AUGUST 1996 Edition
TO OUR READERS
With this issue, we start the fifth year of our Economic
News Digest. It began with a circulation of under 100 which has now grown to
over 1000. It appears on the Internet and parts are translated and published in
a Chinese language business paper each month and we know that many readers copy
or fax it and send it to friends. We are grateful to those who have taken the
trouble to contact us to make suggestions or to tell us you enjoy receiving
succinct information regularly on economic issues which are important,
sometimes arcane and occasionally humorous.
We hope that we impart to our Canadian readers the almost
unlimited opportunities which exist to get into the international marketplace
and the many resources available to those who wish to try. Also, we hope that,
through the Digest, our American readers learn more about the country to your
north and your largest trading partner. As
the Digest had grown so too has A
& A Contract Customs Brokers. In the last four years we have increased our
staff by nearly 20 per cent, opened four offices in Ontario and Quebec and
before this summer ends, we expect to have another one in B.C. and one in
Manitoba. This last quarter has seen us make many new friends as A & A has
become a major player in issuing thousands of export permits in a timely manner
on behalf of the Canadian lumber industry under the Canada-U.S. Softwood Lumber
Agreement.
Sincerely, Graham H. Robins, President.
CANADA
According to the United Nations, Canada has the world's
most advanced overall human development. The Human Development Report, first
published in 1990 as a way to measure countries' progress, goes beyond gross
domestic product to factor in life expectancy, education, and adjusted real
incomes. The index ranks countries by health, sanitation, the treatment of
women and other aspects of life to give what the authors believe is a truer
picture of day-to-day existence. Canada was followed by the United States, Japan,
the Netherlands and Norway. On a list of 174 countries, Russia ranked 57th,
China 108th and Niger was last. When the list is adjusted to reflect the status
of women, Canada drops to second behind Sweden.
PASTA
Canadian pasta makers contend their industry is
vulnerable to a flood of cheap imports from Italy. A Revenue Canada
investigation had concluded that pasta was being subsidized and dumped by
Italian manufacturers at discounts of up to 50 per cent and imposed a 20 per
cent duty. However, the Canadian International Trade Tribunal ruled in May that
the imports had not caused damage and ordered the duty removed. This blow was
compounded by a U.S decision in June to slap duties of up to 50 per cent on
Italian pasta which will probably cause them to divert efforts to the Canadian
market. The Canadian share of the domestic pasta market has eroded to 80 per
cent from 90 per cent over the past four years as U.S. companies have
established a beachhead and Italian brands have doubled their share of the
market to 13 per cent nation-wide.
SOCIAL WELFARE
The Netherlands, which has been spending about 46 per cent of its gross
domestic product on social welfare and public service payments, is looking for
ways to cut Europe's most lavish benefits. For example, it has now abolished
the right of a Dutch person whose spouse has died to collect that spouse's
salary.
HOT DOGS
Rent for the privilege of parking a hotdog pushcart
outside New York's Metropolitan Museum of Art will soar to US$316,200 annually
by 1997. Rents have skyrocketed because of a bidding war between the Makkos
brothers which doubled rent on the coveted south side of the Met's steps to
$288,200 in 1995 from $114,200 in 1994. Just to meet the rent last year, the
cart had to take in $790 a day, the equivalent of selling 226 hotdogs, 226
pretzels and 225 soft drinks. And that does not include food costs, salaries,
insurance and sales tax. In 1979, New York got just $80,000 for all 60
concessions in and around Central Park. In 1997, the Makkos brothers will
become the park's second biggest revenue producer with fees of $612,400.
FREE TRADE?
A preliminary ruling by a five-member free trade panel is
allowing Canada to keep its market for dairy and poultry products protected
from outside competition by tariff walls of up to 351 per cent. As a
consequence, the U.S. will probably be able to keep its own barriers around the
American sugar and peanut industries. While this ruling represents a victory
for a small group of farmers, it is a loss for Canadian consumers who are
forced to continue paying higher than necessary prices.
INNOVATION
Skin cancer is the fastest growing cancer in Britain.
Now, a company has developed a range of T-shirts that give a warning to sunseekers
when they are about to receive an overdose of ultra-violet light.The T-shirts
look black and white in a room but once exposed to light outdoors it turns into
16 different colours which become darker according to the level of ultra-violet
light in the environment. The company also markets sun-check monitors, clear stickers that can be attached to
clothing or wristbands which darken as levels of ultra violet light increase.
FUEL
British and U.S. scientists have discovered a way to make
a clean fuel from sugar that could revolutionize the energy industry. The
process uses enzymes from bacteria that live near hot underwater vents to
convert glucose into hydrogen and water. A clean and cheap way to produce pure
hydrogen has long been sought after by energy researchers seeking ways to
replace pollution-creating fossil fuels and atomic reactors.
