Getting Ready To Export, Guide 2006 (Ontario)

Getting Ready to
Export
Your Export
Guide
This guide has been designed to introduce
Ontario firms, particularly small and medium-
sized firms, to the fundamentals of export
success and the resources available to them.
Getting Ready to Export

Exporting requires detailed thinking about the unique opportunities and challenges of
foreign markets. Every company, every product and every service has its strengths and
potential. This guide will help you analyse some of the key issues that you need to
consider and offers practical advice for firms new to exporting and those wishing to
expand their export programs.
The text is divided into two main parts: Part One focuses on “how to” and some of the
fundamental components of successful exporting; Part Two lists a range of resources
and organizations available to assist exporters. An Appendix provides further detailed
information.
There are numerous programs, services and networks that can help you build a
successful export program.
For more information please contact:

Trade Information Officer
Export Development Branch
Investment and Trade Division
Ministry of Economic Development & Trade
Hearst Block
900 Bay Street, 6th Floor
Toronto, ON M7A 2E1
Tel: (416) 314-8200 Fax: (416) 314-8222
Web Site: www.ontarioexports.com
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G e t t i n g R e a d y t o E x p o r t
Exploring Our Export Opportunities

The opportunities for Ontario companies in the export market are immense. The
dismantling of trade barriers means that small and large companies alike are better able
to participate in the global marketplace.
Ontario exporters have already demonstrated that innovation, creativity and careful
marketing are key to giving their products a competitive edge in the global marketplace.
Ontario cars, phone networks, computer software and ready-to-eat entrees are all being
exported with great success. Ontario companies can build on these trading successes by
rigorously promoting their superior goods, skills and services to international customers.
Exporting requires detailed thinking about the unique opportunities and challenges of
foreign markets. Every company, every product and every service has its strengths and
potential. This guide will help you analyze some of the key issues that you need to
consider and offers practical advice for firms new to exporting and those wishing to
expand their export programs. The text is divided into three main parts:
Part I
Focuses on “how to” and some of the fundamental components of successful exporting.
Part II
Lists a range of resources and organizations available to assist exporters.
Appendix
Provides further detailed information.
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T a b l e o f C o n t e n t s
PART I Planning Your Export Strategy

1. Is Your Company Ready to Export?
1.1 Evaluating Your Strengths and Weaknesses ........................................................................... 5
1.2 A Note to Service Exporters...............................................................................................................6
1.3 Export Readiness Evaluation..............................................................................................................7
2. First-step–Export Opportunities
2.1 Doing Business in the United States ..........................................................................................9
2.2 NAFTA Implications for New Exporters .............................................................................10
2.3 Exporting to the United States under NAFTA ...............................................................11
2.4 The Mexican and Chilean Opportunities ............................................................................12
3. Your Export Market Access Plan

3.1 Export Market Research Techniques .......................................................................................12
3.2 Preparing Your Export Marketing Plan ..................................................................................13
3.3 Export Entry Strategies .....................................................................................................................14
3.4 Strategies for Service Exporters ..................................................................................................15
3.5 Direct Exporting Options ................................................................................................................16
3.6 Exporting in a Changing World .....................................................................................................18

3.7 Indirect Exporting Options .............................................................................................................22
4. Selecting Your Local Sales Agents

4.1 Finding the Right Representative ...............................................................................................23
4.2 Evaluating Potential Representatives .......................................................................................25
4.3 Agency and Distributor Agreements ........................................................................................27
4.4 The Canadian Trading House Option ....................................................................................28
4.5 Working with Strategic Partners ..................................................................................................30
5. Export Pricing and Financing

5.1 Calculating Accurate Export Costs ...........................................................................................31
5.2 Pricing Considerations .......................................................................................................................32
5.3 Financing Your Export Program .................................................................................................34
5.4 Arranging Your Payment Terms ...................................................................................................36
5.5 Payment Tips for Service Exporters .........................................................................................38
6. Building Export Success

6.1 Your Business Trip ..................................................................................................................................38
6.2 The Export Contract ...........................................................................................................................41
6.3 Delivery: Containers, Carriers and Customs ......................................................................42

6.4 Managing Your Risks ...........................................................................................................................44
6.5 Export Success Checklist .................................................................................................................46
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P l a n n i n g Y o u r E x p o r t S t r a t e g y
PART II Export Resources:Where to Find Help

1. Export Readiness Evaluation Software ...............................................................................47
2. Low-cost Market Research Aids ...................................................................................................47
3. Searching for Export Opportunities on the Internet ..........................................49
4. Alternative Export Financing

4.1 Export Credit Agency Financing–EDC .................................................................................53
4.2 Aid Financing Programs–CIDA ..................................................................................................54
5. Ontario Government Support to Exporters

5.1 Export Development Programs ...................................................................................................55
5.2 Export Support Programs ................................................................................................................57
6. Federal Government Support to Exporters

6.1 Federal Trade Support Programs ...............................................................................................58
6.2 Program for Export Market Development ..........................................................................59
6.3 Virtual Trade Commissioner Service .......................................................................................59
6.4 Canadian International Development Agency–CIDA .................................................59
6.5 Canadian Commercial Corporation–CCC .........................................................................60
6.6 The Export Development Canada–EDC .............................................................................60
6.7 The Federal Trade Commissioners ...........................................................................................61
Appendix
A. Implications of FTA/NAFTA for Goods Exporters .....................................................63
B. Implications of FTA/NAFTA for Service Exporters ....................................................67
C. Case Study: Setting the Right Price .........................................................................................68
D. Sample Export Forms .........................................................................................................................73
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1. Is Your Company Ready to Export?
Part I
The first step in determining whether exporting is a viable option for your company is
to review the strength of your business at home.
Successful exporters are generally those with an established base in Canada. They have
reliable production, excellent reputations for quality, and products that are in demand
in the domestic market and therefore, potentially in international markets. However,
some highly specialized companies that do little or no business in Canada have also
found a niche in foreign markets.
1.1 Evaluating Your Strengths and Weaknesses

Any Ontario company considering entering the export market will have to assess its
strengths and weaknesses. Consider these eight key aspects of your business:
1. management expertise
2. production resources
3. product design and ability to adapt
4. domestic market success
5. marketing skills
6. technology
7. financial resources
8. people resources
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1.2 A Note to Service Exporters

Given today’s computer technology and telecommunication linkages, there are many
very small service firms that are successful abroad in carefully selected niche markets.
But there are some different factors that service exporters need to consider to ensure
export success.
Because service exporting usually involves the movement of personnel across the
border, you need to become very familiar with immigration regulations and work
permit requirements.
You need to build credibility in the foreign market so that customers there will take a
chance on your service. Find opportunities to showcase your expertise, network with
local contacts, establish a profile in the media–in general, become visible. At least
initially, you need to be building the profile of your firm, rather than focusing on
advertising a particular service offering.
For professional service firms in particular, your top professionals have to do the
marketing–not a sales rep.
For many service exporters, attendance at trade fairs will not be time-effective.
Instead, you may need to find conferences, etc., at which to speak and build visibility.
In order to feel conveniently accessible to customers, many service firms need to

establish some form of a local presence.
Remember that services can be exported in several different ways:

• providing a service from a Canadian base to a foreign country
(e.g., architectural drawings created in Canada for a foreign client)
• traveling to the foreign country to deliver the service (on-site construction
project management)
• providing the service to foreign clients in Canada (e.g., a training program
in Canada for foreign executives)
Requirements for Export Success

• A strong domestic business base (usually).
• A long-term commitment to exporting by top management.
• An allocation of sufficient company resources and personnel.
• A sound business plan with a realistic time frame for export market development.
• A well-designed, consistently high-quality product/service that meets the quality and
performance standards applicable in the target export market.
• A product/service that meets the often diverse requirements of foreign customers.
• A product/service that sells at a competitive price and is delivered on time.
• A product/service that can be fully supported with after sales service (if applicable).
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1.3 Export Readiness Evaluation
Part I
To help determine your company’s potential for expanding into the export market, ask
yourself the following questions. If you can respond positively to these challenges, then
you are ready to start planning to export!
Your Current Position/Commitment:

What is your position in the Ontario market?
Are foreign markets necessary for your company’s growth?
What is your scope for expansion?
Is your company prepared to make the commitment of money and people for the often
long-term development of export markets?
Exporting is not just a stop-gap for a slow domestic market. Commitments of resources
should extend for a two-year period. Three years would be better and one is the
absolute minimum.
Will your export manager be able to call on the support and cooperation of other key
individuals in finance, production, technical support, and shipping? Is everyone in your
company prepared to work toward the same goals?
People Resources:
Do your marketing and technical staff understand how to do business in foreign markets?
Do your professional/technical staff have the necessary certifications in the foreign market?
Will professional staff need to be licensed locally?
Do you have access to additional qualified labour?
Do you have Canadian support staff capable of speaking the relevant foreign languages?
Are your marketing, technical staff and senior executives prepared to spend days, or
even weeks, away from home?
If not, is the company prepared to train or hire people to work in new markets?
Is your senior management prepared to have departments work together to support
an export initiative?
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Marketing Expertise & Resources:

If you are a small firm, do you have staff with marketing expertise?
Is your senior management and/or marketing staff skilled at marketing in other cultures?
Financial Resources:
Do you have excess growth capital to use for foreign market development?
Do you have enough financial resources to manage professional fee withholds at source
(for tax reasons) if applicable?
Are you financially equipped to increase production significantly?
Product Suitability & Certification:

Is your product suited for export? Can it be adapted easily to meet different cultural
preferences?
What are the characteristics of your product that provide it with a marketing advantage?
Can your goods be easily shipped? Can your service be delivered easily abroad?
Does your packaging meet international requirements?
Will you need to redesign your product (packaging, manner of delivery, etc.)?
Will you need to translate materials?
Is your product cost competitive?
Is your quality control up to international standards?
Are you ISO (International Standards Organization) certified and approved?
Can your product be modified to meet mandatory technical standards in foreign markets?
Will your product need to be certified by a foreign agency before being allowed
into the market?
Production & Communications Resources:

Can you increase production to meet a surge in demand?
Will your production facilities need to be certified by a foreign agency before your
product is allowed into the market?
Can you expand your telecommunications capabilities easily? Do you have a fax
machine and e-mail capability?
Do you have a strategy for accommodating different time zones and vacations when
using the phone?
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2. First-step Export Opportunities
Part I
When thinking of doing business beyond Canada’s borders, the best place to start could
be next door. The United States is Ontario’s largest market for good reasons. Under the
Free Trade Agreement, the U.S. market is more accessible to Canadian exporters.
As part of the NAFTA, exporters might also consider exporting to Mexico. This could
prove an important first-step to approaching other Latin-American markets. As trade
agreements are constantly changing, so exporters are well advised to stay on top of the
latest developments.
2.1 Doing Business in the United States

It makes good sense to consider exporting to the United States. Many exporters find
this market an excellent opportunity for learning about the export business. As we share
the same language and a similar culture, breaking into this market may be much easier
for some companies than taking on cultural and language differences as well.
The United States is the world’s largest and richest national market. Our laws and
customs are similar. Today with the Free Trade Agreement and the North American
Free Trade Agreement, we have access to the best trade opportunities in the world. The
FTA/NAFTA provides Canadian goods exporters with a cost advantage over offshore
competition equal to the U.S. tariffs that these competitors have to pay.
Political and Cultural Distinctions

The U.S. market differs in structure from Canada, with four levels of government
(Federal, state, county, municipal). Entrepreneurship is strong, with a greater separation
between private and public sectors. With a portion of the American government being
elected every two years, Canadian exporters should be very aware of the American
political issues and their impact on specific economic initiatives and general openness to
dealing with Canadians.
The U.S. market is very competitive; these customers are used to lots of options,
excellent quality assurance, convenient access and rapid response times. Executives are
often quick to reach decisions and may be ready to “make a deal” sooner than
Canadians expect.
U.S. Marketing and Communications Tips

Ontario companies may find it of strategic benefit to have a U.S. telephone number
with a remote call forwarding feature to your office in Ontario or an 800 or 888 number.
These services can project the image of a local presence in the market without the cost of
a local office. There are also services available that provide a complete range of business
support services at reasonable cost such as mini-offices, a local business identity,
corporate representatives, (for the Certificate of Authority) warehousing and shipping.
9Û
The competition for attention in the U.S. market is intense. Advertising and public
relations can help promote Ontario products in the United States through trade and
consumer magazines and other media. Care must be taken to select media that reach
the required target market and that the product is presented as being as easy to buy
as a U.S. product.
Tax Implications
Canadian firms should be aware of the U.S. tax implications of doing business in the
United States. Generally, if you are exporting and do not have any physical presence in
the United States, you would not be subject to U.S. income tax. Also, be aware that
Canada and the United States have a federal tax treaty that basically gives credit for
taxes paid in the other country on taxes owing in the country of residence.
If a Canadian exporter is deemed to have a “U.S. establishment,” the firm will be liable
for U.S. federal corporate income tax. Exporters need to be aware that the definition of
establishment could cover a warehouse or distribution centre if there are employees.
If you are invoicing from a U.S. address, you will need a Certificate of Authority (or be
subject to a substantial fine) that names your local corporate representative. Such a
representative is a legal point of contact, not necessarily a marketing rep.You need to
verify such requirements with the nearest Canadian Consulate. The Canada-United
States tax treaty provides firms with many advantages and you should get some advice
from a U.S. tax specialist.
2.2 NAFTA Implications for New Exporters

