July 1999 Economic Digest - Importing and Exporting

July 1999 Edition

PACTS

 
Canada has signed a framework agreement to liberalize trade with Latin America countries of the Andean Pact. The non-binding agreement with the five countries--Peru, Colombia, Ecuador, Venezuela and Bolivia--commits the parties to assessing each other's trade barriers, harmonizing customs and collaborating at talks toward the Free Trade Area of the Americas (FTAA). The hemispheric free trade agreement is to be signed in 2005.

SOFTWARE

Software piracy in Canada grew last year even as it fell in the U.S. despite attempts here to educate the public and impose tougher penalties against sellers of illegal computer programs. The Canadian Alliance Against Software Theft (CAAST) says the industry must work harder to narrow the piracy-rate gap between Canada and the U.S. if industry sales, jobs and government tax revenues are to be protected. CAAST found that 40 per cent of business software applications loaded on personal computers in Canada in 1998 were pirated, compared with 39 per cent in 1997. The U.S. rate by comparison dropped to 25 per cent last year, from 27 per cent in 1997.

GROWTH

The Conference Board of Canada predicts that Toronto will lead all Canadian cities with an average real GDP growth of 3.4 per cent between 1999 and 2003. Montreal ranks second at 3.2 per cent powered by its high-tech sector followed by Ottawa and Edmonton. Vancouver lags in sixth position.

PAPER

Futurists' predictions of a paperless society have been blown away by the surging demand for electronic information. Americans have been using more paper than ever. Consumption of new paper products rose to 747 pounds per person last year, up steadily from 695 pounds per person at the beginning of the 1990s.

GOLF

According to Golf Digest, there are 16,000 golf courses in the U.S. Japan is next with 2,300 and the U.K. and Canada are tied at 1,725 each. There are 15 courses in Bangladesh, eight in Botswana, two in Papua New Guinea and a pair in El Salvador.

AIRLINES

Airline Quarterly Financial Review shows that for calendar year 1998, operating profit and net income for the 13 major airlines combined were near all-time highs. Every major carrier, except for Northwest and Trans World, attained an operating and net profit for the calendar year. Five major airlines -- Alaska, America West, American, Delta, and Southwest -- reported all-time carrier records for any calendar year in both operating and net income. The 13 carriers as a group reported a combined operating profit during the fourth quarter of $1.4 billion and a combined net profit of $596 million.

CHINA

A price war among Chinese TV makers has exposed a deep struggle between state support of industry on one side and ferociously competitive firms on the other. TV used to be a rare luxury in China. Today, about 100 TV makers can produce a third more than the country needs, or about 45 million sets a year. The result; cutthroat tactics as firms fight for market share. China's leading TV maker recently slashed prices by 20 per cent and rivals followed suit which has resulted in smaller companies going out of business. But many TV companies were formed in the days of central planning with a goal of creating mammoth industries, not market winners. Many churn out identical cheap televisions no one wants, but they enjoy the protection of officials unwilling to see them fail.

BROADCASTING

We are used nowadays to those ubiquitous bar codes on everything from soup cans to traffic tickets. Now, some work being done by Motorola could put them in the history books. A new kind of microchip being developed combines enough memory to store 110 characters with a radio antenna - all the size of a single coffee ground. This microchip can be stuck or manufactured to just about anything. The chip can use its built-in antenna to transmit information about the product it's stuck to. That means no more waiting in line to check out at the grocery store - you just walk to the checkout station and a radio receiver will tally up what is in your cart.

FACT

A chip of silicon a quarter-inch square has the capacity of the original 1949 ENIAC computer, which occupied a city block.

NEWSPAPERS

In 1971 there were 114 Canadian daily newspapers, 115 in 1981, 108 in 1991 and 105 at the end of last year. Circulation was reasonably steady registering 5.4 million in 1980 and 5.1 million in 1997. One of the most marked changes in daily newspaper statistics relates to morning and evening editions. In 1980, there were 25 Canadian morning and 95 evening editions. By 1997, the numbers were 44 morning and 61 evening papers. The trend is even more pronounced in the U.S. There, 387 morning papers and 1,388 evening editions in 1980 became a nearly even split by 1997 between 705 morning and 816 evening papers.

PROGRESS!

According to the Washington Post, the little known truth about North American farming, in fact farming everywhere, is that it's in a never-ending race to stay ahead of disaster. Only a handful of major crops (including rice, wheat and corn) supply most of the calories for the world and their production has been concentrated on a relatively small number of varieties. It takes about five to nine years on average before a widely planted variety of crop becomes particularly susceptible to disease, and researchers must have a new variety waiting in the wings. The new strains come, in part, from places that haven't been "saved" by modern agriculture.

BANKING

Internet banking for most means retail banking -- new ways for individual customers to access accounts and manage their money. A new study indicates that corporate banking is also embracing the Web. The U.S. management consulting firm Booz Allen & Hamilton says the number of corporate banking sites will quadruple within a year. There are now about 500 and we can expect around 2,000 worldwide by the year 2000. Of those sites, as many as 700 will have the complete range of corporate services. The major obstacle continues to be security, but stronger cryptography and security mechanisms are emerging. So far, three countries, Canada, the U.S. and Australia, account for all the corporate Internet sites.

DOWNLOADING

Using Microsoft technology, Sony Music will this summer start selling hit "virtual singles" on the Internet, as soon as they are available in record shops. The price is likely to be similar -- $3.49 -- and they will take around five minutes to download.

HEALTH CARE

Worldwide sales of over-the-counter health-care products were worth $75 billion in 1998. Vitamins and dietary supplements made up one third of the total; cold and allergy remedies account for just under one fifth. Although they still represent only a small share of the overall market, sleeping aids and products to help people give up smoking are the two fastest-growing segments of the market. With an average of $135 per person, Japanese spend the most on over-the-counter health care. Americans are second at $76 per head with Canadians fifth at $44 per head.

STETHOSCOPES

After almost 200 years, the stethoscope has gone high-tech. Introduced by the medical division of Hewlett-Packard, it is a fully electronic stethoscope capable of amplifying biological sounds up to 14 times higher than the conventional stethoscope.

AREA CODES

Internet lines, fax machines, wireless phones and increased competition in the telephone industry are causing North America's pool of area codes to dry up 23 years earlier than first anticipated. Industry experts say the last of those three-digit numbers will be used up sometime in the next decade and that fixing the problem will be a monumental task equivalent to the billions of dollars and hours put into the year 2000 computer bug. When area codes run out, the industry will need to move to either a four-digit code or eight-digit phone number, requiring all terminal equipment, network switches, data bases, and call centre software to be reprogrammed to accept at least 11 digits.

TRADE

Nearly 20 per cent of world trade is now in services, rather than goods. Global exports of commercial services totalled $1.29 trillion according to the World Trade Organization. The U.S. is by far the world's biggest exporter of services with sales of $234 billion last year., 18 per cent of the world total. Britain ranked second with $99 billion in sales.

MUSIC

Global recorded-music sales rose by 3 per cent last year to $38.7 billion. But unit sales fell by one per cent to 4.1 billion units. A rise in CD sales of 6 per cent was offset by a 10 per cent decline in cassette purchases and an 11 per cent decline in singles. Sales in the U.S., which made up 34 per cent of the world market in 1998, jumped by 11 per cent to $13.2 billion. Sales in the EU were also up but Japanese sales declined by 5 per cent.

LIFE

The life expectancy of both men and women reached record highs in 1997 as a result of declines in mortality rates for most of the leading causes of death. While women born in 1997 could still expect to live longer than men, the gap between the two is closing. In 1997, life expectancy at birth, a key indicator of a population's health status, reached 75.8 years for men and 81.4 years for women, a gain of 0.3 and 0.1 years respectively over 1996. The gap in life expectancy at birth between the sexes has been narrowing in the last two decades, from a peak of 7.5 years in 1978 to 5.6 years in 1997.

MEXICO

Mexican retailers are reporting they expect flat or declining retail sales this year. Retail growth last year was expected to be about 7 per cent but ended up at 2.7 per cent following the rise in interest rates and inflation caused by the Asian and Russian financial crises. Wages fell and both businesses and consumers couldn't get credit which led to reduced profits for most retailers. In real terms, retail sales are still lower than they were in 1994, before the peso crisis. Manufacturers can expect reduced sales to Mexican retailers, whether the product comes from Mexico, the U.S. or other countries.

SAFETY

A soggy baby diaper is helping to save everything from homes to utility poles from wildfires. A fire resistant gel has been developed by a firefighter who noticed a disposable diaper was the only thing that survived uncharred in a house fire. It is being hailed by experts and businesses as the greatest invention in firefighting since the hose and pump. Barricade gel, made from super-absorbent polymers, looks like shaving cream and can be applied with a hose.

CASSETTES

According to the Canadian Recording Industry Association, pre-recorded cassette sales in Canada are now at one-fifth of their peak level of 41 million units in 1985. The CRIA stopped reporting vinyl LP sales a decade ago when they dropped below 3.6 million units.

