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WISCONSIN WORLDWIDE Vol. 5 #6, July 2006
In
this issue:
Expanded Office Hours in China Because
of the time difference between Wisconsin and China, it can be difficult
to arrange a phone call between business people in the two
locations. In an effort to expand services and counseling to
Wisconsin companies, the Wisconsin Department of Commerce contractor in
China is now offering OFFICE HOURS, an opportunity to talk with China
when you’re at your desk rather than in the middle of the
night. Effective July 6th, 2006, Mr. Paul Swenson, Director of the China Office, can be reached by telephone at (608) 554-4581 every Thursday from 9:00 - 11:00 am Wisconsin time. When Daylight Savings Time ends the hours will be 8:00am to 10:00am. The call is charged as a regular (608) call, not as international long distance. Since OFFICE HOURS are not scheduled in advance and open to all Wisconsin clients, your incoming call may be answered by voice mail if Mr. Swenson is already speaking with another client. Please leave a message with your direct telephone number including extension and he will call you back. If the Office director is in the United States you may receive a message indicating the visit. The Office Director will call you back during the Wisconsin business day after receiving your message. Outside of the formal hours, the OFFICE HOURS phone number will not be answered and the China Office can be reached at its regular number: (86) (21) 3228-3505. Planning for the Chinese HolidaysChina has three seven-day holiday periods every year that should be considered when doing business there. They are the Chinese National Day Holiday (October 1-7), the International Labor Day Holiday (May 1-7), and the Chinese New Year Holiday (or Spring Festival).The dates of the Chinese New Year Holiday are determined by the lunar calendar and do not always fall on the same days each year according to Gregorian calendar used in the United States. The dates for the next few Chinese New Years are: 2007 - February 18 - 24 2008 - February 7 - 13 2009 - January 26 - February 1 2010 - February 14 - 20 Additionally, many students and workers are given a government mandated three days of travel time to return to their home provinces for the holiday. This additional travel time usually stretches the impact of the holiday to one week before and one week after the “official dates”. The New Year’s holiday is traditionally stretched to run from Chinese Lunar New Year’s Eve through the Lantern Festival fifteen days later. Business travelers should be aware that government offices and many Chinese companies will be affected by the holiday and vacation dates. There may be a long lapse in contact and Chinese business people may not be available for meetings. Even if you avoid traveling to China during these major holidays, your e-mails and phone calls may go unanswered as well. Just as Chinese business people seeking to make contacts in Wisconsin have learned to avoid Christmas/New Years and the first week of Deer Hunting Season, Wisconsin business people seeking to succeed in China should keep an eye on the calendar. Mexico's Presidential Election Results On
Thursday, Mexican election officials determined that Felipe
Calderón of the PAN Party won the country’s
presidential
election by a narrow margin of 240,000 votes of 41 million
cast.
Mr. Calderón has received congratulations from the White
House,
Canada, and the European Union. His opponent,
Andrés
Manuel López Obrador of the PRD, remains convinced he won
and
refuses to concede defeat. He is preparing legal challenges
to
present to both the Federal Electoral Tribunal and the Supreme
Court. Mr. López Obrador's lawyers contend that
the
initial count of the ballots was careless and that poll workers
purposefully inflated Mr. Calderón's totals. Mr.
