MARCH 1994 Edition
CROSS-BORDER TRIPS
In 1993, according to Statistics Canada, Canadian
residents made 48.3 million same-day car trips to the United States, down 15.2
per cent from 57 million in 1992, and down more than 10 million from the record
59.1 million in 1991 when studies indicated Canadian retailers lost $3.5
billion to $5 billion in sales to cross-border shopping. The 1993 figures are
the lowest since 1989 when Canadians made 43.3 million same-day trips by car.
WORK
The Japanese work several hundred more hours than
European and U.S. residents, with one in six putting in hours that could kill
them, says a Japanese government study. Japanese workers clocked an average
2,124 recorded hours in 1990, about 200 hours longer than Americans and
Britons. And real working hours were even longer, with most Japanese probably
putting in a daily average of 1.5 hours of so-called "service
overtime," extra work that is unrecorded and unpaid. One in six males
worked more than 3,100 hours in 1992, a level that doctors say can kill.
The United States is the only Western nation that has not
reduced factory work time in the past 30 years, says The Detroit News. By
contrast, Canadian hours declined to 1,827 a year in 1990 from 1,933 in 1960.
NETWORKING
Two Toronto businessmen have started BIG (Bishop Information
Group), an electronic bulletin board that offers inexpensive direct marketing
lists, ready-made designs for newsletters and business forms, and a variety of
software programs and information sources that are useful to small enterprises.
While the larger on-line information services are growing rapidly, they are
expensive and none have specifically targeted the needs of small businesses.
BIG charges $150 a year which entitles users to comb
through the system for an hour each day, seven days a week. Direct marketing
lists have 120,000 names and include lawyers, doctors, TV and film executives
and many others. Lists are available for about $10.00 each. They offer, free of
charge, templates for commonly used business forms such as newsletters,
letterheads and business cards. The partners are talking to a variety of
government agencies, business associations and trade organizations many of whom
are interested in listing information about their small business programs on
the bulletin board. For example, the Ontario government will soon post
information explaining to entrepreneurs how their employees can be placed in
training programs at little cost. Other provincial and federal offices may
follow suit. Entrepreneurs can "test drive" the system for a week, at
no charge, by calling 416-364-8770.
METRIC
Since February, U.S. Federal Trade Commission rules
require that new labels printed for consumer products must include metric as
well as the British units customarily used on American products. Manufacturers
will be allowed to use up their old supplies of labels so it may be a while
before the label change becomes obvious. Products covered by this rule include
such items as soap, toilet paper, foil wrap, plastic bags, detergents, mops,
deodorants, shampoo, batteries and light bulbs. The Food and Drug
Administration is developing labelling rules requiring the addition of metric
measurements on foods, drugs and cosmetics. Many products already include
metric measurements, especially alcoholic beverages and soft drinks. The move
is the latest step under the U.S. Fair Packaging and Labelling Act which also
requires that a product label disclose the contents of the package and the name
and place of business of the manufacturer, packer or distributor.
HELP WANTED
The Canadian Department of Foreign Affairs and
International Trade (DFAIT) is reviewing the investment policies of Japan and
the European Community (EC), and would like to hear from Canadians who have
experienced government barriers in these countries affecting their investment
or plans to invest.
Barriers could include measures that favour a domestic
investor over a Canadian investor, or grant special status to some foreign
investors but not to Canadians. Unclear administrative requirements may also
impede investment. As well, the Department would be interested in hearing about
investment restrictions in certain sectors or industries that have deterred
Canadian investment.
These reviews will examine how barriers to foreign
investment may hinder efforts by Canadian firms to globalize, diversify, and
gain access to new markets and technologies. To discuss these or other kinds of
government barriers, or other opinions regarding investment in the EC or Japan,
please contact Tim Miller, Tel. (613) 996-4921, or Steve Rhealt-Kihara, Tel.
(613) 992-9094, Economic and Trade Policy Branch (DFAIT). Fax: (613) 944-1679.
(Source: CanadExport, Vol 12, No 2.)
INNOVATION
The big difference between very successful small
companies and those with less impressive growth is innovation, according to a
Statistics Canada survey of 1500 companies. They give high priority to
technology and spent more on research and development. They also stress
inventory control, process control, reducing energy costs and their use of
materials, old and new.
The average company responding to the survey had 44
employees and sales of $6.6 million. As a rule, government programs designed to
help business ranked last on the companies' list of contributors to their
success. The only ones they seemed to like
were R&D tax credits and export subsidies that helped them explore
and develop new markets.
Key differences showed up in the kind of things top
companies emphasized more than their less successful counterparts:
* Developing new
technology--a 21 per cent higher score.
* Refining the technology
of others--16 per cent higher.
* Improving their own
technology--7 per cent higher.
* Just-in-time inventory
control--17 per cent higher.
* Process control--26 per
cent higher.
* Using new materials--19
per cent higher.
