December 1999 Economic Digest - Importing and Exporting

December 1999 Edition

 BUYOUTS

Corporate America spent a staggering $24 billion (U.S.) to complete 181 mergers and acquisitions of Canadian companies during the first nine months of 1999. This is up dramatically from the same period last year when U.S.-based businesses spent $12 billion buying Canadian companies in 138 transactions. The numbers represent a reversal of a three year trend. Historically, Canadian companies have been the net buyers in cross border M&A's. Overall, foreign buyers spent $28 billion on 227 deals involving Canadian companies by the end of September.

OPEN SKIES

There has been a two-thirds increase in the number of flights between Canada and the U.S. over the past five years. This year, the number of scheduled commercial flights will be 193,427 from the U.S. to Canada, more than the total for Asia and Europe combined. Air Canada has tripled its U.S. destinations to 45 and across the U.S., 24 cities have begun direct flights to Canada. As a result, Canada now equals Britain as the favoured destination for Americans. Last year, about 8.4 million Americans boarded flights for each country.

POWER

Passenger cars, according to U.S. figures, average 5.05 horsepower per 100 pounds, up from 3.68 in 1978. At the same time, their average weight has fallen to 3,075 pounds from 3,349 pounds.

NEWFOUNDLAND

After lagging behind the national average for several years, Newfoundland's economy led the provinces in 1998 as strength in the new oil sector propelled growth to 6.2%. Oil has flowed from the Hibernia offshore platform since late 1997, and crude oil accounted for the bulk of Newfoundland's stellar export growth in the platform's first full year of operation. Corporate profits took off, rising more than 30% on top of large gains in 1997.

PUMPS

Get ready for commercials while pumping gas. A Kitchener, Ontario, company is testing an advertising device that sits on top of a pump and delivers commercials with full-motion video and audio to captive viewers. Soon, gas stations will even be able to tailor their pitches to specific types of vehicles, ads for diapers or amusement parks to drivers of minivans for instance. Vehicles will be identified by a camera high above the pumps.

CREDIT CARDS

The first multi-use credit card, a Diners Card, was issued in 1950. Only five hundred cards were in circulation, and they were accepted in twenty-seven locations. Forty years later, 492 million cards had been issued, and 247 territories accepted credit cards.

eCOMMERCE

An Internet survey conducted by consumer protection agencies in 14 countries has found most eCommerce sites fail to provide basic consumer information. The survey covered 700 eCommerce sites, examining them against 10 key consumer protection principles. Most sites failed to provide consumers adequate information on subjects such as the security of on-line payments systems and how they handle consumers' personal details. Only 44 per cent of sites disclosed information on the security of on-line payments, while 25 per cent disclosed their privacy policy. Only 10 per cent of sites examined carried a statement of laws applicable to transactions and only one in five sites had information about lodging a complaint.

MAGAZINES

In the last 14 years, U.S. magazines have more than doubled in number from 2,500 titles in 1985 to nearly 6,000 today. Currently, 1,000 U.S. magazines come on the market every year and about 950 magazines fail.

DUST

A new breed of dust-sized computers is being developed in the U.S. So called "smart dust" will pack sensors, communicators and computing power into silicon "motes" light enough to float on air. They could be used to observe weather patterns, monitor battlefield conditions or even spy. Currently, the motes are about the size of Aspirins but researchers hope to reduce them to the size of grains of sand. A tiny onboard computer will help store the motes' readings and sort out what data is worth reporting.

THE FUTURE

Genetic engineers want to craft a Christmas tree that would grow its own lights, an invention that would spell the end to the seasonal frustrations of fiddling with faulty bulbs and cables. The plan, put forward by students at the University of Hertfordshire in England, would be to take a Douglas fir tree and add two genes, from fluorescent jellyfish and fireflies, that would make it grow luminous needles.

PIRACY

Global music executives have singled out Hong Kong as the centre of a $4.5 billion (U.S.) piracy business and have pressed demands for shutting down illicit manufacturers. Hong Kong has 84 licensed compact disk factories that can make two billion disks a year, while legitimate local demand is estimated at 300 million CDs. Since mid-1998, about 20 million CDs were seized en route from Hong Kong and South East Asia to Latin America. Most were destined for Brazil, the world's sixth largest music market.

RUBBISH

NCR Corp. has added a new product to its kitchen range--a "smart" rubbish bin. It recognizes the type of waste as it hovers above the bin, reads bar codes and swallows junk into one of its four compartments where bottles, paper and food waste are tucked away separately--making it easy to recycle. The bin also records consumer habits printing regular shopping lists at the touch of a button, showing what groceries the house is running out of.

ORGANIC

Organic foods are now a $4 billion business in the United States, growing at roughly a 20 per cent rate, while food sales in general are crawling along at three per cent.

WORLD TRADE

The Director General of the World Trade Organization has issued an Overview of Developments in the International Trading Environment in which he pleads for special attention to the needs of the less-developed countries. He notes that it should be a matter of enormous concern that together, the 48 least-developed countries hold a share of only one-half of an one percent of world trade.

FRUIT

The international market in fresh fruits has moved on to the Internet with the launch of FruitXchange, a website where produce can be traded electronically. Fruit is the latest commodity to jump on to the e-Commerce bandwagon. Already, traders can buy chemicals, metals, coffee, sugar and livestock in cyberspace.

ONLINE

A recent study by eMarketer's indicates that the number of U.S. adults online will increase 26%, from 58 million in 1999 to 88 million in 2002. This number is outweighed by the growth rate of the teen segment, which will grow 38%, to 11.1 million during the same period. The report also stated that 30% of the U.S. population will be online by the end of this year. The study also found that:

-the median income for online households is 57 percent higher than the average U.S. household.

-teenagers spend 27 percent more time online per week than the average user and 87 percent of college students are online.

-seniors will be spending $16.7 billion online by 2002.

CHILE

Canada and Chile have signed an agreement to speed up the elimination of tariffs related to the Canada-Chile Free Trade Agreement. As part of this agreement, scheduled to come into force on January 1, 2000, trade in a number of products will become duty free between two and seven years earlier than planned. The value in future bilateral trade in these goods is estimated to be $25 million annually. Two-way trade between the two countries was $683 million in 1998.

AGRICULTURE

All 34 countries of the Americas will form a common front against agricultural subsidies, especially in Europe. To win the support of all the countries, the larger agricultural exporters promised to give the small ones more leeway and more help in their role in creating a free-trade agreement for all of North, South and Central America. According to the U.S., eighty-five per cent of the export subsidies that are distorting trade in agriculture are captured in the common agricultural policy of Europe.

INVESTING

A Yucca plant in Stockholm has become the most unusual investor on the stock exchange. A Swedish artist has attached electrodes to the plant's leaves that link their movements to a computer program tracking the 16 most active stocks. When the Yucca's stock recommendations perform better than the general index, it is given water and light. If the plant fails to deliver profits, it stays dry and in the dark

COURIERS

Couriers and messenger services of all kinds are big business in Canada. In 1997, 11,417 couriers and messengers services generated total revenue of just over $3.8 billion, according to Statistics Canada. Ontario is home to 40 per cent of courier establishments, generating just over $1.9 billion. Local messengers claim 14 per cent of delivery revenue and 59 per cent use surface transport.

REPAIRS

* Fifty years ago there were 75,000 shoe-repair shops in Canada. Now there are about 10,000 and the number is declining.

* Because so few Americans make or mend clothes any more, the U.S Bureau of Statistics in 1998 moved sewing machines from the "apparel and upkeep" category of consumer spending to "recreation."

STARTUPS

Based on surveys with 10,000 people, one in 12 Americans is trying to found a new business. In contrast, just one in 30 Britons, one in 45 Germans and one in 67 Finns want to be entrepreneurs.

MEASURING

The U.S. National Institute of Standards and Technology (NIST) and Japan's Agency of Industrial Science and Technology have agreed to undertake joint efforts to demonstrate the equivalence of measurement capabilities in both organizations. In 1998, the value of merchandise traded between the United States and Japan totalled $180 billion. Regulatory and voluntary standards unique to one country or the other may compel exporters to submit their products for additional testing so that they can demonstrate compliance with the requirements of the importing nation adding to the cost of imported goods.

TRENDS

The Associated Press reports that a major soft-drink company is studying wireless technology that could allow bottlers to raise or lower prices by remote control at certain times; during hot weather for instance. Lower prices during periods of slower sales would presumably bring in more business. The company is testing a machine that can automatically raise prices for its drinks during hot weather. A company spokesman said that the desire for a cold drink increases during the summer heat, so it is fair that it should be more expensive. The machine will simply make the process automatic.

TRIVIA

Golf was banned in England in 1457 because it was considered a distraction from the serious pursuit of archery.

