December 2014 Economic Digest - Importing and Exporting

December 2014 Edition AFRICA From the safari industry to the agricultural and mining sectors, much of Africa’s economy is taking a hammering from the Ebola crisis, and the damage is continuing to rise. The heaviest toll is being suffered in the three main Ebola-afflicted countries in West Africa, but the spill over effect is crossing borders and hitting other regions. And as Ebola cases reach the United States and Europe, foreign anxieties are hurting investments in Africa and wreaking havoc in vulnerable sectors such as tourism and trade. While most of Africa’s economy is not directly affected by the Ebola epidemic, the impact on some sectors and countries is serious enough to hurt the continent’s overall economy, dampening prospects in a region that had been among the world’s fastest-growing. POWER America’s electricity grid is a mess. For one thing, it is two large and three small grids, rolled into one. Two types of organizations, independent system operators and regional transmission bodies control their own parts which may cover several states, each having its own utility laws. Nobody knows the true state of the national grid until something goes badly wrong as it did in October 2012 when Hurricane Sandy left some 8-million people powerless, some for weeks. The number of big outages, defined as those affecting more than 50,000 people, has more than doubled in the past ten years. MONEY Millions in suspicious transactions flowed through four of Vancouver’s casinos in a recent three month period, mostly in C$20-bills, a currency frequently used in street level drug transactions. In other cases patrons showed up at the doors with plastic or brown paper bags filled with cash in wads held together by rubber bands. In some cases, patrons bought in and cashed out without even playing. Casinos are required to identify and report any suspicious activity to the provincial government as well as all cash transactions of $10,000 or more. Police were rarely contacted. INSURANCE With a typical American wedding costing in the region of US$25,000, wedding insurance is now catching on, with many venues requiring couples to take out liability insurance. It was introduced in Britain in 1988 but there were few takers until it caught on in the States. Now, a fifth of couples buy it. Common causes of payouts include the venue or caterers going broke after having taken a big deposit. Extreme weather, a spouse being deployed by the armed forces and an absent priest can all trigger payouts. TRADE For the third time, the World Trade Organization (WTO) has ruled against the US’s meat labelling laws requiring grocery stores to list the origin of meat products, which discriminates against both Canada and Mexico. Canada has warned that unless the US ends the blatantly protectionist regulations, it will strike back with punitive duties on 38 iconic US products ranging from California wine to ketchup and cornflakes. It is estimated that the US regulations cost the North American cattle and hog industry more than US$1-billion a year. EUROPE In the 1990’s Europe produced more than 15 per cent of the world’s microchips. Firms headquartered in Europe now account for only 8-9 per cent of global semiconductor revenues which was worth US$315-billion in 2013. Microprocessors and memory chips are mass-produced mainly in Asia and America these days, as the cost of building a “fab” as chip-fabrication factories are called, is too high for all but the largest scale endeavours. However, overall, Europe does provide 20 per cent of the world’s electronics industry’s equipment and materials, 12 per cent of subsystems such as boards and modules and 16 per cent of stand-alone and embedded systems. DOLLS Sales of Mattel’s iconic Barbie fashion doll fell a staggering 21 per cent in the third quarter of this year contributing to a 22 per cent drop in profits and an eight per cent decline in sales for the toy maker. Barbie sales have fallen double-digits in each of the past four quarters. The 55-year-old doll has fallen out of favour with young girls who have gravitated to other dolls manufactured by Mattel such as Monster High and more recently, dolls based on the hit Disney movie Frozen. LOANS Around the world, student debt is a financial burden for millions, and in the US, a growing number of senior citizens are still repaying the cost of their education into retirement age. In 2005, older adults owed US$2.8-billion in federal student debt. By 2013, that figure had ballooned to $18.2-billion. According to a General Accounting Office study, the number of individuals whose Social Security benefits were offset to pay student loan debt increased from about 31,000 to 155,000 between 2002 and 2013. In total, outstanding student loan debt in the US amounts to $1-trillion. SHOPPING Cross-border shopping by Canadians in the US rose between 2006 and 2012, but even with these increases, purchases from the US were between 1 per cent and 2 per cent of total Canadian retail sales. Cross-border shopping by Canadians was an estimated C$4.7-billion in 2006. Since then, annual increases, with the exception of a decline in 2009 have taken the total to $8-billion in 2012, 73 per cent higher than in 2006. The annual amount brought back grew from $370-million in 2006 to $844-million in 2012 while the total from overnight visits doubled from $1.8-billion to $3.6-billion. MOVIES Chinese box office revenues surged 32 per cent in the first nine months of this year. Takings have reached C$3.89-billion, nearly equalling the $3.92-billion total for all of 2013. The best performing movie of 2014 so far has been the Transformers which has taken in $356-million. China is the second biggest film market in the world and last year became the first international market to gross more than US$3-billion. China’s boom comes at a time when the US box office has slumped over the summer season to its lowest point in eight years. ORGANISMS Scientists in the UK are warning that an army of species from Turkey and Ukraine is poised to invade Britain’s waterways. One organism, the quagga mussel, was discovered in a river near London just weeks ago. At least 10 others are established in the Netherlands and there is a critical list of them entering the UK. Researchers are concerned that the invaders, including the killer shrimp, will spread rapidly and devastate native species. Researchers say that as well as ballast water from ships, the species often travel in ornamental plants. Damage from the quagga mussel could cost the UK economy in excess of US$2.5-billion annually. MILKING Genomic analysis, that is the examination of the DNA, could allow B.C. dairies to predict which calves will become elite milkers, with the promise of huge savings for farmers who will not have to raise inferior cows that will ultimately be made into hamburgers and bologna. Now, dairy farmers have to raise young cows for a little over two years at a cost of about C$2,500 each before they can determine which animals can produce milk with superior volume, fat content and protein. The result of a genomic test can identify poor producers as young as two months of age. INFORMATION An app which allows healthcare professionals to share photos is being rolled out across Europe. It is designed to enable doctors to share pictures of their patients, both with each other and with medical students. So far, more than 150,000 doctors have uploaded case photos with the patient’s identity obscured. Patients’ faces are automatically obscured by the app but users must manually block identifying marks like tattoos. Each photo is reviewed by moderators before being added to a database. DRUGS A new study has found that Canada is still paying far more than other industrialized countries for generic drugs despite recent efforts by the provinces and territories to cut costs by bulk-buying six particularly costly medications including those for high blood pressure and high cholesterol. The study shows that while Canadians are saving some money under the bulk-purchasing schemes, they are still paying much more than people in the UK, Germany, New Zealand, Sweden and the US. The six medications account for about 20 per cent of publicly funded spending on drugs. YOGURT New York recently signed Bill 6695 designating yogurt as the official state snack. As the United States’ top yogurt producer, New York State pumped out 336-million kilograms of it in 2013 trouncing the 268-million produced by runner-up California. Dairy manufacturers in New York accounted for about 9,500 jobs with total wages of US$513-million in 2013. BORDER Frustrated by costly delays at the Canada-US border, the business community is urging the governments to seek solutions from private-sector whiz kids. They are being pressed to adopt a model popularized by high-tech start-ups during the original dot.com boom in the 1990s: gather a bunch of software engineers in one room, give them a problem to solve and promise them a prize. They call it a “hackathon.” Business groups are requesting a hackathon for the border, unsatisfied by the pace of progress following years of government efforts to reduce wait times. RENOS In the 12-months to June of this year, more money was spent renovating homes in Canada than building new ones. Renovation spending was C$48.4-billion as against $46.3-billion for new builds. Also, prices for higher-priced homes are rising faster than prices of lower-priced homes in cities such as Toronto, Calgary, Ottawa and Edmonton, making it harder for homeowners to trade up to a bigger or better home. Over the past five years, spending on home renovations as a share of total residential investment averaged close to 46 per cent, by far the largest share on record. TRENDS Staff at the JTI Gallaher cigarette company in County Antrim, Ireland, has been told the plant is to close permanently by 2017. The firm has manufactured tobacco in Northern Ireland for 15 years. It is the last remaining tobacco factory in the UK. KOREA The Canada-South Korea free trade agreement is now in effect and should help Canadian companies boost sales to the East Asian country’s 50-million citizens, many of whom have plenty of disposable income. The agreement will eventually put Canada on an equal footing with the US and the European Union which already have trade pacts with the country. South Korea is Canada’s seventh-largest trading partner with two-way commerce of about C$10.8-billion in 2013. FLYING Buffalo Niagara International Airport, which garnered almost half its passenger traffic from Canada last year, is seeking to attract even more Canadian. The taxes and fees airlines add to Canadian tickets, congestion around Toronto Pearson Airport, and the additional time it takes to get through security and customs helped push Canadian traffic to about 46 per cent of the 5.5-million passengers using the Buffalo airport last year. That compares with 26 per cent in 2006. A family of four flying to Orlando can save as much as C$500 travelling through Buffalo. COMMERCE Pope Francis recently allowed the Sistine Chapel to be rented out for Porsche to entertain 40-high-paying tourists. It is the first time the Chapel has been rented out for a corporate function. 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

