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DRIC Clears Another Hurdle But Faces More Questions
|  | The proposed new bridge between Windsor and Detroit, the bi-national Detroit River International Crossing (DRIC) project, narrowly cleared one major hurdle recently in the Michigan state legislature.
By a narrow 56-51 margin the House of Representatives passed a bill permitting the state to take part in the $5.3 billion project. No Republicans voted for it.
The second and last hurdle remaining is for the Republican controlled state Senate to approve passage, in a vote that was to have come at the beginning of June, but instead was deferred pending revenue estimates from the Michigan DOT.
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New U.S. Labelling Requirements for Light Bulbs Effective 2011
|  | The U.S. Federal Trade Commission has announced forthcoming publication of a final rule that will require new labels on light bulb packages starting in mid-2011.
An FTC press release states that under this rule the label on the front of the package will emphasize the bulbs' brightness as measured in lumens, rather than in watts, and will include the estimated yearly energy cost for the particular type of bulb.
The back of each package will have a "Lighting Facts" label modeled after the "Nutrition Facts" label on food packages that will provide information about brightness, energy cost, the bulb's life expectancy, light appearance (for example, if the bulb provides "warm" or "cool" light), wattage (the amount of energy the bulb uses) and whether the bulb contains mercury. In addition, the bulb's brightness (in lumens) and a disclosure for bulbs containing mercury must be printed on each bulb.
Interested parties have an opportunity to comment on the proposed regulations before Sept. 20, 2010. Additional specifications and U.S. FTC contact information is available on our website here.
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Canada-Colombia FTA Almost Finalized
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Canada and Colombia came one step closer to finalizing a free trade agreement earlier this month, with the Canadian House of Commons voting in favour of the deal. The FTA will next be viewed by the Canadian Senate for final approval. The FTA passed with an amendment that requires both the Canadian and Colombian governments to assess the accord's effects on human rights on an annual basis.
Colombia is Canada's fourth-largest trading partner in South America, with trade between the two countries amounting to US $1.3 billion in 2008. Liberal MP Scott Brison was quoted in The Globe & Mail as praising the FTA, saying that its ratification would "give us a head start, and Canadian interests an advantage."
Canada's passage of this deal is likely to put additional pressure on the U.S. to pass its own FTA with Colombia. The US signed an agreement with Colombia in 2006, but the FTA has been stalled in the US Congress ever since.
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FDA Transparency Plan Addresses Food Safety Inspections, Recalls |  |
As part of a push for more government transparency, the U.S. Food and Drug Administration (FDA) released a draft report detailing steps it could take to share more information, such as providing fuller explanations of its decisions and posting more inspection reports.
Most of the proposals in the report apply to drugs and devices that the FDA regulates, but some measures address food safety issues such as import evaluations, facility inspections, and recalls.
The proposals reflect President Obama's goal of creating more openness in government and are part of a transparency initiative launched by Dr. Margaret Hamburg when she stepped into her new role as FDA commissioner in June 2009.
The FDA is accepting public comment on the proposals until July 20, 2010.
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Importing Non-compliant Vehicles & Engines Results in Heavy Fines
|  | A joint press release from the Environmental Protection Agency and the Department of Justice last month reports that the Pep Boys automotive retail chain has agreed to pay US $5 million in civil penalties to settle claims that it violated the Clean Air Act.
According to the complaint, at least 45 vehicle and generator models built by more than 35 different manufacturers in mainland China and imported and sold by these two companies were not certified to meet federal emission standards. The retailer was also accused of failing to provide purchasers with the full emission-system warranty required by the Clean Air Act and imported and sold vehicles and engines without the proper emission control information labels.
EPA and U.S. Customs and Border Protection officials discovered the violations through inspections conducted at the retailer's stores, at U.S. ports and through a review of importation documents provided to EPA by the retailer.
