December 31, 2010
News from Thompson Ahern: Weekly Updates
An updated list of recently published government memorandums, notices, regulations and decisions for the week ending December 31, 2010 is now available on our website here.
December 29, 2010
Surprise of the Year: Price Paradox
(Export Development Canada – Peter G. Hall)
Looking back over 2010, there was no lack of drama. The year began with a bang: news that we ended 2009 with a surge of growth combined with evidence of continuation into the New Year. Most were proclaiming recovery. But just as abruptly, the engine stalled in the second quarter as the effects of stimulus faded. Then came the successive waves of sovereign default fears. In all the turbulence, there are many possible candidates for the big surprise. Can we narrow it down to one?
Many immediately cite the developed economies that are on the brink of default. This may well be the shock of the decade, but the risks faced by developed sovereigns were reasonably well known at the beginning of 2010. Some suggest that, after becoming Keynesian all over again in 2009, we are Keynesian no longer, as governments go into fiscal retreat. It is inevitable, and it will be a shock (as you and I foot the bill), but at present, it’s still largely a future event. And in contrast to the late-2008 policy coordination, governments are currently all over the map: some have announced strict austerity plans, others seem undecided, and another group is actually augmenting stimulus spending.
Perhaps more surprising is the rapid response of business, primarily in the US, to the downturn. Contrary to previous cycles, American firms were quick to rationalize operations, and unlike the past, have maintained solid productivity growth during the lean period. Many don’t have a cash problem – US firms are sitting on hoards of it. But the cash doesn’t have many places to go. Slow demand and low utilization of current capacity are dual deterrents to new investment. One place the cash is going is to bonuses, notably in financial firms that were close to the brink just a few months back.
Read more and/or watch the video here.
Looking back over 2010, there was no lack of drama. The year began with a bang: news that we ended 2009 with a surge of growth combined with evidence of continuation into the New Year. Most were proclaiming recovery. But just as abruptly, the engine stalled in the second quarter as the effects of stimulus faded. Then came the successive waves of sovereign default fears. In all the turbulence, there are many possible candidates for the big surprise. Can we narrow it down to one?
Many immediately cite the developed economies that are on the brink of default. This may well be the shock of the decade, but the risks faced by developed sovereigns were reasonably well known at the beginning of 2010. Some suggest that, after becoming Keynesian all over again in 2009, we are Keynesian no longer, as governments go into fiscal retreat. It is inevitable, and it will be a shock (as you and I foot the bill), but at present, it’s still largely a future event. And in contrast to the late-2008 policy coordination, governments are currently all over the map: some have announced strict austerity plans, others seem undecided, and another group is actually augmenting stimulus spending.
Perhaps more surprising is the rapid response of business, primarily in the US, to the downturn. Contrary to previous cycles, American firms were quick to rationalize operations, and unlike the past, have maintained solid productivity growth during the lean period. Many don’t have a cash problem – US firms are sitting on hoards of it. But the cash doesn’t have many places to go. Slow demand and low utilization of current capacity are dual deterrents to new investment. One place the cash is going is to bonuses, notably in financial firms that were close to the brink just a few months back.
Read more and/or watch the video here.
Loophole in Cargo Security?
(Video: Fox News / Story: StarTribune/NYT)
Ever since the terror attacks of Sept. 11, 2001, each new security threat to airlines has increased the rigor of passenger screening. They have to remove their shoes and carry liquids only in small containers. They have to take off their belts and take laptops out of their cases. Now, they have to submit to full-body scanning machines and intrusive pat-downs.
Ever since the terror attacks of Sept. 11, 2001, each new security threat to airlines has increased the rigor of passenger screening. They have to remove their shoes and carry liquids only in small containers. They have to take off their belts and take laptops out of their cases. Now, they have to submit to full-body scanning machines and intrusive pat-downs.
But since the discovery in October of explosives from Yemen hidden in ink cartridges on cargo planes, the $50 billion freight business has seen little of the same kind of escalating security.
Even in the midst of one of the air cargo industry's busiest periods of the year, governments and aviation experts continue to struggle to come up with ways to strengthen cargo security without paralyzing a business essential to global trade. Read more here.
December 28, 2010
Airport Customs Agents Granted More Search Powers
(Michael Wood — Calgary Sun)
Border guards are poised to receive power to manhandle airport and port personnel under proposed regulations concerning new so-called customs-controlled areas.
