News from Thompson Ahern: Weekly Updates

An updated list of recently published government memorandums, notices, regulations and decisions for the week ending April 13, 2011 is now available on our website here.

U.S. and EU Considering WTO Actions Against Argentine ‘Protectionist Practices’

(MercoPress)

The U.S. and forty countries which formalized a joint statement before the World Trade Organization complaining about Argentina’s trade restrictions are considering moving a step further and begin a “disputes settlement” process which could lead to an open condemnation if the administration of President Cristina Kirchner does not lift the protectionist network.

According to Buenos Aires daily Clarin quoting WTO sources in Geneva, “expectations are that it will be the U.S. that presents the “disputes settlement” process since the White House was the main sponsor of the joint statement. The process could end with a formal condemnation of Argentina opening the way for commercial reprisals”. Read more here.

As Mexico Booms, Canadian Exporters Benefit

(The Globe and Mail – Kevin Carmichael)

The most alarming statistic in Bank of Canada Governor Mark Carney’s trade speech last week was this one: among Group of 20 countries, only Britain has lost a greater share of international trade since 2000 than Canada.

Some trading nation, eh?

Canada’s share of imports by the world’s major economies shrunk over the past couple of decades, with one exception: Mexico, the unsung hero of the global economy.

A few weeks ago, Export Development Canada chief economist Peter Hall did me the favour of crunching some numbers. […] Using the International Monetary Fund’s “Direction of Trade” data, Mr. Hall showed that Canadian exporters might finally be doing some serious business with Canada’s other partner in the North American free-trade agreement. Canada’s share of Mexican imports was 2.9% in 2010, down slightly from 3.1% in 2008 and 2009. But that’s markedly better than 1993, when Canadian exports represented 1.8% of Mexico’s purchases from abroad. Read more here.

Cuts to Food-Safety Inspection Force Will Impact Food Quality in Canada: Union

(Sarah Schmidt — Postmedia News)

Canada’s food-safety inspection force will shrink by as many as 100 inspectors — cuts the workers’ union says will have an impact on the safety of food purchased by Canadians.

The union representing food inspectors says the cuts, to be implemented over three years to help save the Canadian Food Inspection Agency $56 million in operating costs by 2014-15, will reverse increases to the inspection force that were put in place in response to the deadly listeriosis outbreak in 2008.

“This decision will make the inspector shortage worse, not better. And because the government has failed to consult its own inspectors, they are cutting food safety blindly with little understanding of the consequences,” Bob Kingston, president of the Agriculture Union of the Public Service Alliance of Canada, said Wednesday. Read more here.

Border Security Threatened by Job Cuts, Critics Say

(CBC News)

Ottawa ‘playing with fire’ by reducing CBSA jobs, says security expert

Major job cuts at the Canada Border Services Agency could undermine national security and public safety, according to a security expert and public-sector union officials.

A total of 1,137 border agency employees were notified on Wednesday that they could lose their jobs as part of a massive wave of federal budget cuts, according to the Public Service Alliance of Canada (PSAC).

Officials with PSAC did not have a regional breakdown of affected jobs at the CBSA, which staffs border crossings across the country. Read more here.

Expanding Trade a Top Priority as Harper Prepares for Summit of the Americas

(The Canadian Press)

Canada is willing to discuss everything — including its controversial supply management system — when it sits down with other countries to negotiate a tantalizing trans-Pacific free trade zone, said Trade Minister Ed Fast.

Fast underlined that the Conservatives have promised egg, dairy and poultry farmers that they will protect their interests.

But he also suggested that all the countries involved — including nations such and the United States and New Zealand — would have their own sticking points to hash out.

Fast made the comments as he and Prime Minister Stephen Harper prepare to participate in the Summit of the Americas in Cartagena, Colombia this weekend. The summit brings together 34 hemispheric leaders.

“We’re prepared to discuss everything at the negotiating table, and every partner brings certain sensitive areas to the table which they defend aggressively, and at the end of the day they make a decision on whether to sign on to an agreement, whether they see the trade interests of their country being moved forward in a substantive way,” Fast said in an interview from Lima, Peru. Read more here.

