Despite global trading tensions and worries over recessions, Canadian exporters and investors had expressed confidence in foreign trade by planning to increase both foreign exports and foreign investments in the near future.

However, those plans, reported in Export Development Canada’s (EDC) year end Trade Confidence Index (TCI), have been cast into uncertainty as coronavirus disrupts international travel, cuts off trade pipelines, and causes global markets to plummet.

Guide: How COVID-19 delays could affect your supply chain from contracts to insurance and custom clearance

While immediate plans for increases in foreign investment and export may be uncertain – Canadian exporters to China, for example, have already seen disruptions –EDC continues to be optimistic, saying disruptions should be short term and the markets resilient.

Businesses reported plans to increase exports and investments

Before coronavirus outbreak, 51% of the 1,000 businesses surveyed for the TCI said they expect exports to the United States to increase in the next six months, and there had been an increase in foreign investment by Canadian exporters in 2019 overall. Investments in other countries has risen from 14% in 2012 to 17% in 2019.

Ten percent of businesses reported that they plan to invest abroad in the near future. The United States continues to be the target of Canadian exporters and investors.

Currently, 91% of the responding businesses are exporting to U.S., followed by 17% to the U.K., 15% to Mexico, 15% to China and 14% to France. For those planning to export to new markets, 67% planned to export to the United States, 12% to France, 8% to China, 8% to Japan and 7% to the U.K. The story is similar for Canadian businesses investing abroad: United States is the overwhelming destination for foreign investment, with 64% of businesses currently investing in the United States, 12% in China, 8% in the U.K., 8% in Mexico and 7% in Germany. Of those planning to invest abroad, 68% to the United States, 11% to China, 7% to Germany, 6% to India and 5% to Mexico.

How will the coronavirus pandemic disrupt those plans?

In its Q1 predictions, EDC predicts that coronavirus outbreak impacts won’t extend into the last two quarters of 2020.

Additionally, EDC predicts that any ground lost by businesses will be regained as travel bans are lifted and supply chains are restored. Those predictions are based on previous outbreaks, such as SARS and H1N1, which also dramatically interrupted markets and trade. In those cases, markets showed that they were able to rebound quickly from the sudden shocks of business closures, interrupted supply chains and decreased economic activity.

When it comes to moving forward with growth plans and current operations, EDC advises Canadian exporters and foreign investors to continue to do business and execute their plans.

At the same time, EDC advises, businesses should be aware of any changes in foreign regions that could cause disruptions. EDC, meanwhile, said it will continue to work on broadening foreign markets for Canadian businesses, even to areas impacted by coronavirus.

Before coronavirus, concerns over global recession eased

When surveyed about a global recession before the coronavirus outbreak, businesses said they were less concerned that a recession was imminent. When asked in mid-2019, 41% of businesses reported concerns that a global recession would hit in 2020. That number had dropped to 26% by then end of the year, and 35% of respondents said they didn’t expect a global recession before 2022.

This shows that based on what they’re seeing in their own businesses, Canadian exporters and investors expected markets to remain steady for the time being. While tumbling global markets could fuel concerns for some businesses, EDC said markets should prove resilient, as demand to meet global human need remains the same regardless of the outbreak.

While some businesses likely will see temporary drops in demand that harm cashflow, EDC said short-term emergency loans and government aid should help to alleviate constraints and enable businesses to recover when demand resumes.

CUSMA could mean good news for exporters

Once coronavirus border constraints lift, Canadian exporters and investors could see some positives with the passage of the Canada-United States-Mexico Agreement (CUSMA). The agreement, meant to replace NAFTA, was quickly ratified by the Canadian Parliament March 13th. The number of respondents with a negative view of CUSMA dropped from 34% to 16%; 62% of respondents had a neutral view of CUSMA, and 22% had a positive view.

Additionally, while the primary concern cited by businesses was international protectionism, the CTI reports that businesses don’t feel that they have been influenced or negatively impacted by international trade tensions. In the survey, 70% of businesses said their concerns had not influenced their export or international investment strategies. Additionally, 54% of respondent said the trade tensions between the United States and China had not impacted their businesses, and 12% of businesses said they have positively been impacted. Sixty-seven percent said they had not been impacted by trade tensions between China and Canada, and 6 % said they have seen positive impacts.

Trade confidence beyond coronavirus

Undoubtedly, the outbreak of the coronavirus pandemic has disrupted trade markets, along with the entire economy, in a way that is sure to have shaken trade confidence.

Before the outbreak, the TCI delivered quite a bit of good news, as an increased number of exporters and investors had widened their footprint in foreign markets, and more businesses expected to follow suit. Businesses also said they have not been hurt by trade wars and expect positive effects from the ratification of CUSMA.

While coronavirus adds a great deal of uncertainty, EDC said international businesses shouldn’t be overly alarmed. The effects of the pandemic should be over by the second half of this year, EDC said, and businesses and markets should rebound quickly.

As businesses move beyond the pandemic, there is the potential to move forward with growth plans and see a positive end to the year.

The post Trade Confidence Index: Coronavirus pandemic injects unknown into companies’ planned increases in exports and foreign investments appeared first on Trade Ready.

Canadians, members of one of the largest economies in the world, are largely aware of the benefits foreign trade can bring them. Over 70 years ago, Louis St. Laurent shared his opinion on this matter by stating that Canadians are dependent on foreign markets for products they make but don’t consume, and for the ones produced abroad that are essential to their well-being. Nevertheless, Canada’s exporting remains relatively low for an economy of its size – why? 

A lack of opportunity or confidence?

When we see the importance of international trade for other countries, we can rightfully ask why there is a lack of it in Canada. It’s not that Canadians are unable to see the opportunity, they are simply afraid of it.

A study from 2016 reports that two-thirds of Canadian SME’s feel like their businesses are not suitable for international expansion. The reasons? According to the survey, there are four main barriers to global development: knowledge, talent, resources, and risk exposure. SMEs reported they don’t have suitable (local) partners, and they lack in right local insights to consider expansion.

