|
|
|
WISCONSIN
WORLDWIDE
Vol.
5 #3, January 2006
Wisconsin
Worldwide's mission is to provide you
with news and insights on international trade and export opportunities
that
will help you compete in the global marketplace. If you have
comments, critiques or questions please e-mail Stanley
Pfrang.
Canada Goes to the Polls
By Nancy Ward, Director of our Canada Trade Office
 As a result of an
unusual non-confidence vote
in the House of Commons Liberal Prime Minister Paul Martin dissolved
the Canadian government on November 28 and called an election for
January 23, 2006. The last federal election in Canada was
held on
June 28, 2004. While Canadian politics may be very
tumultuous,
the economy and opportunities for Wisconsin exporters continue to move
in a positive direction.
As predicted, the ongoing federal election campaign has been a
contentious one. The Liberals have been in power since 1993
and
Paul Martin has been Prime Minister since December 12, 2003.
They
have not been able to shake the taint of scandal, regardless of the
fact that an independent inquiry report, released in November,
exonerated the current Prime Minister and placed the majority of the
blame for the "Sponsorship Scandal" on the previous Prime Minister,
Jean Chrétien.
The "Sponsorship Scandal" saw millions of dollars of government funds
channeled to advertising agencies in Québec for the purpose
of
promoting nationalism. Contracts for these funds did not go
through the standard government procurement process and were awarded to
agencies friendly to the Federal Liberal Party. This will
hurt
the Liberals primarily in Québec and help the Bloc
Québecois, the separatist party in the province, pick up
seats. This would be extremely damaging for the Liberals as
many
key cabinet ministers hail from Québec.
Pollsters predict that neither the Liberals nor Conservatives will win
enough seats to form a majority government. The left-leaning
New
Democrats will likely win enough seats to be a player in any coalition
government. The Bloc will have a stronger role in policy
making
if it takes the predicted number of seats in
Québec. This
could cause more alienation with Western Canada. Whichever
party
does worse at the polls, the Conservatives or the Liberals, will
probably see a post-election leadership shakeup. If another
minority government is elected it is likely that another election will
be called within the next two years.
The enthusiasm for the election is limited as a large portion of the
public views it as an expensive process which may not yield a
significantly different Canadian political landscape. The
campaign has been fractious with additional scandal being aroused by
the use of anti-U.S. sentiment, a police investigation into a potential
leak by the Finance Minister’s Office on changes to Income
Trust
legislation, and a focus on gun control tragically brought to the
forefront by a shooting in downtown Toronto on Boxing Day.
The
latest polls released January 3 show the Liberals and Conservatives
almost even in their support. However, there are still two
weeks
left in the campaign and news sources are now stating that we are in
the issue leg of the campaign.
Despite the challenges in the political system, Canada’s
economic
fundamentals are strong; the unemployment rate stands at 6.4 percent,
its lowest level since December 1974. The Canadian dollar is
sitting in the 84 -86 cent range vis-à-vis its U.S.
counterpart,
which is at its strongest rate since the early 1990s. Despite
the
strong dollar, exports have remained brisk and the inflation rate is
well within the 3 percent range administered by the Bank of
Canada. Thankfully, electioneering is seemingly not having an
impact on the economy.
New
EU Directive on Electrical and Electronic Products
Since
August 2005, companies selling a broad range of electrical goods in
Europe have needed to conform to the European Union's WEEE (Waste
Electrical and Electronic Equipment Directive) and as of July 2006,
those same companies will also need to conform to RoHS (Restriction of
Hazardous Substances). The ten product categories regulated
under
WEEE include: large household appliances; small household appliances;
IT and
telecommunications equipment; consumer electronics; lighting equipment;
electrical and electronic tools; toys, leisure and sports equipment;
medical equipment; monitoring and control equipment; and automatic
dispensers. The RoHS Directive dovetails into WEEE by
reducing
the amount of hazardous substances (mercury, cadmium, lead, chromium
VI, PBB and PBDE) used in product manufacture. This reduces
the
occupational risk to recycling personnel, reduces the need for special
handling and treatment, and places less toxins into landfills and the
environment.
