US Customs and Border Protection (CBP) has issued its report of the APHIS-CBP Joint Task Force on Improved Agriculture Inspection (Word document).
The principal themes addressed by this report are:
1. raising the priority of the agriculture mission within CBP
2. developing strategies to improve capability for prevention of the introduction and establishment of exotic plant pests and foreign animal diseases
3. integrating agriculture into the primary CBP mission of terrorism prevention
August 25, 2007
At Least the Rest of the World is Strong… Right?
(Stephen Poloz, EDC)
A key source of comfort during the financial turmoil of recent weeks has been the consensus that the world economy remains strong. This is important, for it means that even if the financial contagion continues to spread, the world economy will prove resilient to the shock.
There can be no doubt that the world economy is in better health than it was during 1997-99. At that time, emerging markets with stretched fundamentals staggered from one crisis to another, starting with the Asian flu, then the Russian crisis, and then it spread to Latin America. Global growth slowed, but at the time it was all an emerging market story. Despite the associated financial turbulence, the major economies managed to perform reasonably well.
This time, it’s the other way around. The U.S. economy has clearly slowed. The housing market is in recession and is likely to remain so for a long time. GDP growth averaged 2.9 per cent in 2006, but averaged 2 per cent in the first half of this year (an inventory-led exaggerated dip in Q1 and a temporary rebound in Q2). Importantly, consumer spending appears to be slowing, with latest retail sales growth at 3.3 per cent. And recent volatility in financial markets is creating a risk that confidence will be dampened further. Growth is likely to slip below the 2 per cent level during the second half of the year.
But growth in the rest of the world remains strong, right? Well, not in Japan. Growth averaged 2.5 per cent in 2006, and rose to 3.2 per cent in 2007Q1, but then fell dramatically to 0.5 per cent in the second quarter. Two sources of weakness were apparent in the data – the Japanese consumer remains weak (latest retail sales growth of -0.4 per cent) and exports to the U.S. have slowed.
But Europe is experiencing a renaissance, right? True, the European economy has seen a return to good growth, led by Germany. But, again, the most recent news is less than stellar. After averaging just over 3 per cent growth in 2006, European growth eased to 2.8 per cent in the first quarter and then to 1.6 per cent in the second quarter. Again, consumers appear to be taking a breather – the latest retail sales figures show growth running at 2.2 per cent – and exports to the U.S. have slowed.
This time around, the major markets are moderating, while the emerging market economies remain strong. Brazil, Russia, India and especially China are all humming. China, in particular, is scrambling to slow its economy by tightening monetary policy. Nevertheless, these economies are all reliant to some degree on the majors for final demand, either directly through exports or indirectly through strong prices for commodities. Between them, the U.S., the E.U. and Japan make up 45 per cent of the world economy, a fact that keeps them in the driver’s seat. Brazil, Russia, India and China together constitute about 27 per cent of the world economy, so it would take a significant acceleration in their growth to offset a moderation in the Big-3. This is not in the cards.
The bottom line? The world truly is in better shape than in the late-1990s, and should prove resilient to financial turbulence. Indeed, the more likely interpretation is that the turbulence we are seeing is a symptom of a generalized moderation in economic growth, not the cause. Investors are recalibrating all risks in light of slower growth, and seeking higher returns in exchange.
A key source of comfort during the financial turmoil of recent weeks has been the consensus that the world economy remains strong. This is important, for it means that even if the financial contagion continues to spread, the world economy will prove resilient to the shock.
There can be no doubt that the world economy is in better health than it was during 1997-99. At that time, emerging markets with stretched fundamentals staggered from one crisis to another, starting with the Asian flu, then the Russian crisis, and then it spread to Latin America. Global growth slowed, but at the time it was all an emerging market story. Despite the associated financial turbulence, the major economies managed to perform reasonably well.
This time, it’s the other way around. The U.S. economy has clearly slowed. The housing market is in recession and is likely to remain so for a long time. GDP growth averaged 2.9 per cent in 2006, but averaged 2 per cent in the first half of this year (an inventory-led exaggerated dip in Q1 and a temporary rebound in Q2). Importantly, consumer spending appears to be slowing, with latest retail sales growth at 3.3 per cent. And recent volatility in financial markets is creating a risk that confidence will be dampened further. Growth is likely to slip below the 2 per cent level during the second half of the year.
But growth in the rest of the world remains strong, right? Well, not in Japan. Growth averaged 2.5 per cent in 2006, and rose to 3.2 per cent in 2007Q1, but then fell dramatically to 0.5 per cent in the second quarter. Two sources of weakness were apparent in the data – the Japanese consumer remains weak (latest retail sales growth of -0.4 per cent) and exports to the U.S. have slowed.
But Europe is experiencing a renaissance, right? True, the European economy has seen a return to good growth, led by Germany. But, again, the most recent news is less than stellar. After averaging just over 3 per cent growth in 2006, European growth eased to 2.8 per cent in the first quarter and then to 1.6 per cent in the second quarter. Again, consumers appear to be taking a breather – the latest retail sales figures show growth running at 2.2 per cent – and exports to the U.S. have slowed.
This time around, the major markets are moderating, while the emerging market economies remain strong. Brazil, Russia, India and especially China are all humming. China, in particular, is scrambling to slow its economy by tightening monetary policy. Nevertheless, these economies are all reliant to some degree on the majors for final demand, either directly through exports or indirectly through strong prices for commodities. Between them, the U.S., the E.U. and Japan make up 45 per cent of the world economy, a fact that keeps them in the driver’s seat. Brazil, Russia, India and China together constitute about 27 per cent of the world economy, so it would take a significant acceleration in their growth to offset a moderation in the Big-3. This is not in the cards.
The bottom line? The world truly is in better shape than in the late-1990s, and should prove resilient to financial turbulence. Indeed, the more likely interpretation is that the turbulence we are seeing is a symptom of a generalized moderation in economic growth, not the cause. Investors are recalibrating all risks in light of slower growth, and seeking higher returns in exchange.
China to Launch New Label on Food Exports
(Daily Times)
China will next month begin marking food exports that pass quality tests with a special label, following recent safety scandals that have hurt the industry’s reputation, state media said on Thursday. Food exports that have passed inspections will carry the label “CIQ”, which stands for China Inspection and Quarantine, agencies reported, citing a regulation from the nation’s quality watchdog.
Packing must also carry information, such as the producer’s name and address, batch number and production date, to keep the source of any potential quality problems on record and stem fake exports, the report said. The new labelling system would begin on September 1.
The system is likely to increase the costs for Chinese food exporters, with about 20,000 shipments worth 100 million dollars in Dongguan, Guangdong province in the south alone to be affected each year.
However, the move is necessary as many of the recent food safety problems have involved illegal exports that were not subject to inspections, according to agencies, citing a Chinese industry executive. Thai health authorities last week warned consumers to be cautious in buying food imported from China, especially fruits and vegetables that may contain dangerously high levels of chemicals.
Contaminated seafood has also been found in the US. Aside from food, toothpaste, car tyres, blankets and toys have been some of the exports to have come under sharp international scrutiny in recent months over safety concerns.
China will next month begin marking food exports that pass quality tests with a special label, following recent safety scandals that have hurt the industry’s reputation, state media said on Thursday. Food exports that have passed inspections will carry the label “CIQ”, which stands for China Inspection and Quarantine, agencies reported, citing a regulation from the nation’s quality watchdog.
Packing must also carry information, such as the producer’s name and address, batch number and production date, to keep the source of any potential quality problems on record and stem fake exports, the report said. The new labelling system would begin on September 1.
The system is likely to increase the costs for Chinese food exporters, with about 20,000 shipments worth 100 million dollars in Dongguan, Guangdong province in the south alone to be affected each year.
However, the move is necessary as many of the recent food safety problems have involved illegal exports that were not subject to inspections, according to agencies, citing a Chinese industry executive. Thai health authorities last week warned consumers to be cautious in buying food imported from China, especially fruits and vegetables that may contain dangerously high levels of chemicals.
Contaminated seafood has also been found in the US. Aside from food, toothpaste, car tyres, blankets and toys have been some of the exports to have come under sharp international scrutiny in recent months over safety concerns.
Atlantic Provinces Close to ‘Gateway’ Memorandum with Federal Government
(The Canadian Press)
The four Atlantic provinces are ready to sign a memorandum of understanding with Ottawa on an Atlantic Gateway strategy, an official with Nova Scotia’s Transporation Department said Tuesday.
Gateway initiative director David Oxner said an announcement was initially scheduled in July, around the time Ontario and Quebec signed a similar memorandum with the federal government. But the new government in Prince Edward Island needed more time.
“We’re now working on trying to find a new date to have the Atlantic Gateway MOU signed with Transport Canada,’’ he said.
The agreement will set out objectives and acknowledge that a committee of federal and provincial officials are working to assess gateway needs. Oxner said the plan is to get actual projects started within 24 months. “Obviously, we want to get it figured out a lot faster than that,’’ Oxner said.
Atlantic transportation ministers discussed the timeline during a meeting in Fredericton on Tuesday.
Ottawa promised $2.1 billion in gateway funding over seven years in its March budget. The Atlantic and Ontario-Quebec strategies will be competing for that cash. The Pacific Gateway project already got $591 million outside that pot of money.
Applications for the new cash are supposed to be assessed on merit.
Oxner said the Atlantic Gateway is looking at short-term projects, including a marketing push. Halifax is currently running at 50 per cent of port capacity. That could frustrate any attempted expansion.
“Most of the shippers and shipping lines are not aware of Halifax’s ability to handle additional traffic,’’ he said.
A lot of emerging customers in India and China are not aware that Halifax is a day and a half closer to them than New York City by way of the Suez Canal, he said. And the East Coast of North America is closer to many Asian ports than the West Coast.
Down the road, New Brunswick and Nova Scotia might look for money to twin highways. Oxner said it’s unclear if those projects will best be handled by gateway funding or regular highway agreements.
Private investors hope to build a new $300-million container terminal on the Strait of Canso as early as 2010.
“When it gets close, I expect it would give us a good business case for twinning the highway straight through to that area around the port,’’ Oxner said.
Other projects could include fixing highway and rail bottlenecks.
Oxner said increased traffic in Halifax would put more trucks on downtown streets. The committee will have to assess whether that will propose a problem for shippers or the public.
The four Atlantic provinces are ready to sign a memorandum of understanding with Ottawa on an Atlantic Gateway strategy, an official with Nova Scotia’s Transporation Department said Tuesday.
Gateway initiative director David Oxner said an announcement was initially scheduled in July, around the time Ontario and Quebec signed a similar memorandum with the federal government. But the new government in Prince Edward Island needed more time.
“We’re now working on trying to find a new date to have the Atlantic Gateway MOU signed with Transport Canada,’’ he said.
The agreement will set out objectives and acknowledge that a committee of federal and provincial officials are working to assess gateway needs. Oxner said the plan is to get actual projects started within 24 months. “Obviously, we want to get it figured out a lot faster than that,’’ Oxner said.