López Obrador is calling for a complete recount in about
50,000
of the 130,000 polling places, where he contends he has evidence of
irregularities or fraud. International observers had declared
the
vote the most transparent in Mexican history.While Mexico does not have US-like "red state and blue state" differences, the division in the vote was very much north-south. The PAN candidate won 16 states, the PRD candidate won 16 states and the PRI ((the party that had dominated Mexico until Fox's election in 2000) finished second in about half of the states but first in none. The PAN won every state north of Mexico City except Zacatecas, Baja California Sur, and Hidalgo, and the PRD won every state south of Mexico City except the Yucatan and Puebla. Mexico’s north is home to much of the country’s manufacturing base while the south is heavily agricultural. The PAN won governorships in the states of Tamaulipas, Jalisco, and Guanajuato by wide margins while the PRD won the Governorship of the Federal District by an even larger margin, giving the PRD the Federal District government for the third election in a row. In Senate and Congressional elections, the PAN received about 34% of the vote, followed by the PRD with 29% and the PRI with about 27%, meaning that both houses will have to deal with a three party system and rely on partisan coalitions to get laws passed. Because of a special system that gives each party additional seats in both houses based on an overall vote total, it is not possible to provide figures for absolute percentage of positions in each house until later in the week. While the PAN will hold the largest share of seats in Congress, they will have to work with PRI and other non-PRD elected officials to try and forge absolute majorities to pass laws in Congress if they hope to avoid the fate that President Fox faced in trying to push through reforms during his six year term. In the short and probably the medium term, Calderon and the PAN Congress will not be able to count on bipartisan support of any kind from the PRD. NAFTA Rules of Origin RevisionsAs of July 1 in the United States and Canada and July 5 in Mexico, regulations amending the NAFTA Rules of Origin Regulations have gone into effect in the three NAFTA countries. The revised rules affect headings and subheadings in the following chapters:
HS Code ChangesOn January 1, 2007, significant changes are slated to be made to the Harmonized System (HS), the broad classification system of approximately 5,000 6-digit headings which are used for classifying goods involved in international trade.First introduced on January 1, 1988, HS numbers have subsequently been adopted as the basis for describing and classifying goods for customs purposes by more than 200 countries and customs territories, together accounting for almost 98% of world trade. The United States uses HS numbers as the basis for the Harmonized Tariff Schedule (HTS) for imports and the Schedule B for exports. They are also used in establishing rules of origin used in NAFTA and other free trade agreements. The latest set of changes is intended to keep the harmonized system up-to-date with advances in technology and patterns of trade. Over 350 amendments are included in this third major revision of the system. The most significant changes cover high technology products classified within Chapters 84, 85, and 90. As an example, printing machinery formerly classified within various subheadings will be combined into a single heading. Other notable changes will impact wood and bamboo products, pipe and tube products, optical fiber connectors, automotive parts, vacuum cleaners, and toys. More information on HS numbers is available from the World Customs Organization. Canadian Budget and Wisconsin Exporters
Even though Conservative Canadian Prime Minister Stephen
Harper’s
initial budget was passed by the House of Commons on June 6 without any
debate (thanks to a technicality), there are a couple of issues that
should interest Wisconsin business people. Topping
the list
is the reduction of the Goods and Services Tax (GST) from seven to six
percent. The GST is a consumption tax that applies to most
transactions in Canada. Businesses are able to claim refunds
on
the GST they pay, with the final amount being paid by the ultimate
consumer. While the savings on individual purchases may be
small,
the cut will redirect an estimated $5 billion into consumers’
wallets from Ottawa’s treasury. Because of the rise
in the
value of the Canadian dollar, imports are looking more appealing to