Changes to Non-safety Food Packaging Regulations and Development of a Self-assessment Labelling Tool

(CFIA)

The Canadian Food Inspection Agency’s (CFIA) inspectors will continue to perform risk-based label verification activities. The CFIA is also developing and implementing an online self-assessment labelling tool. This tool will help producers, manufacturers and retailers create compliant labels. While it is intended for industry, this new public tool may also be used by consumers to learn more about labelling and the rules companies are required to follow.

The intent of this tool is to create greater industry awareness, understanding and compliance with labelling requirements for a broad range of information such as:
 
• net quantity, 
• date markings,
• nutrition labelling, 
• bilingual labelling, and
• legibility and location.

It is expected that this tool will reduce the amount of time CFIA staff spend working directly with industry to explain and clarify labelling rules. The CFIA expects to launch the labelling tool in 2014-2015. In the interim, industry and other stakeholders will be consulted to ensure that this new tool meets its desired outcome.

CFIA inspectors will continue to perform risk-based label verification activities to check that the information on the labels reflects what is actually in the product. For example, the CFIA may verify a product labelled as containing “0 grams of trans fat” per serving to see if the product truly contains that level. As well, the CFIA will continue to test for the potential presence of undeclared allergens in food products.

Ongoing label verification activities will continue to be carried out in many ways; through investigations into complaints, facility inspections, inspections at the retail level and laboratory testing of products, including verification of the nutrient content or calories in the food at manufacturers, importers and retailers.

In addition to developing the labelling tool, the CFIA will be removing regulations that restrict the sizes of containers for food. These regulations are outdated and limit industry innovation and consumer choices. Repealing regulations on container sizes across food commodities will provide more options for consumers and industry alike.

Food container size regulations are not related to health and safety. Changing the CFIA’s role and activities in this area allows the Agency to place a greater focus on higher priority activities including health and safety aspects of the food production and regulatory systems.

Maersk to Raise Cargo Rates Again

(Journal of Commerce)

Carrier to implement increase rate from $400 to $630

Maersk Line is implementing a new round of general rate increases on various trade lanes that will take effect in May.

The Danish carrier said it will push its rates up by $400 per 20-foot, $500 per 40-foot, $565 per 40-foot high cube and $630 per 45-foot high cube container on cargo from Far East Asia to the U.S. West Coast, starting May 1.

From Far East Asia to the U.S. East Coast, the carrier will apply increases of $560 per 20-foot, $700 per 40-foot, $790 per 40-foot high cube and $885 per 45-foot high cube container, effective May 1. Rates on dry shipments from the U.S. to Far East Asia will increase by $160 per 20-foot, $200 per 40-foot/high cube and $250 per 45-foot high cube container, effective May 1. Read more here.

Drop Tariff Walls, CEOs Tell Tories

(Edmonton Journal – Jason Fekete)

Protectionism in dairy, poultry hurting wider trade, says group

At the same time it’s promising innovation and a new international trade strategy within the federal budget, the government is protecting an antiquated supply management system that is hurting the economy, business leaders say.

In the recently released budget, the Tories pledged a new global commerce strategy that will identify priority trade markets around the world where there’s the biggest potential for growth and economic benefits for Canada.

With Ottawa fully engaged in several major bilateral trade negotiations as well as the Trans-Pacific Partnership bloc, there were high hopes that the Tories might signal they’re willing to retreat on their defence of a supply-management system that protects dairy and poultry farmers and forces consumers to pay higher prices, said John Manley, president of the Canadian Council of Chief Executives, said Tuesday in an interview. Read more here.

Food-Safety Workers Among Hardest Hit by Harper Budget Cuts

(The Globe and Mail – Bill Curry)

Veterinarians and other inspectors responsible for food recalls and ensuring the safety of Canadian meat are among the hundreds of federal public servants who will be told this week their jobs are at risk. The Globe and Mail has learned that the Canadian Food Inspection Agency and Agriculture Canada will be among the hardest-hit departments as Ottawa rolls out where it will cut 19,200 jobs across the country.

Union leaders say the sheer volume of affected staff working in food safety directly contradicts the Conservative government’s claims that budget cuts will largely be limited to “back office” efficiencies.