Atlantic transportation ministers discussed the timeline during a meeting in Fredericton on Tuesday.
Ottawa promised $2.1 billion in gateway funding over seven years in its March budget. The Atlantic and Ontario-Quebec strategies will be competing for that cash. The Pacific Gateway project already got $591 million outside that pot of money.
Applications for the new cash are supposed to be assessed on merit.
Oxner said the Atlantic Gateway is looking at short-term projects, including a marketing push. Halifax is currently running at 50 per cent of port capacity. That could frustrate any attempted expansion.
“Most of the shippers and shipping lines are not aware of Halifax’s ability to handle additional traffic,’’ he said.
A lot of emerging customers in India and China are not aware that Halifax is a day and a half closer to them than New York City by way of the Suez Canal, he said. And the East Coast of North America is closer to many Asian ports than the West Coast.
Down the road, New Brunswick and Nova Scotia might look for money to twin highways. Oxner said it’s unclear if those projects will best be handled by gateway funding or regular highway agreements.
Private investors hope to build a new $300-million container terminal on the Strait of Canso as early as 2010.
“When it gets close, I expect it would give us a good business case for twinning the highway straight through to that area around the port,’’ Oxner said.
Other projects could include fixing highway and rail bottlenecks.
Oxner said increased traffic in Halifax would put more trucks on downtown streets. The committee will have to assess whether that will propose a problem for shippers or the public.
August 24, 2007
Canadian Chamber Welcomes Progress at Leaders’ Summit, but Calls for Greater Sense of Urgency
(Canadian Chamber of Commerce)
The SPP leaders’ summit concluded today with good progress, but much more needs to be done. The Canadian Chamber of Commerce supports regular exchanges among the three leaders and looks forward to the now-annual meetings. The Canadian Chamber welcomes the commitments on a number of Chamber priorities.
Smart and Secure Borders: An agreement to develop and coordinate the management of the movement of goods and people during a border incident; promoting a seamless operation at the Canada-U .S. border; expanding NEXUS and FAST; and renewed commitment to enhancing capacity at Windsor-Detroit.
Regulatory Framework: Commitment to strengthen cooperation and help remove the thousands of small differences undermining North American job creators. Specific sectors such as automotive and ICT were identified for action, providing an opportunity to measure progress at the next Leaders Summit.
Counterfeiting and Piracy: It is very encouraging to see an Intellectual Property Action Strategy, designed to combat counterfeiting and piracy, identified as one of the top North American priorities. It is vital to implement the SPP commitment for a Fake-Free North America. This includes implementing strong recommendations found in two Parliamentary committee reports from this spring.
Environmental Technologies: An integrated approach to climate change and air pollution along with the development of clean and sustainable energy; cooperation on auto fuel efficiency standards; and the development and employment of new environmental technologies will enhance a sustainable and competitive North America.
The Chamber welcomed discussions by Prime Minister Harper and President Bush on improving the implementation on the U.S. Western Hemisphere Travel Initiative (WHTI) and the ongoing, strong commitment to a successful and ambitious outcome to the WTO negotiations.
“Today’s announcements were another important step forward for the three countries,” says Perrin Beatty, Canadian Chamber of Commerce President and CEO. “However, the pace of progress is still too slow. North American businesses are still confronted by a border that is becoming thicker, stickier and more costly. We urgently need to make greater progress.
“We are facing global challenges from economies like China, India and Europe that are putting our competitiveness to the test. There is no turning back.
The global marketplace only gets fiercer from here, and our three countries must work in partnership to protect the prosperity of our citizens and businesses”.
The SPP leaders’ summit concluded today with good progress, but much more needs to be done. The Canadian Chamber of Commerce supports regular exchanges among the three leaders and looks forward to the now-annual meetings. The Canadian Chamber welcomes the commitments on a number of Chamber priorities.
Smart and Secure Borders: An agreement to develop and coordinate the management of the movement of goods and people during a border incident; promoting a seamless operation at the Canada-U .S. border; expanding NEXUS and FAST; and renewed commitment to enhancing capacity at Windsor-Detroit.
Regulatory Framework: Commitment to strengthen cooperation and help remove the thousands of small differences undermining North American job creators. Specific sectors such as automotive and ICT were identified for action, providing an opportunity to measure progress at the next Leaders Summit.
Counterfeiting and Piracy: It is very encouraging to see an Intellectual Property Action Strategy, designed to combat counterfeiting and piracy, identified as one of the top North American priorities. It is vital to implement the SPP commitment for a Fake-Free North America. This includes implementing strong recommendations found in two Parliamentary committee reports from this spring.
Environmental Technologies: An integrated approach to climate change and air pollution along with the development of clean and sustainable energy; cooperation on auto fuel efficiency standards; and the development and employment of new environmental technologies will enhance a sustainable and competitive North America.
The Chamber welcomed discussions by Prime Minister Harper and President Bush on improving the implementation on the U.S. Western Hemisphere Travel Initiative (WHTI) and the ongoing, strong commitment to a successful and ambitious outcome to the WTO negotiations.
“Today’s announcements were another important step forward for the three countries,” says Perrin Beatty, Canadian Chamber of Commerce President and CEO. “However, the pace of progress is still too slow. North American businesses are still confronted by a border that is becoming thicker, stickier and more costly. We urgently need to make greater progress.
“We are facing global challenges from economies like China, India and Europe that are putting our competitiveness to the test. There is no turning back.
The global marketplace only gets fiercer from here, and our three countries must work in partnership to protect the prosperity of our citizens and businesses”.
U.S. to Rethink Dropping Plans to Pre-Clear Cargo at Border, Says Executive
(Canadian Press)
A top U.S. executive who met Tuesday with North American leaders says the Homeland Security Department will rethink its rejection of a measure to pre-clear cargo at the border.
Ron Covais, U.S. co-chairman of a tri-lateral advisory group, said officials committed to have another look at the decision to drop plans to put U.S. customs operations on the Canadian side.
Prime Minister Stephen Harper raised the issue in a meeting with President George W. Bush, saying he wants to see a pilot project go through to ease trade lineups at the Peace Bridge linking Buffalo, N.Y., and Fort Erie, Ont.
The White House and the State Department both support the move. But Homeland Security Secretary Michael Chertoff nixed the plan in April.
“President Bush was quite receptive,’’ said another executive. ``It’s not surprising. He supports the concept of pre-clearance. He initiated it at a previous meeting.’’
Business leaders on both sides of the border have been concerned that unreasonable security concerns are outweighing commerce in the aftermath of the 2001 terrorist attacks.
While there were no major breakthroughs at the annual summit on easing trade between Canada, the United States and Mexico, Covais said he was satisfied with what he heard.
“I got exactly what I expected,’’ he said from Montebello, Que.
“It’s always been about incremental progress.’’
U.S. officials will also revisit the new fees they’ve slapped on truckers and airline passengers to pay for more inspections of agricultural products, something Canada sees as an unreasonable tax grab.
But there’s little optimism in the U.S. about a change since the fees are already in effect.
The pre-clearance project involves processing cargo before it hits the border to minimize delays. If it worked at the Peace Bridge, it would be extended to other major trade crossings.
The executives also affirmed that the so-called Security and Prosperity Partnership, widely criticized as elitist and secretive, should be more transparent, said Covais, a Lockheed Martin executive.
“There was general agreement about more public outreach.’’
Only 30 business leaders, 10 from each country, have been advising the leaders. Other interest groups aren’t involved.
Harper, Bush and Mexico’s Felipe Calderon agreed at the summit to crack down on unsafe goods and toys and take action to ensure the borders don’t close in the event of another crisis like 9-11.
A top U.S. executive who met Tuesday with North American leaders says the Homeland Security Department will rethink its rejection of a measure to pre-clear cargo at the border.
Ron Covais, U.S. co-chairman of a tri-lateral advisory group, said officials committed to have another look at the decision to drop plans to put U.S. customs operations on the Canadian side.
Prime Minister Stephen Harper raised the issue in a meeting with President George W. Bush, saying he wants to see a pilot project go through to ease trade lineups at the Peace Bridge linking Buffalo, N.Y., and Fort Erie, Ont.
The White House and the State Department both support the move. But Homeland Security Secretary Michael Chertoff nixed the plan in April.
“President Bush was quite receptive,’’ said another executive. ``It’s not surprising. He supports the concept of pre-clearance. He initiated it at a previous meeting.’’
Business leaders on both sides of the border have been concerned that unreasonable security concerns are outweighing commerce in the aftermath of the 2001 terrorist attacks.
While there were no major breakthroughs at the annual summit on easing trade between Canada, the United States and Mexico, Covais said he was satisfied with what he heard.
“I got exactly what I expected,’’ he said from Montebello, Que.
“It’s always been about incremental progress.’’
U.S. officials will also revisit the new fees they’ve slapped on truckers and airline passengers to pay for more inspections of agricultural products, something Canada sees as an unreasonable tax grab.
But there’s little optimism in the U.S. about a change since the fees are already in effect.
The pre-clearance project involves processing cargo before it hits the border to minimize delays. If it worked at the Peace Bridge, it would be extended to other major trade crossings.
The executives also affirmed that the so-called Security and Prosperity Partnership, widely criticized as elitist and secretive, should be more transparent, said Covais, a Lockheed Martin executive.
“There was general agreement about more public outreach.’’
Only 30 business leaders, 10 from each country, have been advising the leaders. Other interest groups aren’t involved.
Harper, Bush and Mexico’s Felipe Calderon agreed at the summit to crack down on unsafe goods and toys and take action to ensure the borders don’t close in the event of another crisis like 9-11.
August 23, 2007
Manufacturing Doubt
(National Post)
Faulty Chinese Exports Could Very Well Trigger the Beginning of a Trade War
When Liu Jie walked into the toy factory where he worked, he had little idea that what he found would put him at the centre of an international safety scare and might yet mark the beginning of a trade war across three continents.
Hanging from the rafters was the body of his boss, Cheung Shu-hung.
Mr. Cheung, a Hong Kong resident who was unmarried, was one of hundreds of Chinese entrepreneurs trying to get rich from Western children’s love affair with plastic.
His firm, Lee Der, churned out dolls by the shipload for Mattel, the toy giant behind Barbie, Polly Pocket and the Fisher-Price label.
But when Mattel said one million of his Sesame Street figures had too much lead in their paint and demanded compensation, the bottom fell out of his business.
Although Mattel did not stop the contract, the Chinese authorities wanted to show they could be as tough as the Americans and Europeans when it came to safety standards and withdrew his export licence. According to his workers, Mr. Cheung sold off enough machinery to give his employees their back pay, then hanged himself.
Yesterday morning, Mr. Liu, an assembly line manager, left the factory for the last time, following 4,000 others who have lost their jobs in the past week.Both Lee Der and Mr. Cheung were virtually unknown outside the grimy industrial city of Foshan, in Guangdong province on the Chinese mainland north of Hong Kong -- and certainly to the parents who bought Mattel products for their children.
The California-based Mattel is more open than many other companies, but it is reluctant to reveal details of the factories in industrial parks all over southern China that make its products.
