(Edmund Conway — The Telegraph)
The Group of Seven leading finance ministers has been accused of being “asleep at the wheel” after its closely-watched communique on the state of the world economic system merely repeated the same exhortations it has used at summit after summit.
The G7 held its spring meeting in Rome over the weekend but made only minor changes to its statement, sparking fears that ministers have run out of new ideas with which to tackle the global financial crisis.
The statement warned of the risks inherent in protectionism, and that further drastic measures were needed from governments around the world to bail out their banking systems.
But despite hours of discussion at the meeting explicitly about the financial crisis, the ministers could not agree on a firm commitment to take further measures, such as setting up a system of bad banks to absorb toxic assets.
Simon Johnson, former chief economist at the International Monetary Fund, now a professor at MIT, said the G7 was “asleep at the wheel”, adding: “[The meeting] was a great opportunity for this group of leading industrial countries to reassert its leadership in the global economy.
“Instead, all we received officially is a communique that blandly restates what these documents always say.”
Mr Johnson had warned that a number of countries including Ireland were at increasing risk of defaulting on their national debt – something hinted at by the relentless increase in the credit default swaps on sovereign debt – a means of insuring against the likelihood of countries failing to pay their debts. Read more here.
Monday, February 16, 2009
Sunday, February 15, 2009
Canada to Use ‘Intensive’ Approach in Washington
(CTV News)
Canada will push American legislators to be mindful of their international trade commitments as the U.S. moves ahead with its massive US$787 billion stimulus bill that includes amended, but still contentious, “Buy American” provisions.
International Trade Minister Stockwell Day said Sunday that Canada will employ a “collaborative but intensive” approach in Washington over the next few months.
“We’re going to be protecting Canadian interests and working in a collaborative way, but reminding our trading partners in the U.S. that we have agreements and we live up to our agreements and we expect all our partners to do the same,” Day told CTV’s Question Period.
While President Barack Obama has made it clear that the U.S. cannot renege on its trade commitments in implementing its “Buy American” provisions in the stimulus bill, Day said that Canada has some concerns.
“It will be a matter of political will to make sure that the other parts of that bill, which suggest that only U.S. products — iron, steel and other products — can be used in the bidding of their own infrastructure process,” Day said. Read more here.
Canada will push American legislators to be mindful of their international trade commitments as the U.S. moves ahead with its massive US$787 billion stimulus bill that includes amended, but still contentious, “Buy American” provisions.
International Trade Minister Stockwell Day said Sunday that Canada will employ a “collaborative but intensive” approach in Washington over the next few months.
“We’re going to be protecting Canadian interests and working in a collaborative way, but reminding our trading partners in the U.S. that we have agreements and we live up to our agreements and we expect all our partners to do the same,” Day told CTV’s Question Period.
While President Barack Obama has made it clear that the U.S. cannot renege on its trade commitments in implementing its “Buy American” provisions in the stimulus bill, Day said that Canada has some concerns.
“It will be a matter of political will to make sure that the other parts of that bill, which suggest that only U.S. products — iron, steel and other products — can be used in the bidding of their own infrastructure process,” Day said. Read more here.
Friday, February 13, 2009
Manufacturers Consider Migrating Back to U.S.
(Industry Week – Adrienne Selko)
In the last three years, manufacturers have seen a significant increase in costs related to off-shoring manufacturing for export purposes rather than in country demand.
A new study by Archstone Consulting shows that companies are contemplating the re-establishment of manufacturing domestically, amid rising costs and other strategic challenges within the off-shoring model. As companies reassess their manufacturing and supply chain strategies for today’s global economic environment, the trend may create significant job opportunities in the U.S., according to the recent study.
“For years, the concept of off-shoring, or moving production and/or sourcing operations to a foreign country, has been the mantra of any supply chain manager looking to cut costs,” said John Ferreira, Principal, Archstone Consulting. “Now, amid volatile oil prices and an uncertain global economic future, this analysis no longer is a certainty. Furthermore, companies that will commit to domestic manufacturing can spur much-needed improvements in customer service, innovation and job creation – especially when servicing the large domestic market.” Read more here.
In the last three years, manufacturers have seen a significant increase in costs related to off-shoring manufacturing for export purposes rather than in country demand.
A new study by Archstone Consulting shows that companies are contemplating the re-establishment of manufacturing domestically, amid rising costs and other strategic challenges within the off-shoring model. As companies reassess their manufacturing and supply chain strategies for today’s global economic environment, the trend may create significant job opportunities in the U.S., according to the recent study.
“For years, the concept of off-shoring, or moving production and/or sourcing operations to a foreign country, has been the mantra of any supply chain manager looking to cut costs,” said John Ferreira, Principal, Archstone Consulting. “Now, amid volatile oil prices and an uncertain global economic future, this analysis no longer is a certainty. Furthermore, companies that will commit to domestic manufacturing can spur much-needed improvements in customer service, innovation and job creation – especially when servicing the large domestic market.” Read more here.
China Exports Suffer Record 17.5% Decline
(Financial Times – Geoff Dyer)
Chinese exports recorded their biggest decline in more than a decade in January, falling 17.5% from the same month the year before as the impact of the global economic slump gathered pace.
Imports to China plummeted a dramatic 43.1% in a further indication of sharply lower demand in the Chinese economy over the past few months which has caused unemployment to soar. Both figures were worse than expected.
January was the third month in a row in which Chinese exports fell. But the pace of decline accelerated from the 2.8% drop in December and the decline in imports was much sharper than the 21.3% contraction in December.
Economists cautioned that the January trade figures partly reflected the earlier lunar new year holiday this year, which meant there were fewer working days than in the same month the year before. The full picture will become clear only when February’s data become available. Peng Wensheng at Barclays Capital estimated that after taking into account holidays, exports declined by 7% in January and imports by 35.9%.
However, even with that caveat, many had been expecting a steep contraction in China’s exports given the recent trade figures from other large Asian exporters. Taiwan’s exports fell 42% in December, South Korea’s by 17% and Japan’s by 35%. All three countries are important suppliers of components that are assembled in factories in China. Read more here.