The obstacles of importing goods

Importing is crucial for a high number of Canadian small businesses; however, the whole process can be tedious and difficult to manage. Once they’ve determined what they want to import, Canadian businesses have to check whether there’s a demand for that product on the Canadian market and if it’s legal to use and sell. They also have to prepare paperwork for it: both in English and French, which is complicated enough.

Furthermore, there are complications in the logistics of imported products due to different taxes in each jurisdiction, product classification (where the same product is classified differently between jurisdictions), labeling, and safety requirements. All of this can be overwhelming, especially for new businesses.

Today’s Canadian SMEs trade in services

When we look at the data from 2017, we see there were 1.18 million employer businesses in Canada. The vast majority (97.9%) were small businesses, almost 2% were counted as medium-sized businesses, and only 0.2% were large businesses. More than half of them were concentrated in Ontario and Quebec. A vast majority of these businesses (78.4%) were in the service sector, while the goods-producing sector held second place.

The provinces that trade the most

Although Canadians are not great exporters, businesses involved in exporting can be found in every province. The province with the highest concentration of exporters per thousand establishments remains Ontario (48.4), while Manitoba (43.9) and Quebec (43.1) hold second and third place. Newfoundland and Labrador (17.2) are underdogs.

The contribution of Canadian SMEs

Canada’s export of goods increased to around $483.6 billion in 2017, which was a 6.19% increase from the previous year. SMEs contributed to 41.9% of 2017’s total export value. They managed to increase their export output from $186.2 to $202.5 billion. The most lucrative industrial sectors were responsible for more than 90% of the value of exported goods: manufacturing, wholesale trade, management of companies and enterprises, mining, and oil and gas extraction.

Top international business industries and breakdown of export value

When it comes to export, the biggest moneymakers in Canada are motor vehicles, aircraft, coal, and fertilizers. What’s more: Canada is the fourth-largest producer of oil in the world thanks to its tech-oriented industrial society, preferred by international markets. Canada is responsible for 5% of global oil production, and this trend will only grow – by the estimates of EIA International Energy Outlook 2019, Canada’s oil production could double by the end of 2050.

Canada’s hottest product in terms of export is cars: they are valued at almost $50 billion and have placed Canada in 10th place when it comes to auto-producing countries. Aircrafts, helicopters, and spacecrafts are ranked as the second most-exported products (more than 7 million), while natural resources, such as coal, are being ranked third ($6.7 million).

(Source)

The vast majority of Canadian exporting companies have less than 100 employees. However, that doesn’t stop them from producing a quarter of the total value of Canadian exports.

Main export destinations

Over a period of seven years (between 2010-17), the total value of exported goods increased to 4.3% per year, resulting in a profit of $484 billion. Canada’s main export destinations are the United States, China, the United Kingdom, Japan, Mexico, and South Korea.

Worth of goods imported by Canadian SMEs

In 2017 the import of goods made by Canadian SMEs increased by over 5% in comparison to 2016. What’s more, SMEs were responsible for almost 99% of all imports and nearly half of total Canadian imports by value. A vast majority of companies imported from Asian and European markets, decreasing their imports from North America.

SMEs and international trade: the final verdict

Even though they’re faced with many obstacles in international trade, Canadian SMEs are paving the way for future successful trading activities. One thing is for sure: there’s a lot of potential out there.

The post The state of Canadian SMEs involved in international trade appeared first on Trade Ready.

On August 22, 2019, the CanExport funding program undertook two significant updates that impacted how the program operated and the value it provided to Canadian exporters. The first and most notable update was to the program’s contribution amount, while the second focused on company eligibility. Previously, agriculture and agri-food companies were unable to apply; these types of applicants are now encouraged to submit funding applications.

Applicants are now able to access up to 75% of eligible expenses to a maximum $75,000. These had previously been set for 50%/$50,000.

All new applications will be considered for the new contribution rate and eligibility criteria, but any applications submitted prior to August 22 will be evaluated under the program’s old rules. Please note that companies can only have one active project funded by the program at a time; despite the program update, all previous successful applicants still need to wait until their supported project activities have completed and all project claims have been processed before they can apply again.

What are CanExport and AgriMarketing grants?

CanExport is a Canadian government grant that offsets the cost of export marketing projects, such as participation in trade shows or missions. Provided federally, businesses and organizations across Canada can apply for this funding to expand export marketing budgets and get more value out of export expansion projects.

AgriMarketing is a now-closed Canadian government funding program that provided funding for many of the same projects and activities supported through CanExport. The biggest difference between the two programs was that AgriMarketing only supported agricultural producers and agri-food processors whereas CanExport supported all other applicant types.

How did these export marketing grants change?

Changes rolled-out to both the CanExport and AgriMarketing funding programs had a direct impact on the way funds are administered:

1. Contribution Increase: CanExport and AgriMarketing grants have historically provided up to 50% of eligible project expenses to a maximum $50,000 per application. As of August 22, 2019, CanExport’s new funding contribution amount increased to 75% of eligible project expenses to a maximum $75,000 per application. This is a significant increase that greatly reduces a business’ export marketing costs.
2. Program Realignment: Now closed, AgriMarketing will no longer process new applications. All applicants, even agricultural producers and processors, are encouraged to use the CanExport program for all new applications. CanExport’s expanded eligibility criteria supports previously ineligible companies, so long as your marketing activities and target market are eligible for funding.

How can businesses apply for CanExport funding?

To apply for CanExport marketing grants, businesses must complete a comprehensive application that includes a detailed plan for expanding sales in global markets. Applicants need to show the value of the project (new leads or revenue), a detailed breakdown of project expenses, and explain why the new market is of strategic importance. Businesses must receive application approval prior to incurring funding-eligible expenses.

To discuss your upcoming project and discuss if it’s a good fit for Canadian export marketing grants, please contact Mentor Works.

The post CanExport funding increases to 75%/$75,000 and supports agri-business appeared first on Trade Ready.

