Canada Adds More Jobs Than Expected in December

(Reuters – Louise Egan)

Canada’s economy created more jobs than expected in December after three months of disappointing employment numbers, once again outperforming the United States, where labor market recovery failed to gain momentum. About 22,000 more Canadians were working in December than in November, primarily because of an inexplicable surge in manufacturing jobs. The unemployment rate held steady at 7.6%, according to Statistics Canada’s labor force survey released on Friday. Read more here.

Summary Labour Force Survey data and links to the data files are on the Statistics Canada website here.

U.S. Seeks Help on Transport Security

(Reuters)

U.S. Homeland Security Secretary Janet Napolitano called on Thursday for more international cooperation in protecting transport routes against attack and controlling trade in potentially dangerous materials.

In a speech in Brussels, Napolitano said security and customs authorities needed to work closer with industry to develop new technologies and share information to track chemicals that can be used to produce weapons.

Not enough effort is made, she also said, to minimise potential disruptions to trade and transport in case major infrastructure hubs are damaged by attacks.

“Consider the consequences of such an attack ... Beyond the immediate impact ... the consequences could quickly snowball and impact economies around the world,” Napolitano said during a two-day visit to meet European Union officials. Read more here.

Ocean Freight Rates Should Remain Stable

(International Freighting Weekly – Mike King)

Forwarders believe lines may have learned their lesson on capacity management

Ocean freight rates will remain stable in the first half of 2011 if shipping lines have learned the capacity management lessons of the last two years, according to leading forwarders.

Kaiying Chan, Senior VP for Ocean Freight, South Asia-Pacific at DHL Global Forwarding, told IFW the lines were now more efficient in their ability to manage capacity through peak and low seasons. 
 “There were no drastic rate decreases through 2010, like we have seen in the past,” he said. 

“Market levels stabilised during the slack season and for weeks now shipping lines have been announcing peak season surcharges again on various trade lanes like the transpacific eastbound. Fleets are growing as per demand, and if demand is moderate in comparison to supply, shipping lines understand well enough how to balance that.” Read more here.

U.S. BTS Releases North American Surface Trade Numbers for October

(CIFFA eBulletin)

Trade using surface transportation between the United States and its North American Free Trade Agreement (NAFTA) partners Canada and Mexico was 14.9% higher in October 2010 than in October 2009, reaching $70.6 billion, according to the Bureau of Transportation Statistics (BTS) of the U.S. Department of Transportation. The value of U.S. surface transportation trade with Canada and Mexico in October 2010 remained 2.9% below the October 2008 level despite the 2009-2010 increase.

BTS reported that the value of U.S. surface transportation trade with Canada and Mexico rose 3.3% in October 2010 from September 2010. Month-to-month changes can be affected by seasonal variations and other factors.

U.S.-Canada surface transportation trade totalled $40.7 billion in October, up 12.2% compared to October 2009. U.S.-Mexico surface transportation trade totalled $29.9 billion in October, up 18.8% compared to October 2009. In October, 86.1% of U.S. trade by value with Canada and Mexico moved on land.

Country of Origin Labeling Required for Packed Honey

(World Trade Interactive)

The Department of Agriculture’s Agricultural Marketing Service has adopted as final, effective Feb. 3, a July 2009 interim rule concerning labeling requirements for packed honey. This rule (a) establishes new regulations requiring country of origin labeling for packed honey bearing any official USDA mark or statement and (b) adds a new cause for debarment from inspection and certification service for honey if country of origin labeling requirements are not met for packages of honey containing official USDA grade marks or statements.

Trade Walls Are Back in Fashion

(James Milway — Toronto Star)

We may be out of the recessionary woods as unemployment is easing and economic growth is resuming slowly. Governments recognize that good fiscal and monetary policies are critical to getting us back on track. But equally important is the need to tackle protectionist threats and increase global trade.

Protectionism contributed mightily to the collapse of global trade from $5.3 billion (U.S.) in 1929 to $1.8 billion by 1933. This is a key reason why the Depression was so deep and long — and we can’t forget this lesson. While protectionist measures may be politically popular, they will only lengthen the recession and leave us all worse off. Read more here.

