October 1998 Economic Digest - Importing and Exporting

October 1998 Edition

 PALLETS

U.S. companies importing from China will likely be forced to abandon the use of wooden pallets by December following a recent decision by the U.S. agriculture department aimed at keeping out the troublesome long-horned beetle. Importers will face a tight window to treat or eliminate beetle-infested wooden pallets, or their cargoes will be banned from American ports which could affect a third to a half of China's $62 billion exports to the United States. Experts warn that the simplest solution, which is to treat the wood that goes into the pallets, might not be the best answer. The answer for the future, according to scientists, is for shippers to quit using wood pallets, or wooden crates and boxes, and to shift to manufactured or molded pallets that won't carry hitchhikers.

FRESH

Health magazine states that canned fruit and vegetables are as good for you as fresh. This is because they're processed within hours of being picked. Fresh ones may sit on the road or at the store, losing nutrients, for weeks before you get them.

EXPORTS

A recent Canadian Alliance of Manufacturers conference warned that British Columbia's faltering economy can expect little help from Southeast Asian countries for several years. About a one-third of B.C.'s exports go to Southeast Asia making the region vital to the province's economic well-being. Asia's economic and political turmoil will aggravate the problems already faced by the province, which has seen its exports to Asia fall by 36 per cent in the first six months of 1998.

UNEMPLOYMENT

China's state enterprises, most of which are big money-losers, shed 3.53 million workers over the past year under a stepped-up government drive to end their drain on the state budget.

INVENTING

Scientists predict that an abundance of new raw materials will make it possible to revolutionize manufacturing and construction in the next century. Already, a California group has proposed the construction of a new bridge near San Diego that would be made of composite materials reinforced with plastic, carbon and glass fibres. Scientists continue to experiment with atoms, rearranging the familiar into entirely new commodities.

RESERVATIONS

American Airlines is implementing a computer program that will understand spoken instructions from a select group of most-prized customers instead of taking commands from touch-tone telephone keypads.

FAITH

Seven British insurance company workers on a motivation course were rushed to hospital with severe burns after trying a fire-walking trick perfected by Indian fakirs. The coals they were persuaded to walk on turned out to be red hot instead of merely glowing. The exercise was part of a training course on teamwork and motivation and was supposed to show them that they could overcome anything.

ALTERNATIVES

Politicians have talked about a possible east-west link across South America for years. Now, some transportation companies are quietly testing the idea with an eye toward an intermodal corridor which would spare a trip around Cape Horn or through the Panama Canal. An Argentine railroad is carrying containers to the Chilean border where they are loaded onto trucks and ferried to a Chilean railroad which takes freight to Valparaiso for export to Asia. The savings is not so much in cost, but rather in time.

YEAR 2000

Businesses are stepping up efforts to avoid computer problems when the calendar hits January 1, 2000, according to a follow-up survey conducted by StatsCan. Virtually all firms (99%) reported being aware of the so-called "millennium bug" and more than two-thirds (70%) said they had taken steps to prepare their systems for it. This compares with a similar survey conducted last year, which found that less than half (45%) of firms had taken any action, with about 1 in 10 not even knowing about the issue. These improvements mainly reflect changes among small businesses (6 to 50 employees), where the overall proportion of firms taking action jumped from 39% to 66%, and among medium-sized firms (51 to 250 employees), where there was an increase from 70% to 94%.

VIEWING

A U.S. survey of visually impaired and blind people found that they watched television an average of 25 hours a week. Among the shows that interest the severely sight impaired are: news shows, talk shows and the shopping networks.

MOVIES

The California Film Commission estimates that every year $1 billion (U.S.) in economic impact from TV and film production in the state is being lost to Canada. A CFC report states that in 1997, TV production days were down 29 per cent and feature-film days 25 per cent. The Hollywood Reporter says that 250 productions went to Canada in 1997 where they spent $600 million.

WOOL

U.S. makers of high-end men's suits and formal wear are faced with huge tariffs, up to 31 per cent. These wools come primarily from Italy and England and can add from $60 to $200 per suit. Canada cut its tariffs on European wools while the U.S. did not. Through the NAFTA, Canadian-made suits are exempt from import duties in the U.S. While U.S. production of men's wool suits has fallen about 40 per cent in the last decade, Canada's exports of quality suits to the U.S. have surged from nearly zero to 1.5 million annually. Employment in the U.S. tailoring industry has dropped from 58,000 to 30,000 in the last decade and may drop another 10,000 by 2006.

WHEAT

The Canadian Wheat Board has long been condemned by the U.S. government as an unfair trader. While many Canadian grain farmers would like to leave the Wheat Board, negotiations are now underway to see if North Dakota farmers could join it and sell grain through the board. Joining forces could give farmers on both sides of the border more marketing clout instead of competing with each other. North Dakota farmers finds themselves somewhat isolated in the U.S. They grow several crops in common with Prairie farmers namely spring and durum wheat, while the rest of the U.S. grows mainly winter wheats.

PROGRESS

A new variety of rice that can outperform the most prolific strains by up to 25 per cent is being developed by the International Rice Research Institute in the Philippines. The new rice produces more grains and is ready for harvest in 100 days, 30 days sooner than present high-yielding varieties and 40 to 80 days earlier than traditional rice.

INSURANCE

Canada's insurance industry paid out an unprecedented $1.4 billion Canadian dollars (US$924 million) for some 70,000 claims resulting from last January's ice storm. The storm, principally in the provinces of Quebec and Ontario although reaching into Atlantic Canada, produced the most expensive catastrophic loss ever experienced by the Canadian insurance industry. Insurance payments for storm damage generated additional sales in Canada of $2.2 billion and created 16,000 jobs. The insurance industry helped hundreds of thousands of Canadians repair their cars (from damage from fallen trees and branches), rebuild their roofs, restore their household pipes and resume their lives.

BEEF

Scientists have discovered a simple way to dramatically reduce the risk of people getting sick from E.coli-tainted beef. Feeding cows grain to fatten them up, as most farmers do, encourages the growth of E.coli bacteria that are strong enough to cause sickness in humans. By feeding cows hay instead of grain for a mere five days before they're slaughtered could virtually eliminate the risk and would also save farmers money. Questions including whether abruptly changing a cow's diet from starchy grain to fibrous hay overnight might cause digestive problems, should be answered within a year.

LOSS

Toyota's four-wheel-drive Land Cruiser is 23 times more likely to be stolen or broken into than the average U.S. car, according to the Highway Loss Data Institute.

COSTS

A study by the Wall Street Journal suggests that the cost of keeping a typical home up to current standards for 30 years is almost four times the purchase price. Some experts claim that it may actually be cheaper to by a new or fully remodelled home every ten years than to deal with the mounting repair problems that occur as materials fail.

PROFESSIONS

Census figures show women represented about 9 per cent of engineers in Canada as of 1996, 18 per cent of architects, 30 per cent of physicians, 31 per cent of lawyers, 34 per cent of university professors and 45 per cent of accountants. In contrast, 71 per cent of all interior designers are women, as are 95 per cent of nurses and 81 per cent of elementary school teachers. One in eight employed Canadian women owns her own business.

PENSIONS

The market value of assets in trusteed pension funds, a key source of retirement income for many Canadians, surpassed the half-trillion dollar mark during the first three months of 1998, riding the strength of financial markets. Total assets grew an impressive 8.1% in the first quarter, pushing this form of household wealth to $506 billion. This represents an average value of just over $130,000 for each of the 3.8 million members covered by these funds. The net income (revenues minus expenditures) of trusteed pension funds for the first quarter of 1998 amounted to $11.6 billion, about 2.5 times larger than the benefit payments of $4.5 billion.

FISHING

According to the Worldwatch Institute, in 1996, the world's fisheries caught and sold commercially 16 kilograms of fish per person on the planet. They also hauled in and later discarded about 200 kilograms per person of sea urchins, sponges and other marine life.

JOBS

Technology has changed the world throughout the twentieth century and will continue to do so into the twenty-first. Farming, for example, used to employ some 65 per cent of all working Americans; it's now down to 3 per cent. Likewise manufacturing will become more efficient and, as a result, employ fewer people, By 2025, a mere 5 per cent of the world's workers could be producing all the manufactured goods of the entire population.

TRENDS

Now that new cars and trucks have cup holders in just about every conceivable place and enough electrical outlets for cellphones, video games and computers, designers are now filling the interior of vehicles with pockets for tennis balls, backpacks, sneakers and more. Car companies say that market research tells them that having a map pouch in the door, a glove compartment and space in the console doesn't provide enough space for the necessities of life.

ROOM WITH A VIEW?

A top security London prison is offering 200 guests a bed-and-breakfast special in its cells in a bid to show the public a glimpse of life behind bars. Guests will be housed in a recently refurbished part of the 19th century Brixton jail and get a prison supper before being locked in their cells for the night.

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

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

September 1998 Economic Digest - Importing and Exporting

September 1998 Edition

QUALITY

A study by the Toronto-based National Quality Institute claims that small and medium-sized businesses are spending most of their quality resources in fixing problems instead of preventing them. Companies could increase their productivity and competitiveness by focusing on cost-effective activities and practices that prevent poor quality from occurring. Only about 25 per cent of quality budgets go into prevention.

