(Statistics Canada)
Canadian industries steadily increased their levels of both “outsourcing” and “offshoring” from 1961 to 2003, according to a new research paper that assesses trends in international trading patterns.
Outsourcing involves moving production outside a firm. Offshoring occurs when Canadian-based companies buy foreign-produced goods or services as production inputs.
The study found that between 1961 and 2003, there was a strong shift towards the offshoring of both goods and services, which increased in almost all industries. The rate of growth of offshoring has been highest in service industries.
The study suggests that offshoring in goods has been positively related to multifactor productivity growth. Service offshoring has been associated with a shift towards higher value-added activities in Canadian industries.
The study found that neither offshoring in goods nor services is associated with a change in employment in Canadian industries. While material offshoring was not related to wage growth, service offshoring was negatively associated with wage growth in the service sector.
Growth in the offshoring of both services and materials reflects the continuing trend towards economic globalization and integration of world economies. Most of Canada’s offshoring is with the United States, although there is some increase over the last decade with developing countries. Recent interest in outsourcing and offshoring has intensified with rapid economic development in China and India.
Share of imported material inputs nearly doubles in 40 years
The growth in services and material offshoring reflects two distinct aspects of globalization. These are, first, the changes that have occurred as trade increased with developing countries, and secondly, the gains associated with exploiting economies of scale in differentiated product lines.Canadian industries have purchased an increasing share of material and service inputs from abroad, a trend that has been pervasive across industries.
Between 1961 and 2003, the share of imports in material inputs almost doubled from 20.5% to 38.0%. The share of imports in service inputs almost tripled from 2.6% to 7.6%.
Business services (e.g., high-tech services, research and development, and consulting and design services) represent the largest category of service inputs that Canadian industries have offshored. They are followed by financial services.
Goods and services offshoring have different effects
The study found that the economic effects of service offshoring have differed from those of material offshoring.
Material offshoring has been positively related to multifactor productivity growth over the 40 year period, while service offshoring has not.
Between 1961 and 2003, the study suggested that the increase in material offshoring contributed 0.2 percentage points a year to growth in multifactor productivity. This increase represented about 8% of multifactor productivity growth during this period.
Industries that increased their service offshoring activities also increased their investments in information and communications technologies (ICT), as well as the share of value-added in their shipments. The intensive use of ICT inputs served to reduce the distance barriers associated with trade in services.
The study also found that neither form of offshoring, goods or services, was related to employment in Canadian industries. However, the two had differing effects on the growth in wages.
Service offshoring has had a small negative effect on worker wages in the services-producing sector, but little effect on wages for workers in goods-producing sector. Cor complete story with graphs and links to actual research paper go here.
May 22, 2008
New PIP “Security Profile” Delayed
Under modernization changes to the CBSA Partners in Protection (PIP) program the current Security Questionnaire is being replaced by an industry-specific Security Profile that all participants will need to complete.
The CBSA had indicated several months ago that the Security Profile would be provided online so that companies could get a head-start in meeting new security requirements. However, the CBSA now advises that posting of the Security Profile online has been temporarily delayed but will soon be available.
Program changes are still scheduled to take effect on June 30, 2008. On this date, the CBSA will begin to accept applications under the modernized program.
The CBSA had indicated several months ago that the Security Profile would be provided online so that companies could get a head-start in meeting new security requirements. However, the CBSA now advises that posting of the Security Profile online has been temporarily delayed but will soon be available.
Program changes are still scheduled to take effect on June 30, 2008. On this date, the CBSA will begin to accept applications under the modernized program.
May 21, 2008
Oil Execs Tell Congress: Don’t Blame Us
On a day that crude crossed $130 a barrel, executives from the top U.S. oil companies say they are not to blame for rising prices at the pump and offer an array of reasons why gas costs more and offer some ideas on how to solve the problem. More at CNN.
PM Announces Changes to Canadian Food Label Laws
(CTV News)
The “made in Canada” label is about to become a lot more Canadian, Prime Minister Stephen Harper announced Wednesday.
Ottawa is introducing new laws so that food products processed in Canada, but made with foreign ingredients, will have to say so on the label, Harper told reporters in Vineland, Ont.
