Why do business in the USA?
The United States market continues to be a strong, viable business expansion opportunity for Canadian companies, especially those with specialty niche products and/or services. Beyond the favorable exchange rate, which historically has earned Canadian exporters between 25% – 30% more on their U.S. sales, the ‘new NAFTA’ was accepted and signed on December 12,2019 restoring confidence and ‘certainty’ to the “$1.4 billion worth of annual trade between the three countries.” (Source)
The recently ratified North American trade deal (a.k.a. USMCA) between Canada, the United States and Mexico, reports The Associated Press’ Paul Wiseman, now better reflects e-commerce and the ‘digital economy.’ Since the tech sector is so prevalent in the Pacific Northwest’s ‘Cascadia Corridor’ between Portland, Seattle and Vancouver, B.C. Canada, this specific modernization of the deal is particularly relevant to our region. In addition to ‘duty-free’ trading, Canada and America enjoy cultural similarities and both speak English which lend to easier business negotiation and communication. Geographical proximity and established trade routes as well facilitate cross-border trade between the two countries. Subsequently, once established in the USA, Canadian exporters become very well positioned for further global expansion.
“Know before you go”
‘Know before you go’ is a phrase coined by U.S. Customs and Border Protection (CBPS) and it means to be prepared. Understand your obligations to the respective U.S. Federal Agencies and the CBPS prior to arriving at any one of the 328 American Ports of Entry (Locate a U.S.A. Port of Entry). Immigration and business lawyers, international tax accountants, trade consultants and customs brokers should all be consulted prior to showing up at a U.S. port of entry with the expectation of entering “to do business” in the United States. (Related: Doing Business in the USA Seminar)
Build strong relationships
The Business Development Bank of Canada (BDC) recommends building as strong of a relationship with a team of export specialists as would be expected to invest in growing a relationship with customers. These invested, long-term collaborations are ‘hard-won’ but can be trusted. Find reliable, experienced immigration and business lawyers, international tax accountants, customs brokers and logistics partners. Trustworthy, expert counsel is critical for export success to the U.S.A.
Marketing meet logistics
According to the BDC, in addition to Incoterms®, volume fluctuations, fuel surcharges and safeguarding shipments, “the costs associated with an average importer/exporter’s transportation and logistics requirements represent 7% – 15% of the value of cost of goods sold”(source). Meaning to ship from Canada to the USA, Canadian exporters should be including logistics and distribution in their overall business expansion strategy. After all, why sell something if it can’t be delivered profitably? Leaning on the experience of a trusted logistics partner establishes an affordable, reliable supply chain and shipping/distribution channel that ensures customer satisfaction in an extremely competitive market like the United States.
In addition to UCanTrade, additional trade services and export advice can be found at the BDC, Export Development Canada (EDC), the Canadian Trade Commissioner Service, Pacific Customs Brokers, and Cascadia Cross-border Law.