Chinese exports recorded their biggest decline in more than a decade in January, falling 17.5% from the same month the year before as the impact of the global economic slump gathered pace.
Imports to China plummeted a dramatic 43.1% in a further indication of sharply lower demand in the Chinese economy over the past few months which has caused unemployment to soar. Both figures were worse than expected.
January was the third month in a row in which Chinese exports fell. But the pace of decline accelerated from the 2.8% drop in December and the decline in imports was much sharper than the 21.3% contraction in December.
Economists cautioned that the January trade figures partly reflected the earlier lunar new year holiday this year, which meant there were fewer working days than in the same month the year before. The full picture will become clear only when February’s data become available. Peng Wensheng at Barclays Capital estimated that after taking into account holidays, exports declined by 7% in January and imports by 35.9%.
However, even with that caveat, many had been expecting a steep contraction in China’s exports given the recent trade figures from other large Asian exporters. Taiwan’s exports fell 42% in December, South Korea’s by 17% and Japan’s by 35%. All three countries are important suppliers of components that are assembled in factories in China. Read more here.
More Companies Using ACE Periodic Payment to Lower Costs, Streamline Operations – CBP
(World Trade Interactive)
U.S. Customs and Border Protection reports that the periodic monthly statement process available under the Automated Commercial Environment is growing in popularity. This process allows importers and brokers to pay duties and fees monthly instead of on a transaction-by-transaction basis.
A recent CBP press release states that during the last six months of 2008 nearly $7 billion in duties and fees was collected from importers and brokers using this process. For all of 2008 CBP collected $12.5 billion from ACE participants, a more than 450% increase over 2005.
CBP states that periodic monthly statement processing may provide participants with a significant cash flow advantage, as entry summaries for goods entered or released during the previous month are consolidated and can be paid on the 15th working day of the following month. In addition, the monthly statements obtained through ACE can streamline accounting and report processing by providing an electronic record for companies to trace their import activities and quickly generate easy-to-use business reports.
U.S. Customs and Border Protection reports that the periodic monthly statement process available under the Automated Commercial Environment is growing in popularity. This process allows importers and brokers to pay duties and fees monthly instead of on a transaction-by-transaction basis.
A recent CBP press release states that during the last six months of 2008 nearly $7 billion in duties and fees was collected from importers and brokers using this process. For all of 2008 CBP collected $12.5 billion from ACE participants, a more than 450% increase over 2005.
CBP states that periodic monthly statement processing may provide participants with a significant cash flow advantage, as entry summaries for goods entered or released during the previous month are consolidated and can be paid on the 15th working day of the following month. In addition, the monthly statements obtained through ACE can streamline accounting and report processing by providing an electronic record for companies to trace their import activities and quickly generate easy-to-use business reports.
Obama Backs Off ‘Buy American’
(Politico – Carol E. Lee)
President Barack Obama’s visit to a Caterpillar manufacturing plant Thursday did more than focus attention on his efforts to create working-class jobs, as administration officials hoped. It provided the perfect backdrop to highlight Obama’s change of heart on controversial “Buy American” provisions that require government-funded projects to use only U.S.-made materials.
The issue has forced Obama to dance between rival camps of supporters in the debate over his economic stimulus bill. Labor unions wanted a strong Buy American provision in the plan; U.S. trade partners and companies with significant overseas exports, such as Caterpillar, oppose the proviso.
It’s unclear exactly where the president, who during the campaign ran “Buy American, Vote Obama” ads in labor-heavy states, currently stands on the issue. But citing the economic crisis, he now says he supports a watered-down version of the Buy American provisions contained in the House and Senate stimulus bills.
Obama said his reversal was prompted by concern that tough Buy American requirements ultimately could spark international trade wars.
And on Thursday, he visited Caterpillar Inc., the world’s largest mining and construction equipment manufacturer – a company that couldn’t be more American if it manufactured apple pie but whose chief executive led the attack on Buy American mandates in the stimulus bill. Read more here.
President Barack Obama’s visit to a Caterpillar manufacturing plant Thursday did more than focus attention on his efforts to create working-class jobs, as administration officials hoped. It provided the perfect backdrop to highlight Obama’s change of heart on controversial “Buy American” provisions that require government-funded projects to use only U.S.-made materials.
The issue has forced Obama to dance between rival camps of supporters in the debate over his economic stimulus bill. Labor unions wanted a strong Buy American provision in the plan; U.S. trade partners and companies with significant overseas exports, such as Caterpillar, oppose the proviso.
It’s unclear exactly where the president, who during the campaign ran “Buy American, Vote Obama” ads in labor-heavy states, currently stands on the issue. But citing the economic crisis, he now says he supports a watered-down version of the Buy American provisions contained in the House and Senate stimulus bills.
Obama said his reversal was prompted by concern that tough Buy American requirements ultimately could spark international trade wars.
And on Thursday, he visited Caterpillar Inc., the world’s largest mining and construction equipment manufacturer – a company that couldn’t be more American if it manufactured apple pie but whose chief executive led the attack on Buy American mandates in the stimulus bill. Read more here.
Canada and NAFTA – No Mariachis, Please
(The Economist)
Some Canadians think they are more important than Mexicans
For the past 15 years Canada and Mexico have been joined with the United States in the three-way North American Free-Trade Agreement. But both still set much more store by their bilateral relationship with their superpower neighbour. This has led to sometimes farcical rivalry. To the joy of Canadian officials, Barack Obama is making his first, albeit brief, foreign visit as American president to Ottawa on February 19th. But Mexican officials whisper that their president, Felipe Calderón, got in first with a lunch with Mr Obama days before his inauguration.
More seriously, a growing number of Canadians, including politicians, trade negotiators and former ambassadors, have called for their government to turn its back on NAFTA and put all its efforts into improving bilateral ties with Washington. Canada was always a reluctant member of NAFTA, joining the talks mostly to safeguard gains made in a bilateral free-trade deal with the United States concluded five years earlier. Politicians chafe when Canada is lumped together with Mexico, as happened last year during Mr Obama’s campaign when he vowed to renegotiate NAFTA to protect Americans from weak environmental and labour standards. Even more woundingly, Janet Napolitano, the new secretary of homeland security, who is a former governor of Arizona, ordered a review of the northern border, saying that it presented a greater terrorist threat than the southern one.