ALCOHOL

Canadian wines captured a greater share of the domestic wine market in 1996/97, whereas domestic beers and spirits lost ground to imported products. Total wine sales increased 4.8% to 253 million litres, the largest annual increase in 15 years. Canadian wines increased their domestic market share to 46.5%, the first gain in five years. The biggest factor was a 27.8% increase in sales of domestic red wine, which have grown at an annual average rate of 13.9% over the last four years. Overall beer sales declined 1.5% to about 2 billion litres while sales of spirits increased 1.4% to 130 million litres. In total, 2.4 billion litres of alcoholic beverages were sold in Canada in 1996/97. Imported products accounted for 11.2% of this total, compared with 9.9% the year before.

ABORIGINAL BUSINESSES

Aboriginal business owners in Canada believe they must improve management skills and improve productivity to make their businesses successful, according to new research. A survey of 723 Aboriginal business owners showed that 83% identified improving management skills and 73% identified improving productivity as priorities for achieving business success. Sixty-seven percent cited financing as a priority, followed closely by innovation, at 64%. Thirty-one percent of successful business owners have taken advanced business training, compared with 24% of Aboriginal businesses overall. Only one-third of Aboriginal businesses had a computer. Forty-six percent of Aboriginal businesses had at least one full-time employee in addition to the owner. Only 1.1% of businesses employed 20 or more full-time employees.

CHINA

The Chinese Ministry of Foreign Trade and Economic Cooperation is relying on the World Wide Web to attract interest and generate sales. A China Market site may be found at www.chinamarket.com.cn. Potential buyers type in keywords for products or browse though categories such as foodstuffs, textiles, chemicals or industrial products. The opening of this site follows the opening of the ministry's own site at www.moftec.gov.cn which has attracted two million visits since March, the majority from Canada, the U.S. and Japan, and boasts the biggest online database about Chinese export products.

RECOVERY

A June survey of 65 multinationals working in Asia conducted by Renaissance Technomic, showed that most thought a devaluation of China's currency was unlikely. Stability in East Asia would return only after 2000; recovery would come first to Thailand and Singapore, and last to Indonesia.

GENETICS

France has announced it will approve two genetically modified corn varieties, alleviating tensions--for the time being at least--between the U.S. and France over access to the EU market for U.S. corn. France also announced a two-year moratorium during which no non-corn genetically modified products will be approved. France and the U.S. have been embroiled in a trade dispute over market access for genetically modified organisms (GMOs). Opposition to GMOs had essentially blocked all corn imports from the U.S. this year. U.S. corn exports to the EU are worth about US$300 million annually.

REACHING OUT

A recent survey found that about half of all computer users are more likely to send an e-mail to someone who lives out of town than they are to make an old-fashioned phone call. And a third of the respondents were more likely to use e-mail than to place a local phone call.

DATES

Besides the Year 2000, financial institutions have been alerted to another potentially troublesome date for some computers: April 9, 1999. This is the 99th day of the year and translates into an internal message of "9999" in some programs. However, 9999 means "end of file" in many programming languages and may signal a computer to close its files on that day.

PUBLISHING

Canadian-controlled book publishers and agents accounted for almost two-thirds of total publishing revenues in 1996/97 but they were less profitable than their foreign-controlled competitors. 562 book publishers and agents in Canada reported revenues of just under $2.0 billion in 1996/97, and profits of $75 million. Revenues for Canadian-controlled publishers and agents was just under $1.3 billion, while those of foreign-controlled firms was $690 million. However, profits represented 3.0% of revenues for Canadian firms, compared with 5.4% for foreign firms. The publishing industry in Ontario led all regions of the country with total revenues of $1.4 billion, or 71% of the total.

RISK

While the risk of doing business in Asia has increased dramatically, the U.S. market is a higher-risk market for the majority of smaller Canadian exporters. For all export business in which Canada's Export Development Corp. was involved in last year, it paid out less than 1,200 claims. Of that number, just over 1,000, or 83 per cent, were claims based on exports to the U.S. They accounted for 73 per cent in dollars of the total claims paid out.

CASH

If you are just out to make some cash, these are the top dozen part-time jobs according to the summer issue of P.O.V. magazine: bartender; mobile disc jockey; private eye; graphic designer; database designer; career counsellor; personal trainer copywriter, waiter; Web-site programmer; debt collector and relocation consultant.

TRADE

The U.S. enjoyed a $6.83 billion trade surplus with Latin America for the first half of the year, compared to $3.14 billion surplus in the same period in 1997. This helped offset a worsening of the total U.S. trade due to economic problems throughout Asia. Mexico nearly passed Japan as the second-largest U.S. trading partner, falling short by about $300 million, or just over two per cent. Two-way trade with Mexico totalled $14.4 billion in June and $85 billion for the first half of 1998.

TRUTH

It was only when a hypnotist put a focus group of men into a trance that a New Jersey clothing retailer discovered how they really felt about their clothing. The men reported they often hated the way their clothing fit, but didn't know how to complain. Also, they felt ganged up on by their wives and sales clerks.

EXPORTS

Canadian exports to Japan in the first half of 1998 were 26.8% lower than in the same period last year. The decline affected all commodity groups - with softwood lumber and coal being the hardest hit. Although exports to the U.S. continued to fall, they remained 8.6% above last year's level. Much of the decrease resulted from plant closures and transportation problems in the automotive sector. By contrast, Canadian exports to Europe showed strong growth, chiefly due to higher exports of gold and communications equipment. Exports of industrial goods rose substantially in June, setting a new record high.

APPLIED SCIENCE

A Cambridge, Mass. company has introduced a lamp switch that recognizes the commands "lights on," "lights off" and "lights dim." The target market for Lamp Commander is old and disabled people.

Employees of a research laboratory in Britain have a coffee maker that can read their ID badges as they approach and, if they have clicked a button on the badge, prepare a coffee for them the way they like it.

COFFEE

Consumption of espresso-based coffees at Second Cup, which now has 360 outlets in Canada, rose from 3 per cent of sales in 1991 to 27 per cent today. The growth in gourmet coffee outlets is hot: from 984 in Canada in 1993 to 2,248 last year. But regular coffee is still No 1 by an immense margin. Last year, regular coffee was ordered with 22 per cent of restaurant meals while specialty coffees figured in only 1.3 per cent of meals and decaffeinated coffee showed up in 1.6 per cent.

GROWTH

The Internet is growing faster than all other technologies that have preceded it. Radio existed for 38 years before it had 50 million listeners, and TV took 13 years to reach that mark. The Internet exceeded 50 million users in just four years. In 1994, a mere three million people worldwide were connected to the Internet. By the end of last year, more than 100 million were using it. Some experts predict that Net commerce may exceed $300 billion (U.S.) by 2002 (from $8 billion in 1997)--a sum greater than the revenues of Canada's top 25 corporations.

GARAGE SALES

According to The Garage Sale Handbook, some items are perennially bestsellers at garage sales. They include: broken appliances; functional kitchen appliances; old radios and cameras; old diaries and pictures; old books, craft items such as knitting needles; dishes, new and antique; children's toys; buttons, plant pots; picture frames; old records and well-priced furniture.

SCARY!

It is reported that in April, when Massachusetts tested the reading and writing ability of its new teachers, 59 per cent flunked the exam. The state board of education has now lowered the passing grade to 66 per cent from 77 per cent, meaning that only 44 per cent failed.

ORIGIN

Trade officials in Geneva from 132 nations have set November 1999 as the new deadline for reaching an accord to harmonize global rules of origin. The accord will affect thousands of products traded globally, from chemicals to textiles. Initially, July 1998 had been set as the deadline for the accord but it was delayed because only 1,300 items had been agreed out of 5,000.

ETHICS

Be ethical if you want to foster loyalty among your employees. A 1997 survey of 1,694 employees, 86 per cent of those who had a favourable view of their companies' ethics were "strongly committed" to the organization. Only 14 per cent of people with an unfavourable opinion expressed such loyalty. In addition, 42 per cent said a company's ethical record would influence their choice of employer.

FRAUD

Companies around the world are struggling to recover hundreds of millions of dollars lost to employee fraud. Three-quarters of the 1,200 firms who took part in an Ernst & Young survey said they had been a victim of fraud between 1993 and 1997, with losses amounting to more than $628 million (U.S.) in the last year alone. Of that, only 13 per cent, or $85 million, has been recovered. Part of the reason is that 80 per cent of respondents have no fidelity insurance which protects against internal fraud losses. The participating companies were from 32 countries.

LOW-TECH

The British edition of GQ magazine reports that Mynah birds can change the TV channel by mimicking the ultrasonic signal from a remote control. They are so smart they can be trained to make touch-tone calls or to mimic the alarm and scare off burglars.