The North American Free Trade Agreement (NAFTA), which came into force January
1, 1994, establishes one of the largest free trade areas in the world. The overall objective
of this Agreement is to extend the trade and investment enhancing provisions of the
Canada-United States Free Trade Agreement (FTA) to Mexico. It is possible that the
agreement could eventually form part of a wider trade initiative that would include
most of the countries of the western hemisphere. The Chile-Canada free trade
agreement, signed in 1996, was an important step in this direction.
Under NAFTA, Canada, the United States and Mexico will accord “national treatment”
to imports of each other’s goods and services and to investors, meaning that each
country will treat the goods and services of the other two partners as if they were
domestically produced and treat foreign investors as if they were nationals.
Here is a brief listing of key areas of benefit to exporters under this agreement:
• temporary entry for business people
• reduction of tariffs
• qualification under the Rules of Origin
• special customs duty programs
• government procurement
• settlement of disputes
• investment
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Under NAFTA, there are many new rules governing border crossing procedures, rules
Part I
of origin requirements and other customs procedures, standards and government
procurement.
2.3 Exporting to the United States under NAFTA

Entering the United States
Beginning with the FTA, the two governments have been streamlining the process
for temporary business entry into the United States.You should check the latest
requirements in terms of documentation to present.
Carry with you any correspondence indicating that your are entering the United States
for developing business from a Canadian base or to provide a contractual service for
which an agreement has already been reached. Keep in mind that U.S. Immigration is
concerned about people going across the border looking for jobs/employment. The
border crossing process is being expedited through several multiple-entry visa options.
Professional Qualifications
Under NAFTA, professional associations from the three countries are to work together
to establish standards for mutual recognition of professional credentials. Some
professions (e.g., architects, engineers) have already done so with the United States.
Check with your professional association on the status of such negotiations.
Intellectual Property Rights

NAFTA provides extensive protection for patents, trademarks and trade secrets. It is the
first trade agreement to offer protection for trade secrets, which can include formulas,
customer lists and production processes. The Agreement also contains extensive
provisions on intellectual property enforcement, including civil and administrative
procedures, provisional remedies, criminal penalties and border enforcement mechanisms.
Further information may be obtained on intellectual property matters by calling the

Intellectual Property Directorate, Industry Canada at (819) 997-1936.
Government Procurement
Under NAFTA there are greater opportunities for Canadian firms to sell to the Mexican
and U.S. governments. For example, under the Free Trade Agreement, procurement
disciplines applied only to goods purchased by federal government departments.
NAFTA, however, expands the scope of obligations to include services and construction,
lowers the threshold for competitive bidding, expands the coverage to include more
U.S. departments and agencies and includes Mexican government purchases.
Like the FTA, NAFTA does not apply to procurement by provincial, state, county and
municipal governments.
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2.4 The Mexican and Chilean Opportunities

Mexico is a country of 105 million potential consumers with an expanding middle-class
of around 30 million people (roughly the size of the Canadian market). It is a country
that has problems of infrastructure underdevelopment, transport and communication
difficulties, and pollution concerns.Yet, attitudes in Mexico towards free markets,
capitalism and privatization are changing.
For the Canadian exporter, Mexico will not be as easy a market to penetrate as the
United States. A different language and business culture will present barriers to those
who are not willing to learn and adapt. But for those Canadians willing to invest time
and energy, Mexico represents an export opportunity. For many companies, Mexico
will be their first non-U.S. export.
Some expect Mexico to be a stepping stone to the whole of South America. The Canada-
Chile free trade agreement was an important first step. There is the prospect of a much
larger unified trading market including the whole of South America. Canadian exporters
should recognize the need to get in early.
3. Your Export Market Access Plan

Access to markets varies from country to country and product to product. There is a
wide range of organizations and research tools available to shed light on possible market
leads. Careful planning will save you time and money.
3.1 Export Market Research Techniques

To prepare properly for the export market, you should explore all the avenues available
to increase your knowledge of exporting. A number of government, educational, trade
associations and other private-sector groups operate export seminars and workshops.
Check with your local community college to see what full and part-time programs are
offered. The Export Development Branch of Ontario’s Ministry of Economic
Development and Trade also supports a number of export education workshops
and programs.
A wealth of market research is available. Much of it can be accessed for little or no cost.
Extensive preliminary market research can be done from your own desk. Desktop
research calls for an inquisitive mind and an orderly collection and analysis of
information. This research can save you the price of a return trip to the export market
you are thinking of targeting.
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Low-cost Market Research Approaches
Part I
There is a wide range of organizations and resources that provide exporters with an
inexpensive source of information on potential markets. For more information on the
organizations listed below, see “Low-cost Market Research Aids” in Part II of this guide.
• Canadian Trade Commissioner Service
• trade associations
• major banks
• CanadExport
• Statistics Canada World Trade Database
• major international trade fairs
• International Marketing Consultants
When you’re on holidays, search for sources of export and trade information. Perhaps
your vacation destination could be a market for your product. Would it not be nice to
have a business excuse to get there more often?
3.2 Preparing Your Export Marketing Plan

Analyzing Your Target Market
Your research will provide a better understanding of where the opportunities are and
what is needed to win the business of your target market. This understanding will
contribute to your potential for success when you visit your market destination.
To plan a winning strategy, take a look at your target market’s:

• customers
• industry associations
• trends
• industry/sector events calendars
• market differences
• your competitors
• export requirements
• economic initiatives/priorities
• market segmentation
An analysis of this market information will help you define export opportunities and
associated risks. This homework is an excellent investment–and it is cheaper than a
plane ticket to your potential market!
13Û
Checklist: Key Elements of Your Marketing Plan

Once you have identified your market, you will need to organize the key elements of
your Export Marketing Plan. Use the guidelines below to help develop your plan.
• Establish a competitive export price.

• Ensure that you have high quality and technically accurate support documentation for your agents/
distributors in their language.
• Give special attention to the selection, training, incentives and support given to your agent or distributor.
• Arrange for your agents, distributors, and customers to visit your plant in Ontario, if appropriate, for
critical training in product application, after-sales service, etc.
• Have your senior management visit the target market to confirm your commitment to the market and
your customers there.
• Use major international trade shows to promote your merchandise and raise the visibility of your company.
• Continue to monitor your competition.
• Ensure on-going product and technology development.
3.3 Export Entry Strategies

Exporting the finished good or service represents only one of several strategies for
entering foreign markets. Factors like high transportation costs or high tariffs could
mean your merchandise cannot be competitive in a foreign market. Other ways may be
open. Make sure that you explore all the strategies for bringing your goods to your
customers outside Canada. Apart from shipping finished goods, you can enter into
export markets by:
• licensing designs or technology
• investing in a branch plant
• setting up a manufacturing joint venture in collaboration with a local firm
in the foreign market
Your strategy can differ from country to country and from regional market to regional
market.You could find, for instance, that you can easily sell your goods in the United
States, but that your transportation and product tailoring costs make it difficult to
export to Southeast Asia. A joint venture to manufacture in the region might make
more sense. Or a wholly owned investment in a foreign branch plant may best serve
your objectives in the region.
The best strategy for entering a market is one that makes your merchandise most
competitive in that market. Consider the following in assessing your potential to
compete in a target market:
• tariff and non-tariff barriers
• the cost of customizing the merchandise to meet local market requirement
• currency fluctuations
• transportation costs
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While adapting to the market of the host country could significantly increase costs, the
Part I
resulting increase in volume may make it worthwhile. Additional business contributes to
the fixed costs of production even if the profit margin is relatively small.
Structuring Your Export Access Strategy

When structuring your export access strategy, make sure your management is in clear
agreement on:
• company objectives for both the medium and long term
• tactical approaches to entering the market
• marketing plans to schedule activities that will support objectives and tactics
• allocation of resources for one- to five-year commitment to establish a presence
in your target market
• the export strategy may have to be modified to respond to changing conditions
and opportunities
3.4 Strategies for Service Exporters

Marketing your services abroad is similar to strategies for expanding into another
Canadian province. Depending on your business, there are a number of ways to enter a
new market. In general, you will want to select ones where you can draw on personal
referrals rather than making “cold calls.”
One possibility is to respond to Requests for Proposals (RFPs) from organizations in

the foreign market or International Financial Institutions (IFIs) such as the World Bank
or the regional development banks. Ideally, you would want to be involved with the IFI
at the pre-feasibility stage when you can help shape the project to be funded.
Remember that when an IFI is involved, you will have two clients, the IFI and the
national government. The Canadian government has a representative at each IFI who
can help you in marketing your services.
Another possibility is to identify a need that is not being met and design a service to fit
that need. In this case, you will want either to have an almost guaranteed customer or
someone to invest in promoting the availability of the new service. In such an endeavour,
a local partner can be very helpful.
Tips for Setting Export Objectives

Short-term objectives: aim to establish a foothold in the market.
Medium-term objectives: establish your company as a supplier.
Long-term objectives: deal with making you a major supplier.
15Û
It is much easier to be referred into the foreign market. To do this you will want to talk
with your present and former satisfied customers to determine whom they could refer
you. Similarly, you can talk to foreign students studying in Canada or recent immigrants
to Canada, about contacts they have in their home country to whom they could refer you.
The easiest of all is becoming so visible in the foreign market that potential customers
approach you. To do this, you will want to adopt strategies such as (Note: “local” here
refers to the foreign market you are targeting):
• join a local business/trade association and become active on a prominent committee
• volunteer as a speaker for a local trade association or business/professional school.
• apply for and secure an award for excellence and then promote that award in the
local market
• become a speaker or panelist for a trade event or professional conference in the
market area
• develop and execute a virtually-free demonstration project
• present an educational seminar on an industry trend of interest, linking the
presentation to what services you can offer
• retain a media consultant and get articles placed in the local media about your firm
3.5 Direct Exporting Options

Exporting directly into a foreign market requires more skills than indirect exporting
because you must deal with many unknown factors.
Follow these steps to establish your representation in your target market:

• prepare a list of potential agents or distributors
• screen the candidates to arrive at a short list
• interview those candidates who have been short listed
• select your agent or distributor
• establish an agent or distributor contract using a lawyer familiar with the market
• provide technical and marketing support to your representatives
• communicate with the agent/distributor on a regular basis
• keep the agent motivated and informed about your merchandise
• provide assistance to the agent in solving problems
Foreign Distributors
A foreign distributor orders goods and resells them to wholesalers, retailers or end users
in his own country at prices they set themselves. Distributorships are usually granted for
a specified territory and the distributor provides after-sales service and technical support.
Your distributor may also agree to develop a market for you with his or her sales force,
appoint dealers, and handle all promotions. If a distributor is appointed on an exclusive
basis, he or she receives sole rights to sell in a given territory. A distributor usually
handles a number of similar product lines.
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Agents
Part I
A sales agent (or representative) in a host country generally works on commission in an
exclusive territory. The agent seeks business, enters into legal contracts with the purchasers
on your behalf and conveys the purchase order to your Canadian base.You then ship to
the purchaser directly. In many instances, the exporter relies on the agent’s judgment
regarding credit risk. Agents often provide some collection support.
An agent may be an individual sales representative who works on his/her own in a

specialized product area, or may be a large manufacturer looking for a product to
complement its product line.
Agents may provide a variety of support services, including carrying stock, promoting
services, advertising and repairing goods. When selling through an agent, you have more
control over the market activities than selling through a distributor.
Another form of “agent” is a manufacturer’s representative. Selling via a manufacturer’s

sales representative is appropriate where there are more customers to be called on than
your sales staff can economically handle. Manufacturer’s reps usually carry very
focused, vertical product lines and have the advantages that they already know the
market and customers; you only pay them when they make a sale.
Direct Sales to Final Buyer

Direct sales to a buyer is ideal for technical products requiring technical service and
support.You must have the ability and resources to be involved in all aspects of
marketing and after sales service. When selling directly to a buyer, you retain a high
degree of market control. However, the marketing costs may be high.
Selling direct is appropriate when the depth of knowledge or expertise essential to sell
your products can only be provided by your own sales staff. It also might be appropriate
if you have relatively few potential customers or where your potential customers are
concentrated in a relatively small geographical area.
Foreign Broker
This is a firm or individual working on a straight commission as agreed to by you.
Brokers usually specialize in bulk commodities. They bring together a buyer and seller
and helping negotiate agreements or contracts.
Licensing Agreements
When an exporter is faced with prohibitive production costs at home, low-priced
competition abroad, transportation problems, or high tariff barriers, a licensing agreement
can be an alternative to market development. The holder of the license then produces the
product in the foreign country; finances and builds manufacturing facilities; and uses the
exporter’s trademark, patents, technical know-how, or training, in return for payment of a
royalty or fee. Franchising is another form of a licensing agreement.
17Û
The main advantage of licensing is that market penetration can be achieved without
direct investment by the exporter. However, a disadvantage is that a licensee is a
potential competitor upon the termination of the licensing agreement.
Exclusive agreements on sales territory and rights may be included in a license. Laws
and regulations governing license agreements vary from country to country and the
licenser’s lawyer should review the foreign country’s regulations covering the types of
rights which can be licensed legally. Be sure to investigate your legal recourse to enforce
the foreign licensee’s agreement to pay the royalties and the legal if either party should
break the agreement.
Joint Venture
A joint venture is a step beyond licensing. Here, the exporter invests money along with
a foreign investor or investors to produce the product in the host country. Joint ventures
entail many technical considerations and are often covered by special legislation.
Therefore, before entering into a joint venture, it is important to a lawyer with a
thorough understanding of all host country’s relevant laws.
3.6 Exporting in a changing world