“The truth is, foods marked ‘product of Canada’ or ‘made in Canada’ actually may not be very Canadian at all,” he said. “Our new guidelines are designed to redefine Canadian food content labels to better reflect the true origins of products in today’s global marketplace”
Under current laws, Harper said, it’s legal to call a product “made in Canada” if 51 per cent of production costs were incurred here and the final transformation of the product was in Canada.
The current laws are largely unchanged since the 1980s — before the rapid globalization of food production changed the origin of many of the products in grocery stores.
“A bottle of apple juice could have a ‘made in Canada’ label in it and be made from apples grown in China. A bar of chocolate might say ‘product of Canada,’ but the cocoa beans could come from the Ivory Coast,’’ Harper said.
Under the new rules, a “product of Canada” label will mean that virtually all of the contents are Canadian in origin.
A consumer advocate says the changes are long overdue. Read the complete article.
The “made in Canada” label is about to become a lot more Canadian, Prime Minister Stephen Harper announced Wednesday.
Ottawa is introducing new laws so that food products processed in Canada, but made with foreign ingredients, will have to say so on the label, Harper told reporters in Vineland, Ont.
“The truth is, foods marked ‘product of Canada’ or ‘made in Canada’ actually may not be very Canadian at all,” he said. “Our new guidelines are designed to redefine Canadian food content labels to better reflect the true origins of products in today’s global marketplace”
Under current laws, Harper said, it’s legal to call a product “made in Canada” if 51 per cent of production costs were incurred here and the final transformation of the product was in Canada.
The current laws are largely unchanged since the 1980s — before the rapid globalization of food production changed the origin of many of the products in grocery stores.
“A bottle of apple juice could have a ‘made in Canada’ label in it and be made from apples grown in China. A bar of chocolate might say ‘product of Canada,’ but the cocoa beans could come from the Ivory Coast,’’ Harper said.
Under the new rules, a “product of Canada” label will mean that virtually all of the contents are Canadian in origin.
A consumer advocate says the changes are long overdue. Read the complete article.
Canada’s Food Safety Ranking Surprises Researchers
(CBC News)
Canada ranks fifth for food safety in a survey comparing 17 industrial countries, says a University of Regina study released Wednesday.
The study’s authors, marketing professor Sylvain Charlebois and microbiology professor Chris Yost, say they were surprised to learn that Canada’s food safety systems are among the most thorough and effective in the world.
“I was expecting Canada to be deemed an average country,” said Charlebois.
“I’ve been studying food safety practices in our country awhile and I’ve been quite critical, especially with respect to mad cow. But when you compare Canada to other countries, it’s quite good.”
The report ranks Organization for Economic Co-operation and Development countries based on 45 indicators, including hygiene practices, ability to contain risks, recalls and traceability.
The top ranking went to the United Kingdom, a country that has suffered from two recent and significant food scares — mad cow disease and foot and mouth disease.
Japan ranked second, followed by Denmark, Australia and Canada. Ireland came out on the bottom of the list, just below Belgium and France.
The researchers say Canada got most of its brownie points for its system of inspections of food imports, restaurants, food retailers, distributors and processors. It also has an effective system for food recalls and educating consumers about food safety.
Canada fell down in its ability to trace food across the supply chain. “Consumers should care about this,” said Charlebois. “If there’s a recall of a food in a grocery store, it’s super important to trace back that food to its source of origin.”
Canada also fell down in labelling, including labelling for food allergies, and in its significant use of pesticides.
“The more a country uses pesticides, the less likely food will be safe for consumers,” said Charlebois, calling for more research into safe substitutes for pesticides.
The researchers noted there was very little correlation between a country’s wealth and its ranking, pointing out the wealthiest country in the world, the United States, ranked seventh.
Charlebois and Yost say they hope their food safety report card will become an annual publication.
Canada ranks fifth for food safety in a survey comparing 17 industrial countries, says a University of Regina study released Wednesday.
The study’s authors, marketing professor Sylvain Charlebois and microbiology professor Chris Yost, say they were surprised to learn that Canada’s food safety systems are among the most thorough and effective in the world.
“I was expecting Canada to be deemed an average country,” said Charlebois.
“I’ve been studying food safety practices in our country awhile and I’ve been quite critical, especially with respect to mad cow. But when you compare Canada to other countries, it’s quite good.”
The report ranks Organization for Economic Co-operation and Development countries based on 45 indicators, including hygiene practices, ability to contain risks, recalls and traceability.