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November 1999 Economic Digest - Importing and Exporting

November 1999 Edition

 MERCOSUR

Mercosur is the world's third-largest trading bloc: intra-Mercosur trade accounts for about US$15 billion annually. A currency devaluation in Brazil earlier this year ignited trade tensions among its members, most notably between Brazil and Argentina. Argentina's economy is expected to shrink this year, partly because of reduced exports to Brazil. It claims that the devaluation of the Brazilian currency earlier this year seriously impaired the competitiveness of Argentinean goods in the Brazilian market. Argentina's exports to its Mercosur partners, almost all of which go to Brazil, fell 26 percent in the first half of the year.

UNITED NATIONS

A national survey has confirmed strong U.S. voter support for the United Nations. Nearly 90 per cent of voters indicated that the U.S. must belong to the U.N., an institution that 72 per cent of voters view favourably. In other findings, 66 per cent of Americans know that nations pay dues to the United Nations, and more than 79 per cent of that group are aware that the U.S. is behind in paying its dues to the U.N. Overall, 66 per cent of Americans disapprove of the U.S. withholding the more than $1 billion it owes the U.N.

WORLD TRADE

The World Trade Organization (WTO) has released statistics concerning world trade in 1998. Canada was the seventh-largest importer in terms of world merchandise trade with imports of $206.2 billion (USD), an increase of three per cent. The severity of the financial crisis that hit Asia is demonstrated by the fact that Japan lost 17 percentage points in terms of its importations in world merchandise trade. Hong Kong's merchandise trade was reduced by 12 per cent, Singapore by 23 per cent, the Republic of Korea by 35 per cent, Malaysia by 26 per cent, Thailand by 32 per cent, Indonesia by 34 per cent, and the Philippines by 17 per cent.

VERSATILE

A French designer has developed clothing that changes colour to reflect changes in temperature and humidity.

COMPARISONS

In 1998, each Canadian ate 15 dozen eggs and almost 12 kg of cheese, compared with about 20 dozen eggs and almost 13 kg of cheese consumed by each American. Per capita consumption of red meat increased in 1998 in both Canada and the U.S. after steady declines since the mid-1970s. Consumption of poultry continued to increase - driven in part by strong consumer demand in both countries for a wide variety of convenient processed food products. Overall, Americans eat more red meat and poultry than Canadians.

eCOMMERCE

A new survey shows that interest in eCommerce and eBusiness is high among Latin American companies. International Data Corporation (IDC), conducted interviews with 500 companies in the region during the summer of 1999. Results reveal that nearly 85% of companies indicated they are using or will evaluate using eCommerce within the next 2 years. However, actual implementation rates are relatively low with only 11% of companies currently using eCommerce. The finance industry is the most active industry segment adopting eCommerce in Latin America.

PENETRATION

A survey by Scarborough Research shows that five U.S cities have reached 50% Internet penetration among the adult population. Washington, D.C. ranks number one with 59.9% of the adult population online, followed by San Francisco (56.1%); Austin, Texas (55.5%); Seattle (53.3%) and Salt Lake City (50.0%). Scarborough measured Internet usage over a one-year period both at home and at work for these findings.

TIME

According to the International Time Capsule Society based in Atlanta, there are an estimated 10,000 time capsules worldwide. The majority are American and Canadian and most have been lost or forgotten.

Y2K READINESS

While Canada is considered to be one of the most prepared countries in dealing with the Year 2000 problem, other countries are not so advanced, and the degree of readiness in sectors such as aviation, maritime shipping and ports, telecommunications, banking and finance, government services and energy varies from one country to the next. Country readiness statements, containing factual and non-judgemental information from public sources on the Y2K readiness of foreign infrastructure, are available on the Canadian Department of Foreign Affairs web site at: http://www.dfait-maeci.gc.ca/y2k, and via a toll-free telephone line, 1-800-O-Canada.

FILMS

Three of North America's top seven film production centres are now in Canada according to the Boston Globe. Vancouver, Toronto and Montreal join Los Angeles, New York, Chicago and Orlando, Fl.

DIAGNOSIS

The National Institute of Standards and Technology's (NIST) Advanced Technology Program has selected a team headed by Motorola Labs to develop a biochip-based device that would enable the rapid diagnosis of life-threatening bacterial infections. The goal of the project is to develop a small inexpensive device that could rapidly profile bacteria, which in turn would help to control the spread of often deadly infections. The envisioned device would be capable of performing all preparation steps and genetic analysis functions on a single biochip.

FASHION

The Canadian apparel industry accounts for $1.2 billion in domestic sales and $450 million in export sales annually and employs more than 100,000 people. In Toronto alone, there are 750 fashion manufacturers and designers, employing 18,000.

SOUTH AFRICA

A Trade Development and Co-operation Agreement has been signed between the European Union and South Africa. The agreement will establish a free trade area between the parties over the next twelve years liberalizing about 95% of trade and will have long-term benefits and commercial advantages for both sides. In particular, it will give South Africa preferential access to the world's largest market, opening up important opportunities for South African companies in sectors such as textiles and clothing, chemicals, food and vegetables.

CHIPS

The September earthquake in Taiwan caused inestimable damage to life and property on the island nation. However, the quake's aftershocks are just beginning to hit the U.S. computer industry, which relies heavily on Taiwan as a source of integrated chips for its lifeblood. Taiwan's huge chip industry was idled by the quake and could be crippled for weeks. As a result, prices for silicon chips were up sharply in the days after the disaster. With a disaster such as the Taiwan earthquake, which occurs thousands of miles from Silicon Valley and other U.S. high tech corridors, experts emphasize the importance of having insurance policies that include contingent business interruption, as well as first-party property damage coverage. The September earthquake in Taiwan caused inestimable damage to life and property on the island nation. However, the quake's aftershocks are just beginning to hit the U.S. computer industry, which relies heavily on Taiwan as a source of integrated chips for its lifeblood. Taiwan's huge chip industry was idled by the quake and could be crippled for weeks. As a result, prices for silicon chips were up sharply in the days after the disaster. With a disaster such as the Taiwan earthquake, which occurs thousands of miles from Silicon Valley and other U.S. high tech corridors, experts emphasize the importance of having insurance policies that include contingent business interruption, as well as first-party property damage coverage.

SOY

Soybeans are already used to make everything from tofu to newspaper ink. Now they are being developed into a biodegradable plastic that may hold promise for a host of practical uses and create a welcome new source of demand for struggling soybean farmers. Forks, spoons golf tees and fast food containers are a few uses for soy-based plastic.

COPYRIGHT

According to the Business Software Alliance (BSA), online copyright theft is rising to epidemic proportions, threatening the creative industries while inhibiting the development of electronic commerce. Losses due to Internet piracy are on the rise, contributing an increasing percentage of overall global piracy losses, estimated at nearly $11 billion each year. The economic impact of this activity, the BSA states, extends far beyond the confines of the software industry, harming economies worldwide in the form of greatly diminished tax revenues and substantial numbers of lost jobs.

CANDLES

This industry generates more than $2 billion every year on this continent. According to Carleton Cards, sales in Canada have more than doubled since 1997. 96 per cent of candles are purchased by women, and there are some seasonal trends such as Valentine's Day and Christmas, but 67 per cent of sales have no real holiday hook. More than a third (41 per cent) of all candles are purchased at discount department stores, with 20 per cent bought at supermarkets, 9 per cent at home parties and 6 per cent at drug stores.

FISHING

The U.S., Australia, New Zealand, Iceland and the Philippines have called for the end to subsidies to national fishing industries. The U.S., et al said that fishing subsidies lead to environmentally damaging over-fishing and distort trade by reducing harvesting costs and reducing fish prices world-wide. This in turn, the countries said, hurts the livelihoods of fishing communities especially in poor countries. In their appeal, the U.S., et al were targeting the EU and Japan, both of which provide subsidies to their fisheries sectors. A report from the World Bank, states that national governments provided US$14-20 billion annually to the fisheries sector.

LOSSES

While the population of the world recently reached six billion, 32 countries around the world are losing people, or are about to. The population of these countries currently totals about 800 million, but the UN estimates that by 2050 they will be down to 670 million. These countries include: Russia, Ukraine, Japan, Germany, Britain, Italy and Spain.

CIGARS

Two years ago cigars were all the rage, but this fad is fading fast. In 1996, sales of premium, hand-rolled cigars jumped 67 per cent and in 1997, they leaped another 30 per cent. But now the trend is reversing itself. For 1999, analysts predict a 10 per cent fall in sales.

INSURANCE

Life insurers need to make their policies more intelligible to consumers according to industry watchdogs. The Canadian Council of Insurance Regulators say that insurance contracts may be too complex or difficult to understand. Regulators are proposing that every consumer who buys a life insurance policy or product be given a one-page, plain-language document outlining its key components.

GROWTH

American export volumes grew by 67 per cent between 1990 and June this year. This rapid growth far outstrips the rise in British exports of 41 per cent and in German exports of 38 per cent over the same period. Japanese exports have grown only 19 per cent in this period. However, U.S. export performance has been less spectacular recently with growth of three per cent in 1998 and a decline of 1.3 per cent this year so far.

E-MAIL

The Wall Street Journal reports that when E-mail is introduced, the use of office printers increases 40 per cent.

