Category Archives: Trade

News stories and links about trade, from a Vancouver perspective.

Harmonized System for import/export gets five-year update

Statistics Canada announced today:

The 2017 edition of Canadian Export Classification is now available.

The Canadian Export Classification is a structured, hierarchical classification system based on the Harmonized Commodity Description and Coding System (HS). The HS nomenclature is divided into 21 sections, which in general, group goods produced in the same sector of the economy.

Changes to the Harmonized Commodity Description and Coding System
Changes will be introduced to the HS starting with the January 2017 reference month.

The changes are due in part to World Customs Organization updates to the six-digit HS codes, which are applied every five years to reflect changing international standards and trade patterns.

Additional changes will be applied at the HS ten-digit (import) and HS eight-digit (export) levels in order to improve the coding system. The changes are intended to address data gaps, eliminate seldom-used categories and reduce response burden for importers and exporters.

Concordance table
A concordance between the 2012 and the 2017 six-digit HS classification codes is now available. This concordance table lists the terminated HS codes alongside with the new 2017 recoded HS codes at the six-digit level.

The full Canadian Export Classification (65-209-X) is available in HTML and PDF format.

Trade secrets versus internet freedom

Today the Supreme Court of Canada opens a civil hearing that pits Equustek Solutions Inc., of Burnaby, BC, against Internet giant Google. Here’s the Supreme Court summary:

Under what circumstances may a court order a search engine to block search results, having regard to the interest in access to information and freedom of expression, and what limits (either geographic or temporal) must be imposed on those orders? — Do Canadian courts have the authority to block search results outside of Canada’s borders? — Under what circumstances, if any, is a litigant entitled to an interlocutory injunction against a non-party that is not alleged to have done anything wrong?

The plaintiffs sued their former distributors for unlawful appropriation of trade secrets, alleging that the distributors designed and sold counterfeit versions of their products. The plaintiffs obtained injunctions against the distributors, prohibiting them from carrying on any business online. When this proved ineffective, the plaintiffs sought a court order against Google, to prohibit it from displaying search results that included the distributors’ websites.

The Supreme Court of British Columbia granted a worldwide injunction against Google, finding that it had territorial competence over Google and that it possessed an inherent jurisdiction to maintain the rule of law and protect its processes, which in appropriate circumstances may include an injunction against non-parties. In this case, the balance of convenience favoured granting an injunction. The Court of Appeal agreed that the court held jurisdiction over Google with respect to the injunction application. It also concluded that it was permissible to seek interim relief against a non-party. The power to grant injunctions is presumptively unlimited, and injunctions aimed at maintaining order need not be directed solely at the parties involved in litigation. In this case, an injunction with worldwide effect was justified.1

Equustek designs and manufactures flexible communication interfaces mainly for the industrial automation industry. Products include gateways, bridges, and integration services. After a distribution agreement with American company Datalink Technologies foundered in the early 2000s things got messy, and confusing. However, around 2006 Datalink began selling a copy in substitution for one of Equustek’s products, and according to Equustek, returning defective counterfeits to Equustek for repair/replacement. (Sources: 1Supreme Court of Canada, case 36602 – Google Inc. v. Equustek Solutions Inc., et al.; Reasons for Judgment in the successful appeal in BC Supreme Court of the original Equustek vs. Jack proceeding (16 pp., 167 Kb pdf); The Toronto Star, 2016-12-06, “Google, B.C. firm duel over free speech, copyright in Supreme Court battle“; Techdirt blog)

Protecting Intellectual Property

Intellectual property (IP) consists of intangible assets associated with saleable products and includes design, branding, innovation and knowledge.

The protection of IP is an increasingly vital factor in the global economy. Globally, IP applications have grown nearly 70% in ten years, to over 11 million in 2014. Canadian businesses continue to expand into international markets, making the protection of IP in those markets highly important. IP rights have also become a key component of international trade deals. International trade is a major part of Canada’s economy, with individuals and businesses from over 120 countries around the world filing for IP rights in Canada in 2015. 1

CIPO

The Canadian Intellectual Property Office (CIPO) handles the administration of trademarks, patents, copyright and industrial design. CIPO is the best starting point for national information and assistance in IP matters.

This month CIPO released “IP Canada Report 2016” (also available as a 34 pp., 2.7 MB pdf download). The report discusses trends in the use of IP, both domestically and by Canadian innovators and businesses abroad. It relies both on CIPO’s own internal data and on data from the World Intellectual Property Organization (WIPO), which collects global data.