The top ranking went to the United Kingdom, a country that has suffered from two recent and significant food scares — mad cow disease and foot and mouth disease.
Japan ranked second, followed by Denmark, Australia and Canada. Ireland came out on the bottom of the list, just below Belgium and France.
The researchers say Canada got most of its brownie points for its system of inspections of food imports, restaurants, food retailers, distributors and processors. It also has an effective system for food recalls and educating consumers about food safety.
Canada fell down in its ability to trace food across the supply chain. “Consumers should care about this,” said Charlebois. “If there’s a recall of a food in a grocery store, it’s super important to trace back that food to its source of origin.”
Canada also fell down in labelling, including labelling for food allergies, and in its significant use of pesticides.
“The more a country uses pesticides, the less likely food will be safe for consumers,” said Charlebois, calling for more research into safe substitutes for pesticides.
The researchers noted there was very little correlation between a country’s wealth and its ranking, pointing out the wealthiest country in the world, the United States, ranked seventh.
Charlebois and Yost say they hope their food safety report card will become an annual publication.
U.S. Farm Bill Addresses Transaction Value Interpretation
(Expeditors Newsflash)
On May 15, 2008, House Bill H.R. 2419, commonly known as the Food, Conservation, and Energy Act of 2008 or “Farm Bill”, passed the House and Senate and is now cleared for submission to the President. Language in the bill addresses U.S. Customs and Border Protection’s (CBP, Customs) January 24, 2008 proposal regarding transaction value of imported merchandise.
According to the bill, Customs will require importers to report, at the time of entry, “whether the transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in the first or earlier sale occurring prior to introduction of the merchandise into the United States.”
This requirement would be effective for one year beginning 90 days after the date of the enactment of the Food, Conservation, and Energy Act. On a monthly basis during the one-year period, Customs would report the information provided by importers to the International Trade Commission (ITC). The report would include:
• the number of importers that declare the transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in the first or earlier sale
• the tariff classification of imported merchandise
• the transaction value of the imported merchandise.
After the one-year reporting period, the ITC would report to Congress the following:
• the aggregate number of importers that declare the transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in the first or earlier sale
• a description of the frequency of the use of the “first or earlier sale” determination method
• the tariff classification of imported merchandise, and an analysis on a sectoral basis
• the aggregate transaction value imported merchandise, and an analysis on a sectoral basis.
In a section of the bill titled “Sense of Congress Regarding Prohibition on Proposed Interpretation of the Term ‘Sold For Exportation to the United States’”, Congress noted that the Customs Commissioner should not implement a change to Customs’ interpretation of the term “sold for exportation to the United States,” as it relates to determining transaction value, before January 1, 2011, unless the Commissioner consults with, and provides notice to Congressional committees, the Commercial Operations Advisory Committee (COAC) and receives approval of the Secretary of the Treasury.
The full text of H.R. 2419, the Food, Conservation, and Energy Act of 2008 or “Farm Bill”, can be accessed online here (PDF format).
On May 15, 2008, House Bill H.R. 2419, commonly known as the Food, Conservation, and Energy Act of 2008 or “Farm Bill”, passed the House and Senate and is now cleared for submission to the President. Language in the bill addresses U.S. Customs and Border Protection’s (CBP, Customs) January 24, 2008 proposal regarding transaction value of imported merchandise.
According to the bill, Customs will require importers to report, at the time of entry, “whether the transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in the first or earlier sale occurring prior to introduction of the merchandise into the United States.”
This requirement would be effective for one year beginning 90 days after the date of the enactment of the Food, Conservation, and Energy Act. On a monthly basis during the one-year period, Customs would report the information provided by importers to the International Trade Commission (ITC). The report would include:
• the number of importers that declare the transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in the first or earlier sale
• the tariff classification of imported merchandise
• the transaction value of the imported merchandise.
After the one-year reporting period, the ITC would report to Congress the following:
• the aggregate number of importers that declare the transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in the first or earlier sale
• a description of the frequency of the use of the “first or earlier sale” determination method
• the tariff classification of imported merchandise, and an analysis on a sectoral basis
• the aggregate transaction value imported merchandise, and an analysis on a sectoral basis.