WEALTH

The 400 richest Americans have for the first time amassed a total net worth of $1 trillion US, a figure greater than the gross domestic product of China.

QUOTES

"I have travelled the length and breadth of this country and talked with the best people and I can assure you that data processing is a fad that won't last out a year." A Prentice Hall editor in charge of business books, in 1957.

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

October 1999 Economic Digest - Importing and Exporting

October 1999 Edition

 
MEXICO

According to U.S. Department of Commerce statistics, Mexico consolidated its position as the second-largest U.S. trading partner during the first half of 1999 when U.S.-Mexico trade reached almost $91 billion, a 7 percent increase compared to the same period in 1998, and almost a 125 percent increase with respect to the first semester of 1993, before NAFTA was enacted. From January to June 1999, Mexico bought almost 12 percent of total U.S. exports. Mexican products accounted for almost 11 percent of total U.S. imports. NAFTA has been the driving force of trade growth between the United States and Mexico since the Agreement's implementation in 1994.

IMF

The International Monetary Fund (IMF) is launching Country Pages on its website (http://www.imf.org) to provide easier access to economic and financial information on its 182 member countries and other economies. Country-specific information, including Press Releases, Letters of Intent and IMF disbursements and country repayments, will be readily accessible through the new website service. The IMF is proposing to add links to official websites of central banks and finance ministries to aid public access to country economic and financial information."

MALAYSIA

Malaysia has 58 financial institutions--about 52 too many according to the finance minister. Now the government is ordering them to merge into six "super banks"--big enough to withstand the expected onslaught of foreign competitors in 2003, when financial markets are due to be liberalized. Critics say the plan--which may sideline some of Malaysia's more capable and innovative bankers--is flawed.

VIDEOS

Canadians rented more than $1 billion (U.S.) worth of videos in 1998, part of a North American total of $8.1 billion, an increase of 10 per cent over 1997. Video generates more than 52 per cent of studio revenue. Only 21 per cent of revenue is made in domestic theatrical release. 90 per cent of VCR owners rent videos regularly, with at least 25 per cent renting once a week. But digital video discs (DVD's) represent the newest growth area generating more than $300 million in sales last year. Four million households in the U.S. and 400,000 in Canada are expected to have DVD players by the end of this year.

LEADERSHIP

In a survey taken at 52 large U.S. companies, three quarters of them said that they were having problems finding qualified leaders. Respondents found qualities such as innovation, communication, vision and strategic decision-making lacking among people in leadership roles. The managers themselves said they lacked strength in many skills needed for leadership positions.

TAXES

Barbados has unveiled a major reconstruction of its tax system. Plans have been announced to cut energy taxes, create a million dollar safety net for farmers and impose WTO-approved tariffs on goods ranging from sausages to cotton T-shirts. This is aimed at preparing the country for the proposed Free Trade Area of the Americas, which Latin American and Caribbean countries want to inaugurate in 2005. Tariffs on imported lamb and beef will rise to 40 percent and tariffs on soybean oil, sausages, preserved meats, uncooked pasta, powdered laundry detergents and textiles will rise beginning April 2000.

FLYING

Growing discontent in the crowded skies has caused complaints about airline service to more than double in the U.S. More than 5,000 complaints were lodged against the major carriers in the first six months of this year compared to 2,467 last year. According to the U.S Department of Transportation, the increasing air travel dissatisfaction is because of flight delays caused by unusually severe weather and air traffic jams, cramped and overbooked airplanes and hours spent in airport lines. However, airline profits have soared with planes that take off with an average of 70 per cent of seats filled by a flying public that has increased by 25 per cent in the last five years.

DEATHS

The Organization for Economic Co-operation and Development reports that in 1998, more than 124,000 people lost their lives on roads in its 29 member countries. It estimates that the annual economic loss from road deaths and injuries is around $450 billion, or 2 per cent of gross domestic product in OECD countries. Portugal has the worst record for road deaths while Sweden and Britain have the best records.

PARTY LINES

As recently as 1978 Canada had nearly 500,000 mostly rural homes with two-party lines, that is lines that allow two or more homes to share a single phone line, each subscriber listening for a coded ring indicating who's being sought. There were 250,000 on four-party lines and 453,000 households with lines shared by more than four parties. That was 16 per cent of all residential lines. In 1998, there were about 125,000 residences on party lines, about one per cent of all lines.

PERFORMANCE

Nissan's plant in Sunderland, in the north of England, maintained its position as the most productive European car plant, producing 105 vehicles per employee in 1998, up from 98 in the previous year. The world's leading car plants in Japan produce around 160 vehicles per employee but America's best, that of Honda in Merrysville, Kentucky, produced 88.

SERVICES

Canada's exports of services rose 9% to reach a high of $45.9 billion in 1998, covering travel, transportation, commercial services to the business community and a smaller group of government services. These sales helped bring Canada's deficit in services trade to $7.0 billion, its lowest level since 1988. This deficit - the difference between the services Canada exports and the payments it makes to foreign suppliers - has shown a significant drop since 1993. The 9% rise in service exports for 1998 was greater than the 3% increase in service imports, which reached $52.9 billion.

PRINTING

Encyclopedia Britannica, which dates back to the late 18th century, has announced that it has stopped printing books because the CD-ROM version of its reference works sells far better. The company, founded in 1768, now sells a minimal number of books, compared with 150,000 CD-ROMs every year.

TANDEM

The U.S. has petitioned Japan to repeal its prohibition on motorcycle tandem riding (motorcycles carrying passengers) on highways, a move that would enable an estimated 30 per cent more U.S. motorcycles to be sold in Japan. In 1998, Japan purchased more than $109 million worth of U.S. motorcycles and parts, making it the largest American export market for such goods. The petition is a response to Japan's National Police Agency's (NPA) concerns regarding the safety of tandem riding. A U.S. study concludes that tandem riding on motorways is much safer than on side streets.

ADVERTISING

Getting the message to Canadians by advertisers through all media grew more than 8 per cent to a record $9.5 billion in 1998. TV led the way with expenditure of $2.3 billion with specialty TV channels having the biggest jump, rising 31 per cent to $241 million.

VIRUSES

Last year, the International Computer Security Association estimated there were 15,000 to 20,000 computer viruses in circulation, with 1,000 emerging every month. Only a very small number ever make it into wide circulation or "into the wild" in the industry vernacular.

E-TAXES

The U.S. Chamber of Commerce cautioned against imposing new taxes on the rapidly growing business of Internet sales before resolving major questions surrounding current Internet policies and regulatory issues. The Chamber says that any discussion of e-commerce taxes is premature, if not foolhardy, until rules of the road for Internet businesses and transactions are developed.

MONOPOLY

An estimated 500 million people around the world have played Monopoly. The game is published in 26 languages and licensed in 80 countries; it is banned in North Korea, China and Cuba. A CD-ROM version allows people to play over the Internet.

TEXAS

A 1997 study identifying America's most threatened farming regions showed that Texas is losing more of its best farmland to development than any other state. The study found that Texas developed more than 1.4 million acres of land between 1982 and 1992, more than a third of which was highly productive agricultural land.

SUBSIDIES

The U.S. is joining an international farm lobby that includes Canada in an effort to dismantle some agricultural subsidies at forthcoming world trade talks. The group is protesting against the $362 billion (U.S.) spent by developed nations on export subsidies and aid, blaming them for the sharp drop in commodity prices and the suffering of their insolvent farmers. The EU spends $142 billion a year on aid to farmers.

PRODUCTION

India, not the U.S., is the number one movie producer in the world. Annually India averages more than 800 films compared to just over 500 in the U.S.

FRAUD

China has discovered that over 117 billion yuan ($14 billion U.S.) of state funds were misused in the first half of this year. Auditors found three billion yuan meant for water conservancy had been diverted to other projects and government agencies overseeing the railways, postal and telecommunications sectors misappropriated one billion yuan from pension funds.

SPEED

An experiment in England to cut speeding by flashing drivers' licence plate numbers up on large roadside screens has been so successful that it is to be used nationally. Project Specs uses two roadside cameras 500 meters apart. Drivers going too fast are "named and shamed" on a giant colour screen.

ABORIGINAL SITE

Industry Canada hopes a new web site will encourage more aboriginal entrepreneurs to do business on the Internet. The Aboriginal Business Canada branch recently launched www.abc.gc.ca/abi/home.htm which includes a road map of the information highway, names of local service providers and points out other resources for aboriginal companies. The site also provides profiles of aboriginal companies that are active in the world of electronic business.

TEAMWORK

Scientists at Florida State have found a way to get weather forecasting computers to work together like a team. Researchers combined forecasts produced by computers from around the world into what they call a "superensemble" that produces results that are better than the sum of its parts. For example, in a forecast of hurricane winds over the U.S. three days into the future, computer errors ranged from 31.3 mph to 32-4 mph. It fell to 21.5 mph with the superensemble.

TEA

When tea was first introduced in the American colonies, many people, in their ignorance, served the tea leaves with sugar or syrup after throwing away the water in which they had been boiled.