News from Thompson Ahern: Weekly Updates

An updated list of recently published government memorandums, notices, regulations and decisions for the week ending January 7, 2011 is now available on our website here.

EC Calls for Streamlining of Over-Complex Food Import Controls

(FoodQuality.com – Rory Harrington)

Europe’s food import controls are fit for purpose but their fragmented and complicated nature means they are inconsistently applied across the economic bloc, according to a report from the European Commission (EC). 

The body called for the streamlining of the complex framework governing scrutiny of food, animal feed, animals and plants, with a more “holistic” approach to provide greater coherence. Improvements to legislation and safety tools such as the Rapid Alert System for Food and Feed (RASFF), as well as the better allocation of resources were also vital to boost the efficacy of the structure.

But the EC stressed that while it had highlighted ways to improve import control methods, the current system was “effective" in ensuring consistent scrutiny across the EU’s 27 member states. Its proposals should be viewed as enhancements rather that a call to overall the system, it said.
The European Union (EU) is the world's largest importer of food and animal feed with imports of €85 billion for the period 2007-2009. Described as “pivotal to EU prosperity”, the food sector is the bloc’s largest manufacturing sector with a global annual turnover reaching €900bn, said the EC. Food safety controls for the region are enshrined in the General Food Law (Regulation EC No 178/2002) and the complementary Official Food and Feed Control Regulations (EC 884/2004). Read more here.

Shipping on the Right Terms

(Business Without Borders – Paul Gallant)

The latest iteration of ‘Incoterms’ will help you avoid costly misunderstandings when sending your products

“When was the last time you saw a truck floating?” asks Joy Nott, the president of the Canadian Association of Importers and Exporters. “I don’t think you have.”

But when Canadian companies import or export goods internationally, Nott estimates that 90% of them use the shipping code FOB – short for “Free On Board” or “Freight On Board.” The vast majority of Canadian international trade is by truck; international guidelines state that cargo sent FOB must be carried by a sea vessel. For international land and air transportation, shipping cargo FOB invites only confusion and possible legal headaches. Yet Canadian companies can’t seem to part with the term. Understanding shipping, and the terms that define it, is crucial for any business sending goods abroad.

Nott hopes an update of the International Commercial Sales Terms, known as Incoterms, could persuade Canadian businesses to look more carefully at what they’re agreeing to when they draw up shipping contracts with international suppliers and customers. The 11 revised Incoterms, which come into effect January 1, 2011, are aimed at making the responsibility of buyer and seller even more clear in an era where multimodal transportation has become the rule, not the exception. Read more here (membership required).

Logistics World Looks Beyond China in 2011

(Transport Intelligence – Thomas Cullen)

The world's economy may not be seeing the acute instability of the past two years but it is not quite out of the crisis yet. Growth in world trade remains strong at around 5%, which augurs well for the sectors such air and sea freight, yet the drivers of growth may not be quite the same as those in the recent past.

The health of the Chinese economy continues to be a vital question. Although growth in both domestic demand and export activity is still very high, the signs of over-heating continue to emerge. The money supply is growing fast, driven in part by the effects of quantitative easing in the U.S., whilst the economy still seems hugely over-balanced in favour of investment. Wage rates are rising and the viability of the property market is in question. There is the risk that an unstable China could result in an acceleration of the shift of manufacturing export production away from Southern China. This in turn could also lead eventually to a realignment of trade patterns with many other low cost markets benefiting.

In fact 2011 could well be the year when many emerging markets come of age. Although many of these, such as Brazil, are influenced by Chinese investment and demand, they are also experiencing growth in domestic consumption as GDP per head rises. Consequently opportunities for domestic orientated logistics provision in these markets look good. Indeed, whilst top-line growth numbers may be weaker, the attractions of markets in say Turkey or Brazil may be greater due to stable and transparent markets. This aspect may counter-balance possible instabilities in exports from these countries, such as agricultural products and mineral raw materials.
Read more here (subscription required).

