GHY Tradelines

An updated list of recently published government memorandums, notices, regulations and decisions for the week ending April 27, 2011 is now available on our website here.
 

(CFIA)

CFIA announced changes to the list of designated facilities for the inspection of meat products from the United States for the establishments on the attached list.
 

(China Business Watch – Tony Zhu)

A government official said on Wednesday that China’s moves to regulate its rare earth industry are aimed at protecting the environment and sustaining growth, and pledged to actively respond to a request for consultation by western countries within the World Trade Organization (WTO) framework.

Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology (MIIT), reiterated that comprehensive measures to regulate China’s rare earth industry, including production caps, export quota cuts and stricter emission standards, are in line with WTO rules.

He said China’s regulations are created after fully considering the ability of the environment to ensure effective supplies of rare earth metals. Zhu added that China is willing to cooperate with foreign companies in recycling rare earth metals and developing substitutes for the metals. Read more here.
 

(Financial Post – Kim Covert)

Ontario will be at the forefront of Canada’s “outstanding” export momentum as manufacturing – particularly in the auto sector – rebounds this year, according to Export Development Canada.

In its semi-annual Global Export Forecast, released Thursday, Canada’s export credit agency said Ontario’s exports will grow by 9.4% in both 2012 and 2013, beating the national average both years.

“Thus far, things are looking good for trade” in Canada, says the EDC report. “Export momentum is outstanding — merchandise exports are already up 5.3% over last year’s levels, and any further growth this year will move the figure higher.” Read more here.
 

(CBC News)

American border agents found a dreaded invasive insect crossing into Detroit from Windsor.

Agriculture specialists at the Fort Street Cargo Facility uncovered live larvae of the invasive Khapra Beetle.

They were inspecting an incoming sea container from the Ivory Coast that had traveled through Canada by rail to Detroit.

The shipment of wood veneer was destined for Washington State. Read more here.
 

(RTT News)

The European Council on Thursday adopted a modification to regulation opening an autonomous tariff quota for imports of high-quality beef following a first reading agreement with the European Parliament.

This text will finally bring to an end the long-standing trade dispute between the EU, the U.S. and Canada on the use of “hormones” in beef within the framework of the World Trade Organization (WTO). By this regulation, the EU opens an additional autonomous tariff rate quota for high-quality beef that is not treated with hormones. At the same time, the U.S. has eliminated the sanctions on EU products.

As a first step, an autonomous tariff quota was established in 2009 for imports of 20,000 tons of high quality beef, and this regulation provides for two further increases of this autonomous tariff quota: from 2012 July to 21,500 tons and from August to a total of 48,200 tons. The customs duty of this tariff-rate quota will remain fixed at zero. Read more here.
 

(The Economic Times)

The Obama administration wants China to open its market further and is working to stop the application of a United States law on Russia in a bid to help American businesses compete there, U.S. Trade Representative Ron Kirk said on Thursday.

He added that President Barack Obama’s administration is seeking to terminate application of the Jackson-Vanik amendment with respect to Russia so that American businesses “can compete on a level playing field in Russia os other members of the World Trade Organization.” The Jackson-Vanik amendment regulates trade between the U.S. and “non-market” economies that restrict emigration and other human rights.

In a speech to business executives in Singapore, Kirk said “We firmly believe that China can contribute even more to global prosperity, if it opens its markets with the same dedication that has characterized its pursuit of entry into other countries’ markets over the past 10 years.” Read more here.
 

(Money News)

Despite a recent rebound in the auto industry, Canada’s auto parts manufacturers have fallen from the ranks of global top 10 exporters because they failed to diversify their markets, an economist said on Wednesday.

Canada’s auto parts sector is losing global market share because it has not found a way to tap into the rapid growth in low-cost geographies, Scotiabank economist Carlos Gomes said in a report. “The inability to make inroads in the fast-growing markets of Asia and Latin America is undermining Canada’s position as a major auto parts producer,” Gomes said.

Until 2007, Canada was the world’s sixth-largest auto parts exporter, but was overtaken by Spain, Korea and China during the economic downturn, the report said. Last year, Canada lost its top 10 exporter spot to the Czech Republic. The United States takes 57% of all parts shipped from Canadian plants, but the U.S. share of global vehicle assemblies has slipped to 10% from about 25% in the mid-1990s, the report said. Read more here.
 

(ifw – David Badger)

The global containership fleet is at its largest since last August, as vessel deliveries and a reduction in the idle fleet have raised available capacity to a new record of almost 15 million teu, according to Alphaliner.

The capacity gains have outpaced the growth in demand for space, which is impacting rates and vessel utilisation, says the industry analyst in its latest report. This could put pressure on the carriers’ aim of sustaining the general rate increases announced for 1 May.