Canadian shoppers too.The Conservative government has also announced plans to increase military spending by $15 billion over several years to upgrade hardware and transportation equipment needed by Canadian forces participating in several peacekeeping missions around the world. While much of the increase is earmarked for big-ticket items and systems, Wisconsin suppliers of parts and ancillary equipment should have increased opportunities in the Canadian market. The budget surplus that the Canadian federal government has run for several years has helped push back Canada’s “Tax Freedom Day” calculated by the Fraser Institute to June 19 in 2006 compared to June 24 in 2005. In the United States, “Tax Freedom Day” came three days later this year compared to last year and fell on April 26 according to the Tax Foundation. “Tax Freedom Days” are calculated as the number of days the average person has to work to pay all their national, local, sales, and miscellaneous taxes for the year. Is Your Firm RoHS Compliant?As mentioned in our January issue, the European Union’s RoHS Directive went into effect on July 1, 2006 and may affect your sales of electrical and electronic products to Europe. RoHS (Restriction of Hazardous Substances) is the moniker given to the European Union's directive 2002/95/EC on the restriction of the use of certain hazardous substances in electrical and electronic equipment. While closely related to EU Directive 2002/96/EC on waste electrical and electronic equipment (WEEE), RoHS and WEEE deal with different parts of the product life cycle. RoHS seeks to reduce the amount of hazardous materials entering electronic products while WEEE deals with reducing the amount of electronics entering landfills.The RoHS directive currently lists 6 materials as being restricted: Lead (Pb), Mercury (Hg), Cadmium (Cd), Hexavalent Chromium (Cr-VI), Polybrominated Biphenyls (PBB), and Polybrominated Diphenyl Ethers (PBDE). There is not an outright ban on the listed materials, but restrictions on their uses and concentrations. The list can be expanded in the future should scientific evidence suggest the need to restrict the use of additional materials. Exemptions to the maximum allowed concentrations of restricted materials do exist for cases where technology does not yet allow for substitutions, or where alternatives may have a worse impact on human health and the environment. Some exemptions include mercury in several kinds of fluorescent lamps, lead in steel and aluminum alloys, lead in some types of solder, and military applications. RoHS Article 3. (a) states that RoHS covers electrical and electronic equipment "which is dependent on electric currents or electromagnetic fields in order to work properly and equipment for the generation, transfer and measurement of such currents and fields falling under the categories set out in Annex IA to Directive 2002/96/EC (WEEE) and designed for use with a voltage rating not exceeding 1000 volts for alternating current and 1500 volts for direct current". As an example, a microwave oven would be covered by RoHS because it cannot perform its intended function with the power switched off. On the other hand, a talking doll can still be used as a doll even when the batteries are removed, so it isn't covered by RoHS. Japan, China, and Korea are expected to follow soon with similar laws of their own. For access to the full text of the RoHS and WEEE directives, please click on the links provided. Updating Exporter ListExporters are not required to report information on their international sales to the Wisconsin Department of Commerce, but we periodically conduct surveys to develop a better picture of who is exporting what where. We use this information to alert exporters of particular products or firms with interests in certain markets to trade leads, buying delegations visiting the state, trade show exhibitions, and Wisconsin trade missions.Over the remaining months of the summer we will be conducting an on-line update to our list of the state’s exporters. In the next few weeks senior executives at firms currently in our database will be receiving a letter from Mary Regel, Director of Commerce’s international activities, with a website address, login id, and password. They will be able to review the information that is currently in our database and make any necessary changes. If your firm has not received its login id and password by the beginning of August, you can contact Mr. Stanley Pfrang, ph: (608) 267-0639, to be added to our mailing list. New Procedures for LA/Long Beach Port Beginning Monday, August 7, 2006,
exporters delivering containers to
the Port of Los Angeles/Long Beach during peak hours (Monday through
Friday, 3:00 a.m. to 6:00 p.m.) will be required to claim their booking
numbers from the PierPASS website and entering the booking numbers into
their accounts before the containers arrive at the marine
terminals. Export containers subject to the Traffic
Mitigation
Fee (TMF) that arrive at terminals during peak hours without having
been claimed in this manner will be turned around and encouraged to use
the off peak hours of operation. TMF payments must be made
electronically through the PierPASS
website,
by registered off peak users. No off peak payments are
accepted
at
the terminal gates. The cargo owner (the shipper) is
responsible
