May 2000 Economic Digest - Importing and Exporting

May 2000 Edition

GROWTH

Strong growth in industrial countries, an "exceptional recovery" in world trade and higher commodity prices will help boost average growth rates for developing countries to 4.6 percent this year and slightly higher in 2001, according to a new Global Development Finance report from the World Bank. The developing countries that are expected to grow the fastest are those that rely more heavily on trade, have more diversified economies, are attracting foreign direct investment and have achieved recent gains in competitiveness.

TOBACCO

There is growing evidence that many pharmacy owners and operators are uncomfortable with selling tobacco, and a growing number of stores in the U.S. are dropping tobacco products. Nonetheless, officials at retail drugstore companies say cigarettes, cigars and other tobacco products are still stocked because the public wants them. They cite data indicating that between 20 and 25% of Americans still smoke. They also cite cases in which a drugstore has dropped tobacco, only to find that its overall sales have declined. Tobacco, they contend, is a traffic builder.

LAWYERS

According to the 1996 census, there were 57,680 lawyers in Canada, 30 per cent of which are women.

BANANAS

A WTO dispute arbitrator has ruled that Ecuador - the world's largest Banana exporter - could request over US$200 million in retaliatory sanctions against the EU for the EU's failure to comply with a 1999 ruling against its banana import regime. Subsequent EU attempts at compliance have yet to satisfy Ecuador or the other parties in the dispute who argue that the EU proposals continue to discriminate against its exports.

JAPAN

Japan's reluctance to open its economy to foreigners diminished a bit in 1999, according to figures from Japan's central bank. Foreign direct investment in Japan was, at Yen 1.4 trillion (US$12.3 billion), almost three-and-a-half times higher than in 1998.

FAKE

Organizers of a Europe-wide campaign to label counterfeit goods as "uncool" are asking industry and consumer groups to support the venture that will target the youth market. The 'Don't fake it' campaign to be co-ordinated by AIM, the European Brands Association, together with the Paris-based, Global Anti-Counterfeiting Group (GAGC), seeks to curb demand for counterfeit goods by highlighting the unethical side of product piracy. The campaign organizers hope to launch the campaign in five European countries - France, Germany, Italy, Spain and UK.

HEALTH CARE

Canadians spent $18.1 billion on health and personal care products in 1999, up 9.4% from 1998. Health and personal care products include cosmetics, drugs (prescription and over-the-counter), vitamins, eyewear, and other toiletries. Although drugstores capture the majority of the market for these products, in 1999, consumers bought $3.2 billion of health and personal care products at food stores, 23.7% more than they did in 1998. Another $2.8 billion was bought at general merchandise stores, 16.0% more than in 1998. As a result, the food store share of the health and personal care product market grew by 2.0 percentage points to 17.8%, and general merchandise stores reached 15.5%.

ICE CREAM

A Washington ice cream maker has been targeting Asian American tastes with flavours like green tea, ginger, sour plum, mango, sesame, lichee, taro and green bean. Durian is a favourite among a small clientele but the maker will only sell this foul smelling flavour by the quart.

FREE-TRADE

Japan has a long-held policy of shunning bilateral accords in favour of multilateral agreements, but is reportedly looking at bilateral accords as a way to build momentum for the stalled multilateral trade process. Free-trade talks with Singapore offer the most promising prospects, both in terms of being achievable and with regard to the benefits such an accord would deliver. Singapore, a member with Japan in the Asia Pacific Economic Co- operation (APEC) forum, is expected to sign a free trade agreement with New Zealand later this year, and is expected to launch talks with Chile and Mexico.

ASSISTANCE

According to its annual report, the Canadian government's Export Development Corp. served a record 5,182 customers in 1999, up 16 per cent from a year earlier. The EDC supported more than $40 billion in sales and foreign investments in 1999, up 15 per cent from 1998 and the agency earned a profit of $118 million.

TRADE

According to the latest WTO figures, the U.S. was the top exporter last year with foreign sales of $695 billion, 12.4 per cent of world exports. America exported more goods than any other single country, but the EU, with exports of $799 billion, took a bigger share (18.9 per cent) of world trade. World exports grew by 3 per cent in 1999 to $5,610 billion.

PROFITS

A London Internet consulting firm forecasts that U.K. supermarkets will lose more than $159 million U.S. this year on costly and inefficient online home delivery services. While consumer willingness to buy groceries online will grow this year, vendors' operating losses will too. Grocery products are currently moved around twice as many times as they should be to get them from warehouse to kitchen after an Internet order. Retailers may end up with little to show for heavy outlays now being made on poorly focused advertising of online services and on computer technology infrastructure.

NEW ZEALAND

After enthusiastically embracing free trade for a number of years, the new Government of New Zealand has announced that the proposed tariff reductions, to come into effect on 1st July, will be scrapped. The government is also moving to repeal a 1998 law, the Tariff (Zero Duty) Amendment Act, which would have phased out all tariffs by 2006.

ANTS

Fire ants were probably introduced into the U.S. 70-80 years ago and now cover the south-eastern U.S. from Texas to Virginia. In the west, inadvertent transport by humans has helped them reach California. Besides sending 30,000 people to hospital each year, fire ants are hurting the economy. They damage the nursery and sod-growing industry which in South Carolina is worth $200 million a year. They love electrical wiring and can put appliances out of action. They costs South Carolinians $80 per household per year and cost Texans even more

FAIR TRADE

Sales of products carrying the Max Havelaar fair trade label rose 29 percent between 1998 and 1999, increasing to about US$40 million from US$28 million. The label is carried on a range of products: coffee, tea, cocoa, honey, sugar, orange juice and bananas. Max Havelaar products are certified for fair trade standards by the Fairtrade Labelling Organizations International (FLO), which encourages the development of a fair market through setting minimum prices that cover the costs of production of each good and cutting intermediaries from the trading scheme.