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

August 1998 Economic Digest - Importing and Exporting

August 1998 Edition

MERCOSUR

Canada and the South American trade bloc are signing an agreement to work towards trade liberalization. Ottawa hopes the deal will help open up the four Mercosur countries--Brazil, Argentina, Paraguay and Uruguay--to Canadian business opportunities, especially in natural resources and telecommunications. Trade between Canada and Mercosur was worth $3.6 billion in 1997. Mercosur is a market of 240 million people and has a gross domestic product of $1.4 trillion. Canadian businesses currently face double-digit tariff barriers in these countries.

TECHNOLOGY

Canadian investment dealers and money managers are falling behind when it comes to using technology according to a survey of investors. From simple applications such as using electronic mail to send research reports to sophisticated areas such as "black box" electronic trading, principals at Greenwich Associates found a number of Canadian financial players have failed to embrace technology. 38 per cent of Canadian institutional investors are making use of non- traditional trading methods, which includes electronic stock trading. By comparison, 57 per cent of U.S. institutions take non-traditional routes in trading and the figure rises to 96 per cent in trading on the Nasdaq Stock Market.

RETAIL

Results of a survey by the Retail Council of Canada indicate that, due to a wave of consumer confidence, retailers are planning to build between 900 and 1,800 stores over the next three years. Nearly one-quarter of Canada's retailers are planning to expand and on average will open between one and five stores. Many of these stores will be in new markets and be built by mid-sized chains. The largest stores are forecasting around 700 new stores, however, this will be counterbalanced by about 300 store closings. Survey respondents ranked customer service as their top strategy for building sales followed by customer loyalty programs.

WOMEN

The growing economic clout of women is confirmed by recent U.S. statistics which show that women now control 80 per cent of all household spending. Women buy 65 per cent of all cars, 53 per cent of all stocks, 51 per cent of all sports equipment, 50 per cent of all personal computers and pay for 40 per cent of all home improvement projects. If current trends persist, women will control most of the money in the U.S. by 2020.

APPRENTICESHIPS

Even though the 166,500 enrolments in apprenticeship programs in 1996 was slightly higher than in the previous year, enrolments have decreased 13.7% since 1991. The number of persons completing apprenticeship training has also declined over the same period, by 18.4% to 16,100. The decline in apprenticeship training may be attributable in part to the economic downturn and subsequent slow recovery through the early 1990s. Trades are particularly sensitive to economic cycles. In a slow economy, employment opportunities are fewer and, consequently, there are fewer openings for apprenticeship training. Also, declines in the construction, mechanical and industrial trades may also reflect the structural changes taking place in the Canadian economy. Enrolment declines occurred in all major trade groups with the notable exception of the food and service trades.

TASTE

Rice is regularly eaten by more than 91 per cent of Canadians. The per capita consumption in 1996 was seven kilograms, compared to two kilograms in 1976.

ROLLER COASTERS

This year, 67 new roller coasters are scheduled to open around the world, the most in any single year since the late 1920s. This will bring the number of coasters to 350 in North America and about 700 worldwide. The trend is for bigger, faster and wilder rides and several former aerospace engineers are now working in the industry.

COMPLAINTS

If you need to vent your frustration about poor customer service and you feel there is no place to go, the World Wide Web can help. Service Intelligence Inc. a Seattle firm that does research into customer service quality, now has an area on its Web site (www.serviceintelligence.com) where consumers can post complaints--and compliments--about their experiences with airlines, retailers, hotels and other businesses.

JAPAN

Some $1.6 trillion (U.S.) worth of goods were at stake during a recent meeting of the 18 countries of APEC, the Asia-Pacific Economic Co-operation forum, which is aiming for free trade among its members by 2020. Some countries are suggesting that Japan is holding up a plan to liberalize trade immediately in nine key industries. Negotiators are striving to eliminate tariffs and other trade barriers in environmental products and services, energy, fisheries, forestry, toys, jewellery, medical goods, chemical products and telecommunications.

COMFORT

In San Francisco, the Society for Prevention of Cruelty to Animals runs a dog pound with television, sound-proofing, ventilation and artwork in each animal's "apartment." The $7 million Pet Adoption Center allows several homeless people to stay in the apartments overnight, so the dogs can have companionship.

COMPUTERS

Computer and electronic equipment sales were down for a fourth consecutive month in April of this year. The computer industry is being squeezed by falling prices from an oversupply of computer chips and the increasing popularity of low-cost computers. In the past, the introduction of major new software pushed consumers to buy more powerful computers. Now, the relative lack of software on the market that requires more powerful systems is also a reason behind the weakness of computer sales.

DEMOGRAPHICS

According to the most recent estimates, births in Canada declined for a sixth consecutive year in 1996. This trend shows no sign of reversing. As the death rate continues to rise, it is likely that by the year 2020, Canada's natural growth in the population will approach zero. These developments accentuate a situation that has been anticipated for a number of years, namely that population growth in Canada will depend increasingly on immigration. Immigrants represented 17.4% of the population in 1996 - the largest share in more than 50 years.

PRIVACY

Big companies that sell products on-line are banding together in a trade group to convince the U.S. government not to pass new laws to protect consumer privacy on the Internet. The group, called Online Privacy Alliance, includes Microsoft, Procter & Gamble, America Online and Disney. The alliance said companies should not collect information from any child under 13 without a parent's consent or without notifying parents, but did not announce how it would punish companies that violate that or other privacy principles. The U.S administration is being urged to pass new privacy legislation in the wake of a study from the U.S. Federal Trade Commission that showed widespread privacy abuses on-line.

MEXICO-EU

Negotiations for a free-trade agreement between Mexico and the European Union have begun. The Mexican Senate and the European Parliament have already approved an interim agreement on which the negotiations will be based. Total trade between the two groups reached $14 billion (USD) in 1997, making the European Union second only to the United States as Mexico's largest trading partner. However, the European countries have been losing market share in Mexico since the implementation of the NAFTA.

E-MAIL

The Wall Street Journal reports that when E-mail is introduced, the use of office printers increases 40 per cent.

SNACKS

A national survey on Canadian snacking habits reveals that the majority of Canadians snack at work. However, the choice of snacks varies dramatically across the country. 90 per cent of Vancouverites chose healthy snacks over taste, whereas 88 per cent of Torontonians chose taste over nutrition. Montrealers are split down the middle, 50 choose taste and 50 per cent chose a nutritious alternative.

EL NINO

Shoppers reacted to the warmest spring in 50 years by snapping up bikinis, birdbaths mountain bikes and barbecues two months early. Retailers registered a 13.2 per cent increase in sales in April, to $5.4 billion. The desire for fragrant flower gardens and lawn ornaments of all manner superseded all others among Canadian consumers. The category rose a stunning 69.9 per cent. Sporting and leisure goods jumped 19.7 per cent over the same month a year earlier. Clothiers also enjoyed an 18 per cent sales gain.

CRUISING

It will be the 16th consecutive year of growth for British Columbia to Alaska cruises, the third most popular cruise region in the world after the Caribbean and the Mediterranean. An international fleet of 21 ships will be based in Vancouver and 303 sailings are scheduled carrying 850,000 passengers. A Vancouver Port Corp. survey shows that cruise passengers are spending more on pre- and post- cruise vacations than they did five years ago, injecting some $200 million into the local economy.

SURVEY

A new monthly Statscan survey polled 80 of the largest national retailers, representing 36 per cent of total annual retail sales in Canada, including grocery, department and furniture stores. Data released recently showed that large retailers sold $69.9 billion in goods in 1997. Food stores accounted for 38.4 per cent of total sales, with departments stores capturing 25.3 per cent.

WINES

The success of the Canadian wine industry is putting pressure on the country's supply of premium grapes. An industry wide shortage of Canadian vinifera grapes, particularly red, is being forecast for varietal wines such as cabernet sauvignon, pinot noir and merlot. A recent report suggests that an adequate supply of premium-quality grapes represents the greatest challenge facing the industry in the years ahead. Over 1.500 acres of new vineyards have been planted in B.C. and Ontario in the past year. Typically, growers can expect to spend $15,000 an acre on a vineyard before it begins to show a return.

SUBSIDIES

Taxpayers and consumers shelled out $220 billion in 1997 to meet the cost of supporting most categories of farming in 28 out of 29 countries belonging to the Organization for Economic Co-operation and Development, excluding South Korea. The result is that consumers in many places continue to pay artificially high prices for food. Subsidies are almost non-existent in New Zealand but are equal to three-quarters of the value of all produce grown in Switzerland. The OECD says that 76 per cent of the value of its crops contains some form of actual or hidden subsidy.The 15 nation European Union was the highest spender in cash terms at $106 billion followed by the U.S. at $34 billion.

SOMETHING DIFFERENT

According to the Seattle-Post Intelligencer, British tourists looking for a sports vacation are being offered the chance to tag along with a Tacoma bounty hunter. The customers will wear bullet proof vest and uniforms and if they help catch a malefactor, they will have their pictures taken while slapping on the handcuffs.