Once considered the “Sick man of Asia” in the later stages of the 20^th century, the Philippines has undergone a rapid economic transformation in recent years. With high growth rates, an expanding middle-class, and ambitious public policy initiatives geared toward national economic development, it appears this dynamic, newly-industrialized market is finally on a path toward sustainable growth and stability as it emerges into one of the Asia-Pacific’s most attractive trade and investment destinations.

The economic climate

Currently the world’s 34^th largest economy, the Philippines is among the world’s fastest growing markets. GDP growth rates averaged 6.3 percent between 2010 and 2018, and are projected to grow faster than other neighbouring South-East Asian countries over the next 15 years. In fact, an HSBC forecast predicts the country could enter the world’s top 20 economies in the next quarter century if demographic trends and sound governance remain in place. Consequently, the high growth environment has also been largely responsible for greater investor confidence. Foreign direct investment inflows hit a record-high USD $9.5 billion in 2017, exceeding the Central Bank’s target of USD $8 billion.

In addition to an upward economic transformation, the Philippines offers a number of competitive advantages for prospective business ventures in Asia, including:

• A large, growing population of 106 million people
• An emerging middle-class consumer market
• A highly-skilled, low-cost, English-speaking labour force
• A strategic proximity to neighbouring markets.

The importance of service sectors

While the Philippines remains a large agricultural economy, service sectors have been a major factor in domestic growth and rising income levels. More than half of the country’s labour force is now employed in the service industry – accounting for nearly 60 percent of the overall GDP.  Three industries are particularly noteworthy:

• Business process outsourcing (BPO) has flourished throughout the country’s urban centres and is poised to directly employ up to 1.5 million Filipinos by 2020 with a total income revenue of over USD $50 billion.
• Overseas Filipino Workers (OFWs) continue to be a major contributor to economic well-being. Official figures show 2.3 million Filipinos employed abroad – almost all of whom repatriate income earned overseas to loved ones back home. Inward remittances from OFWs hit a record high USD $32 billion in 2018, giving a boost to domestic consumer spending.
• Tourism accounted for a 12.7 percent share of the overall GDP in 2018. Increasing domestic travel and a record-high 110 million visitors from abroad has helped create a USD $40 billion industry, employing 5.4 million Filipinos.

The environment for Canadian exporters

As Canada’s 28^th largest trade partner, the Philippines presents significant growth opportunities throughout a broad range of sectors. Trends have shown encouraging signs for Canadian exporters with total merchandise exports increasing from USD $511 million in 2014 to USD $753 million in 2018  – most notably in the following products:

• Aircraft and Parts ($129 million USD)
• Lumber and Wood ($122 million USD)
• Frozen Meat ($102 million USD)
• Copper Ores ($70 million USD)
• Wheat ($56 million USD)

Canadian companies of all sizes that specialize in renewable/clean energies, infrastructure, and ICT sectors may also take advantage of upward trends and policy initiatives – particularly outside of the National Capital Region of Manila, as economic activity becomes increasingly redistributed through the country.

Exploratory talks toward a Canada-Philippines free trade agreement have since evolved to rein the remaining six non-CPTPP ASEAN member states into a multilateral Canada-ASEAN FTA. Per Canada’s current trade diversification policy, this option appears to be the inevitable path. In the meantime, Canadian firms doing business in the Philippines can take advantage of an existing reciprocal tax treaty and a foreign investment protection agreement (FIPA).

The Canada-Philippines relationship

Despite the 2019 diplomatic dispute over the repatriation of waste-filled containers from Manila to Canada, the two countries enjoy a strong and resilient bilateral relationship. The Philippines became Canada’s largest source of immigration throughout the latter half of the last decade, with Tagalog becoming Canada’s fastest growing language. As of 2019, 900,000 residents of Canada – comprising 2.6 percent of the population, are of Filipino descent. Conversely, a record-high 250,000 Canadian tourists are projected to visit the Philippines by the end of 2019.

Filipinos view Canada and Canadians very positively. Businesspeople can expect nothing less than VIP treatment, friendly smiles, and genuine hospitality, for which Filipinos are world-renowned. As with many non-Western business cultures, establishing trust and personal relationships is important. Visitors will likely encounter questions about their relationship status, good-natured comments about personal appearance, or if you are friends with their cousin living in Edmonton!

Overcoming challenges and the way forward

Although the Philippines is emerging as a rising star in the global economy, the country continues to rank low on ease of doing business. As such, companies will inevitably have to surmount considerable challenges to achieve success, including:

• Poor quality and lack of infrastructure
• Corruption among public officials at all administrative levels
• A complex, inefficient bureaucracy

Recent reforms and initiatives launched by the current administration under President Rodrigo Duterte have made inroads into reducing burdensome red-tape and eradicating institutional corruption, particularly within the Bureau of Customs and Bureau of Internal Revenue. However, significant work remains.

The Duterte administration has also committed USD $153 billion toward an ambitious national infrastructure plan that would increase investment from 6 percent of GDP in 2018 to 7.4 percent by 2022. More than 70 priority projects have been earmarked, including airports, railways, public transit networks, bridges, highways, and energy-producing facilities.

Of note, foreign companies and individuals are constitutionally prohibited from purchasing land anywhere in the Philippines. They may, however, seek a 50-year land-lease agreement that can be renewed for an additional 25 years.

Getting support for entering the Philippines market

As with any prospective venture into a new market, companies and investors must conduct intensive research, perform due diligence with any potential partners, and be acutely aware of local laws and regulations that may pose barriers to doing business.

The Canadian Trade Commissioner Service is an invaluable resource to assist companies with finding opportunities throughout many sectors. The TCS provides matchmaking services through an extensive list of reliable agents, distributors, local partners, etc., while their practical market knowledge is second to none. Trade Commissioners based in both Ottawa and at the Embassy in Manila should be every Canadian company’s first point of contact.

Exporters can mitigate several risks by obtaining the service of Export Development Canada, bearing in mind the distance and geographic trajectory when shipping products from Canada to the Philippines, and the risk of non-payment if using open terms. EDC provides exporters with a suite of insurance products that should be strongly considered to safeguard against the risks involved.