In 2015, CIPO received applications for:

  • 36,964 patents (4% growth from 2014) and registered 22,201 patents,
  • 52,461 trademarks (3% growth) and registered 31,507 trademarks, and
  • 5,846 industrial designs (1% growth) and registered 5,728 industrial designs

Of course in the youtube age, national patents and trademarks offer limited protection. Canadian businesses must invest in IP rights in other countries in order to protect their inventions, brands, and product designs. In fact growth in Canadian IP activity abroad has outpaced domestic filings by Canadians. The obverse is that the top 5 non-resident filers represent 68% of total patent applications in Canada in 2015. The U.S. is by far the largest filer, followed by Canada (12%), Germany, Japan, France and Switzerland.

WIPO

The World Intellectual Property Organization (WIPO) is the global forum for IP services, policy, information and cooperation. It was established in 1967 as a self-funding agency of the United Nations. Headquartered in Geneva, Switzerland, it currently has 189 member states.

WIPO provides free access to its IP and technology databases:

  • PATENTSCOPE

    Search the technology contained in more than million patent documents, including international patent applications submitted under the PCT.

  • Global Brand Database

    Search brand information from multiple national and international sources, including trademarks, appellations of origin and official emblems.

  • ROMARIN

    Search detailed information, updated daily, on all international marks recorded under the Madrid system, which are currently in force or have expired within the past six months.

  • Global Design Database

    Search industrial design registrations from the Hague System plus participating national collections.

  • Hague Express

    Access details of industrial designs registered under the Hague System.

  • Lisbon Express

    Search appellations of origin registered under the Lisbon system.

  • Article 6ter

    Search for the State emblems, and names, abbreviations and other emblems of IGOs, which have been communicated for protection under Article 6ter.

  • WIPO Pearl

    A multilingual terminology database to find accurate IP and technological terms and concepts in 10 languages, validated by WIPO’s terminology experts.

  • Access to Research for Development and Innovation (ARDI)
  • Access to Specialized Patent Information (ASPI)

IP classifications and standards:

  • International classifications

    Four international classification systems facilitate and simplify IP searches. These classification systems organize a huge amount of information concerning inventions, trademarks, and industrial designs into indexed, manageable structures for easy retrieval:

    • International Patent Classification (IPC)
    • Nice Classification (for marks)
    • Vienna Classification (for figurative elements of marks)
    • Locarno Classification (for industrial design)
  • WIPO Standards: The WIPO Standards for IP offices help streamline data processing procedures for filing, examining, publishing, granting and registering patents, trademarks and industrial designs. Common standards also assist the technical exchange of IP data between offices and WIPO, and facilitate the international dissemination of and access to IP information.

Other WIPO Resources:

  • IP statistics, including reports on IP filing activity worldwide.
  • Official documents from WIPO meetings and Assemblies, as well as presentations from WIPO events.
  • WIPO publications – browse and download for free online.
  • Country profiles, including IP profiles of member states, with statistics, legal information, case studies, photos and WIPO cooperation activities.
  • Case studies – IP Advantage
  • WIPO Library of over 35,000 references to support IP research

Protecting Your Business’s IP

Safeguarding your IP assets is neither simple nor cheap. The U.S. Trade Representative (USTR) this week offers a starting point with the endorsement and release of an APEC (Asia-Pacific Economic Cooperation) document, ”
Best Practices in Trade secret Protection and Enforcement Against Misappropriation” (3pp., 47 KB pdf) The 8 “best practices” are really guiding principles for international agreement and cooperation, but may serve also as useful query points for exporters considering new markets.

The USTR also has available “Administration Strategy on Mitigating the Theft of U.S. Trade Secrets” (141pp., 6.8 MB pdf). In addition to American trade strategy it contains illustrative case examples and outlines the legal framework.

1IP Canada Report 2016

CETA: it’s on again

The vicissitudes of CETA (Canada Europe Trade Agreement) continue. As of today, Canada and the 28 EU (European Union) countries are reportedly ready to sign off on the free trade agreement and a lengthy addendum meant to address European concerns over dispute resolution.

CETA’s dispute resolution provisions, modeled after NAFTA (North American Free Trade Agreement), have been contentious from the start for some European governments and social organizations worried that the terms favour corporate business over national and local decision making. Although the most vocal protests originated in Germany, it was Belgium – a country whose “two solitudes” have created constitutional problems that make Canada’s wrangling with Québec separatism look like child’s play – that brought things to a head with a last minute refusal to sign and precipitated Chrystia Freeland’s frustrated walk-out last week.