The U.S. offers vast market for Ontario exporters. While the similarities of language,
laws, standard of living and attitudes give Canadians a unique advantage over exporters
from other countries, they can also cause us to overlook the many ways in which the
two nations are different.
Canadian exporters must treat the U.S. as a market separate from Canada. The events
of September 11, 2001 and the resulting security measures have affected border wait
times, packing legislation, reporting requirements, travel many other export-related
issues.
If you’re a Canadian citizen, there’s no legal requirement for you to present a Canadian
passport in order to enter the U.S. However, given American security concerns it is wise
to acquire and carry one when you cross the border.Your driver’s license or birth
certificate may satisfy an U.S. border official, but your passport is the only definite
proof of Canadian citizenship.
If you need a Canadian passport, you can contact the Canadian Passport Office at
www.ppt.gc.ca.
You can find additional information about the classifications and their related
documentation in two brochures published by International Trade Canada: Cross-
Border Movement of Business Persons at http://www.international.gc.ca/nafta-
alena/cross-en.asp and Temporary Entry to the United States: A Guide for Canadian
Business Persons at www.international.gc.ca/nafta-alena/temp_entry-en.asp.
The Foreign Affairs Canada’s Canada-United States Relations website at www.can-

am.gc.ca, has links to many resources covering various aspects of the bilateral relation-
Ü18
ship, including visas and immigration, border cooperation and politics, as well as trade.
After September 11, 2001, Canada and the U.S. signed the Smart Border Declaration
Part I
and Action Plan. This identifies initiatives that promote bi-national cooperation in
border security and management needed to ensure public safety and the security of
both countries’ economies.
Certain programs, such as the Free and Secure Trade program (FAST),
http://www.cbsa-asfc.gc.ca/import/fast/menu-e.html will provide exporters with
new options and new requirements. The FAST program is a joint Canada-U.S.
initiative involving the Canada Border Services Agency, http://www.cbsa-
asfc.gc.ca/menu-e.html, Citizenship and Immigration Canada,
http://www.cic.gc.ca/english/index.html, and the U.S. Bureau of Customs and
Border Protection (CBP). http://www.cbp.gov/.
FAST supports moving pre-approved eligible goods across the border quickly and
verifying trade compliance away from the border. It is a harmonized commercial
process offered to pre-approved importers, carriers, and registered drivers. Shipments
for approved companies, transported by approved carriers using registered drivers, will
be cleared into either country with greater speed and certainty, and at a reduced cost of
compliance. In Canada, FAST builds on the Customs Self-Assessment (CSA) program
and its principles of pre-approval and self-assessment, as well as increased security
measures under the Partners in Protection (PIP) program.
FAST includes aligning the requirements of Canada's PIP program and the U.S.
Customs Trade Partnership Against Terrorism (C-TPAT) program. As part of these
programs, companies will have to adopt and implement security procedures to be
compatible with guidelines set by both customs agencies.
FAST focuses on greater speed and certainty at the border and reduces the cost of
compliance by:
• reducing the information requirements for customs clearance
• eliminating the need for importers to transmit data for each transaction
• dedicating lanes for FAST clearances
• reducing the rate of border examinations
• verifying trade compliance away from the border
• streamlining accounting and payment processes for all goods imported by
approved importers (Canada only)
The Partners in Protection (PIP) program – This program enlist industry’s help in dealing
with terrorism, increasing border security, reducing smuggling and combating organized
crime. In Canada, PIP is managed by the CBSA. Companies that sign up for the program
give the CBSA a self-assessment of their security methods. In return, the CBSA will
help the business remedy any flaws in its security. PIP benefits companies through
faster movement of low-risk personnel and goods through U.S. customs, improved
security for the company and better understanding of customs requirements.You can
find out more about PIP from the CBSA’s Partners in Protection web page at
www.cbsaasfc.gc.ca/general/enforcement/partners.
19Û
The Customs-Trade Partnership Against Terrorism (C-TPAT) program – C-TPAT helps

businesses work with U.S. Customs to keep international supply chains secure. If you
produce goods and export them to the U.S., it may be to your advantage to be a C-
TPAT participant.You will benefit from reduced inspections at the border, be provided
with a customs account manager and allowed to use the FAST program.
To enroll in C-TPAT, you’ll have to carry out a thorough self-assessment of your supply
chain security, using the C-TPAT guidelines developed by U.S. Customs and Border
Protection.You’ll also have to develop a program to enhance your supply chain security
in accordance with those guidelines. For more information, refer to the C-TPAT web
page of the U.S. Customs and Border Protection website at
www.cbp.gov/xp/cgov/import/commercial_enforcement/ctpat/
Security alerts – The U.S. Department of Homeland Security (DHS) issues revised
security alerts when it believes there is increased danger of terrorist attack. The level of
such alerts may affect movement of goods and people across the border. For details of
the alert levels and what they mean, refer to the DHS Threats and Protection web page
at www.dhs.gov/dhspublic/display?theme=29.
Border security procedures are continuously evolving. The CBSA’s website has a
page that provides the latest border news and updates. Located at
www.cbsa-asfc.gc.ca/general/border-e.html, it includes regularly updated
estimates of the wait times at major border crossings.
Although U.S. customs regulations are very complex, clearing goods into the U.S. can
be relatively uncomplicated if you’re well prepared for it – for example, by preparing
complete and accurate export documentation. Inaccurate or incomplete documentation is
the most common reason for export shipments having trouble entering the U.S.; so a little
extra time spent on your paperwork will contribute to problem-free customs clearance.
There are two major ways in which your goods can enter the U.S. – as a formal entry,
also called a commercial entry, or as an informal entry. Most exports enter the U.S. as a
formal entry, for which U.S. customs regulations recommends the use of a U.S.
customs broker. Informal entry doesn’t require a broker if the exporter accompanies the
shipment, or if the consignee comes to the port of entry to collect it.
A broker will clear your goods through customs quickly, sparing you storage costs. To
find a U.S. customs broker, check the searchable membership directory on the website
of the National Customs Brokers & Forwarders Association of America (NCBFAA) at
www.ncbfaa.org. Alternatively, you can find a broker at a particular port of entry by
visiting the Ports of Entry page on the U.S. Customs and Border Protection site at
www.customs.gov/xp/cgov/toolbox/ports/. Select the port of entry and scroll down
the page to the link for its brokers list.
Ü20
Required documentation for formal entry
Part I
Your shipment, if destined for formal entry, will require the following documents and
information:
Commercial invoice – Also known as a business invoice, this must exactly represent the
content and value of your shipment. Never declare goods, such as promotional items or
samples, as being of “No commercial value.” U.S. customs officials may decide to
impose a value of their own or may even refuse entry of the goods. Another invoice tip –
when using part numbers, provide a written description that will help classify the goods
for customs purposes. Also, be sure that each invoice also shows the total amount
charged to the buyer for the shipment; never use the net value.
NAFTA Certificate of Origin – Determining the eligibility of goods for NAFTA treatment
and providing the importer with the Certificate of Origin is the exporter’s responsibility.
To claim NAFTA treatment, the importer must be in possession of a valid Exporter’s
Certificate of Origin from the Canadian exporter that certifies that the goods in
question meet the NAFTA Rules of Origin. Exporters can obtain copies from Canada
Customs and Revenue Agency offices in Hamilton, London, Ottawa and major border-
crossing points, or visit their website at www.ccra-adrc.gc.ca
Country of Origin Marking Rules

NAFTA marking rules are distinct from the NAFTA content rules. The marking rules
serve the domestic purpose of informing the ultimate consumer of a good where that
goods were made. In contrast to the content rules, which are common to all three
parties, each NAFTA member is required to establish its own set of marking rules.
The marking rules of each NAFTA country apply only to imports from its NAFTA
partners. Accordingly, the U.S. marking rules will pertain only to imports from Canada
and Mexico. Similarly, Canada’s marking rules apply only to imports from Mexico and
the U.S. The NAFTA marking rules do not apply to exports or to goods that are
produced and sold domestically. Marking must be sufficiently permanent to remain in
place unless deliberately removed.
Importer ID Number – Also known as the Customs Assigned Number, this is used by
U.S. Customs to establish bond coverage, release and entry of merchandise, liquidation,
the issuing of bills and refunds, and drawback processing.Your customs broker can help
you obtain the number or you can get it yourself by submitting Form 5106 to U.S.
Customs, available at forms.customs.gov/customsrf/getformharness.asp?form
Name=cf-5106-form.xft.
Bill of lading or airway bill – Your freight forwarder, carrier or broker is responsible for
filling it out. A bill of lading isn’t needed for mail shipments.
Entry manifest – The carrier is responsible for filling this out. Again, this isn’t needed for
mail shipments.
21Û
Entry/immediate delivery – This is used for time-sensitive shipments, such as fresh

produce, and replaces the entry manifest. The carrier is responsible for submitting this
to U.S. Customs before the shipment arrives at the port of entry.
Harmonized System Tariff Classification (HS Code) – Depending on the nature of the
goods, the shipment may also need to be accompanied by permits or licenses (if they’re
controlled goods) and a packing list.
Informal entry of goods

Your goods are considered an informal entry if their value is less than US$2,000, and
provided they are not controlled goods. Informal entry doesn’t require a broker if the
shipment is accompanied by the exporter, or if the consignee comes to the port of entry
to collect it. Documentation for informal entry is less stringent than it is for formal
entry. The shipment must be accompanied with its commercial invoice.You should also
include a NAFTA Certificate of Origin; while this isn’t legally required by U.S.
Customs, providing one will smooth your shipment’s path across the border.
3.7 Indirect Exporting Options

Indirect exporting is not as aggressive an approach to exporting as direct exporting, and
a firm may not be able to fully maximize the profit potential in foreign markets.
Brokers
An local export broker works on a commission basis, and is similar to an overseas agent
or broker. Usually a specialist in certain bulk commodities or manufactured products,
brokers are then in a good position to find buyers for those products in many areas of
the world.
Trading Houses
Selling via trading house is appropriate if you do not have the resources to service a
distribution channel in the market; if an export market is relatively exotic and requires
cultural and market knowledge that you cannot readily acquire; or when you would
prefer not to become involved with exporting but would rather deal through an
experienced third party.
Trading houses are specialists in exporting. They undertake to market a firm’s product by
acting as a local export department for the firm. Trading houses may be both exporters
and importers. They are knowledgeable about their markets, know the customers’ needs,
the communication problems in foreign markets, and the cultural problems in the market.
They usually handle packing, shipping, and documentation and thus relieve you of many
of the tedious tasks required for exporting. A trading house may buy products from you
outright and assume all credit and financial risks in selling abroad, or it may be retained
on a commission basis, acting on your behalf, with credit and financial risks to be shared
with you.
(Note: For more information on trading houses, see section 4.4 “The Canadian Trading
House Option.”)
Ü22
Canadian-based Foreign Buyers or Purchasing Agents
Part I
Resident foreign buyers or purchasing agents in Canada act on behalf of their principals
abroad. They buy a wide variety of industrial and consumer products and are located in
large cities.
Manufacturers
Some manufacturers in Canada buy many components or parts from other domestic
manufacturers, either for use in the products they export or to complement their export
product line.
Consortia
Many Canadian companies participate in capital projects throughout the world such as
dams, schools, airports, or manufacturing plants. These projects require hundreds of
different products and services; small firms have the opportunity to be suppliers to
them.
Procurement Offices
Some communist or socialist countries buy goods through procurement offices
established in foreign lands. These government crown agencies usually procure large
quantities of goods, such as agricultural equipment, hotel furnishings, construction
machinery, and apparel.
4. Selecting Your Local Sales Agents

Local agents or representatives are critically important to the success of export
programs. They have contacts and networks in place and an established reputation in
their local markets, all of which can open doors for you. The relationship that you
create with your agent can be the foundation of a long-term, mutually beneficial
partnership.
However, it is vital that you find an agent that is right for you. It is also crucial that you
and your agent understand clearly what each party expects of the other. The following
chapter will give you an overview of some issues and options for your consideration.
4.1 Finding the Right Representative

No decision is as important in the development of an export strategy than the selection
of your representatives in your target market. Make sure that the representation you
select (agents or distributors etc.) have the necessary qualifications to develop and
service the market. The following sources can provide lists of individuals and/or
companies that you can use to begin your screening process.
• Representatives of MEDT’s Export Development Branch may have lists of
local representatives who have an established track record selling Canadian
merchandise or related goods in your industry sector. The Canadian Trade
Commissioner in the Commercial Division of the Canadian Embassy can also
advise you regarding agents in their territories. Contact or write to them and
ask for a recommendation.
23Û
• Talk to other Canadian exporters in your industry with non-competing

merchandise. They may recommend agents/distributors in your target
market–be sure to check them out yourself.
• Participate in foreign trade shows. Not only is this an excellent way to test the
market for your goods but it will also provide you with opportunities to meet
agents who are seeking new lines. Be cautious though. The agent hungry for
new lines may not be the best agent. Many of the best agents are careful about
taking on new lines.
• Advertise in the leading international sector/technology trade magazines.
• Contact the local importers’ association or sector association in the target
market. They often can provide names of firms or individuals active in your
sector.
• Where feasible, ask the potential buyers of your goods which agents or
distributors they recommend.
• The Canadian Trade Commissioner can be an excellent source of advice in
selecting representatives. The Commissioner may be able to conduct an informal
investigation into the performance and reputation of a potential representative.
Researching potential representatives will involve sending long-distance faxes and
follow-up telephone calls. The investment will be minimal compared to the
benefits. The time and money you put into screening potential representatives
pays off when you find the best possible representation for your merchandise.
Tips for Selecting a Representative

• Make sure that the other product lines being handled by the agent/distributor are
compatible with your own and are non-competing.
• Check out references from the agent’s clients and within the industry. Do they have a
reputation for performance and integrity? Banks and purchasers are obvious sources of
this kind of information.
• Once you have a short list of candidate firms, you can begin interviewing. Use the
guidelines set out in section 4.2 “Evaluating Potential Representatives” in interviewing
your prospective representatives.
• Examine the prospect’s principal players.
Ü24
4.2 Evaluating Potential Representatives
Part I
Consider their experience and knowledge:
Does the prospective agent or distributorship have the know-how and resources to
provide after sales service at the quality level your company expects?
Who are the principals of the prospective agency or distributorship?
What is their background and experience in your field?
Are they active participants in the firm? If not, how important is this to you?
In some foreign markets the social and business connections of the principals can mean
far more to the success of your merchandise than a monthly marketing call.
Are they reliable and able to deliver:

Examine the prospect’s service record.
Can the prospect deliver the service promised in your existing guarantees and/or warranties?
Examine the prospect’s readiness to serve your needs.
Examine their facilities:

Does the prospect have warehousing facilities and a good shipping system?
Does the prospect have modern communications systems?
How many offices does the prospect have in the territory it would be covering?
Consider their existing customers:

Examine the prospect’s current and past customers.
Does the prospect represent lines that compete with yours?
Make certain that your agent or distributor has no conflict of interest in representing you.
Is the prospective agency or distributorship calling on the type of customer that would be
interested in your merchandise (i.e., is its target market the same as yours)?
What major accounts does the prospect currently hold?
Examine the merchandise lines the prospect represents.
Evaluate the staff and sales abilities:

Is the prospective agency or distributorship large enough to service your potential market?
How many staff members does the prospect have?
Is the staff that will be handling your business qualified?
Examine the prospect’s readiness to serve your needs.
Examine the way the prospect covers its territory.
Does the prospective agency or distributorship cover a territory directly or does it cover it
using regional representatives?
Is the size of the sales force large enough to serve the number of potential customers?
25Û
Does the geographic distribution of the sales staff make sense? For example, in the
United States manufacturers often have several agents across the country on a regional
territory basis.
Keeping Your Representative Motivated

It is important that you and your chosen representative have a clear understanding of
what each can expect from the other. Appointing an agency or distributorship to
represent your merchandise is only the first step in developing a customer base in your
target market. A successful long-term business relationship requires that you
communicate with your representative frequently.
Agencies or distributorships need to be kept up-to-date on your line. If you can, offer
their staff–your sales force–training and/or incentive to become and stay familiar with
your merchandise and its applications. Provide prompt and complete responses to any
questions your target market sales force has. Think of them as “customers” who must
be kept “sold” on your merchandise on a regular basis.
Checklist:What to Expect from an Agent or Distributor

• Thorough knowledge of the local, national markets and any variations.
• Import knowledge of your product type.
• No competitive products.
• Ability to cover territory–urban and/or rural coverage.
• Timely payment as per agreements.
• Adequate warehousing of variable models or stock.
• Sales organization and unrestricted access to sales records.
• Administrative support.
• Ability to prepare marketing plans and sales forecasts.
• Market research and competitive analysis.
• Verify pricing assumptions and calculations.
• Prepare advertising and promotional campaigns.
• Clear understanding of the termination clause in contract.
• Visits to production facilities for product updates.
• Capability to provide accurate verbal and written translations.
Ü26
Checklist:What Agents Expect from You
Part I
• Exclusivity in writing.
• Legal representation for patent and trademark protection.
• Top-quality, trouble-free, warranted goods.
• Commissions payable should be clearly spelled out in writing.
• Shipping services: packaging, labels, documents.
• Prices: lowest possible.
• Payment terms: establish credit rating and patience.
• Advertising and promotional literature and posters.
• New and modified products.
• Training materials: manuals, videos, slides.
• Timely updates, announcements, newsletters.
• Periodic visits from high-level executives.
• Sales conference attendance.
• Rewards and incentives.
4.3 Agency and Distributor Agreements

Legal Factors
A prudent exporter will usually want a written contract with the agent or distributor.
The contract will set out the terms of the business and legal relationship agreed to by
the two parties.
Foreign and Canadian law affects agency and distributorship contracts in a variety of ways:
• Certain formalities may be required to create and maintain legally enforceable
and binding obligations between the parties.
• Provisions may be required to address imposed warranties, product liability,
business practices and other matters governed by relevant law.
• Certain provisions may be automatically included in the legal relationship even
when not specified by the parties or unless specifically excluded by the parties.
• Income tax laws may make one type of business and legal relationship
preferable to another. An agent or distributor could constitute a “permanent
establishment” making the Canadian exporter subject to the income tax
provisions of that country.
Relevant foreign and domestic law should be considered before deciding whether to use
an agent or distributorship. Look at the laws before defining the relationship between
you and your representative. The laws may have a large say in who sells your goods and
who imports them.
Foreign duties and taxes imposed on imported goods may vary according to the type of
business arrangement used. If you sell direct to the end user, duties and taxes may be
imposed on your selling price. If you sell to a representative or maintain an inventory in the 27Û
foreign market, the base for import duties and taxes will be different than the direct price.
When determining the most suitable type of relationship, remember that you can
usually choose which country’s law will be applied to interpret the contract, and
whether the courts or an arbitrator will be used to settle disputes.
When you are ready to draft a contract, the following points should be considered:
1. Define the merchandise to be represented.
2. Specify which present and future goods are to be covered by the contract.
3. Clarify whether or not the representative will have exclusive rights to distribute
your line in the territory.
4. Determine the length of the contract.
5. Define the circumstances under which the contract can be terminated.
6. Consider foreign laws requiring compensation to terminated representatives or to
representatives not granted renewal of the representation.
7. Determine which laws apply to your relationship.
8. Establish which country’s law will govern the interpretation of your contract.
9. Define the extent of the representative’s signing authority for you.
10. State whether the representative is an employee or an independent contractor.
11. Who, by law, is responsible for product liability claims, compliance with business
practices legislation, and labeling and packaging laws?
12. Is there any provision for arbitration in your contract?
13. Define the territory. What are the boundaries of the territory that will be covered
by the representative?
14. What exclusivity will be granted the representative or the exporter? Foreign laws
may limit exclusivity.
15. Define the terms of business.
16. Set out the terms of sale between you and your representative.
17. Specify the payment terms.
18. State the currency in which your business transactions will be settled, sales service,
advertising, writing quotations, collections.
4.4 The Canadian Trading House Option

Canada was founded by trading houses: The Hudson’s Bay Company, The Northwest
Company and the French fur traders. Throughout history, it was not the manufacturers
of the goods that conducted trade beyond the city-state, but the trader.
But, in this day and age, would it be a logical step to use the services of a Canadian
trading house?
For some manufacturers the answer is yes. Trading houses can offer both new and
experienced exporters access to markets beyond their present management capabilities.
For the new exporter, not wanting to increase risk, trading houses can greatly increase
Ü28
profit potential. It can do so without the inherent risks of entering foreign markets.
Trading houses can also assist the experienced company to reach non-traditional markets.
The trader knows all the subtleties of international trade. It is not a sometime activity
Part I
to be engaged in only when there is a glut in the inventory. The trader knows the local
language, local rules and regulations, how to move the goods into and through the
market. The trader can be cost efficient in a particular market area by carrying a
number of similar goods for a number of manufacturers. The costs are spread among
the goods.
A Canadian trading house is a company with one or more specialist traders and it is an
established company operating under Canadian law.
A trading house is an export and/or import specialist offering market intelligence and
commercial trading of goods that it does not produce, between two or more international
markets.
The range of services rather than size is the determining factor. A trading house must
have sound management, international communications, and trade support services
either in-house or readily available. It needs selectivity in goods handled and markets
served, and in representing specific lines it needs a close relationship with the
manufacturer. It could act as the export department of a manufacturer covering all his
merchandise, or only one or two items, into specific overseas markets.
The benefits of Canadian trading houses include:

• specialized knowledge
• extensive experience
• cost effectiveness
• minimum risk
• Canadian customer
• Canadian receivable
• some or all markets
• some or all goods
The Trading House as Your Agent

Canadian trading houses can operate in different ways. The simplest way is to be the
agent. As such the trader is a go-between, usually in complex, high-value projects. The
trader is “plugged in” to the market. That means the trader knows all the right people,
from the government ministries to the customs and shipping regulatory persons.
Frequently, the agent can handle most of the technical aspects of the item. This involves
negotiating and handling logistics of commercial business and shipping. In this
instance, the agent does not take possession of the goods. It follows that the
manufacturer is responsible for the goods and for payment procedures. The trader will
receive the commission once the goods are shipped.
29Û
The other basic function is that of merchant. As a merchant, the trading house will
purchase goods at export prices from the manufacturer and take responsibility for
shipping and payment of the international receivable. The trading house will place an
order against a firm order from overseas while the manufacturer has a domestic
receivable. The trading house needs special export prices to make this feasible. This
merchant trader should not be confused with the trader who performs liquidations.
Selecting the Right Trading House

The sort of trading house that you will need for an on-going export commitment is a
steady trader who knows and understands the manufacturer’s goods. This trader has a
trusting relationship with the producer that is reciprocated. The trader knows overseas
markets, speaks the languages and above all this trader has contacts and knowledge.
The process for finding the right trading house involves the same techniques as the
search for a corporate lawyer or accountant. It is a matter of talking to the candidates.
Getting to know both the candidate and the operation means visiting the offices and
asking for a brief proposal. The choice should be based on the criteria outlined above.
Ask for references, both normal domestic trade references and overseas. Look for a
credible “track record.” Does the trader have the languages of the geographic area of
concentration? The trader who promises to sell any item in any market should get
specially close scrutiny.
You must decide what is the right trading house to complement goods in the target
markets. One trader may be skilled at handling specific merchandise in specific markets.
Another could specialize with one item in one market. Several traders may have
strengths in moving different merchandise in different markets. Any combination that
works is the best choice for the manufacturer.
Ask MEDTs Export Development Branch, your industry association, the Canadian
Manufacturers & Exporters, or the Ontario Association of Trading Houses. Trade shows
are good places to let people know you’re looking for some assistance. Recommendations
are sure to follow.
Note: GST and the Trading House: In Canada export trading houses that resell at least
90 per cent by value of their total annual purchases are permitted by Canada Revenue
Agency to issue to their suppliers a certificate to allow them to purchase goods on a
zero-rated basis. No further processing or alteration of the goods will be permitted in
Canada after the certificate has been issued.
4.5 Working with Strategic Partners

A strategic alliance with an appropriate local partner can reduce substantially the
time and money it will take for you to develop business abroad. A local partner already
has a network of contacts, knows the key cultural variables and can provide you with a
local office.
Ü30
Depending on your needs, you may wish to seek a partner in your same industry or in
Part I
a complementary industry. For example, high-tech firms may find it useful to partner
with a local marketing firm.
Industry associations may be able to recommend local firms interested in foreign

partners. Similarly, the Export Development Branch of Ontario’s Ministry of Economic
Development and Trade and/or the Canadian Trade Commission may have a list of
appropriate local candidates. Remember that local partners are also interested in
opportunities for themselves in Canada, so select a partner whose expertise can also
help you in your domestic market.
An alternative to foreign partners or going-it-alone is to have a Canadian partner.

MEDT’s Export Development Branch, Industry Canada and the Canadian Chamber
of Commerce have been working together on developing a more formal “business
network” system to help Canadian exporters achieve competitive economies of scale.
5. Export Pricing and Financing

Your export success will depend upon bringing a cost-competitive good or service to
the export market. It must also be at a price that is profitable for the exporter. To help
determine that price, an exporter must first establish the actual costs for producing and
delivering the good or service to market. A key factor in establishing pricing is the cost
of financing the export program and the type of payment terms that are established.
5.1 Calculating Accurate Export Costs

The cost of manufacturing is never a mystery when the costs of materials, labour and
administration are known. Make sure you know all the costs involved in bringing your
goods to your foreign customers. An “educated guess” on costs is not enough. Precision
is needed as costs can change frequently. There is no single “correct cost concept” to
apply in all situations. Costs can be described most simply as the volume of dollars paid
to secure a good or service to be resold at a profit. Costs can be broadly classified into:
• production costs such as raw materials and direct labour
• factory overhead (burden) cost directly associated with production
(e.g., electricity, depreciation, etc.)
• administration costs related to both manufacturing and selling
• selling costs including warehousing, sales promotion, sales solicitation,
sales management, marketing, packaging and shipping
• financial costs to conduct manufacturing, selling and administration
31Û
The prices paid for cost inputs will likely stay the same over short periods of time but
change over longer periods.You must be prepared to reflect significant cost changes in
your pricing procedures.
Among the simpler tasks is keeping a record of material and labour charges in the
production process. More difficult, however, is keeping track of overhead costs.
All factory overhead (burden) costs must be added together and allocated on a
determined standard. Overhead costs that neither increase nor decrease for any
specified level of production must be considered. Property taxes, for example, must be
paid regardless of the number of manufactured units produced.
A number of methods exist to develop overhead costs. By far the easiest to use is
related to the number of units produced. This is the formula that applies:
Estimated Total Overhead
= Overhead rate per unit
Estimated Units of Production
This method is accurate only when realistic figures are used. When calculating your per
unit cost, be sure to be realistic. Factor into your assessment:
• the unavoidable idleness of people and machines
• maintenance and repairs
• machine set-ups
• vacations
• statutory holidays
• possible illness or labour difficulties
• possible downturn in orders
Not allowing for these situations could mean unit costs for overhead might be too low.
Profits will suffer accordingly. Calculating these factors into your projected cost and
production output will expose opportunities for improvement.
5.2 Pricing Considerations

To determine your export price, use a careful, step-by-step pricing system. Each export
order should be considered individually. Reducing costs can help to gain an advantage
even in highly competitive markets.You could gain a market edge by providing “best
price” available. Beware, however, that anti-dumping laws in the country where the
exports are destined could be a factor in your pricing policy. It pays to know the rules
before offering “best prices” available.
Note: There are several methods for calculating costs and prices. See the “Case Study:
Setting the Right Price” in the Appendix of this guide for a commonly used pricing
method.
Ü32
In pricing your service, you need to take into account both “what the market will bear”
Part I
and what your break-even point is.Your price needs to include hidden communication/
transportation costs and other non-domestic expenses such as possible currency fluctua-
tions prior to the end of the contract. If the payments are sizable (over $35,000 at a time),
one of the chartered banks will offer you “hedging” options so that you can reduce your
exposure if the client is paying you in a currency other than Canadian dollars.
Pricing for Payment Withhold