In a section of the bill titled “Sense of Congress Regarding Prohibition on Proposed Interpretation of the Term ‘Sold For Exportation to the United States’”, Congress noted that the Customs Commissioner should not implement a change to Customs’ interpretation of the term “sold for exportation to the United States,” as it relates to determining transaction value, before January 1, 2011, unless the Commissioner consults with, and provides notice to Congressional committees, the Commercial Operations Advisory Committee (COAC) and receives approval of the Secretary of the Treasury.
The full text of H.R. 2419, the Food, Conservation, and Energy Act of 2008 or “Farm Bill”, can be accessed online here (PDF format).
Dead End for Free Trade
(Globe & Mail — Barrie McKenna)
Peter Durant is getting edgy. The 41-year-old Ontario trucker should be on his way to Toledo, Ohio, to pick up a load of Oreo cookies for Kraft Canada.
Instead, he’s stuck at a truck stop outside Windsor, Ont. The U.S. Customs computer system that handles freight has crashed and can’t read his electronic manifest.
By the time the all-clear sign comes from his dispatcher an hour later, about 100 trucks are lined up on the U.S. side of the Ambassador Bridge. It will take him another 11/2 hours to navigate the 13-kilometre drive through Windsor and clear customs on the U.S. side.
It’s another day at the busiest trade gateway on the planet – not a bad day; not a particularly good day. Just thick. Dense layers of security, designed to shield Americans from a world full of threats, have conspired to make life enduringly less predictable for everyone else.
“I can’t see this is an efficient way to move things across the border,” observed Mr. Durant, who has hauled cargo across the border once or twice a week for the past 14 years. “This isn’t it,” he said as he guided his rig through winding, rutted lanes beneath the bridge.
Call it thick, sticky or whatever you like. For the people and companies who ply the border trade, the new reality is an increasingly complex, time-consuming and costly experience. And we’re all paying the price.
The long-ago promise of the Canada-U.S. free-trade deal was about dismantling barriers – tariff and otherwise – along the world’s longest undefended border. But those benefits are being slowly eroded as companies absorb ever greater costs – anything and everything to keep trade moving.
Just-in-time inventory management has evolved into just-in-case.
Companies are stockpiling inventory in both countries to cope with the increasingly unpredictable border, wiping out many of the efficiencies of integrated supply chains, according to recent studies by the Conference Board of Canada as well as the Canadian and U.S. Chambers of Commerce.
Stockpiling isn’t the only coping mechanism seeping into everyday business. Disturbingly, businesses are reverting to behaviour that was common before free trade, a trend that is eroding the benefits of Canada’s open access to the U.S. market, the Conference Board concluded.
Companies now routinely preship orders, cross at night or on weekends, send empty trucks to make pick-ups or ship duplicate orders – anything to make sure a delivery arrives on time. All at a cost.
A load that doesn’t get to a customer can shut down a manufacturing plant, explained Robert Kee, managing director of Casco Inc., a Canadian-based maker of corn-based sweeteners.
“It’s a big deal,” he explained. “A customer isn’t going to shut down their plant just because they feel bad for us. They are not going to tolerate that.”
So when a shipment occasionally gets hung up en route by an inspection or some other glitch, Casco sends a second one, while eating the extra cost.
Casco was an early poster child of free trade. The U.S.-owned maker of corn-based feed, starch and sweeteners saw its tariffs go from nearly 20 per cent in the late 1980s to zero. During the 1990s, the company expanded from one to three plants in Ontario – in Brockville, Port Colborne and London – to tap burgeoning opportunities in the U.S. Northeast. Exports soared and the company prospered.
But the dream for Casco, and many others, may be silently slipping away. Longer and more frequent inspections, duplication, border congestion, mounting fees and rising shipping costs are chipping away at the company’s once impressive competitive edge (and that was before the Canadian dollar rocketed to parity). It’s U.S. Homeland Security, the U.S. Food and Drug Administration, the U.S. Department of Agriculture – part of a mushrooming security and safety bureaucracy at the border. Read the complete article.
Peter Durant is getting edgy. The 41-year-old Ontario trucker should be on his way to Toledo, Ohio, to pick up a load of Oreo cookies for Kraft Canada.
Instead, he’s stuck at a truck stop outside Windsor, Ont. The U.S. Customs computer system that handles freight has crashed and can’t read his electronic manifest.
