Further to the Economic Action Plan 2012 commitment to review Canada’s preferential tariff regime for developing countries, the Government of Canada is seeking views on proposed changes to the General Preferential Tariff (GPT). Duty-free or preferential status was introduced in 1974 under the GPT (General Preferential Tariff) to assist 175 developing nations. The global economic [...]
Further to the Economic Action Plan 2012 commitment to review Canada’s preferential tariff regime for developing countries, the Government of Canada is seeking views on proposed changes to the General Preferential Tariff (GPT).
Duty-free or preferential status was introduced in 1974 under the GPT (General Preferential Tariff) to assist 175 developing nations.
The global economic landscape has changed considerably since 1974, including significant shifts in the income levels and trade competitiveness of certain developing countries. To respond to these changes in the global economic landscape and to ensure that this form of development assistance is aligned with Canada’s development policy objectives, Economic Action Plan 2012 announced that the Government was undertaking a comprehensive review of the GPT.
Guided by the objectives of the review outlined in Economic Action Plan 2012, as well as the original policy intent of the GPT to encourage imports from developing countries as a means to promote their economic growth and export earnings, the Government is seeking views on proposed changes to the various elements of the GPT.
Canada’s Department of Finance is proposing that preferential duty status be taken away from goods shipped direct to Canada from 72 countries (e.g., China, India, Brazil, etc.) effective July 1, 2014. Click here to view the proposed changes listed in the Canada Gazette.
I.E. Canada is seeking comments from its members regarding the impact that removing GPT will have on their business. Members should submit comments in writing to Amanda Neadow, Director Committees at aneadow@iecanada.com before close of business Friday February 8th 2013.
Interested parties wishing to comment directly to the Department of Finance on the proposed changes to the GPT amendments should submit their views in writing by February 15, 2013 to the following address:
General Preferential Tariff Consultations
Department of Finance | International Trade Policy Division
L’Esplanade Laurier, East Tower, 14th Floor
140 O’Connor Street
Ottawa, Ontario K1A 0G5
Fax: 613-992-6761
Email: Tariff-Tarif@fin.gc.ca
General inquiries can be directed to Tariff and Trade Policy, Department of Finance (Tariff-Tarif@fin.gc.ca).
Canada’s trading patterns have changed fundamentally over the past decade. The Canadian–U.S. trade relationship is waning in importance, while emerging markets, particularly China, are becoming increasingly important. Also, our trade strengths are shifting away from some manufactured products toward professional services and products related to our natural resource wealth. These changes are not just the [...]
Canada’s trading patterns have changed fundamentally over the past decade. The Canadian–U.S. trade relationship is waning in importance, while emerging markets, particularly China, are becoming increasingly important. Also, our trade strengths are shifting away from some manufactured products toward professional services and products related to our natural resource wealth. These changes are not just the result of the strong dollar; the growing role of emerging markets and shrinking trade barriers are key drivers. This briefing examines these changes and a wide array of factors affecting them.
Click here to download the report (free subscription required).
Source: Conference Board of Canada
Related: USTR Sets Out Trade Policy Priorities with China for 2013
A secret foreign policy document obtained by CBC News suggests that the Harper government should hasten its pace in forging trade deals with China and other emerging economies. “Our influence and credibility with some of these new and emerging powers is not as strong as it needs to be and could be,” the document reads. [...]
A secret foreign policy document obtained by CBC News suggests that the Harper government should hasten its pace in forging trade deals with China and other emerging economies.
“Our influence and credibility with some of these new and emerging powers is not as strong as it needs to be and could be,” the document reads.
“Canada’s trade and investment relations with new economies, leading with Asia, must deepen, and as a country we must become more relevant to our new partners,” it said.
The document also mentions Africa as place with a fast growing middle class. “The fact remains that, over time, African countries have the potential to challenge the likes of Brazil and China as major investment destinations,” it said.
Click here to read the complete article.
Source: CBC News
Update: Secret Conservative Foreign Policy Document Draws Fire
“A problem with thinking in acronyms is that once one catches on, it tends to lock analysts into a world view that may soon be outdated.” — Ruchir Sharma Ruchir Sharma is the head of Emerging Markets and Global Macro at Morgan Stanley Investment Management. He is also the author of Breakout Nations: In Pursuit [...]
“A problem with thinking in acronyms is that once one catches on, it tends to lock analysts into a world view that may soon be outdated.” — Ruchir Sharma
Ruchir Sharma is the head of Emerging Markets and Global Macro at Morgan Stanley Investment Management. He is also the author of Breakout Nations: In Pursuit of the Next Economic Miracle, published earlier this year.
In six short pages, Mr. Sharma pours a lot of cold water on the notion of the BRICs – Brazil, Russia, India, and China – as a four-team economic powerhouse, with more than a few barbs at economic forecasting generally. After noting, for example, the relative weakness in recent years of the Russia economy and the Russia stock market, he suggests that “Russia remains a member of the BRICs if only because the term sounds better with an R.” He is not much kinder to India and Brazil. As for China, in Mr. Sharma’s view, most of the hype over emerging markets can, or should be, attributed to China alone.
