Trade News

November 4, 2020

Canada’s Trade Deficit Widens, Despite Rise in Imports and Exports Through September

Canada’s exports and imports rose in September, though both remain below pre-pandemic levels, while the country’s trade deficit widened more than expected, according to data from Statistics Canada.

The trade deficit widened to C$3.25 billion ($2.47 billion), missing analyst predictions of C$2.6 billion, with August’s deficit also upwardly revised to C$3.21 billion from an initial C$2.45 billion.

“Canada’s trade gap has widened notably through the pandemic,” said Benjamin Reitzes, Canadian Rates & Macro Strategist at BMO Capital Markets, in a note. “With energy prices remaining low, it’s going to be difficult to meaningfully narrow the gap in the short term.”

“On the bright side, the rise in overall trade activity bodes well for the economy in September,” he added.

Imports rose by 1.5%, mainly on higher crude oil imports, while exports were up 1.5%, led by lumber and aircraft. Eight out of 11 export product sections increased, with non-energy exports up 2.2%, Statscan said.

Exports to the United States, Canada’s largest trading partner, declined 1.6%, while imports rose 1.2%.

With the outcome of the U.S. presidential election still unclear, analysts have been unable to predict the immediate impact on Canadian trade.

However, it is likely that regardless of the winner of the election, the United States will remain in a protectionist state due to the continuation of the COVID-19 pandemic, among other reasons.

(Source: Reuters)

November 3, 2020

U.S. CBP Issues Updated Section 232 Guidance for Canadian Aluminum Imports

On October 29, in Cargo Systems Messaging Service (CSMS) #44591106, U.S. Customs and Border Protection issued updated Section 232 guidance on imports of aluminum articles from Canada.

The guidance reflects the changes made to Presidential Proclamation 10060 by U.S. President Trump on October 27, 2020, reinstating the Section 232 exclusion for certain non-alloyed unwrought aluminum articles from Canada.

This exclusion is effective from September 1, 2020. Goods entered prior to September 1, 2020 are still subject to the additional 10% duties under Section 232.

The guidance confirms a statement made by U.S. Trade Representative Robert Lighthizer:

After consultations with the Canadian government, the United States has determined that trade in non-alloyed, unwrought aluminum is likely to normalize in the last four months of 2020, with imports declining sharply from the surges experienced earlier in the year. Average monthly imports are expected to decline 50 percent from the monthly average in the period of January through July. Accordingly, the United States will modify the terms of the 10 percent tariff imposed in August on imports of Canadian non-alloyed unwrought aluminum… Based on these expectations, the United States will resume duty-free treatment of non-alloyed, unwrought aluminum retroactive to September 1, 2020.

Click here to read the full message in CSMS.

October 27, 2020

Canadian Blueberries Under U.S. Trade Scrutiny

U.S. Trade Representative Robert Lighthizer and the Trump administration fear that domestic producers are being unfairly harmed by what they perceive as a recent increase in blueberry imports from Canada and Mexico.

Lighthizer asked the U.S. International Trade Commission to investigate whether domestic farmers, who are feeling the pinch from the COVID-19 pandemic, are being hurt by an increase in foreign competition.

Ordering a USITC investigation, which Lighthizer also did on raspberry imports earlier this year, “is just one of a number of steps the administration is taking to support American producers of seasonal and perishable agricultural products.”

Blueberry imports from Mexico appear to be the primary concern, however, Canadian producers are also taking note.

Canada is the world’s single largest importer of fresh American blueberries by a wide margin, but remains far from the single largest supplier to the U.S., well back of Chile and Mexico.

(Source: Global News)

October 23, 2020

Canadian Trade Shrank in August Due to Slumping Transportation Exports

A lower number of auto exports caused Canadian trade numbers to drop in August, suggesting Canadian economic recovery may be losing steam sooner than economists had predicted.

