JULY 1994 Edition
U.S.TRADE
Canada set trade records in April with autos and
aerospace helping to push exports up $804 million from March to $17.4 billion.
Imports also reached a new peak in April, rising $600 million to $16.1 billion
leaving a $1.3 billion merchandise trade surplus. Autos and parts were the
single largest contributor with shipments reaching a record $4.6 billion, up
$441 million, helped by the fact that many of the most popular new models, such
as minivans, are made in Canada. The aerospace sector--including planes,
engines and parts--was the best performer in the machinery and equipment
sector, where exports reached a record $3.4 billion, up $77 million. Exports in
this sector are 30 per cent above a year ago.
The biggest rise in
imports was in machinery and equipment as Canadian companies continue to
increase production.
TRADE SHOW
For the fourth year running, North America's largest
agent\distributor locator and recruiter show, WORLD TRADE'94, will be
held in Toronto on October, 20, 1994. This international import\export
match-making event is designed for manufacturers and companies interested or
involved in exporting. It is also a venue for Canadian and international
agents\distributors to identify new domestic and foreign sources of supply and
representation. At the last show, there were 168 exhibitors representing 51
countries, states and provinces. The 2,500 visitors represented primarily agents,
distributors, manufacturers, exporters, importers and re-exporters. More
information is available from the Canadian International Trade Association at:
Tel: 416-351-9728, Fax: 416-351-9911.
MINING
Over $307 million in mine exploration funding was raised
on the Vancouver Stock Exchange last year. $167 million was earmarked for Latin
America, $86.1 million for Canada, $44.8 million for the U.S., $6 million for
Asia and $2.4 million for Africa. 21 per cent of 913 B.C.-based miners are
active in Latin America, with Mexico, Venezuela and Chile topping the list.
Even Cuba signed seven joint-venture agreements with Canadian miners.
ROYAL BANK
This bank is making it easier for Canada's importers and
exporters to access international markets with the establishment of a Trade
Help Line.
From anywhere in Canada, companies requiring trade
information and assistance can call the bank's Help Line toll free at
1-800-263-9191, from Monday to Friday, 8:00am to 8:00pm local time. Through the
Help Line, businesses can access a pool of trade expertise of some 180 people,
who speak 25 languages, have international experience and can assist them with
their business dealings in other countries. The trade specialists are highly
skilled in areas such as letters of credit, bonds and guarantees, country risk
analysis as well as innovative financial structures to help companies do
business in the global markets.
MEXICO
Trade between Mexico and the U.S. during the first
quarter of the NAFTA rose sharply to record levels. U.S. imports from Mexico
grew much more rapidly cutting the U.S. trade surplus with Mexico for the first
quarter nearly in half. U.S. exports rose
15.7 per cent to $US11.85 billion compared to the same quarter a year earlier.
U.S. imports from Mexico increased 22.5 per cent to a record $US11.29
billion, narrowing the U.S. trade
surplus with Mexico by 45.1 per cent to $560 million. There are no figures
available yet for Canadian trade with Mexico in 1994.
HOME WORK
Last year, according to a recent survey, about 41 million
people in the United States, or 33 per cent of the adult work force worked at
home at least part of the time. That is up from 26.8 million, or 22.3 per cent
of the adult work force, in 1989. It is projected that by the turn of the
century, 40 per cent of all U.S. households will have at least one family
member working at home.
RESEARCH &
DEVELOPMENT
In 1990, only 1.4 per cent of Canada's GDP went to
R&D.That's only half of what the United States spends and much less than
the 3.1 per cent Japanese firms spend. Private sector investment in human
resources also falls short. Only 15 per cent of Canadian firms have training
budgets. On-the-job skills development is a mere half of one per cent of total
payroll.
DUMB MARKETING
McDonald's in Britain and Coca-Cola in Spain came under
fire from Muslims after printing the flag of Saudi Arabia, which contains a
sacred scripture from the Koran, on hamburger bags and cola cans. This was part
of promotions for this summer's World Cup soccer championship in which Saudi
Arabia is competing. Muslim leaders say the holy words should not be used
commercially on anything that is crumpled up and thrown away.
Not to be outdone, Pepsi-Cola has now offended the Church
of England by laser- beaming its logo onto the Anglican cathedral in Liverpool
to promote a nightclub act. It is only speculation that these companies hired
the three Hoover executives fired as a result of its marketing fiasco.
EXPORTING
Canada is maintaining its position as a leading growth
performer in the world with exports which will jump 10 per cent this year.
Canadian exports will out-perform all industrialized countries and even some of
the Asian giants for the second consecutive year. Last year, Canadian exports
recorded a 14 per cent leap, the highest in the world.
This healthy export record can be attributed largely to
the improvement of U.S. market conditions and the Canadian dollar. These
factors will contribute to an 11 per cent increase in U.S. sales this year
following a 20 per cent growth in exports to the U.S. last year, the largest
increase in a decade. Last year saw 81 per cent of Canada's exports go to the
U.S., a jump from 73 per cent recorded in 1989. Auto and parts exports will
grow by 14 per cent and capital goods sales by the same amount. Lumber exports
will increase 11 per cent and energy by five per cent. Agri-food exports should
grow by two per cent.
