Customs News & Information

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World Bank says recession worse than thought

The following is excerpted from the 22 June 2009 edition of the "Financial Post".

The World Bank said the global recession this year will be deeper than it predicted in March and warned that a flight of capital from developing nations will swell the ranks of the poor and the unemployed.

The world economy will contract 2.9%, compared with a previous forecast of a 1.7% decline, the Washington-based lender said in a report on Monday. Growth will be 2% next year, down from a 2.3% prediction, the bank said.

The bank, formed after World War II to fund health and development projects in poor countries, said that while a global recovery may begin this year, impoverished economies will lag behind rich nations in benefiting. The lender called for "bold" actions to hasten a rebound and said the prospects for securing aid for the poorest countries were "bleak."

"The recovery is not going to be V-shaped," said Alvin Liew, an economist at Standard Chartered Bank in Singapore. "We may see slower consumer demand over a prolonged period."

The bank is more pessimistic than its sister organization, the International Monetary Fund. The IMF, which is forecasting a global contraction of only 1.3% this year and growth of 2.4% in 2010, said June 19 that it plans to revise estimates "modestly upward."

The lender's view also contrasts with that of billionaire hedge fund manager George Soros, who on June 20 told Polish television that the worst of the global financial crisis "is behind us."...

The World Bank cut its forecast for the U.S. this year, calling for a 3% drop in the world's biggest economy, after predicting a 2.4% contraction in March....

Global trade may drop by 9.7%, compared with a March forecast of a 6.1% decline.

"Unemployment is on the rise, and poverty is set to increase in developing economies, bringing with it a substantial deterioration in conditions for the world's poor," the World Bank said. While the world is set to return to growth in the second half of 2009, a recovery will be subdued, the report said.

Reduced capital inflows from exports, remittances and foreign direct investment means "increasingly grave economic prospects" for developing nations, the lender said. After peaking at US$1.2 trillion in 2007, inflows this year may fall to US$363 billion, it said.

Reduced aid from advanced economies because of the economic crisis will also likely weigh on their finances, the bank said.

Economic growth in the developing world will be 1.2%, the World Bank said, scaling its outlook back from 2.1%. Developing nations in eastern Europe and Central Asia will be some of the hardest hit, the revised forecasts show. The region's economy is likely to shrink 4.7% this year, down from the 2% decline projected in March.

China, which is the biggest of the developing economies, will keep pumping money into its financial system during this "critical" phase of its recovery...

Efforts to revive domestic economies through stimulus spending should be coordinated internationally, the bank said.

"Any country that acts alone -- even the United States -- may reasonably fear that increases in government debt will cause investors to lose confidence in its fiscal sustainability and so withdraw financing," the report said.

The U.S. is implementing a two-year,US$787-billion stimulus package, while China is spending US$585-billion.

We may be close to crossing that new bridge

The following article, by Jeffrey Simpson, is extracted from the 20 June 2009 edition of “globeandmail.com”.

Could it be that after so many delays, false starts, political wrangling, engineering studies, competing proposals and plain old-fashioned inertia, a new bridge might soon be under construction between Windsor and Detroit, the busiest border crossing in North America?

Yes, there actually could be a new bridge, believe it or not.

With this project - an estimated $2-billion for the bridge, and more for the access roads on both sides of the border - nothing is ever guaranteed until the final rivet is in place. But on the Canadian side, all the political ducks are finally in line; and on the U.S. side, almost all of them are.

Except that in the U.S., a nation of lawyers, nothing is ever finally settled until the last lawsuit has expired….

The bridge is owned by one of the wealthiest men in the United States, billionaire Manuel (Matty) Moroun of Grosse Pointe. He owns a trucking conglomerate, dispenses political contributions (to 21 candidates in 2008, according to Campaignmoney.com), and keeps lawyers busy by filing lawsuits whenever matters are not going his way.

Which they are not. Mr. Moroun opposes the new bridge proposed by the U.S. and Canadian governments. He insists it will unfairly compete with his Ambassador Bridge, and the new bridge he will build, operate and own adjacent to the existing Ambassador that will eventually be phased out….

