SEPTEMBER 1994 Economic Digest - Importing and Exporting

SEPTEMBER 1994 Edition 

IMMIGRANTS

            Canadians swarmed into British Columbia last year. For the ninth consecutive year, most of the movers were from Ontario and Alberta. In fact, so many Canadians moved to B.C. that had it not been for new immigrants, seven of the other nine provinces, including Quebec and Ontario, would have dropped in population. Ontario and Quebec lost 14,000 and 8,500 respectively through interprovincial migration but gained 122,000 and 41,000 new immigrants. 79,000 moved into B.C. from other provinces and 39,000 left the province for a net gain of 40,000 and 31,000 new immigrants arrived for a total gain of over 71,000. Newfoundland, New Brunswick, Saskatchewan and Alberta actually lost residents. B.C. also boasted the three most popular areas for migrants from other provinces with Greater Vancouver gaining 18,512, the Victoria area up 3,959 and Central Okanagan up 3,337. 

QUEBEC

            Quebec has confounded predictions and profited more from the Canada-U.S. free trade agreement than the country as a whole. It was anticipated that Quebec would fare worse under free trade because it has a higher than average proportion in vulnerable economic sectors such as textiles and fewer industries in high value goods.

            A recent study (which does not include the impact of NAFTA) shows that Quebec exports to the U.S. have surged since free trade came into effect. Counting all products with lower tariffs under free trade, Quebec's exports to the U.S. grew 43 per cent between 1988 and 1992 compared with 36 per cent in the previous four year period. For Canada as a whole, exports to the U.S. grew by 33 per cent after the agreement and 27 per cent during the previous four years. In higher value goods alone, Quebec exports to the U.S. climbed 90 per cent during the four years compared to 49 per cent for Canada in total. The study also shows that as trade grew between Canada and the U.S. after the free trade was signed, trade with other countries dropped.

           

GARDENING

            According to Statscan, the garden industry has been growing fast. Horticulture and nursery sales for 1993 reached $960 million, nearly double the $491 million sales in 1986. Throughout the country, nearly 10 million square metres of greenhouses were under glass or plastic last year with 88 per cent of operators being in Quebec, Ontario and British Columbia.

            Bedding plants brought big business with some 572 million plants prepared for sale last year as well as 27 million potted geraniums which are tallied in a different category. Some 75 million cut roses were produced in Canada last year. The growth in this industry is achieved without government subsidies or helped by import quotas and strong competition is now coming from Mexico and South America.

BOEING

            Given the number of Canadian companies sub-contracting to Boeing, their sales figures are always of interest. Sales for the first half of 1994 totalled $11.7 billion with 149 airplanes delivered and 260 expected by the end of the year. To the end of June, orders were placed for 53 airplanes valued at about $9.3 billion giving a contractual backlog worth $71.2 billion. Boeing has announced that it will invest $600 million in a plant in Xian, China to build tail sections for its 737 jetliners and $100 million in Beijing for a spare parts centre and training programs for pilots, cabin crew and maintenance staff. The Canadian Consulate General in Seattle offers very specialized assistance for Canadian companies seeking advice about Boeing contracts. For more information, please call Ron Merrick, Boeing Liaison Officer at the Consulate General at 206-443-1777.

EURO-FRAUD

            The cost of fraud in the European Union may exceed $5 billion annually. Some examples: Vast heaps of wheat supposedly sitting in Italy and Greece have rotted or disappeared, but EU taxpayers have paid $102 million for them in "intervention funds" which subsidize poor Mediterranean farmers. Austrian milk powder, magically evading customs on its way to Italy, cost taxpayers another $48 million. By pretending that 90 per cent of their olive oil was high quality when it was not, Italians pocketed another $40 million. Polish cattle taken to Italy for slaughter, then sent to Malta, brought back to Italy then re-exported from the EU cost taxpayers another $24 million. Herding sheep back and forth between Northern Ireland and the Irish Republic is a well known device for collecting EU subsidy premiums on ewes twice over. Data processing equipment and training courses, paid for by the EU, mainly for Portuguese and Italians, have cost $160 million but the courses have never been taught and the equipment has never been seen. The cost of fraud in just 30 new or recent cases adds up to $544 million.