Seventy per cent of the world’s toys are manufactured in Guangdong. Nearly all are made by outsourcing companies on a scale and at a price no other country can match.
The workers’ pay and conditions give some idea of how goods can be produced so cheaply. In a
Lee Der dormitory block, workers lived up to 14 to a room in rickety bunk beds. One was decorated with Sesame Street packaging.
Mr. Cheung was a “good boss, with a good relationship with his workers,” said an electrician. “He gave us a day off each week.”
Shop-floor salaries for the six-day week of 10-hour days were $125 to $190 a month, he said, well above the local minimum wage.
Mattel has a reputation for being punctilious about quality control, but the fate of its toys shows how limited big companies’ scrutiny can be.
The electrician said the real culprit was a factory down the road.
“It was the paint, and the paint company,” he said.
Mr. Cheung bought his paint from another Foshan company, Dongxing New Energy, which workers said was owned by his best friend, Liang Jiacheng.
But Mr. Liang in turn sourced his raw materials from a third firm, Zhongxin, based in the nearby city of Dongguan.
Zhongxin is accused of diluting paint powder with cheaper, lower-quality ingredients containing lead. Seven of its managers are now reported to be on the run.
The ever-growing chain of contractors and subcontractors behind China’s industrial boom is now causing concern for many Western firms.
This year’s “Made in China” crisis began in March when pets, mainly cats, in North America began to die from pet food that had been contaminated with melamine. Since then, there have been a series of other scares.
Toothpaste in Panama was found to have poisonous diethylene glycol from China mixed in instead of harmless but more expensive glycerine.
In the toy sector, Thomas the Tank Engine sets were recalled because of excess lead in paint, along with the Sarges toy cars and Sesame Street figures. This week, scientists in New Zealand said they had found dangerous levels of formaldehyde in adults’ and children’s clothes imported from China.
China says its exports are of high standard compared with what is sold at home. Almost 20% of products made for domestic consumption are officially rated as substandard.
The Chinese government says its manufacturers are being vilified because North America and Europe do not like their trade deficits with it. It has exchanged angry threats of retaliation with foreign politicians.But Chinese officials sometimes admit their inspectors have difficulty keeping up with the speed and scale of change.
One problem is persuading them how seriously Western companies take safety issues. While no Western children are reported to have been harmed, in China itself, not only are the workers making the toys repeatedly exposed to lead, but pollution and the lack of clean water mean many children daily ingest high levels of heavy metals.
This is little consolation to Mattel, which in the face of U.S. lawsuits has announced measures to ensure every batch of paint is tested, and then every batch of toys tested again.It is also little consolation to Lee Der’s former workers. They may find new jobs -- in Guangdong companies close and open all the time, and China is actually suffering a shortage of skilled and semi-skilled labour.
The empty Lee Der factories are plastered with recruitment notices. But the conditions they find may be worse than those at Lee Der.
A manager who was one of the last people to speak to Mr. Cheung said he had lost everything.
“He called me to say not to panic,” he said. “He said he would give me money to set myself up.”
Nearby, a pile of Fisher Price cardboard packaging lay in the rain. Its markings made no mention of Lee Der, but said, “Animal Adventure Playpacks. Destination -- Phoenix. Country of Origin: China.”
Faulty Chinese Exports Could Very Well Trigger the Beginning of a Trade War
When Liu Jie walked into the toy factory where he worked, he had little idea that what he found would put him at the centre of an international safety scare and might yet mark the beginning of a trade war across three continents.
Hanging from the rafters was the body of his boss, Cheung Shu-hung.
Mr. Cheung, a Hong Kong resident who was unmarried, was one of hundreds of Chinese entrepreneurs trying to get rich from Western children’s love affair with plastic.
His firm, Lee Der, churned out dolls by the shipload for Mattel, the toy giant behind Barbie, Polly Pocket and the Fisher-Price label.
But when Mattel said one million of his Sesame Street figures had too much lead in their paint and demanded compensation, the bottom fell out of his business.
Although Mattel did not stop the contract, the Chinese authorities wanted to show they could be as tough as the Americans and Europeans when it came to safety standards and withdrew his export licence. According to his workers, Mr. Cheung sold off enough machinery to give his employees their back pay, then hanged himself.
Yesterday morning, Mr. Liu, an assembly line manager, left the factory for the last time, following 4,000 others who have lost their jobs in the past week.Both Lee Der and Mr. Cheung were virtually unknown outside the grimy industrial city of Foshan, in Guangdong province on the Chinese mainland north of Hong Kong -- and certainly to the parents who bought Mattel products for their children.
The California-based Mattel is more open than many other companies, but it is reluctant to reveal details of the factories in industrial parks all over southern China that make its products.
Seventy per cent of the world’s toys are manufactured in Guangdong. Nearly all are made by outsourcing companies on a scale and at a price no other country can match.
The workers’ pay and conditions give some idea of how goods can be produced so cheaply. In a
Lee Der dormitory block, workers lived up to 14 to a room in rickety bunk beds. One was decorated with Sesame Street packaging.
Mr. Cheung was a “good boss, with a good relationship with his workers,” said an electrician. “He gave us a day off each week.”
Shop-floor salaries for the six-day week of 10-hour days were $125 to $190 a month, he said, well above the local minimum wage.
Mattel has a reputation for being punctilious about quality control, but the fate of its toys shows how limited big companies’ scrutiny can be.
The electrician said the real culprit was a factory down the road.
“It was the paint, and the paint company,” he said.
Mr. Cheung bought his paint from another Foshan company, Dongxing New Energy, which workers said was owned by his best friend, Liang Jiacheng.
But Mr. Liang in turn sourced his raw materials from a third firm, Zhongxin, based in the nearby city of Dongguan.
Zhongxin is accused of diluting paint powder with cheaper, lower-quality ingredients containing lead. Seven of its managers are now reported to be on the run.
The ever-growing chain of contractors and subcontractors behind China’s industrial boom is now causing concern for many Western firms.
This year’s “Made in China” crisis began in March when pets, mainly cats, in North America began to die from pet food that had been contaminated with melamine. Since then, there have been a series of other scares.
Toothpaste in Panama was found to have poisonous diethylene glycol from China mixed in instead of harmless but more expensive glycerine.
In the toy sector, Thomas the Tank Engine sets were recalled because of excess lead in paint, along with the Sarges toy cars and Sesame Street figures. This week, scientists in New Zealand said they had found dangerous levels of formaldehyde in adults’ and children’s clothes imported from China.
China says its exports are of high standard compared with what is sold at home. Almost 20% of products made for domestic consumption are officially rated as substandard.
The Chinese government says its manufacturers are being vilified because North America and Europe do not like their trade deficits with it. It has exchanged angry threats of retaliation with foreign politicians.But Chinese officials sometimes admit their inspectors have difficulty keeping up with the speed and scale of change.
One problem is persuading them how seriously Western companies take safety issues. While no Western children are reported to have been harmed, in China itself, not only are the workers making the toys repeatedly exposed to lead, but pollution and the lack of clean water mean many children daily ingest high levels of heavy metals.
This is little consolation to Mattel, which in the face of U.S. lawsuits has announced measures to ensure every batch of paint is tested, and then every batch of toys tested again.It is also little consolation to Lee Der’s former workers. They may find new jobs -- in Guangdong companies close and open all the time, and China is actually suffering a shortage of skilled and semi-skilled labour.
The empty Lee Der factories are plastered with recruitment notices. But the conditions they find may be worse than those at Lee Der.
A manager who was one of the last people to speak to Mr. Cheung said he had lost everything.
“He called me to say not to panic,” he said. “He said he would give me money to set myself up.”
Nearby, a pile of Fisher Price cardboard packaging lay in the rain. Its markings made no mention of Lee Der, but said, “Animal Adventure Playpacks. Destination -- Phoenix. Country of Origin: China.”
Prime Minister Harper Raises Canadian Concerns on Trilateral Agenda at North American Leaders’ Summit
(Government of Canada)
Prime Minister Stephen Harper expressed his satisfaction today with the outcome of the North American Leaders’ Summit in Montebello, Quebec, where he met with U.S. President George W. Bush and Mexican President Felipe Calderón.
“Canada, the United States and Mexico are good neighbours and also good friends. As sovereign countries in the modern world we are both independent and interdependent,” said the Prime Minister. “This week’s Summit has provided an opportunity to share individual perspectives and take stock of challenges we face together.”
The discussions covered a wide range of issues the three countries face, including:
- Working together on consumer protection to ensure the safety of imported foods and products entering North America;
- Developing practical solutions to our mutual environmental challenges; and
- Assuring both efficient and secure borders, while respecting the bonds of friendship and commerce between the three countries.
The discussions focussed as well on international and hemispheric matters from climate change to the upcoming APEC meetings. Also discussed were the Middle East and Haiti, where all three countries are working to advance freedom, democracy and development.
Since last year’s Summit, agreements on regulatory cooperation, pandemics, intellectual property and energy research have been achieved.
“Our three countries share peaceful and productive relations,” said the Prime Minister.
“These relations are rooted in our common commitment to democracy, free and open markets through NAFTA, and equal opportunity for all our citizens.”
Prime Minister Harper met in separate bilateral meetings with Presidents Bush and Calderón.
The Prime Minister and President Bush discussed a range of bilateral issues including the countries’ joint commitment to a secure border open to the exchange of goods and services and the interaction of peoples.
The Prime Minister and President Calderón discussed the growing breadth and depth of the Canada-Mexico relationship such as labour mobility, the environment, security and defence cooperation, and a range of hemispheric issues.
For more information: http://montebello2007.gc.ca/news-eng.html
Prime Minister Stephen Harper expressed his satisfaction today with the outcome of the North American Leaders’ Summit in Montebello, Quebec, where he met with U.S. President George W. Bush and Mexican President Felipe Calderón.
“Canada, the United States and Mexico are good neighbours and also good friends. As sovereign countries in the modern world we are both independent and interdependent,” said the Prime Minister. “This week’s Summit has provided an opportunity to share individual perspectives and take stock of challenges we face together.”
The discussions covered a wide range of issues the three countries face, including:
- Working together on consumer protection to ensure the safety of imported foods and products entering North America;
- Developing practical solutions to our mutual environmental challenges; and
- Assuring both efficient and secure borders, while respecting the bonds of friendship and commerce between the three countries.
The discussions focussed as well on international and hemispheric matters from climate change to the upcoming APEC meetings. Also discussed were the Middle East and Haiti, where all three countries are working to advance freedom, democracy and development.
Since last year’s Summit, agreements on regulatory cooperation, pandemics, intellectual property and energy research have been achieved.
“Our three countries share peaceful and productive relations,” said the Prime Minister.
“These relations are rooted in our common commitment to democracy, free and open markets through NAFTA, and equal opportunity for all our citizens.”
Prime Minister Harper met in separate bilateral meetings with Presidents Bush and Calderón.
The Prime Minister and President Bush discussed a range of bilateral issues including the countries’ joint commitment to a secure border open to the exchange of goods and services and the interaction of peoples.