Chrystia Freeland, Canada's Minister of International Trade‘Freeland, Canada’s International Trade Minister, hasn’t yet confirmed the details of the unpublished “joint interpretive declaration” that was negotiated as an annex to the agreement in order to clarify the dispute resolution’s application and mollify European critics.

CBC News has outlined the main points of the annex and provided a link to a leaked Belgian copy (in French) of the annex text: “What’s in the declarations that sealed the Canada-EU trade deal? Two declarations emerged on Thursday: one Canada negotiated, one is Belgium-specific”.

In the House of Commons this week Freeland took some partisan criticism from the Conservative Party, which negotiated most of CETA on the Canadian side, but her walk-out appears vindicated today. See CBC News, 2016-10-28, “‘The tactic has paid off’: Freeland’s dramatic walk out may have saved CETA. Despite criticism of minister’s ‘visible emotion,’ Canada and Europe seem near a deal“.

Hanjin Shipping bankruptcy roils container market

Korea’s Hanjin Shipping, the world’s seventh-largest container shipping line collapsed into bankruptcy this week after a restructuring proposal was rejected by creditors. Korea’s largest liner company reported $4.5 billion (USD) in liabilities on its June 30, 2016 financial report and efforts to attract more capital and extend payment periods on current debt quickly fell apart.

Several Hanjin vessels have been detained at various Chinese ports and one was being held in Singapore. Korean courts dealing with the bankruptcy are expected to work out terms for an orderly discontinuation of Hanjin’s shipping business that involves regaining control of its fleet overseas and the eventual liquidation of its assets.

The company owns 59 of the 132 ships in its fleet which consists of container and bulk vessels. Among its chartered vessels are three from Vancouver’s Seaspan Corporation which were delivered in 2014 on 10-year contracts with a total value of $364 million (USD). Seaspan now has 88 ships in total and says the Hanjin contracts are not significant enough to endanger its own business.

Hanjin, a member of the Trans Pacific Stabilization Conference, calls at Vancouver and other West Coast ports. See Hanjin’s service map for an overview of its routes. The company’s demise has stranded cargo at the start of container shipping’s high season when retailers are stocking inventory for Christmas season sales. It has also led to rate increases of 50% or more on the spot market for some containers on the Asia-U.S. West Coast route. (Sources: Hanjin Shipping; Bloomberg, 2016-08-30, Korea’s Hanjin Shipping Becomes Symbol of Industry in Pain); Vancouver Sun, 2016-08-31, “Hanjin Shipping receivership affects Seaspan Corp’s charter operations“; CNBC, 2016-08-31, “More Hanjin ships seized, as freight rates surge and cargo owners fret“; CBC News, 2016-09-01, “Giant container vessel stuck in Prince Rupert, company in receivership“)

Asia Pacific Gateway Skills Table releases logistics labour market predictions for western provinces

The Asia Pacific Gateway Skills Table’s1 Corridor Labour Market Information Project provides labour supply and demand information on 34 occupations in the air, logistics, rail, and trucking sectors for the Asia Pacific Gateway Corridor (APGC) transportation network, which extends from Manitoba to British Columbia. It provides occupational analysis at the four-digit National Occupation Classification2 (NOC) level. The forecasts were completed in conjunction with government and industry partners.

The reports and occupation snapshots are available at: www.lmionline.ca.

Read the Asia Pacific Gateway Corridor (APGC) LMI 2016-2025 Executive Summary (20 pp., 888 KB pdf).

Read the APGC LMI Background and Methodology Report (26 pp., 461 KB pdf).

1

The Asia Pacific Gateway Skills Table (Skills Table) is a non-profit, regional partnership between labour, business, and education and training institutions. Our mandate is to coordinate decision-making and action to address overall concerns regarding labour shortages and skills gaps in the Asia Pacific Gateway, and build appropriate capacity in labour resources in innovative ways.

2 The National Occupation Classification “is the nationally accepted taxonomy and organizational framework of occupations in the Canadian labour market,” and is designed to classify occupational information from statistical surveys. The NOC is structured in a four-tiered hierarchical arrangement of occupational groups with successive levels of disaggregation as follows:

  • 10 broad occupational categories – Each broad occupational category has a unique one digit code number and is composed of one or more major groups.
  • 40 major groups – Each major group has a unique two-digit code number and is composed of one or more minor groups. The first digit of this code indicates the broad occupational category to which the major group belongs.
  • 140 minor groups – Each minor group has a unique three-digit code number and is composed of one or more unit groups. The first two digits of this code indicate the major group to which the minor groups belong.
  • 500 unit groups – Each unit group has a unique four-digit code. The first three digits of this code indicate the major and minor groups to which the unit group belongs.

