August 22, 2009
Ottawa, provinces offer ‘time-limited' proposal that would give American firms ‘guaranteed access' to contracts
The Canadian government has offered the U.S. guaranteed access to the provinces’ public purchases in exchange for a quick waiver of Buy American provisions that have frozen Canadian companies out of lucrative American stimulus-spending contracts.
In a letter to U.S. Trade Representative Ron Kirk, Canadian trade minister Stockwell Day said such a deal would address Canada’s immediate concerns about Buy American, and could serve as a prelude to a permanent deal that would open cross-border access to provincial, state, and city contracts.
The letter, dated Thursday and obtained by The Globe and Mail, refers to a proposal that Canada submitted at the same time, after lengthy talks with the provinces.
“Through this proposal, Canada is offering time-limited guarantees to an ambitious package of sub-federal procurement in an exchange for a waiver from the “Buy American” requirements in the Recovery Act and any similar requirements in new federal U.S. legislation.
The U.S. Recovery Act, the $860-billion stimulus package pass early this year, sends about $260-billion to state and local governments in the U.S. for spending projects, but requires that all steel and manufactured goods be U.S. made. Similar provisions are included in several bills winding through the U.S. Congress.
The U.S. has down played the impact, even Canadian companies say they have been frozen out of lucrative contracts. But earlier this month, U.S. President Barack Obama brushed off the concerns.
“I do think it’s important to keep this in perspective. This in no way has endangered the billions of dollars of trade taking place between our two countries,” Mr. Obama said as he, Prime Minister Stephen Harper and Mexican President Felipe Calderon wrapped up their so-called Three Amigos summit.
“I want to assure you your Prime Minister raises this with me every time we see each other,” he had said. “[But] I think it’s also important to keep it in perspective, that in fact we have not seen some sweeping steps toward protectionism,” he said.
Spending by states, provinces, and cities is not covered by the NAFTA – Canadian provinces wanted it left out when the trade pact was signed – but Canadian provinces have agreed to negotiate some guarantees in exchange for a Canadian exception to buy American.
“This offer is ambitious in its coverage of all Canadian provinces, territories and major municipalities as well as coverage comparable to that under NAFTA for all goods and services, including construction services,” Mr. Day wrote in the letter. Read more here.
Ambassador Charles S. Shapiro, Senior Coordinator for the Western Hemisphere Free Trade Agreements Task Force, Bureau of Western Hemisphere Affairs.
Note: canada presently has free trade agreements with Chile, Columbia, Panama, Peru and Costa Rica. Free trade discussions are being conducted with the Andean Community Countries, the Carribbean Community, the Dominican Republic, Central America Four (C4). Canada is also party to the Free Trade Area of the Americas (FTAA) negotiations. Additionally, Canada has Foreign Investment Promotion and Protection (FIPAs) with a number of countries in Latin America.
The Honourable Peter Van Loan, Minister of Public Safety, joined by Russ Hiebert, Member of Parliament for South Surrey-White Rock-Cloverdale, today officially opened the new port of entry facility in Douglas, British Columbia. This modern and environmentally friendly facility will provide improved service to the public crossing the border between Blaine, Washington, and Surrey, British Columbia, in time for the 2010 Olympic and Paralympic Winter Games.
“Our government is strengthening security at our border while facilitating the flow of goods and people,” said Minister Van Loan. “This new and modern facility demonstrates how we are meeting these two goals through investing in better infrastructure for our border facilities.”
The Douglas port of entry is one of the busiest ports of entry in Canada, processing more than 2 million vehicles and over 3 million travellers each year. The new facility has been designed to meet current and future operational needs, including the use of new technologies. It has increased the number of processing lanes from seven to ten, two of which can be used as dedicated NEXUS lanes for trusted travellers. This will translate into reduced transit times for travellers.
The construction included many innovative environmental and energy efficient strategies to minimize the environmental footprint of the new facility. The building design is being considered for the prestigious Leadership in Energy and Environmental Design (LEED) Gold certification.
August 21, 2009
Ben S. Bernanke, the chairman of the Federal Reserve, offered his most hopeful assessment in more than a year on Friday, asserting that “the prospects for a return to growth in the near term appear good.” In a much-awaited speech here to central bankers and economists from around the world, Mr. Bernanke went beyond the Fed’s most recent assessment that the nation’s economy was “leveling out” and that the recession was ending.