If the country requires a certain percentage (usually between 15 to 30 percent) of your
professional fee be withheld at source for tax purposes, you will need to build into your
price your cost of capital or else find a local presence option to avoid the withhold. As a
result of tax treaties signed by Canada with various countries, you will eventually be
able to recover the withheld amount–but that could take up to 18 months.
Note: GST is not applicable on foreign sales, though it may be applicable on the
portion of the work performed in Canada for a foreign client.
Goods and Services Tax

The Federal Goods and Services Tax (GST) is collected at a single rate (7 per cent) on
virtually every transaction of goods and services throughout the production and
distribution chain. Most producers, distributors and exporters pay GST on business
costs can claim it for refund. This means GST should not be included in your company
expenses or in your profit and loss statements. It should be accounted for and shown as
a separate balance sheet account.
Most companies are now familiar with the accounting for GST. You should note that
exports are considered a zero-rated supply (sale). This means you do not collect the
GST on the amount charged on exports, but you may claim an input tax credit for the
GST paid on virtually all your inputs (purchases).
You are required, however, to have proof that the supply (sale) went out of Canada to
support your claim for not charging tax on an invoice. The proof must enable depart-
mental officers to track the entire shipment of tangible personal property from its origin
in Canada to its destination outside Canada. The responsibility to maintain this
evidence of export rests with the registered supplier (vendor). For this reason you will
need to keep any:
• invoices
• purchase contracts
• transportation documents
• customs brokers’ invoices
• import documentation required by the country to which the goods are exported
For more detailed information get GST Technical Information Bulletin, B-062–Export
Documentation from your local Canada Revenue Agency Office. Visit the Canada
Revenue Agency web site at. http://www.cra-arc.gc.ca/menu-e.html
33Û
Ontario Retail Sales Tax

The Ontario Retail Sales Tax should not apply to the sale of goods shipped outside
Canada by the exporter if the details of such shipment are supported by suitable
documentary evidence. The Ontario Ministry of Finance may be contacted for further
information at: 1-800-263-7965 or www.gov.on.ca/FIN/hmpage.html
5.3 Financing Your Export Program

Often export prospects can be enhanced by financing the transaction. Among the factors
to examine are:
• credit availabilities to both customer and supplier
• relative interest rates for different currencies and amounts
• competitive pressures
• the appetite of financial intermediaries (usually banks)
Discussions with potential financiers should start early in the marketing phase.
Committed financing offers may be required at the time of submitting prices and
technical information. In trade finance, normally your goal and that of your bank
should be complementary.
Short-Term Financing
Letters of Credit
Letters of credit (or “documentary credits”) are issued by a bank at the request of an
importer, in favour of a supplier/exporter, for the purpose of financing the import of
goods and/or services. By opening the documentary credit on behalf of the importer,
the bank obligates itself to pay the exporter–provided the exporter complies strictly with
the terms of the credit. This eliminates any risk to the exporter arising from the
customer’s failure to pay for the shipment. At the same time, the issuing bank provides
financing (credit) to the importer. It pays the importer’s obligations to the exporter
after which it will, in turn, be repaid by the importer.
Collections
Collections consist of bills of exchange (or “drafts”) which are defined in the Canadian
Bill of Exchange Act as “an unconditional order in writing addressed by one person to
another by the person giving it, requiring the person to whom it is addressed to pay on
demand or at a fixed determinable future time a certain sum in money to or to the
order of a specific person or to the bearer”.
Open Account Transactions

Selling on open account is arguably the easiest way to finance exports since this
arrangement incurs minimal costs to the exporter and involves little paperwork.
Goods are delivered to the customer, an invoice is issued and the customer pays within
a stipulated period. Open account transactions are typical in domestic business. In
international trade, however, they can be highly risky. The one area of international
trade where they are common is in transactions between Canada and the United States.
The exporting party must finance the transaction with its own funds until it receives
Ü34
payment from the purchaser.
Purchase of Foreign Receivables
Part I
An exporting firm can convert its foreign receivables into immediate cash by selling
them to a bank or factoring house. The receivables are discounted by an amount
deemed to cover financing charges and risks. The purchaser then assumes responsibility
for the commercial and political risks underlying the transaction as well as for collecting
payment from the foreign customer. Selling its foreign receivables provides the exporter
with the advantage of immediate cash, credit risk protection and collection services.
Such advantages are not free. The discount applied covers the costs of these services,
reducing the revenues that find their way to the exporter.
Medium and Long-Term Financing

Medium-termed instruments are usually structured for repayment periods of up to five
years. The repayment of long-term instruments can range between five to 16 years.
Such instruments are usually issued by banks or financial institutions, often in support
of large projects. In issuing such instruments, the financial institution assumes the risk
of non-payment arising from the failure of the customer, the customer’s bank or
political instability in the customer’s country. Among the longer term financing
mechanisms, the following are the most used:
Forfeiting
Forfeiting or forfeit financing is a medium-term form of seller or supplier credit
provided by a number of Canadian banks. The bank purchases medium-term (up to
five, and in special cases, seven-year) promissory notes due to the Canadian exporter
from a foreign customer. The value of the promissory notes is discounted at a fixed rate
so that the exporter receives cash, after deduction of the interest charge or discount.
Usually provided with a guarantee from the customer’s bank, the promissory notes are
discounted by the Canadian bank on a non-recourse basis to the exporter.
The Canadian exporting firm benefits from passing on the credit risk and currency
exposure to the Canadian bank, turning a credit sale into a cash transaction, receiving
fixed rate financing, incorporating the financial cost in the contract price and
eliminating extensive documentation.
Buyer Credits
A buyer credit is a method of financing an export over the medium to longer term
whereby funds are loaned directly to the foreign customer. These credits are usually
suited to large financing of capital goods and to support turnkey projects. Buyer credits
generally are on a non-recourse basis to the exporter as the importer enters into a direct
financial relationship with the lending bank.
35Û
Export Leasing
Canadian chartered banks can provide export leasing services through subsidiaries. This
form of trade financing is usually undertaken by exporters working in conjunction with
a leasing company to gain a competitive edge. It can be used for exporting to countries
where import restrictions prevent the customer from purchasing foreign equipment
outright or where the tax regime favours leasing over outright purchase.
Export leasing is usually a medium to long-term means of financing. Depending on the

mechanism used, the exporting firm receives cash for its transfer of title to the leasing
company and the delivery of the capital equipment to the customer. The leasing
company then collects regular payment from the leaseholder.
Project Financing
Project financing secures payment for a sale out of the cash flow that the project is
expected to generate when it comes into production. The assets of the project serve as
collateral, and lenders also have recourse to the cash flow created by the project.
Such loans are usually longer term, require extended gestation periods before
completion and require innovative financing. Canadian charter banks, through their
International Trade and Merchant Banking Divisions, are experienced in arranging
project financing, particularly for the mining, energy, forestry, transportation, public
utilities and engineering industries.
Financing through Export Development Canada

Export Development Canada (EDC) is Canada’s official export credit agency. EDC’s
mandate is to promote Canadian exports by providing insurance to exporters, financing
foreign customers of Canadian goods and services and guarantees to banks in support
of export trade. EDC financing helps Canadian exporters by providing funds to foreign
customers who otherwise might not be able to make the purchase and by assuming the
repayment risks in place of the exporter.
5.4 Arranging Your Payment Terms

Getting paid is proof of success in exporting. The best proof of all is getting paid
promptly. Exporters who have to wait unduly for payment are the ones who suffer
a loss of profit.
Specialized expertise is required for an exporting venture. There are a number of

factors affecting export payments that do not usually apply to domestic sales. These
affect the time it takes to receive payment, which in turn may affect your financing of
your export program.
Be aware that exporting involves additional distance and time between you and your
market, your transactions involve more than one currency and legal system, and
Canadian banks do not formally finance foreign receivable (except from the United
States). Consider the following methods of payment:
Ü36
Cash In Advance (Prepayment)
Part I
When the customer pays cash in advance, the exporter receives a partial or full payment
before the goods are exported. This method is risk free to the exporter but extremely
risky for the importer. It is normally only used in paying for goods or services that are
scarce and in high demand.
Bills of Exchange and Drafts

These are documents handled by the chartered banks that state the total value of the
goods exported and the date of payment. They are addressed to the importer and require
payment on demand–or on a fixed or “to be determined” date–a specified amount of
money to, or to the order of, a specified person. The title to the goods is not transferred
until the payment is made. There are two types of drafts: a sight draft and a time draft. A
sight draft requires a customer to pay at sight, i.e., on receipt, while a time draft is for a
specified time after receipt.
Letters of Credit
Letters of credit are the most common method of payment in international trade as
they provide protection to both parties involved in the transaction. They are issued by
the international department of a chartered bank, usually that of the exporter and state
all the terms and conditions that the exporter must meet before collecting the specified
amount. If the conditions are met, the bank promises to pay the exporter. Letters of
credit specify the documentation needed for customs clearance as well as details of any
other terms associated with the sale (e.g., packaging changes or translated literature).
A letter of credit may be revocable or irrevocable. Irrevocable letters of credit are

preferable because they cannot be canceled unilaterally and therefore greatly reduce the
risk of non-payment. The exporter can also ask the bank that will be transferring the
funds, usually the exporter’s own bank, to confirm the letter of credit. This means that
the bank guarantees payment upon the fulfillment of the terms of the agreement by the
exporter. This confirmation provides additional assurance that the exporter will be paid.
Open Account Trading

This method is primarily used between companies that have a long-standing trusting
relationship or when billing within the same firm. It is also common in transactions
between Canada and the United States. Trading an open account consists of issuing
invoices once the goods have been shipped, exactly as is done in domestic transactions.
With this method, the exporter assumes all of the risks and because of the absence of
any negotiable instrument to document the sale, collection difficulties can occur if the
customer refuses to pay.
Consignment
When goods or services are sold on consignment, the exporter retains ownership until
they are sold. The seller is responsible for the financial burden and risks (i.e., risk of
default and damage to goods). This method of payment is usually only used for goods
that are risky or not very popular.
37Û
Countertrade and Barter

Countertrade is a trading arrangement in which a sale to an importer is conditional on a
reciprocal purchase by the exporter. Instead of being paid in cash for a shipment, the
exporter would receive products (or even certain kinds of services) from the target market.
The governments of developing countries often require trade deals to include

countertrade arrangements because countertrade enables them to protect foreign
exchange reserves; create new exports or markets; balance trade for economic or
political reasons; or acquire new technology.
Barter, or payment in kind, is the most basic form of countertrade. It involves the
mutual exchange of goods and services between two or more parties. For example, two
state-owned trading companies could agree to a quantity of sugar for a quantity of oil
deemed to be of equal value.
Because trading without the exchange of money is a difficult business, Canadian

companies seldom engage in international barter. Successful resolution of these
challenges depends on careful analysis, experience in global markets and, quite often,
good luck. For the trade practitioner just starting out, the best course is to seek
assistance from those who have experience in barter deals and learn from them.
5.5 Payment Tips for Service Exporters

Service firms most typically extend to the customer an “open account,” meaning that
the service is produced and delivered before payment is received.You may wish to
negotiate partial payment prior to delivery to protect yourself in case of default or
extensive delay in settling the account.
Unless you are incurring major expenses in another currency, your safest route is to
negotiate payment in Canadian dollars. That way you will be unaffected by currency
changes. However, the customer may be unwilling to accommodate your request.
The most rapid ways to get paid from abroad are cash-in-hand or a wire transfer
directly to your bank in Canada. If you want payment by wire transfer, you will need to
supply your customer with the routing information for your bank, as well as your bank
account number.
6. Building Export Success

Export success calls for not only vision and determination, it requires attention to a
thousand details–from legal contracts to remembering to take enough business cards on
your trip.
6.1 Your Business Trip

You’ve done your market research, established an export strategy, read up on the
culture and business environment and developed a short list of key contacts. Now it is
Ü38
time to visit the market.
Consider making that initial trip with a provincial or federal trade mission. Traveling
Part I
with business associates can provide new insights. For convenience, it helps to stay close
to where business meetings will take place. Many business people like to be near the
Canadian Embassy, especially if the Canadian Trade Commissioner is helping with the
contacts. This can save you valuable traveling time and taxi costs.
Remember to give the provincial and federal trade consultants plenty of notice in
advance of your trip to the market.
Cultural Aspects of Business Travel

Being informed about the culture of the peoples in the potential export market is the
first step toward building a mutually beneficial business relationship.
Reading about the history and culture of a country prior to your first business trip is
time well spent. Not only will this help you enjoy your visit more, but your interest will
be well appreciated and noticed by your business contacts. Business people who
understand the culture of a country in which they wish to export are more likely to
develop successful, long-term business relationships.
Canadians abroad are generally viewed as ethical and dependable, which helps in
forming alliances. Usually, Canadians are well liked in international business circles,
perhaps, because of our traditional reserve. Nevertheless, Canadian firms should pay
close attention to different styles of doing business and the degree of importance placed
on developing business relationships. Often the first meeting in many cultures is an
occasion to get acquainted. Customs may demand that hard negotiations wait until
another day.
Customs and Taboos

Cultural taboos can affect a business relationship. In Thailand, for example, it is
culturally unacceptable to touch the head of a Thai. Similarly, crossing your legs in a
manner that shows the sole of your shoe is bad form. Gift-giving is an important part of
doing business in Japan. In contrast, gifts are rarely exchanged in Germany.
Cultural customs also affect how and when products can be marketed effectively. For
example, in the Netherlands, Christmas gifts are given on St. Nicholas’ Day (December
5) not on Christmas Day. In this country, exporters may need to adjust their advertising
to reflect this. Also, customs regarding who may provide the services of a notary vary
from country to country.
39Û
Important Items for Your Trip