PARTNERS

Thirteen of the world's leading retailers have announced they will form a collaborative partnership to establish the WorldWide Retail Exchange. The exchange is a web-based marketplace, enabling transactions between retailers operating in the food, general merchandise and drugstore sectors. The new business-to-business exchange is expected to begin operating mid-2000. It is designed to facilitate and simplify trading between retailers and over 100,000 suppliers, partners and distributors. Together, the group operates over 30,000 stores and had 1999 combined sales of over US$345 billion.

WTO

At a recent meeting in Hawaii, representatives from 1,100 businesses in 20 Asian countries called on World Trade Organization Members to review their positions outstanding from the failed WTO ministerial meeting in Seattle and demonstrate flexibility necessary to bridge remaining gaps and move forward expeditiously on negotiations aimed at launching a new global round. The WTO Director General has also warned that a new round will not take place until WTO Members take more flexible positions in key negotiating areas.

CARGO

A new Internet portal has been launched in Singapore for the buying and selling of surplus cargo space. CargoExchange.net is a neutral business-to-business exchange for the on-line trading of surplus global container cargo space. The exchange allows buyers and sellers to post bids and, after the bids are closed, negotiate the price anonymously. Their identities are revealed once the brokerage payment has been made.

NAFTA

In the sixth anniversary year of the North American Free Trade Agreement (NAFTA), each country welcomed the spectacular success of the Agreement and the benefits it has brought to the people and economies of the U.S., Canada and Mexico. Trade between the three countries has grown by 96% since the NAFTA came into force. From less than US$289 billion in 1993, trilateral trade has now surpassed US$567 billion. Investment among the three economies has also increased significantly, with more than US$189 billion invested in each other's economies in 1997.

ATMs

The first cash dispenser was opened in 1967 in the Enfield branch of Barclays Bank in England. The maximum single withdrawal was 10 pounds ($25.00).

FOOD

According to Statistics Canada, Canadians spent a higher proportion of their food dollars on meals outside the home during the 1990s than in the 1980s. Of every $100 spent on food in 1998, an average of $34.60 went to meals outside the home, mostly in restaurants, up from $32.70 in 1989. This increase may have been due to several factors: economic expansion and improved consumer confidence in the mid- to late 1990s; greater time constraints for consumers; more single-person households; and rapid growth in the number of food service establishments. Personal expenditures on meals purchased outside the home increased 42.2% from 1989 to 1998.

WINE

U.S. wine exports, about 95 percent from California, edged up two percent to $548 million in 1999, representing a 300 percent increase from a decade ago in 1990. By volume, wine exports posted a gain of five percent over the previous year to 75.4 million gallons.

In Canada, wine-makers are demanding that the government protest EU policies to the WTO. The EU has banned all Canadian ice wine on the grounds that its sugar content is too high. The EU also bans all but $500,000 worth of regular Canadian wine because Canadian wine-making processes are different from those in Europe.

PAPER

Moose droppings have been used by a Swedish manufacturer to make elegant grey paper. The company makes paper out of all sorts of things including old jeans, wasp nests, nettles and egg cartons.

NAMES

Bib-Label Lithiated Lemon-Lime Soda was the creation of Charles Griggs from Missouri, who introduced the lemon-lime drink in 1929. Four years later he renamed it 7-Up. Sales increased significantly.

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

April 2000 Economic Digest - Importing and Exporting

April 2000 Edition

STATISTICS

 
In an effort to satisfy the enormous demand for some official measure of the digital economy, Statistics Canada is preparing to analyze Canadian Internet commerce in an ambitious survey to be released this month. The economy-wide study will attempt to put a dollar figure on Canadian e-commerce. In the U.S., the Commerce Department has unveiled a new index to track e-commerce separately from its overall retail sales figures. This is the government's first attempt to provide an indicator devoted to tracking the on-line boom.

PEN SCANNERS

Driven by the growing popularity of the Internet and the need for image digitization, scanners have gone mainstream. Pen scanners, also known as digital highlighters, are the next step in scanner evolution. According to IDC, this segment of the U.S. scanner market will experience a compound annual growth rate of 109% from 1999 to 2004, as shipments climb to 840,000 units by the end of the forecast period. Once confined to the desktop, scanners have become a fully portable peripheral that can scan single lines of text, convert them to editable text, and store the information for transfer to a personal computer.

TELEVISION

Harvard researchers have concluded that TV is having a corrosive effect on public life. People who say the medium is their primary form of entertainment also say they are significantly less likely to attend dinner parties, visit friends, go on picnics, give blood, and send greeting cards or e-mails.

WORK

There has been an extraordinary growth in self-employment during the past two decades, according to data from the Canadian Labour Force Survey. Between 1976 and 1998, self-employment doubled in Canada. But this rate of growth was far surpassed by the increase in the number of dual-earner, husband-and-wife couples in which at least one spouse was self-employed. In 1976, at least one spouse was self-employed in 21% of all dual-earner couples. However, by 1998, this figure had virtually tripled to just under 1.2 million couples, accounting for 33% of all dual-earner couples. Self-employed couples tended to be older than couples with paid jobs, and were more likely to live in a rural area.

TELESCOPES

The fastest growing part of the U.S. telescope market (up 50 per cent since 1992) is instruments that cost less than $250 U.S.