New California Proposal for Greatly Expanded Product “Hazard Traits” Escalates Risks for Product Manufacturers

(Lexology – Alston and Bird LLP)

In yet another dramatic step in California’s assertion of regulatory authority over product design in the name of “environmental safety,” product manufacturers selling into California may soon be facing increased risks resulting from new and expansive product “hazard traits” just proposed by the California Office of Environmental Health Hazard Assessment (OEHHA).

On December 17, 2010, OEHHA announced proposed rulemaking that would exponentially expand the hazard trait characteristics of product ingredients, which, in turn, would substantially increase the exposure of product manufacturers to California environmental regulations. While California’s existing Proposition 65 requires labels or consumer notification for products containing “carcinogens” or “reproductive toxins,” the new list of over 30-plus hazard traits will eventually be combined with the green chemistry regulations and their associated lists of chemicals and products of concerns to trigger data call-ins and potential regulatory actions such as bans, recalls of inventory, substitution of ingredients and end of life stewardship requirements, as well as labels under the green chemistry regulations.

Read more here and click here to view Proposed New Hazard Traits.

Food Safety Overhaul to Become Law; ST&R Offers Webinar to Review Changes

(World Trade Interactive)

President Obama was expected to sign as early as Jan. 4 the FDA Food Safety Modernization Act, which incorporates the most sweeping changes in U.S. food safety regulation in 70 years. This law will affect all businesses involved in the U.S. food supply chain, foreign and domestic, who will need to meet new requirements related to food safety plans, certification standards and mandatory recalls.

Sandler, Travis & Rosenberg is offering a webinar on Thursday, Jan. 13, to help companies examine the provisions of this new law and plan how to efficiently and economically meet their obligations under it. Topics to be addressed include hazard analysis, written safety plans, verification of controls, import certification, safety standards for certain food categories, more FDA inspections, suspension and revocation of FDA registration, mandatory recalls, and criminal and civil penalties. Click here to register for this webinar.

One Year Later, ISF Has Unfinished Business

(American Shipper)

Contrary to industry expectations, U.S. importers have experienced relatively little hardship since the U.S. government began requiring importers to transmit 10 data elements in advance of vessel loading for security screening purposes.

The smooth implementation so far is a byproduct of extensive outreach by U.S. Customs and collaboration with international shippers in the years leading up to the Jan. 26, 2010 enforcement date, which was preceded by a one-year dry run to help both sides familiarize themselves with a new system.

Although the Importer Security Filing has proven less disruptive than anticipated, especially with regard to postponed shipments due to incomplete data, there are still a number of latent issues that trade specialists want to iron out. The top item on their agenda is shortening the statute of limitations for ISF penalties. Read more here.

Report Details Distribution Center Costs

(American Shipper)

A new report details the wide range in costs of operating a distribution center in different parts of the U.S. and Canada.

The Boyd Co., a corporate relocation firm based in Princeton, N.J., said, “with fuel and shipping rates projected to spike significantly in 2011, comparative costs for factors like labor, property taxes, energy and real estate are under the site selection microscope like never before. “While shipping rates are often negotiable among competing carriers, most other operating costs facing the warehouse site planner are fixed and a less than optimum operating cost structure can lead to a compromise of competitive position that will persist for years.” Read more here.

Boyd says copies of its report can be obtained on a complimentary basis by writing contact@theboydcompany.com.

Memorandum D15-2-17: Certain Bicycles Originating In or Exported From Chinese Taipei and the People’s Republic of China

(CBSA)

1. This memorandum refers to the application of anti-dumping duty to importations of certain bicycles originating in or exported from Chinese Taipei and the People’s Republic of China.

