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export-performance requirements nor specific restrictions on hiring of expatriate personnel, the foreign investment law leaves room for such requirements to be applied. The law contains no provision for international arbitration in the event of expropriation, disinvestment, or compensation disputes.

There is no legal requirement for the Bulgarian government to procure only local goods and services. Government procurement works mostly by competitively-bid international tenders. U.S. investors are finding, however, that neither the remaining state enterprises nor private firms are used to responding to competitive bidding to supply goods and services within Bulgaria to these investors. Moreover, in the case of purchase prices for grain, the government set an artifically low price for wheat in July 1991 and at the same time forbade wheat exports. The resulting market distortion and disincentive for local producers may in fact lead the government to seek a greater quantity of grain on world markets in 1992.

Customs duties are paid ad valorem according to the tariff schedule. Imports from the United States are assessed at the most-favored-nation (MFN) rate. A temporary import tax of 15 percent is levied on most goods. A one-half percent customs clearance fee is assessed on all imports and exports. Bulgaria applies the Single Administrative Document used by European Community members.


Export Subsidies Policies

The Bulgarian government does not directly subsidize exports.


Protection of U.S. Intellectual Property

Property rights in general in Bulgaria were minimal under the former communist regime. Bulgarian inventors and others entitled to intellectual property rights were not entitled to more than a token one-time benefit from their work. The government appointed November 8, 1991 intends to pass an intellectual property rights law in line with Western European models. In accord with the April 22, 1991 U.S.-Bulgarian trade agreement, the Bulgarian government issued Decree No. 190 of September 27, 1991 granting temporary patent protection under certain conditions for U.S. patent holders in the fields of micobiology, pharmaceuticals, cosmetics, foodstuffs and flavors, and for products produced through genetic engineering.

At least one U.S. pharmaceutical company has complained of potential patent infringement by a Bulgarian veterinary drug manufacturer. Large U.S. beverage companies have complained at misuse of their trademarks. They say that under current Bulgarian law, it is impossible to prosecute trademark violators. Post has no figures of estimated losses to U.S. firms.

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Under the existing Labor Code, workers cannot exercise the right of free association without permission. Article 49 of the 1991 Constitution, however, grants workers the right of association in syndical organizations and unions. In practice, therefore, the Government has allowed workers freely to associate, and intends to bring the Labor Code in line with the Constitution. Article 50 of the Constitution grants workers the right to strike in accordance with conditions determined by law.


Right to Organize and Bargain Collectively

During the first half of 1991, wages were set by the Trilateral Commission involving the government, employers and trade untions. Collective bargaining was to have been instituted in July, but as privatization and demonopolization of state enterprises had not progressed significantly, negotiating partners were not always clearly identifiable, and the Commission is still involved in wage agreements which are negotiated only at the national level and cover only price compensation. bulgaria's Labor Code, whcih at present does not address antiunion discrimination, is expected to be amended by the new Parliament. There is as yet no law on trade unions. Economic and social life is still ruled by decrees and not by laws.


Prohibition of Forced or Compulsory Labor

The new Constitution states that no one may be compelled to carry out labor.


Minimum Age of Employment of Children

According to the unamended labor code, the minimum age for employment of children is 18. School attendance is compulsory to age 16. Increasingly underage children are employed as street vendors.

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The Constitution states that workers have the right to healthy and secure conditions of work, but health and safety standards are often not met. The consititution also provides the right to social security, welfare and unemployment assistance. The law establishes a standard workweek of 42.5 hours. The trilateral commission sets the minimum wage, although much of the population fell below the minimum income in 1991 due to a drop in real wages.


Rights in Sectors with U.S. Investment

Overall U.S. investment is relatively small as of late 1991. of the nine sectors covered in the Trade Act report, only the electric and electronic equipment sector has an active U.S. presence as of December 1991. Conditions are comparatively better in this sector than in others.


Extent of U.S. Investment in Goods Producing Sectors

No sector by sector data is available on investments in Bulgaria.


Key Economic Indicators

(Millions of Canadian Dollars (Cdols) Unless otherwise stated)

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Money Supply (MI)

39,478 Money, savings, time deposits (M2)228, 742 Bank of Canada Rate (pct)

12.47 Chartered Banks' Prime Rate (pct) 13.50 90-Day Commercial Paper (pct)

12.34 Personal Savings Rate (pct)

10.4 Annual Consumer Price Index (1986 = 100)

114.0 Annual Percent Change

5.0 Annual Industrial Product Price Index (1986 100)

109.4 Annual Pct Change:

2.1 Exchange Rate (one cdol = U.S. cents) (average annual closing)


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Balance of Payments and Trade

Merchandise Exports

To the U.S. Merchandise Imports:

From the U.S. Merchandise Trade Balance

Balance with U.S.
Current Account Balance

Balance with U.S.
Gold Holdings (Millions

of u.s. dollars)
Official International Reserves

(Millions of U.S. dollars) Gross External Debt:

(Billions of Cdols)

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Debt Service Payments:

30,652 N/A=Not available 1/

SAAR: Seasonally Adjusted Annual Rate 2/ Embassy projection 37 Third quarter actual data 47 Quarterly average 5/ Actual for the year 6/ Average of the first three quarters

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Canada is the world's seventh-largest market economy. Production and services are predominantly privately owned and operated. However, the federal and provincial governments are significantly involved in the economy. They provide a broad regulatory framework and engage in considerable redistribution of wealth from high income individuals and regions to less advantaged persons and provinces. Also important are government-owned Crown Corporations such as the Canadian Broadcasting Corporation, the Canadian National Railway Co., and Petro-Canada.

Canada is a major producer of natural resources and related products. Forestry, mining, and the energy sector are leading exports. The economy is also fully industrialized and produces highly sophisticated consumer goods and capital equipment. Canada is the most important trading partner of the United States, with merchandise exports of 94.7 billion U.S. dollars (USdols) to the U.S. and merchandise imports from the U.S. valued at USdols 79.6 billion in 1990. Vehicles and parts accounted for approximately 30 percent of U.S. merchandise exports to Canada in 1990. The stock of total foreign direct investment in 1990 was Cäols 127 billion, of which u.s. foreign direct investment amounted to Cdols 79 billion. In 1988, roughly 45 percent of the assets of Canadian manufacturing companies were foreign-owned. of this total, about 80 percent belonged to the United States.

Federal government economic policies since late 1984 have emphasized reduction of public sector interference in the economy and promotion of private sector initiative and competition. The Canadian government dismantled the highly interventionist National Energy Program and converted the restrictive Foreign Investment Review Agency into Investment Canada, which was given a mandate to encourage foreign investment. Both federal and provincial governments undertook privatization of selected Crown Corporations.

The deficit and related expansion of government debt are the most pressing problems facing fiscal policymakers. The federal government made some progress in slowing the growth of public debt after 1984, reducing the annual federal deficit from Cdols 38.3 billion in fiscal year 1985 (FY-85) to Cdols 28.1 billion in FY-88. However, it rose to Cdols 28.9 billion in FY-90 and Cdols 30.6 billion in FY-91. Government options to reduce the deficit are constrained by the high level of non-discretionary spending in the federal budget. Statutory social transfers to individuals and to provincial and local governments account for 40 percent of the FY-91 federal

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