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

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

July 1998 Economic Digest - Importing and Exporting

July 1998 Edition

ASIA

In its latest report on the world economy, the Conference Board of Canada states that Asia's economic woes, which have already hurt Canadian exporters, will likely continue to the end of the year. The value of Canada's sales to Asia in the first quarter were down 33 per cent from a year earlier as a result of lower commodity prices and reduced export volumes. However, it is expected that the Asian economies will rebound in 1999. Those of Thailand, Indonesia, Malaysia and the Philippines should expand by 3 per cent, and Japan by 0.8 per cent. Canadian exporters are getting some help from the lower value of the Canadian dollar which makes goods cheaper.

LITERACY

Strong literacy skills are the key to success and to economic well-being in the information-based economy. Those with weak literacy abilities will find it increasingly difficult to gain a foothold in the labour market. Adult literacy is understood to be fundamental to the economic and competitive performance of industrialized nations. For an individual, the level of literacy skills he or she possesses can spell economic success or failure. Close to 50% of Canadian adults at the lowest level of literacy live in households with low income, compared with only 8% of those at the highest level of literacy. Also, 66% of those at the lowest scale were less likely to find work and, if they did work, earned less than $15,000.

SCAMS

According to the International Chamber of Commerce in Paris, a scam involving bank trading instruments that don't exist has turned up on the Internet. Online investors are being asked to put their money into spurious programs and the Chamber says the scam has fleeced investors of tens of millions of dollars. A quick Internet search under "bank debenture trading" yielded three scams in the first page of hits. The International Chamber of Commerce may be reached at www.iccwbo.org.

CHOCOLATE

While the world's appetite for chocolate grows more voracious each year, cocoa farms around the globe are failing, under seige from fungal and viral diseases and insects. Researchers predict a shortfall in beans from the cacao tree, the raw material from which chocolate is made, within 5 to 10 years.

GROWTH

Of the top 100 on Profit Magazine's list of fastest growing Canadian companies, manufacturing companies account for 35. Next are business services with 22; software development, 12; distribution, 10; consumer services, nine; financial services, five; construction, four and retail, three. The top ranked company makes a quality-control device that uses computers and digital cameras to scan for manufacturing flaws on production lines. It reported sales of $30 million in 1997, an increase from $117,101 in 1992.

BILLS

At the end of 1997 there were $30-billion worth of bills in circulation in Canada. The twenty dollar bill is the most popular with about 444 million of them in circulation. But the twenty is getting some hot competition from much bigger notes-- $1,000 bills and, to a lesser extent, hundreds. Since 1990, the number of thousands in circulation has more than doubled while hundreds have increased 62 per cent. Theories regarding these increases include the underground economy, criminal activity and gambling.

PATENTS

A surge in U.S. patent applications could be an indication of future economic growth, recent research suggests. According to the Harvard Business School, the rate and pace of innovation is a very important thing to factor into growth expectations for the economy. Experts are studying the recent patent explosion and say that U.S. inventors in the decade from 1985 to 1995 pushed patent applications to highs of about 120,00 a year, an increase from the previous average of about 40,000 to 80,000 a year.

FOOD

Food industry groups from Canada, Mexico and the United States have said they will work together to eliminate trade barriers with food safety, environmental and labelling requirements. The newly formed North American Alliance will try to accelerate trade among the Nafta countries. Members are the Grocery Manufacturers of America, ConMexico and Food and Consumer Products Manufacturers of Canada.

WOMEN

The Canadian government has created a new Web site designed specifically to help female exporters. The site, Businesswomen in Trade, offers electronic access to a variety of government resources as well as an on-line quiz to determine readiness for foreign markets. It also includes the success stories of experienced female exporters. The site is located at: www.infoexport.gc.ca. Of the 700,000 firms created in Canada between 1990 and 1995, 30 per cent are led by women.

VALUE

A survey of 1,030 North American companies, 346 of them in Canada, shows that most managers and employees don't see eye-to-eye when it comes to measuring performance. Just under half the workers surveyed said their current contributions are greater that their managers' assessments. Only 19 per cent of employees rate their performance lower than their manager does.

SPENDING

Because of allowances, jobs and family gifts, Canadians aged nine to 19 command around $10 billion in disposable annual income, an estimated $1.3 billion of it in B.C. The 15 to 19 age group spends the lion's share of that money, an average of $5,000 per individual against $600 per year for those between nine and 14. In terms of dollar volume, the older group spend their money on clothes and running shoes, CDs, magazines and candy and snacks while the younger ones spend theirs on clothes, cassettes and CDs, candy and food.

MESSAGES

U.S. office workers send and receive an average of 190 messages a day, and most of them get interrupted at least three times an hour by these communications according to a study by Pitney Bowes Inc. The study is based on a survey of 1,000 workers as well as face-to-face interviews. It tallied up 12 forms of communications from phone calls to letters to courier packages. Last year the average was 178 messages a day.

MOTIVATION

Forget workload and job security--skills development, competent management and rewards are the factors that keep people loyal according to a new U.S. study. Employees who plan to stick around for the next five years are generally satisfied with opportunities to learn new skills, the ability of top management and the recognition and respect they receive. The study involved 500,000 employees with 300 companies.

HORSES

Last year, 85,000 horses met their end in the four horsemeat packing plants left in the U.S. In 1996 these businesses shipped $64 million worth of horsemeat to Belgium, France, Switzerland and Mexico. The prime candidate for slaughter is a 10-12 year old well muscled quarter horse. The hind quarters are chilled and flown to Europe; the front quarters are minced and sent by boat. American exports of horsemeat for human consumption have fallen by more than a half in the past seven years. Studies and analysis of this industry are almost non-existent.

OWNERSHIP

Available from Statistics Canada, the Inter-Corporate Ownership Directory is a unique directory of "who owns what" in Canada and currently lists over 90,000 corporations. The data are presented in an easy-to-read tiered format, illustrating at a glance the hierarchy of subsidiaries within each corporate structure. The entries for each corporation provide both the country of control and the country of residence. Some findings of the Inter-Corporate Ownership Directory are: over 12,800 corporations, residing in Canada, are controlled by foreign interests; of the corporations under foreign ownership, American interests control over 6,700 corporations, British interests over 1,200, German interests over 910, Japanese interests over 560 and French interests 520.

HIGH-TECH

This industry had 1997 revenues of $7.6 billion in B.C and is growing at 22 per cent a year. It employs 57,000 workers and expects to add another 43,000 by 2000. However, there are big disparities when comparing the business climate of B.C. and Oregon. The average B.C. wage for high-tech employees was $40,627; for those in Oregon it was $43,700 (U.S.). In 1996, Oregon's revenue from the sector were $16 billion. Nearby Washington State employs 231,000 in the high-tech sector. Top executives in the industry claim the high-tech sector could be far more successful in B.C. if it weren't for high taxes, a critical shortage of talent and a lack of support from the government.

BIRDS

Television broadcasters and wireless telephone firms often build their towers on ridges and mountain tops where they act as a steel obstacle course for migrating birds which are often decapitated by the thin, taut guy wires on tall towers. A recent Wisconsin study shows that between 1957 and 1994, a single 1,000 foot tower caused the deaths of 121,560 birds representing 123 species.

THEFT

Entry-level workers in the restaurant industry admitted in a U.S. survey that they've stolen an average of $114 (U.S.) a year in cash and merchandise from their employers. 1,375 workers in 14 fast-food and full-service restaurants were surveyed. It also found that managers, while less likely to steal than hourly workers, said they took an average $80 a year.

METAL

Palladium is a precious metal used in car catalysts, dentistry, mobile phones and laptops, among other things. Recently, the price of palladium shot up by 10% to an 18-year high, making it more valuable than gold for the first time since the mid-1970s and dearer than platinum for the first time ever.

ODD

The oldest time machine in the world to suffer from the millennium bug has been found in a museum in Liverpool, England. The 400 year old instrument, which predicts the position of the planets, will stop working at the dawn of the new millennium, unable to accept the date of Jan. 1, 2000, like so many unadjusted computers around the world.

DIET

British doctors fear that health-conscious parents are starving their children by insisting on low-fat, low-sugar foods for them; as many as one in 20 young children now admitted to hospital are malnourished. According to The Independent, the so-called "muesli-belt malnutrition" has become an increasing problem for middle-class families over the past 15 years.

UNIONS

During the first half of 1997, an average of 3.5 million Canadians, or about a third of all employees, belonged to a union, according to data from the Labour Force Survey (LFS). An additional 332,000 employees were not union members but were covered by collective bargaining agreements, and thus enjoyed union-negotiated privileges.

Union membership rose fairly steadily from 2.1 million in 1967 to a peak of 3.8 million in 1990 and has declined slowly since then.

FORGERIES

A trove of 100 Roman coins, found in Britain, shows that authorities were using counterfeit money to pay their soldiers. The coins are bronze but coated with silver. Actual coins from the reign of Claudius 1 are considered rare but forgeries even more so.