SOUND

A three-mile stretch of highway in England is to be resurfaced at a cost of $9 million, reducing tire noise, so local owls can find prey more easily. The birds rely on hearing as well as sight.

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

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June 1999 Economic Digest - Importing and Exporting

June 1999 Edition

BIG-BOX STORES

Over the last decade, big-box developers such as Home Depot, Chapters and Business Depot have opened up all over the Greater Toronto area. Shoppers can now choose from about 320 big-box retailers and amble through aisles among more than 13 million square feet of floor space. Only 96 stores existed before 1990 and most new ones arrived since 1994. 27 stores have closed since 1990. The number of traditional stores on retail strips actually grew by 11 per cent between 1994 and 1997, the period of the biggest big-box development.

REMANUFACTURING

Mexico is fast becoming a new base of operations for North American companies that want to rebuild or refurbish parts and products. Everything from boom boxes to disk drives are being sent to factories just over the border to be rebuilt or remodelled by Mexico's low-cost labour force. This phenomena is relatively new and so far Mexico has less than 5 per cent of a North American "remanufacturing" industry worth about $50 billion (U.S) a year. But there are 300 companies engaged in this type of business in Mexico, many of them newly established.

WORLD GROWTH

World export growth slowed sharply in 1998 according to the World Trade Organization. The volume of world merchandise exports rose by only 3.5 per cent, down from growth of over 10 per cent in 1997. The WTO expects growth of only 3.5 per cent again this year. In dollar terms, world exports fell last year by 2 per cent, their biggest decline since 1982. America's exports fell for the first time since 1985, by 1 per cent to $683 billion. The value of Japanese exports fell by 8 per cent and the value of the European Union exports was up by 3 per cent.

RESEARCH

Ten of the world's leading drug companies are jointly creating a new research consortium to study how variations in human DNA affect disease development. This will help drugmakers to tailor their products to individual patients.

WEATHER

The Kestral 2000 is one of several electronic devices that are evolving into hand-held, personal weather stations for the general public. It measures or calculates the temperature, the wind, relative humidity, dew point and heat index. A competing device, the Wind Watch, has a barometer and altimeter.

MOVIES

As of December 30, 1997, Disney held eight of the top ten spots on the All Time Movie Video Sales Chart. The Lion King(1), Aladdin(2), Cinderella(3), Beauty and The Beast(4), Snow White and the Seven Dwarfs(5), Toy Story(7), 101 Dalmatians(8), Pocahontas(10). The two non-Disney films to make the list are - Forrest Gump(6) and Jurassic Park (9).

BRITAIN

Supermarkets in the UK are being investigated amid allegations that some chains are ripping off consumers. The Monopolies Commission is being asked to investigate whether the big supermarkets have a monopoly that operates against the public interest. British shoppers may be paying up to 40 per cent more for everyday products in comparison with their European and American counterparts. A selection of basic items such as butter, milk and cheese costs 36 per cent more in Britain than in France and 45 per cent more than in the U.S.

TASTING

Researchers at the University of Texas have developed an electronic tongue. By pouring liquid over the chip, its 100 little holes, each containing a tiny sponge-like synthetic taste bud, change color depending on a liquid's chemical composition. Then a digital camera displays the results on screen. The food and beverage industry is closely monitoring the development to automate what thousands of human tasters do daily. The researchers say telling the difference between Coke and Pepsi in a taste test would be easy for the e-tongue.

LOANS

A $21 million federal investment aimed at aboriginal entrepreneurs will create an estimated 900 businesses and more than 2,000 jobs over the next five years. The fund is designed to make access to capital and debt financing easier, create a service network and improve existing support programs. Over the past 14 years, Canada's Aboriginal Corporations have made about 12,000 loans totalling $428 million. The average business loan is about $40,000.

ADVERTISING

Network and network promotional spots on TV are increasing. In November 1998, an average hour of U.S. prime time contained 15 minutes and 44 seconds of advertising, up 25 seconds from a year earlier, and the most since advertising groups began keeping count in 1989.

SHOES

In the future, shoes may have a microchip in the heel. A smart shoe prototype has been developed by MIT that automatically senses the wearer's cushioning needs by adjusting fluid in five bladders in the sole. A microchip in the heel monitors pressure on the bladders, adjusting pressure on the fly -- more cushioning for running, less for walking.

WINE

U.S. wine exports, 90 percent from California, jumped 26 percent over the previous year to $537 million in 1998, a 448 percent increase from export sales of $98 million a decade ago. Over 125 California wineries export to 165 markets worldwide, with the U.S. ranking as the fourth leading wine producer in the world and the ninth by volume as a wine exporter. However, there is still room to grow as the U.S. only holds a three percent share of the world export market by gallonage. The U.K. was the largest U.S. wine export market with $143 million in sales last year, a 32 percent jump over 1997. Exports to Japan surged 134 percent to $93 million, making it the second largest wine export market for U.S. wine. Canada was third with $91 million in sales, a 15 percent increase from 1997

VITAMINS

More Canadians took a vitamin or mineral supplement in 1997 than in 1986 according to surveys by the Non-Prescription Drug Manufacturers Association though there was a puzzling drop in the percentage taking vitamins in the early nineties. The 1986 survey asked if people had taken vitamins or minerals in the past six months and 39 per cent said yes. In 1991, when the same question was put, only 28 per cent answered in the affirmative. In the 1997 survey, overall, 42 per cent said yes, with 50 per cent of women and 31 per cent of men taking supplements.

POLAND

Poland's economy and society have been transformed by reforms implemented after the communist regime, which have created a division between the "haves" and the "have nots." The former praise the changes and the latter have turned against the government. Public school teachers earn on a monthly basis what equates to $155, which is less than the average monthly pay of $360. By comparison, private-sector workers earn two to three times the monthly average. But Poland's economy has managed to become the strongest among former Soviet satellites. Investors last year poured $10 billion into the former-communist economy that also grew by 4 percent.

AUSTRALIA

Australia is both the sixth largest country in the world and the world's smallest continent. The country has the eleventh largest economy in the OECD and the third largest in the Asian region, after Japan and China. It is a member of APEC and has one of the most highly developed economies in the Southern Hemisphere. Next year it will be staging the Olympics in Sydney.

SMART CARDS

British banks are beginning to roll out 100 million smart cards and terminal upgrades, retiring the usual magnetic stripe cards. Even though each smart card will cost the banks about a dollar and a half more than a regular credit card, they expect the changeover to save money through improved fraud prevention, and make money with new services, such as loyalty programs

WORK

An Ohio State University study indicates that nearly 59% of U.S. home-based workers are male. The average is 44 years old, married, has some education beyond high school and has been involved in work at home for nearly a decade.

WASHBOARDS

Costing between $7 and $20, they are now used mainly by musicians and some poor people, particularly those in high-rise apartments. The Amish use them as do others who shun modern ways. The last U.S. manufacturer of washboards was producing 110,000 units as late as 1987. Last year, with sales sinking, the company was about to close down but has been bought out by a group which feels that washboards can be a growth industry once again. There has been a flurry of orders recently from people who fear their washing machines will not work because of Year 2000 problems.

GREYING

The first trickle of post-World War II baby boomers began to hit the half-century mark in the latter part of 1996. A larger wave is coming however. From 1996 to 2006, the number of Americans in their fifties will increase by 50 per cent, or twelve million people. That will be more than half the total U.S. population increase during that decade.

TRAFFIC

The Geneva-based Airport Council International has designated Atlanta's International Airport as the busiest in the world handling 73.5 million passengers last year. The next four busiest are: Chicago O'Hare (72.4 million), Los Angeles International (61.2 million), London Heathrow (60.7 million) and Dallas Fort Worth (60.5 million).

SHEET MUSIC

Both the photocopier and now the Internet are a huge threat to the sales of sheet music in Canada. However, people still seek whole songbooks and photocopying can be cumbersome and not always cost effective. The big music publishers are hunting down outlaw web sites. Sales of printed music continue to grow. Sales were approximately $17 million in 1998, compared to $14 million in 1997 and $12 million in 1996.

INVENTIONS

A smart bandage has been awarded a U.S. patent. Developed by a molecular biologist and an ophthalmologist, the device has a micro-controller that monitors the status of a wound or incision, stores the data and downloads it to a computer.

DEBT

Canada's net debt owed to foreigners edged down to $324 billion last year, the third drop in four years. Statscan reports that net foreign liability dropped to 36 per cent of gross domestic product from 44 per cent in 1994. There were external liabilities of $971 billion and external assets of $647 billion. Americans were Canada's largest net creditors at the end of 1998 with holdings of $218 billion. Japan was the next largest creditor followed closely by Britain.

MISSING?

Last year, a pilot making an aerial survey of a national park in Pembrokeshire, Wales, discovered a secret "eco-village." He spotted the solar panels of Brithdir Mawr, a self-sufficient community founded by an architectural historian. The village had survived for five years without any interference from the outside world. Park planners originally demanded that the place be demolished but have relented. The commune can remain provided it backdates its planning applications.