Shipping lines have added capacity on most routes, but capacity withdrawn from the main Far East-Europe and Far East-North America trade lanes has largely been cascaded down to secondary line-haul markets, with South America (up 13%) and Africa (20%) seeing the largest percentage increases, the analyst said. Read more here.
 

(Reuters)

Mexican President Felipe Calderon on Tuesday gave an impassioned defense of free trade as Mexico waits for the United States and others to decide whether it will be allowed to join talks on a trade pact in the Asia-Pacific region.

“In this very difficult time in the world economy, the world needs more trade and not less trade,” Calderon said in a speech at the U.S. Chamber of Commerce, a short distance from the White House. “That is why Mexico is pushing a lot to be part of the TPP, the Trans-Pacific Partnership.”

Calderon, who is not meeting with President Barack Obama on this visit, credited Mexico’s participation the North American Free Trade Agreement and more than 40 other trade agreements with helping its economy grow four percent last year and create almost 600,000 net new jobs in the formal sector. Read more here.
 

(Agrimoney)

Cattle prices rebounded, but did not recover all their losses of the last session, amid concerns of clampdowns by Russia and South Korea, major importers, on U.S. beef imports following the discovery of a case of mad cow disease.

Many importers, such as the European Union and Mexico, said that the discovery in California of a cow with the disease, known officials as bovine spongiform encephalopathy, or BSE, would have no impact on purchases of U.S. beef.

John Clifford, the U.S. Department of Agriculture’s chief veterinary officer, said that the infected cow was “never presented for slaughter for consumption, so at no time presented a risk to the food supply chain or human health”.

“This detection should not affect U.S. trade.” Read more here.
 

(John Ivison — National Post)

What a difference a couple of years makes. For the Conservatives, cutting is the new spending and, in the words of Ed Fast, trade is the new stimulus.

The Canadian response to the financial crisis has been to grow domestic demand, aided by low interest rates, and re-orient trade relations to the emerging new world economic order.

The first course has been successful but households are now tapped out and interest rates are set to rise. The fate of the Canadian economy and, in all likelihood, the Conservative government rests on boosting exports that are still below pre-recession levels.

Those hopes rely on Canada concluding a comprehensive economic and trade agreement (CETA) with the European Union. This is not just because it would boost existing two-way trade of $92.1-billion by an estimated 20%, but also because the reforms needed to strike the CETA in areas like intellectual property, government procurement, labour mobility and agriculture will be required if the Conservatives are to make good on their ambitious trade agenda with other countries like Japan, India and South Korea. Read more here.
 

(Mike Godfrey — Tax-News)

Canada and Costa Rica have concluded a third round of talks on the expansion and modernization of their existing free trade agreement (FTA).

The latest negotiations were held in Ottawa, with a fourth round scheduled for June. The original FTA entered into force in 2002 but did not include provisions in areas such as cross-border trade in services, financial services, investment and government procurement.

According to Canada’s Department of Foreign Affairs, expanding the agreement to include such sectors would bring the deal into line with the model the government nowadays aspires to in its trade negotiations. It is also hoped that an amended FTA will create new opportunities for Canadian businesses in sectors like construction, manufacturing, financial services and telecommunications. Read more here.
 

(Sungwoo Park — Bloomberg)

South Korea will halt customs clearance of U.S. beef imports after the first U.S. case of mad cow disease in six years was found in a dairy cow in central California, an agriculture ministry official said.

The government will release details of inspections “soon,” Park Sang Ho, an official at South Korea’s agricultural ministry, said by phone. The agriculture office shortly after issued a statement saying it will take the “necessary measures.”

South Korea, once the third-largest buyer of U.S. beef, began restricting shipments in 2003, following the discovery of bovine spongiform encephalopathy, or mad cow, in the U.S. herd. The Asian country resumed imports of the meat from cattle younger than 30 months of age in June 2008. This is the fourth BSE case found in the U.S. herd , and the first since March 2006. Read more here.
 

(CBSA)

On April 23, 2012, the Canada Border Services Agency (CBSA), pursuant to paragraph 35(2)(a) of the Special Import Measures Act (SIMA), terminated the investigations of dumping and subsidizing in respect of certain potassium silicate solids originating in or exported from the Islamic Republic of Pakistan.

The Canadian International Trade Tribunal injury inquiry proceedings will also cease as a result of these decisions pursuant to subsection 35(3) of SIMA.

Additional information about the investigation is contained in a Statement of Reasons, which will be available within 15 days on the CBSA’s website.
 

(CBSA)

The Canada Border Services Agency (CBSA) announced today that it is initiating an investigation into the alleged injurious dumping of liquid dielectric transformers having a top power handling capacity equal to or exceeding 60,000 kilovolt amperes (60 megavolt amperes), whether assembled or unassembled, complete or incomplete, originating in or exported from the Republic of Korea.