November 2014 Economic Digest - Importing and Exporting

November 2014 Edition

ORGANIC More than 20-million Canadians buy organic products weekly and there are 900,000 hectares of farmland across Canada. The organic market is worth C$3.5-billion annually and Canadian organic exports are valued at $458-million. Nationwide, there are over 5,000 certified organic farms, processors and handlers. CHOPSTICKS In the battle to save Asian forests, disposable chopsticks have long been a target for environmentalists. Last year, China exported over 10,000 tonnes of them and manufactures 80-billion pairs each year. For that, 20-million trees, mainly bamboo, birch and poplar, are chopped down. When the government imposed a 5% tax on throwaways, few people paid attention when the factory price of a pair is about one-third of a US cent. Some campaigners are now turning to the health dangers in using throwaway chopsticks which in small-town workshops are typically bleached in hydrogen peroxide, polished with paraffin and treated with sulphur dioxide. ADS Digital is now the favourite media category of Canadian advertisers. A new report says Canadian Internet publishers earned more revenue in 2013, making it the first time digital media outperformed television, daily print newspapers and radio broadcasters. Digital ad revenue grew 14 per cent last year rising to C$3.5-billion from $3.1-billion. Though TV advertising was down 2.3 per cent from $3.47-billion, it still took second-highest share of revenue. Daily print newspapers earned the third highest share of revenue, despite a 17 per cent drop from $2.2-billion to $1.68-billion. Magazines fell 2.7 per cent from $573-million to $558-million. CHOCOLATE Vancouver’s Mink Chocolate company learned recently that its Mermaid’s Choice bar had been named best chocolate bar at an international competition and awarded a gold medal. Altogether, the company won six medals at the 2014 San Francisco International Chocolate Salon exhibition--three gold, two silver and a bronze. Mermaid’s Choice, which retails at C$6.25, is a ganache-filled bar, about 70 per cent dark chocolate with a soft truffle-like centre. FINES China issued its strongest pushback yet against global auto makers as it levied fines against Audi and Chrysler totalling US$45.8-million. This signals a growing frustration with foreign dominance in the world’s largest car market. More than three-quarters of the sedans driven off Chinese lots are Chevrolets, Volkswagens, Nissans or other foreign brands. More than two-thirds of China’s luxury-car sales go to just three brands: Audi, BMW and Daimler Mercedes Benz. Most local drivers do not consider Chinese brands as safe or stylish as foreign models. CITIZENSHIP Abandoning citizenship is often a last resort for Americans living outside the USA to escape a lifetime of onerous tax filings. It is about to become a costlier exit strategy. Citing dramatically increased numbers of Americans abandoning their citizenship, the US State Department is raising its renunciation fees to US$2,350 a person, up from the current $450. Throughout the first half of this year, 1,577 Americans worldwide renounced their citizenship or gave up their green cards. In 2013, a record 3,000 Americans renounced, up from just a few hundred a year in the mid 1990s. VISAS The number of foreign students at US universities reached a new high of 819,644 last year. Many came from China on F-1 visas which are reserved for students. Chinese students in the US now number 200,000, up from 16,000 in 2003. Students from India, South Korea and Saudi Arabia also flock to America’s top universities. Foreign students contribute over US$30-billion to the US economy annually. FARMING A Dutch farm is being run by robots. They feed 180 cows, monitor their health, clean their stables and milk them whenever the cows choose. In 2008, the owner invested US$730,000 in the machines that enabled him to double the number of cattle, increase the milk yield per cow by 15% and reduce wasted feed. An app warns the farmer if a cow needs human attention. Land and labour are expensive in Northern Europe. To compete, Dutch scientists, businesses and government have worked closely to boost productivity and develop high-value crops. Dutch cows now produce twice as much milk as they did in 1960. The value of the country’s agricultural exports are now second only to the US. TAXIS When the first Metro Toronto taxi licence was issued in 1953 it had no value. Today, a permit to operate a cab in the city is valued at more than C$300,000. Between 2003 an 2013 the value of a Toronto cab licence has increased 235%. The figure for Vancouver is 220 %. In the same period the value of West Texas crude has increased 191%, Art, 183%, Fine Wine, 182% and Chinese porcelain, 83%. BREWERIES Between 2007 and 2012, the number of breweries in the US has doubled from 398 to 869. The brewery industry reported US$28.3-billion in shipments in 2012, an increase of nearly 33.6% since 2007 Employment in the brewery industry also climbed over the five year span, rising to 26,077 employees in 2012, up 3825 or 17.2% from 22,252 in 2007. While overall employment grew, the average number of employees per establishment was nearly halved, from 56 in 2007 to 30 in 2012. Beer shipments in cans increased 32% between 2007 and 2012, and was worth $14.3-billion. The wineries industry employed 37,602 people in 2012, up from 33,390 in 2007. TRUCKS In the midst of the strongest market for commercial trucks in eight years, North American sales of natural-gas-powered vehicles are just crawling along. Their higher purchase price compared with diesel trucks, improved diesel fuel economy and continued scarcity of fuelling stations are damping natural-gas-powered truck demand. About 10,480 of the heavy-duty trucks are expected to be sold this year up 20 per cent from the 8,730 sold last year, but forecasters had expected sales to nearly double to 16,000 given the enthusiasm for natural gas a year ago. A natural-gas truck costs about US$50,000 more than $150,000 diesel truck. MANUFACTURING Britain is now the lowest cost manufacturing economy of Western Europe. Stable wages and improved productivity over the past decade has made the UK increasingly competitive even compared to many Eastern European countries. The UK is recovering its mantle as a global manufacturing hub and is now one of the cheapest locations to produce goods in Western Europe. . Direct manufacturing costs in the UK have improved by up to ten percentage points compared to other Western European countries. POWER Engineers in Canada have built a chin strap that harnesses energy from chewing and turns it into electricity. They say that the device could one day take the place of batteries in hearing aids, earpieces and other small gadgets. Made from a “smart” material that becomes electrically charged when stretched, the prototype needs to be made 20 times more efficient in order to generate useful amounts of power. AMAZON The rate of destruction of the Amazon rainforest in Brazil has increased for a second year running. Brazilian government figures show deforestation was up by 29% to the 12 months ending in July 2013. Satellite data shows that almost 6,000 sq. km. of forest were cleared during this period. The largest increases were in the states of Para and Mato Grosso where most of Brazil’s agricultural expansion is taking place. Besides agricultural expansion, the rebound in deforestation is due to illegal logging and the invasion of public lands adjacent to big infrastructure projects such as roads and hydroelectric dams. PALM OIL For half a century, Indonesia and Malaysia have accounted for the vast majority of the world’s palm oil. Now, investors are flocking to West Africa to secure land for rival plantations. Environmentalists say that the forests of South-East Asia have been massively despoiled and are warning West African governments not to follow suit and a growth versus conservation battle is in the offing. Demand for palm oil, whose annual global production is valued at US$50-billion, is soaring and consumption may triple between 2000 and 2050. SNACKS Worldwide, the snack industry is worth US$300-billion in revenue and is expected to exceed $380-billion by 2017. The industry is driven by consumers’ changing tastes and health considerations. Since 2004, the number of consumers categorized as “healthy snackers” has grown from 29-million to 41-million. Supermarket sales account for 50 per cent of all snack sales which is important at a time when the average size of supermarkets is declining. CITIES The Economist has again ranked Vancouver as the third most livable city in the world. Three Canadian cities, Vancouver, Toronto and Calgary have been named as some of the best places in the world to live. Toronto was number four and Calgary tied with Adelaide, Australia for fifth. Melbourne, Australia topped the list of 140 cities for the fourth year in a row with Vienna, Austria coming in second. SHARKS Google has had to reinforce its fragile undersea internet cables with a material similar to that used in bulletproof vests in order to protect against shark attacks. The company announced it was going back to some of the 100,000 miles of private fibre optic cable it owns around the world and reinforcing it with the protective material to at least in part minimize the damage that results from frequent and unexplainable shark attacks. Fibre optic cables use lasers to send data across the ocean, allowing transfer rates up to 100 times higher than traditional copper cables. CURRENCY Despite steadily increasing trade with China, Canadian businesses were the least likely to have settled transactions using the Chinese currency of 11 markets surveyed. Only five per cent of Canadian companies reported that they had done cross-border business using Chinese yuan or renminbi. By comparison, 22 per cent of global companies had done business using the yuan and 17 per cent of US businesses made transactions using the currency. More than half the Chinese businesses surveyed said they would offer discounts of as much as five per cent to firms willing to pay using their local currency. WEDDINGS For many, the ideal place for a wedding reception would be a local hall or a nice stately home. Not in Hong Kong however. McDonald’s wedding parties are so popular that the fast food empire has a dedicated wedding service there, available in 15 venues where customers can choose from four different wedding packages.

Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com. Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp

October 2014 Economic Digest - Importing and Exporting

October 2014 Edition

SHIPPING

Size is considered a great advantage in the container-shipping industry. The largest of the colossal vessels that now move the metal boxes between the world’s ports are twice as big as those launched a decade ago. Such scale is not to everyone’s pleasing. In June, China’s antitrust regulators sank plans by the world’s three biggest container-shipping firms to form a vast alliance aimed at sharing space on board their vessels, say that such an alliance was not in the “social public interest.”. Of the 20 biggest container lines, 17 are breaking even or losing money. Container-ship operators say that by pooling resources they can offer more frequent service to more ports and that costs can be kept down by ensuring that ships put to sea with less empty space.

CHIPS

Scientists have produced a new computer chip that mimics the organization of the brain, and squeezed on one million computational units called neurons. They describe it as a super computer the size of a postage stamp. Each neuron on the chip connects to 256 others, and together they can pick out the key features in a visual scene in real time, using very little power.

GLUTEN

Now the “gluten-free” label on packaged goods has real meaning and should no longer confuse shoppers.. Until now, the terms was unregulated and manufacturers made their own decisions about what it meant. The new US requirement is especially important for people who suffer from celiac disease and don’t absorb nutrients well They can get sick from the gluten found in wheat and other cereal grains. An estimated 3-million Americans have this disease. Gluten-free foods have become big business in the last few years, topping an estimated US$4-billion in sales last year.

DIAPERS

Lining the pants of the world’s aging population is lining the pockets of Domtar Corp, the Montreal company best known for its pulp and paper products. The company has made five acquisitions of infant and adult diaper companies and the takeovers are paying off. Domtar’s diaper sales reached US$234-million in the second quarter of this year, a relatively small proportion of their overall business which generated $4.5-billion in sales in 50 countries in 2013. In a few years, the elderly will outnumber babies, growth that will drive increased sales of adult incontinence products.

BEES

Newfoundland’s healthy honeybees are an increasing draw for researchers in the race to understand why colonies across much of the globe are struggling or dying off. There are fewer and fewer places to look at around the world that can claim to be free from major bee pests and Newfoundland is one of them. Honeybees are crucial pollinators for fruit, vegetables and other crops. The Canadian Honey Council estimates that the bee population across the rest of Canada has dropped by about 35 per cent in the past three years. A new report shows that more than half of Ontario’s 100,000 colonies died off during the past winter.

HATS

Ecuador has been weaving hats since the 17th century. They became known as “Panamas” because that was the market to which they were primarily sold. By the 1840's Ecuadorean entrepreneurs were sending them to Panama in the tens of thousands. They fell out of favour in the second half of the 20th century but demand is now rising again. The country exported finished hats worth US$6-million in 2013, up from $517,000 in 2003. The headgear now goes primarily to Italy, Britain and the US where they can fetch anything from a few dollars to several thousand for the most intricate designs.

VENDING

From junk food and soda pop to organic snacks and digital payments, the vending machine industry is reinventing itself one treat at a time. Canadians are returning to the automated dispensers they ignored for several years. In the five years to 2018 the Canadian vending machine industry is expected to grow at an estimated annual rate of 1.9 per cent to about C$716-million, driven by products such as coffee, tea, juice and healthy snacks. To boost profits, operators are moving away from the soft carbonated drinks that had been a core industry product to varieties of waters and energy drinks.

E-COMMERCE

According to Statistics Canada, e-commerce sales by retailers reached C$7.7-billion in 2012, up from $6.6-billion in 2011. Retail e-commerce (+16.3%) grew at over five times the pace of overall growth in retail trade (2.9%). Retail e-commerce sales accounted for 1.5% of total retail sales in 2012. Retail e-commerce sales are defined as the purchase or commitment to purchase goods or services over the Internet. On a comparative basis, retail e-commerce sales in the United States accounted for 5.2% of its total retail sales in 2012.

NUDISTS

Tourism by American naturists generates more than US$440-million a year according to the American Association for nude recreation( AANR). Castaway Travel which arranges nudist cruises and other vacations saw business soar 20 per cent last year. Another nude-cruise firm which started in 1990 with a cruise for 36 people last year chartered a ship big enough to carry 3,000 to the Caribbean. There are more than 250 nudist and clothing-optional resorts and clubs across the US.

RESERVES

India’s foreign reserves have recently swollen past US$300-billion to a near record high,. But India’s import cover, the number of months of imports its reserves can pay for, has fallen from around 15 months in 2008 to 8.6 byJune of this year. Other BRIC countries (Brazil, China and Russia) have import cover of around 1.5 years and 2 years.. Russia’ import cover, though still a healthy 1.5 years has fallen from nearly 2.5 years in 2010.

FRIDGES

Refrigerators are a multi-billion -dollar industry in North America. In the US, sales are expected to grow by three per cent annually over the next three years, reaching a market value of US$14.4-billion by 2016. Fridge makers are keen to score a bigger piece of the market by introducing new gadgets and features of all kinds. The innovations hitting the market this year range from a special temperature-control system to a smart fridge that connects you to recipe website Epicurious. General Electric is introducing one with hot water for tea, soup and so on. The LG model runs an android operating system with a WiFi LCD screen and comes with a built-in app which tracks what’s inside and how long its been around.

TECHNOLOGY

A new British report has found that most people hit their peak confidence and understanding of technology when they are just 15. This drops gradually up until their late 50s and then falls rapidly from 60 and beyond. In fact, six-year-olds have the same level of understanding of modern technology as 45-year-olds.. The study also showed that most British adults are still clinging to older forms of physical media such as books, CDs and DVDs despite the growth in digital music, films and devices. Almost 90 per cent of 45- to 54-year-olds own a CD collection and the average 55- to 64-year-olds owns 118 books.

FISH

Restrictions on cod and salmon fishing aimed to rejuvenate falling stocks in the Irish Sea and inland waterways do not appear to have halted the decline. After years of light quotas from the EU in Brussels and strict angling controls, there have been no population boost in the two species as scientists expected. They are now looking at other explanations because there is little more the fishing industry can do to reduce their catch of cod in the Irish Sea. The temperature of the Irish Sea has been increasing over the past four decades and cod, originally an Arctic species, are now at the southern limit of their range with respect to tolerating temperature.

