April 1999 Economic Digest - Importing and Exporting

April 1999 Edition

INDIA

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

ENERGY

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

COMPUTERS

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

LANGUAGE

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

PROFITS

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

SERVICE

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

LABOUR

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

EUROPE

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

SHOPPING

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

HOUSEWORK

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

CASH

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

CLAY

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

WAR

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

ISRAEL

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

TRENDS

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

PHONES

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

CHINA

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

ALBERTA

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

HOME

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

TIES

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

AROMA

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

FUNERALS

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

LOST AND FOUND

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

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March 1999 Economic Digest - Importing and Exporting

March 1999 Edition

MERGERS

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

DIAMONDS

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

TWEEN-AGERS

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

LABELLING

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

MORALE

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

JOBS

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

BRITAIN

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

CHEAP

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

SPENDING

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

BLUE

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

AFFLUENCE

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

BROADCASTING

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

GIVING

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

HORMONES

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

AIR FARES

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

THE FUTURE

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

SECURITY

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

SMART FOODS

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

FILM AND VIDEOS

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

HEATING

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

GERMS

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

ELEPHANTS

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

PAY

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

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

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February 1999 Economic Digest - Importing and Exporting

February 1999 Edition

GROWTH

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

ENTERTAINMENT

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

NATURE

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

TEA

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

CHARITY

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

LUGGAGE

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

TAXES

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

LANGUAGE

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

EXPANSION

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

GAMBLING

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

OPEC

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

WATER

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

TECHNOLOGY

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

FARMING

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

REPAIRS

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

LITERACY

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

GOLD

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

SERVICE

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

COMFORT

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

SHOPPING

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

PIZZA

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

PERMISSION

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

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

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

January 1999 Economic Digest - Importing and Exporting

January 1999 Edition

HEAD OFFICES

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

AMWAY

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

RESPECT

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

DYEING

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

NAMES

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

INVENTIONS

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

SCENT

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

PRESTIGE

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

EARNINGS

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

BUGS

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

SERVICE SECTOR

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

PACKAGING

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

APPLIANCES

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

LABOUR

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

ENVIRONMENT

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

SINGAPORE

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

CULTURE

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

COMPUTERS

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

HEALTH

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

EFFICIENCY

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

PUBLISHING

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

BARBIE

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

AGEING

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

SMART

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

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

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

 

December 1998 Economic Digest - Importing and Exporting

December 1998 Edition

 CHILE

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

EUROPEAN GROWTH

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

TOOTHBRUSHES

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

PROFITABILITY

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

MICROROCKETS

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

STATISTICS

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

GREEN

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

ADVERTISING

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

PORK

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

FOOTWEAR

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

AGRICULTURE

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

BANANAS

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

DISPUTES

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

PACIFIC TRADE

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

SURFING

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

JEANS

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

PLATINUM

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

WALL STREET

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

PEACE!

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

FRIES

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

TECHNOLOGY

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

HONEY

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

OOOPS

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

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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November 1998 Economic Digest - Importing and Exporting

November 1998 Edition

GROWTH

Six months ago, the IMF forecast that world economic growth this year would be 3.1%; now it reckons that growth this year will reach only 2% - maybe. Japan's output, put at zero growth six months ago, will decline by 2.5%; Russia's 1% growth will slump to a 6% decline.

TRADING

London remains by far the biggest foreign-exchange dealing centre, with average daily turnover rising from $464 billion in 1995 to $637 billion this year, a slower growth than New York's but still a greater turnover than New York and Tokyo combined. Tokyo's turnover slid by 8%, the survey organised by the Bank for International Settlements showed, its first fall since the triennial survey began in April 1986.

CANADA\EFTA

Canada has launched free trade negotiations with the countries of the European Free Trade Association (EFTA): Norway, Switzerland, Iceland and Liechtenstein. An agreement with EFTA would:

-reduce tariffs on exports of Canadian goods entering EFTA countries:

-put Canada on an equal footing with competitors that already have their own free trade arrangements with the EFTA:

-demonstrate the scope and potential for free transatlantic trade, thus complementing Canadian efforts to open markets in the 15-member European Union.

