According to the latest analysis, of Canada’s one million small- and medium-sized businesses, only about 40,000 are exporters - and just 10,000 of those export outside the U.S.
Sure, our big neighbour to the south is our closest and largest trading partner but, given the current climate of uncertainty there – not to mention the massive untapped potential of overseas markets – now may be an ideal time to broaden your customer base.
Trade agreements – more than just NAFTA
NAFTA has served us well when it comes to enabling the flow of goods between Canada, the U.S. and Mexico. But did you know Canada has trade agreements in force with over a dozen other countries? (And there are more in the works, too, with several due to be signed in the next one to two years.)
If you’re thinking about reaching out to potential new customers around the world, it will be important to consider what trade agreements and trade regulations exist (or are in the works) as these could influence your success.
Some things to keep in mind as you consider broadening your customer base:
- Check whether there is a trade agreement in place between Canada and your target market. If there is, find out whether your product qualifies for duty relief.
- If there is no trade agreement, find out what tariff rates will apply and make sure your product will still be competitive in that market after any tariffs are applied.
- Sometimes, the difference between a product that qualifies for tariff exemptions and one that doesn’t is very subtle. Find out if you can modify your product – without compromising quality or profitability of course – so that it will qualify.
- Try to learn about the trade climate in your target market. Are they tightening or loosening trade rules with foreign countries? Keep an eye out for existing or potential non-tariff barriers to trade also.
Consult your suppliers and trade service partners to identify both the opportunities and risks inherent in expanding into international markets.
With enough planning, forethought and informed decision-making, a foray into the global marketplace can be a rewarding and profitable experience!
Contact our trade consultants to discuss what untapped opportunities are out there that could benefit your company.
Information provided by: Canadian Customs Consulting Dept. - Cole International