Peter Harder, a former Canadian deputy foreign minister, argues that NAFTA holds back bilateral ties. “It is not in our interests to allow the speed of three to define the relationship of two,” says Mr Harder. “We have trilateralised for too long.” That view has been echoed by John Manley, a former Liberal deputy prime minister.
In fact many cross-border problems differ only in degree. That applies to the drug trade, gun smuggling, border security, the environment and illegal immigration. All three countries have a stake in the floundering car industry, which is organised on a North American basis. Canada and Mexico are the United States’ top two suppliers of imported energy, giving them both an interest in Mr Obama’s plans for energy and environmental measures. Read more here.
Some Canadians think they are more important than Mexicans
For the past 15 years Canada and Mexico have been joined with the United States in the three-way North American Free-Trade Agreement. But both still set much more store by their bilateral relationship with their superpower neighbour. This has led to sometimes farcical rivalry. To the joy of Canadian officials, Barack Obama is making his first, albeit brief, foreign visit as American president to Ottawa on February 19th. But Mexican officials whisper that their president, Felipe Calderón, got in first with a lunch with Mr Obama days before his inauguration.
More seriously, a growing number of Canadians, including politicians, trade negotiators and former ambassadors, have called for their government to turn its back on NAFTA and put all its efforts into improving bilateral ties with Washington. Canada was always a reluctant member of NAFTA, joining the talks mostly to safeguard gains made in a bilateral free-trade deal with the United States concluded five years earlier. Politicians chafe when Canada is lumped together with Mexico, as happened last year during Mr Obama’s campaign when he vowed to renegotiate NAFTA to protect Americans from weak environmental and labour standards. Even more woundingly, Janet Napolitano, the new secretary of homeland security, who is a former governor of Arizona, ordered a review of the northern border, saying that it presented a greater terrorist threat than the southern one.
Peter Harder, a former Canadian deputy foreign minister, argues that NAFTA holds back bilateral ties. “It is not in our interests to allow the speed of three to define the relationship of two,” says Mr Harder. “We have trilateralised for too long.” That view has been echoed by John Manley, a former Liberal deputy prime minister.
In fact many cross-border problems differ only in degree. That applies to the drug trade, gun smuggling, border security, the environment and illegal immigration. All three countries have a stake in the floundering car industry, which is organised on a North American basis. Canada and Mexico are the United States’ top two suppliers of imported energy, giving them both an interest in Mr Obama’s plans for energy and environmental measures. Read more here.
Wednesday, February 11, 2009
CPSC Issues Guidance Document on CPSIA Requirements
(World Trade Interactive)
The Consumer Product Safety Commission has issued a guidance document that is specifically designed to educate small businesses, resellers, crafters and charities about some of the more relevant provisions included in the Consumer Product Safety Improvement Act. The guide includes a useful review in a question-and-answer format of a broad range of CPSIA-related issues, including, for example, product coverage, testing requirements, compliance with the new lead and phthalate bans, exemptions and exclusions from the lead content limits, donations and requirements for resellers. Click here for the complete article.
The Consumer Product Safety Commission has issued a guidance document that is specifically designed to educate small businesses, resellers, crafters and charities about some of the more relevant provisions included in the Consumer Product Safety Improvement Act. The guide includes a useful review in a question-and-answer format of a broad range of CPSIA-related issues, including, for example, product coverage, testing requirements, compliance with the new lead and phthalate bans, exemptions and exclusions from the lead content limits, donations and requirements for resellers. Click here for the complete article.
Vilsack: U.S. Should Have Single Food Inspection Agency
(GovExec.com - Jerry Hagstrom, Congress Daily)
Agriculture Secretary Tom Vilsack said Tuesday he favors a single food safety agency, but he has not decided whether it should be located in the Agriculture Department’s Food Safety and Inspection Service, the Food and Drug Administration or an independent agency.
Commenting on the salmonella peanut butter scandal, Vilsack told the U.S. Rice Federation that the issue of centralization is key because food safety is both a human health and market issue.
“We are the only industrial nation to have two systems,” Vilsack said, a reference to USDA’s responsibility for meat, poultry and eggs and FDA’s responsibility for most other food products. Read the full story here.
Agriculture Secretary Tom Vilsack said Tuesday he favors a single food safety agency, but he has not decided whether it should be located in the Agriculture Department’s Food Safety and Inspection Service, the Food and Drug Administration or an independent agency.
Commenting on the salmonella peanut butter scandal, Vilsack told the U.S. Rice Federation that the issue of centralization is key because food safety is both a human health and market issue.
“We are the only industrial nation to have two systems,” Vilsack said, a reference to USDA’s responsibility for meat, poultry and eggs and FDA’s responsibility for most other food products. Read the full story here.
Buy America is Just the Beginning of Our Trouble
(Embassy – Leslie Campbell)
The “Buy American” clause in the U.S. economic stimulus bill could turn out to be just the tip of the iceberg in terms of trade hurdles emanating from the new Democratic Congress.
The mini-crisis about Buy American may pass, but it would be a mistake to view its insertion in the bill as an anomaly to be ignored. Congress is in a mood to protect and reward local fiefdoms and to penalize the multi-national corporations perceived to be exporting jobs.
In one example of newfound chutzpah, seven Democratic senators wrote on February 4 to Tom Vilsack, President Barack Obama’s agriculture secretary, asking him to revise country-of-origin labelling (COOL) rules to protect against food produced in countries with “fewer health and safety standards” in order to “boost our livestock producers.”
Canada and Mexico have the most to lose from COOL and most Canadians would be surprised to learn that their country has fewer health standards than the U.S. The senators’ request seems to be aimed more at shoring up domestic industry than genuinely targeting food safety.