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

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

June 1998 Economic Digest - Importing and Exporting

June 1998 Edition

 THE EURO

Leaders of the European Union's 15 countries formally agreed that 11 of them would adopt a single currency, the euro, from the start of next year. Coins and notes should start circulating in 2002. Total trade last year between the European Union and Canada was $45 billion, second only to Canada-U.S. trade. The change will create challenges and opportunities for Canadian companies doing business in Europe. Every detail of their operations, from the currencies listed on cash register receipts and pay cheques to the conditions of long-term contracts must be reprogrammed. Information may be found on the IBM website at www.ibm.com.

TECHNOLOGY

A new process might turn the postage meter industry upside down. A private company has got approval from the U.S. Postal Service to field-test its technology, which lets companies print their own metered postage using the Internet, a personal computer and a standard printer. After a user enters an address, the system calculates the correct postage--even the correct zip code---and subtracts the amount from an "electronic vault," a device which looks like an oversized watch battery and is attached to the printer port of the PC. The address and postage are printed onto an envelope or label along with a barcode and the postal service sorting code. Once the vault is empty, it can be refilled by logging on to a web site.

RED TAPE

According to a 1997 World Bank survey of 3,685 entrepreneurs who operate small and large businesses in 69 countries, the most red tape is found in Northwestern South America (Colombia, Ecuador and Venezuela) followed by countries of the former Soviet Union. The fewest obstacles are in Northwestern Europe (Ireland and the U.K.) and central Western Europe (Austria, France and Germany). Obstacles include regulations, trade and foreign exchange policies, inflation, financing, government revenue and spending policies, uncertainty, corruption and crime.

SUBWAYS

In 1997, the Moscow subway had 3.16 billion riders. The next highest were: Tokyo, 2.74 billion; Mexico City, 1.42 billion; Seoul, 1.39 billion; New York, 1.13 billion; Paris, 1.12 billion and Osaka, one billion.

WEIGHT

Advertising Age suggests that a Brazilian phenomenon called "food by weight," in which consumers choose what they want to eat and are charged by weight, is jeopardizing the dominance of fast-food restaurants. Competition has intensified and McDonalds has responded by lowering its prices; French fries are now 20 per cent cheaper. 20 years ago, there were 300,000 restaurants, bars and other food outlets in Brazil. There are now 756,000.

TAXES

It seems that cyberspace will be off limits for the taxman. Reports say that negotiators at the World Trade Organization are close to an agreement that would bar governments from collecting tariffs on computer programs and similar goods delivered electronically across international frontiers over the Internet. Internet shopping, products ordered from a web site but delivered by mail, would not be covered. No country has a system for charging duties on electronic commerce. The measure's main sponsor, the U.S., had sought to ban all Internet duties.

OIL

Canada is pushing out Venezuela as the No 1 supplier of oil to the U.S. Venezuela, with its huge production of heavy oil, has historically outranked all other countries as the top exporter of oil to the U.S., followed by Canada, Saudi Arabia and Mexico. But pipeline expansion, rising production of heavy oil, and more refinery capacity in the U.S. to upgrade it should put Canada ahead in the U.S. by the end of the year. The U.S. government has long supported a policy of diversifying oil imports from the Persian Gulf.

DOGS

The dog culture in New York pumps an estimated $500 million (U.S.) into the city's economy annually. The Big Apple has dog psychics, a $15 do-it-yourself dog wash, a limousine service for dogs and an acting workshop that trains dogs for TV and the movies. A Dog Scout Camp in Michigan offers merit badges to dogs who master socially useful skills such as therapy in nursing homes and hospitals and assisting disabled people and retrieving empty beer cans.

COMPETITION

Australian competition laws, followed by those of Germany and Canada, are the best in the world at preventing unfair competition, according to businessmen surveyed for the latest World Competitiveness Yearbook published in Switzerland. The report tries to rank countries' competitiveness according to 259 criteria. The U.S. was fifth. Worst was Indonesia.

LICORICE

China has blamed the overharvesting of the licorice plant, a sand-dwelling species, for devastating dust storms that have swept through the northern part of the country. China's licorice root has skyrocketed in value as other licorice-producing countries such as Russia and the U.S. have implemented export bans to protect their environments.

PORTS

Led by Vancouver, Canada's ports handled a record amount of international cargo in 1997. The growth in international cargo pushed the total tonnage handled by the ports to its highest level in nine years. Shipments of four bulk commodities-crude oil, coal, iron ore, and wheat-were responsible for the increase in international marine cargo. Total international cargo reached 282.3 million tonnes, an 8.5% increase from 1996 and an all-time high. Total cargo handled reached 375.5 million tonnes in 1997, up 5.0% over 1996. Vancouver handled a record 71.8 million tonnes of cargo in 1997, almost one-fifth of the total cargo handled at Canadian ports.

ORGANIC

Worth an estimated $1.5 billion annually, organic farming in Canada is an industry on the threshold of moving from a niche in the food supply industry to becoming big business. The transformation has been quicker in the U.S. where the organic industry brings in $3.5 billion (U.S.) a year. Organic farmers don't spray their fields with pesticides, spread synthetic fertilizers or fatten their livestock with chemically treated feed. Instead, they use a variety of techniques, including the liberal use of manure, compost and mulches along with crop rotations and an array of tilling techniques.

SOLO

Information on starting or running a business may be found on a U.S. Web site at: www.workingsolo.com. It is geared toward independent entrepreneurs and offers articles, book reviews and a free e-mail newsletter.

JOBS

U.S. based P.O.V. magazine has come out with its forth annual listing of Hot Jobs\Not Jobs. The hot jobs: Java programmer (working with Internet software), private equity investor, estate planner, Hispanic media professional and interactive advertising executive. The not jobs: ship captain, credit authorizer, farmer, corporate middle-manager and proofreader.

KNOWLEDGE

Executives believe knowledge is critical to a company's competitiveness, but they do not think they have a good handle on managing it. Respondents to an Ernst & Young survey by 431 companies in the U.S. and Europe said they are poor or very poor at transferring knowledge to other parts of their firm.

DESTINATIONS

According to the World Tourist Organization, the top tourism destinations in 1997 were: France, 67 million; the U.S., 49 million; Spain, 43 million; Italy, 34 million and the U.K., 26 million. Canada was 10th with 17.5 million visitors.

HEALTH

The health of Canadians improved in 1996, particularly among men. Life expectancy at birth rose to new highs because of declines in the mortality rates for the leading causes of death. In 1996, life expectancy at birth, a key indicator of a population's health status, reached 81.4 years for women and 75.7 for men, representing gains of 0.1 and 0.3 years over 1995 respectively. Thus, the gap in life expectancy at birth between men and women continues to narrow: from 7.5 years in 1978 to 5.9 in 1995 and 5.7 in 1996.

HOURS

A new study shows a sharp rise in the number of U.S. workers who would like to reduce their hours. Nearly two-thirds of workers would reduce their time on the job by an average of 11 hours a week, an increase from 47 per cent in 1992. In identifying obstacles to lower work hours, most of them cited a need for money, pressure from employers or a desire to help their companies succeed. The study also suggests that when workers do not have enough time for themselves and their families, then job performance suffers.

RESOURCES

The Futurist magazine reports that researchers at the University of British Columbia recently estimated that the typical North American consumes resources each year equivalent to the renewable yield from 12 acres of farmland and forest land. For all the world's people to consume at this rate is a mathematical impossibility. It would require four Earth's worth of production.

2000

The Washington Post reports that the big explosion of U.S. lawsuits won't start until next year according to industry specialists. However, the Gartner Group which monitors Year 200 work at 375 large law firms says that 200 disputes have already been settled out of court, most of them resolved for substantial sums, between $1 million U.S. and $10 million per settlement. Meanwhile, some U.S. utility companies estimate that 10 to 15 per cent of their generators will blow in the early days of the new millennium.

TUESDAYS

The best day of the week from a manager's point of view is Tuesday--the day employees are by far the most productive, says Accountemps, a U.S. temporary employment firm. In a survey of 151 executives, 51 per cent chose Tuesday. In distant second was Monday, cited by 17 per cent, followed by Wednesday with 15 per cent and Thursday with just 5 per cent. Of course Friday brought up the rear--only one percent said it was the most productive day of the week.

CATASTROPHES

Last year was the least disastrous since 1986, measured by catastrophe-insurance payouts. According to Swiss Re, a reinsurer, worldwide insured losses were $6.7 billion last year, around half of 1996's figure in real terms and barely one-fifth of 1992's record high. Storms, particulary severe in Eastern Europe, were the chief source of insured catastrophic losses, costing $2.5 billion. Despite headlines about El Nino, storm losses were less than half what they were in 1996 and much smaller than during the previous bad El Nino, in 1982-83.

STRIKES

The Danish government has intervened in an effort to end Denmark's biggest strike for two decades. Some 450,000 Danes have been demanding, among other things, a sixth week of holiday a year!

PRIZES

Recently, a vice-president of marketing for the underwriter ASU Enterprises spent the afternoon stacking Oreo cookies, but he never made it past 22. A Nabisco Holdings unit needed to know the cost of insuring the risk of someone winning the $1 million (U.S.) it offered to anyone who could stack 85 Oreos.