By the time the all-clear sign comes from his dispatcher an hour later, about 100 trucks are lined up on the U.S. side of the Ambassador Bridge. It will take him another 11/2 hours to navigate the 13-kilometre drive through Windsor and clear customs on the U.S. side.
It’s another day at the busiest trade gateway on the planet – not a bad day; not a particularly good day. Just thick. Dense layers of security, designed to shield Americans from a world full of threats, have conspired to make life enduringly less predictable for everyone else.
“I can’t see this is an efficient way to move things across the border,” observed Mr. Durant, who has hauled cargo across the border once or twice a week for the past 14 years. “This isn’t it,” he said as he guided his rig through winding, rutted lanes beneath the bridge.
Call it thick, sticky or whatever you like. For the people and companies who ply the border trade, the new reality is an increasingly complex, time-consuming and costly experience. And we’re all paying the price.
The long-ago promise of the Canada-U.S. free-trade deal was about dismantling barriers – tariff and otherwise – along the world’s longest undefended border. But those benefits are being slowly eroded as companies absorb ever greater costs – anything and everything to keep trade moving.
Just-in-time inventory management has evolved into just-in-case.
Companies are stockpiling inventory in both countries to cope with the increasingly unpredictable border, wiping out many of the efficiencies of integrated supply chains, according to recent studies by the Conference Board of Canada as well as the Canadian and U.S. Chambers of Commerce.
Stockpiling isn’t the only coping mechanism seeping into everyday business. Disturbingly, businesses are reverting to behaviour that was common before free trade, a trend that is eroding the benefits of Canada’s open access to the U.S. market, the Conference Board concluded.
Companies now routinely preship orders, cross at night or on weekends, send empty trucks to make pick-ups or ship duplicate orders – anything to make sure a delivery arrives on time. All at a cost.
A load that doesn’t get to a customer can shut down a manufacturing plant, explained Robert Kee, managing director of Casco Inc., a Canadian-based maker of corn-based sweeteners.
“It’s a big deal,” he explained. “A customer isn’t going to shut down their plant just because they feel bad for us. They are not going to tolerate that.”
So when a shipment occasionally gets hung up en route by an inspection or some other glitch, Casco sends a second one, while eating the extra cost.
Casco was an early poster child of free trade. The U.S.-owned maker of corn-based feed, starch and sweeteners saw its tariffs go from nearly 20 per cent in the late 1980s to zero. During the 1990s, the company expanded from one to three plants in Ontario – in Brockville, Port Colborne and London – to tap burgeoning opportunities in the U.S. Northeast. Exports soared and the company prospered.
But the dream for Casco, and many others, may be silently slipping away. Longer and more frequent inspections, duplication, border congestion, mounting fees and rising shipping costs are chipping away at the company’s once impressive competitive edge (and that was before the Canadian dollar rocketed to parity). It’s U.S. Homeland Security, the U.S. Food and Drug Administration, the U.S. Department of Agriculture – part of a mushrooming security and safety bureaucracy at the border. Read the complete article.
Economy Showing Signs That Worst Is Already Past: Economists
(The Canadian Press)
The loonie once again worth about the same as the U.S. greenback, employment, exports and consumer spending continuing strong – what is happening to Canada’s year of economic discontent?
Just as the Canadian and U.S. economies were expected to be at their gloomiest – falling into negative numbers or close to it in the second quarter – some economists are entertaining the notion that the worst may already be in the past.
“What’s with the doom and gloom in Canada lately?” asked BMO deputy chief economist Doug Porter this week in a list of 10 reasons to feel good about the economy.
Among the categories – strong income growth and employment, no real credit crunch, rising equity prices, a surprising trade surplus and a healthy housing market.
“We know that bad news sells, but this is ridiculous,” Porter said of the hand-wringing in face of the positives.
Even in the U.S. – which is the real threat to the Canadian economy in terms of falling exports – the news has not been as uniformly bad as most economists had been forecasting for months, and the talk that the U.S. had already dipped into recession has not been supported by the numbers.
Growth in the U.S. has been tepid at best at 0.6% the past two quarters, but it has remained above the line. And while many had pointed to the second quarter as the time the American economy would cross the line, the early numbers are at best mixed.
This week saw another “surprise” when the U.S. Commerce Department reported retail sales had actually risen 0.2% in April, or 0.5% if auto sales are excluded. Read the complete article.