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

September 1999 Economic Digest - Importing and Exporting

September 1999 Edition

MERGERS

 
The rush of worldwide mergers and acquisitions is accelerating. In the U.S., deals worth $570 billion were completed in the first half of 1999, compared with $528 billion for the same period last year. European deals, fuelled by monetary union, were worth $346 billion in the first half of 1999; in the whole of 1998 the total was $541 billion.

SPACE

Last year, there were 1.1 million people worldwide who were employed in jobs directly related to space. France launches 50 per cent of the world's commercial satellites. The U.S. is second with 40 per cent of them and Russia and China split most of the rest, using mostly surplus rockets left over from the Cold War.

Y2K

The U.S. Department of Transportation is heading an International Year 2000 civil aviation evaluation process, which is reviewing information about the Year 2000 (Y2K) readiness of foreign air traffic service providers, foreign airports, and foreign air carriers flying into and out of the U.S. The process will review and evaluate all available information regarding the Y2K readiness of foreign air traffic services providers and airports used by U.S. airlines, as well as foreign airlines. Beginning this month, travellers will be able to access information on the internet at http://www.dot.gov/fly2k.

ORGANIC

According to the Ministry of Agriculture, British farmers are cultivating five times more land using organic methods than a year ago.

GROWTH

One of the most significant business developments of this century is the dramatic growth of women-owned businesses. Eight million women own businesses that contribute nearly $2.3 trillion annually to the U.S. economy, and these businesses are increasing at nearly twice the national average.

SURGE

Export Development Corp., the Canadian government's trade finance arm, reports the number of smaller companies--annual sales up to $25 million--using its services rose nearly 21 per cent to 3,704 customers in the first six months of the year compared with the 1998 period. The value of exports grew 8.2 per cent to $3 billion. Smaller exporters account for 86 per cent of EDC's customers. These smaller exporters sold their goods and services in 142 countries.

INFLUENCE

Although 90% of all U.S. exporters are small businesses accounting for 30% of the dollar value of U.S. exports, small businesses are poorly represented on important global trade and export policy councils. The World Trade Organization (WTO), for example, represents 135 countries accounting for 90% of all global trade. Yet the WTO has no committee representing the interests of small and mid-sized companies. A number of critical overseas trade issues impact small U.S. companies, yet many cannot afford the legal and other costs involved for example, in protecting intellectual property rights abroad, staying on top of product safety certification requirements for overseas sales, among other issues.

CURRY

In 1950 there were just six Indian restaurants in Britain, now there are over 7,500. Twice as much Indian food is sold in Britain as fish and chips. Even McDonalds have had to adjust their British menus to include "curry and spice." However, last year there were at least 300 closures of Indian restaurants compared with just over 100 openings. Indian restaurants, while still the biggest players in the industry, are losing market share to pizzas, burgers and to new forms of eastern cuisine, such as Thai and Japanese food.

LABELLING

Over 30 agricultural products may be subject to mandatory biotechnology labelling under a proposal announced Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF). Under the scheme, food items including corn snacks, popcorn, or those with corn starch, corn flour, corn grits or corn oil will be subject to labelling that denotes whether they contain "genetically modified or non-genetically modified ingredients." Both manufacturers and importers will be obligated to label these foods. The new labelling standards will be announced in April 2000 to be implemented by April 2001.

VIETNAM

European environmental groups are calling for a boycott of hardwood garden furniture made in Vietnam. They allege that the furniture products, while bearing labels claiming the products were "Made in Vietnam," are actually derived from wood bought illegally from Cambodia, where the wood was harvested to fund Cambodian military operations. The groups are encouraging consumers to only purchase wood furniture bearing the Forest Stewardship Council logo, indicating the wood was derived from a sustainably managed forest system. The groups also say that Cambodia's forest cover has declined from 70% of land area in the early 1970s to 30-35% today.

BRAIN DRAIN

Lured by lower taxes and booming job opportunities, Canadian professionals are flocking to the U.S. in numbers that are unprecedented according to a Conference Board of Canada study. About 98,000 Canadian emigrants--the bulk of them on temporary work visas--headed south in 1997, up from just 16,900 in 1986. The study provided additional ammunition to business groups and opposition Mps who argue that the federal government must dramatically slash taxes to stem the flood of highly skilled workers leaving the country.

ACCOUNTANTS

The management accounting organizations of Canada, the U.S. and Australia are forming an alliance that may ultimately lead to the mutual recognition of their national management accounting designations. The three national bodies have signed a letter of intent to form the nucleus of a worldwide organization. The idea is to supply international support that would assist in providing leadership, research and resources for the profession.

CAMPING

Because the stores sell gear, groceries, auto supplies and souvenirs, and they are often open all night, most of Wal-Mart's 2,910 parking lots across the U.S. have become more appealing to the trailer and RV set than the regular campgrounds just outside town. While they do not have hookups, they are free, don't require reservations and always have vacancies. K Mart Corp., a big competitor, discourages overnight campers because it often violates leases and local laws. On one evening recently in Anchorage, Alaska, about 90 campers with licence plates from as far away as Florida and North Carolina took up nearly half the Wal-Mart parking lot.

E-COMMERCE

Home Depot, the largest North American retailer of home-improvement products has written to more than 1000 of its suppliers asking them not to sell their products directly to consumers over the Internet or risk having their products dropped from the chain's shelves. The company said it may hesitate to do business with suppliers that also market products online because they would become competitors. Many manufacturers are treading carefully to find ways to get a piece of the lucrative and fast growing Internet market without angering companies that sell their products.

MONEY

The Bank for International Settlements in Switzerland estimated in April 1998 the scope of global trading by the world's financial institutions to be $1.5 trillion daily. This sum is larger than the annual GDP of Canada or any of the largest European countries, or the largest states in the U.S. In 1998, the average daily trade by financial institutions was equal to 5 per cent of global GDP. Or, to put it another way, it took the world's financial institutions less than three weeks to trade an amount equal to the world's entire production of goods and services in the whole year.

BOOKS

The $122 million Canadian books earned in export revenues in 1996-97 is still a modest portion of a $2 billion industry. But the growth from five years earlier is notable. In 1991-92 according to Statscan, export sales were $48 million, little more than a third of recent sales. Experts suggest that the NAFTA and the end of the recession are likely factors in book-sale growth.

SNIFFING

Engineers at the University of Warwick have developed a device to help both the fruit industry and ordinary shoppers. Most of the traditional methods used to assess fruit ripeness have ended up in the destruction of a piece of fruit. But researchers have put together the sensors of an electronic nose coupled to a neural network to produce a device that calculates the exact ripeness of the fruit by its smell. Once the electronic nose has been trained on a particular fruit it doesn't require a skilled operator and can obtain the results in a few seconds with over 92% accuracy.

FOOD

Canadians are eating more according to 1998 data. At the same time they continued the trend to healthier eating choosing lower-fat products. The 1998 general increase in food consumption coincided with an expanding Canadian economy and a falling unemployment rate. Per capita consumption of red meat increased in 1998 after declining since the mid-1970s. This increase can be attributed to pork demand, which rose 6.5% to 27.0 kilograms per person in 1998, as consumers responded to increased supplies and lower prices. Rice continues to rise in popularity as an alternative to potatoes. Its consumption has more than doubled over the past 15 years.

WEALTH

The UN Development Programme published its index of Human Well-being, noting that the world's three richest men have more wealth than the combined GNP of the 43 poorest countries.

BUGGIES

Shopping carts cost Canada Safeway Ltd. $175 each and losses due to stealing cost the company around $1 million annually nationwide. Cart thefts from a single store were $150,000 last year. Now they are introducing a new anti-theft system which costs $50,000 per store. The system involves a special wheel covered by a plastic braking shell. When the cart is pushed far enough away from a Safeway parking lot, sensors buried around the store's perimeter activate a battery powered device that lowers the shell over the wheel making it immovable. The system is already being used in California and Texas.

WIRED

Albertans lead the pack and Quebeckers lag furthest behind when it comes to the rate of Internet use in Canada. StatsCan found that 45 per cent of Albertan households were regular users of the Internet in 1998, higher than the national average of 35.9 per cent and nearly double Quebec's rate of 26 per cent. B.C. at 42 per cent, Ontario at 39 per cent and Nova Scotia at 37.9 per cent were the only other provinces to beat the average usage rate.

ENERGY

A person uses more household energy shaving with a hand razor at a sink (because of the water power, the water pump, and so on) than he would by using an electric razor.

SUNSCREEN

Miami Beach pharmacist Benjamin Green invented the first suntan cream by cooking cocoa butter in a granite coffee pot on his stove at home, and then testing the batch on his own head. His invention was introduced as Coppertone Suntan Cream in 1944.

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

August 1999 Economic Digest - Importing and Exporting

August 1999 Edition

DRUGSTORES

 
Most of the money Canadians spent last year in drugstores was on cosmetics, $275 million worth of them. Headache remedies were next at more than $206 million. Hair colour expenditure was $128 million, disposable diapers, $118 million, shampoo, $112 million deodorant, $94 million and cold remedies $90 million. Antihistamine spending was $73 million and spending on vitamins and cough syrup was $60 million each.