HOVERING

When it comes to flight, nature just has the edge on engineers. This is according to a study comparing hummingbirds with one of the world’s most advanced micro-helicopters. Researchers found that in terms of power they require to lift their weight, the best hummingbird was over 20 per cent more efficient than the helicopter.

REMITTANCES

Money from immigrants and migrant workers in Canada sent to family or for investments back home is a booming business. Remittance centres are the unassuming face of a globalized money transfer industry that has tripled in value in a decade–to $529-billion a year according to the World Bank. The amount of money that leaves Canada was C$24-billion in 2012, a sum that is equivalent to the annual budgets of 12 Universities of British Colombia. The top countries receiving Canadian remittances are China (which received $3.9-billion) , (India $3.5-billion) and the Philippines ($2-billion). After these three, the countries receiving the most Canadian remittances are Britain, France, Lebanon, Vietnam, Germany, Italy and South Korea.

CATTLE

A new study suggests that the production of beef is around 10 times more damaging to the environment than any other form of livestock. Scientists measured the environment inputs required to produce the main US sources of protein. Beef cattle need 28 times more land and 11 times more irrigation water than pork, poultry, eggs or dairy. The scientists used data from 2000-2010 from the US Department of Agriculture to calculate the amount of resources required for all the feed consumed by edible livestock. Other researchers say the conclusions of the new study are applicable in Europe even though the work is based on US data.

PLASMA

Samsung is to stop producing plasma televisions by the end of November. It has said that falling demand means it will instead focus on producing curved and ultra-high-definition TVs. Panasonic, Sony, Hitachi and Pioneer have also pulled out of the sector in recent years and LG is expected to follow soon. Plasma screens, which use electrically charged ionised gasses, are often applauded for their brightness and deep blacks considered ideal for watching sports and films.

HAGGIS

The UK government is making a fresh bid to overturn a US import ban on traditional Scottish haggis which has been outlawed in the US since 1971. The ban was put in place because the country’s food standards agency prohibits sheep lungs, one of the key ingredients in haggis, in food products. Scottish beef is set to make a return to menus in America for the first time in almost 20 years. This follows a move by officials to reopen the US market to EU beef and other bovine products, following a ban put in place in the 1990s over concerns that Bovine Spongiform Encephalopathy (BSE) could infect the human food chain.

POWER

Rising power demand from “smart” TVs, game consoles and other network devices are driving up global electricity consumption, leading to calls for greater regulation of the booming electronics industry. Such devices consumed more than 600 terawatt hours of electricity worldwide in 2013, equivalent to the output of 200 medium-size coal-fired power plants. And three times more than they would need if their manufacturers used best-available energy-saving technology. Electricity usage from such electronics is climbing at a rate of six per cent per year, twice the increase in overall global power consumption.

SUPPORT

A struggling Korean baseball team which in the past five years has sustained more than 400 losses has invented a novel way to improve the atmosphere at their matches, by bringing in a crowd of robot fans. The robots can cheer, chant and perform a Mexican wave.

Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.

Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp

September 2014 Economic Digest - Importing and Exporting

September 2014 Edition

SECURITY

Google and Microsoft are to add a “kill-switch” feature to their Android and Windows operating systems, The feature is a method of making a handset completely useless if it is stolen, rendering a theft pointless. Apple and Samsung, two of the biggest phone makers, offer a similar feature on some of their devices. The move by Google and Microsoft means that kill-switches will now be a part of the three most popular phone operating systems in the world. Some 3.1-million mobile phone devices were stolen in the US in 2013, nearly double the number of devices stolen in 2012 and one in three Europeans experienced a theft or loss of a mobile device in 2013.

MALLS

Dying shopping malls are to be found across the US, often in middle-class suburbs wrestling with socio-economic shifts. Estimates on the share that might close or be re-purposed in coming decades range from 15 to 50 per cent. Americans are returning downtown and online shopping is taking a 6% bite out of bricks-and-mortar sales. Shopping malls were a natural product of the post-war era as Americans with cars and fat wallets moved to the suburbs. Leaders in many towns that once fought for malls are now grappling with how to inter their remains, some have been redeveloped to include housing, offices and even green space.

TUNGSTEN

Work has started to excavate Britain’s first new metal mine for 40 years. The mine is on the edge of Dartmoor, will cost $250-million to dig and is expected to start producing Tungsten in 2015. The mine will exploit the world’s fourth-largest deposit of tungsten and hopes to produce about 3,000 tonnes of tungsten and tin a year. Tungsten is almost as hard as a diamond and has one of the highest melting points of any mineral. Up to now, 80% of world’s tungsten production took place in China, allowing it to dictate supply to the rest of the world.

WEALTH

The combined fortune of Britain’s richest 1,000 people has hit a new high of US$1,038-trillion, equivalent to a third of the nation’s economic output and double the figure of five years ago. Meanwhile, real wages, pay adjusted for inflation, have been falling and working people have continued to face a cost-of-living crisis that sees them $3,200 a year worse off than in 2010. Government figures show that Britain’s richest one per cent had accumulated as much wealth as the poorest 55% put together.

AFRICA

Nigeria overtook South Africa as the continent’s biggest economy this year, but Canada will continue to bet that South Africa is still its top priority market in Africa, though bilateral trade with the country is a relatively modest C$1.6-billion. Canada has become the biggest foreign investor in Madagascar and Burkina Faso because of its multi-billion investment in the gold-mining sector in Burkina Faso and nickel mining in Madagascar.

OIL

The US Administration has quietly cleared the way for the first exports of unrefined American oil in four decades, allowing energy companies to chip away at the long-standing ban on selling US crude overseas. Two energy companies have been told they can export a kind of ultra-light oil that has become plentiful as drillers tap shale formations across the US. Experts estimate that as much as 700,000 barrels a day could be available starting next year.

SCIENCE

Expenditures by Canadian federal departments and agencies in science and technology are expected to decline 5.4% from the previous fiscal year to C$10.3.-billion in 2014/2015. Expenditures peaked in 2010/2011 and have declined since then. Science and technology spending is composed of two components–research and development as well as related scientific activities. Research and development is defined as creative work with an appreciable element of novelty and uncertainty undertaken in a systematic manner to increase the stock of scientific and technical knowledge.

PROPERTY

The total value of residential properties in Canada was C$3,838.2-billion in 2011, up 6.5 per cent from 2010. Much of the increase in value occurred in Ontario, British Columbia and Quebec. Together, these three provinces accounted for 88.7% of the annual increase. Growth in residential property values eased in 2011 compared with 2010, but remained well above rates observed during the economic slowdown of 2008 and 2009.

BARCODES

An invisible barcode is being developed to track explosives, medicines and banknotes. A team from Worcester Polytechnic Institute in the US has found that some nanoparticles have unique characteristics that can be used to mark items. The researchers say the technique could link objects to their manufacturer, seller or buyer. Using barcodes to mark and trace objects is now widely used by manufacturers but covert barcodes could be used to fight crime and reduce counterfeiting.

FLOWERS

The US imported flower industry is worth US$20-billion annually. Most come from Colombia, a country that is second only to the Netherlands in flower production. Canada imported $26-million worth of roses from Colombia in 2012. This industry is a top user of pesticides and, according to the International Labour Rights Forum, flower workers in Colombia experience higher than average rates of premature births, congenital malformations and miscarriages and are forced to work 70 to 80 hours a week during the peak season.

PLASTICS

Researchers have developed a collection of new plastics that are recyclable and adaptable. They include strong stiff plastics and flexible gels that can mend themselves if torn. The findings could lead to cheaper and greener cars, planes and electronics. This is the first time that durable “thermoset” plastics have ben produced in a recyclable form. Because they are strong and light-weight, thermosets are used throughout modern cars and aircraft, often mixed with carbon fibres to form composites. Some 50% of the new Airbus A350 jet, for example, will be made from composites.