In another example of the congressional mood, a bill hidden deep in the shadows of the stimulus debate would, according to its sponsors, give the office of the U.S. Trade Representative (USTR) more authority to “enforce trade agreements we already have” in order to “stem the outflow of U.S. manufacturing jobs due to trade competition.”
The Senate bill, introduced February 2, is co-sponsored by moderate Maine Republican Olympia Snowe and Montana Democrat Max Baucus, with support from Democrats Kent Conrad and Jay Rockefeller. Calling it the “Trade CLAIM Act,” the senators want to force the USTR to act on virtually every complaint about foreign trade practices brought forward by U.S. industry. From Canada’s perspective, U.S. industry already uses questionable trade complaints to harass their Canadian counterparts, particularly in the softwood lumber industry. Read more here.
The “Buy American” clause in the U.S. economic stimulus bill could turn out to be just the tip of the iceberg in terms of trade hurdles emanating from the new Democratic Congress.
The mini-crisis about Buy American may pass, but it would be a mistake to view its insertion in the bill as an anomaly to be ignored. Congress is in a mood to protect and reward local fiefdoms and to penalize the multi-national corporations perceived to be exporting jobs.
In one example of newfound chutzpah, seven Democratic senators wrote on February 4 to Tom Vilsack, President Barack Obama’s agriculture secretary, asking him to revise country-of-origin labelling (COOL) rules to protect against food produced in countries with “fewer health and safety standards” in order to “boost our livestock producers.”
Canada and Mexico have the most to lose from COOL and most Canadians would be surprised to learn that their country has fewer health standards than the U.S. The senators’ request seems to be aimed more at shoring up domestic industry than genuinely targeting food safety.
In another example of the congressional mood, a bill hidden deep in the shadows of the stimulus debate would, according to its sponsors, give the office of the U.S. Trade Representative (USTR) more authority to “enforce trade agreements we already have” in order to “stem the outflow of U.S. manufacturing jobs due to trade competition.”
The Senate bill, introduced February 2, is co-sponsored by moderate Maine Republican Olympia Snowe and Montana Democrat Max Baucus, with support from Democrats Kent Conrad and Jay Rockefeller. Calling it the “Trade CLAIM Act,” the senators want to force the USTR to act on virtually every complaint about foreign trade practices brought forward by U.S. industry. From Canada’s perspective, U.S. industry already uses questionable trade complaints to harass their Canadian counterparts, particularly in the softwood lumber industry. Read more here.
Produce Tracking Initiative Web Site Launched
(American Shipper)
The North American produce industry has launched a Web site to promote an initiative to standardize the tracking and tracing of fruits and vegetables from the field to store shelf.
Producetraceability.org, administered by the Canadian Produce Marketing Association, Produce Marketing Association, and United Fresh Produce Association, includes resources and educational tools for those companies interested in learning more about the Produce Traceability Initiative.
“There are still important industry questions that need to be answered and we plan to use the Web site as an information forum,” said Cathy Green, PTI Steering Committee chairman and Food Lion’s chief operating officer, in a statement.
Since October 2008, more than 40 companies from throughout the produce supply chain have endorsed the recommendations developed by the PTI Steering Committee to move the supply chain to a common electronic tracing standard by the end of 2012.
The North American produce industry has launched a Web site to promote an initiative to standardize the tracking and tracing of fruits and vegetables from the field to store shelf.
Producetraceability.org, administered by the Canadian Produce Marketing Association, Produce Marketing Association, and United Fresh Produce Association, includes resources and educational tools for those companies interested in learning more about the Produce Traceability Initiative.
“There are still important industry questions that need to be answered and we plan to use the Web site as an information forum,” said Cathy Green, PTI Steering Committee chairman and Food Lion’s chief operating officer, in a statement.
Since October 2008, more than 40 companies from throughout the produce supply chain have endorsed the recommendations developed by the PTI Steering Committee to move the supply chain to a common electronic tracing standard by the end of 2012.
EDC Has ‘Legitimate’ Role In Domestic Market: Legislative Review
(National Post – Paul Vieira)
In its budget, the federal government proposed to give Export Development Canada new powers to enter the domestic financing business – a move observers said could lead to a boost in loans available for new projects. The Conservatives perhaps got the idea from people they had previously employed to look at EDC’s mandate.
A group of consultants reporting to the Minister of International Trade just conducted a legally-mandated review of EDC that recommended there was a “legitimate” role for the Crown agency in the domestic financing field.
“There appears to be a legitimate case for reviewing EDC’s ability to provide support for domestic financing transactions,” said the just-completed legislative review of EDC, conducted by Ottawa-based International Financial Consulting, which was tabled in the House of Commons Monday afternoon by the Trade Minister, Stockwell Day.
The review, at 154 pages, said that any EDC activity in the domestic market should be restricted to “ filling gaps and to complementing the activities of private and public sector financing entities, such as the banks and [Crown-owned] Business Development Bank of Canada. The objective should clearly and explicitly be to increase and to enhance the capacity of the banks and other financial institutions and not to compete with them.”
In gathering testimony, the consultants said the country’s banks “have strong views in this area. While they acknowledge EDC’s existing activities in support of catalyzing financing capacity for smaller Canadian exporters, they express concern about EDC expanding into areas that could overlap with the banks’ existing markets and clients.”
EDC said it is in the midst of reviewing how and where it can use these newfound powers, which will be made official once the budget implementation bill before the House of Commons is passed.
In its budget, the federal government proposed to give Export Development Canada new powers to enter the domestic financing business – a move observers said could lead to a boost in loans available for new projects. The Conservatives perhaps got the idea from people they had previously employed to look at EDC’s mandate.
A group of consultants reporting to the Minister of International Trade just conducted a legally-mandated review of EDC that recommended there was a “legitimate” role for the Crown agency in the domestic financing field.
“There appears to be a legitimate case for reviewing EDC’s ability to provide support for domestic financing transactions,” said the just-completed legislative review of EDC, conducted by Ottawa-based International Financial Consulting, which was tabled in the House of Commons Monday afternoon by the Trade Minister, Stockwell Day.
