December 1998 Edition
CHILE
This country now ranks as the number-one investor in Latin America. Chilean companies accounted for more than 46 per cent of interregional investment activity in 1997, climbing from US$15 million in 1990 to more than US$3 billion last year. Top destinations for Chilean investment were Argentina and Peru. At the same time, Chile saw inbound foreign investment grow by almost 3 per cent in the first quarter of 1998 over the same period in 1997. Investments from January to March totalled US$ 1.6 billion. Drawing the most foreign interest were mining, the services sector and manufacturing.
EUROPEAN GROWTH
Economic growth is expected to remain strong over the period 1998-2000 within the European Union, driven essentially by internal consumption and investment. In 1998, EU growth is now expected to be 2.9 percent, slightly above earlier forecasts, despite the effects of events in Asia and more recently in Russia. The marked deterioration in the external environment has led to downward revisions in the growth figures for 1999 from 3 percent to 2.4 percent; however growth should pick up again to 2.8 percent in 2000, according to the economic report.
TOOTHBRUSHES
After three years of development, 26 patent filings and a $70 million investment in a new manufacturing installation, Gillette has introduced a premium performance toothbrush which it claims establishes a whole new segment in manual oral care.
PROFITABILITY
For the sixth consecutive year, larger firms were substantially more profitable than medium and smaller enterprises in 1997. Large firms earned an average return on assets of 7.2%, well ahead of returns of 4.3% for medium-size firms and 4.6% for smaller firms. Large firms tend to have higher rates of profitability for several reasons, mostly relating to economies of scale. Enterprises involved in larger-scale operations can benefit from efficiencies relating to input costs, advertising, distribution and other operating costs. As well, larger firms may benefit from lower relative financing costs, due to lower possible risk levels.
MICROROCKETS
Mass-produced rocket engines no larger than a fingernail may one day lift payloads cheaply into orbit. Aerospace engineers are becoming proficient at etching a microrocket motor just 3 millimetres thick and 1.5 centimetres across into a silicon wafer. Thanks to microscale physics of the sort that allows ants to haul potato chips, the rocket-on-a-chip should provide 20 times as much thrust per unit weight as the space shuttle's main engine. The first ignition is planned this winter. An array of 800 microrockets (about the size of a hardcover novel) could carry a 1,000-kilogram vehicle into space.
STATISTICS
Canadians can now obtain a wealth of information about their communities, free of charge, through Statistics Canada's Internet site at www.statcan.ca. The Agency has released statistical profiles of almost 6,000 towns, villages and cities, as well as Aboriginal communities. Each profile contains data on four major components: population; education; income and work; and families and dwellings. For example, Canadians can find basic information for their community on the highest level of schooling for the population aged 15 and over, as well as its industrial makeup and the composition of the families who live there.
GREEN
Datamonitor's newest consumer goods report "US Organics 1998" reveals that the US market for organically produced foods and beverages is growing faster than expected, despite a lack of national standards for the products. The study shows that the organic foods and beverages market grew more than 26 percent to $4.5 billion in 1997.
ADVERTISING
Proctor & Gamble and Unilever spent most on advertising outside the United States last year. P&G spent US$3 billion on advertising outside the U. S. pulling further ahead of the global ranking of other companies. Unilever spent US $2.5 billion followed by Nestle which spent US1.3 billion. P&G's total global spending was $5.75 billion in 63 countries. Of the top 100 advertisers, 40 were European companies, 33 were U.S and 25 Asian.
PORK
A crisis situation exists as producers of North Carolina's largest agricultural commodity are losing millions of dollars each week due to the lowest prices in decades, according to the North Carolina Pork Council. Faced with the lowest hog prices in over 25 years, thousands of North Carolina farmers that depend on pork production for their income are losing approximately $13.8 million each week as they take their hogs to market.
FOOTWEAR
In Canada, this industry produces shoes, boots, slippers and sandals from leather, rubber and synthetic materials. Revenue in 1996 was an estimated $774 million with 84 companies employing around 7,500 people. This industry has undergone a wave of consolidation. Ten years ago, 150 footwear companies employed 14,500 people. It is estimated that the number of firms fell to 42 in 1998. Canada's share of the estimated $36 billion world market is a fraction of 1 per cent.
AGRICULTURE
Canada has launched a major U.S. public relations blitz to counter what it says are widespread myths and lies about Canadian farm exports. Worried that rising U.S. farmer militancy is undermining Canadian trade, officials are waging an uncharacteristically aggressive counterattack that includes speaking out, writing letters to leading newspapers and challenging key detractors in Congress. Last year, Canadian agricultural exports to the U.S. totalled $11.4 billion. Farmers on both sides of the border are suffering from depressed commodity prices due to global oversupply, weak Asian demand and European subsidies.