SERVICES

International travel and tourism to the U. S. is America's leading services export, creating a trade surplus of nearly $19 billion and injecting $91 billion in revenue into the U.S. economy in 1998, according to the Commerce Department. More than a million people work in jobs supported by the spending of international visitors. Expenditures by Western European visitors set a record $30.2 billion, with the U.K., France and Italy each setting records for arrivals. Tourism is expected to stage a strong recovery by 2002, with arrivals topping 52 million and expenditures expected to exceed $110 billion.

GM

In line with European labelling requirements, the British government has ordered restaurants and fast-food outlets to tell consumers if their meals contain genetically modified (GM) products. And French retailers claim they have led the way in the drive among European supermarkets to root out GM foods from among their own-brand products.

BANGLADESH

The Soros Fund of New York is loaning $10.6 million to help capitalize a unique venture that will eventually bring reliable, affordable telephone service to virtually all of Bangladesh. It calls for the provision of one phone in each of 50,000 rural villages in the impoverished South Asian nation of 120 million people where landline phone service is virtually non-existent in the rural areas. Small loans will allow individuals, mostly poor women in remote rural villages, to purchase cellular phones. Equipped with the phones, the women will establish small "pay phone" businesses to sell usage to other villagers, thus deriving income to support themselves and payback their loans. Already such pay phones are operational and profitable in more than 300 villages.

SPENDING

Consumers spent more in retail stores on motor vehicles and related products in 1998 than they did on food, clothing and footwear combined. Out of every $100 of retail spending, Canadians purchased $35.00 worth of motor vehicles and related products, compared with $19.44 spent on food and $9.89 on clothing and footwear. The fourth largest category was home furnishings and electronics, which took $7.31 of every $100 spent by consumers. Purchases of prescription and over-the-counter drugs took $3.99, slightly outpacing the $3.83 spent on sporting and leisure goods. Consumers spent $3.22 out of every $100 on alcoholic beverages, compared with $2.37 on tobacco products and supplies. In total, spending in retail stores reached $246.8 billion in 1998, up 3.6% from 1997. Consumers spent about $86.4 billion on motor vehicles and related products, and $59.3 billion on food and beverages.

SIZE

In the 1940s, the average size of a newly built Canadian house was 800 square feet. By the 1990s the average size was 1800 square feet

TECHNOLOGY

Speakers in TV sets and attached to computers may soon become relics of the past. A U.S. company says it has found a way to press any LCD screen or monitor into service as a speaker. The very edge of the glass or plastic screen doubles as the transducer (the device that converts electrical energy to mechanical energy, thus providing sound). The larger the screen, the louder the sound and the better the bass. Time to gestation: 18 months -- but the company has already licensed the technology to 90 companies.

GROWTH

This month, barring construction glitches, McDonald's will reach a milestone no other business in the world has ever achieved: the opening of its 25,000th store.

POLITICALLY CORRECT

Crayola is changing the name of its Indian Red crayon. The company says Indian Red was based on a reddish-brown pigment commonly found in India. But the manufacturer has received complaints from teachers who say students think the color has to do with American Indians. It's not the first change--in 1962, "Flesh" was changed to "Peach" to recognize that all skin tones are not the same.

THE FUTURE

Australian researchers say a powerful computer using atom-sized components could be a reality within a decade. Theoretically, a quantum computer could exceed the combined power of all the world's computers. The design, using existing technology, involves placing phosphorus atoms into extremely pure silicon crystals in a precise pattern. Such a computer could be highly sensitive, especially to errors and could crash easily. But there are worries it could also work too well. Quantum computers would be extraordinarily good at breaking codes, putting the security of credit card transactions, e-mail, government documents and financial records at risk.

PORTS

Shipments to Asia from Canadian ports declined 9.6% to 56.0 million tonnes in 1998. The Asian economic crisis was a major contributor to the decline in foreign-bound cargo from certain ports, particularly Prince Rupert which handled 8.5 million tonnes of freight in 1998, down 32.3% from the year before. Vancouver, again Canada's busiest port in 1998, was less affected by the Asian crisis. It handled 70.7 million tonnes of cargo in 1998, or about one-fifth of the national total. Vancouver may have benefited from the Asian economic crisis. Low Asian exchange rates boosted the demand for Asian imports to North America, increasing Vancouver's inbound international freight, particularly cargo in containers. International shipments which arrived in Canada from foreign ports reached a record 100.5 million tonnes in 1998 (+6.1%), breaking a record set the previous year.

WOMEN

The number of female-owned businesses in the U.S. is on the rise as is their sales figures and employment base. Women now own 9.1 million businesses--38 per cent of all companies in the U.S. These companies employ 27.5 million people and generate more than $3.6 trillion in sales annually. The greatest growth is in "non-traditional" industries. The number of women involved in construction, wholesale trade, transportation, communications, agriculture and manufacturing surged between 1992 and 1999.

SUPERMARKETS

Canadians spent more than $1.5 billion on flavoured soft drinks last year according to a survey by AC Nielson. Milk was next at $1.4 billion followed by $1.1 billion on candy. Frozen dinners and meat pies were worth $805 million and ready-to-serve cereals and packaged bread at $766 and $695 million respectively. The only non-edible items on the list are bathroom tissues at $690 million and laundry detergent at $325 million.

EXERCISE

Walking is the most popular way for Canadians to get some exercise. That's how more than 60 per cent of adults older than 12 get moving. And more than half of all Canadians (52 per cent) participate regularly in some form of activity. The next three most popular activities are home exercise, enjoyed by 25.6 per cent of those surveyed, bicycling (25.2 per cent) and swimming (23 per cent).

MARINE SECTOR

Canada's marine sector is a significant employer. More than 26,000 people work for organizations engaged in water transport or incidental service industries, such as marine cargo handlers, shipping agents and marine pilots. These industries paid about $1.1 billion in wages and salaries in 1998, according to StatCan's survey of employment, payroll and hours. This does not represent the total employment in marine activity as some firms, engaged in industries such as petroleum and forest products, transport or handle their own products via marine transport.

WATER

In arid Las Vegas, authorities are offering residents "cash for grass." People can receive as much as $400 for replacing their lawns with rocks and desert plants.

EXPERTS

An Ohio State University study suggests that experts are wrong a surprisingly large amount of the time and they often deny it. 5,000 predictions were collected from more than 200 experts over the last 12 years. In every scenario in which a prediction could be tested for accuracy, barely half the experts correctly foresaw the events that occurred and only one in four showed a willingness to admit their error.

EGYPT

The Export Development Corp. has established with the United Bank of Egypt a $10 million (U.S.) line of credit for Canadian companies wishing to sell goods and services in Egypt. The credit facility has been structured to finance transactions as small as $50,000, which can support contracts awarded to small and medium sized businesses.

MANUFACTURING

The importance of manufacturing to the U.S. economy continues to decline. In 1960, manufacturing accounted for 47 per cent of corporate profits, 31 per cent of jobs and 27 per cent of GDP. Last year it had only 26 per cent of profits and 15 per cent of jobs. In 1997 it contributed 17 per cent of GDP.

GARDENING

According to the Canadian Nursery Landscaping Association, gardening is the fastest-growing leisure activity in North America. It's also a very large industry. About $355 million in plants and soil at the initial farm stage of the business translated into some $6 billion in sales of plants, gardening products and equipment. The nursery business has been growing Canada-wide at 8 per cent every year for about a decade.

BUSES

Passenger bus traffic in Canada is nowhere near the level of two decades ago. In 1997, more than 13.9 million passenger trips were taken by bus from one city to another, up 13.6% from 1995, yet far off the 30 million trips made in 1981. Scheduled intercity bus travel declined steadily throughout the 1980s and early 1990s, before levelling off. In the mid-1990s, it has, in fact, started to increase as bus companies identify and adapt to changing consumer demands. The largest gains have been made by bus companies that previously had specialized in charter travel.

EXPANSION

While Wal-Mart still garners over 90 per cent of its income from the U.S., in three to five years it expects that foreign stores will account for 30 per cent of its profit growth. The giant discount retailer already has stores in Canada and Mexico, as well as in Brazil, Argentina and China. This year it expects to open more than 90 stores in Germany and to use this base to expand throughout Europe.

VISION

In 1875, the director of the United States Patent Office sent in his resignation and advised that his department should be closed. There was nothing left to invent, he claimed.

GUANO

In the British seaside resort of Hastings, sea gulls have knocked out a collection of 51 solar-powered parking meters by depositing guano on their solar panels. An extra town employee has been hired to clean the panels. The meters are intended to be environmentally friendly, energy-saving and economical.

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

July 1999 Economic Digest - Importing and Exporting

July 1999 Edition

PACTS

 
Canada has signed a framework agreement to liberalize trade with Latin America countries of the Andean Pact. The non-binding agreement with the five countries--Peru, Colombia, Ecuador, Venezuela and Bolivia--commits the parties to assessing each other's trade barriers, harmonizing customs and collaborating at talks toward the Free Trade Area of the Americas (FTAA). The hemispheric free trade agreement is to be signed in 2005.