Verified Gross Mass of container shipments now mandatory

Verified Gross Mass (VGM) documentation for marine containers became mandatory on July 1, 2016 in Canada and elsewhere. Gross mass means the combined mass of a container’s tare mass and the masses of all packages and cargo items, including pallets, dunnage and other packing material and securing materials packed into the container. Under Transport Canada regulations1,

in order to verify the gross mass of a packed container in Canada the shipper shall either
a. weigh the loaded container (Method one); or
b. weigh all the items loaded into the container (including dunnage, securing material, etc.) and add the tare mass of the container to the sum of those single masses (Method two).

The International Maritime Organization (IMO) this year amended the SOLAS (International Convention for the Safety of Life at Sea) regulations. Specifically, Chapter VI, Regulation 2, paragraphs 4 to 6 which now require the verification of the declared weight of containers, whereas carriers previously had to rely on shippers’ declarations of weight/mass.

The IMO states2:

it would be beneficial if Administrations and port State control authorities could take a “practical and pragmatic approach” when enforcing [the updated regulations], for a period of three months immediately following 1 July 2016.

The IMO’s Maritime Safety Committee (MSC) has published an advice circular (pdf download) regarding the SOLAS VGM. The MSC also reminded members of the shipping community “that the stability and safe operation of ships, including the safe packing, handling and transport of containers, is not limited to the provision and use of VGM information and is also covered by a number of SOLAS regulations, including SOLAS regulations VI/2.1, VI/2.2 and VI/2.3, and other IMO instruments, amongst others.”

1 CANADIAN PROCEDURE FOR OBTAINING THE VERIFIED GROSS MASS OF PACKED CONTAINERS AS REQUIRED BY SOLAS VI/2 – TP 15330 (retrieved from: http://www.tc.gc.ca/eng/marinesafety/tp-menu-515-4505.html}

2 (retrieved from: http://www.imo.org/en/MediaCentre/PressBriefings/Pages/14-VGM.aspx)

Canada Transportation Act Review: report now available

The Canada Transportation Act (CTA) Review, commissioned in 2014 is now available for download from Transport Canada. It is issued as two pdf files of 286 pp., 5.3 MB and 230 pp., 7.7 MB respectively.

Volume 1, “Pathways: Connecting Canada’s Transportation System to the World” consists of the report itself, while Volume 2 consists of the supporting Appendices that outline commissioned research and public submissions.

Volume 1 Table of Contents

  • Chapter 1: Points of Departure
  • Chapter 2: Governance
  • Chapter 3: Linking Trade and Transportation
  • Chapter 4: The North
  • Chapter 5: Innovation
  • Chapter 6: Climate Change
  • Chapter 7: Access and Accessibility
  • Chapter 8: Rail Transport
  • Chapter 8.1: Freight Rail
  • Chapter 8.2: Transport of Grain
  • Chapter 8.3: Passenger Rail
  • Chapter 9: Air Transport
  • Chapter 10: Marine Transport
  • Chapter 11: Canadian Transportation Agency
  • Chapter 12: Summary
  • Chapter 13: Recommendations

Volume 2 Table of Contents

  • Appendix A: Economic Context
  • Appendix B: Governance
  • Appendix C: Linking Trade and Transportation
  • Appendix D: The North
  • Appendix E: Innovation
  • Appendix F: Climate Change
  • Appendix G: Access and Accessibility
  • Appendix H: Freight Rail
  • Appendix I: Transport of Grain
  • Appendix J: Passenger Rail
  • Appendix K: Air Transport
  • Appendix L: Marine Transport
  • Appendix M: Canadian Transportation Agency
  • Appendix N: Mandate and Terms of Reference
  • Appendix O: Submissions and Consultations
  • Appendix P: The Team
  • Appendix Q: Glossary

The CTA Review report is available here.