The Prime Minister and President Calderón discussed the growing breadth and depth of the Canada-Mexico relationship such as labour mobility, the environment, security and defence cooperation, and a range of hemispheric issues.
For more information: http://montebello2007.gc.ca/news-eng.html
Business Slams U.S. Border Delays
(Globe and Mail)
Washington’s policy of tightening security hampers commerce, CEOs assert
The American preoccupation with security at the border threatens to drive up the cost of trade and cause unacceptable delays for travellers, North American business executives have warned the three leaders at the Montebello summit.
In a report yesterday to U.S., Canadian and Mexican leaders, the executives from the North American Competitiveness Council said the U.S. insistence that cross-border travellers must soon have passports to enter the United States will hurt economic relations.
They urged the three governments to explore the use of other secured documents, including driver’s licences, for cross-border travellers - a proposal the United States has so far ruled out.
The executives also warned that the failure of Canada and the United States to negotiate a system for preclearing exports through customs could seriously undermine trade and commercial relations, and criticized new user fees and inspections for commercial cargoes coming into the United States.
The business leaders met yesterday with Prime Minister Stephen Harper, U.S. President George W. Bush and Mexican President Felipe Calderon, and urged them to recommit to open borders even as security concerns lead to heightened surveillance.
“We encourage the leaders to make a firm commitment to avoid the introduction of any new measure that would add costs or delays at borders within North America without considering how it would affect both competitiveness and security,” said the council’s report, which the political leaders commissioned last year.
In a bilateral meeting with Mr. Bush, Mr. Harper reiterated Canada’s opposition to the passport requirement - which has been suspended temporarily at land crossings - but received no commitment that the President could forestall the congressionally mandated regulation.
However, Mr. Bush acknowledged the concerns and promised to work with Canada to minimize disruption and improve commercial flows at the border.
“There is a joint commitment to a secure border that remains open to the exchange of goods and services and the interaction of our people,” Mr. Harper said at a closing news conference.
The North American Competitiveness Council included 10 senior corporate executives from each country. The three leaders established it last year to provide advice on improving trade and commercial flows between the countries.
Among those present yesterday were Dominic D’Alessandro, chief executive officer of Manulife Financial Corp., Rick George, CEO of Suncor Energy Inc., and Linda Hasenfratz, CEO of Linamar Corp., as well as senior executives from U.S. and Mexican corporations including General Electric Co., Wal-Mart Stores Inc., and Ford Motor Co.
In their report, the business leaders urged the political leaders to recommit to an integrated North American marketplace, saying that concerns about security, illegal immigration and economic dislocation are threatening the gains made under the North American free-trade agreement.
In additional to border concerns, they urged the leaders to formalize the process for harmonizing regulatory regimes and to support the further integration of continental energy markets.
Thomas d’Aquino, head of the Canadian Council of Chief Executives, also attended the meeting, and said later that Mr. Bush demonstrated a clear determination to solve the impasse at the border. “The response was encouraging,” Mr. d’Aquino said, noting that Homeland Security Secretary Michael Chertoff was in the room when the President said his administration would look for solutions.
He said that, in the absence of new high-tech security clearance at the border, delays are going to become more troublesome for both commercial freight and individual travellers. “We don’t want to be in a situation where companies decide that there will be no more just-in-time inventories from Canada, and at the next round of investment, they’re going to put [plants and equipment] closer to where they need them rather than count on a fast border to get the inventories through.”
Washington’s policy of tightening security hampers commerce, CEOs assert
The American preoccupation with security at the border threatens to drive up the cost of trade and cause unacceptable delays for travellers, North American business executives have warned the three leaders at the Montebello summit.
In a report yesterday to U.S., Canadian and Mexican leaders, the executives from the North American Competitiveness Council said the U.S. insistence that cross-border travellers must soon have passports to enter the United States will hurt economic relations.
They urged the three governments to explore the use of other secured documents, including driver’s licences, for cross-border travellers - a proposal the United States has so far ruled out.
The executives also warned that the failure of Canada and the United States to negotiate a system for preclearing exports through customs could seriously undermine trade and commercial relations, and criticized new user fees and inspections for commercial cargoes coming into the United States.
The business leaders met yesterday with Prime Minister Stephen Harper, U.S. President George W. Bush and Mexican President Felipe Calderon, and urged them to recommit to open borders even as security concerns lead to heightened surveillance.
“We encourage the leaders to make a firm commitment to avoid the introduction of any new measure that would add costs or delays at borders within North America without considering how it would affect both competitiveness and security,” said the council’s report, which the political leaders commissioned last year.
In a bilateral meeting with Mr. Bush, Mr. Harper reiterated Canada’s opposition to the passport requirement - which has been suspended temporarily at land crossings - but received no commitment that the President could forestall the congressionally mandated regulation.
However, Mr. Bush acknowledged the concerns and promised to work with Canada to minimize disruption and improve commercial flows at the border.
“There is a joint commitment to a secure border that remains open to the exchange of goods and services and the interaction of our people,” Mr. Harper said at a closing news conference.
The North American Competitiveness Council included 10 senior corporate executives from each country. The three leaders established it last year to provide advice on improving trade and commercial flows between the countries.
Among those present yesterday were Dominic D’Alessandro, chief executive officer of Manulife Financial Corp., Rick George, CEO of Suncor Energy Inc., and Linda Hasenfratz, CEO of Linamar Corp., as well as senior executives from U.S. and Mexican corporations including General Electric Co., Wal-Mart Stores Inc., and Ford Motor Co.
In their report, the business leaders urged the political leaders to recommit to an integrated North American marketplace, saying that concerns about security, illegal immigration and economic dislocation are threatening the gains made under the North American free-trade agreement.
In additional to border concerns, they urged the leaders to formalize the process for harmonizing regulatory regimes and to support the further integration of continental energy markets.
Thomas d’Aquino, head of the Canadian Council of Chief Executives, also attended the meeting, and said later that Mr. Bush demonstrated a clear determination to solve the impasse at the border. “The response was encouraging,” Mr. d’Aquino said, noting that Homeland Security Secretary Michael Chertoff was in the room when the President said his administration would look for solutions.
He said that, in the absence of new high-tech security clearance at the border, delays are going to become more troublesome for both commercial freight and individual travellers. “We don’t want to be in a situation where companies decide that there will be no more just-in-time inventories from Canada, and at the next round of investment, they’re going to put [plants and equipment] closer to where they need them rather than count on a fast border to get the inventories through.”
Experts Say Airfreight Rates Will Remain High and May Rise
(CIFFA e-Bulletin)
Reported in the Shipping Gazette August 17, 2007Rising costs, salaries and fuel prices have put air cargo carriers in a position to introduce higher freight rates, after several years of flat growth, says a US industry association. “This issue has always been a hot potato with forwarders,” said Nolan Palud, spokesman for the San Francisco Air Cargo Association in a report in Logistics Management magazine. “The airline pricing departments are responsible for formulating rates based on what it actually costs to provide lift,” Mr Palud said, also noting that rates had been low for 40 years.
“Rates are further confused by tacking on surcharges rather than demanding across-the-board increases.” Said Giovanni Bisignani, CEO of the International Air Transport Association: The pick-up in freight, led by Asia, could be the first sign of strengthening demand.” According to IATA data, average air cargo load factors have so far remained strong at 73.7 per cent this year, an improvement of 0.1 per cent year to date.” But Mr Bisignani added other factors at play: “We will be watching intensifying competition from other modes of transport and structural changes such as manufacturers producing lighter goods.” IATA predicts that 2007 will be the first profitable year for the industry since 2000, owing to high load factors and efficiency gains, the report added.
Reported in the Shipping Gazette August 17, 2007Rising costs, salaries and fuel prices have put air cargo carriers in a position to introduce higher freight rates, after several years of flat growth, says a US industry association. “This issue has always been a hot potato with forwarders,” said Nolan Palud, spokesman for the San Francisco Air Cargo Association in a report in Logistics Management magazine. “The airline pricing departments are responsible for formulating rates based on what it actually costs to provide lift,” Mr Palud said, also noting that rates had been low for 40 years.
“Rates are further confused by tacking on surcharges rather than demanding across-the-board increases.” Said Giovanni Bisignani, CEO of the International Air Transport Association: The pick-up in freight, led by Asia, could be the first sign of strengthening demand.” According to IATA data, average air cargo load factors have so far remained strong at 73.7 per cent this year, an improvement of 0.1 per cent year to date.” But Mr Bisignani added other factors at play: “We will be watching intensifying competition from other modes of transport and structural changes such as manufacturers producing lighter goods.” IATA predicts that 2007 will be the first profitable year for the industry since 2000, owing to high load factors and efficiency gains, the report added.
August 22, 2007
Canadian Dollar Could Lose Shot at Parity
(Globe and Mail)
The turmoil in global credit markets and shifting interest rate expectations in both Canada and the United States are threatening the loonie’s run toward parity, according to economists at Bank of Montreal.
In an updated forecast released Tuesday, BMO said it now expects the Bank of Canada will hold off on any additional rate hikes until next year, reflecting higher U.S. economic risks and tighter credit conditions. Previously, they had been expecting a quarter-point hike in Sept. 5, with “significant risk” of an October move.
The U.S. Federal Reserve is no longer forecast to stand pat on Sept. 18, BMO said, but is expected to cut rates to mitigate the increased downside risks to economic growth.
“The lack of Bank of Canada tightening and a weaker starting point should take away the Canadian dollar’s shot at parity,” BMO economists Michael Gregory and Benjamin Reitzes wrote in a note.
Turmoil in global credit markets and shifting interest rate expectations are threatening the loonie’s run toward parity with the U.S. dollar.
The loonie has been on a tear in recent years, leading some economists and strategists to suggest it will hit parity with its U.S. counterpart for the first time in three decades. However,
Canada’s currency has dropped 1.6 per cent from a 30-year high of 96.36 cents (U.S.) on July 25, caught up in the selling triggered by the U.S. subprime mortgage crisis and the resulting credit market woes.
The Canadian dollar closed down 0.85 of a cent at 94.02 cents on Tuesday in the wake of a benign inflation report that economists said is more likely to keep the Bank of Canada on the sidelines next month. The central bank raised rates to 4.5 per cent on July 10 and suggested then that further increases might be needed to stem inflation.
Consumer prices rose just 0.1 per cent in July from June, leaving Canada’s annual inflation rate at 2.2 per cent for the fourth straight month, Statistics Canada said Tuesday. The core index, which the central bank uses to monitor its inflation control target, it came in at 2.3 per cent in July, down from 2.5 per cent the previous month.
A separate report showed that Canadian retail sales fell 0.9 per cent to an estimated $34.6-billion in June, after surging 2.6 per cent in May. The retail sales data is the last piece of the puzzle ahead of the release of next Friday’s GDP report.
The U.S. credit crunch, which started with the meltdown of the subprime mortgage market, has spilled into Canada and other sections of the globe. The panicked movements on both global equity and currency markets seems to have abated somewhat this week.
