OCTOBER 1995 Edition
INVISIBLE TRADE
The worldwide total of service exports, non-commercial
transfers and income from overseas assets reached $2.4 trillion in 1994, a
record. The U.S. earned most from invisible trade in 1993 with exports worth
$299 billion, ahead of Japan ($204 billion) and France ($188 billion).
Invisible exports mean most to the economies of Belgium and Luxembourg; they
were equivalent to more than half of their combined GDP in 1993. America's
invisible exports equalled 4.8 per cent of its GDP. Canada's were worth $25
billion.
HARMONIZATION
Harmonized domestic policies--including common standards,
intellectual property protection and investment rules--are rapidly overtaking
lower tariffs as the main focus of global trade liberalization. According to
the Canadian Trade Minister, "The era of the tariff is over, to a large
degree. Free trade is moving into domestic areas that were previously outside
international scrutiny or rules." He also stated that, with the exception
of agriculture, there will soon be no significant tariff barriers between
Canada and Europe and that pushing for transatlantic free trade, or TAFTA, is a
next logical step on the trade front.
FOODNET
Developed by the Food Institute of Canada (FIC) and
Agriculture and Agri-Food Canada, FoodNet is an Internet site dedicated
to meeting the information needs of the food industry. It provides companies
with immediate access to marketing, technical and regulatory information, with
data added on a regular basis. Foodnet has the capability of quickly
transferring large files of information to clients and is linked directly to
sites such as the Department of Foreign Affairs and International Trade, U.S.
sites such as Agriculture, Food and Drug Administration and other international
sites , the Japan External Trade Organization (JETRO), for example. FoodNet's
World Wide Web address is "http://foodnet.fic.ca."
INTERPROVINCIAL TRADE
A new study from the C.D. Howe Institute states that a
lot of work needs to be done to ensure freer trade among Canada's 10 provinces
and to tear down the internal barriers to the movement of goods and services.
The Federal and Provincial governments have already missed deadlines for
sorting out disagreements on energy and procurement policies for
municipalities, schools and hospitals. There is scepticism that governments
will either remove the remaining barriers or live up to the provisions already
worked out.
STOCK MARKETS
A July survey by Morgan Stanley shows Canada's stock
markets had the second-best performance in the developed world after Australia.
In the year to date, Finland has performed best, followed by the U.S. and
Sweden. At the other end of the scale, Japan, Singapore and Austria performed
worst. In the emerging markets category, Israeli, Turkish and Peruvian stocks
all showed strong gains while Taiwanese, Sri Lanka and Colombia stocks slipped
badly.
COMPETITIVENESS
Canada is now the 12th most competitive country in the
world, climbing from 16th last year, according to the World Economic Forum in
Geneva which examines the competitiveness of 48 countries. For the second year
in a row, the U.S was the most competitive, followed by Singapore and Hong
Kong. Japan comes in fourth, a significant decline for a country which led the
rankings for eight years running. Russia is last but shows tremendous
opportunities for the future. Canada's higher ranking is attributed, in part,
to the Canada-U.S FTA and NAFTA. Specific Canadian areas of improvement are
government, management and infrastructure.
INDUSTRY
Canadian industry operated at 83.3 per cent of capacity
in the second quarter, down from 84.8% in the first quarter, the sharpest drop
in four years, according to Statistics Canada. All but one of 22 manufacturing
industries reduced their levels of capacity use. The construction industry,
hurt by the weak housing market, showed the biggest drop. The paper industry
was the only industry to show an increase in capacity and plans to spend $4
billion on plant and equipment this year, almost double its 1994 capital
spending.
TIDINESS
Stocks of U.S. companies whose executives left their
desks messy rose an average of $3.50 last year according to a survey of 1,112
top executives. Stock prices of companies with neat executives fell an average
of almost a dollar. About 58 per cent of
executives surveyed said they kept their desks spotless. Thirty-one per
cent said their desks are messy and 11 per cent somewhere in between. The
survey suggests it may be worth checking an executive's desk when looking for a
new job. Only 16 per cent of executives with neat desks believe in Christmas
bonuses as a rule, while 48 per cent of messy executives approve of bonuses.
WEIGHT
Major international steel makers have begun a battle
against the aluminum producers to win the hearts and minds of the car
manufacturers. A 32-member consortium of steel makers announced it can now
build frames in the mid-size car range that will weigh 35 per cent less. The
new design would reduce costs by 14 per cent and make cars more rigid and thus
quieter. They claim a lighter car body will also reduce weight elsewhere
because smaller and lighter engines, tires, suspensions, brakes and other components
will be required.
COAL
Prices are up and world demand continues to increase and
there is enough coal buried in Western Canada and the Maritimes to last for
centuries. But the coal industry is worrying about how the country can become a
bigger player in the flourishing thermal coal market. Canada has not been
successful in reducing overall production and transportation costs to the level
where we could export as much thermal coal as we do metallurgical coal.