Canadian sectors that stand to benefit from a successful agreement include agricultural produce, lumber, machinery and a variety of manufacturing industries. An agreement would benefit Canadian exporters by reducing tariffs on exports. Last year these exports were valued at $1.2 billion, making the EFTA countries collectively the 15th largest destination for Canadian exports (ranking between Mexico and Australia). Canada currently imports about $4.3 billion in goods from the EFTA nations.

CABLE

Statscan has released the first data from the 1998 Survey of Internet Service Providers and Computer Services. Questionnaires were mailed to 675 Internet service providers across the country. Valid responses were received from 389, or about 58%. Of the 389 providers responding, only 2% of their total revenue in 1997 was derived from providing electronic commerce or, "e-commerce" services. The bulk of revenue, about 78%, came from access services. Providers were asked about their biggest barriers to growth. The cost of dial-up lines (reported by 68%) and the cost of leased lines from upstream providers (61%) were perceived as the major impediments to growth.

IMPLANTS

Italian executives who fear being kidnapped are having microprocessor homing devices planted in their bodies so police can track them down if they are abducted. The chips, called Sky-Eyes, use the satellite Global Positioning System. Chip-carrying clients receive an eight-digit code which they are told to divulge only to next-of-kin or a trusted representative.

WEATHER

Newly released data from satellites showed that the period from February to July this year was the world's hottest six months in 20 years. Some scientists said it was due to man-made global warming; others blamed El Nino.

POTATO

Canadians still reach for the humble potato at the dinner table more than any other vegetable. Potatoes are the principal vegetable crop in Canada, and remain the overwhelming favourite among consumers. In 1997, each individual ate on average more than 72 kilograms of potatoes, either fresh or as processed products such as french fries and potato chips. In fact, potatoes comprise about 40% of all the vegetables Canadians eat in a year. Overall, the preference for vegetables has soared over the past 25 years as Canadians have altered their eating habits and lifestyles to include healthier food. In 1997, they consumed more than 181 kilograms of vegetables, up 27% from the early 1970s.

FOREIGN

Chrysler is to be kicked out of Standard & Poor's S&P 500, one of the main American share indices. The reason? Its merger with Germany's Daimler-Benz makes it, technically, a foreign company.

ENERGY

Running an animated meeting in front of the boss uses up to 188 calories an hour according to Fitness magazine. Cleaning your desk burns about 177 calories an hour. At the bottom of the list is sitting through a boring meeting which uses just 88 calories an hour, about the same as watching paint dry.

HAPPINESS

A happy employee will stick with a company, give better service to customers and recommend company products to others. A study by Sears Roebuck has found that "if employee attitudes on 10 essential counts improve by 5 per cent...customer satisfaction will jump 1.3 per cent, driving a 0.5 per cent rise in revenue.

SHIFTS

Four out of 10 (634,000) dual-earner couples working full time had at least one spouse doing shift work, according to the 1995 Survey of Work Arrangements. This first-time look at the schedules of dual-earner couples showed that the time spouses could spend together was shorter among those who did shift work. Because of staggered schedules, and on average longer workdays, couples where one partner did shift work had considerably less time off together (11.5 hours) compared with couples who did not perform shift work (16 hours). The vast majority of those who did shift work reported that it was a requirement of the job. However, roughly 1 in 10 (proportionally more women than men) did shift work for reasons other than the job requirements. The most common other reason reported by husbands was to earn more money, while for wives it was to care for children or other family members.

GADGETS

Two U.S. companies are marketing computerized-gadgets that let parents track a vehicle's speed, location and how hard it is driven. Another one which uses satellite mapping technology, also helps people who worry about having older parents who drive.