The draft regulations are slated to go into effect at three airports next spring in an effort to combat “internal conspiracies” and crack down on the importation of contraband at major hubs across the country, as outlined by the Canada Border Services Agency.
CBSA spokeswoman Patrizia Giolti said the new powers will apply to any employee entering or leaving a customs-controlled area, leaving them subject to interrogation, non-invasive scans of their possessions and, potentially, strip searches by members of the CBSA. Read more here.
The draft regulations are slated to go into effect at three airports next spring in an effort to combat “internal conspiracies” and crack down on the importation of contraband at major hubs across the country, as outlined by the Canada Border Services Agency.
CBSA spokeswoman Patrizia Giolti said the new powers will apply to any employee entering or leaving a customs-controlled area, leaving them subject to interrogation, non-invasive scans of their possessions and, potentially, strip searches by members of the CBSA. Read more here.
Six Reasons to Put China in Your Business Plan
(CanadExport)
Doing business in China just got easier. The Canadian Trade Commissioner Service recently opened new offices in six emerging business centres. Whether you are looking to start a new venture, find local business experts or seek business opportunities, the TCS in China is now just a phone call away.
The six new offices will help Canadian companies prepare for international markets, assess market potential, find qualified contacts and resolve problems. The new offices are established in partnership with the Canadian Commercial Corporation, whose experts will provide contracting and procurement advice that can help companies mitigate project risks.
The Trade Commissioner Service is now ready to help Canadian companies do business in the six cities below. Here is a snapshot of each:
Shenzhen: Given it’s proximity to Hong Kong, Shenzhen is often the first stop on a foreign company’s mainland expansion. Thirty years ago it was a sleepy fishing village; now, it’s the richest city in China (per capita) and is home to more than 8 million consumers.
Chengdu: With a market reach of over 200 million consumers, Chengdu is an economically diversified city in Western China’s Sichuan province. The city is home to 11 million people. It’s a high-tech city but it’s also known for being a manufacturing centre for the electronics, pharmaceuticals, chemicals, metallurgy and food processing industries.
Wuhan: As the fourth-largest city in China, Wuhan’s major industries include manufacturing in sectors like automotive, steel and iron, and high-tech industries, including opto-electronic technologies, pharmaceuticals, biology engineering, new materials and environmental protection.
Nanjing: This city of over 6 million people is a key deep-water port at the intersection of key water and land transport arteries. Nanjing boasts a number of successful investment zones and has focused on technology-intensive industries such as information technology and electronics, bio-pharmaceuticals and advanced manufacturing.
Qingdao: Known as “Switzerland in the East,” the picturesque coastal city of Qingdao is a key economic centre and port city. But it’s more than just pretty landscapes; the city’s seaport ranks first in China in terms of resources used for foreign trade, and 15th internationally when it comes to output. In fact, Qingdao’s development is largely attributed to foreign investments and international trade.
Shenyang: This city is home to some of China’s leading firms in the aerospace, heavy machinery, defence, automotive, electronics and software sectors. It’s close to Japan, South Korea, Mongolia and Russia so Shenyang is a gateway into the Northeast Asia Economic Region and the Bohai Sea Rim Economic Region.
To learn more about how Canadian Trade Commissioners can help you succeed in China, go to the China page on the Canadian Trade Commissioner Service website here.
Doing business in China just got easier. The Canadian Trade Commissioner Service recently opened new offices in six emerging business centres. Whether you are looking to start a new venture, find local business experts or seek business opportunities, the TCS in China is now just a phone call away.
The six new offices will help Canadian companies prepare for international markets, assess market potential, find qualified contacts and resolve problems. The new offices are established in partnership with the Canadian Commercial Corporation, whose experts will provide contracting and procurement advice that can help companies mitigate project risks.
The Trade Commissioner Service is now ready to help Canadian companies do business in the six cities below. Here is a snapshot of each:
Shenzhen: Given it’s proximity to Hong Kong, Shenzhen is often the first stop on a foreign company’s mainland expansion. Thirty years ago it was a sleepy fishing village; now, it’s the richest city in China (per capita) and is home to more than 8 million consumers.