SOFTWARE

Software piracy in Canada grew last year even as it fell in the U.S. despite attempts here to educate the public and impose tougher penalties against sellers of illegal computer programs. The Canadian Alliance Against Software Theft (CAAST) says the industry must work harder to narrow the piracy-rate gap between Canada and the U.S. if industry sales, jobs and government tax revenues are to be protected. CAAST found that 40 per cent of business software applications loaded on personal computers in Canada in 1998 were pirated, compared with 39 per cent in 1997. The U.S. rate by comparison dropped to 25 per cent last year, from 27 per cent in 1997.

GROWTH

The Conference Board of Canada predicts that Toronto will lead all Canadian cities with an average real GDP growth of 3.4 per cent between 1999 and 2003. Montreal ranks second at 3.2 per cent powered by its high-tech sector followed by Ottawa and Edmonton. Vancouver lags in sixth position.

PAPER

Futurists' predictions of a paperless society have been blown away by the surging demand for electronic information. Americans have been using more paper than ever. Consumption of new paper products rose to 747 pounds per person last year, up steadily from 695 pounds per person at the beginning of the 1990s.

GOLF

According to Golf Digest, there are 16,000 golf courses in the U.S. Japan is next with 2,300 and the U.K. and Canada are tied at 1,725 each. There are 15 courses in Bangladesh, eight in Botswana, two in Papua New Guinea and a pair in El Salvador.

AIRLINES

Airline Quarterly Financial Review shows that for calendar year 1998, operating profit and net income for the 13 major airlines combined were near all-time highs. Every major carrier, except for Northwest and Trans World, attained an operating and net profit for the calendar year. Five major airlines -- Alaska, America West, American, Delta, and Southwest -- reported all-time carrier records for any calendar year in both operating and net income. The 13 carriers as a group reported a combined operating profit during the fourth quarter of $1.4 billion and a combined net profit of $596 million.

CHINA

A price war among Chinese TV makers has exposed a deep struggle between state support of industry on one side and ferociously competitive firms on the other. TV used to be a rare luxury in China. Today, about 100 TV makers can produce a third more than the country needs, or about 45 million sets a year. The result; cutthroat tactics as firms fight for market share. China's leading TV maker recently slashed prices by 20 per cent and rivals followed suit which has resulted in smaller companies going out of business. But many TV companies were formed in the days of central planning with a goal of creating mammoth industries, not market winners. Many churn out identical cheap televisions no one wants, but they enjoy the protection of officials unwilling to see them fail.

BROADCASTING

We are used nowadays to those ubiquitous bar codes on everything from soup cans to traffic tickets. Now, some work being done by Motorola could put them in the history books. A new kind of microchip being developed combines enough memory to store 110 characters with a radio antenna - all the size of a single coffee ground. This microchip can be stuck or manufactured to just about anything. The chip can use its built-in antenna to transmit information about the product it's stuck to. That means no more waiting in line to check out at the grocery store - you just walk to the checkout station and a radio receiver will tally up what is in your cart.

FACT

A chip of silicon a quarter-inch square has the capacity of the original 1949 ENIAC computer, which occupied a city block.

NEWSPAPERS

In 1971 there were 114 Canadian daily newspapers, 115 in 1981, 108 in 1991 and 105 at the end of last year. Circulation was reasonably steady registering 5.4 million in 1980 and 5.1 million in 1997. One of the most marked changes in daily newspaper statistics relates to morning and evening editions. In 1980, there were 25 Canadian morning and 95 evening editions. By 1997, the numbers were 44 morning and 61 evening papers. The trend is even more pronounced in the U.S. There, 387 morning papers and 1,388 evening editions in 1980 became a nearly even split by 1997 between 705 morning and 816 evening papers.

PROGRESS!

According to the Washington Post, the little known truth about North American farming, in fact farming everywhere, is that it's in a never-ending race to stay ahead of disaster. Only a handful of major crops (including rice, wheat and corn) supply most of the calories for the world and their production has been concentrated on a relatively small number of varieties. It takes about five to nine years on average before a widely planted variety of crop becomes particularly susceptible to disease, and researchers must have a new variety waiting in the wings. The new strains come, in part, from places that haven't been "saved" by modern agriculture.

BANKING

Internet banking for most means retail banking -- new ways for individual customers to access accounts and manage their money. A new study indicates that corporate banking is also embracing the Web. The U.S. management consulting firm Booz Allen & Hamilton says the number of corporate banking sites will quadruple within a year. There are now about 500 and we can expect around 2,000 worldwide by the year 2000. Of those sites, as many as 700 will have the complete range of corporate services. The major obstacle continues to be security, but stronger cryptography and security mechanisms are emerging. So far, three countries, Canada, the U.S. and Australia, account for all the corporate Internet sites.

DOWNLOADING

Using Microsoft technology, Sony Music will this summer start selling hit "virtual singles" on the Internet, as soon as they are available in record shops. The price is likely to be similar -- $3.49 -- and they will take around five minutes to download.

HEALTH CARE

Worldwide sales of over-the-counter health-care products were worth $75 billion in 1998. Vitamins and dietary supplements made up one third of the total; cold and allergy remedies account for just under one fifth. Although they still represent only a small share of the overall market, sleeping aids and products to help people give up smoking are the two fastest-growing segments of the market. With an average of $135 per person, Japanese spend the most on over-the-counter health care. Americans are second at $76 per head with Canadians fifth at $44 per head.

STETHOSCOPES

After almost 200 years, the stethoscope has gone high-tech. Introduced by the medical division of Hewlett-Packard, it is a fully electronic stethoscope capable of amplifying biological sounds up to 14 times higher than the conventional stethoscope.

AREA CODES

Internet lines, fax machines, wireless phones and increased competition in the telephone industry are causing North America's pool of area codes to dry up 23 years earlier than first anticipated. Industry experts say the last of those three-digit numbers will be used up sometime in the next decade and that fixing the problem will be a monumental task equivalent to the billions of dollars and hours put into the year 2000 computer bug. When area codes run out, the industry will need to move to either a four-digit code or eight-digit phone number, requiring all terminal equipment, network switches, data bases, and call centre software to be reprogrammed to accept at least 11 digits.

TRADE

Nearly 20 per cent of world trade is now in services, rather than goods. Global exports of commercial services totalled $1.29 trillion according to the World Trade Organization. The U.S. is by far the world's biggest exporter of services with sales of $234 billion last year., 18 per cent of the world total. Britain ranked second with $99 billion in sales.

MUSIC

Global recorded-music sales rose by 3 per cent last year to $38.7 billion. But unit sales fell by one per cent to 4.1 billion units. A rise in CD sales of 6 per cent was offset by a 10 per cent decline in cassette purchases and an 11 per cent decline in singles. Sales in the U.S., which made up 34 per cent of the world market in 1998, jumped by 11 per cent to $13.2 billion. Sales in the EU were also up but Japanese sales declined by 5 per cent.

LIFE

The life expectancy of both men and women reached record highs in 1997 as a result of declines in mortality rates for most of the leading causes of death. While women born in 1997 could still expect to live longer than men, the gap between the two is closing. In 1997, life expectancy at birth, a key indicator of a population's health status, reached 75.8 years for men and 81.4 years for women, a gain of 0.3 and 0.1 years respectively over 1996. The gap in life expectancy at birth between the sexes has been narrowing in the last two decades, from a peak of 7.5 years in 1978 to 5.6 years in 1997.

MEXICO

Mexican retailers are reporting they expect flat or declining retail sales this year. Retail growth last year was expected to be about 7 per cent but ended up at 2.7 per cent following the rise in interest rates and inflation caused by the Asian and Russian financial crises. Wages fell and both businesses and consumers couldn't get credit which led to reduced profits for most retailers. In real terms, retail sales are still lower than they were in 1994, before the peso crisis. Manufacturers can expect reduced sales to Mexican retailers, whether the product comes from Mexico, the U.S. or other countries.

SAFETY

A soggy baby diaper is helping to save everything from homes to utility poles from wildfires. A fire resistant gel has been developed by a firefighter who noticed a disposable diaper was the only thing that survived uncharred in a house fire. It is being hailed by experts and businesses as the greatest invention in firefighting since the hose and pump. Barricade gel, made from super-absorbent polymers, looks like shaving cream and can be applied with a hose.

CASSETTES

According to the Canadian Recording Industry Association, pre-recorded cassette sales in Canada are now at one-fifth of their peak level of 41 million units in 1985. The CRIA stopped reporting vinyl LP sales a decade ago when they dropped below 3.6 million units.

SOUND

A three-mile stretch of highway in England is to be resurfaced at a cost of $9 million, reducing tire noise, so local owls can find prey more easily. The birds rely on hearing as well as sight.