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FUN TRADE FACTS
|  | Until 1896, India was the only source of diamonds in the world. Today, India is still one of the world's largest diamond cutting and polishing
centres, with exports valued in excess of $6 Billion. About 9 out of 10 diamond stones sold anywhere in the world, pass
through India.
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GHY E-Newsletter Issue #9 June � 2010
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Stepping Up Your Trade Game
Canadian companies need to do more of what it takes to be truly competitive in the international marketplace says Conference Board
Canada's international trade has been bouncing back. Following a devastating collapse in 2009, trade numbers are again registering modest growth. But a new Executive Action briefing by the Conference Board of Canada (available for download from our website here) warns that Canadian companies must change their game to survive in future against fierce international competitors.
Trade has been the lifeblood of the Canadian economy with exports at one time accounting for more than 40 per cent of the country's gross domestic product, and for at least one in every four jobs. However the country began losing that edge a few years ago as commodity prices soared, sending the loonie higher, and taking away the crutch that exporters had relied on for years, the 75-cent dollar, according to the Conference Board.
"For a country that considers itself a major trading nation, the trend lines are uncomfortable. Canada's trade in real terms has been flat over the past decade," said the board's chief economist, Glen Hodgson.
On an inflation-adjusted basis, our trade with the U.S. has actually slipped over the past decade, Hodgson said, adding Canada also has been missing out on opportunities abroad, especially in emerging markets. Last year, Canada imported more than it exported, the first time since 1975 the country posted an annual trade deficit.
"International trade is a tough business at the best of times, and it is about to get tougher. While Canada has some clear areas of strength in global trade, it is also up against exceptionally fierce competitors and can no longer rely on a weak dollar or proximity to the U.S. market. The answer is to refocus our trade policy efforts," said Hodgson.
Taking Action & Shifting Gears
The board's Executive Action briefing underscores the need to recognize the ways in which Canada's trade realities are changing and calls on businesses to adopt much more deliberate strategies to re-energize trade and make Canada truly competitive in the international marketplace.
Amongst the key actions needed according to the board is for companies to improve overall productivity, increase investment in innovation, internationalize operations, and adopt China/emerging Asian market strategies.
Complimentary to these recommendations is the adoption of what the Conference Board describes as an "integrative trade mentality" involving the expansion into regional and global value chains and services and/or goods-linked services trade while at the same time recognizing the positive links between trade and direct inward/outward investment. (For a more in-depth explanation of this concept, DFAIT features on its website an extensive interview with Glen Hodgson.)
Looking Ahead...
In the next issue of "Tradelines" we will be introducing the first of a series of articles describing our own "integrative" approach to global supply chain management and compliance, a comprehensive risk-mitigation strategy that GHY has developed for companies seeking to more effectively maximize their global business opportunities.
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New Legislation Would Save Companies Money on Small Entries
Proposed bill intended to increase trade across northern border and help small businesses
On May 26 Rep. Bill Owens (D-NY) introduced the Customs De Minimis Adjustment Act of 2010 (H.R. 5375), which would increase from $200 to $1,000 the value of goods that can be brought into the U.S. duty-free and without customs entry procedures. The proposed bill follows a similar measure already introduced in the Senate.
A press release from Owens' office states that this increase in the so-called de minimis level, the first in 17 years, would encourage domestic economic development as well as more trade by small and medium-sized business owners.
"For our community to continue down the path to economic recovery, it is critical that we take advantage of the economic benefit that comes from a robust trade relationship with our neighbors to the north," Owens said. "We must make it more attractive to our local economic leaders to take part in this relationship."
"With the increasing use of Internet shopping, a higher de minimis level will facilitate the development of small online retailers and allow more people to benefit from the efficiencies of modern commerce," explained Michael Mullen, executive director of the Express Association of America.
Airforwarders Association Executive Director Brandon Fried said the bill will also have a positive impact on homeland security by expediting the clearance and processing of low-value shipments and thus allowing U.S. Customs and Border Protection to focus more of its efforts on risk-based security targets. |
Canadian Business Needs to Aggressively Increase Trade with Asia
Diversification key to more balanced global trade strategy: Export Development Corp.