Abstracts of the commissioned research reports are also available here. The research reports consist of:

  • AECOM: Overview and Long-Term Outlook for Inter-City Passenger Rail
  • Robert C. Ashby: Comparative Analysis of Canadian & U.S. Approaches to Accessible Transportation Standards
  • Asia Pacific Foundation: Understanding Asia in 2030 and the Implications for Canadian Transportation Policy
  • Gordon Baldwin: Multi-modal Data Dashboard – Performance and Management for Strategic Decisions: An Examination of Federal Transportation Data
  • CAPA Centre for Aviation: Cost-Benefit Analysis of Restricting and Liberalising International Air Access To Canada
  • CBS Capitol Business Solutions: Comparison of Canadian and U.S. Approaches to Transportation Accessibility
  • Colorado State University: Incentives and Subsidies for Greening Freight Transportation Supply Chains
  • John Coleman: Freight Rail Transportation in Canada: The Interrelationships Among Capacity, Congestion, System Optimization, and Levels of Service
  • Conference Board of Canada: A Strategic Approach to Transportation Infrastructure Funding in Canada
  • CPCS Transcom Limited: Global Scan of Penalties and Associated Regimes for Railway Service Breaches
  • CPCS Transcom Limited: Impact of Future Bulk Commodity Flows on the Canadian Transportation System
  • CPCS Transcom Limited: Report on the Western Grain Transportation Maximum Revenue Entitlement
  • Dawson Strategic: United States’ Transportation Supply Chain Barriers
  • Dr. Bruce Doern: The Relevance of Common Carrier Provision in the Context of “Social License” and Social Regulation Concepts: Key Priorities, Complexity and Legitimacy in Long Term Canadian National Transportation Policy and Governance
  • Ann Frye Limited: Comparing Canadian and European Approaches to Transportation Accessibility
  • Ann Frye Limited: Comparative Analysis of Canadian & European approaches to accessible transportation standards
  • Brendon Hemily on behalf of ITS Canada: Surface Transportation-related Technological Innovation in Canada and Abroad
  • John Higginbotham: Canadian Arctic Marine Transportation: Long-term Challenges and Opportunities – Unlocking Economic and Natural Resource Development
  • IBI Group: Canada’s Transportation System: Identification of “Critical Trade-Related Infrastructure” and Approaches to Funding
  • ICF International: Action to Take to Reduce Greenhouse Gas Emissions from Rail
  • Institute on Governance: Port Governance Review
  • Kieran MAS: International Comparison of Passenger Rail Systems
  • MariNova Consulting Ltd.: Analysis of Short Sea Shipping and Extending the Seaway Season
  • Mary R. Brooks Transportation Consulting: Port Performance Measures- Identification, Summary and Assessment of Port Fluidity and Congestion Measures
  • PBX Engineering Ltd.: Supply Chain Technological Innovation
  • PROLOG Canada Inc.: A Preview of Northern Resource Corridor Development: Prospects for Arctic and Northern Surface and Marine Corridors
  • Public Interest Advocacy Centre: Consumer Protections for Airline Passengers
  • René Drolet Consulting Services: Action to Reduce Greenhouse Gas Emissions from Marine Vessels
  • Research and Traffic Group: Overview of Long-term Scenarios for Regional and Remote Passenger Rail in Canada
  • RP Erickson & Associates: Comparison of Approaches for Supporting, Protecting & Encouraging Remote Air Services
  • Brad Tipler: Utilizing Wireless Communication Applications to Improve Transportation Safety and Efficiency
  • University of Manitoba – Transport Institute: An Assessment of Foreign Investment Limits on Air Service Provision in Canada
  • University of Toronto, Institute for Aerospace Studies: Actions to Reduce the Climate Change Impact of the Aviation Sector
  • Van Horne Institute and PROLOG Canada: Over-dimensional Loads – A Canadian Solution

Canada will require electronic logs on commercial trucks in 2017

Following the lead of the United States which has mandated the use of electronic log devices (ELDs) starting in December 2017, Transport Canada (TC) says it will adopt a similar timetable for commercial truck and bus drivers to record their hours of service with ELDs that automatically record driving time by monitoring engine hours, vehicle movement, kilometres driven and location information. The rules will apply to vehicles crossing provincial or international boundaries.

Technical details and requirements are still being worked out in both countries. Many later model vehicles and those in larger fleets already contain such technology. It’s expected that firmware or software updates will allow those vehicles to adapt to the final rules without the expense of hardware replacement.

Currently, drivers fill out paper logbooks to ensure that they remain in compliance with Hours of Service (HOS) rules; federally regulated drivers in Canada are allowed to work 13 hours per day before taking at least 8 consecutive hours of off-duty time before driving again. Opposition to mandatory ELDs comes mostly from owner/operators and smaller companies. (Sources: CBC News, 2016-02-15, “Truck safety rules planned to combat driver fatigue“; Truck News, February 2016, “US to mandate e-logs”)