Liquid dielectric transformers are capital goods that are made to order from a customer’s particular needs. They are used to increase, maintain or decrease electric voltage in high voltage transmission and distribution systems. The subject goods encompass all power transformers regardless of name designation, including but not limited to: step-up transformers, step-down transformers, auto-transformers, interconnection transformers, voltage regulator transformers, HVDC transformers and rectifier transformers.

The investigation follows a complaint filed by ABB Inc. of Varennes, Québec, and CG Power Systems Canada Inc. of Winnipeg, Manitoba. The complainants allege that the dumping of these goods is harming Canadian production by causing the following: price depression and price suppression, lost sales, lost revenues and decreased employment levels.
 

(Food Safety News – Helena Bottemiller)

The U.S. Food and Drug Administration released a new report this week outlining the ways the agency is trying to fulfill its mission globally. Though the report, titled “Global Engagement Report,” covers the broad swath of FDA-regulated products, including medical devices, drugs and cosmetics, it also details some of the agency’s key food safety initiatives abroad.

“As our world transforms and becomes increasingly globalized, we must come together in new, unprecedented, even unexpected, ways to build a public health safety net for consumers around the world,” said FDA Commissioner Margaret Hamburg.

As FDA points out, the agency is charged with regulating products from more than 150 countries, 130,000 importers and 300,000 foreign facilities. Since 2005, food imports have grown year over year by an average of 10 percent. Read more here.
 

(Julian Beltrame — The Canadian Press)

Free trade talks with the European Union are nearing the “end game,” although the most difficult issues still remain on the table, the head of the EU council said Monday.

Pia Olsen Dyhr, the Danish trade minister and president of the council, said she was optimistic a deal could be struck within six months.

“We are actually at the end game. At the moment we have finalized 75 per cent. It’s been one of the most forthcoming negotiations” the EU has ongoing, she told a news conference with Canadian Trade Minister Ed Fast. “We have to finalize the last bits and I see that coming soon and we might expect within a half a year we have finalized the agreement.”

Fast was more circumspect in his comments, saying progress was being made at a “satisfactory pace” and he hoped for an agreement by the end of the year. Read more here.
 

(The Huffington Post –  Alexander Eichler)

Manufacturing work might actually be coming back to America.

More than one-third of executives at big manufacturing firms say they’re either considering moving production into the U.S. from China, or that they’re already planning to do it, according to a recent poll from the Boston Consulting Group. The poll specifically addresses executives at U.S.-based manufacturing companies with annual sales of $1 billion or more.

While more multinational companies may be bringing jobs back home, it doesn’t begin to make up for the manufacturing jobs lost during the recession, according to reports released last month. The manufacturing sector lost 16.3% of its jobs between 2007 and 2009, according to the Information Technology and Innovation Foundation, and only 1.4% of those jobs have come back since.

Still, the phenomenon of companies moving operations into the U.S. from abroad is one that carries mixed implications for American workers. Read more here.
 

(CFIA)

The Canadian Food Inspection Agency (CFIA) today announced plans to develop new regulations that will better protect consumers from unsafe imported foods. The proposed new regulations, a commitment of the Government’s Food and Consumer Safety Action Plan, would require food importers to be licensed and have measures in place to keep unsafe food out of the marketplace.

“The vast majority of food entering Canada is safe, but we are continuing to adapt to the increasingly complex global marketplace,” said Agriculture Minister Gerry Ritz. “Canada imports food from more than 190 countries, and our Government is taking action to maintain the high level of food safety that consumers expect and deserve.”

The regulations are being developed in close consultation with industry so that food safety objectives can continue to be met with minimal burden on business operations. The proposed regulations would include a range of tools and streamlined processes to help importers-particularly small enterprises-transition to the new requirements. A user fee is being proposed to recover the cost of issuing the import licences.

“Whether food comes from across the street or across the ocean, consumers should have confidence in their purchases,” added Minister Ritz. “The measures being proposed would tighten controls on imported foods and build on the significant investments we’ve already made to safeguard Canada’s food supply.”

The CFIA continues to welcome input from all levels of industry and the public as it develops the new regulations. The CFIA consulted nationally on the regulatory proposal in Fall 2010, receiving overall support for the proposal. There will be several more opportunities to provide feedback, including
• consultations on a user fee proposal for the licensing cost and regime from April 20 to June 29, 2012; and
• consultations on the proposed new regulations, when published in Canada Gazette, Part I.

All food importers are encouraged to sign up to the Non-Federally Registered Sector listserv to receive email notifications on the forthcoming proposed new regulations and other relevant news. For more information, continue to visit the CFIA website.