Canada needs to diversify its traditional offerings of mineral and wood product exports into direct investment if it is going to make a greater impact in rapidly developing Asian markets, according to the head of the country's export credit agency.
 At a recent meeting of the Asia Pacific Foundation of Canada in
Vancouver, Eric Seigel, president and CEO of Export Development Canada (EDC), an agency that assists more than 8,400 Canadian companies doing business abroad, said the credit crunch and the result of the global economic recession demonstrated that companies needed to diversify their customer base and production networks.
"For EDC, this evolution means looking beyond exports, to investment opportunities that open doors for us to develop investment partnerships and facilitate the entry of Canadian companies into these markets."
Canada, in particular, remained dependent on the United States, its largest trading partner. Last year, despite America being the "epicenter of a global financial meltdown," Seigel said that Canada shipped 75 percent of its merchandising exports to its southern neighbor, down from 87 percent in 2002.
In contrast, Canadian goods going to China accounted for only 1.1 percent of all merchandise exported into that country over the past five years. The story was similar in exports to India and Vietnam.
"The bottom line is Canadian exports to Asia are not keeping up with the growth in imports," said Siegel, who is visiting Shanghai and Beijing this month to talk about the EDC's key relations with China Export and Credit Insurance Corporation and China Development Bank, among others, and funds the agency has invested in to help bring Canadian capital into the Chinese market.
"Imagine what could happen if large industrialized markets accounted for just over half of Canada's exports, and emerging markets took up the remaining space," he said. "In place of the 6.5 percent average growth seen from 2004 to 2008, Canadian merchandise exports could easily have expanded by 10 percent annually."
"Diversification would have partially cushioned the recessionary blows that exports suffered last year," he said. While the increased exports would be dramatic, he said it could possibly add one percent to Canada's annual GDP growth.
Note: A related video featuring the EDC's Chief Economist Peter Hall talking to the Asia Pacific Foundation about opportunities for Canadian enterprises to take advantage of developing markets in Asia can be viewed here.
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U.S. Textile Industry Seeks Customs Reform
Congress urged to enact legislation combating fraud and other forms of illegal trade that are costing "tens of thousands of U.S. jobs."
In testimony before the House Ways and Means Committee's Trade Subcommittee at the end of last month, National Council of Textile Organizations President Cass Johnson outlined a litany of fraudulent practices that he says are running rampant as a result of lack of enforcement of FTAs and preferential trade agreements.
"There is no more important issue for the domestic textile industry than the integrity and enforcement of our trade agreements and obligations," Johnson said.
The majority of the US textile industry's $13bn in exports go to free trade agreement (FTA) and preference program partners, so it relies heavily on strong customs enforcement for its livelihood.
Johnson told the subcommittee that "years have passed" since enactment of various free trade agreements and "we still are wondering when the promised tough enforcement is going to appear." Johnson said the textile industry has seen rapid increases in illegal fraud coming from preferential trade agreement countries "as unscrupulous importers and producers have progressively discovered there is little they can't get away with."
Fraudulent schemes include phony companies that repackage Pakistani and Chinese yarns as US yarns; undervaluation of Chinese apparel in order to avoid duty payments; and a flood of Chinese denim through the United States and into Mexico that illegally claims duty-free preferences under NAFTA.
Johnson said his association has developed several key areas in which problems need to be addressed:
* Customs verification systems regarding textiles and apparel are burdensome to importers and provide Customs with little actionable information.
* Customs can do a better job of making import specialist assignments to high-trade ports.
* Importers that do not reside in the United States and therefore are outside of the nation's legal authority have become difficult to manage and have become a major source of fraudulent activities.
* Customs needs additional resources to focus on and combat undervalued goods, particularly from China.
* Customs does not have sufficient resources to partner with foreign-country customs services, particularly in the free and preferential trade areas.