On economic forecasting generally he offers these insights:
• “The current fad in economic forecasting is to project so far into the future that no one will be around to hold you accountable.”
• “The longest period over which one can find clear patterns in the global economic cycle is around a decade.” And,
• “Most CEOs and major investors still limit their strategic vision to three, five, or at most seven years…”
Broken BRICs: Why the Rest Stopped Rising is a link to Mr. Sharma’s Foreign Affairs article as it appears on the website of the Council on Foreign Relations.
Current & future economic and business trends The global marketplace has seen big changes this past year, and only more change can be expected in 2013. Many of the world’s economies will look very different in the years to come – new leaders will emerge and new opportunities will arise for businesses operating internationally. Join [...]
Current & future economic and business trends
The global marketplace has seen big changes this past year, and only more change can be expected in 2013. Many of the world’s economies will look very different in the years to come – new leaders will emerge and new opportunities will arise for businesses operating internationally.
Join David Watt, Chief Economist for HSBC Bank Canada and Dr.Thomas Homer-Dixon, CIGI Chair of Global Systems, Balsillie School of International Affairs, professor and award-winning author, as they explore the global marketplace in its current and future state.
This event will feature presentations highlighting:
• A current look at the global economy and future projections
• Key economic, social, political and environmental factors in the emerging markets
• Canada’s role in the global marketplace
• Macro and sectoral opportunities for companies in 2013 and beyond
Don’t miss this opportunity to learn how your company can navigate this fast-paced economic climate.
Register today!
November 19: Toronto
November 20: Saskatoon
November 21: Edmonton
November 22: Calgary
November 23: Vancouver
These events are free and exclusive to Business without Borders members. Not yet a member?
Register for free today
When Ball Corporation, a US industrial conglomerate, was looking to diversify internationally during the mid-2000s, its attention fell on Formametal SA, an Argentine maker of metal cans. The target looked like a good fit, adding a reliably in-demand product to Ball’s broad portfolio, and in 2006 the deal was done. But soon after the deal [...]
When Ball Corporation, a US industrial conglomerate, was looking to diversify internationally during the mid-2000s, its attention fell on Formametal SA, an Argentine maker of metal cans. The target looked like a good fit, adding a reliably in-demand product to Ball’s broad portfolio, and in 2006 the deal was done.
But soon after the deal closed, Ball found that Formametal employees had been paying Argentine government officials to secure the import of used machinery, and the export of raw materials with reduced tariffs, according to findings by the Securities and Exchange Commission, the US regulator.
Payments of at least $106,749 were logged in Formametal’s books as “customs advisory services” and “verification charges”, but were allegedly bribes organised by two senior executives at the company.
According to the SEC, Ball did not do enough to stop graft, and bribes continued even after Formametal was under its control. The SEC launched an investigation into whether Ball had violated the Foreign Corrupt Practices Act (FCPA), and only last year did Ball settle for $300,000, without admitting any liability.
Ball’s story highlights the risks of M&A in emerging markets. Buying into developing economies can offer a fast path to growth, but it can also introduce corruption, fraud, the need for risk management and other issues to the organisation.
Click here to read the complete article.
Source: David Gelles | Financial Times
A Delta Economics report commissioned by HSBC predicts that U.S. trade will increase by 95% by 2026 and that growth in exports will be led by shipments to developing countries. “Traditional export•driven economies in ‘emerging’ markets are becoming more consumer•driven and importing more from high•end developed nation producers like the United States to fulfill demand,” [...]
A Delta Economics report commissioned by HSBC predicts that U.S. trade will increase by 95% by 2026 and that growth in exports will be led by shipments to developing countries. “Traditional export•driven economies in ‘emerging’ markets are becoming more consumer•driven and importing more from high•end developed nation producers like the United States to fulfill demand,” an HSBC press release quoted Senior Executive Vice President Steve Bottomley as saying. “U.S. businesses should not ignore this important shift, and growth driver, but instead position themselves to become beneficiaries of this opportunity that is expected to help fuel global trade for many years to come.”
Highlights of the report include the following:
• U.S. trade growth is forecast to average 3.3% annually over the next five years and then accelerate to more than 6% by 2021.
• Canada and Mexico will remain the two main export partners for the U.S. and its number two and three sources for imports through 2016. However, growth will be relatively slow, with annual exports up 1.7% to Canada and 4% to Mexico and imports rising 0.7% and 3%, respectively.
• Emerging nations expected to import U.S. goods at the fastest pace during the next five years include Peru (8.7%), Turkey and Brazil (each more than 8%) and India (7.6%).
• U.S. imports from emerging nations are also expected to rise during this period, led by Vietnam at around 7% and Colombia, Russia and Singapore at 5•7%.
• Exports of soy beans, coal and petroleum should all see significant growth during the next five years, above 9%. Biopharmaceuticals and telecommunications equipment are the two fastest growing non-commodity exports at 8.6% and 6.7%.