CYBORG

A British computer scientist has had a silicon chip implanted in his arm. The chip communicates through radio waves with computers in his laboratory at the University of Reading. When he enters the lab, the computers inside know who he is and greet him with a "Hello." This is part of a new and growing field of computer engineering in which engineers are trying to embed computer power in people.

GMOs

Because of overseas resistance to genetically modified (GMO) crops, U.S. farmers are losing overseas markets. Brazil and China have both benefited from certified non-GMO shipments, while American farmers lose over one billion dollars in sales. U.S. grain exporters continue to insist that GMOs be sold instead of giving the customer what they want. The attitude of US exporters and some domestic farm organizations is forcing overseas buyers to turn their backs on U.S. corn and soybeans.

BUREAUCRACY

Although there are 660,000 sheep in the Falkland Islands, British servicemen must import tons of lamb from Britain, 12,000 kilometres away because the one Falkland slaughterhouse does not meet European Union standards. Falkland farmers cull 30,000 sheep a year and burn or bury the carcasses.

SHELVES

A new study commissioned for the Food Distributors International suggests that independent grocers are losing sales because they are not getting new products to shelf as fast, or managing their shelf space as well as their chain store counterparts. The study shows that independent retailers who move new products to their shelves faster can increase unit sales by 21%, realize a 12% increase in sales revenue and see a 7% hike in gross profit. It takes independent retailers on average 7.2 weeks to get a new product on their shelves. By comparison, chain supermarkets take only 3.6 weeks. Consumers look for the new products because they are heavily advertised. When the products are not available consumers will shop elsewhere.

URUGUAY

Between January and November 1999, trade between Canada and Uruguay grew by 39 per cent compared to the same period in 1998. Uruguayan exports increased from C$57 million to C$80 million while Canadian exports reached C$28 million from C$21 million. Overall Canadian exports to South America dropped by as much as 15 per cent in the first three quarters of 1999.

MOVIES

Canadian film and video productions made major inroads into foreign markets in 1997-98, as exports surpassed the $100-million mark for the first time. The continued surge of Canadian productions abroad, as well as strong sales of foreign film and video productions in Canada, led to overall record revenues of $1.8 billion for the industry as a whole.

GOLD

One major South African gold producer is trying to assess the financial costs of the AIDS crisis to their operation. South Africa based Gold Fields, the world's third largest gold producer, estimates that by 2006 employees infected with the virus could cost the company as much as $15 (U.S.) an ounce on its annual gold production of four million ounces. Average cost of production is $220 an ounce. The company operates three hospitals in South Africa which now cost $31 million a year to operate.

FISH

Canada's export of fish and seafood products reached a record high of $3.7 billion in 1999. Exports to the U.S. showed strong growth, rising from $2.14 billion in 1998 to $2.58 billion in 1999, a 21 per cent increase.

TRADE

While developing countries' share of trade in merchandise goods increased from 20 percent in 1973 to 28 percent in 1999, it still is a long way off from a high of 33 percent in 1948. There are three reasons for this figure: technology and knowledge has bypassed developing countries and the gap is widening; second, those markets where developing countries are competitive (e.g. textiles and agriculture) remain very closed; and third, developing countries themselves have not done enough in terms of adjusting their national policies to take advantage of global markets.

CAUTION

A survey of 900 firms by Deloitte & Touche has found that many sectors of Canadian industry are merely paying lip service to conducting business electronically. Fewer than half the companies surveyed are using the Internet to serve customers, and only 30 per cent said their Website created an effective place to conduct business. Of those using the Internet, the functions are most often marketing and communications with customers. More complex uses, such as processing orders and payment transfers are somewhat limited.

EXPOSURE

Last November, each hour of U.S. prime-time network television contained an average of 16 minutes, 43 seconds of advertising and other "non-programming" content, a jump of 59 seconds from the preceding year. Now U.S. advertisers are increasingly worried about the amount of time devoted to non-programming content because they fear their messages can get lost in the clutter. Of course, prices for commercial time keep going up.

MARKETS

Mexico moved into the top spot on the list of California's export markets last year. All told, California exported $14.9 billion (U.S.) in goods to Mexico in 1999, an increase of 11.8 per cent over the previous year. This was the biggest piece of the state's total exports which reached $107.5 billion in 1999. Mexico mostly bought computers, cell phones, electronics and industrial machinery. Japan has been the state's leading export market since the 1980s.

BRITAIN

A team of U.S. officials is to visit Britain to size up the British economy for possible membership of the NAFTA. The inquiry is proceeding at the request of the U.S. senate where members believe that there may be advantages for the U.S. if Britain, the world's fourth largest economy, were to become part of the NAFTA. However, joining the free trade zone would almost certainly require Britain to leave the European Union. Presently, Britain does 53 per cent of its trade with the EU and only 17 per cent with NAFTA countries.

BIOSAFETY

The US Department of Agriculture has announced new guidelines for organic foods. Under the rules, foods containing genetically modified organisms (GMOs) would not be considered organic. The guidelines also prohibit the use of pesticides on crops, ban the use of sewage sludge as fertiliser and heavily restrict the use of antibiotics in livestock. This is the second attempt by the USDA to issue comprehensive organic guidelines. Two years ago the agency was flooded by complaints by organic farmers, environmental and consumer groups for being too loose.

PORTS

For the 14th year running, Singapore is set to retain its position as the world's busiest port. It handled 877 million gross tons last year, up 2.3 per cent from 1998. About 38 per cent of last year's tonnage consisted of container ships, 30 per cent tankers and 15 per cent bulk carriers. A total of 141,523 ships called at the port last year. Rotterdam was second followed by Hong Kong.