Merchandise exports fell 1% in August, after jumping 42% between April and July, according to Statistics Canada, while imports decreased 1.2 %. That leaves total trade at about 94% of pre-pandemic levels, a decrease from July when it had rebounded to about 96%.

Lower imports of aircraft and other transportation equipment were the largest contributors to slumping August numbers.

The trade deficit narrowed slightly to $2.45 billion in August, from a revised $2.53 billion in July. Economists had forecast a deficit of $2.05 billion.

Strike action at the Port of Montreal was also cited by Statistic Canada as a potential reason for lowering trade numbers.

(Source: BNN Bloomberg)

October 21, 2020

Global Trade Rebounding Slowly To Pre-Pandemic Levels, Though Future Remains Uncertain

Global trade is staging what the United Nations termed a “fragile recovery,” as economies battered by the pandemic claw their way back to full activity.

UN trade body UNCTAD’s assessment for the latter half of 2020 recorded sea freight volumes in September that were close to the previous year’s level.

A revival of global commerce is a key prerequisite for the economy to exit the historic recession unleashed by the COVID-19 pandemic that forced many businesses around the world shutter their doors.

The International Monetary Fund predicts a 4.4% drop in global gross domestic product this year, and has warned the path of recovery is uneven.

If the pandemic resurges in coming months, that could lead to a deteriorating environment for policy-makers and sudden increase in trade restrictive policies, it said.

China’s exports rebounded strongly in the third quarter after falling in the early months of the pandemic, and have posted year-on-year growth rates of nearly 10%, UNCTAD said.

“Overall, the level of Chinese exports for the first nine months of 2020 was comparable to that of 2019 over the same period,” it said.

In its report on Wednesday, UNCTAD said that despite the third-quarter rebound, global trade is forecast to plummet about 7% this year. An even deeper slump is possible if the pandemic intensifies again or if there is a “sudden increase in trade restrictive policies.”

(Source: Bloomberg)

October 20, 2020

Canadian Dairy Farmers Demand Compensation Amid CUSMA Losses

Canadian dairy farmers are demanding compensation from the government because of losses to their industry they say have been caused by a series of international trade deals.

Dairy Farmers of Canada representatives say they have received $1.75 billion in compensation from the government for losses they have incurred due to Canada’s trade deals with Europe and with Pacific Rim countries.

But they have yet to be compensated for a third trade deal: the new North American trade pact with the United States and Mexico — CUSMA.

The lobby group says that by 2024, trade concessions which came into effect on July 1, 2020, will mean that 18% of domestic milk will be outsourced to foreign dairy farmers.

David Wiens, the vice-president of the organization, says it didn’t want to push too hard at the start of the pandemic because the government had its hands full but now the dairy farmers are done waiting.

(Source: Kamloops This Week)

October 20, 2020

Washington Pushes for Tighter Sanctions for eCommerce Counterfeits

U.S. President Trump is cracking down on counterfeit trafficking by way of ecommerce platforms, such as Amazon and eBay.

Trump has signed a memorandum asking the executive branch to exercise tighter control over ecommerce sites in the U.S. that offer third-party selling. The proposed set of sanctions would give the Secretary of Homeland Security, through the Commissioner of U.S. Customs and Border Protection, the right to seize counterfeit goods imported to the U.S. on ecommerce platforms, while imposing fines on the online sites.

“Trafficking in counterfeit goods infringes on the intellectual property rights of American companies, undermines their competitiveness and harms American workers,” the memorandum stated. “Counterfeit trafficking also poses significant health and safety threats to online consumers. E-commerce platforms serve as key contributors to counterfeit trafficking by acting as intermediaries and providing marketplaces that match up buyers and sellers.”

The Secretary of Homeland Security and the Attorney General have 120 days to develop a legislative proposal backing the memorandum.

In January, U.S. Customs and Border Protection launched a pilot program with marketplaces and shipping services, such as Amazon, Zulily, eBay and FedEx — all of which volunteered for the program — to disclose information on shipments, package contents, manufacturing and recipient details.

