European Parliament welcomes progress in EU-Canada free trade negotiations
10 June, 2011
The European Parliament adopted, by a large majority, a resolution welcoming progress in the negotiations for a Comprehensive Economic and Trade Agreement (CETA), between the European Union (EU) and Canada.
Members of the European Parliament (MEPs) nonetheless voiced concerns about seal products, tar sands, asbestos, intellectual property rights and public procurement.
The CETA would be the most comprehensive trade agreement that either side has ever negotiated, and includes chapters not only on trade, but also on investment and intellectual property rights. MEPs from most political groups welcomed progress in negotiating the agreement with such an important trading partner for the EU.
Parliament nonetheless raised some potential concerns. One was the environmental impact of extracting oil from tar sands, due to its high CO2 emissions and its local impact on biodiversity. Another was serious harm to the health of workers mining asbestos, the processing and use of which is already banned in the EU. Thirdly, MEPs hoped that the conflict concerning the EU's ban on seal product imports could be solved amicably, and that Canada's request for a WTO dispute settlement panel on the EU ban would not impede the CETA negotiations. They specifically called on the Commission to remain firm on the EU ban, and voiced their strong hope that Canada would withdraw its WTO challenge before the European Parliament has to vote on ratifying the CETA.
Canada's federal structure also poses some difficulties for MEPs. The resolution notes that whilst the federal government is conducting the negotiations, Canada's provinces and territories will be responsible for implementing any agreement, for instance on opening up public procurement processes. It therefore encourages the provinces and territories to "synchronise policies and procedures" and considers that "a successful negotiation should include explicit commitments from provincial and territorial governments."
On intellectual property rights (IPR), MEPs argue that strict protection must be extended to trademarks, patents and geographical indications, but add that this should not hamper the production of generic medicines.
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Canadian trade deficit close to one billion dollars in April
10 June, 2011
Statistics Canada reports that the country's exports decreased 1.9% in April, following a 4.8% gain in March. Imports also declined, falling 0.6%. As a result, Canada's trade deficit widened from $417 million in March to $924 million in April.
Exports decreased to $36.3 billion in April, led by a slow down in the machinery and equipment sector, industrial goods and materials, and the automotive sector. Imports fell to $37.2 billion, as automotive products registered the largest decline. The automotive sector, which had reported strong gains in March, has been adversely affected by the earthquake and tsunami in Japan in March.
Exports to the United States increased for the second month in a row, edging up 0.3% to $26.9 billion. Imports increased 1.7% to $23.1 billion in April, reaching their highest level since November 2008. Consequently, Canada's trade surplus with the United States narrowed from $4.2 billion in March to $3.9 billion in April.
Exports to countries other than the United States fell 7.9% in April to $9.3 billion, as exports to all principal trading areas declined. Imports decreased 4.1% to $14.1 billion. As a result, Canada's trade deficit with countries other than the United States widened from $4.6 billion in March to $4.8 billion in April.
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WTO concludes U.S. meat labelling rules are an illegal barrier to trade
10 June, 2011
According to media reports the World Trade Organization (WTO) has tentatively determined that the United States' country of origin labeling rules (COOL) for meat violate global trade rules.
A confidential preliminary ruling was distributed to the parties by the dispute settlement panel established to hear Canada's challenge to the U.S. legislation imposing mandatory country-of-origin labelling for beef, pork, lamb, chicken and goat meat, and certain perishable commodities sold at retail outlets in the U.S.
According to the rule, in order for meat to be labelled as a product of the U.S., all production activities (birth, rearing and slaughtering) have to occur in the U.S. For meat derived from animals of different national origins, the label must indicate the country or countries involved at each step, from the animal's birth to the final retail wrapping of meat cuts.
The WTO will issue a formal ruling in September. The preliminary ruling concluded U.S. COOL requirements violate provisions of the organization's agreement on Technical Barriers to Trade.
In contesting the U.S. rules Canada claimed that, in the context of the integrated North American beef and pork supply chains, U.S. COOL has resulted in additional and unnecessary costs being imposed on Canadian cattle and hog exports. Under the rules U.S. processors, for instance, have to segregate Canadian animals and the meat from these animals at their facilities, which generates additional costs. Because of these additional costs, some processors no longer buy Canadian animals, buy them only on certain days, or buy them at a discounted price.
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Budget 2011 announces an overhaul of the Customs Tariff
9 June, 2011
The Canadian Government announced in this week's Budget 2011 that it is initiating a process to simplify the Customs Tariff in order to facilitate trade.
This process will identify changes to the Customs Tariff that will be subsequently implemented by a variety of legislative amendments and regulatory modifications.
Part of the project will consist in revoking obsolete provisions that have either expired or become redundant due to recent tariff and trade initiatives.
The number of tariff items contained in the Schedule to the Customs Tariff will be reduced by eliminating many end-use provisions which impose an additional administrative burden on importers.
Finally, the List of Countries and Applicable Tariff Treatments in the Schedule to the Customs Tariff will be restructured to make the tariff treatments applicable to imports from each country more transparent.