GROCERS

Fifty of the world's largest food, beverage, and consumer product manufacturers have joined with the Grocery Manufacturers of America (GMA) to explore creating a new, open, electronic marketplace that would be accessible to all supply chain players and could connect to other exchanges in the future. The electronic marketplace reportedly would be the largest collaborative effort among food, beverage, and consumer product manufacturers to seek to create efficiencies on a global level over the Internet.

CHICAGO

Chicago is the candy capital of the world having more chocolate manufacturers within a small radius than any other place in the world. This dates back to the 1800s when Chicago was a national hub for transportation and manufacturing, in addition to being very close to sources for key candy ingredients, milk and corn syrup. It was also convenient to ship candy products to either coast from Chicago.

PATENT

The first patent was granted in 1421 to architect Filippo Brunelleschi in Florence to make a barge crane to transport marble.

AWARDS

According to Variety, the number of entertainment awards has reached epidemic proportions. In 1997, there were 252 entertainment-award ceremonies, this year it has counted 332.

DEMAND

Recently, Home Depot customers picked General Electric as the third-best known brand in water heaters, even though GE did not make water heaters. So Home Depot paid GE for the right to slap its label on a line of Japanese-made heaters.

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

March 2000 Economic Digest - Importing and Exporting

March 2000 Edition

AFTA-CER FREE TRADE

A task force composed of representatives of ASEAN countries plus Australia and New Zealand met recently in Jakarta to look into the feasibility of establishing an AFTA-CER free trade area by 2010 [ASEAN Free Trade Area (AFTA) - Australia-New Zealand Closer Economic Relations Agreement (CER)]. The Task Force also held initial discussions on the possible scope and coverage of the proposed FTA and agreed on the areas requiring further study and consideration which would include the views of the business community and the experiences of other regional groupings.

SIGHTSEEING

The Canadian sightseeing segment of the bus industry has grown significantly. During the first half of 1999, companies specializing in sightseeing reported gross revenues of about $8 million, compared with about $1 million in the first half of 1995. In 1999, 15 sightseeing companies reported data compared with only three in 1995. Several companies began operations during 1997 and 1998, especially in Ontario and British Columbia. These gains were in part a result of more activity in the tourism industry.

HORMONES

The European Commission (EC) has extended the deadline for the US to satisfy requirements for hormone-free meat exports. The US has announced an improved monitoring programme to test for unauthorised substances and residue levels exceeding EU limits in fresh meat and meat products. Recently, EU scientists found traces of hormones in 12-20 percent of beef samples from US slaughterhouses--samples which were supposed to be hormone-free. This has posed a significant obstacle to resolving the broader dispute between the EU and US over the EU ban on US (and Canadian) hormone-treated beef.

METAL

Palladium is a precious metal used in car catalysts, dentistry, mobile phones and laptops, among other things. Recently, the price of palladium shot up to over $700 an ounce, an all-time high, making it more valuable than gold for the first time since the mid-1970s and dearer than platinum.

FAILURE

Statistics Canada reports that at least half of new companies in Canada go out of business before their third anniversary, and only one-fifth of them survive a decade. Roughly one out of every four new firms (23%) won't make it past their first birthday. The study examined 1.3 million businesses that began operations during the 10 years between 1984 and 1994. In terms of overall survival rates, new firms in Ontario, B.C. Quebec and Alberta fare better than those in other provinces. In these four provinces, between 20% and 25% of firms in their first year will go under, compared with 35% of new companies in the Atlantic provinces.

CONVENIENCE

According to a recent poll by Yankelovich Partners Inc., the availability of 24-hour convenience stores was one of the highest-ranked items that Americans want to see continue into the new millennium and was chosen by 85 percent of those polled. The country's 100,000 convenience stores provide goods and services that reach practically every community in the country. In 1998, nationwide convenience store sales topped $164 billion, a five per cent increase over the previous year. Convenience stores also sell roughly 60 percent of the gasoline sold in the U.S.

TRENDS

A major British supermarket chain plans to cheer up British shoppers this summer by turning its car parks into free drive-in movie venues. The chain aims to show films at 50 stores across the country. Movies will be free to the public who arrive on foot and it will cost one pound for cars with the money being given to charity. The supermarket is planning to provide a separate entrance and tiered seating for about 500 customers who wish to take advantage of the offer.

ELECTRICIANS

The overwhelming obstacle to wiring American businesses over the next decade will be recruiting and training thousands of professional electrical workers needed to cable the nation's new commercial buildings and rewire outdated ones. It is estimated that an additional 50,000 telecommunications technicians and installers will need to be recruited and trained over the next 10 years to meet the demand for cabling the nation's commercial buildings. Currently 5,000 apprentice technician/installers are enrolled in an $80-million-a-year program, which has more than 40,000 apprentices in multi-year training programs for highly-skilled electrical jobs.

EMPATHY

Computer systems that understand human emotions are being developed. A current project is "Orpheus, the affective CD player, a digital musical delivery system that plays music based on your current mood and listening preferences." Mood sensing jewellery is also being developed.

FREE TRADE

By 2003, as part of a free-trade deal agreed with the EU, Mexico will dispense with tariffs on just over half the industrial goods exported there by EU countries, with the remainder going by 2007. The EU will drop its tariffs on most industrial goods, which account for 93% of bilateral trade, by 2003.

PATENT 5970300

This is a Xerox Corp. patent and could be one of the most interesting printing advances in years. Xerox has developed an apparatus that applies scents to paper in a printer or copier. In addition to printing images onto sheets, this new printer has a conditioner that adds odour to selected images of a job. By matching this technology with an image recognition database, you could have instant matching of smell to image. An advertisement with apples would smell like apples.