The Asian market should grow by 7 per cent in 1994 with
government spending on infrastructure alone totalling around $65 billion. Latin
America should grow by 3.5 per cent with projections over the next decade of
$650 billion to be spent on infrastructure, $250 billion on power generating
and the same on transportation and $125 billion on telecommunications
equipment.
WAL-MART
This giant U.S. retailer drives a hard bargain with its
vendors. The key to Wal-Mart's success is the buying strategy enforced by
founder Sam Walton. The $67 billion chain negotiates a payment schedule that is
slightly longer than the time it will take to move merchandise off the shelf.
Vendor agreements cover 30 basic requirements, from UPC (universal product
code, or bar-codes) on all goods to 100 per cent fulfilment on each order.
There is a price to pay if you do not comply. If a
supplier ships goods with an unreadable UPC, or without a purchase order
number, Wal-Mart fines them $10,000 or 10 per cent of the value of the order.
Fines climb to $50,000 for the second offence and top out at $100,000 the third
time. Retail experts claim that this policy helps to make better manufacturers.
Wal-Mart stores, usually with about 110,000 square feet, typically carry some
150,000 items restocked daily. The U.S. chain's stores move about $US297 worth
of merchandise per square foot per annum.
PRIMARY GOODS
Manufacturing in British Coumbia still means making
boards, not furniture and chipping pulp not fine paper, according to the
provincial statistical agency. Last year, 59 per cent of all shipments of
manufactured goods were products that had only the most basic changes. Of
those, half were primary wood products--boards, shingles, shakes, veneer,
plywood and pulp. Even though the total value of manufacturing shipments
increased 11 per cent to $26.9 billion --largely because of a 34 per cent
increase in the value of shipments of wood products--there were fewer jobs.
Secondary manufacturing accounts for 41 per cent of the value of shipments, up
from 21 per cent in 1983.
OPPORTUNITY
Patrocinio, Brazil, is a malaria-infested gold mining
town of 2000 deep in the Amazon rain forest. It has no mayor, no doctor, no
running water, no sewers and often no electricity. But it does have 20 Avon
Ladies. Mostly, they trade cosmetics for gold nuggets, but they have been know
to accept other barter goods such as wood fruit and eggs. Two dozen eggs will
buy a Pop-Love water-melon flavoured lipstick, and 20 kilograms of flour a
bottle of Topaze cologne. A jar of Avon's top-selling face cream will set you
back three grams of gold or about six days pay.
Setting off in kayaks down the muddy tributaries of the
Amazon or travelling on foot through dusty gold-mining communities, an army of
more than 60,000 Avon vendors peddle products to some of the most remote
communities in the rain forest. Since it changed its marketing strategy three
years ago to boost its sales force in the Amazon outback, Avon has become one
of the few Brazilian companies to see sales rocket despite a 10 per cent drop
in per-capita income. The sale of Avon products has supplanted the extraction
of gold as the main economic activity and Avon Ladies are now the commercial
elite.
DATABASE
The Open Bidding Service (OBS) from Information
Systems Management Corporation is a national electronic service offering
businesses current and complete information about procurement opportunities.
All that is needed to have access to this information is a computer and modem.
OBS has entered into an agreement with Foreign Affairs and International Trade
for a one-year pilot. The OBS collects Mexican NAFTA procurement requirements
and translates them from Spanish to English. Subscribers also receive
procurement notices from over 20 Canadian federal departments, including
Government Services, the Province of Alberta, and the U.S. Commerce Business
Daily. Another service will search the database for opportunities matching a company's
profile and an historical database of past procurement notices and awards. The
annual subscription fee is $130 and online charges from anywhere in Canada are
42 cents a minute. For further information, or to register with OBS, call
1-800-361-4620.
ATMOSPHERE
"Sounds of a Thriving Office" is a $19.95 tape
unlikely to make the top of the charts. Aimed at a niche market, it is for
people who work at home or for a small office but want to sound on the phone
like they're working somewhere busy. The tape features the sounds of doors
closing, phones ringing, typewriters clacking, drawers banging, feet shuffling
and voices droning in the background.
LABELLING
Mexico is drafting legislation requiring imported retail
goods to include consumer safety, instructional information and product
labelling in Spanish. Technically there has been a law to this effect since
1987 but it has not been enforced. The likely effective date will be April
1995. It has not yet been determined if the instructions and guarantees that
come inside a packaged product must be in Spanish; if the importer-exporter
label will still be required; how the laws will be enforced, either by Mexican
customs brokers or through random checks of shelves in stores. Unaffected
products will include apparel, footwear and tires, and products imported for
manufacturing. As Mexicans consider products with English labelling to be of
superior quality, companies are advised to plan a bilingual label strategy.
KILLING TIME
Instead of reading old magazines while waiting for car
repairs at Swedish Auto in Farmer Branch, Texas, you can now get married. The
garage offers a free marriage ceremony with any 30,000-mile inspection on
Hondas, Volvos and BMWs. The auto service comes with a warranty, the marriage
does not.
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