Any business that sells applicable electronic products, sub-assemblies
or components directly to EU countries, or sells to resellers,
distributors or integrators that in turn sell products to EU countries,
is impacted if they utilize any of the restricted substances.
Because these are Single Market Directives, they must be applied in all
member states of the European Union, but because they are environmental
directives there will be differences in implementation across the
member states. Though many EU member states have delayed
implementation of WEEE legislation they are preparing for
implementation.
For additional information and updates, please visit http://www.buyusa.gov/europeanunion/weee.html
and http://www.rohsguide.com.
Federal Fee
Increase Stopped
State economic development agencies joined together in an advocacy
campaign led by the State International Development Organizations
(SIDO) to beat back a proposed tripling of federal fees for export
promotion services. In January 2005 the U.S. Commercial
Service
announced that it would be raising its fees for the “gold
key” matchmaking and other international trade services by as
much as 300%. The Commercial Service has always charged for
these
services to partially defray costs, but the Office of Management and
Budget (OMB) ruled that the Department of Commerce must comply with
circular A-125 restrictions on favoring individual businesses and
required Commerce to charge full cost for these services.
Through SIDO’s efforts, the House and Senate Appropriations
committees introduced language in the 2006 Appropriations bill
exempting the Department of Commerce from A-125 restrictions.
This bill was signed into law on Novembers 25. However, the
bill
also contained a requirement that Commerce raise $8 million in revenue
from fees. While less onerous than full costs recovery, the
new
mandate will require Commerce to raise the fees it charges to
businesses.
SIDO, in order to protect small exporters, recommends that the current
language allowing a waiver from OMB full cost recovery rules be
retained in future appropriations cycles. In addition, SIDO
would
like Commerce to be exempted from the requirement to raise $8 million
in fee revenue. To comment on this issue, contact Mr. Neal
Burnham, Deputy Assistant Secretary, United States Commercial Service, neal.burnham@mail.doc.gov,
ph: (202) 482-4767.
South
Central
Wisconsin Gets Foreign Trade Zone
The Foreign Trade Zones Board
of the U.S. Department of Commerce
granted authority for Dane County to establish a Foreign Trade Zone
(FTZ) on December 13.
A Foreign Trade Zone is a specific area within the United States,
located in or near a port of entry, where certain types of merchandise
can be imported without going through formal customs entry
procedures. The goods are not considered to have entered U.S.
commerce until they are sold and leave the zone. This can
help a
company’s cash flow and saves substantial dollars.
Benefits of using an FTZ include:
- Duty Exemption - no duties
or quota charges on products
temporarily held in an FTZ before being re-exported
- Duty Deferral - customs
duties and federal excise tax deferred on
imports until goods leave the FTZ. A firm's cash flow can be
helped by importing in large quantities just a few times a year and
paying duties on smaller quantities as they are about to be delivered
to customers
- Inverted Tariff - when
imported components are used to
manufacture finished products, the finished products often face a lower
duty rate than the foreign inputs
- Logistical Benefits -
companies using FTZ procedures may have
access to streamlined customs procedures (e.g. "weekly entry" or
"direct delivery").
The Dane County Regional Airport compiled the application for FTZ
status and two parcels of airport-owned land are included in the
initial zone. Three additional, non-contiguous parcels in
Dane
and Colombia Counties were included in the zone so that tenants can use
multiple forms of transportation - air, rail, and truck. More
parcels can be added later within the eight counties included in the
new South Central Wisconsin FTZ (Dane, Sauk, Columbia, Dodge, Iowa,
Jefferson, Green and Rock).
There are currently two other Foreign Trade Zones operating in
Wisconsin, in Brown County/Green Bay and in Milwaukee. To
learn
details about how a firm can use the benefits of the Dane County
Foreign Trade Zone, contact Mr. Paul Tessmer, President of Capitol
Warehousing Corp., ptessmer@capitolwhse.com,
ph: (608) 846-9310 x237.
Bolivian
Election's Effect
on Business
 Socialist
Evo
Morales was elected President of Bolivia on December 18 in a decisive
victory dubbed the “leftist landslide in the Andes”
by The
Economist magazine. He will be inaugurated on January 22 as
the
country’s first president of indigenous descent.