Membership in business organizations are also highly beneficial for networking opportunities, acquiring market knowledge, and participating in trade shows. Companies and individuals across all sectors can join organizations such as the Canada-Philippines Business Council and the Canadian Chamber of Commerce in Manila to seek advantageous insider knowledge and to make valuable connections.

High risk, high reward

Sadly, the Philippines continues to be characterized by negatives – a country plagued by rampant corruption, extreme poverty, and severe overpopulation. Add in extrajudicial killings, skirmishes with the Chinese naval patrol in the South China Sea, and kidnappings by insurgents to the news cycle, and suddenly a proposed business venture may appear too risky.

Between the lines, however, is a dynamic, forward-moving, emerging market with an abundance of opportunity that awaits. The Philippines is currently experiencing an unprecedented transition and is on its way to becoming an influential and powerful Asian economy in the 21^st century. Canadian companies ought to act on this opportunity, bearing in mind that even without an existing free trade agreement, a coherent business strategy in a complex and unfamiliar market is the golden ticket toward success.

The post Learn why Canadian exporters should capitalize on increasing opportunities in the Philippines appeared first on Trade Ready.

Most domestic businesses, at some point, nurture dreams of selling into several overseas markets across the world. At face value, such dreams are extremely valid.

Canada is, after all, a first-class economy built on trade, with 30% of its GDP directly connected to its ability to send goods and services around the world.

Trade unleashes vibrant economic activities and creates jobs; it makes companies competitive, fosters organic growth, and delivers outstanding corporate results to stakeholders.

Available World Bank statistics support the notion that trade is the engine room of Canada’s economy, and that Canadian companies that export tend to fare much better than those that don’t.

Canadian businesses aren’t as global as we think

However, what those statistics usually fail to highlight is a fundamental defect in the structure of our trade: 75% of all Canadian exports destined for the U.S. market.

Invariably, roughly 8 of every 10 vessels laden with Canadian goods heading overseas will likely dock at a U.S. port. So much for the dream of exporting all over the world.

Proximity plays a huge part in all of this, as well as long standing historical and cultural ties, and a shared loyalty to global supply chain management principles.

A change of mindset post-CUSMA

But the unnerving diplomatic spats surrounding the CUSMA (referred to as USMCA in the U.S.) negotiations and its aftermath has exposed the vulnerable underbelly of Canadian trade, and I believe we should all worry.

I’ve always suspected that if U.S. markets sneezed, Canada could catch cold, and that the after effects may be severe enough to tailspin this economy into a mild recession.

What we never saw coming was the sudden change in the political equation in the game changing U.S. presidential elections on November 8th, 2016, and how it would affect America’s relationship with Canada.

The world changed that night; and the great partnership of equals that had served Canada so well in trade and commerce collapsed under the weight of protectionism.

We should no longer today conduct Canadian trade with the same pre-November 2016 mindset, and must instead reconfigure the balance of trade.

Thanks to CUSMA, the U.S. markets will still be the first choice for our exports for a long time to come, but Canada needs a game changing strategy that puts it firmly back in the driving seat.

Canadian exporters must be encouraged to shake off the overreliance that led to locking down 75% of our exports in one multifaceted regional market, for better or worse.

It’s time to explore new markets – especially emerging markets

A good place to start is with the recent trade agreements inked in Asia and Europe. You can also include India, South America and Africa. Target ramping up trade in the emerging markets by 20 – 30% over the next 5 years.

Canadian companies should start playing to their global reputational strengths by becoming dominant players in markets where guarded risks give way to decent returns.

It is said that the spirit of enterprise plus a flair for adventure penetrates new markets, as seen with American, European and Chinese enterprises, but Canada needs to play catch up.

It is a big plus that in terms of perception of quality, Canadian standards are arguably the most highly regarded in the world. Take our educational standards as a base case.

It is no mere coincidence that each year our schools attract thousands of overseas students. This trend creates a real boom for several small and medium enterprises providing marketing and logistics services to help schools acquire these students and help them succeed in Canada.

These overseas students become Canadian-trained professionals and then go back home after graduation with knowledge of the Canadian market and a positive view of Canada, dotting the business landscape of their home countries. While many Canadian businesses could identify, accelerate or execute more entry strategies to these markets with the help of these professionals, this incredible resource is sorely underutilized by Canadian businesses.

Indeed, Canadian small enterprises have so much to offer the emerging market world in ICT, energy, agriculture, mining, manufacturing, health & safety, general goods and more.

Many such emerging markets had GDP growth rates above 5% in 2017, (double the U.S. rates), have healthy population and purchasing power dynamics, and posted above 15% p.a average returns.

Fortune favours the bold business

Some might ask, what about risk? Risks are embedded in all export markets, but they can be dimensioned and adequately mitigated to reflect individual risk appetites.

The bigger risk by far is doing nothing to change the lop-sided structure of our trade. Bonding with a close market is good, but Canadian trade needs the energy of new markets.

The post Why Canadian businesses need diversification to survive in today’s economy appeared first on Trade Ready.

In our current trade environment, trade wars will increase costs to the consumer, and the risks for employers, shareholders and employees of cross-border businesses. However, what will remain unchanged will be Canada’s need to generate our standard of living through success in the global marketplace. Current customers need to be retained and new ones found. Input cost changes will require significant creativity to preserve trade flows and margins.

Canadian politicians and economists have been talking for a very long time about our over-dependence on the U.S. market and the need to diversify. The diversification message coming from the Canadian government to businesses today has a special note of urgency, reflecting the risks which are being added seemingly daily for cross-border businesses.

And there’s been all kinds of attempts over the years to encourage Canadian companies to look elsewhere. Well, now you have a circumstance in which our best market, the United States, may become less attractive as a place to do business. This should provide Canadian corporations with an opportunity to reassess where else in the world their products can be marketed, products and services.

Companies can’t diversify their global markets without the right tools

We’ve got to turn this to our advantage. This is a real moment in time for Canadian trade and organizations striving to do cross-border business.