Alas for Mr. Moroun, the Department of Homeland Security does not favour his project, fearing terrorists could knock out one bridge, thereby crippling commerce among other losses. Nor does the U.S. Coast Guard favour Mr. Moroun's efforts. It recently ordered preliminary work stopped on his new bridge. Nor does the Democratic delegation in Congress from Michigan, with one exception.

Nor does the mayor of Detroit. Nor does the state government….

Mr. Moroun has just launched a lawsuit, claiming the U.S. government agencies had not followed their own rules in turning him down.

Unless this Hail Mary lawsuit succeeds - and very few people give it a hope - work will start later this year on the Windsor side preparing ground for the access from the 401 highway to the new six-lane bridge….

Many Windsorites wanted a tunnel from the 401 to the bridge, but the cost would have been astronomical. Now, it appears Mayor Francis and Queen's Park have reached an agreement whereby some of the access road will be sunken, although not tunnelled. With that compromise, the last hurdle fell on the Canadian side for a new bridge so long discussed, so long delayed.

The federal, provincial and municipal governments in Canada, and the federal, state and local governments on the U.S. side would appear all in agreement, finally, that a new bridge is needed and that it should be the publicly financed one. The Canadian section will likely be built through a public-private partnership….

It almost seems too good to be true: a new bridge by 2015. Hold your breath.

Amendments to the Customs Act

The following was published on the CBSA website in June 2009.

In June 2009, amendments were made to the Customs Act in support of the Government of Canada's strategy to strengthen security and facilitate trade. The primary purpose of the changes was to give the Canada Border Services Agency (CBSA) greater scope and flexibility in its management of risk. The key amendments allow the CBSA to fully implement the Advance Commercial Information program (known as eManifest) and to put in place changes at customs controlled areas. Both initiatives have been previously approved and funded by the Government.

The CBSA provides integrated border services that support national security priorities and facilitate the free flow of people and goods, including food, plants and animals, across the border.

One of the key pieces of legislation that governs the CBSA's mandate is the Customs Act. Although first enacted in 1867, it has been revised and amended over the years to give the Government greater flexibility to respond to changing technology and business practices.

SUMMARY OF AMENDMENTS

Advance Commercial Information

The June 2009 amendments to the Customs Act will provide the required legislative foundation for eManifest, the third phase of the Advance Commercial Information program. eManifest will change the commercial import process to reflect the CBSA's integrated risk management approach and to keep pace with the changing global environment.

As a result of eManifest, all commercial trade chain members will be required to electronically submit trade information in advance of their shipment's arrival in Canada. Getting the right information at the right time on who and what is coming into Canada will enhance the CBSA's capacity to identify threats before they reach the Canadian border. In addition, eManifest will enhance the import process by rewarding those who comply with predictable and expedited processing while reducing delays and congestion at the border.

Customs controlled areas

Previously, in 2001, various amendments were made to the Customs Act in response to the CBSA's desire for new tools to interdict crime resulting from internal conspiracies at Canada's ports of entry.

The 2001 amendments allowed for the creation of customs controlled areas. These designated areas are close to or associated with the border where domestic travellers or workers may come into contact with international travellers and/or goods that have not yet cleared customs. At that time, border services officers were only provided with the authority to stop, question and search individuals at exit points.

With the June 2009 amendments to the Customs Act, border services officers will have the authority and flexibility to examine goods and to question and search people anywhere within a customs controlled area. This will enhance the Agency's ability to combat internal conspiracies at ports of entry and interdict contraband and other illegal items before they reach Canadian communities.

Officers will be able to focus on areas of risk and persons of interest and this results in greater security for Canadians.

Other amendments

Some technical and housekeeping items were also part of the June 2009 changes: 

-- Correct wording in provisions of the Act that relate to valuation to reflect the wording in the World Trade Organization's Customs Valuation Agreement (1990). Canada is a signatory to this agreement. 

-- Clarify when and in what manner airlines must provide advance passenger information.

-- Address language inconsistencies between the French and English versions of the Customs Act.

Disclaimer: The information we feature does not necessarily reflect our opinion on a given international trade issue. While every effort has been made to ensure the accuracy of the information noted in the daily e-mail, government policies are constantly evolving. A.D. Rutherford & Co. Ltd. cannot assume any responsibility for actions taken solely or principally on the basis of the information provided.