WAL-MART IN MEXICO

            When the first Wal-Mart store opened in Mexico City nine months ago, all 72 cash registers rang constantly. On a recent Saturday, the high point of the shopping week in Mexico, 51 of them were closed. The sales slump is only one of the many problems besetting Wal-Mart in Mexico. In addition, prices are so high that some Mexicans still cross the border to shop in U.S. Wal-Marts.

            Some analysts say retail outlets are growing far faster in Mexico than the buying power of potential customers. Mexico's median annual per capita income is still only $1,956. When Wal-mart opened a super centre--a combination grocery and general merchandise store--in Monterray last year, it had to bar the door to control crowds. The local press soon lambasted the company for charging 15 to 20 per cent more than the Wal-Mart in Laredo, a two-hour drive away to the north in Texas.

            Wal-Mart say the higher prices in Monterray reflect transportation costs from the U.S. and that many duties have not yet been phased out. In many cases, profit margins have been reduced compared to the U.S. Also, Wal-mart lacks the leverage with Mexican vendors that its size gives it in the U.S. In addition, distribution systems are very different in  Mexico, where thousands of suppliers ship directly to stores rather than to retailer warehouses. Up north, Wal-Mart's efficient control of distribution is largely credited for its low prices. Also, analysts say that as most Mexicans do not own cars, it limits stores' geographic reach. And most Mexicans, because of their shopping patterns and limited incomes, own very small refrigerators and so can't easily store a week's worth of groceries. Experts believe that Wal-Mart will eventually succeed in Mexico, in the meantime, other U.S. retailers are watching their problems with interest. 

DUTY-FREE

            A company has offered to pay $184 million for a six year contract, starting in 1996, for duty-free space in the new terminal at Vancouver International Airport, twice the cost of a new runway. The company expects $500 million in sales over the period. If sales exceed projections, the company will pay an additional percentage. Vancouver airport is the duty-free capital of Canada, out-selling Toronto which has triple the air traffic. This is due to big-spending Japanese tourists who buy expensive items on the West Coast before returning home, and by increasing numbers of Taiwanese, Korean and Chinese. International travellers now account for about 2 million out of a total of 9.5 million travellers and it is projected that this will jump to 2.8 million by 2000 and 4.5 million by 2010.       

TOURISM

            A unit of the Conference Board of Canada said the lower Canadian dollar, compared with its U.S. counterpart, is keeping Canadians close to home and drawing more foreigners to the country. U.S. visitors to Canada increased 5 per cent for the first four months of the year, while travellers from Japan increased 15 per cent and arrivals from France grew 21 per cent. Canadians crossing the border dropped nearly 11 per cent in the first four months. The total travel industry in Canada should grow about 4 per cent this year.

            In 1993, Canadians spent $5.5 billion on leisure travel to the U.S. compared with the $4.3 billion they spent in Canada. This year marks the third in a row that fewer Canadians will visit the U.S. which helps Canada's balance of payments but not the U.S. travel industry. It is estimated that in July and August alone, Canadians will spend about $200 million less in the U.S., and for the whole year it could be down by as much as $2 billion.

U.S. EXPORT MARKETS

            With the agonizing decision now made concerning granting most-favoured-nation status to China, the U.S. Commerce Secretary will shortly lead a high powered trade mission to China taking two dozen top business executives. The trip will result in a framework agreement between the U.S. and China and a number of specific agreements involving energy, transportation, finance and information systems. According to the Commerce Department, there are more than $1 trillion worth of infrastructure projects likely to be developed in Asia over the next 10 years, almost one-third of which will be in China and Hong Kong.

            The United States has identified 10 large emerging markets that will be of importance to its economy (which Canadian companies would do well to bear in mind). Four are in Asia: China, Indonesia, South Korea and India. Three are in Latin America: Argentina, Brazil and Mexico. Two in Central Europe: Turkey and Poland, and South Africa.

GATT

            According to a new federal government survey, a Canadian family of four will see its annual income rise by at least $400 a year thanks to the new global trading pact which comes into effect next year. The GATT Agreement should see an extra $3 billion a year pumped into the economy. For the average Canadian, that means a 0.4 per cent rise in income every year in perpetuity once all the provisions of the deal are in place. The gains will show up mainly in cheaper imported goods, better prices for Canadian goods on world markets and cuts in agricultural subsidies. These projected gains are in addition to the 2.5 per cent a year boost that free trade with the U.S. has already given Canada, according to the Finance Department.