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 1998 Economic Digest - Importing and Exporting

May 1998 Edition

 HEALTH FOODS

Stores selling health foods are getting stronger in the retail marketplace. The funny-smelling shops that sell herbs and root extracts have grown into one-stop shopping emporiums that carry a full selection of organic foods, nutritional supplements and environmentally friendly items. A study by the U.S.-based Food Marketing Institute showed sales of organic products growing at double-digit rates.

VEHICLES

The average amount consumers paid for new vehicles in Canada has been rising faster than average household income. From 1992 to 1996, the latest year for which average household income estimates are available, average household income in current dollars increased 5.2%, from $46,465 to $48,875. During the same period, consumers paid 34.1% more for new vehicles, up from $18,410 in 1992 to $24,694 in 1996.

CARTELS

The world's major industrial countries have decided it's time to crack down on cartels. The OECD has agreed to beef up national legislation and institutions designed to break cartels, share information among themselves to track international cartels and prosecute suspected cartel members. The OECD definition of a cartel is a conspiracy among competitors to fix prices, rig bids, establish output restrictions or quotas and to share and divide markets by allocating customers, suppliers, territories or lines of commerce. Recent fines for cartel activity included manufacturers of citric acid, graphic electrodes, explosives, bread and companies in the marine industry.

SMALL-MARTS

As it approaches the saturation point for existing store concepts, Wal-Mart is about to open much smaller stores that could compete with convenience stores and supermarkets. If successful, the format could open the way for Wal-Mart to open stores in markets with populations too small to support a larger store, or in metropolitan areas where big developments are curbed by planning restrictions or lack of space. Wal-Mart has 1,900 discount stores selling general merchandise, 440 supercentres that sell groceries and fresh produce and 440 Sam's Club warehouse stores.

IMAGE

Focus groups have told the Disney Corporation that Mickey Mouse and his colleagues lack "attitude." According to Disney, the characters were born in the Great Depression and were imbued with a simple optimistic outlook. In a series of 60 new stories, Mickey will be reintroduced as a mouse for the nineties but one also baffled by the rise of feminism and advanced technology. Minnie Mouse, formerly a homebody, will become a career woman--the conductor of an orchestra. Goofy will swap his bicycle for a snowboard.

2000

A new $50 million loan program aimed at helping small businesses cope with the Year 2000 computer problem is now available from the Business Development Bank. The program includes flexible payments, such as the possibility of no principal payments until the year 2000. The venture capital lender is also offering services to entrepreneurs to evaluate their 2000 vulnerability. The bank has come up with a questionnaire to help owners determine their readiness and is offering expert advice through its toll-free number 1-888-INFO-BDC.

EXCHANGE

Asia's credit crunch is sending it back to the age of barter. With national and corporate coffers from South Korea to Indonesia depleted of foreign exchange, companies looking to sell their goods in Asia are being offered everything from tea to textiles instead of cash. Southeast Asian leaders are calling for regional trading programs that avoid the U.S. dollar, or any other currency. A group of Australian cattlemen is negotiating beef on the hoof for Indonesian cement and beer. A Malaysian concern is exchanging rice for Philippine corn. No-cash deals are expected to increase by 20 per cent as companies try to keep commerce moving.

INFORMATION TECHNOLOGY

Two recent studies indicate that companies continue to throw money at information technology projects they can't manage and usually generate no increase in profit. Last year, North American companies spent $800 billion on IT, but only a third of that investment improved profitability. Despite these results, the companies will increase spending to $1.4 trillion by 2002. Over 500 of North America's 3,000 biggest companies were surveyed. A study of 1,450 Canadian companies paints a picture of out-of-control spending; three-quarters of them missing IT deadlines by a wide margin and more than half greatly exceeding their budgets.

EXPORTS

According to the World Trade Organization, the U.S. remains by a large margin the world's biggest exporter. In 1997 it sold merchandise worth $689 billion to foreigners, or 12.6 per cent of the global total. Germany accounted for 9.4 per cent of worldwide exports and Japan 7.7 per cent. China has moved up to tenth position with 3.3 per cent.

ENTERTAINMENT

Although young adults often get the credit for being the economic force behind the entertainment industry, the biggest spenders are middle-aged Americans, according to The Boomer Report. In 1995, householders aged 35 to 54 controlled 51 per cent of all spending on entertainment.

MERGERS

Canadian firms do a better job of executing takeovers than their U.S. counterparts. 62 per cent of Canadian takeovers are successful, compared with 46 per cent of U.S. mergers and acquisitions. A recent study, limited to publicly traded buyers, looked at 184 Canadian deals each worth more than $100 million and 250 U.S. deals each worth more than $1 billion. Total return to shareholders was tracked for three years after the deal and purchasers that out performed their industry were judged a success. The study speculates that the Canadian success rate arises from lessons learned in earlier failures with U.S. acquisitions. Last year's U.S. mergers were worth a record $1 trillion and $101 billion for Canadian deals.

TRADE

World merchandise trade grew in volume by 9.5% in 1997, the second highest rate in more than 20 years, largely thanks to strong trade growth in North and South America. Despite Asia's problems, world output grew by 3%, the best rate in eight years.

MAQUILADORAS

According to the Mexican government, 42 new maquiladora manufacturing plants opened in January generating 7,306 jobs. Maquiladoras are manufacturing operations that import component parts duty free and assemble them for export. This brings the number of workers employed in maquiladoras to 988,667.

WINE

A Melbourne wine merchant has discovered fake bottles of a premium Australian wine, 1990 Penfolds Grange, a vintage whose price has soared to around US$332 a bottle since America's Wine Spectator named it wine of the year in 1995. One clue on the fraudulent label: "pour" was spelt "poor."

FAST-FOOD

According to Euromonitor, a market research company, the U.S leads the world with 25 burger outlets and 11 pizza parlours for every 100,000 people. Japan is far behind with five burger and two pizza restaurants with Britain at its heels. The fastest growth is in European countries such as France, Germany, Spain and Italy which have less than two burger outlets per 100,000, but where numbers have doubled in the last five years. As of 1996, Canada had roughly 21 pizza and 14 burger restaurants for every 100,000 people.

TARIFFS

China has offered to reduce further its tariffs on imported goods to boost its chances to join the World Trade Organization. The country is ready to remove more barriers to foreign investment as long as it's allowed to implement tariff cuts and other concessions over a period of time.

TRAINING

According to a Statistics Canada report, Canadians are hungry for training. One in three workers say they want more training for career or job-related reasons. That is higher than the rate for other countries involved in the study which included: the U.S., Switzerland, the Netherlands, Germany and Sweden. Canadian workers receive an average of 44 hours of training a year. The Netherlands was at the high end with 72 hours a year.

STRESS

Reducing animal alarm and aggression is important as it is costly commercially. Experiments in Scotland indicate that television and video images may help battery hens get over their anxieties. At the Roslin Institute, they showed hens and chicks screensaver-type moving images for 10 minutes each day. Within three days the fowl were hooked, running over to the TV as soon as it was turned on. The most popular images so far are fish and flying toasters.

SEEDS

The U.S. Department of Agriculture and a U.S. seed company have been granted a patent for a technique that can prevent seeds from germinating when replanted. So far it has only been used on cotton and tobacco seeds but some scientists believe that within a few years crucial crops like wheat, rice and soy beans--staples for three-quarters of the world's poor--may be under the control of international agribusiness.

CELLULARS

Revenues from cellular phone services in Canada grew from $118 million to $2.4 billion between 1987 and 1996, a compounded annual growth rate of 40 per cent. In the same period, the number of subscribers grew from 98,300 to 3.4 million. The average monthly revenue per subscriber has declined steadily from $116 to about $70 in 1996. Since 1988, the number of full-time employees in cellular telephone services has almost tripled from 2,465 persons to 7,075.

QUIET

The South Pacific is the quietest part of the world's oceans at 65 decibels. The North Atlantic whaling areas are about as noisy as a New York intersection (100 decibels). A shoal of shrimp can put out 80 decibels and an offshore oil rig is good for 180 decibels.

ELEVATORS

In Canada, the U.S., Guam and the Caribbean islands, there are 105,000 Otis elevators. When people in these elevators press the help button, the phone rings in a second- floor office in Connecticut where 850 to 950 calls are received a week on the Otisline.

BLADES

Gillette recently unveiled the Mach3, the long-awaited $5.00, three-bladed, spring-loaded successor to the highly successful but merely two-bladed SensorExcel. Development will have cost not far off $1 billion by the time the razor hits the shelves in a few months.

ANNIVERSARY

This year marks the 50th anniversary of the world's multilateral trading system. Previously known as the General Agreement on Tariffs & Trade, it is now called the World Trade Organization. Industrial tariffs have dropped over the 50 years to an average of just under 4 per cent from 40 per cent, helping to boost world economic growth and living standards. In 1950, trade as a proportion of world gross domestic product was just 7 per cent, it is now 23 per cent. Since 1950, world merchandise trade has risen 14 times.

WORTH

Used-car dealer Tom Hartley, 14, has become Britain's youngest millionaire. He says: "I am no different from any other 14-year-old except that I buy and sell cars."