We know that knowledge preserves margins. Knowledge is power in all human activities, but particularly so in international trade. Market intelligence translates directly into market power. Value-added exports create higher margins the closer the producer gets to the customer. Availability of information is therefore critical to export growth, sustainability and job growth in a supplier’s jurisdiction.

The Forum for International Trade Training (FITT) and Export Development Canada (EDC) are heavily involved in efforts to grow the number of small businesses taking advantage of opportunities in the global marketplace through upskilling and building international business know-how.

As more people take FITTskills courses, their businesses will be increasingly prepared to make the risk calculations necessary to do the business and preserve their margins.

But this is also the perfect opportunity to refocus the way trade promotion services (TPO), such as the Canadian Trade Commissioner Service and private sector advisors, have been relating to their client base.

Trade promotion organisations and advisors need to give businesses what they really need – qualified leads

Look to TPOs like Saskatchewan Trade and Export Partnership, who are doing it right! Their number one deliverable to their Saskatchewan member companies are qualified trade leads.

Provide the qualified international leads to local businesses that are prepared and interested in doing a transaction. This is very difficult work. It’s far easier to do a speech to a chamber of commerce talking about how the GDP in Costa Rica has gone up 6.4% last year. Frankly, businesses don’t care about that. What they care about is who in Costa Rica is buying what I’m selling.

When I was an ambassador to the Philippines, we had the Asian financial crisis in ’97-’98. I went to a meeting of our ambassadors from around Southeast Asia and many people were despondent that the region would no longer be a priority market for Canada. I asked, “What’s the problem? Indonesia hasn’t stopped. Imports haven’t stopped. There may be fewer customers now, but go and identify some new ones.”

These guys were all tied in up in the idea that if you’re not a priority market, then you’re not quite as good. We don’t need priority markets. Canadian business needs customers and partners.

Serving businesses by thinking like one

Trade advisors and trade promotion services need to think more like the small businesses they serve and less like economists.

A major impact of the internet has been the facilitation of direct connection between buyers and sellers all over the world. Thanks to cyberspace, more customers are now in touch with more suppliers than ever before. A larger portion of Canadian companies became active and successful in international trade through the receipt of an unsolicited request for their product than you might think. One day, somehow, somebody heard about their product who wasn’t in Canada, and they became “accidental exporters.”

So, rather than establishing and promoting priority markets and sectors, TPOs and advisors’ priorities should instead concentrate on the selection of strategic services that will be offered to any qualified client.

Let’s leverage our assets to mitigate common exporter challenges

Classic trade promotion programs remain very important to the success of national economies in the global marketplace. Focused, targeted offshore marketing strategies work well. If exporters are to sell on something more than price, quality must be anticipated by a customer before it is experienced.

Similar challenges face exporters in every country:

• Need for a healthy and growing customer base
• An absence of support organizations in their communities
• Need to understand new markets, domestic and foreign
• Lack of skilled international trade practitioners in the economy
• Shortage of time to pursue opportunities over the horizon
• Low level of understanding in the community of how integrated local business has become in the international economy

We have the assets to facilitate global business:

• Young, highly educated professionals whose talents are at a global standard
• Access to the internet and global television news
• Access to global support organizations ex: logistics, standards, design, etc.
• Access to telecommunications and air connections enabling anyone to be anywhere in a day
• Access to public resources devoted to economic development initiatives (international and domestic public sector resources)

Public sector resources devoted to addressing these challenges, or capitalizing on these assets tend to be wasted when trade advisors endeavour to determine, rather than facilitate, the direction of the economy. The role of government advisors should be to leverage the efforts of the business community. Best practice dictates, therefore, that all advisors and service providers both public and private should apply resources to save the exporter time and effort.

Measures of success for trade advisors

Without the effective intervention of TPOs and advisors, business will still happen. But exporters, particularly SMES and those new to cross-border business, will be less equipped to handle challenges in the global marketplace, and will yield margins to someone in the process (customers, agents, or distributors).

How can TPOs and advisors measure success in their efforts to equip businesses to go global? Focus on the creation and impact of deliverables. For example:

• Capture the number and measure impact of qualified business leads to client companies
• Measure the number, and impact on corporate behaviour, of market research reports
• Track the retention and growth of the TPO or consultant’s client base
• Track client participation in trade fairs, missions, conferences and other events and document feedback

These are relatively simple measures, but they are effective. The challenge is to demonstrate real value to SMEs who have the potential to become clients and, in turn, successful exporters.

Help for business new to trade

Another challenge SMEs and organizations new to trade face is the overwhelming number of public and private organizations offering solutions. How do they know where to go? Overlap, duplication, scattering of resources and ignoring real areas of need are all too common within these organizations. Emphasis must be placed on cooperation and coordination between agencies focusing on economic development and reducing anxiety at early stages of development.

The key driver in the domestic and international support networks can and must be the TPOs and export advisors. They are in a unique position to:

• Create and drive the vision behind the national export strategy
• Make visible the current and potential impact on international trade on the economic wealth of the nation
• Identify and build the trade support networks which serve the needs of exporters
• Translate demand from the global marketplace into transactional market intelligence delivered to interested and active export companies

Trade advisors must lead the effort to create cross-border support networks that are driven by vision, designed by the private and public sectors, and guided by performance measures. The measures chosen have to impact the daily work of all involved.

The unfortunate truth is that no trade agreement ever created a direct job, except perhaps for the negotiators. Jobs are created when suppliers identify and satisfy buyers or visa versa. The needs of business are universal: qualified business leads, competitive intelligence, contacts with key decision makers and data on technical standards.

Equipping exporters with the knowledge they need to qualify customers and understand the competitive forces at work the will translate directly to more success and the higher margins.

The post How trade advisors can help today’s exporters to go global appeared first on Trade Ready.

This article was updated on April 16, 2019

For Canadian exporters in the know, many would agree that the Canadian Trade Commissioner Service (TCS) is one of Canada’s best-kept secrets.