The review, at 154 pages, said that any EDC activity in the domestic market should be restricted to “ filling gaps and to complementing the activities of private and public sector financing entities, such as the banks and [Crown-owned] Business Development Bank of Canada. The objective should clearly and explicitly be to increase and to enhance the capacity of the banks and other financial institutions and not to compete with them.”
In gathering testimony, the consultants said the country’s banks “have strong views in this area. While they acknowledge EDC’s existing activities in support of catalyzing financing capacity for smaller Canadian exporters, they express concern about EDC expanding into areas that could overlap with the banks’ existing markets and clients.”
EDC said it is in the midst of reviewing how and where it can use these newfound powers, which will be made official once the budget implementation bill before the House of Commons is passed.
Tuesday, February 10, 2009
Rupert Murdoch: Don’t Give Up on Open Markets
(ForaTV)
Newscorp CEO Rupert Murdoch champions the open market and cautions against the “very dangerous move...towards protectionism” among international economies.
Newscorp CEO Rupert Murdoch champions the open market and cautions against the “very dangerous move...towards protectionism” among international economies.
Monday, February 9, 2009
The Protectionist Virus: Editorial
(National Post)
Protectionism is one of those bad ideas that never seems to go away, no matter how many economists remind us just how discredited it truly is. Whenever there is any sort of downturn, you will always find some populist faction or other willing to peddle the idea as the solution to a nation’s ills.
In the United States, this intellectual bottom-feeding has taken expression in the proposed “Buy America” provisions of the stimulus bill slowly taking form on Capitol Hill, which would require that any steel and iron (and, possibly, other materials) used in stimulus-funded projects be purchased from domestic suppliers. To his great credit, President Barack Obama opposes this restriction. But the Buy America bill has significant support in Congress, as well as among the trade unions on which the Democrats rely for support.
Here in Canada, on the other hand, the two major federal parties have shown a refreshing reluctance to engage in protectionist sabre-rattling. As Allan Gotlieb and Milos Barutciski noted in Saturday’s National Post, provincial governments, too, generally have refrained from talk of trade barriers. The current crisis, the two authors note, gives Canada the opportunity to “reclaim our historic role as one of the world’s greatest trading nations.”
Unfortunately, not all Canadian politicians are similarly farsighted. Somewhat predictably, NDP leader Jack Layton is arguing that Canada should adopt a “Buy Canadian” strategy.
“The United States has had a ‘Buy American’ act for 76 years,” Mr. Layton declared last week.
“It’s perfectly legal under the World Trade Organization, and, in fact, under NAFTA, governments are allowed to buy at home in order to use taxpayers’ money to create jobs for workers and to support communities and their industries ... Mexico, China, Japan, South Korea, they all have national procurement policies, and it would be a good idea for Canada. Can the prime minister tell us what’s wrong with a ‘Buy Canadian’ policy as permitted under continental and global trade rules?”
One cannot be struck at how the far left, which casts itself as all in favour of peaceful internationalism in just about every other context, always lines up with the economic Luddites when it comes to trade. Read more here.
Protectionism is one of those bad ideas that never seems to go away, no matter how many economists remind us just how discredited it truly is. Whenever there is any sort of downturn, you will always find some populist faction or other willing to peddle the idea as the solution to a nation’s ills.
In the United States, this intellectual bottom-feeding has taken expression in the proposed “Buy America” provisions of the stimulus bill slowly taking form on Capitol Hill, which would require that any steel and iron (and, possibly, other materials) used in stimulus-funded projects be purchased from domestic suppliers. To his great credit, President Barack Obama opposes this restriction. But the Buy America bill has significant support in Congress, as well as among the trade unions on which the Democrats rely for support.
Here in Canada, on the other hand, the two major federal parties have shown a refreshing reluctance to engage in protectionist sabre-rattling. As Allan Gotlieb and Milos Barutciski noted in Saturday’s National Post, provincial governments, too, generally have refrained from talk of trade barriers. The current crisis, the two authors note, gives Canada the opportunity to “reclaim our historic role as one of the world’s greatest trading nations.”
Unfortunately, not all Canadian politicians are similarly farsighted. Somewhat predictably, NDP leader Jack Layton is arguing that Canada should adopt a “Buy Canadian” strategy.
“The United States has had a ‘Buy American’ act for 76 years,” Mr. Layton declared last week.
“It’s perfectly legal under the World Trade Organization, and, in fact, under NAFTA, governments are allowed to buy at home in order to use taxpayers’ money to create jobs for workers and to support communities and their industries ... Mexico, China, Japan, South Korea, they all have national procurement policies, and it would be a good idea for Canada. Can the prime minister tell us what’s wrong with a ‘Buy Canadian’ policy as permitted under continental and global trade rules?”
One cannot be struck at how the far left, which casts itself as all in favour of peaceful internationalism in just about every other context, always lines up with the economic Luddites when it comes to trade. Read more here.
B.C. Port Labour Talks to Resume February 12
(Alberta Farmer – Alana Vannahme)
Federally appointed mediators have set February 12-13 as the next dates for contract negotiations between Local 514 of the International Longshore and Warehouse Union of Canada (ILWU) and the British Columbia Maritime Employers Association (BCMEA).
The two groups have been trying for months to draft a new collective agreement and avoid a strike at B.C.’s busy Lower Mainland, Vancouver Island and Prince Rupert ports. The local’s members, roughly 450 ship and dock foremen, have been without a contract since March 2008. Since then, efforts to reach a labour agreement have been unsuccessful, including an intense round of negotiations which began in December after the local threatened to issue a 72-hour strike notice at the beginning of January.
In the event of a strike, it’s expected that more than 5,000 other ILWU members would support Local 514 by joining the picket line.
Some companies that rely on the busy West Coast gateways to transport goods in and out of Canada have been diverting their freight away from B.C. since the threat of a strike in January first emerged. However, the January 26 resumption of the House of Commons following a seven-week suspension has taken some of the uncertainty out of the situation.