• Lots of business cards for your meetings and visits (a card with a translation in the local language
on the reverse can be helpful).
• Company stationery.
• Company/product brochures, technical literature.
• Product samples if applicable and feasible (it may be advisable to obtain a “Carnet” for facilitating
customs clearance).
• A selection of small gifts (seek advice from the Trade Commissioner)–consider gifts that relate to
your business.
• Sufficient funds–carry enough local currency to get you to your hotel (often the best exchange
rates can be had at the airport upon arrival).
Be prepared with lots of business cards. Treat their exchange with respect, especially in
a formal culture. In Japan, as cards are exchanged, the title and organization are
acknowledged with ceremonial nods and comment. In Indonesia, only the right hand is
used for business card exchange.
Cultures also differ with regard to the use of meal times for business meetings and the
timing of when business topics are introduced. In France and Spain, the business lunch
may last two to three hours and is used as an opportunity to get to know one another.
In the Caribbean, business persons go home for lunch to have it with their spouse and
children.
Note: Check your library for resources on cultural aspects of international business.
The Canadian Trade Commissioners will usually have a “do’s and don’ts list” for
your target market. The lists are available for the asking. Refer to Part II, “Federal
Government Support to Exporters” of this guide for more information on Canadian
Trade Commissioners.
Traveler’s Tips!
• Allow time to rest following arrival.You will likely experience some jet lag
following a long flight.
• Safeguard your valuables such as passport and credit cards. It is often advisable
to leave these in the safety deposit box at the hotel and carry only the items
necessary for a day’s business activity.
• Have duplicate copies of all important documents.
• Carry an address card of the hotel with you in the local language. This may help
you get back to the hotel if there is a communication problem with taxi drivers.
• Contact the Canadian Embassy or Consulate if you need assistance.
• When setting up your schedule of appointments remember to leave enough
time for travel between appointments. In some cities it can take much longer to
Ü40
go from place to place than in Canada.
Pre-trip Checklist
Part I
• Acquire a valid passport. Most countries require passports upon entry to have at
least six months left on their passport before it expires.
• Arrange for visas or entry permits required by the country of destination. Also,
transit visas may be required for stop-overs en route. Check with your travel agent
and local consulate of the countries to be visited. Carry extra passport-size photos.
• Get immunizations recommended for the destination country. Check with the
traveler’s clinic at major hospitals.Take along your certificate of vaccinations.
• Get medical insurance for traveling outside Canada. Don’t assume that your regular
coverage will be adequate should an emergency arise.
• Leave a duplicate copy of your itinerary, including hotels, with the office and/or family.
• Carry some basic medications–antibiotics, disinfectant, stomach-headache remedies,
bandaids.
• Get your doctor’s advice before traveling, especially to the tropics. Be sure to have
a letter with your doctor’s authorization if you’re carrying special drugs.
• Confirm all airline and hotel reservations. Reconfirm airline reservations at each
stopover during the outward journey. A word of warning: if outward or return
reservations are not reconfirmed at least 48 hours prior to departure, your
reservation may be canceled automatically by computer.
• Make sure you are aware of all international holidays observed in your new markets.
• Check your credit cards for expiry date and acceptability. Be sure that balances are
paid down so that you have maximum charging facilities.
• Register your portable phone, computer and other equipment you plan to take
abroad with Canada.
• Customs to avoid problems when crossing borders or returning home. Carry bills
of sale proving where these items were purchased.
6.2 The Export Contract

Legal responsibilities and liabilities are automatically imposed by law between the
exporter and his distributor, and between the exporter and purchasers sold via an
agent. These legal relationships exist whether or not there is a written contract.
Furthermore, these legal relationships can also be affected by verbal unwritten

undertakings. Discuss with your lawyer what contractual terms are imposed under
Canadian law or foreign law, when no other agreement exists between the parties.
You may choose to modify or add to those terms based on your findings.
Preparing a Written Contract

You should ensure that suitable legal relationships regarding your exports are set forth
in written contracts. Various laws in Canada and foreign countries subject vendors and
41Û
purchasers to obligations and liabilities that can be modified by written agreement.
The laws of the country where the offer to enter into a sale is accepted–or which has
the more substantial tie to the transaction–will normally govern the legal relationship
between you and your representative. A written contract can designate a different
governing law in most business relationship matters.
United Nations Convention on Contracts

The U.N. Convention on Contracts for the International Sale of Goods may also apply
in addition to, or as part of, the domestic law otherwise governing the export sale. This
applies in stipulated circumstances: if the countries of both parties have adopted the
Convention, or if the law of the country that has adopted the Convention governs the
contract. The Convention came into force in Canada in May, 1992, and automatically
governs most international trade contracts entered into by Canadian companies.
6.3 Delivery: Containers, Carriers and Customs

Packaging Requirements
Your merchandise must arrive on time and in perfect condition. The packaging must be
designed to resist damage in transit and to conform to possible heavy-lift requirements.
It has to resist both thieves and climate en route and at destination. Today, most
shipments are containerized.
Environmental regulations in the country of destination may determine how you need
to pack your goods. Increasingly packaging must be recyclable. Germany, for example,
has one of the toughest packaging laws in the world requiring companies to take back
and recycle packaging used during transport or arrange for someone to do this. While
the importer has immediate responsibility, your competitiveness in the market will
depend on your ability to meet such criteria.
Checklist: Writing Your Contract

A written contract for the export sale of goods should:
• Be executed by persons empowered to legally bind the parties;

• Stipulate the country whose law will govern the contract.
• Exclude any terms imposed by law that the parties do not want to apply.
• Stipulate price, terms of sale, terms of payment and currency of settlement (consider any foreign exchange
controls).
• Assign responsibility for compliance with local standards and codes in the export market (e.g., packaging and
labeling laws, etc.).
• Provide for arbitration if this type of dispute resolution is preferred over resorting to the courts.
• Transfer financial liability to the extent that governing laws impose warranties, product liability, etc., in a manner
not usual for the parties.
• Stipulate all other matters agreed to by the parties.
Be sure to have the general form of the contract to a particular country reviewed by competent lawyers in that
country and in Canada.
Ü42
Transportation Costs
Part I
Since the mid-1980s, the transportation industry in Canada has become deregulated,
following similar action in the United States earlier in the decade. Transportation costs
are now much more affected by the market supply and demand.
This results in lower transportation costs and improved services for manufacturers and
shippers. Deregulation launched a new way for shippers and carriers to do business
together. Transportation services are negotiated and can be contracted in advance on a
confidential basis. This is in sharp contrast to the days when prices were determined by
tariff boards. Deregulation has introduced innovation and creativity into the industry,
resulting in significant efficiency and productivity gains.
Transportation costs play a critical role in determining whether an export sale is

profitable or even feasible. The success of your export marketing strategy will depend
on getting your goods into the foreign market at a competitive price. While the
responsibility for transportation is negotiated in the terms of sale, it is always essential
to understand the costs and alternatives available. Make sure you comply with all
regulations if transporting hazardous materials.
The Freight Forwarder

A competent freight forwarder can save you time and effort in planning the best
methods for shipping, routing and the preparation of export documents. To ensure that
your forwarder is doing the job for you at a competitive price, you also need to
understand the basics of freight forwarding.
Since your potential customer compares quotations from all sources on the basis of his
delivered costs, it is critical that you select the most cost-efficient method for shipping
your goods. Cost savings from your freight forwarder are vital to your competitive and
profitable export selling price.
Exporters of smaller shipments might consider using the services of a freight forwarder
who can offer consolidation at better prices than shipping independently, as well as the
convenience of single billing and tracing service. Check the reliability, capability and
experience of the freight forwarder best suited to you.
Meeting the Standards

Standards are playing an increasing role in regulating trade in all industry sectors.You
must meet merchandise standards and codes in all states of the United States and in
the European Community (EC). In the EC, for example, the Commission of the
European Communities issues directives for specific merchandise groups, outlining
minimum requirements that must be met before goods can circulate freely throughout
the European Community.You need to identify what directives affect your goods and
what standards must be met. The Standards Council of Canada can provide relevant
information.
43Û
ATA Carnet: Duty-free Admission

The ATA Carnet is a special customs document providing for temporary, duty-free
admission of commercial samples, advertising materials, professional equipment into
the countries participating in the system. The Carnet allows the traveling exporter to:
• use a single carnet for goods that pass through customs of several countries in
one trip
• make these arrangements quickly at a pre-determined cost
• make as many trips as desired within the one-year period of validity of the Carnet
To obtain a Carnet, an exporter will be required to provide security to the extent of

40 per cent of the value of the shipment, which is held for up to 30 months. Security is
refunded or canceled provided the Carnet documents are in order and there is proof
that the goods have been returned to Canada.
Note: Application forms for the ATA Carnet can be obtained from The Canadian
Chamber of Commerce: Tel: (613) 238-4000 Fax: (613) 238-7643 or Tel: (416) 868-
6415 Fax: (416) 868-0189.
6.4 Managing Your Risks

Insuring Risk
Risk is part of life for any business, including exporting. Risks exist even though you are
prudent in what you have contracted to undertake. Some risks are beyond your control.
Fortunately, it is possible to take out insurance to cover many contingencies.You can,
for instance take insurance precautions against:
1. non-payment by the customer
2. product liability
3. theft
4. damage
5. war
Not all customers and countries can be covered in this way. If coverage is not easily
available, you may want to think twice about doing business there.
Insurance for protection against risks of loss by exporters of goods or services are, in
general, broken into two basic categories: political and general/commercial.
Risk begins once the contract comes into effect (if not before) and continues until payment
is complete. As a result, exporters should investigate the types and costs of insurance
required and desired should commence at the initial stages of transaction negotiations.
Political Risk
Insurance against many political risks can be arranged from either the federal Export
Development Corporation or from a number of private commercial insurers and your
licensed insurance broker. While the products available from each often compete in
coverage and cost, they also complement each other.
Ü44
General/Commercial Insurance
Part I
These coverages are associated with the usual risks of doing business and are available
from private commercial insurance companies and your licensed broker. Be aware that
not all brokers have had the opportunity of exposure and therefore many lack
experience in the peculiarities of insurance relating to foreign application and the
export trade. The extent of coverage is often dictated by the terms of sale.
The following are examples of the types of coverage available:
1. Credits Insurance
Export receivables are subject not only to the political risk in the customer’s country
but also the commercial risk of the foreign customer, i.e., its ability to pay. Most firms
find managing the commercial risk more difficult than with domestic receivables
because of the lack of adequate credit information and the long distances between the
supplier and customer.
Losses due to contract cancellation, customer insolvency, repudiation or simply default

(refusal of the customer to pay an invoice when due), can have a disastrous impact on
your cash flow and your ability to finance operations.
Coverage is available from private insurers and Export Development Canada (EDC),
Canada’s official export credits agency.
2.Transportation/Marine Cargo
This insurance covers the loss or damage to goods during transit by land, sea or air and
incidental associated storage periods. This coverage may include:
• Direct Damage/Property
• Third Party (General) Liability
• Surety/Performance Bonds
• Product Liability
3.Travel Insurance
This coverage needs to include trip cancellation (if a restricted air fare), travel of family
members to care for personnel ill abroad, return of the body in case of death abroad,
etc. Such coverage, up to specified limits, is often required as part of major contracts.
4. Professional Liability
Professional liability insurance is especially important in markets like the United States
where legal action is very common. At a minimum, such insurance can cover the cost of
legal fees for responding to an action that has been filed against your firm.
There are three other areas of exposure addressed by professional liability insurance:
1. alleged non-performance
2. problems resulting from implementing your recommendations
3. non-performance by third parties who were your subcontractors
At present, it is difficult to get “global” coverage and market-by-market coverage

can be costly. 45Û
6.5 Export Success Checklist

The following 20 steps will help ensure success in your export program:
• Make a long-term commitment to exporting.

• Develop an export marketing plan.
• Produce the right product for the market.
• Pay close attention to your export strategy, including product positioning and pricing.
• Be prepared to offer credit terms to customers.
• Give careful attention to the selection of your partner, agent or distributor.
• Nurture your relationship with your agent or distributor.
• Support your export marketing with multi-lingual promotional and technical materials.
• Hire personnel with who speak the languages of your foreign market and who know
those markets.
• Ensure competent staff through on-going export training and international marketing
courses.
• Develop a strong in-house support network for international marketing.
• Go out and meet your customers–send senior company officers to the foreign markets
from time to time after a contract has been won.
• Exhibit at trade fairs or speak at international conferences–take full advantage of
Government-supported trade fairs in your target markets.
• Learn the local culture and business customs.
• Consider using Canadian trading houses or experienced Canadian partners to develop
the more distant and challenging markets.
• Honour your contracts with foreign customers.
• Be aware of potential hazards and manage your export risks.
• Be prepared to change strategy to suit often changing market conditions.
• Make a commitment to on-going research and development.
• Be prepared to respond quickly to changes in technology.
Ü46
Export Resources: Where to Find Help
1. Export Readiness Evaluation Software

Part II
For new exporters, International Trade Canada has developed a computer evaluation
package, entitled “Export Readiness Diagnostic” This web based program evaluates
your responses to a series of questions on your business and your product. It helps you
objectively identify your company’s strengths and weaknesses and provides you with an
assessment of your potential for success in export markets.
An export readiness/evaluation program can be viewed at:

http://www.exportdiagnostic.ca/
2. Low-cost Market Research Aids

Ontario Ministry of Economic Development and Trade,
Export Development Branch
Exporting success requires knowledge and experience. The Export Development
Branch’s experienced International Marketing Consultants can increase your chances of
export success through education and consultation. They can provide timely intelligence
on market opportunities, market trends, foreign competition, cultural and economic
issues. They can advise you on developing an effective marketing strategy and business
plan in accessing a market opportunity.
If you are interested in more information or seeking country-specific export education,

consultation or market information, select the region of interest to you and locate the
appropriate International Marketing Consultant responsible for that country.
Canada-Ontario Business Service Centre–COBSC

COBSC is the information gateway for Ontario business to access federal and provincial
programs and services for business. They can help you find answers to your export
business start-up, business growth, and exporting questions.
Tel: (416) 775-3456 or 1-800 567-2345 Fax: (416) 954-8597