(Source: Yahoo News)

October 19, 2020

EU Ready to Impose Digital Services Tax Without Agreement from OECD

The European Commission remains ready to propose an EU-wide tax on digital companies, absent an international agreement being negotiated at the Organization for Economic Cooperation and Development.

Besides wanting to make multi-national tech giants pay their fair share, Executive Vice President of the European Commission, Valdis Dombrovskis, said the EU is mindful of member countries — such as France — going it alone.

“We stand ready to come forward with a digital taxation proposal at the EU level, because we would like to avoid the fragmentation of the single market if different member states now start introducing different digital taxes,” he said.

Asked about France’s digital tax, the new EU trade chief said Brussels would not accept U.S. retaliation.

“The EU’s position on this has been clear: Taxation is a sovereign right of countries and so we are not accepting that third countries are interfering with taxation rights of the member states, especially if those are done in a horizontal way not addressed to any particular country,” he said.

(Source: Politico)

October 19, 2020

No Movement on U.K. – Canada Trade Deal As Year-End Approaches

As prospects of a trade deal between the United Kingdom and the European Union collapse, there is growing doubt in a post-Brexit pact involving Canada being completed by the end of the year.

Talks between the U.K. and EU have so far gone poorly and British Prime Minister Boris Johnson is now preparing voters to enter 2021 without a trade agreement in place.

A deal between the two is likely being prioritized over negotiations with Canada, but the U.K. has agreed in principle to some bilateral trade agreements.

As of 2021, the U.K. will no longer be included in the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU.

Conservative Party of Canada critic for export promotion and international trade Tracy Gray says companies are looking for certainty as 2021 approaches.

“We’re at a stage right now where the deadline is quickly approaching and we’ve got a number of industries that are very concerned,” says Tracy Gray, noting the near $20-billion worth of goods Canada exported to the U.K. last year.

Mary Ng, the federal minister responsible for international trade, continues to say both parties are working on finishing a transitional agreement before the end of the year.

In response to a question on the matter during Question Period in September, Ng said she remains in close communication with the U.K.

Earlier this year, the governing Liberals agreed to inform parliamentarians of any negotiations it enters into within 90 days, but by mid-October, no notification had been made.

(Source: The Western Producer)

October 16, 2020

Ontario Proposes Allowing 24-Hour Deliveries

Proposed legislation in Ontario would pave the way for 24-hour deliveries to businesses. The Main Street Recovery Act, 2020, introduced by Associate Minister of Small Business and Red Tape Reduction, Prabmeet Sarkaria, contains measures to help small businesses rebuild, reinvest and create jobs.

The proposal, among other things, would permanently allow 24/7 deliveries to businesses including retail stores, restaurants, and distribution facilities.

The proposed legislation was welcomed by the Region of Peel, which has been piloting off-peak deliveries.

“The Region of Peel has long recognized that the regional economy is dependent on a strong goods movement system,” said Peel Goods Movement Task Force chairman Nando Iannicca.

“Peel also knows that our goods movement system is facing strong growth pressures and businesses are becoming increasingly challenged with delivering goods and services to the community. This Bill, if passed, will allow for a timely and consistent movement of essential goods and supplies, assuring the people of Ontario that essential supplies will be available at their drug stores, supermarkets, and other retailers across the province when needed.”

“The passing of this Bill will be welcomed news and a big win for our local businesses, the environment and residents commuting throughout the Greater Toronto Hamilton Area,” added Caledon mayor Allan Thompson.

“Our supply chain is more important than ever and this flexibility will have many positive spin-offs.”

The Region of Peel’s Off-Peak Delivery Pilot with the University of Toronto, the LCBO, Loblaw, and Walmart Canada, showed goods movements improved by 18.1 percent, and emissions related to congestion fell 10.6 to 15 percent.

(Source: Inside Logistics)