If a strike were to occur now, the union’s members could be legislated back to work by the federal government, a move they have supported in the past.
Federally appointed mediators have set February 12-13 as the next dates for contract negotiations between Local 514 of the International Longshore and Warehouse Union of Canada (ILWU) and the British Columbia Maritime Employers Association (BCMEA).
The two groups have been trying for months to draft a new collective agreement and avoid a strike at B.C.’s busy Lower Mainland, Vancouver Island and Prince Rupert ports. The local’s members, roughly 450 ship and dock foremen, have been without a contract since March 2008. Since then, efforts to reach a labour agreement have been unsuccessful, including an intense round of negotiations which began in December after the local threatened to issue a 72-hour strike notice at the beginning of January.
In the event of a strike, it’s expected that more than 5,000 other ILWU members would support Local 514 by joining the picket line.
Some companies that rely on the busy West Coast gateways to transport goods in and out of Canada have been diverting their freight away from B.C. since the threat of a strike in January first emerged. However, the January 26 resumption of the House of Commons following a seven-week suspension has taken some of the uncertainty out of the situation.
If a strike were to occur now, the union’s members could be legislated back to work by the federal government, a move they have supported in the past.
DHS Gets $4.7b in Senate Stimulus Bill; Air, Border Security Big Winners
(HS Today – Anthony L. Kimery)
In the final version of the Senate’s shaky 778-page, $827 billion economic stimulus bill arduously hammered out by moderate Democrats and Republicans over the weekend, the Department of Homeland Security (DHS) emerged with $4.7 billion for aviation security, border enforcement and other programs and activities.
In addition, there’s significant funding for first responders, law enforcement, mass transit and port security and other homeland security-related needs under non-DHS funding programs.
While the Senate bill overall contains less money for DHS than the initial Senate stimulus package, Senators redirected and refocused a lot of the money that they kept in their final bill, especially in areas of aviation and border security.
Several Capitol Hill staffers familiar with the matter who were reached by HSToday.us late Sunday night said on background the fact that both the House and Senate bills contain funding for DHS programs is a clear indication that lawmakers on both sides of the aisle understand the importance of homeland security and the urgency to continue to work to plug certain potentially exploitable vulnerabilities in security.
According to the Congressional Budget Office (CBO), “largely based on historical spending patterns for affected programs, CBO estimates that most of [the] funds [for DHS] would be spent over the 2009-2011 period.” Read the complete article here (PDF).
In the final version of the Senate’s shaky 778-page, $827 billion economic stimulus bill arduously hammered out by moderate Democrats and Republicans over the weekend, the Department of Homeland Security (DHS) emerged with $4.7 billion for aviation security, border enforcement and other programs and activities.
In addition, there’s significant funding for first responders, law enforcement, mass transit and port security and other homeland security-related needs under non-DHS funding programs.
While the Senate bill overall contains less money for DHS than the initial Senate stimulus package, Senators redirected and refocused a lot of the money that they kept in their final bill, especially in areas of aviation and border security.
Several Capitol Hill staffers familiar with the matter who were reached by HSToday.us late Sunday night said on background the fact that both the House and Senate bills contain funding for DHS programs is a clear indication that lawmakers on both sides of the aisle understand the importance of homeland security and the urgency to continue to work to plug certain potentially exploitable vulnerabilities in security.
According to the Congressional Budget Office (CBO), “largely based on historical spending patterns for affected programs, CBO estimates that most of [the] funds [for DHS] would be spent over the 2009-2011 period.” Read the complete article here (PDF).
Justified Rates
(Traffic World Online – John Gallagher)
As LTL shippers take advantage of the best leverage over transportation rates they’ve had in decades, they’re finding their influence over how those rates are determined may have taken a hit.
The first arbitration proceeding carried out under the auspices of a revamped National Motor Freight Traffic Association – now operating without the benefit of antitrust immunity, which was eliminated by Surface Transportation Board in December 2007 – revealed that shippers might have to work harder to show why the classification of their products should or should not be changed.
Since 1956, the National Motor Freight Classification has served as the benchmark against which rates are determined, with carriers determining rates on a scale based on a product’s classification. And a classification change often leads to an increase or decrease in the corresponding base transportation rate.
“When they enjoyed antitrust immunity, the NMFTA had the burden of proving the reasonableness of a classification change – that’s out now,” said Fritz R. Kahn, who arbitrated the classification case.
“Effectively the burden has shifted to shippers to prove that the classification is not reasonable.”
The January 22 decision, which involved changing the classification of paint products, was mundane: non-hazardous paint products will keep the same classification, and those deemed to be hazardous will be rated one class higher. But with an estimated 60% of the paints transported now considered to be hazardous, upping the classification – and subsequently the rate which carriers would charge to move them – may not be a small consequence for the $20 billion paint industry. Read more here.
As LTL shippers take advantage of the best leverage over transportation rates they’ve had in decades, they’re finding their influence over how those rates are determined may have taken a hit.
The first arbitration proceeding carried out under the auspices of a revamped National Motor Freight Traffic Association – now operating without the benefit of antitrust immunity, which was eliminated by Surface Transportation Board in December 2007 – revealed that shippers might have to work harder to show why the classification of their products should or should not be changed.
Since 1956, the National Motor Freight Classification has served as the benchmark against which rates are determined, with carriers determining rates on a scale based on a product’s classification. And a classification change often leads to an increase or decrease in the corresponding base transportation rate.
“When they enjoyed antitrust immunity, the NMFTA had the burden of proving the reasonableness of a classification change – that’s out now,” said Fritz R. Kahn, who arbitrated the classification case.
“Effectively the burden has shifted to shippers to prove that the classification is not reasonable.”
The January 22 decision, which involved changing the classification of paint products, was mundane: non-hazardous paint products will keep the same classification, and those deemed to be hazardous will be rated one class higher. But with an estimated 60% of the paints transported now considered to be hazardous, upping the classification – and subsequently the rate which carriers would charge to move them – may not be a small consequence for the $20 billion paint industry. Read more here.