It’s baffling that a trade network with such a proud 120+ year history doesn’t have higher brand recognition within the Canadian business community.  I am regularly reminded of this when meeting with SMEs throughout the Prairies.

However, once they fully understand the diverse ways the TCS can help them into foreign markets and the impact it can have on their businesses, these companies often become long-standing TCS clients.

Simply stated, the TCS helps connect Canadian companies with international business opportunities.  Here are five easy ways your business can get the TCS Advantage:

1. Connect with your TCS regional office first

There are five TCS regional offices across Canada, each with a team of trade commissioners covering specific sectors to best support companies in their region.  If your business has the capacity and commitment to do business abroad, the TCS wants to meet with you.

Consider the regional trade commissioner as your key account manager; they can serve as your first point-of-contact for all government-related programs and services.

Their biggest value-add, however, is helping you connect with our TCS network in over 160 international locations.  Regional offices regularly receive business leads from TCS colleagues abroad, and occasionally host incoming foreign buyer delegations.

We can’t connect you with these opportunities if we don’t know about you!

2. Have the TCS vet potential business contacts/leads

You have just received an unsolicited inquiry from an interested foreign supplier or sales agent.  You’re interested in the market potential, but how can you be sure if it’s a reputable business?  Ask the TCS, of course!

Think of the TCS as an extension of your sales/marketing team.  Your TCS regional office will refer you to the right trade commissioner abroad to help vet potential business contacts and leads.

Our trade commissioners abroad also provide local market context to help you decide if it’s the right market for your business.  They might also recommend alternative market entry strategies that you haven’t yet considered.

3. Reach out to your in-market trade commissioner when traveling for business

I’m always surprised to learn how frequently Canadian SMEs travel abroad for trade events or fact-finding missions.

Business travel budgets are tight, so why not maximize your investment and meet with a local trade commissioner during your trip?

Here’s a tip: wherever we have a Canadian Embassy/Consulate/High Commission, we likely have a trade section as well.

Those trade commissioners are working on your behalf to help you succeed in that market.  If you make the effort to visit a country, it shows you are serious about the market.

Usually, a trade commissioner will gladly make the time to meet with you, learn about your business, and understand why you’re there.

Such introductions help keep your company top-of-mind when business opportunities are uncovered by the same trade commissioner later on.  Again, your TCS regional office will gladly make these introductions for you.

With sufficient lead time, the TCS can even arrange additional meetings with local contacts you wouldn’t have thought of on your own!

4. Consider trade shows where the TCS is already involved

Industry trade shows are an obvious way to assess new market potential and develop local contacts.  However, attending events that have active TCS participation will increase your chances for success.

How so?  The TCS is already involved in numerous trade events worldwide and often organizes side-events.

Your business can take advantage of pre-planned networking receptions, export cafés, and B2B matchmaking activities.

As one example, the Prairies TCS regional office welcomes over 20 trade commissioners from abroad every year to the Global Petroleum Show in Calgary.

Many trade commissioners bring potential buyers, for which the regional office – together with government partner, Export Development Canada – arranges B2Bs for TCS clients.

In addition, our visiting trade commissioners are happy to meet with Canadian companies to explain the opportunities in their overseas markets.

5. Don’t underestimate the value of province-/industry-led trade missions

Some companies have told me that they regularly receive invitations to join trade missions organized by the province or sector association but decline because they don’t see their company as the right “fit.”

They should reconsider.

What most don’t realize is that the in-market TCS team usually coordinates most of the mission logistics and B2B programs for these Canadian businesses.  Wherever possible, meetings with local contacts are tailored to match the interests of each participant.

It makes sense to leverage Canada-branded trade promotion activities for your own business. For each trade mission, the TCS works behind-the-scenes planning exhibition space, identifying foreign buyers, scheduling B2B’s and so on.

Collaboration between Canadian provinces/industry associations and the TCS network abroad helps deliver trade missions to different markets and industry sectors.

Now the “secret” is out about how your Canadian business can take advantage of the TCS to succeed in global markets.

Reach out to your nearest regional office to learn more about how the Canadian Trade Commissioner Service (and its new funding program, CanExport) can support your expansion plans into new markets and business lines.

The post 5 easy ways Canadian exporters can get the TCS advantage appeared first on Trade Ready.

If you’re a small business aiming to expand into new global markets, you may be wondering about the best way to approach it. Entering global markets can be a significant undertaking, and like any undertaking, it requires know-how, and developing or securing that know-how will require an investment of time and money.

So, in practical terms, what’s the value of investing in trade know-how?

Who better to ask than our own Certified International Trade Professionals (CITPs)?

Survival Systems Limited – Trish Tully, MBA, CITP, VP – Marketing & Sales

As a leader with 25 years of experience at Survival Systems Limited, Trish has played a key role in growing the company’s international reputation as the leader in delivering premier water survival training center equipment and services to commercial training operations and military services worldwide.

She earned a Bachelor’s Degree in Commerce and an EMBA from Saint Mary’s University and is a Certified International Trade Professional (CITP), having completed the global trade training program with the Forum for International Trade Training (FITT).

Trish is responsible for Survival Systems Limited’s new business development, contracts management, and a broad array of marketing and sales related activities. She has travelled worldwide to negotiate sales and to form long-term business relationships that garner repeat trade. She has also built strong industry references and business-to-business partnerships.

We asked Trish to tell us more about Survival Systems Limited.

What problem does your business solve, and how?

Survival Systems Limited is committed to the preservation of human life through the development of simulation technologies that provide realistic survival and safety training while addressing risk at all levels of the process. We enhance and preserve workers’ lives through safety education, training technologies, and applied research and development.

Our products and services include producing, commissioning, and servicing high-quality Modular Egress Training Simulators (METS®) for delivering underwater egress; integrated Personnel-Rated Lift Systems for hoisting METS® into and out of a pool water environment; high-fidelity Environmental Training Aids (wind, wave, downwash, rain, etc.) for Survival Training Simulation Theaters; and Modular Fire & Rescue Simulators.

How is your business involved in global trade?