“The volumes and volatility this week are lower and it is less frenetic in FX land than last week,” said Dustin Reid, a global currency strategist who monitors the Canadian economy out of ABN Amro’s Chicago offices.
The loonie, he said, is still struggling amid increased risk aversion, which tends to drive up the U.S. dollar versus other global currencies. The Canadian dollar is also tied to commodity prices, which typically fall when global growth slows.
“If the Fed decides to cut rates, either inter-meeting or at its meeting, you will have interest rates widening,” Mr. Reid said. “So that event should see the Canadian dollar appreciate but the more important driver is the risk theme and how that will impact the dollar.”
National Bank Financial chief economist and strategist Clément Gignac said there is a greater chance the Fed will need an inter-meeting rate cut to “address the current credit crush and avoid that the current fly to asset quality in money market instruments turns out as a full fledge systemic risk.”
In his opinion, the Bank of Canada should consider joining the Fed - and possibly some other central banks - if the credit situation in the financial markets continues to deteriorate.
The turmoil in global credit markets and shifting interest rate expectations in both Canada and the United States are threatening the loonie’s run toward parity, according to economists at Bank of Montreal.
In an updated forecast released Tuesday, BMO said it now expects the Bank of Canada will hold off on any additional rate hikes until next year, reflecting higher U.S. economic risks and tighter credit conditions. Previously, they had been expecting a quarter-point hike in Sept. 5, with “significant risk” of an October move.
The U.S. Federal Reserve is no longer forecast to stand pat on Sept. 18, BMO said, but is expected to cut rates to mitigate the increased downside risks to economic growth.
“The lack of Bank of Canada tightening and a weaker starting point should take away the Canadian dollar’s shot at parity,” BMO economists Michael Gregory and Benjamin Reitzes wrote in a note.
Turmoil in global credit markets and shifting interest rate expectations are threatening the loonie’s run toward parity with the U.S. dollar.
The loonie has been on a tear in recent years, leading some economists and strategists to suggest it will hit parity with its U.S. counterpart for the first time in three decades. However,
Canada’s currency has dropped 1.6 per cent from a 30-year high of 96.36 cents (U.S.) on July 25, caught up in the selling triggered by the U.S. subprime mortgage crisis and the resulting credit market woes.
The Canadian dollar closed down 0.85 of a cent at 94.02 cents on Tuesday in the wake of a benign inflation report that economists said is more likely to keep the Bank of Canada on the sidelines next month. The central bank raised rates to 4.5 per cent on July 10 and suggested then that further increases might be needed to stem inflation.
Consumer prices rose just 0.1 per cent in July from June, leaving Canada’s annual inflation rate at 2.2 per cent for the fourth straight month, Statistics Canada said Tuesday. The core index, which the central bank uses to monitor its inflation control target, it came in at 2.3 per cent in July, down from 2.5 per cent the previous month.
A separate report showed that Canadian retail sales fell 0.9 per cent to an estimated $34.6-billion in June, after surging 2.6 per cent in May. The retail sales data is the last piece of the puzzle ahead of the release of next Friday’s GDP report.
The U.S. credit crunch, which started with the meltdown of the subprime mortgage market, has spilled into Canada and other sections of the globe. The panicked movements on both global equity and currency markets seems to have abated somewhat this week.
“The volumes and volatility this week are lower and it is less frenetic in FX land than last week,” said Dustin Reid, a global currency strategist who monitors the Canadian economy out of ABN Amro’s Chicago offices.
The loonie, he said, is still struggling amid increased risk aversion, which tends to drive up the U.S. dollar versus other global currencies. The Canadian dollar is also tied to commodity prices, which typically fall when global growth slows.
“If the Fed decides to cut rates, either inter-meeting or at its meeting, you will have interest rates widening,” Mr. Reid said. “So that event should see the Canadian dollar appreciate but the more important driver is the risk theme and how that will impact the dollar.”
National Bank Financial chief economist and strategist Clément Gignac said there is a greater chance the Fed will need an inter-meeting rate cut to “address the current credit crush and avoid that the current fly to asset quality in money market instruments turns out as a full fledge systemic risk.”
In his opinion, the Bank of Canada should consider joining the Fed - and possibly some other central banks - if the credit situation in the financial markets continues to deteriorate.
Customs Unveils New ACE Capability
(Journal of Commerce)
US Customs and Border Protection has announced a rule change that allows additional forms of entry using the Automated Commercial Environment Automated Truck Manifest system at land border crossings.
The new rule will allow the automated manifest system to be used for entry of duty-free goods and unaccompanied goods.
The rule covers goods returned free to the U.S. that have been left undeliverable with a carrier or foreign customs authority. It also covers so-called General Note 1 exemptions, which include records, diagrams or data in any form relating to any business, engineering or exploration operation, human remains and parts from U.S.-registered aircraft. …
The announcement is in the Federal Register.
US Customs and Border Protection has announced a rule change that allows additional forms of entry using the Automated Commercial Environment Automated Truck Manifest system at land border crossings.
The new rule will allow the automated manifest system to be used for entry of duty-free goods and unaccompanied goods.
The rule covers goods returned free to the U.S. that have been left undeliverable with a carrier or foreign customs authority. It also covers so-called General Note 1 exemptions, which include records, diagrams or data in any form relating to any business, engineering or exploration operation, human remains and parts from U.S.-registered aircraft. …
The announcement is in the Federal Register.
August 21, 2007
DHS to Fast-Track Contractor Selection for Secure Freight Database
(American Shipper)
The U.S. Department of Homeland Security bidding process for a third-party international data warehouse to support screening of shipments for terrorist smuggling will be limited to a handful of pre-vetted information technology companies, according to a DHS official involved in the program.
The upcoming request for quotation to establish a Global Trade Exchange pilot program will only be available to the handful of vendors now established in the EAGLE procurement program…. The Enterprise Acquisition Gateway for Leading Edge Solutions contracting process was set up last year as a way for DHS to quickly move on priority projects by using pre-approved contractors in which certain preliminary terms are pre-negotiated. Specific requirements are defined at the task order level…
The companies are a who’s who of some of the largest technology integrators in the world, with experience designing, building and operating huge databases for government and private sector purposes…
Many industry groups are concerned about data privacy and the cost of participating in the system.
DHS’s plan to issue a Request for Quote rather than a Request for Proposal “implies that DHS has the impression that these types of systems exist in industry,” said Sam Banks, a former deputy commissioner of Customs and current vice president at Sandler & Travis Trade Advisory Services.
DHS Deputy Secretary Michael Jackson, who conceived of the data collection system, has hinted in the past that DHS could tap private networks run by automated trade management, security, communications or logistics companies rather than create a new system from scratch.
Among the companies that act as data intermediaries for the clients in the supply chain arena are Savi Networks, GE Security, Motorola, IBM and Maersk Logistics, Descartes Systems, FedEx and UPS. These companies are noted for their use of information systems to enhance the tracking and reliability of freight movements so clients can better control their inventory.
Savi is a subsidiary of Lockheed Martin that specializes in radio frequency identification for cargo management. It is partnering with terminal operator Hutchison Port Holdings on a joint venture called Savi Networks based on an interoperable architecture designed to accommodate identification technologies such as bar codes, RFID and satellite-based global positioning systems.
IBM bought the IT arm of Danish shipping conglomerate A.P. Moller-Maersk in late 2004, and now manages information systems for the Maersk as well as assisting French container line CMA CGM with booking, payment and other customer service systems.
Companies such as Lockheed Martin, IBM, Unisys, large third-party logistics providers and others have large international footprints and established relationships with shippers, carriers, ports and governments.
Although DHS is kick-starting the concept through a government procurement, officials have suggested they ultimately expect the program to be funded by the private sector. Part of the contractor’s proposal likely will include a plan for how industry will be to participate in such an information-sharing system and pay for IT benefits they may receive.
DHS is “going to have to be able to show they can provide business value” to shippers in order to incentivize them to share data, Banks said. An international database, for example, could enhance the distribution of “Do Not Load” messages by U.S. Customs and Border Protection.
Currently, Customs notices are sent to ocean carriers through the Automated Manifest System. But many terminal operators are not tied into that system and mix-ups sometimes occur in prematurely releasing containers for delivery. CBP has cracked down in the past year on unauthorized gate exits and penalized terminal operators for mistakes.
“So if they can show there are better ways to communicate this information, that they can get better visibility and see where potential delays are” in their supply chains, then businesses may be willing to adopt the data mining concept, Banks said.
Click here for a full list of EAGLE contractors.
Related: DHS Nears Procurement for Secure Freight Data Mining Pilot
The U.S. Department of Homeland Security is very close to issuing a solicitation to test the controversial concept of a global information warehouse designed to enhance security screening of international cargo shipments, Secretary Michael Chertoff said Thursday.
Other DHS officials suggested a request for quotation seeking private sector operators for the data mining project could be issued within weeks.
The Global Trade Exchange is the brainchild of Deputy Secretary Michael Jackson, who has proposed an information clearinghouse that would collect non-regulated, raw commercial transaction data exchanged between importers and their overseas suppliers beyond what is submitted to the government through advance manifests, customs entries or a proposed filing better identifying the manufacturer and consignee.
Businesses engaged in international trade are very nervous about sharing confidential information with commercial third parties with whom they do not have contractual relationships.
Chertoff provided few details about the project, part of the department’s Secure Freight Initiative, but did say data sharing with the clearinghouse would initially start on a voluntary basis. Department officials explained there could be multiple data warehouses, not necessarily one big repository…
… [D]etails about the program are still hazy and members of the trade community remain deeply skeptical about a program that involves sharing commercially sensitive data.
Some COAC members asked Chertoff to brief the committee on how the Global Freight Exchange would work and allow it to offer recommendations for shaping the system before moving forward with the request for quotation….
“If you’re going out for an RFQ that appears you are going out for bid for something you’ve already designed, but you haven’t talked to the trade who has to populate it,” said Christopher Koch, president of the World Shipping Council and a COAC member…
Chertoff’s presence marked the first time a DHS secretary has attended a quarterly meeting of the industry sounding board…
The secretary also said he expected to begin implementing the 10+2 proposal mandating importers and carriers file extra shipment data prior to vessel loading by the end of the year.
The rule will be phased in over a 12-month period to help importers adjust to the new requirement before penalties and shipment denials go into full effect, officials have said.
U.S. Customs and Border Protection has been rushing since November to produce a regulation for advance data about the origin and destination of international cargo to improve its analytical capability to pre-screen shipments for security inspections overseas or upon arrival at a U.S. port. The security filing was mandated by Congress in last year’s SAFE Port Act.
Chertoff said the department is reviewing the notice of proposed rulemaking prepared by CBP and will soon send it to the Office of Management and Budget (OMB) for clearance.
Chertoff’s schedule is ambitious. CBP officials had hoped to publish the notice by June and a final rule by fall. OMB frequently takes 90 days or more to clear a rule, especially ones that could have significant economic impact. Then the rule must be go through a 30-day comment period and be re-reviewed before being finalized.