The Budget documents state that all changes will be revenue-neutral and where necessary, stakeholder views will be sought on certain proposed changes.
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EU countries will charge heavy trucks for costs of air and noise pollution
9 June, 2011
Following a vote in the European Parliament this week the European Union's Member States will now be able to charge heavy trucks, not only for the costs of infrastructure which is currently the case, but also to levy an additional charge to cover the costs of air and noise pollution.
The new rules which revise the current "Eurovignette Directive" will also give Member States better tools to manage problems of congestion, with a new flexibility to vary the charge for heavy truck (by up to 175%) at different times of the day.
Importantly the new rules provide strong incentives to Member States for "earmarking" revenues i.e. to set aside new charging revenues for investment in sustainable transport infrastructure (TEN-T) projects.
The Vice-President of the European Commission responsible for Transport, Siim Kallas, said: "These new EU rules will send the right price signals to operators so they will invest more in efficient logistics, less polluting vehicles and more sustainable transport at large. They also give Member States new tools to fight congestion with possibilities to vary charges at different times of the day to get heavy lorries off the roads at peak periods. This is a very important step in the right direction- towards creating a fair financial environment where prices across different transport modes reflect the real costs to society and the taxpayer."
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International Maritime Bureau issues piracy warning for South China Sea
9 June, 2011
The International Maritime Bureau issued a warning to vessels sailing through the South China Sea bordering Malaysia, Indonesia and Singapore.
The hijacking of three tugboats and a barge in recent weeks prompted the alert. These were the first hijackings in the region in 2011, and mark a departure from the usual modus operandi of pirates in this region who are usually opportunistic and rob vessels before fleeing with the proceeds.
The Bureau's Manager Noel Choong commented: "As most bigger ships in this area have transmitters on board to help authorities locate them, we believe that pirates in this area are hijacking tugboats which are small and are not required to have transmitters".
The most recent incident occurred on 1 June 2011 when the Bureau received a distress signal from an Indonesian tugboat of Batam Island. Authorities were subsequently able to locate the vessel and detain the pirates.
A few days prior, pirates successfully hijacked a tug and barge travelling between Borneo Island and Port Klang. A fishing vessel rescued the crewmembers who were left adrift. Another tug was hijacked, between Singapore and Cambodia, on 24 March 2011. The crew were again abandoned on a raft in the South China Sea. The tug and barge are still missing.
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Port of Halifax to get new Super Post-Panamax cranes
8 June, 2011
The owner of the Port of Halifax's Halterm Container Terminal, Macquarie Infrastructure Partners, will invest in two additional Super post-panamax cranes (SPPX).
"The investment in new cranes is indicative of Halterm's confidence in the long-term strength of the Halifax market," said Ashley Dinning, CEO of Halterm Container Terminal Limited.
In 2012, the Port of Halifax will feature four SPPX container berths equipped with seven SPPX cranes following the addition of these new cranes.
The Port of Halifax features the deepest container berths on the Eastern Seaboard and can handle vessels of any size. Existing capacity at the Port can accommodate a tripling of container volumes. A $35 million terminal project currently underway includes the extension and deepening of the pier which provides operational flexibility to accommodate two of the world's largest vessels simultaneously.
"Macquarie Infrastructure Partners' investment in new cranes further positions the Port of Halifax as a highly competitive East Coast North American trade gateway," said Karen Oldfield, President and CEO of Halifax Port Authority. "This additional investment signifies a solid private sector commitment to the long-term growth of the Port of Halifax."
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Airline industry's profitability forecast keeps dropping
8 June, 2011
The International Air Transport Association (IATA) announced a further drop in its 2011 airline industry profit forecast to $4 billion. This is a reduction of more than half the $8.6 billion profit forecast in March and a 78% drop compared with the $18 billion net profit recorded in 2010. On expected total revenues of $598 billion, a $4 billion profit equates to a 0.7% margin.
"Natural disasters in Japan, unrest in the Middle East and North Africa, plus the sharp rise in oil prices have slashed industry profit expectations to $4 billion this year. That we are making any money at all in a year with this combination of unprecedented shocks is a result of a very fragile balance. The efficiency gains of the last decade and the strengthening global economic environment are balancing the high price of fuel. But with a dismal 0.7% margin, there is little buffer left against further shocks," said Giovanni Bisignani, IATA's Director General and CEO.
Fuel costs are the main cause profit reduction. The average oil price for 2011 is now expected to be $110 per barrel (Brent), a 15% increase over the previous forecast of $96 per barrel. For each dollar increase in the average annual oil price, airlines face an additional $1.6 billion in costs.
Growth rates for both cargo and passenger markets have been revised downward because of higher fuel costs. Passenger demand is now expected to grow 4.4% over the year, a full 1.2 percentage points below the 5.6% previously forecast in March. Similarly, cargo demand is expected to increase 5.5% and not 6.1% as predicted earlier.