ASIA

In 2013, Canada shipped C$51-billion in goods to Asia, making it Canada’s second largest export market. Of these, 26.5 per cent were Agricultural and Agri-food products. 24% were Metals and Minerals, 16.1% Wood Pulp and Paper, 9.4% Energy products and 9.15% Chemicals, Plastics and Rubber. Only 0.5% were Consumers Goods and Miscellaneous Manufactured Products. Asia now absorbs close to 45% of British Colombia’s merchandise exports and more than 13 % of Nova Scotia’s. In 2013, Asian countries bought 82% of Saskatchewan peas, 87% of Newfoundland’s iron and ores and 99.7% of Nunavut’s tanned furskins. Asia is now the main source of international students studying in Canada and in 2010, 76.9% of international students in Price Edward Island came from China alone.

WINE

For the first time, the US has overtaken France as the world’s biggest national market for wine. US drinkers consumed 210.9-billion hectolitres of wine in 2013, 0.5% more than in 2012. Meanwhile French consumption fell 7% from the year before to 2.8-billion litres. The amount of wine drunk per head is still higher in France than in the US. According to 2011 figures, the average French person drinks just over a bottle a week , six times more than the average US consumer. However, the worldwide capital of per capita wine consumption is the Vatican.

BRAZIL

The world’s biggest reserves of fresh water are to be found in Brazil, most of it in the Amazon. But Sao Paulo, home to one-fifth of Brazil’s population, is suffering the worst drought since records began in 1930. Low rainfall and high rates of evaporation in the scorching heat have caused levels in the Cantareira system of reservoirs, which supply 10-million people, to drop below 12% of capacity. This time last year, levels stood at 64%.

PHONES

Mozilla has shown off a prototype of a US$25 smartphone that is aimed at the developing world. The company which is famed mostly for its Firefox browser, has partnered with a Chinese low-cost chip maker. While not as powerful as more expensive models, the device will run apps and make use of mobile internet. It will prove popular in the developing world as a halfway point between “dumb” phones that just make voice calls and other basic functions and fully-fledged smartphones. Mozilla hopes it will capture an early lead in a market that is now being targeted by mobile device manufacturers.

DISASTERS

More than 26,000 lives were lost in natural and man-made disasters last year. The biggest catastrophe was Typhoon Haiyan in the Philippines where 7,500 died or went missing and more than four million were made homeless. Flooding in India caused a death toll of 6,000. Many parts of Europe also suffered severe flooding, while hailstorms in Germany and France generated the largest insured loss from hail on record, US$3.8-billion. Yet the $45-billion paid out by insurers was down sharply from $81-billion in 2012.

ROBOTS

China was the biggest buyer of industrial robots last year, snapping up 36,500 units. (Japan has the largest number of robots in operation). Around 179,000 robots were sold worldwide.

HERITAGE

Forty-three per cent of Metro Vancouver, British Columbia residents have an Asian heritage, becoming the most “Asian” city outside Asia. The only other cities around the world that come close to Metro Vancouver for their portion of residents with Asian backgrounds are San Francisco (33%) London, England (21%), Metro Toronto (35%) Calgary (23%) and Sydney, Australia (19%), Statistics Canada projects that the numbers with Asian roots in Vancouver will continue to grow at a faster rate than the non-Asian population.

SMELL

The human nose can detect one trillion different odours, far more than previously thought, according to Rockefeller University researchers. Until now, the long-held belief was that we can sniff out about 10,000 smells. New estimates suggest the nose outperforms the eye and the ear in terms of the number of stimuli it can distinguish between. The human eye uses three light receptors that work together to see up to 10-million colours while the ear can hear almost half a million tones.

MALARIA

Warmer temperatures are causing malaria to spread to higher levels a new study suggests. Researchers have found that people living in the highlands of Africa and South America are at an increased risk of catching the mosquito-borne disease during hotter years. They believe that temperature rises in the future could result in millions of additional cases in some areas. Areas at higher elevations have traditionally provided a haven from this devastating disease.

CALLS

The Canadian government has been running a massive robocall campaign out of Ottawa, dialling its own offices and hoping no one answers. The object is to ferret out and cancel the thousands of unused telephone lines that cost taxpayers millions each year.

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

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August 2014 Economic Digest - Importing and Exporting

August 2014 Edition

DOMAINS

European wine producers together with their Californian and Australian counterparts are fighting a rearguard action to prevent the introduction of internet domain names such as .vin and .wine. Producers of fine wines argue that making these names available could make it easier for unscrupulous companies to pass off inferior wines such as Champagne, or Napa Valley sparkling wines. European wine producers are prepared to boycott the new domain names if they are introduced saying that protecting wine-growing place names is critical to all wine-growing regions of quality.

PHONES

More than one in five households in Canada have cell phones as their only form of telephone service. In 2013, 21 per cent of households reported using a cell phone exclusively, up from 13 per cent in 2010. This is more pronounced in young households where all of the members are under 35 years of age. Total cell phone usage, whether used exclusively or in a combination with other types of phone service, continues to grow in popularity in Canada. In 2013, 83 per cent of Canadian households had an active cell phone, up from 78 per cent in 2010. The province with the highest proportion of cell phone users was Alberta with 91 per cent and the lowest was Quebec with 76 per cent.

LABELS

Consumer demand for more natural, environmentally friendly and socially-responsible food has proliferated. More than ever, consumers want to know exactly what is in their food, and they are turning to food labels to provide this information. When shopping for foods, according to Consumers Reports, two-thirds of Americans are checking to see if their food is locally produced. The majority of consumers (59 per cent) are also checking to see if their food is natural. Consumers are less likely to look for fair-trade (31 per cent of consumers), animal welfare (36%), antibiotic (39%) and non-GMO (40%).

KOI

Japanese Koi fish have been found in Boundary Dam in Estevan, Saskatchewan. They are not native to the province and are causing problems. The government which has known about the Koi since 2010 speculate that they were dumped into the Dam. The fish uproot submerged vegetation that can impact how other fish and other aquatic species do as they depend on the aquatic vegetation. Koi fish are also known for stirring up sediment and eating the eggs of other fish. There does not appear to be a feasible method that is environmentally friendly of getting rid of the Koi.

CONSUMERS

Online shoppers in the UK now have longer to cancel orders under new laws. The cooling-off period for an online order has been extended to 14 calender days from seven working days. Shoppers can now claim a full refund during this period without having to give a reason for the cancellation.

CODES

Doctors in the US complain that errors in how they code treatments are often mistaken for fraud and that the automation of claims-monitoring could make this worse. Next year, Medicare will have 140,000 different codes, including nine for injuries caused by turkeys. (Was the victim struck or pecked? Once or more often? Did she suffer negative after-effects? And so on). Many clinics have fallen under suspicion and had payments suspended, only to win a reprieve when the facts are studied closely. This could make many doctors reluctant to take Medicare patients.

DRINKS

Just as Russia has its vodka, Mexico its Tequila and Scotland its Scotch, China has its Baijiu. It is the world’s biggest-selling spirit category and represents a US$23-billion market. Producers are now seeking new markets in the US and Europe as sales fall in China after a crackdown on wasteful spending. The Chinese white spirit is distilled from sorghum, wheat or rice and accounts for more than one-third of all the spirits consumed in the world because China is the leading spirit consuming nation. Baijiu can trace its history to the first century BC. Experts say western palates may need some training to appreciate the product which some have compared to drinking paint thinner.

COAL

Power plants fired by coal in the US will be hit hardest by an Environmental Protection Agency plan to cut carbon dioxide emissions from existing power stations by 30 per cent from their 2005 levels by 2030. Industry groups are already lining up to object with the US Chamber of Commerce warning of a US$51-billion annual hit to the economy from higher energy bills. However, if that estimate is accurate it would still represent only about 0.3% of the annual US GDP. It also ignores the environmental and medical benefits of reducing the use of coal which pumps out double the carbon dioxide of natural gas when burned and contributes to smog and respiratory problems.

HOGS

Iconic motorbike manufacturer Harley Davidson, has revealed its first electric motorcycle. The bike will not go on general sale, instead the company will select customers from the US to ride it and provide feedback. The bike will travel down the US’s Route 66 visiting more than 30 Harley Davidson dealerships between now and the end of the year.