EXPORT CHALLENGES

            In a recent survey by the Canadian Chamber of Commerce, the major reason Canadian firms give for having trouble cracking export markets is lack of contacts. Nearly half the respondents cited this reason. But results vary with size. More than 60 per cent of firms with fewer than 20 employees cited foreign contacts compared with only 33 per cent of firms with 500 workers or more. But 54 per cent of the big companies mentioned adverse trade rules compared with 17 per cent of small firms. Other reasons given were: Lack of market knowledge 36%, Financing 33%, Transportation costs 32% and Customs problems 15 per cent.

FREE TRADE

            According to a U.S. Commerce report which released figures for the pact's first six months, the NAFTA is proving to be an economic boon to the United States, Mexico and Canada. U.S. exports to Mexico are at record levels, rising 17 per cent for the first six months compared to the same period a year ago. About $24.5 billion (U.S.) in U.S. goods were shipped to Mexico. Exports to Canada hit $55.6 billion by June, up 10 per cent. Even as U.S. exports increased, Americans were buying more Canadian and Mexican goods. Imports from Mexico were up 21 per cent to $23.4 billion while exports from Canada were up 10 per cent to $61.4 billion. 

TECHNOLOGY

            Nearly 300 small to midsize companies  were recently asked to rate the effectiveness of various technologies in improving customer service through expediting orders, tracking sales and logging customer comments. The survey was based on their satisfaction and usage levels. The highest rating, with 87%, went to the fax\modem for order taking. Bar-coding to track orders and deliveries received an 80% rating followed by 72% for an on-line computer system for order taking.

AUGUST 1994 Economic Digest - Importing and Exporting

AUGUST 1994 Edition

ABOUT OURSELVES

            With this issue, we start the third year of our Economic Digest. It began with a modest distribution of 75 and now reaches over 750  monthly. It goes to most Canadian provinces and every State in the Union. One copy goes to Beijing. Information from it is translated and published in the Trading Post, a Vancouver Chinese Newspaper with a 15,000 circulation. A shorter version is available downtown courtesy of B.C. Trade.

            The Digest earns no revenue, in fact it costs us a considerable amount over the course of a year. But we hope that we continue to generate goodwill through this venture as we strive to show that we are interested in all aspects of the economy, not just the area in which A & A Contract Customs Brokers is specialist. It is our philosophy that if the economy is doing well, then we all benefit, whatever our business.

            We always have far more information left each month than we are able to fit in the Digest. In the coming year we hope to expand the sharing of this information utilizing the new technology. Using Faxback, we would like to make single-page Digests available monthly on specific sectors such as Retail, Manufacturing, EDI and USA\NAFTA. If readers have any suggestions about areas you would like to see us cover, please call us at 538-1042, or Toll Free 1-800-663-4270.

INTERPROVINCIAL TRADE

            The recent deal to reduce trade barriers between provinces is less ambitious than hoped, but makes progress in key areas such as procurement and investment. Governments will no longer be able to favour provincial suppliers in tendering for goods worth more than $25,000 and for services or construction projects over $100,000. The provisions will be extended to municipalities, municipal organizations, school boards and publicly funded academic, health and social institutions by June 1996. Governments spend about $49 billion a year on goods and services.

            Provinces will be prevented from using incentives such as tax breaks, grants or debt guarantees to get businesses from another province to relocate. Also, qualified workers will find it easier to work in another province and provinces will recognize licensing and other work standards in other provinces. Consumer health and safety standards cannot be used to discriminate against out-of-province suppliers. A work plan is to be completed by 1996 which will see common provincial standards for the trucking industry such as truck weights and dimensions, safety rules and bills of cargo.

            However, the agreement leaves in place barriers to agriculture, energy and alcohol. Consumers will still pay too much for electricity, milk and eggs and have less choice in wine and beer. Disputes will be handled by a panel of experts. Decisions are not binding but will be made public and the injured province will have the right to retaliate with measures of "equivalent effect."

HEALTH CARE

            Industry Canada has developed the Canadian Health Care Services Suppliers (CHCSS) computerized data base in collaboration with Health Canada. The CHCSS is being launched to enhance the Department's knowledge of Canadian private sector supply capability and to facilitate the matching of export opportunities with Canadian supply capability. The information in the database will also be used to encourage the formation of industry alliances and other partnerships for the pursuit of export opportunities.