2. The memorandum is divided into five sections.

3. A definition of the subject goods is provided.

4. The milestone dates of the investigations are provided, along with the applicable classification numbers.

5. Information regarding the normal value of the subject goods and anti-dumping duty is provided.

Customs Notice 10-026: Application Forms to Transact Non-bonded Highway Carrier Operations and Non-bonded Freight Forwarder Code

(CBSA)

1. The purpose of this Customs Notice is to advise that application forms to transact non-bonded highway carrier operations at point of arrival in Canada (Form BSF329-7) and non-bonded freight forwarder code [to supply electronic supplementary data for advance commercial information (ACI) only, (Form BSF329-9)] are now available in electronic, fill-able, format on the Canada Border Services Agency (CBSA) Web site here. Similar changes to the bonded highway and bonded freight forwarders carrier code applications, and remaining modes, are forthcoming.

2. Forms BSF329-7 and BSF329-9 may now be used in place of forms E369 and E369-1 respectively. It is intended that Forms E369 and E369-1 will be discontinued effective July 1, 2011. Meanwhile, if application forms E369 and E369-1 are used as part of an application package, a separate hard-copy questionnaire must accompany the application. A copy of the CBSA questionnaire can be obtained by sending an email to carrier-cargo@cbsa-asfc.gc.ca.

3. To better serve our clients, and expedite processing of carrier code applications, the above-noted electronic forms now contain data elements taken from both the current application forms, combined with data previously requested on the separate hard-copy questionnaire.

4. In addition, in preparation for the implementation of eManifest for highway carriers, please note that Field # 14 of both electronic application forms asks if a “shared secret” access code to create an account for the e-Manifest portal is required. The eManifest portal is expected to be available in 2011.

5. Please direct any questions regarding this notice to:
Registration Unit, Canada Border Services Agency
Email: carrier-cargo@cbsa-asfc.gc.ca, Telephone: 1-866-749-6623

China Considering New Export Quotas on Rare Earth Alloys

(Industry Week – Agence France-Presse)

Also mulling separate export quotas for heavy and light rare earths

A report from Dow Jones Newswires on Dec. 30 said that China is considering new export quotas on rare earth alloys – a move that would further restrict shipments of the minerals used in a variety of high-tech industries.

The country – which has a near-monopoly in the industry – is also mulling separate export quotas for heavy and light rare earths, Dow Jones Newswires reported, citing an unnamed official with knowledge of the plans. The commerce ministry declined to comment on the report. Read more here.

Canada, EU Trade Deal Still on Track: Van Loan

(Montreal Gazette – Peter O’Neil, Postmedia News)

Canada’s talks on sealing a historic free trade agreement with the European Union by 2011 remain “ahead of schedule” despite a three-month delay in the presentation of formal offers by each side, according to Trade Minister Peter Van Loan.

While there are numerous areas of dispute, the delay was caused primarily by political concerns in debt-plagued and increasingly protectionist Europe. It was thought that the deal, by liberalizing trade in professional services, could exacerbate tensions over immigration, according to sources close to the talks.

Both sides had planned throughout 2009 to table formal offers on the most sensitive issues – including services, intellectual property, investment, culture and the opening of lucrative government procurement contracts to foreign bidders – prior to the sixth round of talks scheduled for mid-January.

The exchange-of-offers process has been moved to round seven, to take place in Ottawa in April. Read more here.

Stay of Enforcement Lifted on Testing and Certification of Some Non-Children’s Products

(World Trade Interactive)

Effective Jan. 26, 2011, the Consumer Product Safety Commission is lifting its stay of enforcement of the testing and certification requirements under the Consumer Product Safety Improvement Act of 2008 with respect to non-children’s products subject to CPSC regulations pertaining to vinyl plastic film, carpets and rugs, and clothing textiles. As a result, as of that date manufacturers (including private labelers) of such products that are imported for consumption or warehousing or distributed in commerce must have such products tested by a third-party conformity assessment body accredited to do so and must issue a certificate of compliance with the applicable regulations based on that testing.

The Influence Game: Safety, Trade Interests Clash

(Washington Post – Joan Lowy, The Associated Press)

An Obama administration proposal aimed at preventing air shipments of lithium batteries from causing fires in flight is drawing fierce opposition from some of the United States’ top trading partners, who say it would disrupt international shipping and drive up the cost of countless products.

The European Union, China, Japan, South Korea and Israel are lobbying against requiring air shipments of lithium batteries and products containing them to meet hazardous cargo regulations, diplomatic and industry officials told The Associated Press.