Since his
election he has already visited his leftist colleagues Fidel Castro in
Cuba and Hugo Chávez in Venezuela. The
president-elect has
also visited Spain, France, Belgium, South Africa, China and Brazil.
During the campaign, Mr. Morales declared his intention to nationalize
the country’s natural gas reserves. Foreign
investors in
the oil and gas industry are already feeling the pain from the new
Hydrocarbons Law put in place in May, requiring these investors to pay
increased royalties and taxes. Their current contractual
rights
may be further weakened under the new government.
However, when assuming office, Mr. Morales may have to reconsider his
plans for the industry. There is significant investment in
the
Bolivian energy industry from other left-leaning countries such as
Brazil and Spain. Brazil, as the largest importer of Bolivian
gas, and with the leftist but market-friendly government of Lula da
Silva, may have influence in Morales’ decisions.
While in
Europe, Mr. Morales met with representatives of Spain’s gas
company, Repsol YPF, which also has large investments in the country.
Despite the political turmoil present in Bolivia over the past several
years, U.S. and Wisconsin exports have grown to this poor South
American country. While U.S. exports through September of
2005
grew by 13.5% over the same time period of the prior year,
Wisconsin’s exports have shown a stronger growth of 123% to
almost $2 million. Top export products from Wisconsin include
electrical machinery, industrial machinery, furniture and bedding, and
medical devices.
New
Wisconsin International
Website
A new website, http://international.wi.gov,
has been introduced to help state residents find international
resources and introduce Wisconsin to business people, travelers, and
educators in other countries. While the International
Division at
the Wisconsin Department of Commerce (Commerce) is the primary state
agency involved with international activities, many other elements of
state government are engaged in international activities.
Commerce has created the new website to link information on the various
international services and programs in one useful location.
The State of Wisconsin's international activities are not just limited
to trade missions and promoting exports. Every year Wisconsin
welcomes thousands of international students and we encourage Wisconsin
students to study abroad in order to increase their ability to succeed
in an ever more interconnected global community. Cultural
exchanges increase the bonds between Wisconsin and other
regions.
More and more international tourists are discovering the joys of
vacationing in Wisconsin.
The site provides links to the Departments of Agriculture, Trade and
Consumer Protection; Public Instruction; Tourism; Natural Resources;
Financial Institutions; Workforce Development; and Administration plus
the Wisconsin Arts Board, the UW-System, and the Technical College
System. The home page is currently viewable in Chinese,
French,
German, Japanese and Spanish. Subsequent pages will be
translated
in coming months.
Worldwide
Biotech Contacts at Wisconsin's Doorstep
 BIO,
the world’s largest marketplace and idea exchange for the
biotech
industry, will be held in Chicago April 9-12, 2006. While
practically at our doorstep, Wisconsin participants will have the
opportunity to make contacts with potential joint venture partners,
investors, academics and researchers, and customers from over 24
countries. To help Wisconsin firms identify key contacts from
among the 20,000 participants and schedule one-on-one business meetings
with international contacts, the Wisconsin Department of Commerce is
offering the International Business Matchmaker (IBM) Service.
We
will work with our overseas trade offices and other international
contacts to introduce you to key players from Australia, Canada,
Europe, Japan, Taiwan, and elsewhere in order to maximize your time at
BIO. The IBM Service is free of charge and will be available
during all three days of the conference. Contact Mr. Brad
Schneider, bschneider@commerce.state.wi.us,
ph: (920) 420-1796, for more information.
China
Industrial Machinery
Market
 U.S.
industrial
machinery exports to China have experienced healthy growth over the
past several years. In 2004 they amounted to $6.2 billion and
they grew by 15% in the first three quarters of 2005.
Wisconsin
is the #7 state for industrial machinery exports to China, selling over
$186 million worth of industrial machinery to China between January and
September of last year.
China has become the world’s largest machine tool consumer
and
importer. The majority of imported equipment includes
grinders,
lathes, spindles, tool carriages, ball-screws, tool system
manipulators, high-speed protectors, and precision tools.
China
primarily depends on imported machine tools and integrated products
that are high speed, precise, intelligent, environmentally friendly,
high quality, and efficient.