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

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May 1999 Economic Digest - Importing and Exporting

May 1999 Edition

  

MEXICO

Mexico is aggressively positioning itself as the leading free-trade trader of the Americas and is turning into a hub for bilateral trade agreements. Besides the NAFTA, Mexico already has free-trade pacts with Chile, Bolivia, Colombia, Venezuela, Cost Rica and Nicaragua. Talks with Panama are advanced, and Mexico is also negotiating with Peru, Belize, Ecuador, Israel and Trinidad. Top of Mexico's agenda is finishing an agreement with the European Union before the end of the year. This will give Mexico access to the lucrative European market and allow Mexico to diversify its export market instead of depending so heavily on the U.S.

ASSIGNMENTS

An annual survey of the top destinations for international assignments, shows that the U.S. was again the top location for expatriates and short-term assignees. The study utilized data on worldwide transfer activity of more than 18,000 international assignments in 1998. Companies bring employees into the U.S. on shorter-term assignments, typically up to one year, for training, technology and management development. The 1998 top five locations for international employee assignments were: the U.S., the United Kingdom, Mexico, Canada and Singapore. Hong Kong, ranked in 5th place last year, is no longer a top ten destination.

SHANGHAI

Headquartered in Shanghai, the Lianhua Supermarket Co is China's largest chain-store operation with 400 outlets and sales of $400 (U.S.) million a year. Despite its size, Lianhua remains little known outside Shanghai but this may change. Once it was a pet project of municipal officials, now it is the favourite of the national government. Developing domestic chains has become a political priority as China seeks to modernize retailing and boost consumer spending, a vital step to preventing economic growth from sliding below this year's target of 7 per cent. Chains get consumers to spend by offering a greater range of products and placing their stores in convenient locations.

Chain stores now account for less than 2 per cent of China's retail sales.

HUNGARY

Hungary is close to the geographical heart of Europe. Budapest, the capital, has over two million inhabitants and is the commercial hub of the country. Since the collapse of communism, the country has established a parliamentary democracy and developed a strong market economy. The Government has privatized most state-owned companies, banks and utilities. Nearly 80% of the country's gross domestic product is now produced by the private sector, compared with only 10% in 1990. Over 80% of Hungary's trade is now with OECD countries, including some 71% with the European Union (EU). Until 1990, 65% of Hungary's trade was with Communist bloc countries.

PIRACY

The market for pirated music exploded in 1998 as new digital technologies and the Internet gave audio pirates more ways to break the rules. The recording industry reports that 338,458 pirated CDs were confiscated in the U.S. in 1998, up 163 per cent from 129,000 in 1997. The figure reflects products that were confiscated on street corners, in flea markets, retail outlets and via Internet sales. The rising number of illegal copies is said to be due to the recent availability of inexpensive CD recorders.

IT'S IN THE MAIL

Mail deliveries in Trinidad only reach half the island's households; airmail from Britain can take eight weeks and mail sometimes sits on the docks for months. The turnover is only $7 million a year with losses of around $3 million. Now, Trinidad & Tobago has given the New Zealand Post Office a five-year contract to run its postal service. South Africa is about to out-source its mail service with New Zealand Post on the short list and Britain's Royal Mail already has a 30-year franchise to deliver letters in Argentina.

PORK

A U.S.-China trade agreement has given U.S. pork producers access to the largest pork-consuming market in the world. Per-capita consumption of pork in China already is higher than in the US. Analysts expect pork demand in China to increase by 6 to 7 percent per year, meaning that each year, China will consume an additional amount of pork five times greater than the 529,000 metric tons of pork exported by the U.S. in 1998. Previously, China blocked U.S. pork imports through a system of high tariffs, restrictive import licensing and distribution practices, and complicated and arbitrary sanitary requirements.

ASIA

It seems Canadian entrepreneurs doing business abroad have coped with the so-called "Asian flu." According to a 1998 survey of 1,007 small and medium-sized enterprises (SMEs), 43 per cent of respondents said they were either "successful" or "very successful" in doing business in Asian countries. The overwhelming majority of respondents said cross-cultural awareness is important to doing business in Asia, but only 15 per cent had formal training in place.

PRIVATIZATION

The global privatization boom slowed last year. In 1998, sales of state-owned companies fell by 26 per cent worldwide to $115 billion according to the OECD. Sales in non-OECD countries fell by half to $28.5 billion; excluding Brazil, they were only $3 billion. Italy was the biggest privatiser last year, with sales of $14 billion and France was second. Britain which pioneered privatization in the 1980s, sold nothing last year.

FAMILY INCOME

Average family income in Canada before taxes was an estimated $57,146 in 1997, essentially unchanged from 1996 after adjusting for inflation. This left family income at virtually the same level it was in 1994, the last year there was a significant improvement, and some $2,700, or 4.5%, below the pre-recession peak of $59,862 in 1989. In terms of specific family types, two-parent families had an average income of $64,814 in 1997, virtually unchanged from 1996. However, average income for lone-parent families headed by women increased 4.1% to $25,445, as higher employment earnings were accompanied by increased Child Tax Benefits.

ARCHITECTS

Their services range from designing furniture to planning residential, institutional and commercial buildings. Last year, 3,800 companies, mainly small, private ones employing two or three people, conducted business in Canada. The federal government estimates total employment at about 11,500 and revenue at $899 million for 1995. A number of firms are doing work abroad, however, just $17 million of revenue came from exports in 1995. Falling trade barriers have improved export prospects but this also means more competition within the domestic market

SHOPPING

A.C. Nielsen Corporation has announced that participation in grocery store frequent shopper programs has grown to 66 percent of U.S. households - up from 55 percent in 1997 and 35 percent in 1996.

CITIES

In 1931, Montreal and Toronto were only two Canadian cities with populations of half a million or more, now there are nine. The two big cities in 1931 held 18 per cent of the country's population. In 1996, the nine big cities held 48 per cent of the Canadian total. What draws population it seems is sheer size. The large cites are not just home to a lot of people, but a magnet that draws theatres, orchestras, art galleries, restaurants and visitors. However, the biggest metropolises are plagued by high real estate prices, pollution and a perception of high crime rates.

HOGS!

A recent U.S study by J.D. Power and Associates which polled 9,000 people who bought motorcycles in 1998, found that women represented a surprising 22 per cent of first-time buyers. While the world of motorcycling is still overwhelmingly male--only eight per cent of all buyers were women--the female first-time buyer is a significant trend. This is a trend that is also reflected in Canada.

DRUGS

For the first time this decade, sales of brand-name pharmaceuticals in 1998 grew at a faster rate than lower priced generics. Prior to 1998, the prescription trend for generics had been growing faster than for brand therapies, with most provincial health insurance plans opting to increase usage of generic drugs. Pharmaceutical sales in Canada soared 12.7 per cent to $7.5 billion last year, the world's ninth-largest market. Reflecting a global trend, consolidation in the Canadian drug industry is increasing. In 1998, the top ten pharmaceutical companies in the country accounted for 51 per cent of industry sales.

LIFE

An American millennium baby can expect to live nearly twice as long as one born in 1900, and to grow a full three inches taller. A Canadian or Swiss baby now has twice the life expectancy of a Zambian or Ukrainian one.

GIFTWARE

The giftware and crafts industry includes products ranging from jewellery to stationery, toys and home and garden supplies. About 45,000 work in this sector, including 25,000 artists and artisans, estimates Industry Canada. The value of exports has been growing since the mid-nineties. Items for export include glassware, ceramics, porcelain, china, artwork and miscellaneous giftware. In 1997, Canadian companies exported more than $121 million of these items, up from $70 million in 1994. In addition to the large companies, there are about 400 export-ready craft and giftware producers in Canada. Their annual sales range from $80,000 to $100,000.

DEBT

Canada's net debt owed to foreigners edged down to $324 billion last year, the third drop in four years. Statscan reports that net foreign liability dropped to 36 per cent of gross domestic product from 44 per cent in 1994. There were external liabilities of $971 billion and external assets of $647 billion. Americans were Canada's largest net creditors at the end of 1998 with holdings of $218 billion. Japan was the next largest creditor followed closely by Britain.

HOMES

More Canadians are moving up from starter homes to something more pricey, according to federal housing analysts. While first-time buyers dominated the market in 1997, the trend shifted last year as consumers looked for more expensive homes. The trend was particulary noticeable in Halifax, Montreal and Calgary. In Montreal, demand for new homes over $300,000 jumped 75 per cent in 1998. In Calgary, demand for homes for less than $150,000 declined 16 per cent.

PREDICTIONS

In 1943, IBM Chairman Thomas Watson stated that in his opinion there was a world market for maybe five computers. By 1997, this computer giant was predicting that hard-disk drives in personal computers would be outselling television sets within three years.

TRASH

In Oxfordshire, England, local authorities are putting video cameras in empty drink cans and leaving them lying about the countryside. These hidden cameras are used to catch people who dump garbage illegally in fields and along the sides of roads.