At a minimum the proposal could cost hundreds of millions of dollars and disrupt the flow of products such as cellphones, laptops, medical devices, water meters and electric car batteries, among others, these governments say.

But the Transportation Department estimates its proposal would cost only $9 million a year. Pilot unions want the additional safety precautions, saying it’s only a matter of time before the batteries cause a plane crash. Read more here. 

Asian Exports Helping Forests

(Prince George Free Press – Arthur Williams)

Forests, Mines and Lands Minister Pat Bell is feeling optimistic about the forest sector’s future in 2011, following two record-breaking months of exports to Asia. In September B.C. forest product exports to China and Japan exceeded the value of exports to the U.S. for the first time in history. In October the trend continued with $143.7 million in exports to China and Japan, verses $124 million to the U.S., Bell said.

“If we look at 2011, I think it’s going to be a much better year than anyone contemplated five or six months ago,” Bell said. “The Chinese market is not one that anyone could have anticipated the potential of. I’m often accused of being overly optimistic, but even in my most optimistic version it was 2013 to get where we are today.” Read more here.

Study Shows Port is Central to Recovery

(Port Strategy)

Montreal’s ability to emerge from recession has long been pointed to as a guide to what can be achieved from a downturn, but a global study has now outlined the port’s part in the picture. The study, entitled The Path to Economic Recovery, covers 150 global metropolitan areas and has been jointly undertaken by the Brookings Institution, London School of Economics & Political Science and Deutsche Bank Research.

The authors of the study attribute Montreal’s strong performance to three factors, which include the Canadian banking system and the aerospace and electronics sectors – and the port’s dynamism. Read more here.

Canada Seeks to Expand [Buy American] Deal

(Montreal Gazette – Andrew Mayeda, Postmedia News)

Buy American. Negotiations for broader agreement on horizon

Canada will enter negotiations with the United States early next year in the hopes of reaching a broader, long-term agreement based on the Buy American compromise the two sides reached earlier this year, says Trade Minister Peter Van Loan.

The worst fears of Canadian exporters – getting frozen out by their trading partner – became a reality when the U.S. government included Buy American provisions in its $787-billion U.S. economic-stimulus legislation. The bill required all iron, steel and manufactured goods used in construction projects that received stimulus funding to be produced in the United States. […]

Van Loan declined to provide a timeline for a wider deal, noting that individual states will have to be convinced. “It’s too early to predict what the timeline would be, because there’s so many variables. You’re not just dealing with a national government, you’re dealing with specific states,” he said, adding that any deal likely would be separate from the North American Free Trade Agreement. Read more here.

Permeable to Trade, Impregnable to Threats

(The Economist Blog)

THERE was a time when Canadians boasted that the line separating Canada from the United States, stretching for 8,900 kilometres (5,500 miles), formed the world’s longest undefended border. Security measures taken by the American administration in the wake of the terrorist attacks of September 11th 2001 put an end to that. […]

In the last nine years, Canadian governments have tried to keep the border as open as possible for trade while at the same time allaying American security fears with a series of deals. It hasn’t worked. Exporters continue to complain about a thickening of the border, which has helped reduce goods shipments to the United States from 87% of the total in 2001 to 73% in 2009 (though the emergence of new trading partners in the developing world and a lengthy recession south of the border also played a part).

So in some ways it was not a surprise when Stephen Harper, the Canada’s conservative prime minister, confirmed in one of his year-end interviews that Canada was negotiating a new security and economic deal with the Americans. Rumours that something called a perimeter security arrangement was in the works had been circulating for weeks. One media outlet even got its hands on the communications strategy the government would use to sell the deal to Canadians sceptical of giving away sovereignty in exchange for market access. Read more here.

Is Globalisation on the Retreat in 2011?

(Gideon Rachman — Financial Times)

During the past two years, the world has experienced its deepest economic crisis since the 1930s. But – despite the fears of many experts – there has been no major outbreak of protectionism. Globalisation, the economic and political mega-trend of the past three decades, is still firmly in place.