Survival Systems Limited (SSL) has been exporting its simulators and services around the world since 1987 (over 30 years) which involves:

• Researching potential clients and agents to qualify capabilities
• Traveling to market to meet in person
• Hosting potential clients, existing clients, agents, government departments, and others at SSL’s Survival Training Simulation Theater (STST)
• Working with Global Affairs, Trade Commissioner Services, ACOA, NSBI, and other government departments
• Preparing proposals and pricing
• Responding to tenders
• Negotiating and securing contracts
• Providing after-sales services

How has FITT training/ know-how contributed to the success of your business?

After graduating with a Bachelor’s Degree in Commerce in 1997, I undertook an EMBA congruent with the time when I became more heavily involved with marketing and sales at Survival Systems Limited. In 2007, I completed the Strategic Marketing Management program at Harvard.

I had also been aware of the global trade training offered by FITT. After taking the training, I was pleasantly surprised that the course materials and lecturers delivering the program were very practical, detailed, and offered present and real case scenarios applicable to any small business either exporting their wares currently or wishing to do so.

What are some of your secrets of success?

The importance of building relationships and becoming a trusted advisor to clients; understanding their needs to address customized solutions; offering assistance and expertise to solve their (training) challenges; reacting quickly; fluent communications; keeping promises; standing behind our product and services by always doing the right things.

What is the most important lesson you ever learned?

By following these secrets of success, we have formed long-term business and personal relationships with our clients and a solid network of people who genuinely wish to help those being trained and who act as SSL’s ambassadors in a niche industry. The best and most reliable source for validation and advertising!

The post CITP Business Spotlight – Survival Systems Limited appeared first on Trade Ready.

There may never have been a better time to take your business beyond borders and tap into new international markets. Is your business ready to start exporting? Check out the 7 characteristics of successful exporters below and see where you stand.

With the recent signing of new trade deals such as USMCA (sometimes referred to as NAFTA 2.0) and the CPTPP, there are strong indications that the future is rife with opportunities for growth.

After a protracted period of trade turbulence, a collective sigh of relief followed the recent signing of USMCA, the United States-Mexico-Canada Agreement, with businesses already getting ready to the seize the opportunities.

The CPTPP, a new free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam has been ratified and will, once it enters into force, be one of the largest free trade agreements in the world.

Trade diversification is a key element of Canada’s future prosperity and the Government of Canada is putting considerable resources and support behind the push to get more Canadian businesses to internationalize.

As a small-business-friendly government, we’re working hard to make it easier for Canadians to do business here at home and abroad. The world wants to buy Canadian goods and services, and the USMCA supports opportunities for small and medium-sized businesses to access the North American market. By supporting small businesses in their efforts to export, we’re helping strengthen the economy and grow the middle class.

– The Honourable Mary Ng, Minister of Small Business and Export Promotion

7 characteristics of successful exporters

1. Their products and/or services are successful domestically
2. They have a solid domestic business plan with proven effectiveness
3. They have specific advantages over the competition
4. Their products and/or services are unique in one or more ways
5. Their products and/or services are competitively priced
6. They are willing to invest resources of time, people and capital without return for a period of time. Entry into new markets may require two or three years of effort before showing a profit
7. They are sensitive to and aware of the cultural differences of doing business in other countries

If an organization does not have a solid domestic business plan, is struggling in its existing markets, is producing and selling an ordinary product that is readily available, and has limited financial, human and production resources, it is not in a good position to begin exporting.

Want to learn more about how to make smarter decisions by assessing your organizational readiness for new international trade initiatives? Check out the FITTskills Feasibility of International Trade online course!

Take advantage of support and resources

If going global is in your plans, be sure to make full use of the considerable support, services and resources available. A good place to start is export development agencies and trade commissioners but also consider checking into industry associations.  Service providers such as training organizations, customs brokers and freight forwarders can also provide invaluable assistance.

While there is wealth of resources and services at the ready, a fundamental part of successfully launching a new international venture involves comprehensive research, planning and preparation.

Is your business trade ready?

Before launching into a new international trade venture, it’s important to assess your current situation on several fronts. The extent of your assessment will depend upon whether your business has operated internationally in previous ventures. Those who are completely new to being importers or exporters will need to perform a much more in-depth analysis than those who already have some experience in international trade.

Human Resources

A case in point: An organization appointed the next senior manager in line for a promotion to handle the company’s entry into international trade ventures without assessing the person’s skills and abilities in international trade. As this individual was just the most senior person ready to be promoted, rather than the right person for the job, the project was mishandled and entry into the foreign market was delayed by a year. The company finally did an internal and external search and found an appropriate candidate for the position. This delay meant the company fell behind its competitors in market share.

Organizations may have human and managerial resources adequate for its domestic needs, but can they support business operations that may be on the other side of the world? Of importance are:

• A management team capable of developing a comprehensive export plan
• A management team committed to pursuing export markets and willing to dedicate time, personnel and funds to its export program
• Adequate personnel to meet increased demand or the capacity to hire/ contract staff to meet needs
• Trained marketing staff, or the ability to hire qualified people, with experience in buying or selling products or services abroad (an alternative is to use intermediaries with the required expertise, such as agents, distributors or trading organizations)

Financial Resources

A case in point: A Canadian manufacturing company specializing in customized automation for the auto industry has 20 employees and annual sales of CAD 2.5 million. The company attempted to export to Mexico with limited financial resources, expecting government programs to contribute further resources. This assumption was not based on solid research about the programs or the criteria for accessing them.