FAIRTRADE

A new British report from the School of Oriental and African Studies (SOAS) says that coffee drinkers who choose brands carrying the Fairtrade label are not helping the poor and the “ethical trading” claims made by fair-trade organizations are hollow. The researchers investigated labour markets for export crops in Uganda and Ethiopia, The report’s conclusions will come as a shock to consumers in rich countries who pick brands carrying the Fairtrade logo, supposedly supporting the earnings of family farms and small-holders by paying of a “Fairtrade premium” helping them compete in a world dominated by large plantations. The SOAS researchers are urging Fairtrade organizations to improve their audit procedures and establish minimum wage standards.

TOURISTS

Visitors to Scotland spent 20 per cent more last year than in 2012, a bigger increase than London and the UK as a whole. The number of visitors was up 9.8- per cent to 2.44-million, spending a total of US$3.36-billion. Edinburgh was the biggest draw with 1.3-million people staying one night or more in the city, second only to London. A further increase is expected for 2014.

BLEEDING

A Canadian trauma specialist and an armed forces surgeon has developed a new tool for first responders. It looks like a futuristic hair clip and is about the size of a child’s hand-held toy. It looks innocent except for the eight needles protruding from the clamp. The iTClamp is specially designed to close a wound in a way that is so simple, anyone can do it. Instead of applying a complicated tourniquet with the right amount of pressure, let alone performing the long and complicated process of stitching a profusely bleeding wound, the clamp can be placed simply over the injury and squeezed together. This closes the wound and takes about three seconds to apply. The device has been approved by Health Canada for more than a year and a half, by the US Food and Drug administration for a year and by Europe for about 15 months.

UBER

The next big thing in the tech world is forecast to be Uber which has raised US$1.2-billion in capital from private investors, giving it an estimated market value of $17-billion. Uber’s limousine and car-sharing services operate in 128 cities in 37 countries through its app. which is a challenge to licensed taxi services. There have been protests by European taxi drivers in Paris and London, angry at what they say is unfair competition from Uber’s unregulated service.

FISH

Deforestation is reducing the amount of leaf litter falling into rivers and lakes, resulting in less food being available to fish, a new study claims. Researchers found that the amount of food available affected the size of young fish and influenced the number that went on to reach adulthood. The results illustrate a link between watershed protection and healthy freshwater fish populations. A team of scientists from Canada and the UK collected data from eight locations with varying levels of tree cover around Daisy Lake in Canada which forms part of the boreal ecosystem.

GOLF

Golf, which usually rides out a recession because so many players are affluent is one of the last victims of the financial crisis. In the US, an estimated five million fewer people play the game at least once a week than a decade ago. A similar measure in England shows a 16 per cent drop in the same period. In Canada the number of occasional golfers is down 17 per cent and those classed as playing infrequently have plunged 49 per cent according to a 2012 study. It is estimated that golf accounts for C$11.3-billion worth of Canada’s GDP. The combined revenues of $4.7-billion produced by golf courses, driving ranges and the like nearly matched the total of all other sports and recreational activities.

MIGRAINES

An estimated 2.7-million Canadians, or 8.3 per cent of the population have been diagnosed with migraine, a debilitating disorder characterized by pulsating headaches that can last for a few hours to several days, often accompanied by nausea and sensitivity to light and sound. Females were more than twice as likely as males to report migraines, 11.8 per cent versus 4.7. For both sexes, migraine was most common in ages 30 to 49. Compared with the national figure, the prevalence of migraine was lower in Quebec, (6.8 per cent) and higher in Manitoba (9.5), Nova Scotia (9.1) and Ontario, (8.8).

QUALITY

Canadian workers are winning a reputation for building quality vehicles. A Toyota plant in Cambridge, Ontario led the global rankings in the widely watched annual survey by J.D. Power and Associates that measures vehicle quality. The General Motors plant in Ingersoll, Ontario, placed second in North America, and Canadian-built vehicles placed first in five out of 23 categories. Quality has a direct and meaningful impact on subsequent loyalty and it costs hundreds of millions of dollars to win back customers who have abandoned a brand.

FRIDGES

Doctors in the UK are warning that Britain’s obesity crisis could cripple the National Health Service as hospitals are forced to buy and rent special equipment to keep bodies cool because they are too large to fit into mortuary fridges. Hospitals are also having to widen corridors, buy reinforced beds and lifting equipment in order to cope with the growing numbers of obese patients. A quarter of adults in the UK are estimated to be obese and the number is expected to grow to account for more than half the population in the next 30 years.

NIGERIA

India has taken over from the US as the largest importer of oil from Nigeria. The US has drastically reduced its demand for Nigerian crude in recent months and now buys about 250,000 barrels a day. India buys considerably more, about 30 per cent of the country’s 2.5-million barrels of production. US demand for imported oil has fallen sharply because of increasing domestic shale gas and oil production. It is estimated that the US will be largely energy independent by 2035.

CLAIMS

Researchers into unusual claims by cellphone owners in Britain has revealed the most bizarre and outlandish accidents befalling the nations’s technology. One farmer claims to have damaged his iPhone while calving, acccidently inserting it into the rear of a cow while attempting to use it as a flashlight. And a woman absentmindedly baked her Nokia 6303i into a sponge cake intended for her daughter’s birthday.

Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.

Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp

July 2014 Economic Digest - Importing and Exporting

July 2014 Edition

 
TRADE

A new study for the Canadian Council of Chief Executives has concluded that Canada should declare itself a free trade zone. Removing all remaining tariffs coming into Canada would generate C$20-billion a year in economic gains making the country wealthier, more productive and a magnet for foreign investment. The economic gains, equivalent to a percentage point of gross domestic product, are roughly five times the $4-billion a year Canada now collects from import duties.

WATER

Las Vegas or Los Angeles would love to have Berlin’s problem: too much water. In the Spree valley, the water table has risen in places to just 2.5 metres below ground level. With most cellars in Berlin between two and three metres deep, that means wet basements, water damage and mould. Some 200,000 people, out of Berlin’s total of 3.4-million, live in the worst hit areas. On average Germans would be expected to use about 300 cubic metres of water annually but because of conservation measures they are using only about 200 cubic metres.

ROAMING

The European Parliament has voted to scrap roaming fees charged for using a cell phone while abroad. Under the wide-ranging telecom reforms, the cost of making a call or downloading internet data in another EU country will be the same as at home. Some UK consumers have faced bills for thousands of pounds after falling foul of current high roaming charges. The change is due to come into effect from December but still requires approval from EU governments.

DRONES

A Greek entrepreneur is planning a network of humanitarian drones for transporting cargo, which aims to help the one billion people who do not have year-round access to roads by delivering medical supplies to them. The drones can deliver parcels up to 2-kilograms in weight. In sub-Saharan Africa, 85 per cent of roads are inaccessible during the wet season, cutting off huge swaths of the population and hindering the delivery of medical supplies. Test runs have been made in Haiti and the Dominican Republic and aid agencies are being targeted as the first users.

CABLES

A new design for USB, a standardised connection for data transfer between electronic devices, has been shown off for the first time. The new connector will be reversible, bringing an end to the everyday irritant of trying to force a USB cable in the wrong way. But the rollout of new ports will take some time as manufacturers gradually incorporate them into their products. The first USB cables were introduced in the mid 1990s and, until now, could only be plugged into a computer or other device one way round to ensure a data connection.

WEDDINGS

A US wedding planner, has surveyed 13,00 brides and grooms across the country and sourced statistics on everything from location fees and tuxedo costs. It has found that tying the knot keeps growing more expensive, despite the trend for casual weddings. The average wedding cost in 2013 was about the price of a new car, or about US$30,000, excluding the honeymoon. The most expensive place to wed is Manhattan, $86,916 on average. Wedding dress costs: New York City and Long Island brides spent most on their gowns, $3,027 and $2,160 respectively while brides in Alaska and Oklahoma spent far less, $804 and $859 respectively.