Web site http://www.cbsc.org/ontario
Export Source 1-888-811-1119
Info-FAX: (416) 954-8555 or 1-800-240-4192
Web site http://www.exportsource.ca
Canadian Trade Commissioner Service

The Canadian Trade Commissioner Service maintains a worldwide network of offices
to assist companies seeking export markets and is part of ITCan.
The Trade Commissioner can make direct inquiries or conduct preliminary surveys
regarding the potential market for any product. The Trade Commissioner can also assist
you in setting up appointments with local business leaders, potential partners or agents,
end users and government departments for your visit to the market. Some services that
Trade Commissioners can provide can be found at: www.infoexport.gc.ca
47Û
Trade Associations
Canadian business associations subscribe to foreign government publications and also
receive copies of sector reports from the Canadian federal and provincial governments.
Some associations also offer trade development assistance for members.
Many of Ontario’s associations are listed in a publication called The Directory of

Associations, which is available at all major reference libraries.
The Ministry of Economic Development and Trade’s Export Development Branch

provides a list of major associations with export initiatives.
Major Banks
The international departments of major banks can provide information on financing
and related documentation, credit information, and overseas banking contracts. Many
banks have Home Pages on the Internet and can be easily located by using a number
of common search engines available.
CanadExport
This bi-monthly publication provides market information, notice of upcoming trade
promotion activities and listings of specific business opportunities: To subscribe free of
charge, call CanadExport at: CanadExport Internet site:
http://w01.international.gc.ca/canadaexport/
Statistics Canada World Trade Database

This database presents a matrix of country to country trade flows for 160 countries,
600 commodities and 300 industries. The data can be used to identify domestic and
foreign market trends and to examine market shares in other countries.
Using Canadian data, Statistics Canada can also tailor a personal report under data
variables such as: U.S. state of destination, quantity shipped, mode of transport,
Harmonized System of Customs Classification (HS class), country origin/destination
and value of commodity shipped.
The World Trade Database (WTD) is offered through Statistics Canada and incorporates
United Nations’ data to calculate market shares of any country in any market. The
database outlines market shares in terms of geography, commodity and industry.
Companies can find out more on how to use Statistics Canada’s International Trade
Databases by browsing the Statistics Canada home page at: www.statcan.ca/start.html
Major International Trade Fairs

Trade Fairs are an excellent way to demonstrate your goods to a foreign market and to
meet potential customers and agents from different countries. Information on important
international Trade Fairs is available from MEDT’s Export Development Branch.
Your industry or sector trade association will likely also have information on the main
fairs in your industry. There are a number of sites on the Internet that list major global
Ü48
and domestic trade shows. Trade News is only one of a number of sites that may be
useful in locating the most appropriate trade show. Visit the site at: www.tsnn.com
Note for Service Exporters:
Part II
Service exporters need to contact a number of different sources, including the following:
Take a World View... Export Your Services!

The most comprehensive web site for exporters of services.The “Service Export Cycle” takes
you through the 12 essential steps from increasing your awareness about service exporting, to
preparing the tools, to entering your first market and expanding into new world markets.
http://www.exportsource.ca/gol/exportsource/site.nsf/en/es02487.html
3. Searching For Export Opportunities on the Internet

The Internet is full of sites that can help you to determine where your best export
opportunity is and how best to approach it. The list below are just a few of the
numerous sites available:
ATA Carnet http://www.chamber.ca/carnet/

The ATA Carnet is an international, unified customs document, which under a
series of Customs Conventions, simplifies customs procedures for the temporary
duty free admission of three main categories of goods traded internationally:
• commercial samples
• goods for presentation or use at trade fairs, shows, exhibitions, or similar events
• professional equipment
Bank of Canada http://www.bankofcanada.ca

The Bank of Canada’s responsibilities focus on the goals of low and stable
inflation, a safe and secure currency, financial stability, and the efficient
management of government funds and public debt.
Business Development Bank of Canada http://www.bdc.ca/en/

my_project/Projects/exporting.htm
The Business Development Bank of Canada offers innovative financial services
that address the unique needs of today’s small and medium-sized businesses.
Canada 411 http://www.canada411.ca/

Now with more than 12 million business and personal listings, including postal codes.
Canada Border Services Agency http://www.cbsa-asfc.gc.ca/export/menu-e.html

Handy customs guide for exporters, information on proposed new reporting
requirements, and information on export permits, certificates, licenses and other
authorizations required by other government departments.
49Û
Canada Revenue Agency http://www.cra-arc.gc.ca/menu-e.html

The Canada Revenue Agency administers, tax laws, customs services, inter-
national trade legislation and other programs delivered through the tax system.
Canadian Commercial Corporation (CCC) http://www.ccc.ca/eng/home.cfm

CCC specializes in international procurement markets for Canadian
exporters and provides services to help them win export sales.
Canadian Intellectual Property Office http://cipo.gc.ca/

Search for registered patents, trade-marks and copyrights.
Canadian Manufacturers & Exporters http://www.cme-mec.ca/

Canadian Manufacturers & Exporters provides an online directory of the who,
what, where and how of Canadian manufacturers, exporters and distributors.
Canadian Missions Abroad http://www.infoexport.gc.ca/

The Trade Commissioner Service of ITCan currently has more than 125 offices
around the world.
CIFFA http://www.ciffa.com/
The Canadian International Freight Forwarders Association’s mission is to
represent and support members of the Canadian international freight
forwarding industry in providing the highest level of quality and professional
services to their clients.
COBSC Ontario http://www.cbsc.org/ontario/

Canada Ontario Business Service Centre (COBSC), provides cost-effective
business information easily accessible to the small business community in Ontario.
Currency converter http://www.bank-banque-canada.ca/en/exchform.htm

Performs interactive foreign exchange rate calculations using live, up-to-the-
minute currency rates.
DFAIT http://www.dfait-maeci.gc.ca/
The former Department of Foreign Affairs and International Trade has been split
into two separate departments: Foreign Affairs Canada and International Trade Canada
Ü50
EuroPages http://www.europages.com/home-en.html
Part II
150,000 company addresses from more than 25 European countries, with
company brochures, key business information and links to yellow pages
throughout Europe.
Export Development Canada http://www.edc.ca/index_e.htm

EDC helps Canadian businesses grow and prosper through exports and international
investment, and can help exporters compete in more than 200 countries.
ExportSource http://exportsource.ca/gol/exportsource/
interface.nsf/engdocBasic/0.html
An on-line resource for export information providing a single access point from
all trade-related government departments.
Foreign Affairs Canada http://www.fac-aec.gc.ca/menu-en.asp

Foreign Affairs Canada (FAC) supports Canadians abroad, works towards a more
peaceful and secure world, and promotes our culture and values internationally.
Government of Canada http://canada.gc.ca/main_e.html

Government of Canada’s primary Internet site where visitors can obtain
information about Canada, its government and its services.
IFInet http://www.infoexport.gc.ca/ifinet/menu-e.asp
IFInet provides Canadian exporters with access to information on projects
financed by the International Financial Institutions (IFI) in nearly 20 sectors of
activities in emerging markets and developing economies.
IBOC http://www.iboc.gc.ca/
International Business Opportunities Centre (IBOC) features business leads
identified by Canadian Trade Commissioners abroad which could be matched
with Canadian businesses.
Interactive Business Planner http://www.cbsc.org/ibp/home_en.cfm

The IBP is a business webbased planning software product designed to assist
entrepreneurs prepare a three year business plan for their new or existing business.
51Û
International Trade Canada http://www.itcan-cican.gc.ca/menu-en.asp

International Trade Canada (ITCan) supports the development of trade by
providing services to exporters, developing policy, and by attracting
investment in the Canadian economy.
Online Newspapers http://www.onlinenewspapers.com/

Lists of Internet available newspapers.
Ontario Association of Trading Houses http://www.oath.on.ca/

The Ontario Association of Trading Houses (OATH) is a private, non-profit
organization representing the trading houses of Ontario involved in export
and import of goods and services.
Ontario Associations http://204.101.2.101/hotlinks/

Ontario associations.
Statistics Canada http://www.statcan.ca/start.html

Statistics Canada is Canada’s national statistical agency, with programs
organized into three broad subject matter areas: demographic and social,
socio-economic and economic.
Strategis http://strategis.ic.gc.ca/
Strategis - the information resources of Industry Canada which is dedicated
to promote the success of Canadian businesses at home and abroad.
Export Statistics http://strategis.ic.gc.ca/sc_mrkti/tdst/engdoc/tr_homep.html

Custom-report generator that allows users to obtain Canadian trade statistics for
more than 5000 commodities, 500 standard industrial codes and 200 countries.
Trade Show News http://www.tsnn.com/

A free Internet service providing information global trade shows, conferences
and seminars.
Telephone Directories http://www.infobel.com/teldir/default.asp

Index of phone books from all around the world.
Ü52
U.S. Department of State http://www.state.gov/r/pa/ei/bgn/
Part II
Background Notes are prepared on all countries with which the U.S. has
relations.
World Bank http://www.worldbank.org/

The Bank Group offers a range of products and services directly to the business
community. World Bank loans to governments and government agencies
generate about 40,000 contracts worth approximately $25 billion annually to
firms worldwide.
World Customs Organization http://www.wcoomd.org/ie/En/en.html

The WCO is an independent intergovernmental body whose mission is to
enhance the effectiveness and efficiency of customs administrations. It is the
competent global intergovernmental organization in customs matters.
The above web sites and content are provided as a public service, but we cannot guarantee that
the information is current or accurate. Readers should verify the information before acting on it.
4. Alternative Export Financing

4.1 Export Credit Agency Financing–EDC
Export Financing
EDC makes medium long-term loans at both fixed and floating rates to foreign
customers of Canadian capital goods and services. Funds are paid directly to Canadian
suppliers on behalf of the borrower. These loans do not cover all payments risks to the
exporter.
EDC will consider financing for periods of two to ten years on exports that provide
significant benefit to Canada. EDC allows chartered banks and other financial
institutions to provide part of the financing. This could include the down payment, the
construction period of a project and local cost financing not normally provided by
EDC. These may take the form of parallel loans, co-lending or participation.
Lines of Credit
EDC has extended lines of credit to a number of countries to assist Canadian exporters
to bid on foreign projects. These lines encourage foreign countries to look seriously at
Canadian technology and industrial capabilities. They also alert Canadian
manufacturers and consultants to the enormous potential for capital goods in the
recipient country.
53Û
Visit the EDC web site at: www.edc.ca

For more information on the full range of EDC services, contact the office nearest you:
Toronto
Suite 810, National Bank Building
150 York Street, Toronto, ON
Tel: (416) 640-7600 Fax: (416) 862-1267
London
Suite 1512, Talbot Centre
148 Fullarton Street, London, ON
Tel: (519) 963-5400 Fax: (519) 963-5407
Ottawa
Place Export Canada
151 O’Connor Street, Ottawa, ON
Tel: (613) 598-2500 Fax: (613) 237-2690
4.2 Financing Programs

Canadian International Development Agency–CIDA
The Canadian International Development Agency (CIDA) is Canada’s official
development aid agency. CIDA provides aid by channeling funds to the major
multilateral development banks and by sourcing goods and services required by
developing countries directly from Canadian firms.
The maintenance and development of Canadian technical skills and employment is a

key consideration for CIDA because the agency directly channels a large portion of its
financial assistance to the supply of Canadian goods and services.
CIDA supports a number of development programs, including the Multilateral

Program, the Industrial Cooperation Program and National Initiatives Program.
The Multilateral Program channels Canada’s contribution to a number of multilateral

aid organizations operating worldwide. CIDA’s Industrial Development Program
focuses on building Canadian commercial links in developing countries, especially in
technology transfer agreements.
Contact CIDA at:

Canadian International Development Agency,
External Business Relations (GME)
200 Promenade du Portage,
Gatineau, PQ K1A 0G4
Tel: (819) 997-5006 Fax: (819) 953-6088 or 1-800-230-6349
Visit the CIDA web site at: www.acdi-cida.gc.ca
Ü54
Canadian Commercial Corporation–CCC
Part II
CCC is a unique export sales agency, wholly owned by the Government of Canada,
with a broad legislated mandate to assist in the development of trade between Canada
and other nations.
CCC helps Canadian exporters win sales in government and private-sector markets
around the world, through our unique government-backed guarantee of contract
performance.
CCC provides Canadian exporters with a range of export sales and contracting services
which enhance their access to market opportunities and significantly increases their
ability to land export sales on improved terms.
CCC is an integral part of Team Canada Inc complementing the export financing and
insurance activities of Export Development Corporation, as well as the market intelli-
gence and promotional activities of ITCan and other federal departments and agencies.
Contact CCC at: http://www.ccc.ca
Canadian Commercial Corporation

1100-50 O’Connor Street
Ottawa, ON Canada K1A 0S6
T: (613) 996-0034
F: (613) 995-2121
Toll Free in Canada: (800) 748-8191
Ontario Region
151 Yonge St., 4th Floor
Toronto, ON M5C 2W7
T: (416) 973-5081
F: (416) 973-5131
5. Ontario Government Support to Exporters

Exports help Ontario prosper by creating permanent, high quality jobs. As the country’s
leading exporting province, accounting for approximately half of Canada’s exports,
Ontario’s trade position faces a promising future. The Export Development Branch of
the Investment and Trade Division of the Ministry of Economic Development and
Trade helps firms grow, prosper and create jobs through international trade. Export
success is a journey, not a destination and it takes more than luck to become globally
successful. It requires commitment, hard work and patience.
55Û
Market information
Providing information on foreign markets and assisting Ontario suppliers of goods and
services in developing their marketing strategies. Market penetration assistance or
information on product or service entry strategies can include import/export statistics,
market demographics, advice on doing business in that market, major tariff and non-
tariff barriers, import regulations, distribution channels, payment mechanisms, national
holidays and travel suggestions.
One-on-one consultation and export advice