RESEARCH

Ten of the world's leading drug companies are jointly creating a new research consortium to study how variations in human DNA affect disease development. This will help drugmakers to tailor their products to individual patients.

HELP!

When a man in England phoned 911 recently to complain of a broken heart, phone operators first established that he did not require an ambulance and then told him to hunt for an advice columnist.

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

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

April 1999 Economic Digest - Importing and Exporting

April 1999 Edition

INDIA

India is the world's second largest emerging market. The World Bank forecasts that India may have the world's fourth largest economy by the year 2020. With a population of over 984 million, the country is a huge market and one in which international trade has an important role to play in its future economic development. India has escaped the worst ravages of the Asian economic crisis that has severely afflicted parts of East and SouthEast Asia. Barclays Bank has forecast that the economy will grow by a respectable 4.5 per cent this year, slightly better than an estimated four per cent growth in 1998.

ENERGY

The next power plant might be off the coast. An American university professor has developed a highly efficient, low cost, pollution-free way to harness the power of the ocean's currents and generate energy. The "helical turbine" spins in the ocean's current and stores it in floating energy factories where it is converted to clean-burning hydrogen. Its inventor envisions helical turbine fields on the ocean floor that would act as power farms and generate multi-megawatts of power, enough to light up a city.

COMPUTERS

Statscan reports that over 38 per cent of households had one or more members using computer communications such as Web browsing, E-mail or electronic banking at some time in 1997. The most common location for computer use was the workplace (19.9%), followed by the home (16.0%), school (9.4%), public libraries (3.7%). Overall, 61.0% of households with regular users used computer communications at least once a day and 33.6% used them once a week. E-mail was used most often (83.1% of users), followed by general Web browsing (84.7%) and specific information searching (84.4%). One in five used electronic banking while less than 10% purchased goods and services on the Web.

LANGUAGE

France spends close to $1 billion a year in aid, educations grants, language training programs and credits to spread French civilization around the world.

PROFITS

Canadian businesses earned $105.3 billion in operating profits for 1998, a 4.8% slide from the record high of $110.7 billion earned in 1997. Profits had increased in four of the preceding five years from the $43.3 billion earned during the 1992 downturn. Results were mixed, with 16 of the 30 industry groups reporting lower 1998 profits and the rest posting increases. While overall commodity prices deteriorated, by far the largest contributing factor affecting profits was the collapse in world oil prices. Petroleum and natural gas industry profits tumbled 39.0% in 1998. Excluding the petroleum and natural gas industry, corporate profits were little changed for the year.

SERVICE

Airline passengers have reason to gripe, says America's Department of Transportation. The agency reports that flights on nearly three- quarters of major routes in the U.S. are taking longer than they did a decade ago. Delays on the ground are the chief culprits.

LABOUR

Since 1989, employment growth in the U.S. has outpaced gains in Canada, while the type of employment created by each country has been vastly different. While most of the growth occurred among full-time employees in the U.S., self-employment has been the engine of growth in Canada. Since the recession of the early 1990s, the pace of employment growth has been stronger south of the border. Between 1989 and 1997, employment increased 10.4% in the U.S. compared with only 6.5% in Canada. In Canada, self-employment has been the engine of growth, accounting for 80% of the overall employment increase. In the U.S, self-employment accounted for only 10% of job creation between 1989 and 1997. The reasons for this are not well understood, but may reflect differences in tax policy, and higher payroll taxes and unemployment rates in Canada

EUROPE

Sales of duty-free goods within the EU will cease from July 1st, despite protests from some governments fearful of job losses.

SHOPPING

Within a few months, you may be able to try out the seat at a concert before you buy the ticket. Ticketmaster is said to be working with Intel to develop a new service that will use modelling to help you gauge the view from a sports arena or concert hall. The modelling feature is expected to debut soon and will offer web surfers views of New York's Madison Square Garden, Chicago's Comisky Park, the New York Palace Theatre, and Davies Symphony Hall in San Francisco. You'll be able to compare the view from cut-rate bleacher seats to the view from a super-expensive box seat.

HOUSEWORK

The time spent on housework has changed considerably over the last 40 years. According to The Cleaning Encyclopedia, families spent about 50 hours a week in 1959 taking care of household chores--washing up, laundry, shopping, cooking, cleaning and child care--compared with 22 hours today and back then the average house was much smaller than today. Part of the reason for the change is that homes now have more labour-saving devices such as washing machines, tumble dryers and dishwashers.

CASH

Japan has more cash dispensers than any other country--1,115 per one million people, compared with 616 in the U.S. and 393 in Britain. Despite its reputation for technical innovation, Japan also has only 155 electronic point-of-sale terminals per million people, compared with almost 11,000 in Canada.

CLAY

Companies make products from domestic clay, including bricks, sewer pipes and structural tiles. This industry is a fraction of Canada's $8.5 billion non-metallic mineral products sector but according to Statscan, in 1997, 20 clay products companies employed 1,113 people and produced revenue of $131 million. While Canada's clay product industry is shrinking, that of the U.S. is expanding. In 1997, more than $223 million of these products were imported from the U.S.

WAR

British supermarket price wars have made sliced bread so cheap that some farmers are feeding it to their sheep. One brand of sliced bread is only seven pence a loaf (17c Cdn), making it cheaper than conventional wheat feed given to sheep. Farmers, who themselves have been suffering a slump in sheep prices, have been buying up hundreds of loaves from local stores to feed their flocks. Britain's food retailers are battling to boost sales and profits in a low-growth and low-inflation environment.

ISRAEL

Two years into the free-trade deal with Israel, Canada is seeking even better access. Two way trade has increased by 30 per cent to about $580 million in the first 11 months of 1998. Canada is seeking the further liberalizing of trade in food and agriculture where Canada is still disadvantaged compared with the U.S.

TRENDS

According to the Wall Street Journal, one of life's newer coping mechanisms is take-out dinner from the company cafeteria. Several U.S. corporations offer this item on their benefits buffet. Hallmark Cards Inc has one of the more successful operations; its 120-item menu includes appetizers, entrées, and school lunches for busy parents to take home.

PHONES

Rates for business telephone services are lower in major Canadian cities than in leading U.S. cities according to a survey by the Yankee Group. Analysts have previously noted that many Canadian residential long-distance customers have rates as cheap or cheaper than in the U.S. Business phone rates have plummeted since 1987 when Canada's biggest phone companies began slashing prices in anticipation of long-distance competition and set the ambitious goal of achieving parity with U.S. prices. Deregulation in 1997 of the Canadian market has led to even further price reductions for long-distance, data and wireless services.

CHINA

"Made in China" is often associated with low cost products like T-shirts and toys. But the country that invented paper and rocketry is poised to reclaim its position as one of the world's greatest innovators. Hi-tech giants like Intel and Microsoft say world-class talent already exists there. But before China can create its own Silicon Valley, it needs a legal system that protects inventors and investors. In addition, massive amounts of capital must flow in to support research and development

ALBERTA

The government of Alberta has declared that more Canadian internal trade barriers have to go. The Agreement on Internal Trade (AIT) is now almost four years old and while there have been some improvements, there is still more work to do. More than 62 per cent of everything produced in Alberta is sold outside its borders. International trade accounts for 37 per cent of the total and trade with the other provinces accounts for 25 per cent of provincial production. Alberta claims that barriers to internal trade cost the Canadian economy an estimated 10 billion dollars each year.

HOME

Adults in their 20s and early 30s, married and unmarried, were more likely to be living with their parents in 1996 than at any time during the previous 15 years. In 1996, 23% of women aged 20 to 34 lived in the parental home, up from 16% in 1981. During the same period, the proportion of men in the same age group living at home increased from 26% to 33%. The increase was especially notable for young adults aged 20 to 24; nearly 57% were living with their parents in 1996, up from 43% in 1981. Most of the increase in these proportions occurred during the two periods of economic recession and slow recovery in the early 1980s and 1990s.

TIES

Two British physicists have solved a knotty problem men have pondered for more than 100 years--how to tie the perfect knot in a tie. Using a mathematical model, they produced equations to classify the four most common ways to tie a knot and introduced six new "aesthetically pleasing" knots. Their research, published in the science journal Nature, said 85 knots could be tied with a conventional tie but only four--the four-in-hand, the Windsor, the half-Windsor and the Pratt--are commonly used.

AROMA

According to the marketing journal Strategy, sofas and armchairs that emit a pleasant odour, such as vanilla or lavender, are the rage in Britain. Costing the equivalent of $5,300, the smelly furniture will soon be coming to Canada. Fluffing the cushions automatically releases the scent. The cushion covers are said to hold their fragrance for up to 20 wash cycles.

FUNERALS

Mortuary-science students are enroling in record numbers across the country. The would-be undertakers are getting older with an average age of 27. Last year, 36 per cent of students were woman, up from 9 per cent a decade ago.

LOST AND FOUND

The owner of a wandering cat in Winchester, England, has bought a charge card for her feline which is attached to her collar so people can phone home and say where the Burmese has strayed in search of adventure.

