NOVEMBER 1993 Edition
U.S. EXPORT DRIVE
President Clinton has unveiled a strategy to help
American companies sell more products overseas which includes relaxation of
Cold War restrictions on exporting computers and other high-tech equipment.
Called the National Export Strategy, it aims at raising U.S. export of goods
and services to $1-trillion (U.S.) by the end of the decade from $628-billion a
year in 1992 and creating six million new jobs.
It will also direct the 19 government entities
encouraging exports to work together. And, starting with fiscal year 1995, it
will create one multiagency trade promotion budget out of the $4.3-billion in
separate programs scattered throughout the federal government.
The Administration is
concerned that not enough assistance is devoted to export of manufactured goods
and that the unified budget would direct aid more rationally. It stopped short
of saying agricultural goods would lose out. Currently, about 80 per cent of
export-promotion spending is devoted to agricultural products even though they
represent only about 10 per cent of the export total. The strategy recommends
the creation of "one-stop shops" around the country where employees
of different agencies--the Commerce Department, the Export-Import Bank and the
Small Business Administration--would work together to assist U.S. companies.
INTER-PROVINCIAL TRADE
StatsCan has produced figures to show just how valuable
is trade between provinces. In fact, Canada's provinces and territories export
almost as much to each other as they do to the rest of the world.
In 1989, provinces sold $160-billion worth of goods abroad
and $146-billion worth to each other. Ontario and Quebec ran surpluses in their
trade with other provinces. Everyone else ran deficits, with B.C., Alberta
Saskatchewan and Nova Scotia leading the pack.
On average, Canadians consume about 46 per cent of the
resource and manufactured goods they produce within their own province; another
22 per cent is sold elsewhere in the country and the remaining 32 per cent on
the world markets. The pattern seems to be that the more a province or
territory relies on resources and the smaller the market, the more it sells
outside its borders.
Relative to what they produce, Yukon (minerals) and
Newfoundland (forest, mineral and fish products) were the country's champion
international exporters. Ontario (cars)
and B.C. (forest, mineral
and fish products) are also big exporters, but since each can sell almost half
its goods at home, relatively little goes to the rest of the country. (Ontario
exports huge volumes to other provinces simply because it produces so much in the
first place). Quebec (forest
products, metals and electricity) also consumes almost half its own goods, with
the remainder fairly evenly split between foreign markets and the rest of
Canada.
The pattern for services is much different. Here fully 79
per cent are sold in the province that produces them; almost 14 per cent go to
other provinces and a mere 7 per cent sold abroad.
Just what do we trade
among ourselves?
* The biggest item is
transportation services at $12.9-billion which reflects Canada's geographical
vastness. This includes business travel, tourism and postal and courier
services.
* Wholesale services, at
$12.6-billion ranks second. Marketing goods across provincial boundaries is a huge
business, dominated by Ontario.
* Food is next at
$11.7-billion: meat products from Alberta, dairy products from Quebec and
P.E.I.; fruit and vegetables from B.C. and the three Maritime provinces; fish
products from B.C. and the four Atlantic provinces.
* Financial services are
worth $11.3-billion. Ontario has most of it but B.C., Nova Scotia and Manitoba
have notable chunks.
* Business services,
worth $9.5-billion come mainly from Ontario, Quebec, B.C. and Alberta.
* Ontario and Quebec
dominate the markets for metal products ($9.9-billion), chemical products ($8.1-billion) and transportation
equipment ($7.7-billion).
HONG KONG
The Hong Kong Trade Development Council (HKTDC) has
offices in Toronto and Vancouver and maintains a database that contains information
on more than 90,000 Chinese and 3,500 Hong Kong companies which is available
free to Canadian companies. The HKTDC caters especially to small and
medium-sized companies looking for import connections and export business in
Hong Kong and China. According to a recent HKTDC study, Hong Kong--a trading
conduit between booming Southeast Asia and the outside world--now ranks 10th
worldwide in both imports and exports, although it is just 90th in population
size.
RICH AND POOR
The poor nations of the South transfer annually more than
$50-billion (U.S.) to the rich countries of the North than they receive in aid
and investment. Trade barriers are a constant issue. The World Bank says a 50
per cent cut in trade barriers by the EC, the U.S. and Japan would raise
exports from developing countries by about $50-billion a year--about equal to
the total foreign aid to the poor countries.
PACKAGING
For years, manufacturers have spent considerable
resources designing tops for containers that are child and tamper proof. The
problem is that seniors have difficulty opening them, and often turn to
children for help. Also, seniors have problems with bulky household cleaners,
heavy spring water jugs, hard-to read
instructions and hard-to grasp bottles. These
are problems that the packaged goods industry is starting to address more
seriously as seniors, already about 11 per cent of the population, represent a
growing and lucrative market for manufacturers. By 2021 one in five Canadians
will be 65 or older and as the baby-boom generation reaches retirement age,
seniors will become a dominant consumer force. Last
month, the Seniors Packaging Advisory Council, made up of industry, seniors and
government was given a federal grant of $436,700 to examine seniors complaints
and try to come up with solutions over the next two years.