AGRICULTURE

Canada’s agriculture and agri-food GDP has grown 1.4 per cent annually since 1997, despite a global economic downturn that saw many other sectors stagnate. The food and beverage manufacturing industry is the largest manufacturing industry in Canada in terms of value of production, with shipments worth C93-billion. It accounts for 16 per cent of total manufacturing shipments. Exports of manufactured food products were worth $24.6-billion in 2012, an increase of 5.6 per cent from 2011 and reached 185 countries. Approximately 25 per cent of food and beverage shipments were exported with the largest share going to the United States.

SYRUP

Quebec is the undisputed world champion of the maple syrup business but the dramatic rise in production by Vermont has industry officials casting an eye southward. Quebec’s powerful producer’s federation has hired researchers to find out what is fuelling the rapid growth where production has doubled over the past 13 years. Even with the dramatic rise, the US accounts for only 20 per cent of maple syrup production (Vermont taps about 40 per cent of US production), while Quebec accounts for most of Canada’s 80 per cent. Last year, Vermont had record production. Vermont’s three year average to start the 2000s was 1.6-million litres per year. The past three years ending 2013 saw the state produce 3.1-million litres.

CHOCOLATE

The value of the Canadian chocolate confection market is about C$2.7-billion. Nestle’s Canada has a 16 per cent share of that with its Coffee Crisp and Kit Kat brands leading in total sales. Globally the market is expected to hit almost $100-billion this year from $83-billion in 2010 largely due to a growing sweet tooth among Asian consumers. Chocolate prices were $12.25 a kilogram last year, a 45 per cent increase from 2007 which will hurt Swiss consumers who devour 11.8 kilograms of chocolate per capita each year, compared to 6.4 in Canada and 5.5 in the United States (a large chunk of which is sold around February 14th.

ALMONDS

One of America’s earliest food crops, almonds, is also one of the most important for commercial bee keepers. Almonds depend on bees for pollination but the growth of this crop taxes the honeybees that the industry needs to thrive, California produces over 80 per cent of the world’s almonds, valued at over US$4-billion in 2012. The boom is expected to continue with new food products and expanding overseas markets increasing demand, to the point that no young almond trees are available for purchase until 2016. This demand for almonds translates into demand for pollination so every year 60 per cent of all US honeybees are shipped to California and will require 1.5-million hives this year.

DIAMONDS

In 2012, the value of the worldwide retail diamond market was US$72-billion. Diamonds took a huge hit during the financial crisis and have only just recovered. Sales were up just two per cent last year. Russia has diamond reserves of more than one billion carats followed by Zimbabwe with 200-million, Canada 195-million and Congo and Brazil 180-million each.

RELIABILITY

General Motors which is already locked in a public relations crisis because of a deadly ignition defect that has triggered a recall of millions of vehicles now has another problem on its hands. A new survey of top suppliers to the car industry in the US now considers GM as the worst big auto maker to deal with. The survey asks the industry’s biggest suppliers to rate their relationships with the six auto makers that account for 85 per cent of all light vehicles sales in the US. Suppliers gave GM low marks on all kinds of key measures including its overall trustworthiness, communication skills and protection of intellectual property. Toyota and Honda finished in No.1 and 2 spots respectively.

DROUGHT

NASA scientists have begun deploying satellites and other advanced technology to help California water officials assess the state’s record drought and better manage it. The scientists are also embarking on projects that use satellite images to help more accurately measure the number of fields farmers have chosen not to plant and where land is sinking because of excessive ground-water pumping. California’s relationship with NASA began shortly after the dry year of 2009 when officials sought answers to problems exacerbated by the lack of rain and snow, such as sinking land.

COMPETITIVENESS

In a survey of 60 countries by a Swiss business school, Canada remains the seventh most competitive. The IMD International based in Lausanne, says the United States retains its No. 1 spot, reflecting the resilience of its economy. Switzerland, Singapore, Hong Kong, Sweden and Germany are also ahead of Canada. The UAE, Denmark and Norway are also in the top ten. While Europe fared better than last year because of its gradual economic recovery, the survey shows big emerging economies have dropped in the ranking as economic growth and investment slows.

WAGES

In a nation of mostly haves and have-mores, Swiss voters have rejected a poll which would have seen the nation-wide minimum wage raised to US$27.77 an hour, the world’s highest. Meanwhile, Washington State is expected to approve an increase in their minimum wage to $15.00 an hour, the highest in the United States.

WI-FI

Connectivity for wi-fi from a light bulb, or “li-fi” has come a step closer according to Chinese scientists. A micro chipped bulb can produce data speeds of up to 150-megabits per second (Mpbs). A one watt LED light bulb would be enough to provide net connectivity to four computers it is claimed. Li-fi, also known as visible light communications, at these speeds would be faster, and cheaper, than the average Chinese broadband connection.

FILMING

US authorities have said they are considering allowing the film and television industries to use drones. The Federal Aviation Authority feels there could be tangible economic benefits but cautions about safety issues. Businesses have been pushing hard for permission to use drones which are much less expensive to run than manned aircraft. However, the FAA is concerned about the fact that the US has some of the busiest airspace in the world and it needs to be sure that drones can be integrated with existing commercial and military traffic.

RAIN

Scientists at the Delft University of Technology in the Netherlands would like to turn umbrellas into rain gauges. The smart umbrella has a sensor that detects raindrops falling on its canvas and uses bluetooth to send this information via a phone to a computer Though we have radar and satellites, rain is not being measured on the ground and scientists are relying on an ever dwindling number of scientific gauges which are expensive to maintain.

FOOD

The US$3.9-billion nut-based and sweet spread category grew 34 per cent from 2008-13 and is forecasted to reach $6.5-billion by 2018, a 65 per cent increase. Due in part to countless new product launches, including industry-leading Nutella, such products maintain high household penetration rates and have become pantry staples. One in five consumers surveyed (20 per cent) say they want to see more indulgent nut-based spread, such as raspberry, white chocolate or chocolate chip. From 2009-13 there was a 97.7 per cent increase in new products.

DUTY-FREE

The abolition of duty-free sales within the European Union in 1999 looked like the end of a big chunk of business. But since 2009, sales have grown by more than 12 per cent a year. Half the growth comes from a rise in the number of passengers, especially from places like China. A bit is inflation and the rest comes from travellers’ greater appetite for shopping. Once passengers are through security they are at a loose end and most are relatively prosperous. Airport retailers know the flight schedules and shopping habits of travellers according to their boarding cards and are primed to receive them. Sales at airports alone are forecast to grow by 73 per cent from 2013 to 2019. In 2013, travel retailers sold around US$60-billion worth of goods.

SIZE

Though the engineers measured them, nearly 1,300 French stations are a few centimetres too narrow to take the order of 341 new trains to be introduced between now and 2016. It will cost US$68-million to fix the problem.

Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.

Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp

June 2014 Economic Digest - Importing and Exporting

June 2014 Edition

TEA

A machine with a US$13,000 price tag is said by its manufacturer to make the perfect cup of tea. It claims that the brewing process is far more complicated than simply dipping a tea-bag into some boiling water. Prototypes are being tested in US coffee shops and the device could be commercially available later this year. It uses a brewing chamber into which loose tea leaves and water are placed. The air is then drawn out to create a vacuum. This negative pressure in the chamber brings the tea leaves to the surface of the liquid and draws out flavour more precisely than simply adding boiling water. The process is repeated for between 60 and 90 seconds and different flavours need different numbers of infusion cycles. The machine can brew more than 60 cups of tea an hour.

INTERNET

Tablet computers are behind a swift rise in people aged 65 and over using the Internet in the UK. In the past 12 months the percentage of older people going online rose by more than a quarter to 42 per cent. In 2013, 17 per cent of people in the 65-or- over category had used a tablet for their web browsing. In 2012, tablet use in this group was just five percent. Despite the increase, the oldest group of people spend the least amount of time online of any adult age group with an average of nine hours 12 minutes per week. By contrast, those aged 16-24 devote about 24 hours each week to online activities.