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 1998 Economic Digest - Importing and Exporting

April 1998 Edition

 
AMERICAS

Ottawa plans to develop its own free trade agreement in Latin America, whether the U.S. is on board or not. Canada has stated that it would like to see the U.S. at the forefront of an Americas agreement but the U.S. administration has been unable to move ahead with the planned FTAA by 2005 because Congress has refused to give the President special, fast-track negotiating authority. Canada already has an agreement with Chile.

FOR-HIRE TRUCKING

Canada-based long distance for-hire carriers, with annual revenues of $1 million or more, transported 109.5 million tonnes of freight in the first half of 1997. While domestic activities accounted for 74% of the total tonnage and 79% of the total shipments, transborder movements generated 42% of the revenues earned and 46% of the tonne-kilometres performed by these carriers.

CARGO

Projections for passenger and cargo growth in, out of and within the Asia-Pacific region have been scaled back. IATA estimates that the annual average growth in passengers to 2001 will be 4.4%, not 7.7% as previously expected; for cargo the figure is 6.5%, against 9%. That means 30 million fewer passengers in 2001 than the 207 million expected.

PROMOTIONS

A University of Illinois study of 86 grocery stores in Chicago suggests that numerical pitches can get customers buying. "Three bags of chips for $3.00" and "limit of 12 cans of soup per person" significantly raised the amount purchased by consumers. Items such as candy, soup and soda were offered in slightly discounted multiple units and resulted in increased sales of 40 cent.

INFORMATION

A survey by a firm of consultants looked into where companies pick up management trends. The most popular sources of information are business periodicals, followed by books and conversations with colleagues. In terms of reliability, co-workers are the most authoritative, followed by conferences and consultants. The most unreliable sources of management tools were found to be newspapers, which only 5.5 per cent of North American executive respondents found extremely valuable and 13.3 per cent found unreliable and misleading.

ABUSE

Drug and alcohol abuse costs Canadian industry billions of dollars a year according to the Canadian Centre on Substance Abuse. Abusers are likely to be in low-status jobs, and to be young and male. They also hold positions with easy access to drugs such as medicine and nursing, jobs in high-stress environments or where the use of drugs and alcohol is part of the culture. It is estimated that the annual cost of alcohol abuse alone is $7.5 billion with $4.1 billion in lost productivity.

CALLS

When the economy is booming, people talk longer on the telephone. On average, business phone calls in 1996 lasted 3.17 minutes, an increase from 3.02 minutes in 1995 and 2.96 minutes in 1994. More than two-thirds of business calls lasted less than five minutes. 40 per cent were shorter than a minute, which was attributed to a lot of voice-mail-message phone tag going on.

FRAUD

Fraudulent use of Visa cards in Canada jumped by 31 per cent in 1997 over the previous year, more than double the rate of increase in fraud among Visa's worldwide members. Financial institutions issuing Visa cards in Canada wrote off about $65 million last year because of fraud. Visa has about 70 per cent of the credit card market in Canada. Experts suggest that it because Canadian criminals are especially adept at reproducing the magnetic stripes that contain card data and grafting them on to fake cards. Some countries, such as Britain, have accelerated the move to cards that store data on a computer chip to reduce fraud.

INNOVATION

According to Entrepreneur magazine, companies are using an array of techniques to get their message across. A U.S furniture company puts a lottery ticket in its mailings, which are stamped "lottery ticket enclosed." The catch is the person has to listen to a follow-up telephone sales pitch before they are told the winning number. More than two-thirds of people listen to the message. And a home-furnishings retailer sends prospective customers a Polaroid of an item they are considering. Since starting the practice, closing rates have increased by 25 per cent.

THE BORDER

Americans made more cross-border car excursions into Canada in January 1998 than they have in almost 17 years. Meanwhile, the number of same-day car trips by Canadians to the United States was at its lowest level in 10 years. The Canadian dollar dropped below US$0.70 in January. Americans made 2.3 million same-day car trips to Canada in January - the highest level since May 1981. The 5.8% jump in January was the seventh consecutive monthly increase and the strongest gain since May 1994 when the casino in Windsor, Ontario opened. More than a year after the casino in Niagara Falls opened, in December 1996, Americans continued to make an increasing number of car excursions (+22%) into Canada via the Rainbow and Whirlpool Bridges.

SMART

For decades, U.S. corn farmers have practiced a simple technique to control rootworms; They rotate their field between soybeans and corn every year. The larvae love corn but don't like beans. Amazingly enough, the beetles have figured this out in several states and are laying their eggs in the soybean fields, so the next season when the corn is planted the larvae are ready and waiting. This is a major behavioral shift and could threaten a crop which is a U.S. agricultural cornerstone.

LOANS

The Business Development Bank of Canada (BDC) made 6,403 new loans totalling $1.4 billion to small business in 1997, a 25 per cent increase from a year earlier. Ontario companies were the biggest beneficiaries as the value of their outstanding loans rose by 18 per cent. They were followed by Atlantic Canada (16 per cent) and Quebec (14 per cent). B. C. and the Yukon were 3 per cent.

MORE FRAUD

Three international swindlers used an empty British bank in Torquay, Devon, to run a fraud that netted them $12 million. Calling themselves Bank Europe and offering to lend overseas investors billions of pounds in secured loans, they actually had assets of only $350 in a New York bank.

DATA

Tidal waves of data, according to the U.S. National Science Foundation are known as "Knowledge Storms." IBM Corp estimates that only 7 per cent of the information expensively collected in corporate data bases is ever used; the rest just sits there.

TYPICAL

A typical small business, according to a Dun & Bradstreet survey in the U.S. has three employees, generates $150,000 to $200,000 in revenue, operates 1.3 locations and is privately owned. The owner tends to be a white male (53.5 per cent) who works 50.4 hours a week.

AGRICULTURE

The European Union has announced proposals to limit aid to farmers and create freer markets in sectors where efficient Canadian farmers can eventually hope to compete with European producers on equal terms, including grains and feedgrains. The Common Agricultural Policy and regional aid account for four-fifths of an annual European Union budget of $130 billion.

WORKPLACE

American Demographics magazine reports that the No 1 complaint employees have about work is boredom, cited by 29 per cent of respondents. Next was having a bad boss (28 per cent), then machines that regularly break down (22 per cent), unfriendly co-workers (12 per cent) and poor climate control systems (10 per cent).

EMPLOYMENT

More than 222,000 men reported themselves as truck drivers in the 1996 Canadian Census, the largest single job among men. In 1991, truck drivers ranked third on the list of top 10 jobs. Retail salespersons, the most frequent occupation for men in 1991, dropped to second place. Janitors, who were in fifth place in 1991, rose to third in 1996. Five of the 10 most frequent occupations for men in 1996 were jobs in the broad category of trades, transportation and equipment operators: truck drivers, motor vehicle mechanics, material handlers, carpenters and construction trade helpers. The 10 most frequent jobs for men accounted for 20% of all jobs held by men in 1996.

TRANSPORT

The vast majority of Canadians settled in behind the wheel to get to work in 1996. About 8.9 million people, or 73% of the working population, drove to work in their automobile, whether it was a car, truck or van. Another 7%, or almost 900,000 people, traveled as a passenger with someone else doing the driving. Just 10% of the working population, or about 1.2 million people, reported that they used some form of public transit in 1996 to get to work. A further 7% walked to work, while 1% used a bicycle.

LANGUAGE

Linguists predict that half of the approximately 6,000 languages spoken today will be extinct within the next century and at least 100 are down to one native speaker. Deep in Alaska, there are only three households where Kuskokwim is still spoken and just two people in their 70s keep the Klamath language alive in Oregon. In northern Australia, about 10 native speakers know Jingulu. Most often, languages die because of the influence of more common languages, such as English, a process aided by modern communications technology and easy transportation.

ISO

A report in Quality Systems Update states that in 1997, North American companies continued to seek registration to the ISO 9000 series of quality systems standards. 22,000 firms were registered by the end of the year, almost 50 per cent more than in 1996. In the U.S., 16,776 companies had received certificates. The total in Canada was 5,222 and 596 in Mexico.

BARTER

The age-old practice of paying for goods and services with other goods and services rather than cash, is becoming increasingly common. In North America, the International Reciprocal Trade Association and the National Association of Trade Exchanges, suggest that the industry is now worth about $8 billion. Over the past decade, the bartering business has grown about 15 per cent annually. Today, there are some 20 barter exchanges in Canada negotiating trades. Exchanges charge a one-time initiation fee and a commission on the value of each transaction.

WIRELESS

Visitors to the Nagano Olympics were surprised to see hordes of Japanese children with their own wafer-thin mobile phones. And reporters at the recent economic summit in Switzerland were impressed at the number of Europeans with telephones. For all the talk of creating the information society, this is one area the U.S. has lagged the rest of the world. But things are changing. From 13 million five years ago, the number of wireless phones in the U.S. has jumped to 54 million today.

BAIL

An Oregon woman arrested 12 times last year on forgery and theft charges was released last month after posting bond with $2,000 worth of bogus money orders. The County no longer takes money orders for bail.