However, when Barack Obama visited India recently, the US president warned his hosts that the debate about globalisation has re-opened in the west. The reasons for this are obvious. The western world has come out of the Great Recession in much worse shape than emerging powers. [...] Americans and Europeans are increasingly ill at ease with the “new world order” that emerged after the end of the cold war. As a consequence, a backlash against globalisation is forming – and it is likely to grow in strength. Read more here.

ITC Backs Rambus With 34-Company Probe

(Peter Clarke — EETimes/Design & Reuse)

The United States International Trade Commission has announced that it will launch an investigation into various chips and memory controllers and products that contain them, including PC motherboards, modems, routers and computers, following a complaint filed by Rambus Inc.

Rambus was already pursuing six companies through the law courts alleging patent infringement but additional companies cited as targets of the investigation include: Asus, Cisco, Garmin, Hewlett-Packard Hitachi GST, Motorola and Seagate as part of a list of 34 companies. Read more here (subscription required) and here.

US Reportedly to Take Step Towards Speed Limiter Legislation

(Truck News)

Reports surfaced yesterday that the US National Highway Traffic Safety Administration (NHTSA) is looking to initiate a Notice of Proposed Rulemaking that would require trucks to activate speed limits.

Truckinginfo.com, the Web site for US-based Heavy-Duty Trucking, reported the official announcement will come Monday. Ontario and Quebec already require the mandatory use of speed limiters.

The Owner-Operators Independent Drivers Association (OOIDA), which actively lobbied against the Canadian speed limiter laws, was quick to condemn the impending proposal.

“Speed limiting a truck at 68 miles per hour, or at any other speed, will not improve highway safety,” said Todd Spencer, executive vice-president of the OOIDA. “All credible highway research shows that highways are safest when all vehicles travel at the same speed and that different speeds for cars and trucks actually increase the likelihood of accidents.” Read more here.

Exercises With Police to Go On: Border Agency

(Postmedia News/Montreal Gazette) 

Canada Border Services Agency officials say they aren’t pulling the agency out of participation in all joint operations with other law enforcement agencies, contradicting earlier news reports.

“The CBSA is not ceasing all joint force operations,” agency vice-president Pierre Sabouriin, said in a statement released last week.

“The CBSA values its strong relationships within the law enforcement community and actively participates in 30 joint force operations partnership with Canadian and American police agencies. This will continue.” Read more here.

Cow-Dung Toothpaste? Taryn Simon’s Book “Contraband” Unloads America’s Baggage

(Sean O’Hagan — The Guardian)

It took five sleepless days and nights inside an airport for Simon to capture these shots of seized goods, from counterfeit jewellery to deer penis. The result is a testament to the ingenuity of those attempting to bring banned goods into America – and those preventing them

Taryn Simon’s latest book, Contraband, consists of 1,075 photographs of items confiscated by US customs and the US postal service international mail facility at John F Kennedy international airport, New York, from 16 November to 20 November, 2009.

The seized items include various drugs (Xanax, anabolic steroids, Ritalin, khat, ketamine, hashish), counterfeit jewellery, bags, hats, sportswear, shirts, DVDs and watches as well as several kinds of plants, seeds, grass, nuts and foodstuffs. Among the more exotic confiscated substances are deer antlers, deer blood, deer penis and deer tongue, as well as cow-dung toothpaste and cow urine. Read more here.

PayPal Taps Cross-border Trade Potential With New China Deal

(Michael Kan — IDG News/PC World)

EBay’s online payment service PayPal is hoping to hit a “sweet spot” in China’s e-commerce market by making it easier for Chinese merchants to make money from overseas sales.

On Tuesday, PayPal signed an agreement with the Chinese city of Chongqing to jointly develop an international e-commerce hub that seeks to build cross-border trade between Chinese merchants and buyers from abroad.

PayPal, with access to 190 countries and regions, has become an important tool for Chinese merchants wanting to make sales to Internet users abroad. At the end of this year, the company expects China to have more than 1 million users of its online service, most of them small and medium-size businesses. Read more here.