            Interested applicants complete a questionnaire and profile sheet and return them, with company brochures, to Industry Canada. Search capabilities are extensive and users will be able to search on the basis of any fields (questions) contained in the questionnaire. To obtain a questionnaire or more information, call Luc C. Pamerleau at Industry Canada, Tel: 613-954-2951.

COMMUNICATIONS

            Ford Motor Co. will spend $100 million (US) on a system to link its dealers by satellite for employee training, customer service and relay of business information. The system will allow instructors at Ford headquarters to lead live video training sessions in its North American dealerships. It eventually may give dealers instant access to comprehensive information on individual customers who bring in their cars for repairs. Ford will pay for installation of dishes at dealerships and equipment to send and receive data and the dealers will provide televisions and a personal computer to tie to the system.

VACATIONS

            According to the Conference Board of Canada, fewer Canadians plan vacation trips this year than in any of the previous seven years. Only 59 per cent of those surveyed said they would take a trip this summer, down from 68 per cent last year and 70 per cent in 1990. Despite an improving economy, Canadians are still holding back on travel spending. Instead, they are putting their money into cars, appliances and furniture.  

THE FUTURE

            A study of 2,500 U.S. facilities managers showed what they expect workers will find in offices in ten years:

* Almost three-quarters will have on-site fitness centres.

* About 40 per cent will have day-care.

* 95 per cent will have increased security.

* More than 76 per cent will have voice mail.

* 16 per cent will have individual temperature controls in workspaces.     

PERMITS

            The United States has recorded imports of 366,700 tonnes more wheat and barley than Canada has officially exported during the first eight months of the crop year. It represents about 16 per cent of legal exports of more than  2.2 million tonnes. Record sales into the U.S. market this year have touched off a trade feud between the two countries, with promises of import restrictions unless Canada voluntarily cuts back. Farmers are required to obtain export permits for any wheat or barley heading south. The RCMP are looking into a variety of methods that may have been used to get grain over the border including not stopping at Customs and altering export permits.

ABSENTEEISM

            Sickness-benefit programs in Sweden used to pay workers 100 per cent of their salary for their first 180 days of sickness, resulting in the highest absentee rate in the Western world. (The average Swede missed 26 days of work per year and the problem was particularly acute on Mondays.) The government addressed the problem by eliminating pay for the first day of sick leave. Before this change, car-maker Volvo had to schedule 20 per cent more workers than it needed to ensure a full production crew. After the change, Volvo and other firms found absenteeism down by 25 per cent.

CAR BUYERS

            On some of Detroit's high profile new car launches, Canadians are getting much better prices--on a dollar exchange basis--than American buyers. Canadian auto companies say this is because competition for sales north of the border is much tougher these days. Canadians have less disposable income to spend on new vehicles, taxes are higher, and the economic recovery is slower. For example, a Ford Contour will sell south of the border for $14,655 (U.S.). Ford Canada's domestic price is $16,895 (Can). At the current rate of exchange, the U.S. price converted to Canadian dollars would be more than $20,000.             Not surprisingly, some Americans are trying to take advantage of their buying power in Canada but domestic new car dealers are prohibited from selling to U.S. customers under franchise agreements. The auto makers say there are other good reasons for restricting such sales. One is that vehicles made for the U.S. and Canadian markets are slightly different. Canadian cars, for example, must have daytime running lights and metric speedometers and other gauges.  

WOMEN

            According to a survey of 5,000 managers by the British Institute of Management, many managers believe "female" skills such as teamworking, consensus management and negotiating will become more valuable for businesses to succeed in the next century. Male bosses will have to learn these skills or become obsolete. But surveys show British women are still far behind in terms of pay and prospects for promotion. Only 9 per cent of managers and three per cent of senior managers in British companies are women.

U.S. GOVERNMENT PROCUREMENT

            A new information kit is now available to Canadian businesses and professional services wishing to sell to the $180 billion U.S. federal government procurement market. "Selling to the U.S. Federal Government: Non-defense Products and Services" consists of 23 fact sheets providing a comprehensive introduction on how to do business with the U.S. federal government. Produced by Foreign Affairs and International Trade in conjunction with the Canadian Embassy in Washington D.C., it reflects new opportunities available to Canadian suppliers under the NAFTA. The kit is available free from International Trade's InfoCentre in Ottawa, Fax 613-996-9709. Quote publication code #159UA.