Importers have raised confidentiality and cost concerns about the proposal, namely that they may have to pay an extra fee to an intermediary to file the extra data on their behalf, and that the information is shared with a non-regulated party, like a freight forwarder.
The race is on to convince Congress that DHS’s risk-management strategy for supply chain security works to forestall going forward with the recent mandate for scanning 100 percent of ocean containers at foreign ports within five years, and having early and accurate information that can bolster the computerized screening system is key to that effort, Chertoff told the group…
The U.S. Department of Homeland Security bidding process for a third-party international data warehouse to support screening of shipments for terrorist smuggling will be limited to a handful of pre-vetted information technology companies, according to a DHS official involved in the program.
The upcoming request for quotation to establish a Global Trade Exchange pilot program will only be available to the handful of vendors now established in the EAGLE procurement program…. The Enterprise Acquisition Gateway for Leading Edge Solutions contracting process was set up last year as a way for DHS to quickly move on priority projects by using pre-approved contractors in which certain preliminary terms are pre-negotiated. Specific requirements are defined at the task order level…
The companies are a who’s who of some of the largest technology integrators in the world, with experience designing, building and operating huge databases for government and private sector purposes…
Many industry groups are concerned about data privacy and the cost of participating in the system.
DHS’s plan to issue a Request for Quote rather than a Request for Proposal “implies that DHS has the impression that these types of systems exist in industry,” said Sam Banks, a former deputy commissioner of Customs and current vice president at Sandler & Travis Trade Advisory Services.
DHS Deputy Secretary Michael Jackson, who conceived of the data collection system, has hinted in the past that DHS could tap private networks run by automated trade management, security, communications or logistics companies rather than create a new system from scratch.
Among the companies that act as data intermediaries for the clients in the supply chain arena are Savi Networks, GE Security, Motorola, IBM and Maersk Logistics, Descartes Systems, FedEx and UPS. These companies are noted for their use of information systems to enhance the tracking and reliability of freight movements so clients can better control their inventory.
Savi is a subsidiary of Lockheed Martin that specializes in radio frequency identification for cargo management. It is partnering with terminal operator Hutchison Port Holdings on a joint venture called Savi Networks based on an interoperable architecture designed to accommodate identification technologies such as bar codes, RFID and satellite-based global positioning systems.
IBM bought the IT arm of Danish shipping conglomerate A.P. Moller-Maersk in late 2004, and now manages information systems for the Maersk as well as assisting French container line CMA CGM with booking, payment and other customer service systems.
Companies such as Lockheed Martin, IBM, Unisys, large third-party logistics providers and others have large international footprints and established relationships with shippers, carriers, ports and governments.
Although DHS is kick-starting the concept through a government procurement, officials have suggested they ultimately expect the program to be funded by the private sector. Part of the contractor’s proposal likely will include a plan for how industry will be to participate in such an information-sharing system and pay for IT benefits they may receive.
DHS is “going to have to be able to show they can provide business value” to shippers in order to incentivize them to share data, Banks said. An international database, for example, could enhance the distribution of “Do Not Load” messages by U.S. Customs and Border Protection.
Currently, Customs notices are sent to ocean carriers through the Automated Manifest System. But many terminal operators are not tied into that system and mix-ups sometimes occur in prematurely releasing containers for delivery. CBP has cracked down in the past year on unauthorized gate exits and penalized terminal operators for mistakes.
“So if they can show there are better ways to communicate this information, that they can get better visibility and see where potential delays are” in their supply chains, then businesses may be willing to adopt the data mining concept, Banks said.
Click here for a full list of EAGLE contractors.
Related: DHS Nears Procurement for Secure Freight Data Mining Pilot
The U.S. Department of Homeland Security is very close to issuing a solicitation to test the controversial concept of a global information warehouse designed to enhance security screening of international cargo shipments, Secretary Michael Chertoff said Thursday.
Other DHS officials suggested a request for quotation seeking private sector operators for the data mining project could be issued within weeks.
The Global Trade Exchange is the brainchild of Deputy Secretary Michael Jackson, who has proposed an information clearinghouse that would collect non-regulated, raw commercial transaction data exchanged between importers and their overseas suppliers beyond what is submitted to the government through advance manifests, customs entries or a proposed filing better identifying the manufacturer and consignee.
Businesses engaged in international trade are very nervous about sharing confidential information with commercial third parties with whom they do not have contractual relationships.
Chertoff provided few details about the project, part of the department’s Secure Freight Initiative, but did say data sharing with the clearinghouse would initially start on a voluntary basis. Department officials explained there could be multiple data warehouses, not necessarily one big repository…
… [D]etails about the program are still hazy and members of the trade community remain deeply skeptical about a program that involves sharing commercially sensitive data.
Some COAC members asked Chertoff to brief the committee on how the Global Freight Exchange would work and allow it to offer recommendations for shaping the system before moving forward with the request for quotation….
“If you’re going out for an RFQ that appears you are going out for bid for something you’ve already designed, but you haven’t talked to the trade who has to populate it,” said Christopher Koch, president of the World Shipping Council and a COAC member…
Chertoff’s presence marked the first time a DHS secretary has attended a quarterly meeting of the industry sounding board…
The secretary also said he expected to begin implementing the 10+2 proposal mandating importers and carriers file extra shipment data prior to vessel loading by the end of the year.
The rule will be phased in over a 12-month period to help importers adjust to the new requirement before penalties and shipment denials go into full effect, officials have said.
U.S. Customs and Border Protection has been rushing since November to produce a regulation for advance data about the origin and destination of international cargo to improve its analytical capability to pre-screen shipments for security inspections overseas or upon arrival at a U.S. port. The security filing was mandated by Congress in last year’s SAFE Port Act.
Chertoff said the department is reviewing the notice of proposed rulemaking prepared by CBP and will soon send it to the Office of Management and Budget (OMB) for clearance.
Chertoff’s schedule is ambitious. CBP officials had hoped to publish the notice by June and a final rule by fall. OMB frequently takes 90 days or more to clear a rule, especially ones that could have significant economic impact. Then the rule must be go through a 30-day comment period and be re-reviewed before being finalized.
Importers have raised confidentiality and cost concerns about the proposal, namely that they may have to pay an extra fee to an intermediary to file the extra data on their behalf, and that the information is shared with a non-regulated party, like a freight forwarder.
The race is on to convince Congress that DHS’s risk-management strategy for supply chain security works to forestall going forward with the recent mandate for scanning 100 percent of ocean containers at foreign ports within five years, and having early and accurate information that can bolster the computerized screening system is key to that effort, Chertoff told the group…
August 20, 2007
Is This NAFTA All Over Again?
(Focal Point)
Promoting a Better Understanding of the SPP
The following article appears today in the current issue of Focal Point, the newsletter of the Canadian Foundation for the Americas. The author, Thomas d’Aquino, is Chief Executive and President of the Canadian Council of Chief Executives, and chairs the Secretariat advising Canadian members of the North American Competitiveness Council.
By Thomas d’Aquino
By any measure, the North American Free Trade Agreement (NAFTA) has been an extraordinary success. Since it went into effect in 1994, trade between Canada, the United States and Mexico has flourished, employment across the continent has risen and family incomes have marched steadily upward.
Contrast those results with the alarmist predictions made by Canada’s nationalist left during the run-up to NAFTA’s ratification. Critics claimed that more liberalized trade with our southern neighbours would savage Canada’s economy, destroy cherished social programs and sound the death knell for Canadian sovereignty.
The reality could not be more different, yet the doomsayers have not given up. Their new target of choice is the Security and Prosperity Partnership of North America (SPP), which was launched by the leaders of Canada, the United States and Mexico in 2005. Once again, activists are attempting to sow fear by insisting that Canada’s sovereignty, social programs and quality of life are in imminent danger. Indeed, the charges now being levelled against the SPP bear an uncanny resemblance to the rhetoric they used during the great free trade battles of the 1980s and early 1990s.
In the United States, too, there is an element of “déjà vu all over again” in the debate about the SPP. In 1992, presidential candidate Ross Perot tried to frighten voters into opposing NAFTA by warning about the “giant sucking sound” of jobs heading to Mexico should the agreement be ratified. It did not happen, but today another group of isolationists, of whom the best known is television journalist Lou Dobbs, is working hard to discredit the SPP by claiming that it represents an “unprecedented attack” on the economy and sovereignty of the United States. Mr. Dobbs regularly warns his viewers of a secret conspiracy to erase national boundaries and merge the United States, Mexico and Canada into a “North American Union” similar to the European Union.
Anyone who is even remotely familiar with the SPP knows that such claims are patently false. Still, history teaches that a lie, repeated often enough, can sometimes be mistaken for the truth. That is why, on the eve of this month’s leaders’ summit in Montebello, Quebec, involving Prime Minister Stephen Harper, President George W. Bush and President Felipe Calderón, it is vital that supporters of the SPP speak up and dispel the myths being propagated by extremists on both the left and right of the political spectrum.
To begin with, the SPP is not a treaty or an agreement. Nothing in it infringes upon the sovereignty of any nation. The SPP simply provides a framework to enhance collaboration among the United States, Mexico and Canada in practical ways that will make our people more secure and our enterprises more competitive globally.
In launching the SPP, the leaders of our three nations were responding to two fundamental realities. First, September 11, 2001, marked the beginning of a new era in which economics and security are closely intertwined. Second, the transformation of global trade and investment by new economic powers such as China and India has made it vital for the North American partners to work together more effectively and efficiently. Enterprises in all three countries need markets within North America to work seamlessly and securely if they are to survive and compete against increasingly aggressive global competitors and mounting security threats.
At their 2006 Summit, the three North American leaders recognized that to accelerate progress under the SPP, they would benefit from direct advice from the front lines of the private sector.
This led to the creation of the North American Competitiveness Council (NACC), a trilateral group made up of senior representatives of the business community from each country. NACC members were asked to draw up a list of priority recommendations that, if implemented, would alleviate trade bottlenecks, enhance productivity and lower costs for companies throughout the continent, thereby enhancing North America’s competitive position in global markets.
Those who oppose the SPP have asserted that, by encouraging business leaders to form the NACC, the three North American leaders have handed over control of the continent to the private sector. Some have even accused the business community of staging a “silent coup d’état,” making the NACC the de facto North American government.
The absurdity of such statements is plain to anyone who examines the NACC’s initial report to security and prosperity ministers in February 2007. Following extensive consultations across the business communities of all three countries, the report offered 51 concrete recommendations for the SPP in three areas: improving the secure flow of goods and people within North America; strengthening regulatory cooperation; and enhancing the security of energy supply.
NACC members were pleased with the positive reception of their report by the ministers at their February meeting, and they are encouraged that all three governments have committed themselves to taking action on many NACC recommendations. For instance, in the area of border-crossing facilitation, the governments of Canada and the United States have taken important steps toward a new crossing at Detroit-Windsor to help alleviate chronic transportation bottlenecks. In standards and regulatory cooperation, governments are close to completion of a trilateral Regulatory Cooperation Framework, an essential tool for ensuring the compatibility of new regulations to the greatest extent possible. And on the energy front, ministers are working together to promote the development of specialized skilled labour, at a time when labour shortages threaten to impede economic growth.