The loonie once again worth about the same as the U.S. greenback, employment, exports and consumer spending continuing strong – what is happening to Canada’s year of economic discontent?
Just as the Canadian and U.S. economies were expected to be at their gloomiest – falling into negative numbers or close to it in the second quarter – some economists are entertaining the notion that the worst may already be in the past.
“What’s with the doom and gloom in Canada lately?” asked BMO deputy chief economist Doug Porter this week in a list of 10 reasons to feel good about the economy.
Among the categories – strong income growth and employment, no real credit crunch, rising equity prices, a surprising trade surplus and a healthy housing market.
“We know that bad news sells, but this is ridiculous,” Porter said of the hand-wringing in face of the positives.
Even in the U.S. – which is the real threat to the Canadian economy in terms of falling exports – the news has not been as uniformly bad as most economists had been forecasting for months, and the talk that the U.S. had already dipped into recession has not been supported by the numbers.
Growth in the U.S. has been tepid at best at 0.6% the past two quarters, but it has remained above the line. And while many had pointed to the second quarter as the time the American economy would cross the line, the early numbers are at best mixed.
This week saw another “surprise” when the U.S. Commerce Department reported retail sales had actually risen 0.2% in April, or 0.5% if auto sales are excluded. Read the complete article.
Panama Next Stop on Canadian Trade Agreement Agenda
(Embassy – Michelle Collins)
Officials from the Central American country were in Ottawa last week as the two countries prepare for trade talks
As negotiations for a trade agreement with Colombia face critical opposition in both the U.S. and Canada, exploratory discussions about initiating free trade negotiations with Panama are being taken up in Ottawa.
In the Capital last week for a first meeting with Canadian trade officials, Panama’s chief trade negotiator Leroy Sheffer described the talks as “absolutely positive.” “We’re working to make Panama one of the top sectors in the world,” Mr. Sheffer said. “Panama is a main platform Canada can use to distribute to the Latin American market.”
With its strategic location in Central America and the Panama Canal free trade zone, Mr. Sheffer said the opportunities for Canadian businesses to expand services and exports in the region are immense.
He said a deal between Panama and Canada would serve to complement the two countries’ economies since both are largely service-based with important agricultural sectors. In addition, he said, Panama and Canada share similar views at the World Trade Organization in the service, financial and tourism areas.
Mr. Sheffer said Panama is especially keen to expand relations in some of the areas where Canada excels, such as bio-technology and mining, the industry in which Canada is a world leader. “Panama wants to connect with countries at a certain level of success, Canada has done well and Panama would like to be partners with the right trade partners that Canada has.”
A Foreign Investment Protection and Promotion Agreement was signed with Panama in 1998, and last year bilateral trade between the countries totalled $115.1 million. In its assessment of the country, Export Development Canada described Panama as very attractive to investors. However, the report also stated that there is rampant corruption and cronyism among businesspeople, though the government has set up a dispute mechanism to address the delays and lack of independence in the judicial system.
Since 2005, Canadian exports to Panama, such as pharmaceuticals, machinery, electronics, meat and vegetables, have grown by nearly 44 per cent. Imports from Panama to Canada are mainly mineral fuels, fruits and nuts, seafood, spices and coffee, teas and wood products.
In Export Development Canada’s analysis of Panama’s political situation, the report states that “There is little chance that a party with leftist tendencies will form a majority government or take [the] Presidency in 2009,” because the opposition received little public support in the 2004 elections.
“There’s tremendous opportunity in Panama to expand trade, especially as a portal to go into Latin America as a logistical hub,” Mr. Bains said. “Portal investment is increasing, trade is improving, there are a lot of synergies, a lot of commonalities.”
Leading the charge for an agreement since arriving in Ottawa in 2005 has been Panamanian Ambassador Romy Vásquez. Ms. Vásquez said she has been a non-stop promoter of a trade agreement between the countries because there are enormous market opportunities for both Panama and Canada.
“I’m a business person, and I do believe there are opportunities,” Ms. Vásquez said. “We are a hub for products and services because we are geographically positioned in the centre of the Americas. If Canadian companies would like to have more access, we are in a perfect position.” She said relations between the two countries have been rapidly expanding over the last few years, particularly in tourism. In 2004, Panama saw about 7,500 Canadian tourists a year. Today that number has grown to 55,000 a year, with five chartered flights leaving for Panama each week, she said.