RETAIL

            Another retail giant is planning to move north. Sportmart Inc, is a fast-growing chain of sports goods superstores based in Illinois and expects to open in Toronto early in 1995. This retailer was founded in 1971 and has 45 superstores and 3,800 employees. Typically, each Sportsmart has a broad and deep selection of name-brand products, with 65,000 items for sale. For example, 600 types of running shoes, 100 kinds of tennis rackets and 70 varieties of sleeping bags. An average store is around 4,000 square metres and sells no seconds or irregular merchandise. The company is also scouting for real estate in Ottawa and Vancouver although it may run into problems in B.C. where Sport Mart Discount Superstores Inc is an established Kamloops-based chain with 12 outlets in B.C. and Alberta.

JOBS

            Traditionally, B.C. employment growth is led by the service sector with the goods-producing sector usually trailing. But job statistics for June show that, year-to year, the goods sector moved to the forefront in job creation. Over the year, the goods sector added 54,000 jobs while the service sector produced 26,000. The change is attributed to growth in wood related manufacturing and construction, both of which belong to the goods sector. The number of jobs actually fell in some segments of the service sector. For example, retail sales lost 23,000 jobs, public administration 6,000 and transportation 7,000. Between June 1993 and June 1994, B.C. created 80,000 new jobs, about 40 per cent of the Canadian total. 

DEBT

            Equity magazine calculates that if every province and territory put in $442-million per month to retire the existing federal and provincial debts, at the end of 100 years the debt will not be reduced by even one cent.

ADVERTISING

            Advertising to an international market can be tricky and translations often have hilarious results. When KFC exported its "Finger Lickin Good" slogan to China, it emerged as "Eat your Fingers Off". Similarly, Pepsi didn't have much luck trying to get them to guzzle their cola. "Come Alive With The Pepsi Generation" ended up as "Pepsi Will Bring Your Ancestors Back From The Dead". Coors Beer lost its fizz in Spain when their hip phrase "Turn It Loose" came out as "Drink Coors and get Diarrhoea". When Otis Engineering took part in a Moscow exhibition, "completion equipment" was translated as "equipment for orgasms". And "Body by Fisher" boasted by General Motors in Belgium came out as "Corpse by Fisher". In Spain, when GM introduced the Nova they quickly discovered the word no and va mean "doesn't go".

PAPERWORK

            Citing budget constraints, the office of the Montana governor has refused to issue paperwork proclaiming such events as National Accordion Awareness Week. So far there has been no public outcry.

JULY 1994 Economic Digest - Importing and Exporting

JULY 1994 Edition

U.S.TRADE

            Canada set trade records in April with autos and aerospace helping to push exports up $804 million from March to $17.4 billion. Imports also reached a new peak in April, rising $600 million to $16.1 billion leaving a $1.3 billion merchandise trade surplus. Autos and parts were the single largest contributor with shipments reaching a record $4.6 billion, up $441 million, helped by the fact that many of the most popular new models, such as minivans, are made in Canada. The aerospace sector--including planes, engines and parts--was the best performer in the machinery and equipment sector, where exports reached a record $3.4 billion, up $77 million. Exports in this sector are 30 per cent above a year ago.

The biggest rise in imports was in machinery and equipment as Canadian companies continue to increase production.

TRADE SHOW

            For the fourth year running, North America's largest agent\distributor locator and recruiter show, WORLD TRADE'94, will be held in Toronto on October, 20, 1994. This international import\export match-making event is designed for manufacturers and companies interested or involved in exporting. It is also a venue for Canadian and international agents\distributors to identify new domestic and foreign sources of supply and representation. At the last show, there were 168 exhibitors representing 51 countries, states and provinces. The 2,500 visitors represented primarily agents, distributors, manufacturers, exporters, importers and re-exporters. More information is available from the Canadian International Trade Association at: Tel: 416-351-9728, Fax: 416-351-9911.