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March 1999 Economic Digest - Importing and Exporting

March 1999 Edition

MERGERS

1998 was the world's biggest year ever for mergers and acquisitions: they surpassed $2.4 trillion, 50% above 1997's total. U.S. companies made two-thirds of the deals. Biggest of all in value terms was the union of two oil giants, Exxon and Mobil, announced in December, which will create the world's biggest company in revenue terms.

DIAMONDS

De Beers, the world's largest diamond miner and marketer, states that sales have dipped to their lowest level in 12 years. Hurt by slumping demand from the troubled economies, particularly Japan, which normally accounts for one-fifth of all diamond sales, business dropped 28 per cent from $4.64 billion (U.S.) in 1997 to $3.35 billion in 1998. Experts consider the long-term prospects good for diamonds and for Canada to emerge as one of the world's players within several years, yielding an estimated 3.5 million carats a year. This compares with about 4 million carats a year produced by Australia, which supplies one-third of the world's diamonds.

TWEEN-AGERS

With 59 per cent of Canada's "tweens" having a bank account and 17 per cent possessing cards for automated banking machines (up from 8 per cent in 1995), children aged 9 to 14 are a significant emerging market. A survey by Creative Research International for YTV cable channel indicates that kids in this age group are savvy consumers who exert a growing influence on their families' spending habits. They control an increasingly large pool of discretionary income--$1.5 billion in 1998, up from $1.4 billion in 1997.

LABELLING

The European Commission is proposing to give companies another 10 years to phase out dual labelling in pounds and inches because of fears that an all metric rule could hinder trade with the U.S. In proposing to extend the transition period to all-metric labelling in Europe until 2009, the E.U. urged the U.S. to hurry up and adopt the metric system pointing out that the U.S. is the only western industrialized country that does not use the metric system even though it was a founding state behind an 1875 convention aimed at ensuring worldwide unification of measurements.

MORALE

Employee morale and job satisfaction is consistently and significantly higher in Canada than in the U.S. according to Chicago-based International Survey Research which has conducted employee surveys with thousands of workers in both countries. Canadians are more optimistic about job security and career development though many feel their skills are not being used in their current job. Canadians also feel more in control of their lives compared to the U.S. where employees can be fired more easily and without the financial settlements that apply in Canada.

JOBS

Canada's high-tech industry is expected to generate at least 30,000 jobs over the next two years according to a survey by the Branham Group for the Information Technology Association of Canada (ITAC). The survey found that 34 high-tech companies that participated expect to have 7,848 job vacancies by 2000. They currently have 80,000 employees or 20 per cent of the high-tech work force in Canada. By extrapolating these numbers to reflect the 1,300 Canadian high-tech companies it is estimated that 30,000, or 10 per cent, more jobs will be created. This surpasses the 20,000 job openings estimated by the Software Human Resources Council in Ottawa.

BRITAIN

This country is now the fifth-largest trading nation in the world, with higher per capita exports than either the U.S. or Japan. Britain's film and fashion industries are in the midst of a renaissance, leaving a deep imprint on style and culture worldwide. Britain has become one of the world's leading maker of computer games. New restaurants and various ethnic cuisines have replaced the country's once-grim parade of fish-and-chip shops.

CHEAP

Research by Deloitte & Touche Consulting shows that when investing abroad, U.S. manufacturers often do not choose cheap-labour countries. For many manufacturers, the attraction of cheap labour is outweighed by concerns such as economic stability, skilled workers and well-developed infrastructure. European countries, particularly Britain, were the first choice for off-shore investment, but Canada was second.

SPENDING

Canadian households spent, on average, an estimated $49,950 on everything from child care to travel to communications in 1997, virtually unchanged from 1996. Personal income taxes continue to make up the largest share of household spending. In 1997, an average of 21 cents of every dollar went towards personal income taxes, followed by 20 cents for shelter, 12 cents for transportation and 11 cents for food. The remaining 36 cents were spent on a variety of items such as recreation, personal insurance and pension contributions, household operations, clothing, gifts and contributions to charity.

BLUE

The Color Marketing Group, an organization of 1,500 designers mainly based in North America, has decreed that blue is the emerging colour this year. Blues will be showing up increasingly in clothes, fabrics, paints and consumer goods. Blues have been out of favour for quite a while, mainly because they were overshadowed by the strong popularity of greens in the past several years.

AFFLUENCE

The statistical service of the European Union states that the richest region in the E.U. is Inner London, but only when considered apart from the suburbs. Five of the ten richest regions were in Germany, and the poorest one was Ipeiros, in Greece.

BROADCASTING

Canadian broadcasters are lobbying to make U.S. specialty channels pay to be carried on Canadian airwaves to end a system they say is grabbing advertisers away from Canadian channels. The effort to extract $24 million from channels including A&E and CNN could prompt trade retaliation. The industry claims that the U.S. takes $80 million a year out of Canada in subscriber fees but give nothing back

GIVING

The 21 rich countries of the OECD gave a record low share of their national income in overseas aid in 1997. Only four countries met the UN target of 0.7 per cent of their GDP.

HORMONES

The European Union is trying to avert another trans-Atlantic trade war by adopting an interim solution with the U.S. over the EU's 10 year ban on the use of growth hormones in beef which began in 1989. The interim arrangement, involving some compensation to the U.S. would expire at the end of this year when a series of 17 scientific studies would prove or disprove the EU's contention that beef hormones represent a risk to humans. 1998 U.S. beef exports to Europe were $24 million but used to be around $100 million annually.

AIR FARES

In 1997, the average domestic air fare (all types) paid by Canadian passengers was $181, up 2.4% from the 1996 figure of $177, but still 9.4% below the record average air fare of $200 in 1994. The increase in average fares occurred despite the record 83.0% of passengers who travelled on discount fares on domestic scheduled services, up from the previous record of 79.6% in 1996. The greatest use of discount fares was on international services, where 89.4% of passengers travelled on a discount. The lowest use was in the northern domestic sector, where 66.4% of passengers travelled on a discount.

THE FUTURE

The next time your pop machine takes a while popping a soda out of the chute, it may be busy connecting to the Internet. A British company has won a 20-year agreement with The Coca-Cola Company to bring the company's world-wide cold drink vending machines online. The units will provide Coca-Cola bottlers with accurate, real-time information on the status of individual machines, wherever they are located. Data will include details of the number of drinks sold by brand, space available in the machine, cash box contents and alerts when machines need maintenance, repair or re-stocking.

SECURITY

Private security personnel continue to outnumber police officers. In 1996, there were approximately 59,000 police officers in Canada compared with 82,000 private security personnel. Between 1991 and 1996, private security personnel increased 1% while the number of police officers dropped 4%. In general, private security personnel are responsible for the protection of their client and/or their client's property, whereas police officers are responsible for the safety and security of the public. In recent years, the line between the two has become blurred.

SMART FOODS

According to the Grocery Manufacturers of America, these are foods that can actually ward off the kinds of diseases and ailments that we all develop as we grow older. This market in the next five to ten years is estimated to be worth about 34 billion dollars.

FILM AND VIDEOS

The independent film, video and audio-visual production industry experienced another year of strong revenue growth in 1996/97, surpassing records for total revenue, production revenue and exports set the previous year. Total revenues advanced 4.8% to $1.3 billion. This growth was driven almost entirely by a 10% increase in production revenues, which hit $967 million. And after doubling in 1995/96, exports increased a further 12.7% in 1996/97 to $361.5 million. As in previous years, television programming led exports, accounting for almost two-thirds of the total.

HEATING

Manufacturers produce dozens of major heating appliances including oil and gas burners, metal fireplaces, solar heat collectors, boilers and hot air registers. In 1996, close to 7,000 people worked for 128 heating equipment makers in Canada and these companies reported revenues of $719 million. Production has been growing at an average rate of 3.2 per cent since 1990. Since 1992, both imports and exports to the U.S. has been on the rise with Canada's heating equipment companies running a trade surplus of $57 million. New products such as high-efficiency furnaces, which reduce fuel consumption and are more environmentally friendly, are driving the market.

GERMS

An antibacterial agent widely used in soaps, lotions and other consumer products triggers a genetic change in bacteria that could widen the scope of life-threatening drug resistance, a new study shows. Now germ hunters from Tufts University Medical School in Boston are hoping to capture some of the drug-resistant bacteria they suspect may lurk in households where heavily advertised products containing the compound triclosan are being used every day.

ELEPHANTS

The British edition of GQ magazine claims elephants make their own cider. They bury apples in the ground, wait until they ferment, dig them up again and get drunk.

PAY

Researchers in Washington's National Zoo will "pay" their orangutans a daily allowance of metal coins that they can use to buy bananas, popcorn and other items. Zoologists hope that the animals, which have already grasped a simple language of abstract symbols, will prove adept at handling numbers, judging an item's worth and perhaps even start trading among themselves.

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

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February 1999 Economic Digest - Importing and Exporting

February 1999 Edition

GROWTH

The World Bank reckons that developing countries' growth will average only 2.4% this year and next, half that of 1997. Despite the East Asian crisis, the region as a whole is expected to grow by 3% over the two years, thanks to China -- faster than Latin America or Africa. Over the medium term, the Bank expects East Asia to remain the fastest-growing region, with 6.5% average growth in the eight years to 2007.