As these examples show, the approach of the SPP is to achieve progress through practical, common-sense solutions, and by building on existing systems and processes wherever feasible. At this month’s summit in Montebello, we will be asking leaders to ensure that the SPP remains what it has already shown itself to be: a powerful vehicle for improving trilateral and bilateral cooperation.Working through the NACC, North America’s private sector is committed to doing its part in shaping a more competitive and secure North America – and in promoting a better understanding of how the SPP serves the interests of people in all three countries.
Promoting a Better Understanding of the SPP
The following article appears today in the current issue of Focal Point, the newsletter of the Canadian Foundation for the Americas. The author, Thomas d’Aquino, is Chief Executive and President of the Canadian Council of Chief Executives, and chairs the Secretariat advising Canadian members of the North American Competitiveness Council.
By Thomas d’Aquino
By any measure, the North American Free Trade Agreement (NAFTA) has been an extraordinary success. Since it went into effect in 1994, trade between Canada, the United States and Mexico has flourished, employment across the continent has risen and family incomes have marched steadily upward.
Contrast those results with the alarmist predictions made by Canada’s nationalist left during the run-up to NAFTA’s ratification. Critics claimed that more liberalized trade with our southern neighbours would savage Canada’s economy, destroy cherished social programs and sound the death knell for Canadian sovereignty.
The reality could not be more different, yet the doomsayers have not given up. Their new target of choice is the Security and Prosperity Partnership of North America (SPP), which was launched by the leaders of Canada, the United States and Mexico in 2005. Once again, activists are attempting to sow fear by insisting that Canada’s sovereignty, social programs and quality of life are in imminent danger. Indeed, the charges now being levelled against the SPP bear an uncanny resemblance to the rhetoric they used during the great free trade battles of the 1980s and early 1990s.
In the United States, too, there is an element of “déjà vu all over again” in the debate about the SPP. In 1992, presidential candidate Ross Perot tried to frighten voters into opposing NAFTA by warning about the “giant sucking sound” of jobs heading to Mexico should the agreement be ratified. It did not happen, but today another group of isolationists, of whom the best known is television journalist Lou Dobbs, is working hard to discredit the SPP by claiming that it represents an “unprecedented attack” on the economy and sovereignty of the United States. Mr. Dobbs regularly warns his viewers of a secret conspiracy to erase national boundaries and merge the United States, Mexico and Canada into a “North American Union” similar to the European Union.
Anyone who is even remotely familiar with the SPP knows that such claims are patently false. Still, history teaches that a lie, repeated often enough, can sometimes be mistaken for the truth. That is why, on the eve of this month’s leaders’ summit in Montebello, Quebec, involving Prime Minister Stephen Harper, President George W. Bush and President Felipe Calderón, it is vital that supporters of the SPP speak up and dispel the myths being propagated by extremists on both the left and right of the political spectrum.
To begin with, the SPP is not a treaty or an agreement. Nothing in it infringes upon the sovereignty of any nation. The SPP simply provides a framework to enhance collaboration among the United States, Mexico and Canada in practical ways that will make our people more secure and our enterprises more competitive globally.
In launching the SPP, the leaders of our three nations were responding to two fundamental realities. First, September 11, 2001, marked the beginning of a new era in which economics and security are closely intertwined. Second, the transformation of global trade and investment by new economic powers such as China and India has made it vital for the North American partners to work together more effectively and efficiently. Enterprises in all three countries need markets within North America to work seamlessly and securely if they are to survive and compete against increasingly aggressive global competitors and mounting security threats.
At their 2006 Summit, the three North American leaders recognized that to accelerate progress under the SPP, they would benefit from direct advice from the front lines of the private sector.
This led to the creation of the North American Competitiveness Council (NACC), a trilateral group made up of senior representatives of the business community from each country. NACC members were asked to draw up a list of priority recommendations that, if implemented, would alleviate trade bottlenecks, enhance productivity and lower costs for companies throughout the continent, thereby enhancing North America’s competitive position in global markets.
Those who oppose the SPP have asserted that, by encouraging business leaders to form the NACC, the three North American leaders have handed over control of the continent to the private sector. Some have even accused the business community of staging a “silent coup d’état,” making the NACC the de facto North American government.
The absurdity of such statements is plain to anyone who examines the NACC’s initial report to security and prosperity ministers in February 2007. Following extensive consultations across the business communities of all three countries, the report offered 51 concrete recommendations for the SPP in three areas: improving the secure flow of goods and people within North America; strengthening regulatory cooperation; and enhancing the security of energy supply.
NACC members were pleased with the positive reception of their report by the ministers at their February meeting, and they are encouraged that all three governments have committed themselves to taking action on many NACC recommendations. For instance, in the area of border-crossing facilitation, the governments of Canada and the United States have taken important steps toward a new crossing at Detroit-Windsor to help alleviate chronic transportation bottlenecks. In standards and regulatory cooperation, governments are close to completion of a trilateral Regulatory Cooperation Framework, an essential tool for ensuring the compatibility of new regulations to the greatest extent possible. And on the energy front, ministers are working together to promote the development of specialized skilled labour, at a time when labour shortages threaten to impede economic growth.
As these examples show, the approach of the SPP is to achieve progress through practical, common-sense solutions, and by building on existing systems and processes wherever feasible. At this month’s summit in Montebello, we will be asking leaders to ensure that the SPP remains what it has already shown itself to be: a powerful vehicle for improving trilateral and bilateral cooperation.Working through the NACC, North America’s private sector is committed to doing its part in shaping a more competitive and secure North America – and in promoting a better understanding of how the SPP serves the interests of people in all three countries.
China Plans Greater Scrutiny of Food Exports
(New York Times)
Chinese government authorities are prepared to require that every shipment of food being exported to the United States and other countries be inspected for quality by the government, starting Sept. 1, a senior Chinese trade official said on Wednesday.
Zhao Baoqing, who is based at the Chinese Embassy in Washington, said that all types of food would be inspected with at least one box in each shipment checked and that each package or shipment would be affixed with a government seal.
The pledge came at a hastily called briefing for reporters in Washington intended to address the growing furor among officials here and American consumers nationwide over the surging numbers of Chinese food, drugs, toys and other products that are being recalled or identified as potentially hazardous. “China is very concerned about food safety,” Mr. Zhao said. “What we want is to allow the consumers to rest assured when they use products imported from China.” Mr. Zhao said negotiations were also taking place with officials from the Consumer Product Safety Commission in Washington to find ways to ensure that toys and other products being sent to the United States did not contain lead or other hazards.
In recent weeks, the Chinese government has increased its inspections of toys subject to export.
But he said the government would oppose any mandate that importers hire independent safety laboratories to test all of the Chinese toys destined for the United States. It would also oppose deploying United States government toy inspectors to China.“They can come to train us and tell us the rules,” he said. “But inspection is a country’s sole authority.”
The unusual briefing, in a windowless auditorium at the Chinese Embassy before a giant tapestry of the Great Wall of China, gave the Chinese government an opportunity to admit that as a fast-growing and still-developing nation, it needs to improve the quality of goods it exports.
“We are resolved to ensure greater safety of Chinese products,” he said.
But Mr. Zhao, a former senior official in China’s federal food and product safety agency, was also defiant, saying that he believed the danger presented by Chinese products had been exaggerated. And the United States, he said, has sent flawed products to China, including generators and cotton harvesting machinery.
Previous vows to step up inspections in China have been met with skepticism, because many exporters of food have a tradition of mislabeling goods and shipping them illegally. The country’s food safety enforcement program has historically been weak, and even prone to corruption and bribery.
The recent string of cases involving products from China — including recalls or warnings about hazardous food, toothpaste, fish, tires and toys — has inspired the Chinese government to step up its own safety efforts, he said, both through increasing inspections of goods headed for export and through investigations of companies suspected of violating the law.
He said the government had already apprehended people involved with the mislabeling of puffer fish as monk fish, as well as companies involved in adding hazardous ingredients to pet food. And it is actively investigating a Chinese vendor who apparently sold lead-contaminated paint to a supplier to Mattel, which led to its recent recall of lead-coated toys.
The enhanced food inspections, he said, would not mean that every box of food would be inspected by a government official. Instead, every shipment will be checked at some point along the production line, and a higher percent of the food in individual shipments will be physically checked, he said.
Officials in Washington have made clear that they think the Chinese government — and exporters based there — have not done enough to ensure that exported good are safe.
“There is no question that too many Chinese manufacturers and food producers put the bottom line ahead of safety,” Senator Charles E. Schumer, Democrat of New York, said in a statement on Wednesday.
Mr. Schumer is among those who intend to call for the placement of United States safety regulators inside toy factories in China. Mr. Zhao said that the Chinese government planned to announce by mid-September a new agreement with American regulators and toy importers to address concerns over toy hazards.
American officials have hinted this will include a requirement for more inspections, paid for by toy importers. Mr. Zhao said the Chinese government had no objection to these third-party inspections, but did not want them to be a precondition of toy exports from China.
Chinese government authorities are prepared to require that every shipment of food being exported to the United States and other countries be inspected for quality by the government, starting Sept. 1, a senior Chinese trade official said on Wednesday.
Zhao Baoqing, who is based at the Chinese Embassy in Washington, said that all types of food would be inspected with at least one box in each shipment checked and that each package or shipment would be affixed with a government seal.
The pledge came at a hastily called briefing for reporters in Washington intended to address the growing furor among officials here and American consumers nationwide over the surging numbers of Chinese food, drugs, toys and other products that are being recalled or identified as potentially hazardous. “China is very concerned about food safety,” Mr. Zhao said. “What we want is to allow the consumers to rest assured when they use products imported from China.” Mr. Zhao said negotiations were also taking place with officials from the Consumer Product Safety Commission in Washington to find ways to ensure that toys and other products being sent to the United States did not contain lead or other hazards.
In recent weeks, the Chinese government has increased its inspections of toys subject to export.
But he said the government would oppose any mandate that importers hire independent safety laboratories to test all of the Chinese toys destined for the United States. It would also oppose deploying United States government toy inspectors to China.“They can come to train us and tell us the rules,” he said. “But inspection is a country’s sole authority.”
The unusual briefing, in a windowless auditorium at the Chinese Embassy before a giant tapestry of the Great Wall of China, gave the Chinese government an opportunity to admit that as a fast-growing and still-developing nation, it needs to improve the quality of goods it exports.
“We are resolved to ensure greater safety of Chinese products,” he said.
But Mr. Zhao, a former senior official in China’s federal food and product safety agency, was also defiant, saying that he believed the danger presented by Chinese products had been exaggerated. And the United States, he said, has sent flawed products to China, including generators and cotton harvesting machinery.
Previous vows to step up inspections in China have been met with skepticism, because many exporters of food have a tradition of mislabeling goods and shipping them illegally. The country’s food safety enforcement program has historically been weak, and even prone to corruption and bribery.