FOOD RETAILING
By the year 2000, the 30 or so major food chains in North
America could be reduced to about 10. Many food processors will be squeezed out
of business and there will be less variety on the food store shelf. These are a
few of Ernst & Young's predictions in their annual forecast of the food and
beverage industry. Also, tougher competition, fewer players and a continued
shift in power from the manufacturing sector to the supermarket giants.
Nonetheless, the food and beverage industry will remain one of the most
important in Canada. With 1992 sales of about $44-billion, it is the second
largest industry in terms of sales in Canada, after the forest sector. It
employs one of five Canadians, accounts for exports of about $13-billion and
has a net trade balance of $3.9-billion.
EXPORTERS
The supporting structure for what will be the world's
largest optical telescope is nearing completion in Port Coquitlam. It weighs
more than 150 tonnes, stands 26 metres high and will house a mirror 10 metres
across. It is part of a $100-million project and will be assembled in Hawaii.
The project has kept 65 employees busy for three years.
A Kelowna company has designed from scratch, and built in
six weeks, a seven-tonne army truck, work that would normally take six months.
It required around 700 hours of engineering. The prototype is awaiting shipment
to Kuwait where the company is hoping to win a contract for 2,200 vehicles
which would create 350 jobs and earn $250-million.
The giant Avis, Inc in Garden City N.Y., will use
technology developed by a small Nelson company to equip thousands of its rental
cars with daytime running lights. The system will be tested for a six-month
period and the company hopes Avis will expand the program to its entire 100,000
vehicle fleet.
Research has shown that
daytime running light reduced daytime multi-vehicle accidents by 23 per cent in
Sweden, 40 per cent in Norway and 37 per cent in Finland.
LABOUR PEACE
If trends continue, 1993 will end with the lowest rate of
work stoppages in Canada in half a century. The reason, both labour and
management say, is that the harsh economic climate has given the two sides a
firmer grip on reality, and neither is willing to risk the disruption caused by
a strike or lockout. The Labour Department reported recently that time lost as
a result of major work stoppages in the first half of the year amounted to
187,730 person-days, or 0.01 per cent of estimated working time. This is in
contrast to 1980, for instance, when 0.29 per cent of working time was lost.
Canada has just seen the first strike-free round of negotiations with the Big
Three Canadian automakers in more than 30 years. Average annual wage increases
negotiated in collective agreements have also plummeted. The average reported
in August was 1.5 per cent, compared with increases nearing 14 per cent in the
early 1980s.
DATA
Canada Business Report on Greater China offers
subscribers economic analysis, trade and investment news, and reports on
Canadian activity in one of the world's largest economic regions covering the
PRC, Hong Kong, Taiwan and Macau. The preview issue included stories on Asian
companies turning to the VSE for investment, BC Tree Fruits recent joint venture
in Shandong province, and an overview of the recent large building projects
underway in China. It is to be published 10 times a year and cost $295 a year
and $160 for six months. It is available from Canada-Far East Business
Publications, P.O. Box 23104, Wanchai Post Office, Wanchai, Hong Kong. Fax:
(852) 527-9158.
And now you can get over 250,000 business contacts on a
disk. Companies International combines U.S. and international company data in
one directory for a complete global source of business information. The
directory allows you to access information by company name, geographical
location, sales volume, number of employees, industries served and types of
products made. It is on CD-ROM, print volumes, magnetic tape or diskette.
Details can be obtained from Gale Research at 1-800-877-4253.
STATISTICS
Recently, The Economist asked a panel of international
statisticians to rank the official statistics agencies in 13 industrial
economies. They were asked to judge countries' statistics according to the
objectivity of the agency (ie, whether it is free from political interference),
the reliability of the figures, statistical methodology, and the relevance of
published figures, such as coverage of service industries.
Canada came top, followed
by Australia --the same result as in 1991. In terms of timeliness, the U.S. is
the fastest at getting figures out while fastidious Canada is one of the
slowest. Canada's advantage is considered to be its centralised system using a
single agency. In contrast, the U.S. is highly decentralised with statistical
units in 70 agencies. Holland is the most up-to-date in the use of computers,
particularly for collecting information directly from companies and has made
the biggest advances in environmental accounting.
POTATOES
Maine's two Republican lawmakers have asked the U.S.
Trade Representative to send a fact-finding team to Maine to investigate
Canadian potato subsidies. They claim that Maine's struggling potato farmers
are being threatened by a flood of government-subsidized imports from Canada.
Maine, once the second-largest U.S. potato producer, has seen acreage devoted
to potatoes fall to 81,000 from 108,000, while New Brunswick and Prince Edward
Island have expanded to 138,000 from 110,000.
ONLY IN AMERICA
The shoeshine concession in the courthouse in Hackensack,
N.J., is open for bids from those who can meet the contract specifications--all
18 pages of them. All this for a job that involves eight to 10 shoeshines a day
at $2 each.
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