CONSUMPTION

The Journal of Commerce reports that a study undertaken by the U.N. shows that improvements in science and technology and the lowering of trade barriers have contributed to record-breaking consumption of goods and services in 1998. The projected figure is $24 trillion (US), and represents a sharp rise from 1995 when the total was $21.7 trillion. The study by the UN Development Program, "Human Development Report, 1998", concludes that the expansion in consumption has resulted in historic gains in human welfare. While 20 per cent of the world's people in highest-income countries account for 86 per cent of private consumption, and the poorest 20 per cent for only 1.3 per cent, the globalization of markets has led to an exploding demand for luxury items and services in even traditionally poor communities.

BEER

A beer for vegetarians has gone on sale in England. Most people don't realize, according to the Vegetarian Society, that regular ales and stouts are largely refined using gelatine or isinglass, which is derived from the swim-bladders of tropical fish.

POPULATION

On July 1, 1998, Canada's population reached an estimated 30,300,400, an increase of 296,500 persons from the same date in 1997. This increase represents a growth rate of just under 1%, the first time since 1986 that the population has risen by less than 1%.

NATURE

Nearly 20 million people, or about 85% of the population aged 15 and over, participated in one or more nature-related activities in 1996. These ranged from a simple picnic at the beach to camping, canoeing, sightseeing, fishing or hunting. About one-third of these individuals (6.7 million) visited a provincial or national park or other protected area. The economic benefit of nature-related activities was immense. People spent an estimated $11 billion on nature-related activities, an average of $550 per participant. These expenses, which represented about 2% of total household spending in 1996, included campground fees, outdoor clothing, binoculars for birdwatching, transportation and hotels.

U.S. DEFICIT

The growing world recession is pushing up the U.S. trade balance according to the Commerce Department. For the first eight months of 1998, the U.S. trade deficit was $110 billion and is expected to reach $165 billion before the year is out. The deficit in manufactured goods was $124 billion, roughly equal to all of 1997. An important factor is the demise of traditional U.S. markets in Asia. The news is better in energy where falling prices have moderated the overall import deficit and in agriculture and services, although in both cases the surpluses are smaller than those at a comparable point in 1997.

DISPUTES

The European Union has joined the U.S. in a move to streamline the dispute settlement procedure at the World Trade Organization. The EU made 24 specific suggestions for improving the work of WTO panels including the creation of a standing body of professional panellists comprising between 15 and 24 persons which would be on permanent call for the ever-increasing number of disputes being called before panels. The EU also proposed that more time should be taken in consultations between two sides to try to solve disputes before they reach the panel stage.

SPRINT

This third-largest long-distance company in the U.S. is building its own metropolis in Kansas. Eighteen office buildings, encompassing 3.9 million square feet, will sprawl over 200 acres. Jogging trails will wind around two athletic fields and an eight-acre lake, shaded by 6,000 trees. Sprint World Headquarters Campus, as it is known, will boast banks, dry cleaners, a 3,000 seat amphitheatre, a child-care centre, restaurants, a post office--even its own ZIP code. The venture will cost $700 million (U.S.). The primary purpose of the project is to help Sprint lure talented techies to Kansas and keep them there.

APPROVAL

A recent study indicates that Canadian consumers are most likely to approve of ads endorsed by a health or medical organization. But Americans are most trusting of ads that offer a money-back guarantee.

PLASTIC

Products made of plastic have a variety of uses ranging from packaging to construction and automotive parts. More than 2,100 companies that turn chemicals into plastic operate in Canada. In 1996, those companies employed over 107,000 people and generated annual sales of $19.6 billion. Canada produces 2.1 per cent of the world's total volume of plastics. The country's largest market is the U.S. where more than 90 per cent of Canada's exports were shipped.

IBM

In September, Reynold Johnson died. The IBM scientist was the inventor of the disk drive. His first model weighed a ton and stored five megabytes of data. Recently, IBM released a disk drive reported to weigh less than an AA battery and store 340 megabytes.

TRADEMARKS

The first ones were applied in 1266 when English bakers were required to mark each loaf of bread in the event that if a defective one were sold, "it will be knowne in whom the faulte lies."

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

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

October 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