The growth in machinery exports to China over the past several years is
driven by:
- Demand for superior quality
and precision technology
- Expansion of
China’s manufacturing capacity and increased
competition among domestic manufacturers for quality output
- Influx of foreign invested
manufacturing facilities requiring
world -class machinery
- WTO mandated tariff
reductions
In order to deal with the increased market opportunities and
competition resulting from entry into the WTO, China has placed high
emphasis on upgrading its conventional industries with more advanced
high-tech machinery and equipment.
China is also moving rapidly to restructure the state-owned
enterprises. China's "Revitalize the Northeast" initiative
provides policy and financial incentives for enterprises in the
country's "Rust Belt" to invest in fixed assets, including a de facto
exemption from the value-added tax on imported assets. As of
July
2005, foreign-ownership of infrastructure and transportation
enterprises is allowed in the Northeast. Mining, light rail,
and
port equipment are also in demand in the Northeast.
To help U.S. firms take advantage of this opportunity, the Commercial
Service at the U.S. Consulate in Shenyang, Liaoning Province, is
organizing a "U.S. Pavilion" at the 5th China International Equipment
Manufacturing Exposition (CIEME 2006) to be held August 29-September 2,
2006 at the Shenyang International Exposition Center. This is
the
only show in Northeast China with an official U.S. presence.
U.S.
firms participating in the 2005 show reported $5 million in sales and
four sales agents identified. Participation in the U.S.
Pavilion
includes a nine square meter booth, coordination of product
demonstrations and seminars, briefings by U.S. government officials,
and a business reception with potential Chinese customers.
Wisconsin's Trade Promotion Office in Shanghai can also conduct an
Agent/Distributor Search in advance of the show and arrange meetings
with important business contacts. To learn more about the
China
market for industrial machinery, contact Ms. Beng Yeap, Asia
Specialist, byeap@commerce.state.wi.us,
ph: (608) 266-1480.
Job
Opening at Department
of Commerce
The Wisconsin Department of
Commerce, Division of International
Development is seeking to hire an international trade/export
consultant. Duties include developing and administering the
state’s international export assistance programs in Southwest
Wisconsin; providing technical assistance to industrial firms;
organizing trade missions and trade shows; developing working
relationships with state and federal agencies and organizations;
performing research, analysis, and consultation related to
international trade policy; developing and administering the
state’s foreign investment program; and planning and
conducting
training, workshops, seminars, and conferences. Candidates
will
need knowledge of international trade and export processes; knowledge
of products, services, and characteristics of Wisconsin businesses;
knowledge of foreign markets; research and analytical skills; knowledge
of: export sales and marketing, management of overseas trade shows,
exporting workshops/ seminars, market research, and international
cultures. Qualified candidates will also need effective oral
and
written communication and personal relations skills.
The starting salary for this position is between $41,960 and $48,024
per year, depending on qualifications, plus excellent
benefits. A
twelve-month probationary period is required. This position
is
not represented by a bargaining unit.
HOW TO APPLY: Apply with Application for State Employment
form
(OSER-DMRS-38),
a current resume, and a paper limited to 3 pages
describing in detail your education level and your experience in the
following areas: 1) export /market development (include description of
employer and number of years experience and specify all countries you
have experience with); 2) overseas trade shows; 3) export
financing and international product transportation; 4) market research
(including foreign markets). Be sure to describe your
responsibility for organizing and developing these program
areas.
This paper is the examination for this position. Send
application
materials by January 26, 2006 to:
Ms. Judy Arzt
Commerce Human Resources
201 West Washington Avenue
PO Box 7970
Madison, WI 53707-7970
jarzt@commerce.state.wi.us
ph: (608) 266-9647
FAX (608) 266-0182
Materials will be evaluated and the most qualified applicants will be
invited to participate in the next step of the selection process.
Export Award
Nominations Sought
 Wisconsin
companies that have successfully undertaken exporting initiatives will
want to enter the annual Governor's Export Achievement Awards
Competition. The awards will be presented at the 42nd Annual
Wisconsin International Trade Conference, to be held May 9 in
Milwaukee. Each year the Governor recognizes firms and
organizations that have achieved extraordinary results in international
sales or have contributed to Wisconsin's increased ability to compete
in a global market.