* Using existing
materials more efficiently--14 per cent higher.
* Reducing energy
costs--15 per cent higher.
WASHINGTON--OREGON
Some interesting statistics have been released by the
B.C. Trade Office in Seattle. If one is to break up total B.C. origin exports
to the U.S. into geographic regions and rank them against our major offshore
markets, exports of $2.56 billion to Washington\Oregon are second only to $4.11
billion to Japan. California and the European Community are far behind at $0.88
and $1.34 billion respectively.
Excluding the resource and commodity products, such as
dimensioned lumber, pulp, mineral concentrates, coal and natural gas, the data
is even more surprising. Washington and
Oregon emerge as the single most important market by a factor of more
than two, at $520 million. California is next at $183 million, followed by the
EC and Japan at $102 and $100 million respectively. For more information call
Michael Clark at (206) 628-3024.
RESTRUCTURING
A study by Wyatt Co. of 148 Canadian companies shows that
some companies cut too many jobs and are now having to rehire. The survey says
51 per cent of companies that shed staff in recent years had to refill some of
the jobs dropped. Other findings show that only 61 per cent of respondents that
wanted to cut costs managed to do so; only 37 per cent reached their goal of
increased profit and only 17 per cent increased competitiveness. Customers
didn't get much out of restructuring either. Only 27 per cent of companies said
restructuring helped them boost customer satisfaction. Employers who choose to cut staff must pay close heed to the
needs of survivors if they want to benefit from restructuring, the consultants
say. Those who botch the job may find morale taking a nose dive, production
sliding and valuable staff fleeing to other employers. In most cases it takes
more than six months for surviving staff to recover from restructuring.
WATER
Japanese consumers are developing a taste for bottled
water and sales are surging, especially from Europe and particularly from
France. Imports of foreign mineral water rose last year by 31 per cent to a
record 54 million litres. Sales growth was even higher rising 49 per cent to
$23.6-million (US). Overall, imports now account for 13 per cent of Japanese
mineral water consumption up from 1.4 per cent in 1986. The perception among consumers is that the
quality of tap water is deteriorating. It is even seeping into the very
foundation of the Japanese diet--rice, and people are increasingly switching to
mineral water in the kitchen. The Japanese External Trade Organization predicts
Japan's per capita consumption will triple in the next few years from the
present three litres. In Italy it is 118 litres and 30 in the United States
Meanwhile, in Britain, where demand for bottled water
surged 1000% over the last 10 years and 520 million litres were sold last year,
tap water is subject to more rigorous treatment than bottled water which
contains more bacteria than tap water and is lower in mineral content.
ALCOHOL
The alcohol sold by liquor and beer stores continued a
dramatic four-year decline in the 1991 fiscal year according to Statistics
Canada. The biggest drop was in the volume of spirits which fell by 5.5 per
cent that year. Wine sales dropped 2.1 per cent and beer by 1.7 per cent.
Authorities link the drop to the recession, higher prices, cross-border
shopping brew-your-own businesses, changing drinking patterns and tax
increases. It is estimated that Canadians buy four million bootleg cases of
liquor each year which costs government $1-billion in revenue.
FRAUD
A six-country survey by KPMG Peat Marwick Thorne of Toronto
shows Canadian businesses second only to U.S. companies in being victims of
fraud. About 1,000 Canadian companies were sent questionnaires and 290
responded. 56 per cent of executives surveyed said their companies had been
victimized in the past year. The rate was 76 per cent in the U.S., 52 per cent
in Bermuda, 44 per cent in Australia and 40 per cent in Ireland. The
Netherlands had the lowest rate with 22 per cent. The most commonly reported
type of fraud was misappropriation of funds. Respondents agreed that internal
controls were the main factor in uncovering fraud but few corporations said
they planned to review or improve internal controls.
DUMPING
A U.S. Federal Trade Commission study finds that unfair trade practices such as
"dumping" bring minimal damage to U.S. companies. Less than a third
of the 179 dumping cases the FTC studied resulted in industry revenue losses
greater than 5 per cent and only 21 involved losses greater than 10 per cent.
The study analyzes the effects on U.S. industry of dumping and foreign
government subsidies between 1980 and 1988. It concludes that for 90 per cent
of the cases filed with the International Trade Commission, the injury to the
U.S. industry is less than 10 per cent of industry revenue. Dumping occurs when
foreign firms charge lower prices in the United States than in their own
markets or charge prices below the cost of production. If the ITC discovers a
case of dumping it can impose additional duties on the unfairly imported
products to try to right the imbalance. According
the Morris Morke, co-author of the report, "We're finding that a lot of
the time, the problem is in our own backyard. Industries aren't responding fast
enough to changes in the marketplace, and it is easier to blame foreign
competitors than to change."
MEXICO
Having
just agreed the NAFTA with the United States and Canada, Mexico has now
negotiated a free-trade pact with Venezuela and Colombia which are known in
Latin America as the Group of Three.
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