for payment of the fee, not the trucking company or other carrier.The OffPeak program was launched to reduce congestion in and around the Ports of Los Angeles and Long Beach. More than 2 million truck trips have been diverted from peak daytime traffic since the start of the OffPeak program in July 2005, eliminating costly bottlenecks at the Ports of Los Angeles and Long Beach and reducing gridlock on area freeways. PierPASS is a not-for-profit company created by marine terminal operators at the Los Angeles and Long Beach ports to address multi-terminal issues such as congestion, security and air quality. Beef Exports to Japan to ResumeThe U.S. and Japan have reached an agreement on the resumption of beef trade following the suspension of trade due to mad cow disease and recent compliance problems with product processing. For the new agreement to be effective, Japanese regulatory officials require the inspection and approval of 35 U.S. beef packing establishments before July 21st. The Japanese market is worth hundreds of millions of dollars in sales which makes this a top trade issue for the United States Department of Agriculture. Wisconsin is the 8th ranked producer of beef in the United States.Changes in Export Control for ChinaOn July 6, 2006, U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published a rule in the Federal Register that proposed amending the Export Administration Regulations (EAR) to clarify the United States' policy for exports and reexports of dual-use items to the People's Republic of China (PRC). BIS proposes to amend the EAR by revising and clarifying United States licensing requirements and licensing to prevent exports that would make a material contribution to the military capability of the PRC, while facilitating U.S. exports to legitimate civil end-users in the PRC.BIS will hold a meeting on July 17, 2006 for those companies, organizations, and individuals that have an interest in understanding the United States' revised policy for exports and reexports of dual-use items to the People's Republic of China (PRC). U.S. Government officials will explain the amendments proposed in the rule and answer questions from the public. The meeting will be held on July 17, 2006 at 2 p.m. at the U.S. Department of Commerce, Herbert C. Hoover Building, Main Auditorium, 14th Street between Pennsylvania Avenue and Constitution Avenue, NW., Washington, DC. In order for BIS to prepare for those who plan to attend the meeting, please provide your name and company or organizational affiliation to fax number (202) 482-4094, Attn: China Policy Briefing. For further information, please contact Judith Peterson at BIS on (202) 482-0092. "Getting to Know Europe" Grants
The Delegation of the European Commission in Washington, DC, is seeking
proposals for local programs that promote greater knowledge of the
European Union (EU) in the United States. Activities should
be
targeted at local communities and local government and spur
understanding about what the EU is and what it does, to raise awareness
about EU policies and institutions, and the EU’s role as an
international actor in the economic and political field. Wherever
possible, activities should also highlight local economic, social, and
cultural connections to Europe. Activities can include:
Institutions selected will receive funding in the form of a grant subsidy towards approved costs between November 1, 2006 and December 31, 2007. An estimated eight to ten grants of up to €80,000 (approximately US$102,300) each will be awarded. The Commission contribution will cover up to 75% of total project costs; therefore applicants must be able to provide at least 25% towards these total project costs. The application submission deadline is August 23, 2006. Full details of the competition can be viewed at the European Delegation's web site. The contact person in D.C. is Ms. Helen Henderson, Political & Development Section. Good Morning (from) Vietnam!Every workday morning in
Vietnam
(8:00-11:00 pm in Wisconsin), any U.S. exporter can hear/see/chat,
one-on-one via the Internet with U.S. Commercial Service export experts
at the American Embassy in Hanoi and Consulate in Ho Chi Minh City as
they present "3 EZ Steps" to export success in Asia's hottest market
– Vietnam. Take advantage of this fast growing
market
opportunity today!
Vietnam presently offers a strong combination of rapid growth, social stability, and an excellent demographic profile that is fueling industrial production and consumer demand. The country is undergoing a remarkable transition from a planned economy to a market economy, following a similar path to China. Since the implementation of the Bilateral Trade Agreement in 2001, two-way trade has grown by a factor of ten. The U.S. Commercial Service in Vietnam has identified the following industries as being “best prospects:”
Click on this link for more details on how to make contact. Learning Technical ChineseTo help business people and
engineers
who need to communicate with Chinese counterparts, UW-Madison is
offering a Technical Chinese Program. The courses offered
will
incorporate language skills and cultural understanding that will help
companies in their efforts to improve existing operations in East Asia
and to develop new business opportunities. Participants can take the
course via distance education around the world. The
university
also offers a Technical Japanese Program. More information is
available online.
