GHY Tradelines

(Seattle Times – Michael A. Meighen)

As Canada and the United States continue to refine joint stewardship of our border in the post 9/11 world, it will help decision makers in both countries if they reread twin speeches delivered on the subject on Aug. 18, 1938.

Students of Canadian-American relations know that it was on this date President Franklin D. Roosevelt, arguably the greatest U.S. chief executive of the 20th century, visited Canada to accept a degree from a Canadian university.

After leaving Kingston, Ontario, he traveled to the border community of Clayton, N.Y., and officially opened the international bridge that unites our two countries at the Thousand Islands region.

At the crossing between us, FDR spoke of the need for “common sense” to guide both nations as they administer the border. All these years later, any objective analysis reveals there is a real need for Roosevelt-style common sense at our border today. Read more here.

Sen. Michael A. Meighen of St. Mary’s, Ontario, is a Canadian delegate to the Roosevelt-Campobello International Park Commission, established by Canada and the United States to preserve Franklin Roosevelt’s home on Campobello Island, New Brunswick.
 
 

(CIFFA eBulletin — World Trade Interactive)

The U.S. Transportation Security Administration has issued a final rule making two changes to a September 2009 interim final rule codifying a statutory requirement to establish a system to screen 100% of cargo transported on passenger aircraft reports World Trade Interactive. The 2009 rule applies only to cargo loaded in the U.S. and does not apply to (a) U.S. aircraft operators or foreign air carriers when they load cargo outside the U.S. and transport it into the U.S. or (b) U.S. or foreign all-cargo operations.

The 2009 rule established the Certified Cargo Screening Program, in which TSA certifies shippers, indirect air carriers and other entities as certified cargo screening facilities to screen cargo prior to transport on passenger aircraft. Each CCSF applicant has had to successfully undergo an assessment of their facility by a TSA-approved validation firm or by TSA. In response to public comment, TSA is now removing all validation firm and validator provisions because it has the capacity to review and certify all CCSF applicants itself. As a result, TSA will henceforth conduct all assessments of facilities applying to become CCSFs.

The 2009 rule also requires aircraft operators and foreign air carriers to become certified as CCSFs to screen air cargo off-airport. TSA is deleting this requirement because these entities are already screening cargo on-airport under a TSA-approved security program and do not need a separate certification to screen cargo off-airport.

In addition, TSA is proposing a fee ranging from $31 to $51 for the processing of security threat assessments for aircraft operators, foreign air carriers and indirect air carrier personnel who have unescorted access to screened cargo to be transported on passenger aircraft to screen cargo, supervise the screening of cargo or perform certain other security functions.

(Journal of Commerce – Courtney Tower)

Canada National and Canadian Pacific railways add and expand centers for stuffing exports into containers

Canada National and Canadian Pacific railways’ new and expanded transload centers for stuffing lumber, logs and other products into containers bound for Asia will help the ports at Vancouver and Prince Rupert, British Columbia, keep trade balanced. Asia’s hunger for Canadian lumber has allowed the ports to buck a decades-long trend of importing far more than they exporting.

“We have become neatly balanced as a port on the West Coast, with about 0.8% to 0.9% of full boxes going out for every one full box coming in, as forest products and grain now go out in containers,” said Robin Silvester, CEO of Port Metro Vancouver’s public authority. Read more here.
 

The International Trade Commission released Aug. 15 Shifts in U.S. Merchandise Trade 2010, its annual compendium of data and analysis examining changes in merchandise trade with key U.S. partners and in crucial U.S. industries. An ITC press release states that this report provides a comprehensive review of U.S. trade performance in 2010, focusing on changes in exports, imports and trade balances of key natural resources, agricultural and manufacturing industries as well as changes in U.S. trade with major partners and groups. Also included are profiles of the U.S. industry and market for over 250 industry groups and subgroups, featuring data for the years 2006 through 2010 on consumption, production, employment and trade.

The report’s findings include the following:

Overall Performance

From 2009 to 2010, the value of U.S. merchandise exports increased by 20% to $1.12 trillion and U.S. imports for consumption increased by 23% to $1.90 trillion. The associated trade deficit increased as well, rising by $164.1 billion (27%) to $776.5 billion. All U.S. industries and sectors except agricultural and forest products registered a trade deficit. The most significant deficits occurred in energy-related products, electronic products and transportation equipment.

Export Growth

U.S. exports increased in all merchandise sectors. The greatest absolute increase ($31.1. billion, or 19%) occurred in the chemicals and related products sector, 25% of which was driven by gains in certain organic chemicals and miscellaneous plastic products. Exports grew due to greater foreign demand for these products as a result of government policies in key foreign markets encouraging the adoption of renewable fuels and increased joint venture projects in key Asian economies. Transportation equipment exports grew by $28.3 billion (15%) and much of this growth was influenced by increased sales of motor vehicles. The third-largest reported absolute increase ($25.6 billion) and the greatest percentage shift (43%) occurred in the energy-related products sector, where price increases and refinery shutdowns in Brazil and Mexico contributed to increases in both the value and the quantity of U.S. exports of natural gas, petroleum, and coal, coke and other energy-related products.

An important factor contributing to the growth in U.S. merchandise exports was increased foreign demand due to rising incomes in many U.S. major trading partners. Real income growth for many of the United States’ major export partners, including Canada, the European Union, Mexico and Japan, was positive in 2010, ranging from 1.8% in the EU to 5.2% in Mexico, compared to negative real GDP growth rates in 2009. GDP growth was even higher in developing countries in Asia (9.3% on average) and Brazil (7.5%). Reflecting these increases in real GDP and foreign demand, Taiwan, Brazil, Korea and China accounted for the largest percentage growth rates for U.S. exports, by country.

Import Growth

The largest absolute increases in imports (by value) occurred in energy-related products ($77.3 billion), transportation equipment ($67.1 billion) and electronic products ($66.2 billion). Canada remained the leading source of U.S. imports of energy-related products, representing 28% of the total U.S. trade deficit in these products. Greater domestic consumption of motor vehicles accounted for 57% of the import growth in transportation equipment, and Canada, Japan and Mexico remained the largest suppliers to the U.S. market (a combined 64%). Within the electronic products sector, imports of three product groupings increased significantly, collectively growing by $45.2 billion: computers, peripherals and parts (up 25%); telecommunications equipment (up 23%); and semiconductors and integrated circuits (up 38%). Increased U.S. imports of these goods reflect the growing importance of Chinese production and assembly, as most electronic products are made or assembled in China through either contract manufacturing or indigenous companies.

Bilateral Trade

There was an increase in the trade deficits between the U.S. and its five leading trading partners in 2010, including the European Union (up $21.8 billion), Canada (up $16.7 billion), China (up $47.9 billion), Mexico (up $26.6 billion) and Japan (up $15.3 billion). Together, these economies accounted for 78% of the total U.S. trade deficit, maintaining their relative positions from 2009 to 2010.

China remained the United States’ single largest source of imports by value, and the $278.3 billion deficit with China was the largest with any U.S. trading partner. The EU is the United States’ largest two-way trading partner, accounting for almost 20% of total U.S. merchandise trade in 2010, while Canada remained the largest single-country trading partner. The trade deficit with the EU was principally driven by increased U.S. imports of transportation equipment (motor vehicles) and chemicals and related products (petroleum products), though imports increased across virtually all sectors. The trade deficit with Canada was likewise heavily influenced by increased imports of energy-related products and transportation equipment. Price increases for petroleum products and favorable credit conditions associated with the improving U.S. economy were the likely causes for increased imports in these sectors.