Any agricultural, forestry, industrial, high technology or service
enterprise successfully engaging in or assisting in the export of
Wisconsin-origin products or services can be nominated. The
awards are presented in categories based upon size and industry and
include:
- Small and Large Agricultural
Exporter - food, farm, or forestry
products
- Small and Large Industrial
Exporter - non-agricultural
manufactured products
- Small and Large Service
Exporter - services provided to customers
in other countries
- Small and Large High Tech
Exporter - scientific, medical, or
other cutting edge products.
An Export Assistance Award is also presented to firms or organizations
that provide international business services to customers in Wisconsin.
These can include educational, financial, language, logistical, legal,
or other service providers that have helped Wisconsin exporters succeed.
Applications can be obtained at http://www.commerce.wi.gov/ie/IE-ExportAwards.html
or by calling (608)
267-0587. The deadline for submitting
nominations to the Wisconsin Department of Commerce is April 7, 2006.
Overseas
Office
Directors' Visit Scheduled
Mark your calendars - the
directors of Wisconsin's trade promotion
offices in Canada, Mexico, Brazil, China, and Europe will be in
Wisconsin the week of May 8-12. Their visit is scheduled to
coincide with the 42nd Annual Wisconsin International Trade Conference
to be held May 9 in Milwaukee. The directors' itinerary has
not
yet been finalized, but as in past years, they will be traveling to
several locations around the state in addition to Madison and
Milwaukee. If your firm or organization would like to sponsor
a
visit to your community, contact Ms. Christine Stamm, cstamm@commerce.state.wi.us,
ph: (608) 264-7824.
Complying
with U.S. Export
Regulations
While the U.S. federal
government encourages exports, national
security issues require the government to limit or license exports to
certain countries, businesses, and individuals. Depending
upon
the product and destination, different regulations may apply.
To
ensure that your firm is complying with U.S. law and not endangering
national safety, it is important for your firm to keep on top of the
regulations and integrate the export compliance process into your
business procedures.
In 2005 a California company pled guilty in the Northern District of
California to one felony count of exporting digital oscilloscopes to
Israel without a Bureau of Industry and Security license.
Even
though the United States has a trade relationship with Israel, the sale
of these oscilloscopes, with sampling rates exceeding 1 GHz and capable
of being utilized in WMD development and missile delivery fields, are
controlled for nuclear nonproliferation reasons. The firm was
sentenced to a $50,000 criminal fine, assessed a $150,000
administrative penalty, and had its export privileges suspended for
five years. Additional information on export regulations can
be
found at the website of the Bureau of Industry and Security (http://www.bis.doc.gov).
The next meeting of the International Credit Executives (ICE) will
address export compliance issues. You will be able to hear
from
representatives of the Department of Homeland Security as well as
Wisconsin companies that are meeting their obligations. The
meeting will take place from 9:00 am to 3:00 pm on Tuesday, January 24
at the Four Points Sheraton Milwaukee North in Brown Deer.
For
more information, contact Ms. Dianna Rowinski, diannar@nacmwi.org,
ph: (262)
827-2880 ext. 225.
Northeastern
Wisconsin Global Trade Conference
The 4th Annual Northeastern
Wisconsin Global Trade Conference will
be held on Tuesday, April 11, 2006 at the Bridgewood Conference
facilities in Neenah. The event will again be co-hosted by
6th
District Congressman Thomas Petri and 8th District Congressman Mark
Green. This one day conference is designed to provide the
knowledge, skills, and connections to enhance participants' export
skills and capabilities. A variety of seminar sessions will
be
led by experts including industry executives and senior federal
government officials. Successful exporters from Northeastern
Wisconsin will offer first-hand experience and share effective
practices.
Mr. Terry Growcock, Chairman and CEO of The Manitowoc Co., will provide
the business keynote address during the opening session. U.S.
Secretary of Commerce Carlos M. Gutierrez is the invited luncheon
keynote speaker.
Last year's conference drew 330 attendees. For more
information
on the conference and to request registration materials, please contact
Mr. Fred Monique, monique@titletown.org,
ph: (920) 496-2118.
|