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

June 1999 Economic Digest - Importing and Exporting

June 1999 Edition

BIG-BOX STORES

Over the last decade, big-box developers such as Home Depot, Chapters and Business Depot have opened up all over the Greater Toronto area. Shoppers can now choose from about 320 big-box retailers and amble through aisles among more than 13 million square feet of floor space. Only 96 stores existed before 1990 and most new ones arrived since 1994. 27 stores have closed since 1990. The number of traditional stores on retail strips actually grew by 11 per cent between 1994 and 1997, the period of the biggest big-box development.

REMANUFACTURING

Mexico is fast becoming a new base of operations for North American companies that want to rebuild or refurbish parts and products. Everything from boom boxes to disk drives are being sent to factories just over the border to be rebuilt or remodelled by Mexico's low-cost labour force. This phenomena is relatively new and so far Mexico has less than 5 per cent of a North American "remanufacturing" industry worth about $50 billion (U.S) a year. But there are 300 companies engaged in this type of business in Mexico, many of them newly established.

WORLD GROWTH

World export growth slowed sharply in 1998 according to the World Trade Organization. The volume of world merchandise exports rose by only 3.5 per cent, down from growth of over 10 per cent in 1997. The WTO expects growth of only 3.5 per cent again this year. In dollar terms, world exports fell last year by 2 per cent, their biggest decline since 1982. America's exports fell for the first time since 1985, by 1 per cent to $683 billion. The value of Japanese exports fell by 8 per cent and the value of the European Union exports was up by 3 per cent.

RESEARCH

Ten of the world's leading drug companies are jointly creating a new research consortium to study how variations in human DNA affect disease development. This will help drugmakers to tailor their products to individual patients.

WEATHER

The Kestral 2000 is one of several electronic devices that are evolving into hand-held, personal weather stations for the general public. It measures or calculates the temperature, the wind, relative humidity, dew point and heat index. A competing device, the Wind Watch, has a barometer and altimeter.

MOVIES

As of December 30, 1997, Disney held eight of the top ten spots on the All Time Movie Video Sales Chart. The Lion King(1), Aladdin(2), Cinderella(3), Beauty and The Beast(4), Snow White and the Seven Dwarfs(5), Toy Story(7), 101 Dalmatians(8), Pocahontas(10). The two non-Disney films to make the list are - Forrest Gump(6) and Jurassic Park (9).

BRITAIN

Supermarkets in the UK are being investigated amid allegations that some chains are ripping off consumers. The Monopolies Commission is being asked to investigate whether the big supermarkets have a monopoly that operates against the public interest. British shoppers may be paying up to 40 per cent more for everyday products in comparison with their European and American counterparts. A selection of basic items such as butter, milk and cheese costs 36 per cent more in Britain than in France and 45 per cent more than in the U.S.

TASTING

Researchers at the University of Texas have developed an electronic tongue. By pouring liquid over the chip, its 100 little holes, each containing a tiny sponge-like synthetic taste bud, change color depending on a liquid's chemical composition. Then a digital camera displays the results on screen. The food and beverage industry is closely monitoring the development to automate what thousands of human tasters do daily. The researchers say telling the difference between Coke and Pepsi in a taste test would be easy for the e-tongue.

LOANS

A $21 million federal investment aimed at aboriginal entrepreneurs will create an estimated 900 businesses and more than 2,000 jobs over the next five years. The fund is designed to make access to capital and debt financing easier, create a service network and improve existing support programs. Over the past 14 years, Canada's Aboriginal Corporations have made about 12,000 loans totalling $428 million. The average business loan is about $40,000.

ADVERTISING

Network and network promotional spots on TV are increasing. In November 1998, an average hour of U.S. prime time contained 15 minutes and 44 seconds of advertising, up 25 seconds from a year earlier, and the most since advertising groups began keeping count in 1989.

SHOES

In the future, shoes may have a microchip in the heel. A smart shoe prototype has been developed by MIT that automatically senses the wearer's cushioning needs by adjusting fluid in five bladders in the sole. A microchip in the heel monitors pressure on the bladders, adjusting pressure on the fly -- more cushioning for running, less for walking.

WINE

U.S. wine exports, 90 percent from California, jumped 26 percent over the previous year to $537 million in 1998, a 448 percent increase from export sales of $98 million a decade ago. Over 125 California wineries export to 165 markets worldwide, with the U.S. ranking as the fourth leading wine producer in the world and the ninth by volume as a wine exporter. However, there is still room to grow as the U.S. only holds a three percent share of the world export market by gallonage. The U.K. was the largest U.S. wine export market with $143 million in sales last year, a 32 percent jump over 1997. Exports to Japan surged 134 percent to $93 million, making it the second largest wine export market for U.S. wine. Canada was third with $91 million in sales, a 15 percent increase from 1997

VITAMINS

More Canadians took a vitamin or mineral supplement in 1997 than in 1986 according to surveys by the Non-Prescription Drug Manufacturers Association though there was a puzzling drop in the percentage taking vitamins in the early nineties. The 1986 survey asked if people had taken vitamins or minerals in the past six months and 39 per cent said yes. In 1991, when the same question was put, only 28 per cent answered in the affirmative. In the 1997 survey, overall, 42 per cent said yes, with 50 per cent of women and 31 per cent of men taking supplements.

POLAND

Poland's economy and society have been transformed by reforms implemented after the communist regime, which have created a division between the "haves" and the "have nots." The former praise the changes and the latter have turned against the government. Public school teachers earn on a monthly basis what equates to $155, which is less than the average monthly pay of $360. By comparison, private-sector workers earn two to three times the monthly average. But Poland's economy has managed to become the strongest among former Soviet satellites. Investors last year poured $10 billion into the former-communist economy that also grew by 4 percent.

AUSTRALIA

Australia is both the sixth largest country in the world and the world's smallest continent. The country has the eleventh largest economy in the OECD and the third largest in the Asian region, after Japan and China. It is a member of APEC and has one of the most highly developed economies in the Southern Hemisphere. Next year it will be staging the Olympics in Sydney.

SMART CARDS

British banks are beginning to roll out 100 million smart cards and terminal upgrades, retiring the usual magnetic stripe cards. Even though each smart card will cost the banks about a dollar and a half more than a regular credit card, they expect the changeover to save money through improved fraud prevention, and make money with new services, such as loyalty programs

WORK

An Ohio State University study indicates that nearly 59% of U.S. home-based workers are male. The average is 44 years old, married, has some education beyond high school and has been involved in work at home for nearly a decade.

WASHBOARDS

Costing between $7 and $20, they are now used mainly by musicians and some poor people, particularly those in high-rise apartments. The Amish use them as do others who shun modern ways. The last U.S. manufacturer of washboards was producing 110,000 units as late as 1987. Last year, with sales sinking, the company was about to close down but has been bought out by a group which feels that washboards can be a growth industry once again. There has been a flurry of orders recently from people who fear their washing machines will not work because of Year 2000 problems.

GREYING

The first trickle of post-World War II baby boomers began to hit the half-century mark in the latter part of 1996. A larger wave is coming however. From 1996 to 2006, the number of Americans in their fifties will increase by 50 per cent, or twelve million people. That will be more than half the total U.S. population increase during that decade.

TRAFFIC

The Geneva-based Airport Council International has designated Atlanta's International Airport as the busiest in the world handling 73.5 million passengers last year. The next four busiest are: Chicago O'Hare (72.4 million), Los Angeles International (61.2 million), London Heathrow (60.7 million) and Dallas Fort Worth (60.5 million).

SHEET MUSIC

Both the photocopier and now the Internet are a huge threat to the sales of sheet music in Canada. However, people still seek whole songbooks and photocopying can be cumbersome and not always cost effective. The big music publishers are hunting down outlaw web sites. Sales of printed music continue to grow. Sales were approximately $17 million in 1998, compared to $14 million in 1997 and $12 million in 1996.

INVENTIONS

A smart bandage has been awarded a U.S. patent. Developed by a molecular biologist and an ophthalmologist, the device has a micro-controller that monitors the status of a wound or incision, stores the data and downloads it to a computer.

DEBT

Canada's net debt owed to foreigners edged down to $324 billion last year, the third drop in four years. Statscan reports that net foreign liability dropped to 36 per cent of gross domestic product from 44 per cent in 1994. There were external liabilities of $971 billion and external assets of $647 billion. Americans were Canada's largest net creditors at the end of 1998 with holdings of $218 billion. Japan was the next largest creditor followed closely by Britain.

MISSING?

Last year, a pilot making an aerial survey of a national park in Pembrokeshire, Wales, discovered a secret "eco-village." He spotted the solar panels of Brithdir Mawr, a self-sufficient community founded by an architectural historian. The village had survived for five years without any interference from the outside world. Park planners originally demanded that the place be demolished but have relented. The commune can remain provided it backdates its planning applications.

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.