For course details, please contact Professor James L. Davis,
ph: (608) 262-4810.
Mexico Mission Date ChangeThe dates of the Wisconsin Department of Commerce Business Mission to Mexico have been changed to give participants the opportunity to attend one of two important industry trade shows: Enviro-Pro in Mexico City, September 27-29, and Eximueble in Monterrey, September 28-30. The mission will also be making a stop in Guadalajara, capital of Wisconsin’s sister-state of Jalisco. The mission will depart Wisconsin on September 24 and return on September 30. It is open to all Wisconsin exporters interested in establishing or expanding their sales in Mexico.Mexican government and business leaders are recognizing the need to address pollution problems that have been allowed to build up over the years. The market for clean-up and abatement equipment and technology has never been stronger. Mexico’s growing middle class has increased the demand for Wisconsin-made consumer goods such as furniture that will be showcased at the Eximueble show. Last year, Wisconsin exports to Mexico in all categories were up 25%, on top of 35% and 10% growth in 2004 and 2003 respectively. Wisconsin’s trade office in Mexico City will arrange business appointments for mission participants with pre-qualified prospective representatives, distributors or clients. You will have the opportunity to travel with other local exporters, sharing expertise, and learning best practices. For more information about the mission or other opportunities in the Mexican market, please contact our Latin America Specialist, Ms. Susan Dragotta, ph: (262) 691-5147. Benelux Business Matchmaker Mission The
Wisconsin Department of Commerce plans to lead a Business Matchmaker
Mission to Amsterdam which will target the entire Benelux region of
Europe (Belgium, the Netherlands, and Luxembourg) from November 8-14,
2006. The Benelux countries provide proven and dynamic
markets
for Wisconsin exports and offer convenient shipping and logistical
access to the entire European Union. The mission is open to
all
Wisconsin exporters interested in establishing or expanding their sales
in these countries.For companies involved in the medical equipment/accessories or marine equipment sectors, the mission is scheduled to give participants the opportunity to attend one of two leading industry trade shows: METS 2006 in Amsterdam, November 14-16, is the premier European exhibition of marine equipment and the leisure craft industry, while MEDICA 2006 in Düsseldorf, Germany, November 15-18, is the world's leading medical trade fair. Since 2001, Wisconsin exports of medical-related instruments to the Benelux countries have increased 55%, while exports of pleasure boats and other marine equipment have jumped over 160%. Wisconsin's trade office in Europe will arrange customized business appointments with pre-qualified prospective representatives, distributors, partners or end-users throughout the Benelux region for mission participants. If you are interested in finding out more information about the mission, please contact our European Specialist, Mr. Brad Schneider, ph: (920) 420-1796. Joint Wisconsin/Minnesota Delegation to China Medical Equipment FairWisconsin and Minnesota will join forces to take a business development delegation to participate at the China Medical Equipment Fair (CMEF) in Zhengzhou, the capital of Henan Province in Central China. Business matchmaking meetings in Shanghai will also be arranged for participants. CMEF was been chosen because of its track record and growing opportunities in China. The show has been the premier medical exhibition in Asia for 26 years, attracting exhibitors from many countries as well as local Chinese firms.China’s medical device market is one of the largest and fastest growing, according to the U.S. Department of Commerce. Imports account for about 70% of China’s $6 billion medical device market, and the US supplies approximately 35% of those imports. Japan ranks #2 with 25%. China’s market for imported medical devices is growing at about 15% annually. In 2005, Wisconsin sold $142 million of medical equipment and precision instruments to China, a 22% over the previous year. China is Wisconsin’s fastest-growing export market and our fourth -largest export market overall. Additional information about the show can be found at www.cmef.com.cn. To register for the delegation or to obtain further information, contact our Asia Specialist, Ms. Beng Yeap, ph: (608) 266-1480. Life