U.S. Oil Stockpiles Continue to Build, Undermining OPEC’s Cuts
(Wall Street Journal – David Bird)
The Organization of Petroleum Exporting Countries cut crude-oil output by nearly 1.3 million barrels a day in January in an attempt to tame the supply glut that is anchoring prices near $40 a barrel.
But as the cartel tightened the taps, crude-oil inventories in the U.S. were increasing by 700,000 to 900,000 barrels a day. That growth rate, the most seen in the month of January in 85 years and the highest in any month since at least October 2002, is a setback to OPEC’s efforts.
Crude oil is piling up as the global economic crisis has cut consumer demand for petroleum products such as gasoline and diesel fuel. The oversupply that is driving down near-term prices makes it profitable for refiners to amass crude-oil inventories.
Rising inventories are a further blow to OPEC, which is reeling from the fall in global oil demand and prices. Crude-oil futures are down 72% from their record above $145 a barrel hit in July. Each barrel of oil that goes into storage in consumer countries weakens the cartel’s hold on the market and potentially prolongs the price skid.
OPEC pledged to cut output by 4.2 million barrels a day in September. Since then, the group has cut production by a total 3.135 million barrels a day, indicating a compliance rate of 75%, a survey by Dow Jones Newswires estimates.
Saudi Arabia, the world’s biggest oil exporter and OPEC member, cut output below its agreed level of 8.05 million barrels a day in January. Saudi output of 7.9 million barrels a day was the lowest since October 2002. Now, analysts said, the plunge, alongside oil’s inability to recover, will require deeper cuts by Saudi Arabia and OPEC to prop up the market. Read more here.
The Organization of Petroleum Exporting Countries cut crude-oil output by nearly 1.3 million barrels a day in January in an attempt to tame the supply glut that is anchoring prices near $40 a barrel.
But as the cartel tightened the taps, crude-oil inventories in the U.S. were increasing by 700,000 to 900,000 barrels a day. That growth rate, the most seen in the month of January in 85 years and the highest in any month since at least October 2002, is a setback to OPEC’s efforts.
Crude oil is piling up as the global economic crisis has cut consumer demand for petroleum products such as gasoline and diesel fuel. The oversupply that is driving down near-term prices makes it profitable for refiners to amass crude-oil inventories.
Rising inventories are a further blow to OPEC, which is reeling from the fall in global oil demand and prices. Crude-oil futures are down 72% from their record above $145 a barrel hit in July. Each barrel of oil that goes into storage in consumer countries weakens the cartel’s hold on the market and potentially prolongs the price skid.
OPEC pledged to cut output by 4.2 million barrels a day in September. Since then, the group has cut production by a total 3.135 million barrels a day, indicating a compliance rate of 75%, a survey by Dow Jones Newswires estimates.
Saudi Arabia, the world’s biggest oil exporter and OPEC member, cut output below its agreed level of 8.05 million barrels a day in January. Saudi output of 7.9 million barrels a day was the lowest since October 2002. Now, analysts said, the plunge, alongside oil’s inability to recover, will require deeper cuts by Saudi Arabia and OPEC to prop up the market. Read more here.
DHS Gets $4.7b in Senate Stimulus Bill; Air, Border Security Big Winners
(HS Today – Anthony L. Kimery)
In the final version of the Senate’s shaky 778-page, $827 billion economic stimulus bill arduously hammered out by moderate Democrats and Republicans over the weekend, the Department of Homeland Security (DHS) emerged with $4.7 billion for aviation security, border enforcement and other programs and activities.
In addition, there’s significant funding for first responders, law enforcement, mass transit and port security and other homeland security-related needs under non-DHS funding programs.
While the Senate bill overall contains less money for DHS than the initial Senate stimulus package, Senators redirected and refocused a lot of the money that they kept in their final bill, especially in areas of aviation and border security.
Several Capitol Hill staffers familiar with the matter who were reached by HSToday.us late Sunday night said on background the fact that both the House and Senate bills contain funding for DHS programs is a clear indication that lawmakers on both sides of the aisle understand the importance of homeland security and the urgency to continue to work to plug certain potentially exploitable vulnerabilities in security.
According to the Congressional Budget Office (CBO), “largely based on historical spending patterns for affected programs, CBO estimates that most of [the] funds [for DHS] would be spent over the 2009-2011 period.” Read the complete article here (PDF).
In the final version of the Senate’s shaky 778-page, $827 billion economic stimulus bill arduously hammered out by moderate Democrats and Republicans over the weekend, the Department of Homeland Security (DHS) emerged with $4.7 billion for aviation security, border enforcement and other programs and activities.
In addition, there’s significant funding for first responders, law enforcement, mass transit and port security and other homeland security-related needs under non-DHS funding programs.
While the Senate bill overall contains less money for DHS than the initial Senate stimulus package, Senators redirected and refocused a lot of the money that they kept in their final bill, especially in areas of aviation and border security.
Several Capitol Hill staffers familiar with the matter who were reached by HSToday.us late Sunday night said on background the fact that both the House and Senate bills contain funding for DHS programs is a clear indication that lawmakers on both sides of the aisle understand the importance of homeland security and the urgency to continue to work to plug certain potentially exploitable vulnerabilities in security.
According to the Congressional Budget Office (CBO), “largely based on historical spending patterns for affected programs, CBO estimates that most of [the] funds [for DHS] would be spent over the 2009-2011 period.” Read the complete article here (PDF).
Friday, February 6, 2009
GHY Named One of Canada’s 50 Best-Managed Companies
Giving Customers the Human Touch
(Philip Quinn — Financial Post)
The creation of post-9/11 Fortress America made it imperative for exporting and importing companies to find a way to efficiently handle the reporting requirements for each shipment of goods. That tangle of red tape creates business opportunities for a company such as GHY International, which can trace its roots back to 1901.
“We are a service business to importers and exporters,” says Richard Riess, president and CEO. “We’re involved in executing the transactional reporting to the governments of Canada and the United States on behalf of importers and exporters. For every movement across the border, there’s a requirement to report a minimum of 30 to 40 pieces of information on each of those shipments.”