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May 1999 Economic Digest - Importing and Exporting

May 1999 Edition

  

MEXICO

Mexico is aggressively positioning itself as the leading free-trade trader of the Americas and is turning into a hub for bilateral trade agreements. Besides the NAFTA, Mexico already has free-trade pacts with Chile, Bolivia, Colombia, Venezuela, Cost Rica and Nicaragua. Talks with Panama are advanced, and Mexico is also negotiating with Peru, Belize, Ecuador, Israel and Trinidad. Top of Mexico's agenda is finishing an agreement with the European Union before the end of the year. This will give Mexico access to the lucrative European market and allow Mexico to diversify its export market instead of depending so heavily on the U.S.

ASSIGNMENTS

An annual survey of the top destinations for international assignments, shows that the U.S. was again the top location for expatriates and short-term assignees. The study utilized data on worldwide transfer activity of more than 18,000 international assignments in 1998. Companies bring employees into the U.S. on shorter-term assignments, typically up to one year, for training, technology and management development. The 1998 top five locations for international employee assignments were: the U.S., the United Kingdom, Mexico, Canada and Singapore. Hong Kong, ranked in 5th place last year, is no longer a top ten destination.

SHANGHAI

Headquartered in Shanghai, the Lianhua Supermarket Co is China's largest chain-store operation with 400 outlets and sales of $400 (U.S.) million a year. Despite its size, Lianhua remains little known outside Shanghai but this may change. Once it was a pet project of municipal officials, now it is the favourite of the national government. Developing domestic chains has become a political priority as China seeks to modernize retailing and boost consumer spending, a vital step to preventing economic growth from sliding below this year's target of 7 per cent. Chains get consumers to spend by offering a greater range of products and placing their stores in convenient locations.

Chain stores now account for less than 2 per cent of China's retail sales.

HUNGARY

Hungary is close to the geographical heart of Europe. Budapest, the capital, has over two million inhabitants and is the commercial hub of the country. Since the collapse of communism, the country has established a parliamentary democracy and developed a strong market economy. The Government has privatized most state-owned companies, banks and utilities. Nearly 80% of the country's gross domestic product is now produced by the private sector, compared with only 10% in 1990. Over 80% of Hungary's trade is now with OECD countries, including some 71% with the European Union (EU). Until 1990, 65% of Hungary's trade was with Communist bloc countries.

PIRACY

The market for pirated music exploded in 1998 as new digital technologies and the Internet gave audio pirates more ways to break the rules. The recording industry reports that 338,458 pirated CDs were confiscated in the U.S. in 1998, up 163 per cent from 129,000 in 1997. The figure reflects products that were confiscated on street corners, in flea markets, retail outlets and via Internet sales. The rising number of illegal copies is said to be due to the recent availability of inexpensive CD recorders.

IT'S IN THE MAIL

Mail deliveries in Trinidad only reach half the island's households; airmail from Britain can take eight weeks and mail sometimes sits on the docks for months. The turnover is only $7 million a year with losses of around $3 million. Now, Trinidad & Tobago has given the New Zealand Post Office a five-year contract to run its postal service. South Africa is about to out-source its mail service with New Zealand Post on the short list and Britain's Royal Mail already has a 30-year franchise to deliver letters in Argentina.

PORK

A U.S.-China trade agreement has given U.S. pork producers access to the largest pork-consuming market in the world. Per-capita consumption of pork in China already is higher than in the US. Analysts expect pork demand in China to increase by 6 to 7 percent per year, meaning that each year, China will consume an additional amount of pork five times greater than the 529,000 metric tons of pork exported by the U.S. in 1998. Previously, China blocked U.S. pork imports through a system of high tariffs, restrictive import licensing and distribution practices, and complicated and arbitrary sanitary requirements.

ASIA

It seems Canadian entrepreneurs doing business abroad have coped with the so-called "Asian flu." According to a 1998 survey of 1,007 small and medium-sized enterprises (SMEs), 43 per cent of respondents said they were either "successful" or "very successful" in doing business in Asian countries. The overwhelming majority of respondents said cross-cultural awareness is important to doing business in Asia, but only 15 per cent had formal training in place.

PRIVATIZATION

The global privatization boom slowed last year. In 1998, sales of state-owned companies fell by 26 per cent worldwide to $115 billion according to the OECD. Sales in non-OECD countries fell by half to $28.5 billion; excluding Brazil, they were only $3 billion. Italy was the biggest privatiser last year, with sales of $14 billion and France was second. Britain which pioneered privatization in the 1980s, sold nothing last year.

FAMILY INCOME

Average family income in Canada before taxes was an estimated $57,146 in 1997, essentially unchanged from 1996 after adjusting for inflation. This left family income at virtually the same level it was in 1994, the last year there was a significant improvement, and some $2,700, or 4.5%, below the pre-recession peak of $59,862 in 1989. In terms of specific family types, two-parent families had an average income of $64,814 in 1997, virtually unchanged from 1996. However, average income for lone-parent families headed by women increased 4.1% to $25,445, as higher employment earnings were accompanied by increased Child Tax Benefits.

ARCHITECTS

Their services range from designing furniture to planning residential, institutional and commercial buildings. Last year, 3,800 companies, mainly small, private ones employing two or three people, conducted business in Canada. The federal government estimates total employment at about 11,500 and revenue at $899 million for 1995. A number of firms are doing work abroad, however, just $17 million of revenue came from exports in 1995. Falling trade barriers have improved export prospects but this also means more competition within the domestic market

SHOPPING

A.C. Nielsen Corporation has announced that participation in grocery store frequent shopper programs has grown to 66 percent of U.S. households - up from 55 percent in 1997 and 35 percent in 1996.

CITIES

In 1931, Montreal and Toronto were only two Canadian cities with populations of half a million or more, now there are nine. The two big cities in 1931 held 18 per cent of the country's population. In 1996, the nine big cities held 48 per cent of the Canadian total. What draws population it seems is sheer size. The large cites are not just home to a lot of people, but a magnet that draws theatres, orchestras, art galleries, restaurants and visitors. However, the biggest metropolises are plagued by high real estate prices, pollution and a perception of high crime rates.

HOGS!

A recent U.S study by J.D. Power and Associates which polled 9,000 people who bought motorcycles in 1998, found that women represented a surprising 22 per cent of first-time buyers. While the world of motorcycling is still overwhelmingly male--only eight per cent of all buyers were women--the female first-time buyer is a significant trend. This is a trend that is also reflected in Canada.

DRUGS

For the first time this decade, sales of brand-name pharmaceuticals in 1998 grew at a faster rate than lower priced generics. Prior to 1998, the prescription trend for generics had been growing faster than for brand therapies, with most provincial health insurance plans opting to increase usage of generic drugs. Pharmaceutical sales in Canada soared 12.7 per cent to $7.5 billion last year, the world's ninth-largest market. Reflecting a global trend, consolidation in the Canadian drug industry is increasing. In 1998, the top ten pharmaceutical companies in the country accounted for 51 per cent of industry sales.

LIFE

An American millennium baby can expect to live nearly twice as long as one born in 1900, and to grow a full three inches taller. A Canadian or Swiss baby now has twice the life expectancy of a Zambian or Ukrainian one.

GIFTWARE

The giftware and crafts industry includes products ranging from jewellery to stationery, toys and home and garden supplies. About 45,000 work in this sector, including 25,000 artists and artisans, estimates Industry Canada. The value of exports has been growing since the mid-nineties. Items for export include glassware, ceramics, porcelain, china, artwork and miscellaneous giftware. In 1997, Canadian companies exported more than $121 million of these items, up from $70 million in 1994. In addition to the large companies, there are about 400 export-ready craft and giftware producers in Canada. Their annual sales range from $80,000 to $100,000.

DEBT

Canada's net debt owed to foreigners edged down to $324 billion last year, the third drop in four years. Statscan reports that net foreign liability dropped to 36 per cent of gross domestic product from 44 per cent in 1994. There were external liabilities of $971 billion and external assets of $647 billion. Americans were Canada's largest net creditors at the end of 1998 with holdings of $218 billion. Japan was the next largest creditor followed closely by Britain.

HOMES

More Canadians are moving up from starter homes to something more pricey, according to federal housing analysts. While first-time buyers dominated the market in 1997, the trend shifted last year as consumers looked for more expensive homes. The trend was particulary noticeable in Halifax, Montreal and Calgary. In Montreal, demand for new homes over $300,000 jumped 75 per cent in 1998. In Calgary, demand for homes for less than $150,000 declined 16 per cent.

PREDICTIONS

In 1943, IBM Chairman Thomas Watson stated that in his opinion there was a world market for maybe five computers. By 1997, this computer giant was predicting that hard-disk drives in personal computers would be outselling television sets within three years.

TRASH

In Oxfordshire, England, local authorities are putting video cameras in empty drink cans and leaving them lying about the countryside. These hidden cameras are used to catch people who dump garbage illegally in fields and along the sides of roads.

RESEARCH

Ten of the world's leading drug companies are jointly creating a new research consortium to study how variations in human DNA affect disease development. This will help drugmakers to tailor their products to individual patients.

HELP!

When a man in England phoned 911 recently to complain of a broken heart, phone operators first established that he did not require an ambulance and then told him to hunt for an advice columnist.

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