RVs

Sales of recreational vehicles are at a 21-year-high. Modern RVs include such amenities as large-screen, Internet-equipped TV sets and walk-in closets.

EUROPE

According to Progressive Grocer, major retailers are charging into Central Europe as the region recovers from the Russian economic crisis. In the capitals of Budapest, Prague and Warsaw, dozens of big-box hypermarkets are sprouting up with vast car parks and even vaster inventories of food and other goods. Consumers with growing bankrolls are flocking to the new stores, leading to forecasts of rapid expansion, and giving some relief to western merchants from crowded home markets and the constant competitive headaches.

TRADE

According to the U.S. Commerce Department, the U.S. trade deficit rose 65 per cent in 1999 to a record $271 billion. Contributory factors were the doubling of oil prices and a booming economy that saw a flood of imports from Canada, Japan, China and Europe. Meanwhile, Canada's exports grew twice as fast as imports in 1999 leaving a positive trade balance of $34 billion. In all, Canada exported $360 billion worth of goods, up 11 per cent over 1998. Imports were up eight per cent at $327 billion. 85 per cent of Canada's exports went to the U.S.

COUPONS

For the first year in the last five, Consumer Packaged Goods Manufacturers (CPG) in the U.S. increased the number of coupons distributed to promote purchases of their products. The volume of coupons grew by nearly 3% in 1999, to a total volume of 256 billion. The average face value of coupons distributed was 73 cents. Coupons printed at home via the Internet and coupons delivered via the mail or electronically activated as a result of an Internet site visit grew by more than one-third over 1998, although they remained less than half a share point of the total 256 billion CPG coupons distributed.

TRANSPORTATION

According to the President of Canadian National, the Canadian transportation industries, and the governments that tax and regulate them, must come together to forge a comprehensive national transportation policy. Transportation is crucial to Canadian competitiveness in world markets. 42 per cent of the nation's gross domestic product is exported, yet Canadian carriers must contend with complicated regulations, unfavourable tax treatment and differing policy frameworks. He said that the lack of a cohesive national transportation policy is harming Canadian competitiveness.

E-MAIL

A Pitney Bowes survey indicates that Canadian office workers send and receive an average of 169 messages a day. This is an eight per cent increase over last year but still short of the U.S. average of 201 messages. While North American workers are using e-mail and the Internet, workers in Britain are more likely to pick up a cellphone. Half the U.K. workers use a cellphone daily compared with 27 per cent in the U.S. 56 per cent of Canadians use the Internet daily or weekly; the number is 45 per cent in Germany and 36 per cent in Britain.

FOOD

The Concorde has a per-passenger budget of $90.00 (U.S.), compared with the $3.87 that U.S. carriers spend to feed the average passenger.

WATER

Asia is a massive market for bottled water where millions of people distrust tap water. Consumption is projected to grow at least 10 per cent a year for the next few years. Presently it is a $3 billion market with high stakes. The average consumer in China uses two litres of bottled water a year, compared with 45 in the U.S. and 111 in France. The situation is similar in India, Thailand and Indonesia, where there are 247 bottlers of fresh water. Over the last three years, major European companies have invested around $750-million in bottling plants.

HYPERMARKETS

Murphy Oil Corp and Wal-Mart have announced plans to build 600 European-style "hypermarkets" in the U.S. by 2003. They will be located in the parking lots of giant Wal-Mart shopping centres. Murphy Oil claims that if you put a kiosk and gas pumps in the parking lots of huge hypermarkets, your volume is so great and capital cost so low that you will probably do well. These models of discount sales are proving successful in Europe. In France, they account for a 49 percent share of the retail gasoline market and 21 percent of the market in the United Kingdom.

CDs

An Angus Reid survey of Canadians suggests that those who download music are ready to buy it later. Seventy-two per cent of those who downloaded on-line music over the previous six months said they would continue to do so and that the practice would have no impact on the number of CDs they planned to purchase. This finding seems to contradict fears by musicians and record companies that downloading on-line music without paying poses a major threat to CD sales.

HIPPOS

According to the U.S. Postal Service website, a medium sized hippo occupies at least as much space as 200 gallons of water. To ship this large animal, you'll need: a 1,000 gallon tank, (per hippo), 800 gallons of water, half a kilogram of sedative and soothing music.

Other details are available at http://www.usps.gov/moversnet/plain/howtopacka2.html#hippos.

SUBSCRIPTION

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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

February 2000 Economic Digest - Importing and Exporting

February 2000 Edition

 LABOUR

Faced with the lowest unemployment rate in decades, U.S. businesses are turning their eyes toward the large prison population for labour. Prisons Industry Enhancement (PIE) programs are expected to engage 10,000 prisoners by 2005 in everything from light manufacturing to customer service work for private enterprises. The most compelling reason employers are attracted is the prospect of cheap labour. Inmates are paid US minimum wage (U.S.$5.15 per hour), and companies hiring labour this way do not have to pay for health insurance and other benefits. Prisons take deductions for room, board and other costs from inmates' pay checks.

FAILURES

Britain's small businesses are failing at the highest rate for five years, according to a survey by Dun & Bradstreet; more than 43,000 went to the wall in 1999, an increase of 12% over 1998. Wales was worst affected with a failure rate up by 26% over 1998, but London's small businesses appeared to prosper with failures down 3.4%.

TIME

A new U.S. survey reveals that nearly half the workforce (45 per cent) has changed jobs to spend more time with their families. This is nearly as many as the 47 per cent who have changed jobs to earn more money. Last year, the International Labour Organization (ILO) reported that in 1997, Americans worked nearly 2,000 hours, up four per cent from 1980, and more hours than workers of any other industrialized country.