GHY has invested in state-of-the-art technology that allows it to seamlessly communicate with its customers and customs offices in the United States and Canada. It also prides itself on providing its customers with the human touch.
“We offer the best of both worlds: As companies look at their options for trade services, they’re looking for partners that can deliver all the important technology-based solutions but also maintain close personal relationships and accountability for performance,” says Reynold Martens, executive vice-president.
Growth in the past five years has been phenomenal: In 2003, the company had$1.9-billion in total trade under management; that increased to $5.2-billion in 2008. “We can, from our location here, clear shipments at any port in North America,” Mr. Riess says.
The company’s slogan is “One Border-One Broker,” and it has cleared shipments for such Top 500 companies as Arctic Cat, Nygard International and Unilever Canada. For its major clients it has a program called MARP (Major Account Relationship Program), which emphasizes taking a big-picture perspective and planning ahead rather than reacting to everyday operational demands.
“The way we manage our business is in teams of individuals, six at a time, who have varying levels of experience. But it all starts with an account management consultant who has five technicians who work with him,” Mr. Riess says.
To keep up with the growing demand for its services, the company has opened new offices. “We’ve expanded our locations to include Vancouver, a partnership in Calgary, an office in Toronto and our U. S. head office in Pembina, N.D.,” Mr. Martens says.
Manitoba Firm Added to Best Managed List
(Martin Cash — Winnipeg Free Press)
Manitoba companies made another good showing in the annual list of the 50 best-managed companies in the country with two new entries on the 2008 roster — Genesis Hospitality Inc. and GHY International.
The program has been in existence since 1993 and is managed by the professional services firm Deloitte & Touche. It provides an independent evaluation of the management skills and practices of Canadian-owned and managed companies with revenues over $10 million. Rick Soenen, Deloitte’s Winnipeg partner in its private companies services group, said the new entrants are characteristic of the province's diversified economy with companies from just about every sector finding their way on the list year after year. The effects of the economic downturn that started to take hold of the economy in late 2008 will probably be more evident in next year’s program.
GHY International — Founded in 1901 by George. H. Young, the great grandfather of CEO Richard Riess, GHY International is probably one of Winnipeg’s many unknown jewels.
Now run by the fourth generation of the original founder’s family, it has grown with the global economic trend towards ever-increasing trade flows, especially between Canada and the United States. GHY has about 110 employees mostly in Winnipeg, although the firm also has offices in Emerson, Toronto, Vancouver and Pembina and Fargo, N.D. Customs brokers consolidate all the information in the supply chain and provide the compliance reports required by authorities at both sides of an international trade.
The company does work for more than 2,000 companies, including big-name Winnipeg firms like New Flyer Industries, Nygard International, Bristol Aerospace and E.H. Price.
(Philip Quinn — Financial Post)
The creation of post-9/11 Fortress America made it imperative for exporting and importing companies to find a way to efficiently handle the reporting requirements for each shipment of goods. That tangle of red tape creates business opportunities for a company such as GHY International, which can trace its roots back to 1901.
“We are a service business to importers and exporters,” says Richard Riess, president and CEO. “We’re involved in executing the transactional reporting to the governments of Canada and the United States on behalf of importers and exporters. For every movement across the border, there’s a requirement to report a minimum of 30 to 40 pieces of information on each of those shipments.”
GHY has invested in state-of-the-art technology that allows it to seamlessly communicate with its customers and customs offices in the United States and Canada. It also prides itself on providing its customers with the human touch.
“We offer the best of both worlds: As companies look at their options for trade services, they’re looking for partners that can deliver all the important technology-based solutions but also maintain close personal relationships and accountability for performance,” says Reynold Martens, executive vice-president.
Growth in the past five years has been phenomenal: In 2003, the company had$1.9-billion in total trade under management; that increased to $5.2-billion in 2008. “We can, from our location here, clear shipments at any port in North America,” Mr. Riess says.
The company’s slogan is “One Border-One Broker,” and it has cleared shipments for such Top 500 companies as Arctic Cat, Nygard International and Unilever Canada. For its major clients it has a program called MARP (Major Account Relationship Program), which emphasizes taking a big-picture perspective and planning ahead rather than reacting to everyday operational demands.
“The way we manage our business is in teams of individuals, six at a time, who have varying levels of experience. But it all starts with an account management consultant who has five technicians who work with him,” Mr. Riess says.
To keep up with the growing demand for its services, the company has opened new offices. “We’ve expanded our locations to include Vancouver, a partnership in Calgary, an office in Toronto and our U. S. head office in Pembina, N.D.,” Mr. Martens says.
Manitoba Firm Added to Best Managed List
(Martin Cash — Winnipeg Free Press)
Manitoba companies made another good showing in the annual list of the 50 best-managed companies in the country with two new entries on the 2008 roster — Genesis Hospitality Inc. and GHY International.
The program has been in existence since 1993 and is managed by the professional services firm Deloitte & Touche. It provides an independent evaluation of the management skills and practices of Canadian-owned and managed companies with revenues over $10 million. Rick Soenen, Deloitte’s Winnipeg partner in its private companies services group, said the new entrants are characteristic of the province's diversified economy with companies from just about every sector finding their way on the list year after year. The effects of the economic downturn that started to take hold of the economy in late 2008 will probably be more evident in next year’s program.
GHY International — Founded in 1901 by George. H. Young, the great grandfather of CEO Richard Riess, GHY International is probably one of Winnipeg’s many unknown jewels.
Now run by the fourth generation of the original founder’s family, it has grown with the global economic trend towards ever-increasing trade flows, especially between Canada and the United States. GHY has about 110 employees mostly in Winnipeg, although the firm also has offices in Emerson, Toronto, Vancouver and Pembina and Fargo, N.D. Customs brokers consolidate all the information in the supply chain and provide the compliance reports required by authorities at both sides of an international trade.
The company does work for more than 2,000 companies, including big-name Winnipeg firms like New Flyer Industries, Nygard International, Bristol Aerospace and E.H. Price.
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