The recent string of cases involving products from China — including recalls or warnings about hazardous food, toothpaste, fish, tires and toys — has inspired the Chinese government to step up its own safety efforts, he said, both through increasing inspections of goods headed for export and through investigations of companies suspected of violating the law.
He said the government had already apprehended people involved with the mislabeling of puffer fish as monk fish, as well as companies involved in adding hazardous ingredients to pet food. And it is actively investigating a Chinese vendor who apparently sold lead-contaminated paint to a supplier to Mattel, which led to its recent recall of lead-coated toys.
The enhanced food inspections, he said, would not mean that every box of food would be inspected by a government official. Instead, every shipment will be checked at some point along the production line, and a higher percent of the food in individual shipments will be physically checked, he said.
Officials in Washington have made clear that they think the Chinese government — and exporters based there — have not done enough to ensure that exported good are safe.
“There is no question that too many Chinese manufacturers and food producers put the bottom line ahead of safety,” Senator Charles E. Schumer, Democrat of New York, said in a statement on Wednesday.
Mr. Schumer is among those who intend to call for the placement of United States safety regulators inside toy factories in China. Mr. Zhao said that the Chinese government planned to announce by mid-September a new agreement with American regulators and toy importers to address concerns over toy hazards.
American officials have hinted this will include a requirement for more inspections, paid for by toy importers. Mr. Zhao said the Chinese government had no objection to these third-party inspections, but did not want them to be a precondition of toy exports from China.
Canada, Stop Fearing the Free-Trade Bogeyman
(David Binks — Globe and Mail)
For the next two days, Prime Minister Stephen Harper, U.S. President George W. Bush and Mexican President Felipe Calderon are scheduled to meet in Montebello, Que., to discuss ways to improve trade between the three countries. This has prompted a torrent of editorial comment for and against the initiative.
Following soon after Mr. Harper’s visit to Latin America and his proposal for a free-trade agreement with Colombia, opponents have worked themselves into a lather. They see closer trade ties as a recipe for unfettered access to Canadian riches by resource-hungry nations, with the so-called “NAFTA Superhighway” - a massive road, rail and pipeline corridor stretching from Mexico to Canada - as the principal means by which our resources will be siphoned south. They agonize over the potential loss of sovereignty, despite post-NAFTA experience to the contrary. They trumpet the term “deep integration” to conjure up the spectre of our Canadian identity in imminent peril from hemispheric free trade. And finally, they argue that free-trade agreements with nations like Colombia that are still struggling with human rights issues would provide legitimacy to unworthy governments.
While Canadians worry about closer ties with our neighbours, the rest of the world moves on. Anyone who has visited or lived in the European Union has likely marvelled at the ease of travelling through an essentially border-free territory or the advantages of having a common currency. They may also have reflected on the fact that none of this economic integration has had any impact on the rich cultural, social and linguistic diversity that is the hallmark of Europe.
Compare that with Canada-U.S. commercial relations, which have become increasingly strained due to delays at the border and to irritants such as the protracted softwood lumber dispute. Even within Canada’s own borders, trade is hampered by restrictive regulations and interprovincial rivalries. Canada still has a stock market regulator in every province, and a school teacher certified in Manitoba can’t get a teaching job outside the province without going back to school.
Canadians may be angst-ridden about opening up our trade, but the socialist government of Chile, as reported recently in this paper, seems to have no trouble with the concept. The country has entered into trade agreements with an astounding list of nations in virtually every region of the globe, making it by far the richest country in South America.
I won’t go into all the arguments for and against free trade for Canada. This debate is already in the public domain and, sadly, it feels like déjà vu. What I can say, without hesitation, is that the unprecedented expansion of access - to goods, services, ideas and opportunities - is the primary driver that has created profound and positive change for nations, businesses and individuals around the world, and Canada is no exception to this rule.
There is nothing new about the idea that trade and prosperity go hand in hand. The greatest and most durable empires in history flourished because of open commerce among their various territories. Foreseeing the explosion of global trade and commerce in the late twentieth century, former U.S. secretary of state George Shultz correctly argued that the free flow of information made possible by the revolution in communications technologies would force closed societies like China, India and the Soviet Union to open up.
Although Canada is behind many other countries in entering international trade agreements, we actually fare quite well with regard to our level of access to goods, services and information. This assessment is based on a comprehensive landmark survey commissioned by FedEx and conducted by the independent, non-profit research institute SRI International. Called “How Greater Access is Changing the World,” the study introduces an Access Index that ranks 75 countries on 22 indicators of access to physical items and information in the categories of trade, transport, telecommunications and news, media and information services. Three related subindexes measure the impact of greater access on people, businesses and nations, using 18 to 20 variables in such areas as empowerment, connection, innovation, market reach, growth and competitiveness.
Canada ranks 13th on the main index, one below the United States. By comparison, Hong Kong and Singapore occupy the number one and two slots, respectively, with Nigeria and Bangladesh coming in at 74th and 75th, respectively.
These scores intuitively suggest that access is a key determinant of wealth and quality of life, and indeed there are many examples of the clear correlation between increases in access and decreases in poverty. We’ve already noted Chile’s enormous progress as a result of its many free-trade agreements. In 1978, the year that China began to liberalize its trade policy, poverty levels were at 28 per cent of the population. Twenty years later, the level was 9 per cent. In India, poverty decreased from 51 per cent to 27 per cent during the two decades since the country opened its markets.It is certainly true that poorer, more closed societies would enjoy more immediate benefits from greater access than highly developed economies like Canada and the United States. However, there is stiff competition for international markets among the top twenty Access Index countries, which includes economic powerhouses like Germany, France, the United Kingdom, Australia and Japan. No country can afford to rest on its laurels in a global economy.
It requires no leap of faith to see the connection between liberalized trade and international influence. Canadians hearken back to a time when, through the genius of leaders like Lester Pearson, we punched above our weight in the world’s council chambers. It is difficult to see how we can once again aspire to have such a voice without a corresponding level of free trade with other nations - especially in view of the connection between greater access and better living standards for underdeveloped countries. Think of it as “putting our money where our mouth is.” As one of the world’s most inclusive and multicultural societies, we have a head start in the race to build closer relations with Latin America. The Montebello summit meeting is a golden opportunity to co-ordinate our strategy with our most natural allies in this endeavour - the United States and Mexico. Canada needs to step up to the plate. We have nothing to lose but our angst.
For the next two days, Prime Minister Stephen Harper, U.S. President George W. Bush and Mexican President Felipe Calderon are scheduled to meet in Montebello, Que., to discuss ways to improve trade between the three countries. This has prompted a torrent of editorial comment for and against the initiative.
Following soon after Mr. Harper’s visit to Latin America and his proposal for a free-trade agreement with Colombia, opponents have worked themselves into a lather. They see closer trade ties as a recipe for unfettered access to Canadian riches by resource-hungry nations, with the so-called “NAFTA Superhighway” - a massive road, rail and pipeline corridor stretching from Mexico to Canada - as the principal means by which our resources will be siphoned south. They agonize over the potential loss of sovereignty, despite post-NAFTA experience to the contrary. They trumpet the term “deep integration” to conjure up the spectre of our Canadian identity in imminent peril from hemispheric free trade. And finally, they argue that free-trade agreements with nations like Colombia that are still struggling with human rights issues would provide legitimacy to unworthy governments.
While Canadians worry about closer ties with our neighbours, the rest of the world moves on. Anyone who has visited or lived in the European Union has likely marvelled at the ease of travelling through an essentially border-free territory or the advantages of having a common currency. They may also have reflected on the fact that none of this economic integration has had any impact on the rich cultural, social and linguistic diversity that is the hallmark of Europe.
Compare that with Canada-U.S. commercial relations, which have become increasingly strained due to delays at the border and to irritants such as the protracted softwood lumber dispute. Even within Canada’s own borders, trade is hampered by restrictive regulations and interprovincial rivalries. Canada still has a stock market regulator in every province, and a school teacher certified in Manitoba can’t get a teaching job outside the province without going back to school.
Canadians may be angst-ridden about opening up our trade, but the socialist government of Chile, as reported recently in this paper, seems to have no trouble with the concept. The country has entered into trade agreements with an astounding list of nations in virtually every region of the globe, making it by far the richest country in South America.
I won’t go into all the arguments for and against free trade for Canada. This debate is already in the public domain and, sadly, it feels like déjà vu. What I can say, without hesitation, is that the unprecedented expansion of access - to goods, services, ideas and opportunities - is the primary driver that has created profound and positive change for nations, businesses and individuals around the world, and Canada is no exception to this rule.
There is nothing new about the idea that trade and prosperity go hand in hand. The greatest and most durable empires in history flourished because of open commerce among their various territories. Foreseeing the explosion of global trade and commerce in the late twentieth century, former U.S. secretary of state George Shultz correctly argued that the free flow of information made possible by the revolution in communications technologies would force closed societies like China, India and the Soviet Union to open up.
Although Canada is behind many other countries in entering international trade agreements, we actually fare quite well with regard to our level of access to goods, services and information. This assessment is based on a comprehensive landmark survey commissioned by FedEx and conducted by the independent, non-profit research institute SRI International. Called “How Greater Access is Changing the World,” the study introduces an Access Index that ranks 75 countries on 22 indicators of access to physical items and information in the categories of trade, transport, telecommunications and news, media and information services. Three related subindexes measure the impact of greater access on people, businesses and nations, using 18 to 20 variables in such areas as empowerment, connection, innovation, market reach, growth and competitiveness.
Canada ranks 13th on the main index, one below the United States. By comparison, Hong Kong and Singapore occupy the number one and two slots, respectively, with Nigeria and Bangladesh coming in at 74th and 75th, respectively.
These scores intuitively suggest that access is a key determinant of wealth and quality of life, and indeed there are many examples of the clear correlation between increases in access and decreases in poverty. We’ve already noted Chile’s enormous progress as a result of its many free-trade agreements. In 1978, the year that China began to liberalize its trade policy, poverty levels were at 28 per cent of the population. Twenty years later, the level was 9 per cent. In India, poverty decreased from 51 per cent to 27 per cent during the two decades since the country opened its markets.It is certainly true that poorer, more closed societies would enjoy more immediate benefits from greater access than highly developed economies like Canada and the United States. However, there is stiff competition for international markets among the top twenty Access Index countries, which includes economic powerhouses like Germany, France, the United Kingdom, Australia and Japan. No country can afford to rest on its laurels in a global economy.
It requires no leap of faith to see the connection between liberalized trade and international influence. Canadians hearken back to a time when, through the genius of leaders like Lester Pearson, we punched above our weight in the world’s council chambers. It is difficult to see how we can once again aspire to have such a voice without a corresponding level of free trade with other nations - especially in view of the connection between greater access and better living standards for underdeveloped countries. Think of it as “putting our money where our mouth is.” As one of the world’s most inclusive and multicultural societies, we have a head start in the race to build closer relations with Latin America. The Montebello summit meeting is a golden opportunity to co-ordinate our strategy with our most natural allies in this endeavour - the United States and Mexico. Canada needs to step up to the plate. We have nothing to lose but our angst.
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