MINING

            Over $307 million in mine exploration funding was raised on the Vancouver Stock Exchange last year. $167 million was earmarked for Latin America, $86.1 million for Canada, $44.8 million for the U.S., $6 million for Asia and $2.4 million for Africa. 21 per cent of 913 B.C.-based miners are active in Latin America, with Mexico, Venezuela and Chile topping the list. Even Cuba signed seven joint-venture agreements with Canadian miners.

ROYAL BANK

            This bank is making it easier for Canada's importers and exporters to access international markets with the establishment of a Trade Help Line.

            From anywhere in Canada, companies requiring trade information and assistance can call the bank's Help Line toll free at 1-800-263-9191, from Monday to Friday, 8:00am to 8:00pm local time. Through the Help Line, businesses can access a pool of trade expertise of some 180 people, who speak 25 languages, have international experience and can assist them with their business dealings in other countries. The trade specialists are highly skilled in areas such as letters of credit, bonds and guarantees, country risk analysis as well as innovative financial structures to help companies do business in the global markets.

MEXICO

            Trade between Mexico and the U.S. during the first quarter of the NAFTA rose sharply to record levels. U.S. imports from Mexico grew much more rapidly cutting the U.S. trade surplus with Mexico for the first quarter nearly in half. U.S. exports rose 15.7 per cent to $US11.85 billion compared to the same quarter a year earlier. U.S. imports from Mexico increased 22.5 per cent to a record $US11.29 billion,  narrowing the U.S. trade surplus with Mexico by 45.1 per cent to $560 million. There are no figures available yet for Canadian trade with Mexico in 1994.

HOME WORK

            Last year, according to a recent survey, about 41 million people in the United States, or 33 per cent of the adult work force worked at home at least part of the time. That is up from 26.8 million, or 22.3 per cent of the adult work force, in 1989. It is projected that by the turn of the century, 40 per cent of all U.S. households will have at least one family member working at home. 

RESEARCH & DEVELOPMENT

            In 1990, only 1.4 per cent of Canada's GDP went to R&D.That's only half of what the United States spends and much less than the 3.1 per cent Japanese firms spend. Private sector investment in human resources also falls short. Only 15 per cent of Canadian firms have training budgets. On-the-job skills development is a mere half of one per cent of total payroll.

DUMB MARKETING

            McDonald's in Britain and Coca-Cola in Spain came under fire from Muslims after printing the flag of Saudi Arabia, which contains a sacred scripture from the Koran, on hamburger bags and cola cans. This was part of promotions for this summer's World Cup soccer championship in which Saudi Arabia is competing. Muslim leaders say the holy words should not be used commercially on anything that is crumpled up and thrown away.

            Not to be outdone, Pepsi-Cola has now offended the Church of England by laser- beaming its logo onto the Anglican cathedral in Liverpool to promote a nightclub act. It is only speculation that these companies hired the three Hoover executives fired as a result of its marketing fiasco.

EXPORTING

            Canada is maintaining its position as a leading growth performer in the world with exports which will jump 10 per cent this year. Canadian exports will out-perform all industrialized countries and even some of the Asian giants for the second consecutive year. Last year, Canadian exports recorded a 14 per cent leap, the highest in the world.        

            This healthy export record can be attributed largely to the improvement of U.S. market conditions and the Canadian dollar. These factors will contribute to an 11 per cent increase in U.S. sales this year following a 20 per cent growth in exports to the U.S. last year, the largest increase in a decade. Last year saw 81 per cent of Canada's exports go to the U.S., a jump from 73 per cent recorded in 1989. Auto and parts exports will grow by 14 per cent and capital goods sales by the same amount. Lumber exports will increase 11 per cent and energy by five per cent. Agri-food exports should grow by two per cent.

            The Asian market should grow by 7 per cent in 1994 with government spending on infrastructure alone totalling around $65 billion. Latin America should grow by 3.5 per cent with projections over the next decade of $650 billion to be spent on infrastructure, $250 billion on power generating and the same on transportation and $125 billion on telecommunications equipment. 

WAL-MART

            This giant U.S. retailer drives a hard bargain with its vendors. The key to Wal-Mart's success is the buying strategy enforced by founder Sam Walton. The $67 billion chain negotiates a payment schedule that is slightly longer than the time it will take to move merchandise off the shelf. Vendor agreements cover 30 basic requirements, from UPC (universal product code, or bar-codes) on all goods to 100 per cent fulfilment on each order.