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March 1998 Economic Digest - Importing and Exporting

March 1998 Edition

 TRUCKS

While the proportion of households with a vehicle remained unchanged over the last 10 years the real change occurred in the type of vehicle Canadians were driving. In 1987, 78% of households reported having an automobile and only 23% had a van or truck. By 1997, automobile ownership had dipped slightly to 72%, while van or truck ownership had increased to 33%. The minivan popularity of the early 1990s and the more recent appeal of four-wheel drive vehicles may explain this shift. New motor vehicle sales data show that, on a seasonally adjusted basis, sales of trucks, vans, and buses increased 21% between May 1996 and May 1997.

SHOPPERS

Crowds are the No. 1 complaint of shoppers: 26 per cent cited the problem in a survey by Decima Research for the Retail Council of Canada and American Express. Other pet peeves were high cost of goods (19 per cent), the time involved (17 per cent), bad service and long lineups (7 per cent each) and poor selection (5 per cent). The council suggests retailers do whatever it takes to make shopping less painful. Store employees should be quick, products must be easy to find and checkouts should be free of lineups, it says.

FAMILY FOOD

Average Canadian expenditure on food remained virtually unchanged between 1992 and 1996. The average household spent $112.09 a week on food purchased in grocery stores or restaurants, compared with $110.44 in 1992. One reason that household expenditure on food rose only slightly was due to a 6.5% decline in spending on restaurant meals. Households spent on average 5.0% more on food purchased from stores in 1996 compared with 1992. Provincially, the average weekly food expenditures were lowest in the east and highest in the west. In 1996, the average for households in New Brunswick was $97.31 a week on food while households in B.C. spent on average $121.73 a week, 20.1% higher. Households spent 27.8% of their weekly food budget on restaurant meals in 1996, compared with the 30.2% in 1992.

TRENDS

A major Canadian supermarket chain has launched a new product----banking services for its customers. Modeled on a similar service offered by some grocery stores in Britain, it will provide debit cards, credit cards, savings accounts and access to automated teller machines and telephone banking. The new venture will also feature some in-store kiosks. Banking customers will get loyalty points they can use towards groceries. Chains in Britain have signed up hundreds of thousands of banking customers. Supermarkets have also become more prominent on the U.S. banking scene, where thousands of in-store branches have sprung up and are generally successful.

TRAVEL

After four years of haggling, Japan and the United States reached an agreement on dividing up the $10 billion Transpacific airline market. But European airlines are likely to challenge some of the details of the deal, which still seems to favour American airlines at others' expense.

CONSULTING

According to the Kennedy Research Group which tracks the consulting industry, the worldwide management consulting business is expected to grow by nearly 60 per cent to about $114 billion (U.S.) by the year 2000, driven by technological change and globalization of the marketplace. They expect information technology to account for 70 per cent of consulting work by 2000, an increase from 64 per cent now.

SKILLS

A new Ontario survey says skilled trade jobs are highly valued, but that sentiment isn't prompting youngsters to enter these fields in big numbers. More than half of the 525 interviewees to the Ernst & Young Poll said they would encourage young people to take up a trade. Many industries could soon face severe labour shortfalls in the skilled trades. The study suggests more needs to be done to get the word out about these potential job opportunities.

SENIORS

Having bought a digital organizer and finding it hard to use because the instructions were confusing, the buttons too tiny and its labels so small they could not be read, an Illinois entrepreneur has formed an evaluation company (www.seniorfriendly.com on the Internet) that rates consumer electronics and home appliances according to their ease of use for people 50 and over, of which there are more than 69 million in the U.S. Currently, the website recommends only two VCRs out of 14 units it has tested and 3 out of 15 camcorders. Products are tested against six criteria: Friendliness of packaging, assembly instructions, assembly, operating instructions, operations and routine servicing.

DEALERS

The U.S. has 22,650 automobile dealers and their net profit margins are a modest 1.5 per cent of total sales. The net profit on each of the 15 million new vehicles sold last year in the U.S. was $300 before discounts. New cars, which 20 years ago used to bring in most of the profits, now account for barely 10 per cent of the total. The rest comes from used cars (an estimated 40 million were sold last year), servicing and finance. About 850 dealerships have disappeared in the last five years and it is estimated that there will only be around 11,000 in five years time.

LABOUR

Plantation owners in Thailand are not replacing people with machines, they are giving the work to monkeys. In some Thai villages up to 10 per cent of the land is devoted to growing coconuts which are harvested each month and produce up to 70 coconuts a year. A workforce of several thousand monkeys in southern Thailand help pick the country's crop of 1.5 million tonnes of coconuts. Villages often have at least one monkey per household and the animal is rented out to the local plantation at a modest fee. A well trained monkey can change hands for up to $400. This is a bargain for a plantation owner who spends just $12 a month on "wages" of eggs, rice and fruit. Working monkeys are given names, groomed, bathed and fed three times a day.

LUMBER

According to the Canadian Lumbermen's Association, China is opening up as a big market for Canadian lumber, helping to offset slumping demand in countries hit by the Asian currency crisis. The Chinese government has rescinded 15-year-old restrictions on the use of lumber and wood products in construction. The country had wanted to conserve its wood supplies but now realizes that most of the wood used in China is for cooking and heating, not construction.

NEWSPAPERS

After years of decline, newspaper circulation in Canada appears to have stabilized. The Canadian Newspapers Association, the main lobby group for the country's 105 daily newspapers, reports that 32.96 million copies a week were sold across Canada in 1997, just slightly below the 34.03 million sold in 1996. Until 1997, circulation fell every year in the 1990s.

2000

Most of Canada's stock exchanges are moving to force public companies to disclose the risks that the Year 2000 computer problem poses for them. Companies that refuse to comply could face sanctions raging from a $1-million fine to a cease-trade order. In the U.S., the Securities and Exchange Commission has already put in place disclosure rules which require public companies which have substantial Year 200 problems to disclose their costs and plans this spring. The SEC guidelines cover about 12,000 public corporations, 400 investment companies and thousands of investment-advisor firms.

ADB

Canada is the second largest non-Asian contributor to the Asian Development Bank and the sixth largest out of 56 members. Canada's capital subscription is $2.57 billion (U.S.). Canada has about 5 per cent of the votes on the ADB and any company in a member country can bid on contracts related to ADB projects. Contracts for goods and services awarded to Canadian companies since the bank was founded total nearly $300 million and consulting contracts just over $100 million.

HOURS

France's parliament has passed a law to reduce the working week from 39 to 35 hours starting in 2000.

CARGO

Bulk carriers will soon have to toughen up to meet strict new international guidelines aimed at stopping disasters at sea. The rules, which will take effect July 1, 1999, will force companies to strengthen the bulkheads that separate the front two cargo holds, hopefully preventing vessels from sinking if water gets inside. Because Canada is a frequent port of call for many carriers, it will be up to inspection officials to do more checks. Canada will be able to refuse entry to below-standard ships or delay them until the necessary changes are made.

GROWTH

Mexico has posted its strongest economic growth in 16 years with a 1997 GDP increase of 7 per cent. Analysts are impressed at growth that defied banking sector weakness and a consequent credit squeeze. Last year's performance was helped by positive oil prices, an energetic effort to use up industrial capacity and a predicted downturn in the U.S. economy which never materialized.

PETS

A pet retirement home is being built in Westhampton, N.Y. Though still a hole in the ground, 2,000 pet owners have already asked for applications. There is room for only 50 cats and 50 dogs in the retirement home which has air conditioning and heated floors. $10,000 pays for perpetual care and burial.

DEBT

U.S. consumers spending is at record heights and is being financed through credit at ever increasing rates. According to the U.S. Federal Reserve Board, Americans owe a staggering $1.24 trillion in automobile and revolving credit, double the debt load they had in 1991. On plastic alone, they owe about $523 billion, almost as much as the total of insolvent loans racked up by the troubled Asian countries. Average per capita credit card debt is $7,000 and most Americans have 7.5 credit cards. The cards are lucrative for their issuers. The average interest rate is 16 per cent but some are as much as 22 per cent.

TRANSPORTATION

U.S. customs officials are rethinking a proposed rule change that Canadian truckers say could cause costly inconvenience for shippers. The draft regulation would give local U.S. border officials the power to redirect traffic entering the U.S. If implemented, the new rule could cost millions of dollars. A detour of only 50 kilometres could add more than $60.00 to the cost of a typical international load. Trucks handle about 70 per cent of Canada-U.S. trade.

AFRICA

When companies think of expansion, sub-Saharan Africa is not usually the first place that comes to mind. But a new Harvard study of 20 successful companies concludes it is possible for firms to overcome the region's many obstacles if they think creatively about solutions and make an effort to understand the local environment. The report suggests that Africa may well be the last business frontier.

INSTRUCTIONS

Some product advice noted by the New Scientist:

-(Airline peanuts) "Instructions: Open packet, eat contents."
-(Swedish chainsaw) "Do not try to stop chain with hands."
-(European camera) "This camera only works when there is a film inside."

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