ENTERTAINMENT

Almost half of consumer spending on entertainment in 1996 went toward cablevision, solidifying cable TV's position as the largest component of the entertainment market. In 1996, Canadians spent $5.8 billion on entertainment, up 49.4% in real terms from 1986. While people are still going to the cinema, live staged performances and live sports events, their spending on home entertainment services has grown more rapidly. Spending on cablevision rentals reached almost $2.8 billion in 1996, a 79.7% increase from a decade earlier. Cablevision rentals accounted for 48% of the consumer entertainment services market in 1996, up from about 40% in 1986. Entertainment services accounted for 1.1% of the average Canadian household's budget in 1996, up from 0.7% a decade earlier. On average, households spent $533 on entertainment services in 1996, up from $439 in 1986, due mostly to increases in spending on cablevision.

NATURE

British imperialists often described Hong Kong as a "barren rock." In fact, Hong Kong is surprisingly rich in species. Its 423 square miles supports more types of bird, mammal, insect and plant than the whole of the British Isles.

TEA

Sales of tea in Canada, hot, cold, black, green and specialty flavoured for the 52 week period ending in August 1998, were up 10 per cent over the same period in 1997. Sales of tea for the traditional hot drink rose 6 per cent while iced tea grew 17 per cent. Green tea sales grew by 72 per cent with the greatest increases in B.C. and Alberta. The familiar black tea still makes up 87.5 per cent of the market.

CHARITY

Fewer Canadians gave money to charities in 1997, but those that did gave more. Just under 5.3 million taxfilers reported charitable deductions on their 1997 personal income tax returns, down 3.1% from the year before. However, these individuals gave $4.3 billion, up 6.0% from 1996. The decline in the number of donors was the largest this decade, while the increase in donations was the second largest. Charitable donors in Newfoundland again reported the highest median donation ($270), despite having the lowest median total income ($27,900). Quebec taxfilers had the lowest median donation ($100).

LUGGAGE

British Airways is experimenting with high-tech baggage labels to speed luggage delivery and reduce the risk of loss. The tags contain microchips which use radio frequency technology and report in every few seconds where they are in the delivery path. Any discrepancies sound an alarm.

TAXES

The Canadian government has approved a levy on "recordable media." which will boost the cost of recording materials, including recordable CD-ROMs. The levy is expected to be about 50 cents for every 15 minutes of digital recordable time thus adding around $2.50 to blank CDs. The levy will also be added to blank tapes and the money collected will be distributed to Canadian artists to make up for the income lost from illegal copying. The problem is that CDs have emerged as one of the most cost-effective technologies for dealing with large volumes of data. Some speculate that this levy will cause many software companies to relocate south of the border.

LANGUAGE

During the past 100 years, 10 of Canada's once-flourishing Aboriginal languages have become extinct, and a dozen are on the brink. As of 1996, only three out of 50 Aboriginal languages - Cree, Inuktitut and Ojibway - had large enough populations to be considered secure from the threat of extinction. Of some 800,000 persons who claimed an Aboriginal identity in 1996, only 26% said an Aboriginal language was their mother tongue. 50 Aboriginal languages belong to 11 major language families. Some of these are large and strong, others small and vulnerable. The three largest families together represent 93% of persons with an Aboriginal mother tongue. The two smallest and weakest language groups, Kutenai and Tlingit, have mother tongue populations of only 120 and 145 respectively.

EXPANSION

Small businesses in the U.S. are on a spending spree according to a survey by the National Federation of Independent Business. Easy credit markets, growing sales and the strong domestic economy have created an atmosphere for expansion. Nearly three-quarters of companies surveyed said they expanded capital spending over the past six months and 41 per cent plan to do so in the coming six months, the highest levels reached in the survey's 25 year history.

GAMBLING

Government-regulated casinos and video lottery terminals, introduced during the 1990s, have turned gambling into a multi-billion dollar industry. In 1997, Canadians wagered $6.8 billion on some form of government-run gambling activity, 2.5 times the $2.7 billion in 1992. Casinos and VLTs represented just 10% of all government gambling revenue in 1992. By 1997, they accounted for a full 59%. In 1997, provincial governments made $3.8 billion from gambling, more than double the profit level of $1.7 billion five years earlier. Employment in gambling almost tripled, from 12,000 jobs to 35,000, while employment in all other industries increased only 8%. The net increase of 23,000 jobs since 1992 accounted for 2% of all employment growth during the five-year period.

OPEC

OPEC countries' oil revenue plunged by $62 billion (U.S.), or 35.6 per cent in 1998 to their lowest levels in a decade. Oil revenues for the 11 members of the Organization of Petroleum Exporting Countries fell to $112 billion from $175 billion the previous year. The biggest sufferer was Indonesia where revenue fell 43 per cent.

WATER

According to The London Observer, scientists calculate that seven per cent of the human race do not have enough water to survive. Their figures show this will rise to a staggering 70 per cent by 2050.

TECHNOLOGY

Three million cars in England may be at risk from theft -- thanks to a simple consumer handheld computer. Using the new PalmPilot III PDA and special software (easy to find on the web), it takes about ten seconds to copy the codes from the newer key-mounted remote controls used to operate a modern car's central-locking system. The PalmPilot computer has a built-in infrared port, and software designed to record the infrared signals from TV and video remote controls can also enable users to enable the Palm Pilot to control all IR gadgets -- including car locks.

FARMING

The U.S. Agriculture Department has cut its forecast for the value of farm exports in fiscal 1999, largely because of declining commodity prices and lower poultry exports to crisis-hit Russia. U.S. farmers will export products worth $50.5 billion in the October-to-September year, the department estimates, down from its August estimate of $52 billion.

REPAIRS

In 1997, Canadians got out their hammers and nails increasing spending on home repairs and renovations for the first time in three years. Homeowners spent $12.8 billion to improve and maintain their dwellings, up 7.3% from 1996. Spending increased faster on building materials than it did on contractors, indicating a movement toward "do-it-yourself" activity. On average, homeowners spent $1,712 in 1997. This spending was still considerably below the peak of $2,197 in 1989 but was the first increase since 1994. Of the nation's 7.5 million homeowners in 1997, 9.2% spent more than $5,000.

LITERACY

The health of many Canadian seniors may be at risk simply because they are not able to read crucial information accompanying prescription drugs, according to a recent research paper. The findings support the view that literacy skills and practices may serve as "barriers" for seniors in their attainment of good health. The potential for errors in medication is enormous among seniors unable to properly understand written directions on prescription drugs, or among those who are unable to decipher a written text. Elderly patients will experience this problem to a much greater degree, since they are more likely to use medication and take several prescription drugs simultaneously.

GOLD

It is estimated that last year, Indians spent more money on gold than on cars, two-wheeled transport, fridges and colour TVs combined. Buyers in India will now pay 9 per cent more than the international price of gold. After adding local levies, the difference could be as high as 12 per cent. Gold buying is a habit with strong cultural and economic roots and gold jewellery is the only form of wealth that women can claim as their own. The bill for this year's gold imports will be close to $7 billion, second only to oil among India's imported commodities.

SERVICE

According to Wired magazine, in Finland, which has more cell-phones per capita than any place in the world, people can phone vending machines. A soft drink, for example, comes tumbling down the chute and its cost is added to the phone bill.

COMFORT

Tesco, Britain's largest supermarket chain is considering allowing nude shopping following requests from local nudists. Health and safety concerns permitting--fruit and vegetables may need to be prepackaged to avoid contact with naked flesh--they would be allowed to roam the aisles on a designated evening following the store's normal 10.00pm closing time and redress before they left. Store windows would be blacked out and Tesco staff would be allowed to remain clothed.

SHOPPING

Canadian grocery chains are making little progress towards online availability. In the U.S., IBM and Safeway are working on new shopping technology that bypasses the Internet but allows shoppers to order groceries from the comfort of home. The secret is an advanced version of the handheld scanner that shoppers would use at home. The shopper pages through a list of products then uploads their requirements to the Safeway computer system along with a credit\debit card number for payment purposes. The shopper then visits the store where groceries are already bagged and ready to take home.

PIZZA

Competition in this sector has heated up considerably in Canada in the 1990s. The number of pizzerias has continued to grow, discounting has spread and everyone from grocers to gourmet restaurants are offering the product. The Canadian Restaurant and Foodservices Association estimates that pizza-based restaurants have seen their average pretax profits fall to 3.6 per cent in 1996 from 10.7 per cent in 1990.

PERMISSION

Jack Smedley, an 80-year old in Hull, England, recently had to get a letter from his 101-year old mother before he was allowed to enter a veterans fishing contest because he could not remember how old he was.