According to the CFIA’s own website, its team of veterinarians form “the first line of defence against the spread of many diseases among animals, and between animals and humans.” The agency says its work includes inspecting and certifying animals and meat products for domestic and international markets, as well as food recalls and emergency response. Read more here.

Temporary Instructions for Reporting NRCan 5 Data Elements

(Natural Resources Canada)

As per Customs Notice CN12-012 Amendment 11 to the Energy Efficiency Regulations, please find below temporary import reporting instructions.

Please note, the list of HS codes for Amendment 11 have been finalized and have submitted to the CBSA.

Temporary Instructions for Reporting NRCan 5 Data Elements

Amendment 11 to Canada’s Energy Efficiency Regulations was published in Canada Gazette Part II on October 12, 2011. This amendment comes into force on April 12, 2012. As part of the Regulations, importers have an obligation to report import information on energy-using products they import into Canada. HS codes for those products under Amendment 11 are still being compiled and regrettably will not be in the ACROSS system for April 12, 2012. For the time being, NRCan is providing temporary instructions to facilitate the reporting of import data until the ACROSS system is fully functional.

Background

Amendment 11 will expand the scope of some products such as electric motors, dry-type transformers and large air conditioners. Amendment 11 will introduce new minimum energy performance standards (MEPS) and associated reporting and compliance requirements for five new products:

       

1) standby for electronic products (compact audio products, television (TV) and TV combination units, video products);

2) external power supplies;

3) digital TV adaptors;

4) electric boilers;

5) single package vertical air-conditioners and heat pumps.

Dealers (manufacturers, importers, retailers) who are importing regulated energy-using products into Canada must submit, to the CBSA, the following five data elements:

1) name of product;

2) model number;

3) brand name, if any;

4) address of the dealer who is importing the product; and

5) purpose of the importation (for sale or lease in Canada without modification, for sale or lease after being modified to comply, or for use as a component in any other product to be exported from Canada).

Issue

A list of HS codes for newly-regulated products under the Amendment 11 will be provided to the CBSA early in April 2012. Effective date to submit required data elements to the CBSA using ACROSS service options 463 and 471 to obtain release of newly-regulated energy-using products will be announced after the list of HS codes is available. Until the ACROSS is functional for newly-regulated products, importers and customs brokers should follow instructions below.

Instructions

The reporting requirements of Canada’s Energy Efficiency Regulations are a legal obligation of dealers and importers. As an annex, NRCan has provided a list of newly regulated products affected by Amendment 11. When importing these products, dealers and importers are asked to report the required five data elements to NRCan using the following e-mail address: importation@nrcan-rncan.gc.ca with the subject line “NRCan 5 Data Elements”. NRCan will continue to work with dealers and importers to provide clarity on how to clear their shipments and meet their legal obligations during this period.

Reminder to dealers: NRCan expects dealers of the newly-regulated products under Amendment 11 to comply with the minimum energy performance standard and reporting requirements starting April 12, 2012, when Amendment 11 comes into force. As well, NRCan will monitor import data to ensure that imported regulated energy using products are in compliance with the Energy Efficiency Regulations.

NRCan regrets the additional effort this entails and will be working with CBSA to return the system to its full functionality as soon as possible. For more information on Canada’s Energy Efficiency Regulations visitwww.oee.nrcan.gc.ca/regulations/11239 or contact us at Importation@nrcan.gc.ca.

Canada to Counter-Appeal WTO Ruling on U.S. COOL

(Manitoba Co-operator)

Filing claims WTO panel’s decision didn’t go deep enough

A World Trade Organization panel’s ruling criticizing the U.S. government’s country-of-origin labelling (COOL) law is now under appeal from both sides of the table.

The WTO last week reported receiving formal notice that Canada, like the U.S., plans to appeal parts of last November’s ruling from the WTO Dispute Settlement Body (DSB).

The U.S. filed its appeal on March 23, seeking to overturn the DSB’s ruling that COOL violates Washington’s WTO obligations and “does not fulfil its legitimate objective” of consumer education.