            There is a price to pay if you do not comply. If a supplier ships goods with an unreadable UPC, or without a purchase order number, Wal-Mart fines them $10,000 or 10 per cent of the value of the order. Fines climb to $50,000 for the second offence and top out at $100,000 the third time. Retail experts claim that this policy helps to make better manufacturers. Wal-Mart stores, usually with about 110,000 square feet, typically carry some 150,000 items restocked daily. The U.S. chain's stores move about $US297 worth of merchandise per square foot per annum.

PRIMARY GOODS

            Manufacturing in British Coumbia still means making boards, not furniture and chipping pulp not fine paper, according to the provincial statistical agency. Last year, 59 per cent of all shipments of manufactured goods were products that had only the most basic changes. Of those, half were primary wood products--boards, shingles, shakes, veneer, plywood and pulp. Even though the total value of manufacturing shipments increased 11 per cent to $26.9 billion --largely because of a 34 per cent increase in the value of shipments of wood products--there were fewer jobs. Secondary manufacturing accounts for 41 per cent of the value of shipments, up from 21 per cent in 1983.

OPPORTUNITY

            Patrocinio, Brazil, is a malaria-infested gold mining town of 2000 deep in the Amazon rain forest. It has no mayor, no doctor, no running water, no sewers and often no electricity. But it does have 20 Avon Ladies. Mostly, they trade cosmetics for gold nuggets, but they have been know to accept other barter goods such as wood fruit and eggs. Two dozen eggs will buy a Pop-Love water-melon flavoured lipstick, and 20 kilograms of flour a bottle of Topaze cologne. A jar of Avon's top-selling face cream will set you back three grams of gold or about six days pay.

            Setting off in kayaks down the muddy tributaries of the Amazon or travelling on foot through dusty gold-mining communities, an army of more than 60,000 Avon vendors peddle products to some of the most remote communities in the rain forest. Since it changed its marketing strategy three years ago to boost its sales force in the Amazon outback, Avon has become one of the few Brazilian companies to see sales rocket despite a 10 per cent drop in per-capita income. The sale of Avon products has supplanted the extraction of gold as the main economic activity and Avon Ladies are now the commercial elite.

DATABASE

            The Open Bidding Service (OBS) from Information Systems Management Corporation is a national electronic service offering businesses current and complete information about procurement opportunities. All that is needed to have access to this information is a computer and modem. OBS has entered into an agreement with Foreign Affairs and International Trade for a one-year pilot. The OBS collects Mexican NAFTA procurement requirements and translates them from Spanish to English. Subscribers also receive procurement notices from over 20 Canadian federal departments, including Government Services, the Province of Alberta, and the U.S. Commerce Business Daily. Another service will search the database for opportunities matching a company's profile and an historical database of past procurement notices and awards. The annual subscription fee is $130 and online charges from anywhere in Canada are 42 cents a minute. For further information, or to register with OBS, call 1-800-361-4620.

ATMOSPHERE

            "Sounds of a Thriving Office" is a $19.95 tape unlikely to make the top of the charts. Aimed at a niche market, it is for people who work at home or for a small office but want to sound on the phone like they're working somewhere busy. The tape features the sounds of doors closing, phones ringing, typewriters clacking, drawers banging, feet shuffling and voices droning in the background.

LABELLING

            Mexico is drafting legislation requiring imported retail goods to include consumer safety, instructional information and product labelling in Spanish. Technically there has been a law to this effect since 1987 but it has not been enforced. The likely effective date will be April 1995. It has not yet been determined if the instructions and guarantees that come inside a packaged product must be in Spanish; if the importer-exporter label will still be required; how the laws will be enforced, either by Mexican customs brokers or through random checks of shelves in stores. Unaffected products will include apparel, footwear and tires, and products imported for manufacturing. As Mexicans consider products with English labelling to be of superior quality, companies are advised to plan a bilingual label strategy.

KILLING TIME

            Instead of reading old magazines while waiting for car repairs at Swedish Auto in Farmer Branch, Texas, you can now get married. The garage offers a free marriage ceremony with any 30,000-mile inspection on Hondas, Volvos and BMWs. The auto service comes with a warranty, the marriage does not.