REPAIRS

Canadian homeowners spent an average of $1,670 repairing or renovating their homes in 1998, basically unchanged from 1997 and still well below the peak of $2,710 in 1989. In total, they spent $12.8 billion on work to their homes, almost the same amount as in 1997.

OPINION

Most taxpayers believe that it is unfair that Main Street retailers must collect sales taxes, while Internet retailers don't, says a national opinion poll released by the U.S. Conference of Mayors (USCM). On the issue of tax fairness, nearly three out of four Americans say that it is unfair. Projections over the next five years indicate a loss of up to 10 percent of sales tax revenue because of a substantial increase in Internet sales on which sales tax will not be collected.

TECHNOLOGY

Canadian manufacturing plants have more than doubled their use of advanced technologies such as computer-based networks and knowledge-based software during the past five years, according to a Statscan study. Earlier studies suggested that Canada had been lagging in its use of these more sophisticated technologies. Canadian firms were slow to adopt such technologies during the first half of the 1990s, however, this situation was likely due to recessionary pressures on the economy. During the second half of the 1990s, the rates of growth increased substantially, particularly in the computer-based network communications technologies sector.

PROTECTION

Guidelines for consumer protection in online commerce have been adopted by the Organization for Economic and Cooperative Development (OECD), an intergovernmental forum of 29 countries, including the U.S. established to promote economic growth, trade and development. According to the guidelines, online shoppers should be afforded effective protection that is not less than protection afforded offline. Although not legally binding, the guidelines provide a blueprint for governments as they formulate and implement consumer protections for electronic commerce.

SAVINGS

For the first time in seven years, fewer Canadians contributed to a registered retirement savings plan, and the amount of their contributions declined as well. About 6,122,000 taxfilers contributed to an RRSP during the 1998 tax year, down a slight 0.6% from the previous year. They contributed $26.6 billion, down 3.8% from the record $27.7 billion total in 1997. These declines occurred despite a 4.6% increase in employment income in 1997, as well as a 2.4% increase in recipients of employment income.

FREE

Despite recent massive government intervention in the stock market, Hong Kong remains the world's freest economy, according to analysis of 161 economies. The survey, by the Heritage Foundation and the Wall Street Journal, ranked Singapore and New Zealand as the World's second- and third-freest economies. Canada was ranked 11th. The U.S., Bahrain and Luxembourg tied for fourth place. Rankings of several Asian economies fell as governments intervened to pull their countries out of financial crisis.

CATALOGUES

According to the Alliance for Environmental Innovation, 17 billion catalogues were mailed in the U.S., 64 for every man, woman and child. A survey by Catalog Age found that whereas 52 per cent of Americans feel they receive too many, 40 per cent think they get the right number and 8 per cent think they don't get enough.

REGULATIONS

When the U.S. Postal Service filed to raise postal rates in 1997, the process required 100,00 pieces of paper. One hundred and eleven witnesses testified during the hearings which lasted for 37 days.

CHINA

China has announced that after joining the World Trade Organization, probably later this year, it will phase out tax concessions to foreign companies. Also, four Chinese insurance groups plan to be listed on the stock exchange to maintain competitiveness with foreign companies that will be allowed in after WTO membership.

SHIPS

Ship owners, cargo owners and insurance companies are to be given a valuable new tool in the fight against piracy with the launch of a weekly piracy report on the International Chamber of Commerce website. This report will be posted on the Commercial Crime Services pages every Tuesday. The regular reports will contain details of the location and nature of attacks on shipping in the East and South East Asian region, and will allow companies to put their ships' masters on special alert when they are passing through waters in which recent piratical attacks have been reported. The information is available at www.iccwbo.org/ccs/menu_imb_piracy.asp.

AEROSPACE

The U.S. aerospace industry posted record sales of $155 billion during 1999. The boom was driven largely by the civil aircraft sector, in particular, commercial jetliners. Commercial space generated $7.1 billion in sales in 1999, up by $962 million from 1998, despite a 41 per cent drop in exports. This was the fourth year in a row the aerospace industry has earned profits in excess of $7 billion.

ERGONOMICS

Federally regulated businesses in Canada--including airlines, banks and broadcasters, could soon be subjected to ergonomic regulations similar to those recently proposed in the U.S. Ergonomics is a relatively new science that involves fitting a job to the physical limitations of the worker. Soft-tissue injuries, many of which relate to poor ergonomic practices, are estimated to account for about 50 per cent of workplace injuries in Canada. B.C. and Saskatchewan have already enacted legislation. The B.C. regulations require employers to draft their own plan to reduce soft-tissue injuries in the workplace.

PATENTS

IBM, the world's biggest computer company, was awarded 2,756 patents by the US Patent Office last year, a record number, and 900 more than its closest rival, Japan's NEC. Some 900 patents were awarded to IBM for e-business technologies. Over the past two year, patents applied for by Xerox have increased by thirty per cent.

SPEED

A U.S. consulting group estimates that each of the top 25 U.S. Internet companies became involved in a merger or acquisition after an average of six years in business. By contrast, it took the top Fortune 500 companies an average of 75 years to enter a major merger acquisition. Smaller, speedier Internet companies merged to grow, while traditional companies typically grew first and merged later.

HEAVY-USERS

The heavy-user accounts for only one of five fast food patrons in the U.S. but about 60 per cent of all visits to fast-food restaurants. By definition, the heavy-user accounted for about $66 billion of the $110 billion that the National Restaurant Association says was spent on fast food last year. The heavy user is most often a single male who spends up to $40 a day at fast food restaurants and may visit them more than 20 times a month.

