the EU. However, the USTR states, the EU “claims it can now charge duties on these products simply because they incorporate technologies or features that did not exist when the ITA was concluded.” This approach threatens to “impair continued technological development in the information technology industry and raise prices for millions of businesses and consumers,” the USTR adds.
New Study Highlights Supply Chain Risks
(Canadian Transportation & Logistics)
A new study by the Aberdeen Group research firm has revealed that 99% of companies surveyed have suffered a supply chain disruption over the past year.
Those disruptions resulted in financial losses in 58% of the cases, the study found. As a result, Aberdeen says there are major risk management gaps within the supply chain.
“Growing global operations are forcing companies to more proactively evaluate and address their supply chain risks. Companies are sourcing from and selling to more new regions, often adding new carriers, forwarders, logistics, and distribution partners to their network. At the same time, customers are continuously demanding improved service levels,” said Viktoriya Sadlovska, research analyst, Aberdeen. “These trends, coupled with increased security concerns that have imposed a new level of regulation on global shippers, are driving firms to increase their focus on supply chain risk management and adopt new processes and technologies to make their supply chains more risk-resilient.”
The most frequent types of supply chain disruptions were: supply capacity didn’t meet demand, 56%; raw material price increases/shortages, 49%; unexpected changes in customer demand, 45%; and shipment delayed/damaged/misdirected, 39%.
The study found that best-in-class companies were much more likely than average companies (or laggards), to manage and assess: logistics congestion and capacity; risk profile of suppliers; fuel prices; risk profile of countries; and non-environmental catastrophic events. To read the full report, go here.
A new study by the Aberdeen Group research firm has revealed that 99% of companies surveyed have suffered a supply chain disruption over the past year.
Those disruptions resulted in financial losses in 58% of the cases, the study found. As a result, Aberdeen says there are major risk management gaps within the supply chain.
“Growing global operations are forcing companies to more proactively evaluate and address their supply chain risks. Companies are sourcing from and selling to more new regions, often adding new carriers, forwarders, logistics, and distribution partners to their network. At the same time, customers are continuously demanding improved service levels,” said Viktoriya Sadlovska, research analyst, Aberdeen. “These trends, coupled with increased security concerns that have imposed a new level of regulation on global shippers, are driving firms to increase their focus on supply chain risk management and adopt new processes and technologies to make their supply chains more risk-resilient.”
The most frequent types of supply chain disruptions were: supply capacity didn’t meet demand, 56%; raw material price increases/shortages, 49%; unexpected changes in customer demand, 45%; and shipment delayed/damaged/misdirected, 39%.
The study found that best-in-class companies were much more likely than average companies (or laggards), to manage and assess: logistics congestion and capacity; risk profile of suppliers; fuel prices; risk profile of countries; and non-environmental catastrophic events. To read the full report, go here.
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