VISITORS
The number of non-U.S. overseas visitors to Canada hit a
record high in May with visits by a total of 378,000 overseas residents. In
May, compared with the same month last year, there was a 28 per cent jump in
the number of Asian visitors, a 14 per cent increase in Europeans and a 16 per
cent increase in Australians. Overseas visitors have increased their trips to
Canada by 52 per cent since mid-1992.
SOUTH AFRICA
Two-way trade over the 1993-95 period surged over 145 per
cent, from $229 million to $739 million, and those figures do not include
services and direct investment. Canada's exports to South Africa increased 42
per cent in 1995 to $321 million. Canadians expanded sales of goods and
services across a wide range of categories, with impressive growth in
non-traditional fields, including many manufactured products. Access to the
South African market will be further opened in the months and years ahead as
trade liberalizing measures take effect.
PRODUCTIVITY
A University of Illinois study of 256 clerical and
administrative workers found that listening to their favourite music on a
personal stereo headset at work increased productivity by 10 per cent.
SILK
Thousands of years ago silk built the road connecting
East and West and it became a hard currency. To this day, 20 million households
across China depend on silk and the country commands three-fourths of the world
market. But China's trademark industry is losing its lustre. Obsessed for a
decade with increasing output, China has made the fabric of royalty into cheap
underwear and T-shirts. The image of silk has sunk, exports have dropped and
silk makers can't make a profit. Unable to earn their keep selling raw silk at
market prices, last year Chinese traders saw exports of raw and processed silk
decline by 20 per cent and overseas sales dived a disastrous 42 per cent in the
first quarter of this year.
DISPUTES
Recently, U.S. and Japanese trade negotiators have
focused largely on disputes over semiconductors and film, but the next one
could be over Japan's construction market. Few markets contested by foreigners
are worth more than Japan's construction market which is valued at US$866
million a year in tendered contracts. Of the 613 major new construction
contracts issued in Japan last year, only one went to a foreign company. In
1994, foreigners won contracts valued at only 0.13 per cent of the total market
value.
SWEATSHOPS
A U.S. Labour Department study suggests that clothing
manufacturers can reap higher profits by training workers to be more versatile
and investing in technology than by contracting out to low-wage sweatshops. In
fact, innovations that make manufacturers more flexible and responsive may be
necessary for survival in the rapidly changing, fickle and competitive garment
industry. The most innovative companies reaped operating profits that were on
average 50 per cent higher than so called non-innovators.
AUTO PARTS
Sales by Canadian auto parts companies to Japan-based
vehicle manufacturers rose more than 40 per cent to $1.3 billion in 1994, up
from $900 million the previous year. The figure is expected to rise to $3.5
billion by 1998 when Japan-based companies complete expansions of North
American operations or build new plants. The $1.3 billion in sales represents
about 6.6 per cent of Canadian auto parts shipments.
CLOTHING
The Glen Echo Nudist Park of Pottageville, Ont, is in the
middle of its fifth annual clothing drive for charity. Last year, members were
able to fill 60 large bags with their castoff clothes.
WEALTH
Despite 15 years of global economic growth, 1.6 billion
people---nearly a third of the world's population-- have seen their standard of
living decline. A recent U.N. study shows that over the last 30 years, the
economic share held by the world's poorest 20 per cent of the population
dropped to 1.4 per cent from 2.3 per cent. During the same period, the share of
the richest 20 per cent rose to 85 per cent from 70 per cent. Perhaps the most
staggering statistic is that the combined assets of the world's 447
billionaires exceeds the total annual income of 2.3 billion people or 45 per
cent of the global population. In the last five years, the number of
billionaires in Asia has risen from 26 to 82.
GENETACEUTICALS
This is the name Futurist magazine gives to the potent
combination of genetic research and the pharmaceutical industry. This will be a
booming industry in the next decade as genetic research closes in on treatments
for a host of illnesses, from allergies to AIDS. The magazine also says it's
possible that within 20 years individuals will carry a smart card containing
their entire genetic makeup.
RUSSIA
Trade talks have yielded tax breaks and other commitments
for U.S. and Canadian companies in a sign that the Kremlin is moving to create
a friendlier environment for foreign investment. Immediately affected are the
six U.S. and Canadian joint oil ventures. Among the first large investors in
Russia five years ago, the joint ventures have seen taxes steadily rise despite
initial promises by Russia of tax holidays until investment has been recouped.
The increases were threatening to shut down some of the projects but the
lowered excise taxes are better than trade officials expected.
PARENTING
When his teenager wanted to sleep rather than mow the
lawn, a man in Belton, Mo. pushed the mower into his son's bedroom and started
it, cutting clumps from the bedroom carpet. The son threw a fan at the mower
and called the police who arrested the father and charged him with assault.
Posts