Sciences in the Middle EastU.S. exports of medical products to the Middle East grew by 16 percent in 2005 over the previous year and broke the $1billion level. In the first quarter of this year the category has grown 21%. Wisconsin ranks as the #11 state in medical exports to the Middle East. To help U.S. life sciences firms expand markets further, the American States Offices Association (ASOA) is sponsoring the 2006 Eastern Mediterranean Table Top Trade Show with stops in Amman, Jordan; Tel Aviv, Israel; and Istanbul, Turkey November 12-17, 2006. While Wisconsin does not currently have a state office in the region, our former contractor has offered to assist Wisconsin firms interested in participating. ASOA, in cooperation with its trade partners in Jordan, Israel, and Turkey, will arrange one-on-one meetings with pre-qualified importers and distributors. The meetings in Amman will include Iraqi business people operating out of Jordan. An evening reception with local business leaders will be held in each location.Israel's high standard of medical services and health insurance maintain strong demand for unique hi-tech applications, diagnostic equipment, computerized healthcare systems, imaging systems, cardiology, and high quality disposable products. There is appreciable demand in Jordan for new equipment for hospitals under construction, as well as new equipment to upgrade existing equipment in functioning facilities, clinics and health care structures. The largest single buyer of medical products in Turkey is the Ministry of Health and its healthcare facilities. Teaching hospitals, university hospitals, and the private hospital system, as well as private physicians' offices are also among potential buyers of U.S. medical products. Market growth for medical products is expected to continue due to the expansion of private sector health care services, rising expectations among patients, and efforts of some private hospitals towards attracting foreign patients. Jordan’s Free Trade Agreement (FTA) with the United States which went into effect in December 2001 has eliminated 95% of all tariffs on U.S. exports to Jordan. The U.S.-Jordan FTA has dramatically boosted bilateral trade, which has tripled in just over 4 years to nearly $2 billion. European competitors pose a particular challenge to American exporters in the region, but the drop in the dollar vis-à-vis the Euro is making it easier to win sales. The registration fee for the 2006 Eastern Mediterranean Table Top Trade Show is $995 and does not include airfare or lodging. For more information on the event, please contact Sherwin Pomerantz, ASOA chairperson, ph: (011) (972) (2) 571-0199. Agriculture Promotion in ArgentinaThe Wisconsin Department of
Agriculture
Trade and Consumer Protection’s International AgriBusiness
Center
will represent Wisconsin’s agricultural interests at the
Palermo
Agricultural Exposition July 24-29, 2006 in Buenos Aires,
Argentina. Representatives at the show and the Palermo
Presidential Reception will include Wisconsin livestock and dairy
cattle exporters, artificial insemination and embryo transfer companies
as well as major equipment manufacturers. Participants will meet with
the leading agricultural importers, government officials, media and the
directors of the Argentine dairy and beef cattle breeding organizations.
Prior to the economic crisis of the early years of this decade, Argentina was one of the fastest growing markets for Wisconsin dairy and beef genetics, farm equipment and supplies. As the economy recovers, purchases from agri-businesses are increasing. For more information regarding the Palermo Agricultural Exposition, or exporting your agricultural products to Argentina, contact Agricultural Marketing Consultant, Mr. Dan Vogel, ph: (608) 224-5113. Getting Started in Exporting WorkshopThe International
AgriBusiness Center of
the Wisconsin Department of Agriculture (DATCP) is sponsoring a seminar
to help state firms determine their company's export readiness, prepare
quotes for trade leads, price products, understand terms-of-sale and
payment, select the best method of distribution for products, and
provide export resources to assist food companies. The program will be
held on Thursday, August 10 at the DATCP office, 2811 Agriculture Drive
in Madison. For additional information, please contact
Agricultural Marketing Consultant, Ms. Lisa Stout,
ph: (608) 224-5126. Click here
to register on-line.
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