BANANAS
The U.S is threatening to slap 100 per cent duties on a range of products from France, Britain, Spain and Portugal because it claims the European Union has not complied with a WTO ruling to change its banana importing policies. At stake is access to the world's largest banana market, estimated to be worth $5 billion a year at the retail level. The EU is trying to protect favourable access from suppliers in former colonies in Africa, the Caribbean and the Pacific, to the disadvantage of U.S. companies operating in Latin America.
DISPUTES
The number of disputes brought to the World Trade Organization has topped 150 since it was created nearly four years ago, compared with 300 handled by its predecessor over 47 years. The U.S., which played a key role to ensure the Geneva-based WTO had the teeth its predecessor GATT lacked, has filed a third of all the cases brought to the global trade watchdog's Dispute Settlement Body, more than any other country. Other nations have brought 25 complaints against Washington, while the EU has filed 38 complaints and been accused by other nations of breaking free trade rules 23 times.
PACIFIC TRADE
The drive to create a free trade area in the Pacific could be derailed unless Japan is more willing to lower its trade barriers. Japan has announced it is not able to make tariff reductions in the key areas of forestry products and fish. These are sectors where APEC leaders agreed to negotiate tariff eliminations as a down payment toward the goal of creating a free trade zone by 2020.
SURFING
It is estimated that China will have more Internet users than any other country in Asia, outside Japan, by 2001. China should pass Australia in 2001 as Asia's top Internet user and by the end of 2002 it will have 9.4 million users, up from a mere 1.4 million in 1997. Australia should have 5.8 million users and South Korea will be the third-biggest user with about 4 million people logging on followed by Taiwan with 2 million.
JEANS
During the 1980s, world demand for jeans increased on average by 10 per cent a year. In the 1970s, Australians bought 3.5 million pairs of jeans and 1.2 million men's suits. Over the next 20 years, sales of jeans tripled while sales of suits fell by more than half.
PLATINUM
In 1990, sales of platinum bridal jewellery were almost non-existent. Research conducted by Modern Bride magazine reports that platinum's share of the market for engagement rings and wedding bands now ranges from 21 to 25 per cent. While sales of gold jewellery last year were only up 2.2 per cent over 1996, platinum sales rose 60 per cent. High profile celebrities are wearing platinum and a new generation of consumers appears less wedded to gold.
WALL STREET
Big job cuts are being made by bankers for the first time since 1994. Bonuses, worth $12 billion last year will be down sharply. New York's economy is more dependent than ever on Wall Street according to the state comptroller. It accounted for 56 per cent of the growth in real earnings in the city in 1992-97 (compared with 23 per cent in the boom years of the 1980s). Although it directly represents only 5 per cent of total employment, it accounted for over half of new jobs created in 1995-97. Wall Street's workers took home an average of $182,000 each. The average salary of other New York workers was $39,200.
PEACE!
C-Guard is a product of Israeli military technology that can jam cell-phone reception within 100 metres of its location. It will be launched in Britain shortly in the hopes it will be bought by restaurants, theatres and hospitals.
FRIES
While the U.S. already claims to be awash in Canadian wheat and lumber, the next threat strikes at the heart of U.S. food culture. Nearly 85 per cent of the 2 billion pounds of frozen french fries produced in Canada are sold in the U.S. The lure of cheap Canadian potatoes, which now account for 10 per cent of the U.S. market, is so strong that even U.S. chip makers are setting up shop north of the border. Americans love their fries and each eat an average of 59 pounds a year.
TECHNOLOGY
Canadians are the world's third-greatest spenders on technology. A study by the World Information Technology Alliance found Canada trailing only the U.S. and Japan in technology spending in 1997. Figures show an average of US$697 spent for each Canadian on technology, far behind Americans ($1,207 per person), and Japanese ($854) but ahead of the French ($665), British ($659), Germans $612) and Italians ($310). Overall, global technology spending increased to $1.8 trillion in 1997 from $1.3 trillion in 1992 and the industry grew 27 per cent faster than the global economy during that period.
HONEY
Argentina's honey production, which has not had an off year since 1974, is the third largest in the world behind China and the U.S. and could become the No. 1 exporter of the commodity. Production of Argentine honey in 1998 is expected to be around 70,000 tonnes, all but 10 per cent shipped abroad. Nearly 200,000 hives have been added since 1995 for a total of 1.8 million. The international price is about US$1,350 a tonne.
OOOPS
Millions of trial Euro coins minted in Germany will have to be melted down because the European Union stars on them point the wrong way.
Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.
Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp
This country now ranks as the number-one investor in Latin America. Chilean companies accounted for more than 46 per cent of interregional investment activity in 1997, climbing from US$15 million in 1990 to more than US$3 billion last year. Top destinations for Chilean investment were Argentina and Peru. At the same time, Chile saw inbound foreign investment grow by almost 3 per cent in the first quarter of 1998 over the same period in 1997. Investments from January to March totalled US$ 1.6 billion. Drawing the most foreign interest were mining, the services sector and manufacturing.
EUROPEAN GROWTH
Economic growth is expected to remain strong over the period 1998-2000 within the European Union, driven essentially by internal consumption and investment. In 1998, EU growth is now expected to be 2.9 percent, slightly above earlier forecasts, despite the effects of events in Asia and more recently in Russia. The marked deterioration in the external environment has led to downward revisions in the growth figures for 1999 from 3 percent to 2.4 percent; however growth should pick up again to 2.8 percent in 2000, according to the economic report.
TOOTHBRUSHES
After three years of development, 26 patent filings and a $70 million investment in a new manufacturing installation, Gillette has introduced a premium performance toothbrush which it claims establishes a whole new segment in manual oral care.
PROFITABILITY
For the sixth consecutive year, larger firms were substantially more profitable than medium and smaller enterprises in 1997. Large firms earned an average return on assets of 7.2%, well ahead of returns of 4.3% for medium-size firms and 4.6% for smaller firms. Large firms tend to have higher rates of profitability for several reasons, mostly relating to economies of scale. Enterprises involved in larger-scale operations can benefit from efficiencies relating to input costs, advertising, distribution and other operating costs. As well, larger firms may benefit from lower relative financing costs, due to lower possible risk levels.
MICROROCKETS
Mass-produced rocket engines no larger than a fingernail may one day lift payloads cheaply into orbit. Aerospace engineers are becoming proficient at etching a microrocket motor just 3 millimetres thick and 1.5 centimetres across into a silicon wafer. Thanks to microscale physics of the sort that allows ants to haul potato chips, the rocket-on-a-chip should provide 20 times as much thrust per unit weight as the space shuttle's main engine. The first ignition is planned this winter. An array of 800 microrockets (about the size of a hardcover novel) could carry a 1,000-kilogram vehicle into space.
STATISTICS
Canadians can now obtain a wealth of information about their communities, free of charge, through Statistics Canada's Internet site at www.statcan.ca. The Agency has released statistical profiles of almost 6,000 towns, villages and cities, as well as Aboriginal communities. Each profile contains data on four major components: population; education; income and work; and families and dwellings. For example, Canadians can find basic information for their community on the highest level of schooling for the population aged 15 and over, as well as its industrial makeup and the composition of the families who live there.
GREEN
Datamonitor's newest consumer goods report "US Organics 1998" reveals that the US market for organically produced foods and beverages is growing faster than expected, despite a lack of national standards for the products. The study shows that the organic foods and beverages market grew more than 26 percent to $4.5 billion in 1997.
ADVERTISING
Proctor & Gamble and Unilever spent most on advertising outside the United States last year. P&G spent US$3 billion on advertising outside the U. S. pulling further ahead of the global ranking of other companies. Unilever spent US $2.5 billion followed by Nestle which spent US1.3 billion. P&G's total global spending was $5.75 billion in 63 countries. Of the top 100 advertisers, 40 were European companies, 33 were U.S and 25 Asian.
PORK
A crisis situation exists as producers of North Carolina's largest agricultural commodity are losing millions of dollars each week due to the lowest prices in decades, according to the North Carolina Pork Council. Faced with the lowest hog prices in over 25 years, thousands of North Carolina farmers that depend on pork production for their income are losing approximately $13.8 million each week as they take their hogs to market.
FOOTWEAR
In Canada, this industry produces shoes, boots, slippers and sandals from leather, rubber and synthetic materials. Revenue in 1996 was an estimated $774 million with 84 companies employing around 7,500 people. This industry has undergone a wave of consolidation. Ten years ago, 150 footwear companies employed 14,500 people. It is estimated that the number of firms fell to 42 in 1998. Canada's share of the estimated $36 billion world market is a fraction of 1 per cent.
AGRICULTURE
Canada has launched a major U.S. public relations blitz to counter what it says are widespread myths and lies about Canadian farm exports. Worried that rising U.S. farmer militancy is undermining Canadian trade, officials are waging an uncharacteristically aggressive counterattack that includes speaking out, writing letters to leading newspapers and challenging key detractors in Congress. Last year, Canadian agricultural exports to the U.S. totalled $11.4 billion. Farmers on both sides of the border are suffering from depressed commodity prices due to global oversupply, weak Asian demand and European subsidies.