DENMARK

Denmark is home to 1,500 mink farmers who together rear about 17.2-million of the mammals a year, about one-fifth of the world’s supply. It also produces smaller quantities of other furs such as white fox and chinchilla. Danish food companies make the world’s most nutritious mink food, a foul-smelling, fishy concoction and Danish design companies drive fur fashions. The Danish Fur Breeders Association is the world’s largest fur-auction house which sells fur from all over the world. Last year it auctioned 21-million pelts and had a turnover of US$2.8-billion.

INFRASTRUCTURE

Although US$91-billion is spent each year on American roads, that is nowhere enough to keep the country’s 4.1-million miles of public roadways in good shape. The Federal Highway authority estimates that $170-billion in capital investment is needed every year. Last year, a report from a civil engineering group said that 31 per cent of America’s major roads were in poor or mediocre condition. Main roads through cities were in worst shape with almost half the miles travelled over urban interstates in 2013 giving a bumpy ride.

MAIL

With a workforce of just over 491,000 in 2013, the United States Postal Service is second only to Walmart among civilian employers in America. But it still employed more than 200,000 fewer people last year than it did just nine years earlier, when it handled nearly 500-million more pieces of mail and had almost 2,000 more retail offices. The rise of e-mail has left America’s massive postal service with far less to do and it has been scrambling to find ways to raise revenue. A new report suggests that post offices should begin offering financial services such as cheque-cashing, small loans, bill payments and international money transfers.

TOURISTS

Nearly one in ten international tourists worldwide is now Chinese, with 97.3-million outward-bound journeys from the country last year, of which around half were for pleasure. Most of those who travel go to Hong Kong, Maca or Taiwan Chinese tourists spent most in total, US$129-billion in 2013, followed by Americans at $86-billion. More than 80 per cent of Chinese tourists say shopping is vital to their plans and that they are expected to buy more luxury goods next year while abroad than tourists from all other countries combined. This growth is expected to continue. Currently, only about five per cent of the Chinese population have passports.

AID

Last year, developing countries received US$134.8-billion in aid, the highest ever according to the OECD’s Development Assistance Committee. Donations fell in 2011 and 2012 as rich countries adopted austerity budgets. Five DAC member countries, including Britain for the first time, met the UN target of 0.7 per cent for aid as a share of gross national income (GNI). The Netherlands missed the benchmark for the first time since 1974. The United Arab Emirates increased aid fourfold, chiefly to help Egypt. America gives less than 0.2 per cent of its GNI but remains the largest donor providing $32-billion in 2013.

AIRPORTS

For the fifth year in a row, Vancouver International Airport has been recognized as the Number One airport in the world. The Skytrax rankings are based on more than 12-million passenger surveys conducted in airports around the world on 39 elements of airport experience.

PUBLISHING

A decision by Canada’s Competition Bureau means retailers will now be able to lower the prices of e-books. The Bureau has reached a deal with the four major e-book publishers that forces them to drop their practice of stopping retailers from offering discounts on e-books. Similar settlements in the US over the past two years resulted in shaved prices for e-books there. Best selling e-books are now sold at discounts of 20 per cent or more south of the border.

SNACKS

Scottish potato chip maker Mackie’s has reported a six-fold leap in annual exports to Canada.. The company exported 279,000 packages in 2013, up from 46,000 in the previous year. The Canadian market now makes up about 40 per cent of Mackie’s export sales turnover.

HEALTH

A new report by the World Health Organization (WHO) says that resistance to antibiotics poses a major global threat to public health. It analysed data from 114 countries and said resistance was happening now in every region of the world. It described a post-antibiotic era when people die from simple infections that have been treatable for decades. The report focussed on seven different bacteria responsible for common serious diseases such as pneumonia, diarrhoea and blood infections.

MINING

Plans to open the world’s first mine in the deep ocean have moved closer to reality. A Canadian mining company has finalized an agreement with Papua New Guinea to digging up an area of seabed. The controversial project aims to extract ores of copper, gold and other valuable metals from a depth of 1,500 metres. Environmental campaigners say mining the ocean floor will prove devastating, causing lasting damage to marine life. Under the agreement, PNG will take a 15 per cent stake in the mine by contributing US$120-million towards the cost of operation.

GARLIC

A farmer who stumbled across an ancient Korean method for curing garlic is now supplying some of the UK’s top restaurants with so called “black garlic”. He wanted to find a way of preserving some of the 900,000 pungent bulbs of garlic he grows so they could be eaten all year round. The answer came when he chanced upon a 4,00-year-old Korean recipe giving a way of preserving garlic bulbs by exposing them to heat and moisture for more than a month. The closely-guarded process kickstarts a chemical reaction between the sugars and amino acids which transforms regular bulbs into sweet, sticky black garlic.

ATARI

Filmmakers digging in a New Mexico landfill have unearthed hundreds of E.T, The Extra Terrestrial cartridges, considered by some the worst made video game ever and blamed for contributing to the downfall of the video-game industry in the 1980s. Some speculate that thousands or even millions of the unwanted cartridges made by Atari were buried in the landfill. The game was a design and marketing failure after it was rushed out to coincide with the release of the movie.

CO2

Rising levels of CO2 around the world will significantly impact the nutrient content of crops, such as wheat, rice and soybeans, according to a new study. Experiments show levels of zinc, iron and protein are likely to be reduced by up to ten percent in wheat and rice by 2050. The scientists say this could have health implications for billions of people, especially in the developing world. Around a third of the global population are already suffering from iron and zinc shortages.

DOORKNOBS

Vancouver’s ban on doorknobs on all new buildings has set off a chain reaction across the country as other jurisdictions ponder whether to follow Vancouver’s lead. The war on doorknobs is part of a broader campaign to make buildings more accessible to the elderly and disabled, many of whom find levered doorhandles easier to operate than fiddly knobs. Vancouver’s code adds private homes to rules already in place in most of Canada for larger buildings, stipulating wider entry doors, lower thresholds and lever-operated taps in bathrooms and kitchens, In BC, bears have been known to scavenge for food inside cars whose doors have handles for this reason and one county in Colorado has banned door levers on buildings for this reason.

CONTAMINATION

Almost a fifth of China’s soil is contaminated an official government study has shown. Conducted between 2005 and 2013, it found that 16 per cent of China’s soil and 14.5 per cent of its arable land showed contamination. The report named cadmium, nickel and arsenic as the top pollutants. The study took samples across an area of 6.3-million square kilometres, two-thirds of China’s land mass. The contamination is notably higher than the previous survey between 1986 and 1990. Up to now, this report has been classified as a state secret because of its sensitivity. There is growing fear in China over the effect that modernization has had on the country’s air, soil and water.

FARMING

The Canadian government hopes changes will lead to a huge expansion of BC’s fish farms. Bureaucratic hurdles and legal uncertainty are being swept away as part of an attempt to help the Canadian industry, which has stagnated for years, to take advantage of rising global demand for seafood. It is believed that aquaculture could expand from C$2-billion in total annual economic activity to $5.6-billion in 10 years and to more than $8-billion in 15 years. BC has been compared unfavourably to Norway which has a coastline identical in length to BC and a population size similar to BC. Norway sold more than 1.2-million tonnes of farmed salmon in 2012. In 2013, BC produced 57,000 tonnes.

CHARGING

A battery that can charge in under 30 seconds has been shown at a technology conference in Tel Aviv. A Samsung S4 device went from a dead battery to full power in 26 seconds in the demonstration. The battery is currently only a prototype and it is predicted that it will take three years to become a commercially viable product. It is estimated that the batteries are likely to be 30- to 40 per cent more expensive to manufacture compared to traditional ones and the final product will be twice as expensive as those on the market today.

SPIDERS

Gasoline-sniffing spiders have forced Mazda to issue a voluntary recall notice so it can apply a software fix to its cars. The yellow sac spider is attracted to the smell of gasoline and the manufacturer fears it could weave its web inside engines causing a blockage and build-up of pressure increasing the risk of engine fires. 42,000 Mazda 6 vehicles from 2010 to 2012 are involved in the recall.

ATM's

A homeless man in Maine used the cash advance feature on a bank ATM to give him US$700 and he did it 53 times for a total of $37,000.

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