Canada, however, wants to shut down the part of the DSB’s ruling that implies COOL’s main objective was legitimate in the first place. Read more here.

After WTO Decision, China Establishes Rare Earth Regulatory Body

(Mary Swire — Tax-News)

Following last month’s request by several countries for consultations at the World Trade Organization (WTO) on what they consider to be China’s unfair export restraints on rare earths, the latter has now set up a regulatory body to oversee their exploitation.

The 17 minerals that make up ‘rare earths’ are incorporated into many high technological goods, including superconductors, hybrid car components (primarily batteries and magnets), flat-screen televisions, mobile phones, lasers and many defence-related products.

China produces over 90% of the world’s rare earths supply, but has pointed out that it only holds around one-third of global reserves. However, there has been growing concern that the world may soon face a shortage, particularly as China regulates its exports by quotas, duties and export pricing requirements, as well as related export procedures and requirements. Read more here.

Canadian Retailers Are Concerned About Long Weekend Cross-Border Shopping

(Andrea Macpherson — News1130)

The situation will likely get worse once new regulations go into effect June 1st, which increases the amount of goods you’re permitted to bring back

Retailers are worried your cross-border shopping this weekend will hurt their bottom line. They’re also bracing for the situation to get worse once the amount you’re permitted to bring back is upped in June.

The new regulations, which go into effect June 1st, allow Canadian travellers to bring back $200 worth of goods per 24 hours visit across the border.

Shafiq Jamal with the Retail Council of Canada says this will make it very difficult to compete with US retailers. Read more here.

Food Safety a Top Priority

(Edmonton Journal – George Da Pont)

Re: “Food inspections take hit in budget,” Editorial, April 5.

Let me assure Canadians that the Canadian Food Inspection Agency will continue to verify that labels on food products are accurate and follow Canadian labelling regulations.

Verification is carried out in many ways - through investigations into complaints, facility inspections, inspections at the retail level and laboratory testing of products, including verification of the nutrient content or calories in the food at manufacturers, importers and retailers.

The new web-based label self-assessment tool mentioned in Budget 2012 will help industry create compliant labels. There will be no reduction in the CFIA’s activities to verify compliance with labelling regulations.

The CFIA will continue to verify ingredient lists, including the potential presence of undeclared allergens. While the new labelling tool is intended to better inform industry of its labelling responsibilities, it may also be used by consumers to learn more about labelling and the rules companies must follow.

Changes to the label verification program do not come into effect until fiscal year 2014-15. In the interim, the CFIA will work with consumers and industry to ensure that the CFIA’s approach continues to meet needs and expectations.

The CFIA remains committed to having one of the best food safety systems in the world.

Budget 2012 confirms the government’s commitment to food safety. The budget provided an additional $51.2 million over two years to enhance surveillance and early detection and improve response capabilities to foodborne illness emergencies.

George Da Pont, president, Canadian Food Inspection Agency, Ottawa

Canada’s Current Account Deficit is a Huge Drain

(Globe & Mail – Arthur Donner and Doug Peters)

As much as the current account deficit is important, it’s just a symptom of a bigger underlying problem, i.e. an overvalued currency.

– National Bank, Weekly Economic Letter, March 19, 2012

Canada’s sterling reputation for stability has developed into a serious economic problem, as countries and businesses look to the Canadian dollar as a safe currency. The result has been an inflow of short-term financial investments that have pushed up the external value of the loonie. With a high dollar, Canadian exports, especially of manufactured goods, have deteriorated, and imports have soared. Canada’s international current account has moved from a surplus to a significant deficit.

A recent National Bank article posed the question of whether the Canadian dollar is overvalued, then set out a rather convincing argument that the answer is yes. The overvalued currency has contributed to the major deterioration in the current account position. Read more here.

U.S. to Add Lanes at Port Huron Border Crossing

(The Associated Press)

The U.S. Customs and Border Protection is adding inspection booths on the Port Huron side of the bridge that connects Michigan with Ontario.

The agency said construction begins Monday and will require closing three lanes during the project.
Work at the Blue Water Bridge is expected to take about two months.

Officials say they aim to boost efficiency and security at the border crossing.