SIGNATURES

The European Union telecoms ministers have approved a law giving digital signatures on contracts agreed over the Internet the same legal status as their hand-written equivalents. This law is designed to guarantee secure transactions over the Internet and other electronic networks. It is also expected to boost electronic commerce and help Europe close the E-business gap with the U.S.

FAXES

While Canadians are sending a lot more e-mails, they still love their faxes. In a survey of 234 workers at medium-sized and large companies, respondents claimed their productivity would drop on average by nearly 40 per cent if someone took away their fax machines. The survey indicates that the use of over night express mail had dropped more than 20 per cent over the past year and only 55 per cent of respondents in all companies said they still used it regularly.

FUEL

Canada will be halfway through the 21st century before its conventional supply of natural gas is tapped out by growing domestic and export markets. And an additional 50 years worth of methane lies in Canada's coal, shale and sandstone waiting for the energy industry to figure out how to make it profitable.

DEMAND

A recent Journal of Commerce report suggests that the insatiable demand of U.S. consumers for imported goods is creating logistical headaches for ports, shipping lines, trucking companies, railroads and others in the intermodal chain. The recent peak shipping season demonstrated the large and growing gap between imports and exports which is creating imbalances of marine containers, shortages of domestic trailers and rail equipment problems. In the New York-New Jersey area, containerized imports increased last year by 12.5 per cent while exports declined by two per cent.

WHISKY

Last year, exports of Scotch whisky to the U.S. helped boost shipments to a record level. According to the Scotch Whisky Association, more Scotch was shipped than ever before in value and volume terms. Total exports were $4.8 billion with $625 million worth going to the U.S., a 14 per cent rise from the previous year.

TURKEYS!

Research Britain shows that confined turkeys are healthier and happier when they have compact discs suspended over their heads. When the birds are kept in close proximity, they sometimes fight and peck each other, causing serious injuries. However, shiny CDs hanging on polyethylene strings (which resemble worms) distract the birds by catching their eyes and aggressions. This cuts pecking incidents by up to a third.

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January 2000 Economic Digest - Importing and Exporting

January 2000 Edition

 CHINA

Despite an agreement reached between China and the U.S. on a bilateral market access package, there remain obstacles to overcome before China's accession to the World Trade Organization is assured. A major one is the requirement for China to conclude bilateral deals with an additional 27 WTO members, including the EU, Canada, Brazil, India, and Switzerland. The EU is considered the most critical of China's accession. The U.S.-China deal must also be approved by the U.S. Congress, which could prove a major battle. Labour groups promised to fight hard against the deal that they said would prove disastrous for American workers.

DIRECT SALES

Canadians buy more at the store than from someone who comes to the door, but these sales are still significant. $3.4 billion worth of purchases were made from people who sell directly to the consumer in 1997 (up by 0.3 per cent from 1996). Among the most popular methods of personal sales were demonstrations at home parties (like Tupperware) which saw sales increase by over three per cent in 1997. Sales direct from manufacturers were down as were mail and telephone sales. Cosmetics posted sales increases of six percent and newspapers were the best direct sellers with 15 per cent of 1997 total direct sales.

SHIPS

The annual cost of piracy of the world's oceans is $1 billion (U.S.), according to the London-based International Maritime Bureau. A private security company has secretly installed satellite tracked "Magic boxes" on some large vessels. These devices alert owners when a ship goes off course, which means it may have been hijacked.

BIOTECH

Japan has approved seven new varieties of genetically modified (GM) crops as safe for human consumption, ignoring demands by a consumer lobby that it follow the European Union and slap a moratorium on the import of new GM strains. The ministry of health and welfare said it was following the recommendations of an 18-strong advisory committee of academics, consumer organisations, food standard agencies and medical associations. The decision means that Japanese companies can now import and sell 29 GM varieties of seven crops -- corn, soybeans, rapeseed, potatoes, cotton, tomatoes and sugar beet.

TOYS

Two leading British supermarket chains have urged toy manufacturers to make dolls more full-figured to help cut eating disorders among children. The chains contacted the makers of Barbie and Steffi dolls, asking them to reflect the form of the average woman and make the dolls in more realistic proportions. They acted after shoppers complained that the wafer-thin dolls were fuelling an increase in anorexia and bulimia sufferers.

FOOD

Roughly half of all the world's food never actually reaches anyone's mouth according to the recently published Fearing Food. In countries with relatively low levels of food packaging, such as India, the amount of food wastage reaches 70 per cent: in the U.S., with its obsession with packaging food thoroughly, the level of wastage is just 17 per cent.

ECONOMY

Industrial economies are recovering much better than expected from the effects of the Asian, Russian and Brazil crisis and are looking forward to growth of almost 3 percent in 2000, according to the OECD. In its first forecast for 2001, the OECD forecasts growth in the 29 industrial countries of 2.6 per cent.The main reason for the upward revision in growth is the unexpected momentum of the U.S. economy. Also, there has been an unexpectedly sharp fall in EU unemployment levels, now expected to drop to 8.8 per cent in 2000 and 8.4 per cent in 2001

OCEAN TECHNOLOGY

This industry offers products and services for use in marine environments. Sectors include environmental, defence, manufacturing and information technology. In 1998, Industry Canada estimates there were more than 500 ocean technology companies employing between 7,500 and 12,000 people. Revenue is estimated to be around C$1-billion.

COOL

Air conditioning is found in 29 per cent of Canadian households, up from 12 per cent in 1975. Three quarters of U.S. households use air conditioners.