• 59% of U.S.-based importers and exporters anticipate an overall increase in their trade volumes over the next six months, with 29% identifying Latin America as their greatest opportunity for trade growth and 23% naming China. U.S. businesses are also more optimistic about the state of the global economy, with 44% expecting it to improve by the end of the year, up from 29% in the latter part of 2011.
• China is expected to continue see strong annual growth in both imports (5.1%) and exports (4.7%) through 2016. The annual growth rate of U.S. exports to China is forecast to outpace that of U.S. imports from China during this period.
• China and Germany are set to leapfrog the U.S. to become the world’s largest importers by 2026.
Source: STR Trade Report
Federal Finance Minister Jim Flaherty’s persistent coaxing of Canadian business to diversify international trade beyond the United States may be gaining traction as 71 per cent of large, medium and small businesses in Canada project China or India to represent the largest increase in trade this year. Only eight per cent of businesses project the [...]
Federal Finance Minister Jim Flaherty’s persistent coaxing of Canadian business to diversify international trade beyond the United States may be gaining traction as 71 per cent of large, medium and small businesses in Canada project China or India to represent the largest increase in trade this year. Only eight per cent of businesses project the U.S. to be the fastest growing source of exports and imports in 2012.
According to a quarterly survey of Canadian business commissioned by UPS Canada and conducted by Leger Marketing, the business community’s positive outlook on growth is contingent on the continued stability of the Canadian economy. This optimism is also fuelling a boost in innovation, as nearly three quarters of respondents (71 per cent) plan to launch a new product or upgrade an existing one in 2012. Canadian business is particularly bullish about global expansion with 62 per cent of medium-to-large businesses identifying exporting as a competitive necessity.
According to the survey, the strength of the Canadian economy is the single biggest influence on business goals and direction at 33 per cent. The next three influences are rising oil prices at 13 per cent and the sluggish global economy and anaemic U.S. market at 12 per cent respectively. Given the renewed appetite for global trade with an emphasis on Asia, the strength of the Loonie influences the goals and decisions of only nine per cent of respondents.
There is no doubt that developing markets present enormous growth potential. But with these opportunities comes challenges of operating in emerging markets where corruption, illicit trade and organized crime are commonplace. How does an established, legitimate business stay competitive and compliant when operating in such locations? This is of increasing concern to corporate leaders, according [...]
There is no doubt that developing markets present enormous growth potential. But with these opportunities comes challenges of operating in emerging markets where corruption, illicit trade and organized crime are commonplace. How does an established, legitimate business stay competitive and compliant when operating in such locations?
This is of increasing concern to corporate leaders, according to Ernst & Young’s European Fraud Survey 2011 which found that two-thirds of employees said bribes were widespread in their countries, and one in five felt it acceptable to pay bribes to win business. In the firm’s most recent global fraud survey of corporate leaders found that while more than half of respondents plan to grow within the next year – especially to Latin America and the Far East where corruption is perceived as commonplace – two in five rarely perform fraud or corruption due diligence.
After all, compliance, audits and legal can be extremely expensive functions – costs that sometimes feel hard to justify, especially when competitors are trying to gain a competitive edge in overseas markets by simply following – sometimes loosely – local business practices. But staying on the up-and-up in every location where you do business ultimately makes sense in the long-run, says Andrew MacKinnon, Head of International Casualty, Zurich Global Corporate in North America.
“That compliance and competition intersect one another is the gist of the challenges that each of our customers is dealing with,” MacKinnon says. “It may be a bit more expensive on the front-end to ensure your company is compliant, but if you’re not adhering to local or international regulation, it’s not a matter of if you’ll be caught, but a matter of when.”
MacKinnon says that Zurich, a global insurer with many multinational customers, has seen clients’ questions and concerns shift from a perspective focusing primarily on price to one that now incorporates a higher level of interest in compliance, especially from a corporation’s brand perspective. “Being found for non-compliance in a country where you’re doing business is not the type of headline you want to have,” he says.
To wit, National Western Life, headquartered in Austin, Texas, in November was fined by Brazilian regulators a record $6.2 billion for violating local laws about selling life insurance – news which made local and international headlines. And while some nations are more highly regulated than others, in the long-term there is no location that will be immune from ethical business practices.
“Some emerging markets in Africa, Southeast Asia and Latin America still have a freewheeling, lax mentality regarding compliance,” MacKinnon says. “However, as time goes by, these areas are becoming more affluent and more conscious of issues associated with regulation and tax income. Hence, companies coming into any marketplace, whether in mature, developed markets or emerging ones, need to make sure they are adhering to all local law and business requirements.”
Key compliance points when operating globally:
- Choose partners in-country as well as your home nation that are dedicated to compliance.
- Station employees in key regulation and legal functions on the ground to ensure your organization has “eyes and ears” in-country.
- Identify critical local stakeholders (for example, a chief environment minister), and assign an employee to engage them and understand their agenda.
- When choosing an insurance product, consider one global insurer with the capacity to address each nation’s compliance requirements.
Source: Zurich Insurance via The Atlantic Magazine