BANANAS
The U.S is threatening to slap 100 per cent duties on a range of products from France, Britain, Spain and Portugal because it claims the European Union has not complied with a WTO ruling to change its banana importing policies. At stake is access to the world's largest banana market, estimated to be worth $5 billion a year at the retail level. The EU is trying to protect favourable access from suppliers in former colonies in Africa, the Caribbean and the Pacific, to the disadvantage of U.S. companies operating in Latin America.
DISPUTES
The number of disputes brought to the World Trade Organization has topped 150 since it was created nearly four years ago, compared with 300 handled by its predecessor over 47 years. The U.S., which played a key role to ensure the Geneva-based WTO had the teeth its predecessor GATT lacked, has filed a third of all the cases brought to the global trade watchdog's Dispute Settlement Body, more than any other country. Other nations have brought 25 complaints against Washington, while the EU has filed 38 complaints and been accused by other nations of breaking free trade rules 23 times.
PACIFIC TRADE
The drive to create a free trade area in the Pacific could be derailed unless Japan is more willing to lower its trade barriers. Japan has announced it is not able to make tariff reductions in the key areas of forestry products and fish. These are sectors where APEC leaders agreed to negotiate tariff eliminations as a down payment toward the goal of creating a free trade zone by 2020.
SURFING
It is estimated that China will have more Internet users than any other country in Asia, outside Japan, by 2001. China should pass Australia in 2001 as Asia's top Internet user and by the end of 2002 it will have 9.4 million users, up from a mere 1.4 million in 1997. Australia should have 5.8 million users and South Korea will be the third-biggest user with about 4 million people logging on followed by Taiwan with 2 million.
JEANS
During the 1980s, world demand for jeans increased on average by 10 per cent a year. In the 1970s, Australians bought 3.5 million pairs of jeans and 1.2 million men's suits. Over the next 20 years, sales of jeans tripled while sales of suits fell by more than half.
PLATINUM
In 1990, sales of platinum bridal jewellery were almost non-existent. Research conducted by Modern Bride magazine reports that platinum's share of the market for engagement rings and wedding bands now ranges from 21 to 25 per cent. While sales of gold jewellery last year were only up 2.2 per cent over 1996, platinum sales rose 60 per cent. High profile celebrities are wearing platinum and a new generation of consumers appears less wedded to gold.
WALL STREET
Big job cuts are being made by bankers for the first time since 1994. Bonuses, worth $12 billion last year will be down sharply. New York's economy is more dependent than ever on Wall Street according to the state comptroller. It accounted for 56 per cent of the growth in real earnings in the city in 1992-97 (compared with 23 per cent in the boom years of the 1980s). Although it directly represents only 5 per cent of total employment, it accounted for over half of new jobs created in 1995-97. Wall Street's workers took home an average of $182,000 each. The average salary of other New York workers was $39,200.
PEACE!
C-Guard is a product of Israeli military technology that can jam cell-phone reception within 100 metres of its location. It will be launched in Britain shortly in the hopes it will be bought by restaurants, theatres and hospitals.
FRIES
While the U.S. already claims to be awash in Canadian wheat and lumber, the next threat strikes at the heart of U.S. food culture. Nearly 85 per cent of the 2 billion pounds of frozen french fries produced in Canada are sold in the U.S. The lure of cheap Canadian potatoes, which now account for 10 per cent of the U.S. market, is so strong that even U.S. chip makers are setting up shop north of the border. Americans love their fries and each eat an average of 59 pounds a year.
TECHNOLOGY
Canadians are the world's third-greatest spenders on technology. A study by the World Information Technology Alliance found Canada trailing only the U.S. and Japan in technology spending in 1997. Figures show an average of US$697 spent for each Canadian on technology, far behind Americans ($1,207 per person), and Japanese ($854) but ahead of the French ($665), British ($659), Germans $612) and Italians ($310). Overall, global technology spending increased to $1.8 trillion in 1997 from $1.3 trillion in 1992 and the industry grew 27 per cent faster than the global economy during that period.
HONEY
Argentina's honey production, which has not had an off year since 1974, is the third largest in the world behind China and the U.S. and could become the No. 1 exporter of the commodity. Production of Argentine honey in 1998 is expected to be around 70,000 tonnes, all but 10 per cent shipped abroad. Nearly 200,000 hives have been added since 1995 for a total of 1.8 million. The international price is about US$1,350 a tonne.
OOOPS
Millions of trial Euro coins minted in Germany will have to be melted down because the European Union stars on them point the wrong way.
Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.
Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp
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