SHOPPING CARTS

In 1999, the six leading U.S. discount chains, led by Wal-Mart, have chalked up a sales increases of 5 per cent or more for stores open at least one year. And each of those chains offers customers a shopping cart. Meanwhile the six leading department stores, led by Sears Roebuck, have had sales increases of less than 5 per cent per store. The average shopper with a cart buys 7.2 items, while the customer without a cart buys 6.1 items. Experts claim that a cart will double the sales of bulky items. Sears and Montgomery Ward are now testing small carts.

TRENDS

Tesco, the number one food retailer in the U.K., is expanding its online shopping service beyond groceries. In December it put its Christmas catalog on its Web site for the first time and added videos and compact discs. Early in 2000, it will launch an online "Baby Club" linking special offers and children's retailing with articles on health and advice, in addition to selling books and offering online financial services. The company is also exploring the possibility of selling large household appliances (washers, dryers, refrigerators), computers, travel packages and tickets via its Web site.

WASTE

According to Friends of the Earth, Canada recycles 29 per cent of its waste. By comparison, Swiss households recycle 52 per cent of their waste and Scottish households 5 per cent.

FAST FOOD

Last year, for the second year running, French fries were the most ordered item in Canadian restaurants and were found in one in four orders. Other favourites: Unsweetened baked goods such as bagels and croissants were second (ranked fourth in 1997); Third, Hamburgers, up from fifth place; Fourth, Salads, slipped from second place and Fifth, Pizza, third in 1997.

PLASTIC

Plastic exports to the U.S. almost doubled between 1994 and 1998, reaching C$3.7 billion. Between 1994 and 1998, Canada's share of U.S. plastic imports has increased by six per cent, representing more than 28 per cent of the U.S. market.

STORES

Last year, there were 127,000 grocery stores in the U.S. with total grocery sales of $426-billion. The total number of supermarkets, (over $2 million in sales) was 29,900. Total supermarket sales was $323-billion and there were 1.9 million supermarket employees.

PIRACY

Officials in the U.S. are being urged to start publishing an annual report identifying and ranking the countries with the best and the worst intellectual property enforcement records around the world in an effort to improve U.S. trade performance. The most recent report of the Business Software Alliance points out that in 25 nations, more than 75 percent of all software used in those countries has been pirated. Most of the victims are U.S. companies.

OPTIMISM

A national survey by the 100,000-member Canadian Federation of Independent Business found that small and medium sized business owners are confident heading into 2000 and expect to create more full-time jobs. Entrepreneurs in Alberta and Ontario are the most optimistic, but most of those surveyed expect a stronger performance by their firms. Manufacturers, who have benefited from a booming U.S. economy, expressed the highest levels of confidence for 2000 with 61 per cent expecting stronger growth.

CORRUPTION

Transparency International, the Berlin-based organization devoted to curbing world corruption, has released its fifth annual "Corruption Perceptions Index" (CPI) survey of corruption levels in 99 countries, based on the perceptions of business people, risk analysts and the general public. The survey showed that in 1999, Denmark heads the CPI rankings being essentially a corruption-free country. Finland was second, followed by New Zealand, Sweden, and Canada. The United States ranked 18th followed by Chile and Israel.

DEMOCRACIES

When it comes to U.S. trade and investment dollars, democratic countries in the developing world are losing ground to more authoritarian countries, according to a report released recently by the New Economy Information Service. The report reveals that democratic countries' market share of developing country exports to the U.S. (excluding oil) fell from 53.4 percent in 1989 to 34.9 percent in 1998. According to the NEIS, if the trend continues, foreign purchasing and investment decisions by U.S. corporations may inadvertently undermine the chances for survival of fragile democracies.

SAVINGS

For the first time in seven years, fewer Canadians contributed to a registered retirement savings plan, and the amount of their contributions declined as well. About 6,122,000 taxfilers contributed to an RRSP during the 1998 tax year, down a slight 0.6% from the previous year. They contributed $26.6 billion, down 3.8% from the record $27.7 billion total in 1997. These declines occurred despite a 4.6% increase in employment income in 1997, as well as a 2.4% increase in recipients of employment income.

TRADE

The European Union and Mexico have reached a deal that will end all tariffs on their bilateral trade in industrial goods by 2007. EU officials say the deal is designed to help the EU regain its place in the Mexican market, where its share of imports has fallen to 5 per cent from about 20 per cent in 1994, when the North American free-trade agreement took effect and opened Mexico up to the U.S. and Canadian imports. NAFTA rules of origin will restrict goods from moving duty-free from Mexico into the U.S. and Canada.

IRELAND

This country is building on foundations poured 25 years ago when it targeted software development as a way to transfer its agrarian economy into a commercial one. As a result, Ireland is now the world's second-largest software exporter behind the U.S.. It has also had the fastest growing economy in the OECD for the past four years. Now, Ireland wants to make sure it doesn't miss out on the electronic revolution and has broken ground on a national digital business park for major international high-tech businesses.

MARKETS

Research by The Phillips Group In London predicts that the Internet user base in the Asia-Pacific region will increase from 44 million at the beginning of 2000 to at least 228 million by the close of 2005. Indications show that the potential Asia-Pacific Internet market for 2006 could comprise in excess of 370 million users -- an increase of 750% from the figures predicted for the end of 1999. Within the region, China is expected to take over Japan's present number one spot, in terms of Internet user base growth rate, by late 2004.

QUOTE

There is no reason anyone would want a computer in their home." Ken Olsen, president, chairman and founder of Digital Equipment Corp. in 1977.

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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.

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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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.

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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