Noting that short-term lending markets are functioning “more normally,” that corporate bond issuance is strong and that other “previously moribund” securitization markets are reviving, Mr. Bernanke said that both the United States and other major countries were poised for growth.
In emphasizing not just the imminent end of the recession – the worst since at least the early 1980s if not since the Great Depression – but also the “good” chances of actual growth, Mr. Bernanke’s assessment was in some ways surprising. Read more here and here.
August 20, 2009
Ontario’s premier rallied municipal governments Tuesday to fight U.S. protectionism alongside the federal government.
Dalton McGuinty said the premiers have agreed to keep supporting efforts made by Prime Minister Stephen Harper to lobby U.S. President Barack Obama’s administration with regard to the “Buy American” provision of the U.S. government’s economic stimulus package.
“And I strongly encourage you to do the same,” he told the annual meeting of the Association of Municipalities of Ontario in Ottawa. […]
Ottawa city councillor Peter Hume, president of the AMO, said Ontario cities have already been talking to the American Conference of Mayors.
“We are encouraging our border colleagues, our border cities to talk to their mayors, to explain to them the impact that these policies would have on both of our economies,” he added. Read more here.
U.S. customs brokers and logistics companies that manage international shipments across the Southwest border say Mexico’s surprise move to swap out its entire border inspection force has not had any perceptible impact on trade flows so far.
Mexico’s customs agency on Sunday unexpectedly terminated its entire 700-person force of inspectors and replaced them with 1,454 newly vetted and trained agents in an effort to eliminate corruption as the government of Felipe Calderon continues its aggressive 30-month campaign to crush Mexican drug cartels, which have evolved into mafia-style organizations controlling many aspects of the economy. Drug gangs have murdered about 13,000 people, mostly rivals and police, as they fight to control their territory. The Mexican military was dispatched to airports and border stations to collect firearms from the terminated customs inspectors, the Associated Press reported. Read more here.
The beef trade row between Korea and Canada is expected to make a showdown within this month, as the World Trade Organization dispute settlement panel is expected to be established soon in line with the Canadian government's second request.
Ottawa is expected to ask again today [Thursday] that the WTO step in to resolve the beef row with Seoul that has been persisting for six years now. This second request would follow the initial request made on July 9 by Ottawa on grounds that Seoul refuses to remove its import ban of Canadian beef. Seoul would not be able to oppose arbitration upon a second request, experts say.
Korea imposed a ban on the Canadian meat in May 2003, following the confirmation of a case of mad cow disease, or scientifically known as bovine spongiform encephalopathy. Before the ban, Korea was Canada's fourth-largest beef export market, valued at $50 million in 2002. Read more here
The revision of this memorandum (PDF) is to reflect a clarification and amendment to the previous CBSA policy regarding the classification of marble and granite blocks or slabs, as a result of a Canadian International Trade Tribunal decision. Additional information has been added as it relates to the classification of crude stone slabs versus natural worked slabs, as well as commercial marble and granite versus geological marble and granite.
This memorandum outlines and explains the tariff classification of marble and granite blocks or slabs of tariff items 2515.12.00, 2516.12.10, 2516.12.90, 6802.21.00, 6802.23.00, 6802.91.00 and 6802.93.00.
August 19, 2009
Ontario Premier Dalton McGuinty is encouraging municipal governments to combat “Buy American” policies by reaching out to their neighbours below the border instead of adopting protectionist measures of their own.
“We are kidding ourselves if we think we can be safe by building a lifeboat just for the people in our communities,” McGuinty told the annual conference of the Association of Municipalities of Ontario this afternoon according to an advance copy of his speech. “In an age of globalization, at a time when our jobs depend on strong trade, what's called for is not a lifeboat for a select few. We need an ark, for all of us.”
McGuinty said the best way to recover from the economic downturn is by working together. “I want to thank all of you who have spoken out against 'Buy American' protectionism and reached out to your counterparts across the border,” McGuinty said, adding that he and other premiers have endorsed efforts by Prime Minister Stephen Harper to ask the U.S. to exempt Canada from the protectionist provision in its federal stimulus bill. “I strongly encourage you to do the same,” McGuinty said. Read more here.
Memorandum D3-1-7 (PDF) has been written to provide regulatory and procedural information about the Customs Self Assessment (CSA) Program for Carriers. It reflects amendments made to the Accounting of Imported Goods and Payment of Duties Regulations, Reporting of Imported Goods Regulations and Transportation of Goods Regulations explaining the requirements for the CSA program.