The United Nations’ Economist Intelligence Unit has recently ranked Panama as the second-fastest growing economy in the world.
According to the Department of Foreign Affairs and International Trade, depending on the outcome of the initial talks, the government will embark on comprehensive consultations with stakeholders across Canada before making a decision on whether to launch negotiations.
Mr. Sheffer said he understands Canada has an extensive internal process to follow before moving forward with any agreements, but said he is very encouraged by Canada’s “amazing” commitment to corporate social responsibility. “There’s a need to create necessary synergies to provide benefits for Canada and Panama,” Mr. Sheffer said. “The opportunities Panama offers to Canadian firms are immense.” Read the entire article.
Officials from the Central American country were in Ottawa last week as the two countries prepare for trade talks
As negotiations for a trade agreement with Colombia face critical opposition in both the U.S. and Canada, exploratory discussions about initiating free trade negotiations with Panama are being taken up in Ottawa.
In the Capital last week for a first meeting with Canadian trade officials, Panama’s chief trade negotiator Leroy Sheffer described the talks as “absolutely positive.” “We’re working to make Panama one of the top sectors in the world,” Mr. Sheffer said. “Panama is a main platform Canada can use to distribute to the Latin American market.”
With its strategic location in Central America and the Panama Canal free trade zone, Mr. Sheffer said the opportunities for Canadian businesses to expand services and exports in the region are immense.
He said a deal between Panama and Canada would serve to complement the two countries’ economies since both are largely service-based with important agricultural sectors. In addition, he said, Panama and Canada share similar views at the World Trade Organization in the service, financial and tourism areas.
Mr. Sheffer said Panama is especially keen to expand relations in some of the areas where Canada excels, such as bio-technology and mining, the industry in which Canada is a world leader. “Panama wants to connect with countries at a certain level of success, Canada has done well and Panama would like to be partners with the right trade partners that Canada has.”
A Foreign Investment Protection and Promotion Agreement was signed with Panama in 1998, and last year bilateral trade between the countries totalled $115.1 million. In its assessment of the country, Export Development Canada described Panama as very attractive to investors. However, the report also stated that there is rampant corruption and cronyism among businesspeople, though the government has set up a dispute mechanism to address the delays and lack of independence in the judicial system.
Since 2005, Canadian exports to Panama, such as pharmaceuticals, machinery, electronics, meat and vegetables, have grown by nearly 44 per cent. Imports from Panama to Canada are mainly mineral fuels, fruits and nuts, seafood, spices and coffee, teas and wood products.
In Export Development Canada’s analysis of Panama’s political situation, the report states that “There is little chance that a party with leftist tendencies will form a majority government or take [the] Presidency in 2009,” because the opposition received little public support in the 2004 elections.
“There’s tremendous opportunity in Panama to expand trade, especially as a portal to go into Latin America as a logistical hub,” Mr. Bains said. “Portal investment is increasing, trade is improving, there are a lot of synergies, a lot of commonalities.”
Leading the charge for an agreement since arriving in Ottawa in 2005 has been Panamanian Ambassador Romy Vásquez. Ms. Vásquez said she has been a non-stop promoter of a trade agreement between the countries because there are enormous market opportunities for both Panama and Canada.
“I’m a business person, and I do believe there are opportunities,” Ms. Vásquez said. “We are a hub for products and services because we are geographically positioned in the centre of the Americas. If Canadian companies would like to have more access, we are in a perfect position.” She said relations between the two countries have been rapidly expanding over the last few years, particularly in tourism. In 2004, Panama saw about 7,500 Canadian tourists a year. Today that number has grown to 55,000 a year, with five chartered flights leaving for Panama each week, she said.
The United Nations’ Economist Intelligence Unit has recently ranked Panama as the second-fastest growing economy in the world.
According to the Department of Foreign Affairs and International Trade, depending on the outcome of the initial talks, the government will embark on comprehensive consultations with stakeholders across Canada before making a decision on whether to launch negotiations.
Mr. Sheffer said he understands Canada has an extensive internal process to follow before moving forward with any agreements, but said he is very encouraged by Canada’s “amazing” commitment to corporate social responsibility. “There’s a need to create necessary synergies to provide benefits for Canada and Panama,” Mr. Sheffer said. “The opportunities Panama offers to Canadian firms are immense.” Read the entire article.
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