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New Health Canada Policy on Counterfeit Health Products
Response strategy aims to manage the risk to Canadians and remove bogus products from market
The Health Products & Food Branch Inspectorate has set out new guiding principles of Health Canada's decision-making framework for identifying, assessing and managing health risks to address the issues of counterfeit health products.
Although the issue of counterfeit health products is infrequent, the document is intended to focus on potential vulnerabilities into the regulated supply chain including manufacturing, packaging, labelling, wholesaling, importation, distribution and sale of health products.
Counterfeit health products are described as follows:
A counterfeit health product is one that is represented as, and likely to be mistaken for, an authentic product. Counterfeiting can apply to both branded and generic products, and could relate to a product's identity or source, could include products with the corrected ingredients/components, with the wrong ingredient or components, without active ingredients, with insufficient active ingredients or with misleading packaging or labelling.
The Inspectorate would consider health products to be counterfeit if they are unapproved and fraudulently labelled with respect to identity, composition, origins and/or source, have falsifications which may look genuine or forgeries, i.e. printed.
It is known that typically counterfeit products are illegal products which are packaged or marked to indicate they have been legally manufactured by the market authorization holder. It is noted that "diverted products" may be considered counterfeit, if proven to be so. A diverted product is a genuine product manufactured by an authorized manufacturer which ends up on a different market than intended, one for which they are not specifically authorized. Examples include: theft of expired or recalled product, and illegal redirection of prescription drugs from legitimate sources.
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'Incompatible' EU, US Security Hinders Air Freight: TIACA
Concerns raised that European and US security regulations may delay international movements of air freight and raise costs
Poor communication between the respective authorities was highlighted as an impediment to a future secure supply chain at the executive summit of The International Air Cargo Association (TIACA) held in Leipzig, Germany.
Karl-Heinze Koepfle, Lufthansa Cargo board member for operations, expressed surprise that standardized security protocols had still not been agreed nine years after 9/11.
Ten separate agencies were imposing dissimilar rules, Mr Koepfle noted. In particular, the "approach of the Transportation Security Administration (TSA) in the US made little sense," according to a TIACA statement.
"We were horrified to note that the EU and US differ on fundamental points. There is a different philosophy and they don't harmonize," he said. "Alongside this, other countries have drafted their own regulations. There are an astonishing number of these. None translate immediately into practice."
Jan Muecke, parliamentary secretary for the German transport ministry, complained that the US did not recognize the European Commission's control mechanisms.
Mr Muecke also expressed concern that, ahead of the August 3 deadline for screening all cargo travelling on outbound passenger aircraft from the US, an interim demand for 75 per cent screening by May 1 had been introduced at short notice. He called for carriers meeting EU Secure Supply Chain requirements to be exempt from the screening requirement.
Harald Zielinski, head of Security at Lufthansa Cargo, said, "Everything we ship is secure, both on passenger aircraft and freighters. Don't you trust what we're doing?"
Said TIACA chairman Ulrich Ogiermann: "It is clear that months if not years of work lie ahead to secure the supply chain in both directions without impeding the flow of trade. We are doing everything we can to facilitate this process. As a top priority, we are urging foreign regulatory authorities and TSA to share the details of their air cargo security protocols, so that they can engage in an urgently needed dialogue about possible mutual recognition of these programs."
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Finding time to follow the latest international trade
developments and programs of Customs agencies on both sides of the border
relevant to your business can be challenging, so we hope you find this
issue of our Tradelines e-newsletter to be a helpful resource in this respect. As
always, we'd greatly appreciate any opinions, comments and suggestions you may
have to help us improve this information resource, so please don't hesitate to
let us know what you think.
If you haven't already, we'd like to take this opportunity to invite you to
check out our Tradelines E-News weblog where you can
find current stories updated daily about business events and developments that
are important to Canadian importers and exporters. Sign up for our RSS feed and
get automatic updates to your favourite reader as soon as they're posted. As well, you can now follow GHY on Twitter for the latest information, updates and links to articles of interest.
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