Memorandum D17-1-7 (PDF) has been written to provide information and guidelines regarding the Customs Self Assessment (CSA) Program for Importers. It reflects amendments made to the Accounting of Imported Goods and Payment of Duties Regulations, and the Reporting of Imported Goods Regulations explaining the requirements for the CSA.
August 18, 2009
The Asian Shippers’ Council on Monday denounced the growing practice of liner carriers charging peak season surcharges.
A host of carriers have instituted such surcharges in recent weeks, particularly between Asia and Europe, as demand increases slightly ahead of what used to be the traditional peak season for containerized cargo. Carriers are justifying the surcharges, typically from $150 to $450 per TEU, by arguing that repositioning costs are increasing. The ASC held its annual meeting over the weekend in Sri Lanka, after which it issued a statement blasting the surcharges as well as the Transpacific Stabilization Agreement’s efforts to raise rates among its members.
“In a world caught in recession where shippers are finding volumes declining, shipping tonnage piling up and container space in excess, carriers are still finding it reasonable to charge a peak season surcharge which questions the very logic of market driven prices,” the council said. “ASC denounces TSA’s call for united actions of its members for rate increases, as well as carriers creating artificial space shortage through manipulation of capacity. These actions are disruptive to the proper functioning of the market.” Read more here.
August 17, 2009
Japan has joined the short but growing list of developed countries to emerge from recession, its government said Monday, by posting 0.9% economic growth in the second quarter of 2009.
After the global financial crisis struck last year, the world’s second-largest economy shrank for four consecutive quarters, its largest decline since Second World War. But according to new data released Monday, recovering exports and a sweeping stimulus program helped it grow by an annualized growth rate of 3.7% during the three months ending June 30.
Cutting taxes and creating incentives to buy energy-efficient cars and household appliances helped encourage consumer spending. The Japanese government has also promised to spend roughly US$263 billion to stimulate the economy. That includes cash handouts and public spending on infrastructure projects such as reinforcing the country’s public schools against earthquakes.
Still, Japan’s unemployment rate was 5.4% in June, the highest in six years. And wages fell between April and June. Read more here.
(Miami Herald – Andres Oppenheimer)
The U.S.-Mexico-Canada summit earlier this week was almost universally described in the media as a photo-op, with no substantive results. I don’t think so: It may have been a major step in helping to convince President Barack Obama about the need of greater North American integration. […]
Among the things that Obama heard from his counterparts in Guadalajara:
• Canada and Mexico together buy eight times more U.S. goods than China. While North American trade has tripled since NAFTA went into effect 15 years ago, the growth rate of regional trade has slowed since 2001, largely because of increased border restrictions.
• U.S., Canadian and Mexican exports are losing market share in the global economy. While the three North American trade partners together accounted for 19% of world exports in 2000, they made up only 12.7% in 2008. The U.S. share alone dropped from 12% to 8% over the same period.
• Asian and European countries have signed new free trade agreements and strengthened existing ones in recent years. In North America, meantime, no new roads or border crossings have been built over the past seven years, which is increasing transportation costs along the border and making North America less competitive globally.
• To become more competitive and get out of the economic crisis sooner, NAFTA members should build new border crossings, ease obstacles to trade and harmonize production and labeling rules. If U.S., Mexican and Canadian companies could produce goods with labels that are valid in all three NAFTA member countries, they reach 450 million people living in North America instead of being confined to their home markets.
Read more here.
August 16, 2009
Bid to overturn Buy American regulations won’t have much effect while the U.S. president’s distracted by huge health-care reform challenge
If you’re a U.S. president confronting a 9.7-per-cent jobless rate and desperately seeking congressional support for health-care reform, what are the chances you’ll focus on fighting "Buy American" trade provisions?
But while U.S. protectionist provisions are unlikely to stir Barack Obama, they’re becoming a big political headache for Stephen Harper.
A meeting between the president and the prime minister is set for Sept. 16 in Washington, D.C., and the pressure will be on Harper to get results.
Additionally, the autumn looks like it will be a highly charged political season for Harper. A non-confidence vote looms the week of Sept. 28, potentially triggering an election — an ideal time for the PM to score a coup on U.S. protectionism.
Read the complete editorial here.