Canada's high
transportation costs, increased by the country's vast geography make it hard to
take advantage of increased demand. Much of Canada's coal travels more than
1,000km before reaching West Coast ports. The coal industry employs 10,000
directly and 50,000 more indirectly.
FARMING
Congressmen have complained to President Clinton that
Canada is violating two international trade agreements (NAFTA and the GATT) by
denying access to U.S. products. Ottawa and Washington are negotiating market
access for dairy and poultry products.
American dairy farmers thought they got greater access to Canadian
markets through NAFTA, but Canada is arguing that the Uruguay Round of the GATT
takes precedence. Under that set of trading rules, quotas and marketing boards
that have protected Canadian industries are being phased out. But Canada is
replacing them with high tariffs--ranging from 100 to 350 per cent on products
like eggs, chicken, milk and butter. This also guarantees that Canadians pay
more for these products than they should under NAFTA.
THE DOLLAR
The recent softening of the economy has not kept
Canadians from spending big on travel. The Conference Board predicts Canadians
will have spent 6.3 per cent more on travel in 1995 than last year compared to
a 5.8 growth in 1994. The report suggests that hotel occupancy rates and
domestic air travel for both business and pleasure have remained buoyant. The
low dollar is attracting international tourists and is partly responsible for
the positive forecast. For the same reason,
Canadians are more likely to take
their vacations on this side of the border. The survey also found that, more
often than in the early 90's, Canadians are taking planes to reach their
vacation destinations in Canada. After two years of declining ticket sales,
holiday air travel increased in the first six months of the year.
CHEMISTRY
According to the
University of Texas, a windshield that "washes" itself with sunshine
and wall coverings that use light to self-clean may soon be a reality. The
magic ingredient is titanium dioxide, a photocatalyst that strips organic
matter from surfaces. Windshields coated with the substance could be
manufactured for $10 to $25 in added costs with consumers paying from $50 to
$100 more per car. The Japanese have already harnessed this chemical by
unveiling the worlds first self cleaning bathroom and kitchen tile which kills
cigarette and cooking smoke stains and eliminates common indoor odours.
Hospital tests show the self-scouring tiles removing 99.9 per cent of all
bacteria.
SOFT DRINKS
After nearly a decade without a new product, Coca-Cola is
pushing out new products at a record pace which has helped it capture more than 80 per cent of the growth
in the U.S. soft drink market. But Japan is its most profitable market.
Japanese consumers are notorious for constantly demanding new products.
Companies typically launch between 700 and 800 drinks a year, and few stay in
vending machines for more than a month. Two years ago Coke built a
sophisticated product-development centre to produce new beverages more quickly.
Launch time for new drinks has been cut to 30 days from 90 and Coke releases as
many as 50 new beverages a year.
MARKETING ON THE INTERNET
Some large companies have been quietly registering
Internet domain names which give them worldwide rights to those names. Proctor
& Gamble has registered names such as "badbreath.com," as well as
35 other maladies including "diarrhea.com" (sic),
"dandruff.com," "headache.com," "underarms.com,"
and "pimples.com." P&G has also registered 52 of its products
from Luvs to Metamucil. Kraft Foods has locked up 133 important product names,
from "velveeta.com," to "sanka.com" and 21 generic foods
groups including "saladdressing.com," "weiners.com,"
bologna.com," and even "frozendinners.com." In all, companies
have registered 10,000 new names in the first two weeks of August bringing the
total number of registered commercial domains to 100,000.
HOMES
560 "electronically enabled homes" have gone on
sale in Ontario, built by Intercom Ontario, a consortium of more than 70
high-tech companies. The aim is to discover what home buyers want in the smart
home of the future. The homes will be connected by high-capacity fibre-optic
and coaxial cable lines to a powerful
computer switch able to transmit video signals down a phone line. Special plugs
and wiring will connect telephones, computers and television sets to a
state-of-the-art, high speed network. Jacks will be installed in each house
that can move information at a speed of 10 million bits a second. Each resident
will be provided with a personal computer and participants will be monitored
during the trial.
GENETICS
Plants that grow in the dark are possible with technology
that transfers material for a luminous protein in certain jellyfish into
vegetation. A possible application would be roses that, when placed on a table
between two lovers, would glow as emotions rose and the lovers' breathing
became heavier!
MORE ROMANCE
According to The Miami Herald, Wal-Mart, the No. 1
retailer in the U.S., once fired two employees who dated each other and refused to stop. In an ensuing lawsuit, the
lovers lost because a judge said dating is not a recreational activity.
TRIVIA
* In England, an
association called Pipedown has recently
published a list of restaurants that are free of Muzak.
* In 1992, 14 Canadian
millionaires collected and kept unemployment insurance benefits.
* Locusts contain more
protein per pound than a T-bone steak.
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