Chengdu: With a market reach of over 200 million consumers, Chengdu is an economically diversified city in Western China’s Sichuan province. The city is home to 11 million people. It’s a high-tech city but it’s also known for being a manufacturing centre for the electronics, pharmaceuticals, chemicals, metallurgy and food processing industries.
Wuhan: As the fourth-largest city in China, Wuhan’s major industries include manufacturing in sectors like automotive, steel and iron, and high-tech industries, including opto-electronic technologies, pharmaceuticals, biology engineering, new materials and environmental protection.
Nanjing: This city of over 6 million people is a key deep-water port at the intersection of key water and land transport arteries. Nanjing boasts a number of successful investment zones and has focused on technology-intensive industries such as information technology and electronics, bio-pharmaceuticals and advanced manufacturing.
Qingdao: Known as “Switzerland in the East,” the picturesque coastal city of Qingdao is a key economic centre and port city. But it’s more than just pretty landscapes; the city’s seaport ranks first in China in terms of resources used for foreign trade, and 15th internationally when it comes to output. In fact, Qingdao’s development is largely attributed to foreign investments and international trade.
Shenyang: This city is home to some of China’s leading firms in the aerospace, heavy machinery, defence, automotive, electronics and software sectors. It’s close to Japan, South Korea, Mongolia and Russia so Shenyang is a gateway into the Northeast Asia Economic Region and the Bohai Sea Rim Economic Region.
To learn more about how Canadian Trade Commissioners can help you succeed in China, go to the China page on the Canadian Trade Commissioner Service website here.
Indian Ocean Declared a ‘War Zone’
(International Freighting Weekly – Katerina Kerr)
The Indian Ocean has been declared a “war zone” by the insurance sector’s Joint War Committee (JWC) following the recent increase of pirate attacks in the Indian Ocean.
The move has seen shipowners operating along the East African coast double their freight rates.
According to KenolKobil, a Nairobi-based fuel retailer, freight rates now stand at an average of US$30 per tonne of cargo up from the previous average of $15 per tonne. Read more here.
The Indian Ocean has been declared a “war zone” by the insurance sector’s Joint War Committee (JWC) following the recent increase of pirate attacks in the Indian Ocean.
The move has seen shipowners operating along the East African coast double their freight rates.
According to KenolKobil, a Nairobi-based fuel retailer, freight rates now stand at an average of US$30 per tonne of cargo up from the previous average of $15 per tonne. Read more here.
It’s Clean, and Complicated
(Business Standard – T S Vishwanath)
With countries laying out stringent preconditions for clean energy subsidies, technology-led trade issues are emerging as possible new areas of conflict.
The fight among the World Trade Organisation (WTO) members over clean technologies and energy subsides has been in the news for the past few months, which clearly indicates that the next area of focus for countries would be technology-led trade in the coming years.
A couple of months ago, the U.S. voiced its intention to seek the dispute settlement route against Beijing over alleged green technology subsidies, export restrictions on raw materials and other measures that China claims are necessary to put the country on a cleaner growth path.
Japan, on the other hand, has recently initiated a WTO complaint against one of Canada’s province’s green energy subsidies, alleging that they discriminate against foreign suppliers. At issue are stringent local content requirements of Ontario’s Feed-in Tariff Programme, which allows the province to subsidise electricity operators that use renewable energy if up to 60% of the inputs are manufactured in the province. Only those foreign companies that set up shop in Ontario and produce electricity and equipment there are eligible for the subsidy. Read more here.
With countries laying out stringent preconditions for clean energy subsidies, technology-led trade issues are emerging as possible new areas of conflict.
The fight among the World Trade Organisation (WTO) members over clean technologies and energy subsides has been in the news for the past few months, which clearly indicates that the next area of focus for countries would be technology-led trade in the coming years.
A couple of months ago, the U.S. voiced its intention to seek the dispute settlement route against Beijing over alleged green technology subsidies, export restrictions on raw materials and other measures that China claims are necessary to put the country on a cleaner growth path.
Japan, on the other hand, has recently initiated a WTO complaint against one of Canada’s province’s green energy subsidies, alleging that they discriminate against foreign suppliers. At issue are stringent local content requirements of Ontario’s Feed-in Tariff Programme, which allows the province to subsidise electricity operators that use renewable energy if up to 60% of the inputs are manufactured in the province. Only those foreign companies that set up shop in Ontario and produce electricity and equipment there are eligible for the subsidy. Read more here.
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