Organizations will likely have the financial capacity needed to operate abroad if they have (or can acquire):

• The financial resources to support marketing products in overseas markets
• A strong, dependable cash flow
• The financial strength to compete with foreign products and services in terms of quality and price
• Enough cash, savings, and access to financing (such as increased operating lines of credit or term loans for capital expenditures) to support production and marketing for at least two years without making much profit
• Adequate knowledge of export payment mechanisms, such as letters of credit and open accounts

Production Resources/Capacity

One sure way to fail internationally is to secure a large contract and then be unable to fill it. Organizations can avoid this difficulty by:

• Ensuring suppliers can provide the raw materials and components needed to meet commitments
• Ensuring there is enough spare capacity, or that it can be created quickly, to meet unexpected large foreign demand
• Being prepared to modify and manufacture different versions of products and services. Either to meet the cultural, regulatory and/or certification standards of a foreign market

Logistics Resources

Being able to fulfill an order or a contract is only half the job—buyers still have to receive goods or services on time and in the expected condition. Organizations should ensure:

• They have, or can acquire, an adequate knowledge of how products or services should be shipped or delivered abroad
• Their staff is, or can be, trained in export logistics
• Their staff is, or can be, trained to troubleshoot problems quickly and efficiently

Holding quarterly or monthly meetings with foreign-trade experienced guest speakers can help organizations focus their efforts and generate excitement over new international initiatives. Having outside experts train and educate employees also demonstrates organizations are moving in the right direction and develops employee confidence.

Use Change Readiness Tools

While many organizations choose to engage third-party experts to help them prepare for new international ventures, there are change readiness tools that are available. Both paper-based and online, these are useful guides that are available, often free, through regional, national and international organizations. To find out more, contact your local and national business centres and associations such as the Canadian Trade Commissioner Service (TCS) or the United States Small Business Administration (SBA).

The post 7 characteristics of successful exporters appeared first on Trade Ready.

Imagine this situation: You are an exporter driving southwards on your favourite highway and ahead you see red traffic cones and barriers in the way. You are forced to slow down and notice that some of the barriers have the words “NAFTA debate”, “Soft-wood lumber disputes”, “Dairy regulations” and “Other competitors’ products” on them. You instinctively reach for your GPS to recalibrate, but your fellow passengers tell you “keep going, let’s see what happens”.

Don’t just stand around – do something!

Many Canadian exporters are hoping that the current phase of U.S. protectionism will not be too serious and that given time, cooler heads will prevail. However, apart from any potential changes to NAFTA, there are other important changes taking place in world markets that could affect Canadian exports.

For example, foreign government elections could affect our trading partnerships; many world leaders are changing their attitudes towards international relationships (e.g. Brexit); major environmental changes are affecting people throughout the world; electronic hacking is changing global communications, etc. All these changes make it increasingly difficult for Canada to rely on traditional alliances to plan for our trading future.

Instead of a passive “wait and see” attitude, perhaps it is time to look more aggressively for alternative export markets and recalibrate the Canadian exporters’ Global Positioning System towards other directions.

There is a wealth of up-to-date data, detailed reports and real-time market intelligence available through federal and provincial government sources. This practical, current and timely information is collected by hundreds of locally-engaged sector specialists, who have been hired from local industries by almost 260 offices in 150 countries around the world. They have been hired for their experience and contacts in specific business sectors and their job is to search for export opportunities for Canadian businesses.

These talented professionals have a great deal of real-time information on current on-the-ground marketing trends, and intimate knowledge of what specific products are sought by local importers abroad. Unfortunately, this knowledge is often denigrated by “blood-and-guts” exporters who wrongly claim that civil servants know little about the day-to-day realities of exporting.

Taking a practical look at the available options for Canadian exporters

In view of our unsettled exporting future, this writer decided to look for potential export markets which do NOT fall into Canada’s established and traditional markets. The top 28 destinations for Canadian exports, according to Global Affairs Canada, include the U.S., China, UK, Japan, Mexico, South Korea, Germany and India. But this list fails to include many other smaller and lesser-known, but still worthwhile markets like countries in North Africa, Brunei, Thailand, Trinidad and Tobago and others.

At random I chose “Consumer Products” and “Transportation” as export sectors and searched for information on the Trade Commissioners Service (TCS) website. I sought data on the top foreign markets which the trade commissioners abroad reported as the best opportunities for export.

Consumer Products

1. The TCS identified the top potential markets for Canadian consumer products as Bangladesh, Finland and Germany.
2. I picked Finland and searched for Finnish importers. Several company profiles, data on 2017 consumer trade shows taking place in Helsinki, and directions on how to export to Finland and Scandinavia were listed.

Transportation

1. At random I picked Kenya and found a list of 25 importers of transportation-related products with full contact information and the territory they cover.
2. These 25 companies are seeking auto parts, engine parts, automotive electrical equipment, engines, pumps, tractors, electric motors and other equipment.

While the TCS website was encouraging, I decided to take the opposite approach and (again at random) picked Thailand as a target country. I Googled  “Thailand Importers”, which provided a link with 18 names and addresses of importers, distributors and trading houses, all seeking to buy a wide range of foreign products including softwood lumber, woodworking machinery, furniture and garden products. In addition, when I Googled “Thailand Import Agents”, there were listings of commission agents seeking to represent foreign exporters of various products including food, paint, medical devices and chemicals.

A great reputation and hard work will open doors

While the above are mere examples, and many variables would affect successful export contracts (including competitive pricing, transportation costs, import tariffs, etc), successful exporting to new markets is based on the following facts:

1. Our Brand. That all-important first contact with potential international customers is easier because we have the greatest door opener in the world: the Canadian brand. Our reputation immediately opens doors all over the world, giving any Canadian exporter a salesman’s vital “foot in the door”.
2. The 200-20-2 rule: Anyone who has worked in a call centre or made “cold” calls knows these numbers. They work in any business development activity, in any country, and in any product sector. The concept relies on percentages: if you make about 200 calls you will develop approximately 20 new contacts, and they will invariably produce 2 export deals.
3. Knocking on doors. There is an inescapable logic that states that “if you don’t knock on the door, nobody will open it”.

Let’s knock on new doors by recalibrating our exporters’ GPS (after all, it IS global) and look for other destinations for our exports. They may not be as easy and accessible as our traditional U.S. market has been, but with a little effort and imagination Canada does not have to “wait and see” but can take proactive steps to becoming a truly global exporter.

The post Why it’s time to recalibrate Canada’s exporting GPS appeared first on Trade Ready.