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

January 1999 Economic Digest - Importing and Exporting

January 1999 Edition

HEAD OFFICES

 
Montreal has now supplanted Toronto as the business capital of Canada. In 1988, Toronto-based industrial companies accounted for 35 per cent of total assets of firms listed on the Financial Post 500 ranking of Canadian firms. Toronto has since lost ground to Montreal, Calgary and Vancouver--a casualty of the prolonged 1990s recession that hit Ontario especially hard, and of free trade policies that were opposed by many Ontarians but strongly supported in Quebec and Western Canada. As a result, Montreal now claims 35 per cent of the assets of FP500 firms, amounting to $273 billion up from 29 per cent a decade ago. Toronto follows with 27 per cent.

AMWAY

This direct marketer of vitamins, cosmetics and detergent is adding another product to its arsenal: natural gas. Amway is teaming up with a division of the Columbia Energy Group to market natural gas sales door to door, starting in Georgia. This partnership hopes eventually to sell electricity also. The sales of gas and electricity have long been tightly regulated but are slowly being deregulated around the country in the same way telephone service was opened to competition in the 1980s. Amway salespeople are to receive cash and other incentives for each customer they persuade to buy gas from Columbia.

RESPECT

In a recent Angus Reid poll which asked Canadians which professions they respect the most, small-business owners came out on top, followed by doctors, police officers, teachers, priests, judges and actors. At the bottom of the list of 13 professions were journalists, lawyers, federal government employees, labour leaders and politicians. Journalists were alone in registering a consistent decline when compared with previous such polls.

DYEING

More and more Canadians are colouring their hair. In 1997, they bought $130 million worth of colouring products, up 10 per cent from 1996. This year, sales are up a further 12 per cent. And its not just women. Sales of colouring products for men jumped from $6.9 million in 1996 to $9 million for the year ending September 1998. Experts put the trend down to baby boomers trying to conceal their age, especially in the workplace. However, technical advances in new products that are gentler on the hair are proving popular with consumers.

NAMES

The French are saying that if Britain wants to show it is sensitive to the rest of Europe, then it must rename London's Waterloo train station. Waterloo celebrates the Duke of Wellington's famous victory in 1815 over the French Emperor Napoleon and is the London terminal for channel tunnel trains arriving from Paris. French official have warned that if the change is not made then a Paris station may be changed to Fontenoy after a 1745 French victory over the British. Ironically, it was Napoleon who first proposed digging a tunnel under the Channel--to invade England.

INVENTIONS

Manufacturers of a new oven that combines high-powered microwaves and 80-kilometre-an-hour blasts of hot air, claim their invention can roast a chicken or a 500-gram steak in three minutes and steam vegetables in 90 seconds. A commercial version costing $23,000 is in production and tests are nearly complete for a domestic version to be made and marketed by Maytag though the price is still unknown.

SCENT

According to the New York Times Techno fragrances are the coming thing. A U.S. company is offering little bottles of real-world fragrances like Rubber, Dirt and Vinyl. The company is working hard on Gasoline, a fragrance that will offer less the raw smell of petrol than the "idea of gasoline." Dirt is the smell of the air after a sudden summer thunderstorm, while Earthworm, developed in response to customer complaints that Dirt didn't smell dirty enough, has a richer loamy smell.

PRESTIGE

A new study of workers with so-called dirty jobs--such as garbage collectors and grave diggers--found that a large percentage of them are proud of their work despite the stigma.

EARNINGS

In 1996, the average income of two-partner families in which both had earnings, returned to the record levels of 1989, while families with only one earning partner had an average income about 7% lower than in 1989. Overall, the average income of all two-partner families was $60,600 in 1996, up marginally from 1995 but still 3% lower than the peak year for income in 1989 (after adjusting for inflation). Their average had declined by 5% following 1989 before partially recovering to the 1996 level.

BUGS

A report in the Canadian Medical Journal claims that excessive levels of antibiotics that are fed to livestock on Canadian farms are spawning drug-resistant "superbugs" that in turn can cause serious illness. The report is the first to draw together the full extent of the links between the commercial use of antibiotics and the increased rate of serious infection and mortality worldwide. Pigs, chickens and cows are being fed anywhere from 100 to 1,000 times as much antibiotics as the human population, prompting the evolution of mutant strains of common bacteria such as salmonella that are resistant to virtually all known drugs.

SERVICE SECTOR

Services incidental to the water transport industry registered the highest level of profitability among the 20 service-producing industries between 1995 and 1997. Included are firms engaged in marine cargo handling, harbour and port operations, marine salvage, piloting ships and operating shipping agencies. Their return on capital employed averaged 13.7% during the three years. In second place were firms that provide take-out food services and catering services where returns averaged 11.5%. Least profitable in the services-producing group were the other scientific and technical services industry (1.9%) and the motion picture and video distribution and exhibition industry (2.6%).

PACKAGING

German beer sells better abroad in bottles than in cans, with British and U.S. consumers favouring the bottled variety while the French and Dutch prefer cans according to the German Federal Statistics Office. German brewers sold 181 million litres of bottled beer abroad in the first six months of 1998 compared to 141 million litres in cans.

APPLIANCES

Companies manufacture dozens of products from coffee makers to vacuum cleaners. The value of small appliances produced in Canada represents about one per cent of the nation's $31 billion electronic products industry. In 1996, 48 companies employed around 2,350 people. Production of small appliances is dropping. In 1990, $552 million worth of small appliances were produced. By 1996, this had dropped to $397 million while U.S. production was growing by 4.4 per cent.

LABOUR

A Chicago employment consultancy reports that in a tight U.S. labour market, a great salary is no longer enough to attract a skilled worker. Now, employers are offering to wash employees' cars, do their dry cleaning and walk their dogs. These and other "soft benefits" can make a big difference to an employee in a high stress job.

ENVIRONMENT

In 1995, businesses belonging to the environment industry in Canada had revenues of environmental goods and services of $10.2 billion. These revenues accounted for 53% of their total revenues of $19.4 billion. Businesses generated $4.2 billion of sales from environmental goods, $3.9 billion from environmental services and $2.1 billion from environment-related construction services. Provincially, Ontario led the way with revenues of $4.3 billion and Quebec followed with $2.7 billion. Small firms (under 100 employees) accounted for 67% of these revenues.

SINGAPORE

Singapore recently unveiled an ambitious five-year plan to try to teach nearly half of its entire work force skills needed to become more competitive in business.

CULTURE

Governments spent $5.7 billion on culture in the fiscal year 1996/97, down 2.8% from the previous year. When adjusted for inflation, total spending on culture by all three levels of government was down 3.1% from the previous year. It was the seventh consecutive year that spending on culture has declined in real terms.

COMPUTERS

The average car has about 10 on-board computers, in places such as the air bags, power train and radio; a high-end vehicle may have as many as 80.

HEALTH

While the cereal companies are enemies at the breakfast table, they are allies in a larger battle that could revolutionize food marketing in Canada and change the way consumers shop for groceries. The cereal makers are part of a powerful food industry lobby that is pushing for the right to link health claims to their products, which is currently prohibited under the Federal Food and Drug Act. If they succeed, it would change everything from the types of products sold to the way foods are packaged and advertised. For the food industry the stakes are high. It wants to capitalize on the boom in health foods, called nutraceuticals or functional foods, which generate estimated sales of $500 billion worldwide annually.

EFFICIENCY

A Harvard economist has assembled data from 150 countries to rate how efficiently their governments deliver goods and services, their levels of personal freedom and the degree to which their governments interfere in the private sector. Among the top countries are: 1. New Zealand, 2. Switzerland, 3. Norway, 4. Britain, 5. Canada, 6. Iceland and 7. the U.S. At the bottom: Zaire, Sierra Leone, Sudan, Haiti, Cameroon and Mali.

PUBLISHING

In 1993-94, publishers operating in Canada sold $1.2 billion worth of books to Canadian wholesale and retail outlets. By 1996-97, that figure had jumped to nearly $1.5 billion. Industry experts put this down, among other things, to the increased quality of books available and the higher profile of Canadian works. Other factors include the growth of the large bookselling chains and the Internet.

BARBIE

According to Fortune magazine, 2.5 Barbie dolls are sold every second, generating $1.9 billion (U.S.) in sales annually. Now, Barbie has expanded into clothing with skirts, shoes, jeans and pyjamas for real little girls. And coming soon: Barbie fashions for grownups including $350 sunglasses with a tiny B on the side to celebrate the doll's 40th anniversary.

AGEING

The quarter of the American population that will be over 50 years old at the turn of the century has an annual personal income approaching $1-trillion. These older Americans control fully half of the country's disposable income, 75 per cent of its financial assets (worth more than $8-trillion) and 80 per cent of its savings and loan accounts.

SMART

Every year the brightly lit skyscrapers of North America prove irresistible to migrating birds and huge numbers die after crashing into them. According to New Scientist magazine, their prospects are made even worse in Toronto by local seagulls which have learned to guide the birds towards the buildings so they collide with them. The gulls then feed off them.