Asia-Pacific carriers are expected to earn $2.1 billion - the most profitable of all regions. North American carriers will see the $4.1 billion profit of 2010 fall to $1.2 billion. European carriers will deliver a $500 million profit, down from $1.9 billion in 2010.
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Freight shipping volumes remained flat in May
7 June, 2011
Another drop in U.S. durable goods shipments and orders has flattened freight volumes, which posted a month-to- month 0.2 percent drop, according to an analysis prepared for the Cass Freight Index. Year-over-year growth rates are dropping swiftly as well, with May freight volumes only 9.6 percent higher than a year ago, compared to April which was 12.3 percent higher than a year ago.
The rail industry reported steady gains in the last half of the month, but weekly carloadings levels are well below what they were earlier this year.
Fuel prices rose for most of the month, but posted their sharpest decline in over a year during the last week of May.
Although many industry observers are still predicting a strengthening as we head to the second half of the year, the underlying pieces are not falling into place to support anything more than weak growth.
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Enhanced controls on imports of fresh produce from the European Union
7 June, 2011
The Canadian Food Inspection Agency (CFIA), in collaboration with Canada Border Services Agency (CBSA), announced that they will be implementing enhanced controls on cucumbers, lettuce and tomatoes from the European Union due to current E. coli outbreak in Europe.
The agencies report that there is no indication at this point that any contaminated product has been shipped to Canada. Volumes are very low as the amount of fresh product imported from European countries account for less than one per cent of fresh product entering Canada.
However, as a safety precaution, incoming shipments from the European Union will be identified and the CFIA will intensify sampling and testing of these products for the presence of Shiga toxin-producing Escherichia coli, the E. coli strain linked to the outbreak in Europe.
The CFIA will continue to work closely with the European Union, as well as other trading partners and international organizations. As German government officials are still investigating the cause of the E. coli outbreak in Europe, these measures will be adjusted, as warranted, to ensure the Canadian food supply remains protected.
The CFIA's enhanced surveillance controls will add an additional safeguard to Canada's existing import controls. CFIA maintains rigorous controls and tracking systems for imported food.
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Volumes of rail freight held steady at the end of May
6 June, 2011
The Association of American Railroads reports steady results in weekly intermodal volume for the week ending May 28 totaled 234,668 trailers and containers, up 4.2 percent compared with the same week in 2010. U.S. originating carloads came in at 288,049 for the week, up 0.7 percent.
The commodity groups posting significant carload increases included: metallic ores, up 48.9 percent; grain, up 18.5 percent, and lumber and wood products, up 13.7 percent. Groups posting a notable decrease included: primary forest products, down 23.1 percent; farm products excluding grain, down 19.7 percent, and nonmetallic minerals, down 15.4 percent.
For the first 21 weeks of 2011, U.S. railroads reported cumulative volume of 6,110,554 carloads, up 3.2 percent from last year, and 4,703,701 trailers and containers, up 8.5 percent from the same point in 2010.
Canadian railroads reported 75,412 carloads for the week, up 6.5 percent from last year, and 46,472 trailers and containers, down 0.1 percent from 2010. For the first 21 weeks of 2011, Canadian railroads reported cumulative volume of 1,546,726 carloads, up 1.5 percent from the same point last year, and 973,296 trailers and containers, up 3.3 percent from last year.
Mexican railroads reported 13,665 carloads for the week, down 10.7 percent compared with the same week last year, and 8,944 trailers and containers, up 29.4 percent. Cumulative volume on Mexican railroads for the first 21 weeks of 2011 was 301,250 carloads, up 5.7 percent compared with the same point last year, and 153,887 trailers and containers, up 13.1 percent.
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Hong Kong airport plans to build a third runway
6 June, 2011
In announcing a 20-year development blueprint for Hong Kong International Airport (HKIA) the Airport Authority said the most interesting avenue will be to build a new runway to increase capacity. It would enable HKIA to meet the city's air traffic demand up to and possibly beyond 2030 while further strengthening its position as a leading regional and international aviation hub.
Another option would be to maintain the existing two-runway system, which would help meet Hong Kong's aviation demand in the medium term only.
Local stakeholders and the public are invited to submit their views and comments during a three-month public consultation exercise which started on June 3, 2011. A series of roving exhibitions, public forums and stakeholder briefings will form a key part of the exercise, which will end on 2 September 2011.
The International Air Transport Association (IATA) reiterated its support for the construction of a third runway. "Aviation is a critical part of Hong Kong's economy. It connects 1,300 regional head offices to their markets and gives Hong Kong an important global presence as a major gateway to China. But the Hong Kong hub can only fulfill its important economic role if it has sufficient capacity to grow. For this, a third runway is needed," said Giovanni Bisignani, IATA's Director General and CEO.
The transport association noted that HKIA is rapidly approaching its effective capacity of 74 million passengers and 6 million tonnes of cargo. In 2010, HKIA served a record 50.9 million passengers and 4.1 million tonnes of cargo. IATA airlines serving HKIA forecast that by 2014, 62.2 million passengers and 5.3 million tonnes of cargo will travel to and from Hong Kong.
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