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

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December 1998 Economic Digest - Importing and Exporting

December 1998 Edition

 CHILE

This country now ranks as the number-one investor in Latin America. Chilean companies accounted for more than 46 per cent of interregional investment activity in 1997, climbing from US$15 million in 1990 to more than US$3 billion last year. Top destinations for Chilean investment were Argentina and Peru. At the same time, Chile saw inbound foreign investment grow by almost 3 per cent in the first quarter of 1998 over the same period in 1997. Investments from January to March totalled US$ 1.6 billion. Drawing the most foreign interest were mining, the services sector and manufacturing.

EUROPEAN GROWTH

Economic growth is expected to remain strong over the period 1998-2000 within the European Union, driven essentially by internal consumption and investment. In 1998, EU growth is now expected to be 2.9 percent, slightly above earlier forecasts, despite the effects of events in Asia and more recently in Russia. The marked deterioration in the external environment has led to downward revisions in the growth figures for 1999 from 3 percent to 2.4 percent; however growth should pick up again to 2.8 percent in 2000, according to the economic report.

TOOTHBRUSHES

After three years of development, 26 patent filings and a $70 million investment in a new manufacturing installation, Gillette has introduced a premium performance toothbrush which it claims establishes a whole new segment in manual oral care.

PROFITABILITY

For the sixth consecutive year, larger firms were substantially more profitable than medium and smaller enterprises in 1997. Large firms earned an average return on assets of 7.2%, well ahead of returns of 4.3% for medium-size firms and 4.6% for smaller firms. Large firms tend to have higher rates of profitability for several reasons, mostly relating to economies of scale. Enterprises involved in larger-scale operations can benefit from efficiencies relating to input costs, advertising, distribution and other operating costs. As well, larger firms may benefit from lower relative financing costs, due to lower possible risk levels.

MICROROCKETS

Mass-produced rocket engines no larger than a fingernail may one day lift payloads cheaply into orbit. Aerospace engineers are becoming proficient at etching a microrocket motor just 3 millimetres thick and 1.5 centimetres across into a silicon wafer. Thanks to microscale physics of the sort that allows ants to haul potato chips, the rocket-on-a-chip should provide 20 times as much thrust per unit weight as the space shuttle's main engine. The first ignition is planned this winter. An array of 800 microrockets (about the size of a hardcover novel) could carry a 1,000-kilogram vehicle into space.

STATISTICS

Canadians can now obtain a wealth of information about their communities, free of charge, through Statistics Canada's Internet site at www.statcan.ca. The Agency has released statistical profiles of almost 6,000 towns, villages and cities, as well as Aboriginal communities. Each profile contains data on four major components: population; education; income and work; and families and dwellings. For example, Canadians can find basic information for their community on the highest level of schooling for the population aged 15 and over, as well as its industrial makeup and the composition of the families who live there.

GREEN

Datamonitor's newest consumer goods report "US Organics 1998" reveals that the US market for organically produced foods and beverages is growing faster than expected, despite a lack of national standards for the products. The study shows that the organic foods and beverages market grew more than 26 percent to $4.5 billion in 1997.

ADVERTISING

Proctor & Gamble and Unilever spent most on advertising outside the United States last year. P&G spent US$3 billion on advertising outside the U. S. pulling further ahead of the global ranking of other companies. Unilever spent US $2.5 billion followed by Nestle which spent US1.3 billion. P&G's total global spending was $5.75 billion in 63 countries. Of the top 100 advertisers, 40 were European companies, 33 were U.S and 25 Asian.

PORK

A crisis situation exists as producers of North Carolina's largest agricultural commodity are losing millions of dollars each week due to the lowest prices in decades, according to the North Carolina Pork Council. Faced with the lowest hog prices in over 25 years, thousands of North Carolina farmers that depend on pork production for their income are losing approximately $13.8 million each week as they take their hogs to market.

FOOTWEAR

In Canada, this industry produces shoes, boots, slippers and sandals from leather, rubber and synthetic materials. Revenue in 1996 was an estimated $774 million with 84 companies employing around 7,500 people. This industry has undergone a wave of consolidation. Ten years ago, 150 footwear companies employed 14,500 people. It is estimated that the number of firms fell to 42 in 1998. Canada's share of the estimated $36 billion world market is a fraction of 1 per cent.

AGRICULTURE

Canada has launched a major U.S. public relations blitz to counter what it says are widespread myths and lies about Canadian farm exports. Worried that rising U.S. farmer militancy is undermining Canadian trade, officials are waging an uncharacteristically aggressive counterattack that includes speaking out, writing letters to leading newspapers and challenging key detractors in Congress. Last year, Canadian agricultural exports to the U.S. totalled $11.4 billion. Farmers on both sides of the border are suffering from depressed commodity prices due to global oversupply, weak Asian demand and European subsidies.

BANANAS

The U.S is threatening to slap 100 per cent duties on a range of products from France, Britain, Spain and Portugal because it claims the European Union has not complied with a WTO ruling to change its banana importing policies. At stake is access to the world's largest banana market, estimated to be worth $5 billion a year at the retail level. The EU is trying to protect favourable access from suppliers in former colonies in Africa, the Caribbean and the Pacific, to the disadvantage of U.S. companies operating in Latin America.

DISPUTES

The number of disputes brought to the World Trade Organization has topped 150 since it was created nearly four years ago, compared with 300 handled by its predecessor over 47 years. The U.S., which played a key role to ensure the Geneva-based WTO had the teeth its predecessor GATT lacked, has filed a third of all the cases brought to the global trade watchdog's Dispute Settlement Body, more than any other country. Other nations have brought 25 complaints against Washington, while the EU has filed 38 complaints and been accused by other nations of breaking free trade rules 23 times.

PACIFIC TRADE

The drive to create a free trade area in the Pacific could be derailed unless Japan is more willing to lower its trade barriers. Japan has announced it is not able to make tariff reductions in the key areas of forestry products and fish. These are sectors where APEC leaders agreed to negotiate tariff eliminations as a down payment toward the goal of creating a free trade zone by 2020.

SURFING

It is estimated that China will have more Internet users than any other country in Asia, outside Japan, by 2001. China should pass Australia in 2001 as Asia's top Internet user and by the end of 2002 it will have 9.4 million users, up from a mere 1.4 million in 1997. Australia should have 5.8 million users and South Korea will be the third-biggest user with about 4 million people logging on followed by Taiwan with 2 million.

JEANS

During the 1980s, world demand for jeans increased on average by 10 per cent a year. In the 1970s, Australians bought 3.5 million pairs of jeans and 1.2 million men's suits. Over the next 20 years, sales of jeans tripled while sales of suits fell by more than half.

PLATINUM

In 1990, sales of platinum bridal jewellery were almost non-existent. Research conducted by Modern Bride magazine reports that platinum's share of the market for engagement rings and wedding bands now ranges from 21 to 25 per cent. While sales of gold jewellery last year were only up 2.2 per cent over 1996, platinum sales rose 60 per cent. High profile celebrities are wearing platinum and a new generation of consumers appears less wedded to gold.

WALL STREET

Big job cuts are being made by bankers for the first time since 1994. Bonuses, worth $12 billion last year will be down sharply. New York's economy is more dependent than ever on Wall Street according to the state comptroller. It accounted for 56 per cent of the growth in real earnings in the city in 1992-97 (compared with 23 per cent in the boom years of the 1980s). Although it directly represents only 5 per cent of total employment, it accounted for over half of new jobs created in 1995-97. Wall Street's workers took home an average of $182,000 each. The average salary of other New York workers was $39,200.

PEACE!

C-Guard is a product of Israeli military technology that can jam cell-phone reception within 100 metres of its location. It will be launched in Britain shortly in the hopes it will be bought by restaurants, theatres and hospitals.

FRIES

While the U.S. already claims to be awash in Canadian wheat and lumber, the next threat strikes at the heart of U.S. food culture. Nearly 85 per cent of the 2 billion pounds of frozen french fries produced in Canada are sold in the U.S. The lure of cheap Canadian potatoes, which now account for 10 per cent of the U.S. market, is so strong that even U.S. chip makers are setting up shop north of the border. Americans love their fries and each eat an average of 59 pounds a year.

TECHNOLOGY

Canadians are the world's third-greatest spenders on technology. A study by the World Information Technology Alliance found Canada trailing only the U.S. and Japan in technology spending in 1997. Figures show an average of US$697 spent for each Canadian on technology, far behind Americans ($1,207 per person), and Japanese ($854) but ahead of the French ($665), British ($659), Germans $612) and Italians ($310). Overall, global technology spending increased to $1.8 trillion in 1997 from $1.3 trillion in 1992 and the industry grew 27 per cent faster than the global economy during that period.

HONEY

Argentina's honey production, which has not had an off year since 1974, is the third largest in the world behind China and the U.S. and could become the No. 1 exporter of the commodity. Production of Argentine honey in 1998 is expected to be around 70,000 tonnes, all but 10 per cent shipped abroad. Nearly 200,000 hives have been added since 1995 for a total of 1.8 million. The international price is about US$1,350 a tonne.

OOOPS

Millions of trial Euro coins minted in Germany will have to be melted down because the European Union stars on them point the wrong way.

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