Assisting small and medium sized suppliers evaluate their readiness and capability to
export by reviewing fundamental principles such as: management commitment,
communication capabilities, domestic market strength, production capacity, financial
stability, potential product modifications, and a sound export business plan.
Product promotion and market contacts

Introducing Ontario companies to key international contacts and buyers by facilitating
their participation in major trade shows and missions. Key contacts may include
potential buyers and partners, agents and distributors, government officials, association
leaders and chambers of commerce. Outgoing missions may be lead by the Premier,
Cabinet Ministers, and/or senior government officials. Incoming buyer missions give
Ontario companies the opportunity to showcase their products and services, and meet
buyers and senior foreign delegates.
Community Export Development

The Community Export Development program can assist economic development
organizations across the province in their efforts to help local businesses compete in
global markets.
Celebrating Export Excellence – Ontario Global Traders Awards

The Ontario Global Traders Awards celebrate outstanding exporting achievement by
small and medium-sized enterprises. This annual award was created by the Government
of Ontario and its partners in trade in recognition of the important contribution
exporters make to Ontario’s economy.
Ü56
5.2 Export Support Programs
Part II
New Exporters to Border States
New Exporters to Border States (NEBS), delivered in partnership with International
Trade Canada (ITCan), is a two-day practical program offered on site at a U.S.
border point to introduce companies to the fundamentals of exporting. Participants
learn about export pricing, customs procedures, selecting agents and distributors,
warehousing and distribution, banking and legal issues, export financing and insurance,
immigration issues and identifying new market opportunities.
In-Market Support
In certain countries, the Export Development Branch has access to in-market
International Trade Development Consultants that supply/generate business leads,
make sales calls and provide market information. They do this by making corporate
calls on key decision-makers at targeted companies in specific industrial sectors, attract
new sales, promote exports and encourage trade with small and medium-sized
enterprises in Ontario.
Seminars and Workshops

Export specific programs and seminars that focus on key topics of interest to
exporters, and small and medium-sized enterprises seeking to expand and diversify
their export base. The program incorporates local topics of interest and local partners,
and provides an opportunity to build a global mind set among the export community
throughout Ontario.
Capital Projects
Export consultants can assist suppliers of capital goods and services to secure
international capital project opportunities, facilitating the development of consortia,
providing key contacts with financial institutions and providing commercial advocacy
where government contacts are important.
Virtual Trade Missions

Virtual Trade Missions (VTMs) give Ontario companies the ability to assess their
potential to do business in new export markets by helping prepare for in-market
activities such as upcoming trade shows and market development trips. VTMs use
videoconferencing and Internet technology to connect small and medium-sized
enterprises from Ontario with potential business partners, market experts and key
government representatives worldwide. VTMs also complement other trade initiatives
such as trade missions, trade shows and face-to-face international meetings.
We’re here to help you

To learn how your company can benefit from our expertise,
call us toll-free in Ontario only at
877-46TRADE (877-468-7233)
or at 416-314-8200,
or email us at trade.officer@edt.gov.on.ca.
www.ontarioexports.com 57Û
6. Federal Government Support to Exporters

6.1 Federal Trade Support Programs
There are a number of excellent federal government Internet sites to help you with your
exporting requirements.
Strategis http://strategis.ic.gc.ca
Strategis is Canada’s largest business web site, providing information on
markets, trade and investment, industrial perspectives, technology and
innovation, micro-economic research and analysis, managing your business,
marketplace services.
ExportSource http://exportsource.gc.ca
ExportSource is Team Canada Trade Network’s on-line resource for export
information. ExportSource provides a single access point from all trade-
related government departments and agencies on subjects including:
• market research
• trade statistics
• export financing
• export contacts
• export regulations/logistics
• trade shows and missions
Government of Canada http://canada.gc.ca

This is a comprehensive listing of all Government of Canada locations.
Foreign Affairs Canada http://www.fac-aec.gc.ca/menu-en.asp

Foreign Affairs Canada (FAC) supports Canadians abroad, works towards a
more peaceful, secure world and promotes our culture and values
internationally.
International Trade Canada http://www.itcan-cican.gc.ca/menu-en.asp

International Trade Canada (ITCan) supports the development of trade by
providing services to exporters, developing policy, and by attracting
investment in the Canadian economy.
Ü58
6.2 Program for Export Market Development (PEMD)
Part II
Funding for Canadian Trade Associations that have a national mandate. Assistance is
provided for generic international business development activities that benefit a
particular industry sector. The association’s proposed activities must be for the benefit
of its members, relate to the generic export promotion of the sector’s products or
services, the improvement of market access or the development of market
information/intelligence.
More information can be found at:

http://pemd-pdme.infoexport.gc.ca/pemd/menu-en.asp
6.3 Virtual Trade Commissioner Service

The Virtual Trade Commissioner Service is a computerized sourcing instrument for
Canadian Trade Commissioners abroad. Through participation in the Virtual Trade
Commissioners Trade database Canadian exporters and potential exporters can gain
access to valuable trade leads by ensuring that Canada’s Trade Commissioners have
accurate, up-to-date information on their export capabilities, experience and interest.
To register for the Virtual Trade Commissioner Service contact:

International Trade Canada
Tel: 1-800-551-4946 or (613) 944-4946 in Ottawa
To register by Internet:
http://www.infoexport.gc.ca/ie-en/MarketReportsAndServices.jsp
6.4 Canadian International Development Agency (CIDA)

CIDA administers Canada’s development aid programs. CIDA relies on the
Canadian private sector to implement most of its programs. Firms wishing to supply
goods or services to the Canadian government for use overseas should contact each of
the following:
General information on supplying goods and services for CIDA projects is

available from:
Canadian International Development Agency,
External Business Relations (GME)
200 Promenade du Portage,
Gatineau, PQ K1A 0G4
Tel: (819) 997-5006 Fax: (819) 953-6088 or 1-800-230-6349
Visit the CIDA web site at: www.acdi-cida.gc.ca
59Û
6.5 The Canadian Commercial Corporation (CCC)

CCC is a federal Crown Corporation that brings together the requirements of foreign
governments and international agencies with the supply capabilities of Canadian
suppliers of goods and services. CCC acts as the prime contractor with the client
country and subcontracts for the required goods and services with Canadian firms.
CCC provides Canadian suppliers with access to bidding opportunities, assumes

responsibility for the administration of contracts and as required, arranges shipment,
inspection and acceptance. Contact:
Business Development Officer

Canadian Commercial Corporation,
50 O’Connor St., 11th Floor
Ottawa, ON K1A 0S6
Tel: (613) 996-0034 Fax: (613) 992-2134
Visit the CCC web page at www.ccc.ca
6.6 Export Development Canada (EDC)

Export Development Canada helps Canadian exporters compete in world markets by
providing a wide range of financial services, including export credit insurance, sales
financing and guarantees. EDC is a financially self-sustaining Crown corporation
operating on commercial principles.
Ontario firms of any size can insure their exports against non-payment by foreign
customers.
EDC normally assumes 90 per cent of the commercial and political risks, involving:
• insolvency
• default
• repudiation or cancellation of a contact by the customer
• conversion on transfer currency
• war or rebellion
• cancellation of export permits in Canada
EDC covers both the commercial and political risks inherent in export transactions.
Almost any kind of transaction involving the export of goods, services or technology may
be insured, provided the Canadian content is at least 50 per cent of the selling price.
To facilitate your banking arrangements, EDC will agree to pay any proceeds of a loss
payable under your policy to a bank or any other financial institution.
Ü60
If a bank or other financial institution will agree to purchase an insured foreign
Part II
receivable from you on a limited recourse basis, EDC is prepared to agree to the
assignment of your rights and obligations under the policy to the bank or financial
institution. However, should a loss be occasioned by any factor within the exporter’s
control, the bank or financial institution may exercise recourse.
Credit Insurance Services available:

• Global Comprehensive Insurance provides coverage to the exporter against
both commercial and political risks inherent in export sales made on short-term
credit. An exporter is required to insure all export sales, except sales to the
United States, inter-company sales and sales on letter of credit or cash-in-
advance payment terms.
• Global Political Insurance provides coverage to the exporter against specified
political risk inherent in export sales made on short-term credit. An exporter is
required to insure all export sales except sales to the United States, inter-
company sales and sales on letter of credit or cash-in-advance payment terms.
• Selective Political Insurance provides coverage to the exporter against specified
political risks inherent in export sales made on short-term credit. An exporter
may select the countries for which he wants coverage but all export sales to
customers in the selected countries must be insured.
• Export Credit Insurance is similar to Global Comprehensive (GC) Insurance
but designed for companies with less than $5 million total sales or less than
$1 million in export sales. The application process has been streamlined and
policy administration is simpler than under GC policy.
Visit the EDC web site at www.edc.ca
6.7 The Federal Trade Commissioners

The federal Government actively supports export activities by Canadian suppliers of
goods and services through over 100 overseas offices. For a list of Canadian missions
abroad and their services, contact: http://www.infoexport.gc.ca/ie-en/EServices.jsp
Canadian Trade Commissioners can:

• promote your company to local customers
• advise on marketing channels
• recommend participation in trade shows and other business events
• identify suitable foreign firms to act as agents
• help you find credit and business information on potential foreign partners
• give advice regarding problems with duties, taxes, foreign exchange,
work permits
• advise on a country’s current trade, business and financial environment
and practices
• advise and assist you with foreign joint ventures and licensing
61Û
What You Need to Know About the Competition

• Request information on the local market suppliers of your goods and services.
• Is there local manufacture or partial assembly?
• Are the goods and services presently imported? If so, from whom and
which countries?
• What are the typical price levels and quality considerations in the market?
What Are the Local Conditions

• Are there any restrictions on the import of items being suggested and if so, what?
• Are there codes and standards to be met?
• What restrictions, if any, are imposed on the customer paying in the hard
currency?
• What local import duties, tariffs and other levies apply?
• Are there any special conditions in the market that may affect your selection
criteria of a partner, agent or distributor?
• Are there legally-required withholds at source for professional fees paid to firms
without a local office?
Ask for Assistance

List the specific items with which you need assistance from the trade counselor, for
example:
• setting up meetings
• looking for a local partner
• finance/currency review with banks and other advisors
Checklist:What to Include in Your Letter

When writing for the first time to the Canadian Embassy or Consulate
in foreign markets, exporters should provide the following information:
• A brief profile of your company specifically indicating whether you are a service company,
manufacturer, agent, etc. and approximate volume of business and number of employees.
• A description of your product (include your promotional materials) and supplement with
details outlining specific features and selling points, trade names, prices, terms of payment etc.
• A description of the typical end user.
• Your experience in exporting and present export markets.
• How your products are distributed in Canada and other export markets.
• previous experience selling to the market under study, if there were previous partners or
agents, any other business history in the market.
• Goods exporters should indicate their export price (CIF) to a major port in the target
market and their payment terms.
Ü62
Appendix
Part II
A. Implications of FTA/NAFTA for Goods Exporters
What should be of immediate concern to the new exporter? The phased elimination of
duties on most of our exports to the United States. will have a favourable impact on the
pricing of those goods.
According to the terms of the NAFTA, some tariff barriers will be eliminated immediately
while others will be phased out over periods of five, ten and 15 years. Non-tariff
barriers such as customs user fees, quotas and licensing requirements will also be
eliminated over ten to 15 years.
Trade between Canada and the United States will continue to be governed by the tariff
phase-outs negotiated under the provisions of the FTA. These phase-out schedules are
unaffected by NAFTA. As was the case under the FTA, there is an acceleration clause
under which tariffs may be phased-out faster than originally negotiated if the three
countries agree to such action. If only two countries agree, acceleration takes place only
between those two.
NAFTA Content Rules

NAFTA provides preferential tariff treatment for all “originating” North American
goods traded between Canada, the United States and Mexico. NAFTA content rules
are used to determine whether an item qualifies as a good originating in North
America. These rules ensure that preferential tariff benefits are only available for goods
substantively produced or transformed in North America.
Any goods produced in any or all of the NAFTA countries, with components and
materials that themselves are wholly sourced or manufactured in any of the countries,
qualify as originating goods entitled to preferential tariff treatment.
Goods that incorporate offshore raw materials or components will also qualify for
preferential tariff treatment if they have undergone a specified change from one tariff
description to another. For certain goods, such as auto sub-assemblies, these criteria are
supplemented by a value-added test.
The NAFTA rules of origin build on the rules that were developed for the FTA.
Canadian exporters will find the NAFTA rules clearer and more predictable.
More detailed information about NAFTA go to their web site at

http://www.dfait-maeci.gc.ca/nafta-alena/menu-en.asp
While all firms exporting to the United States or Mexico should obtain copies of these
publications, they will be particularly useful to firms whose goods are subject to a value
content requirement.
63Û
Certificate of Origin
Determining the eligibility of goods for NAFTA treatment and providing the importer
with the Certificate of Origin is the exporter’s responsibility. To claim NAFTA
treatment, the importer must be in possession of a valid Exporter’s Certificate of Origin
from the Canadian exporter that certifies that the goods in question meet the NAFTA
Rules of Origin.
The Certificate of Origin should be sent directly to the importer and not accompany
the shipment. Exporters may obtain a Blanket Certificate of Origin covering more than
one shipment for a specified period of validity.
Exporters can obtain copies from Canada Revenue Agency, offices in Hamilton, London,
Ottawa and major border-crossing points at their web site www.cra-arc.gc.ca/
Country of Origin Marking Rules

The NAFTA marking rules are distinct from the NAFTA content rules. The NAFTA
marking rules serve the domestic purpose of informing the ultimate consumer of a good
where that good was made. In contrast to the NAFTA content rules, which are
common to all three parties, each NAFTA member is required to establish its own set
of marking rules.
The marking rules of each NAFTA country apply only to imports from its NAFTA
partners. Accordingly, the U.S. marking rules will pertain only to imports from Canada
and Mexico. Similarly, Canada’s marking rules apply only to imports from Mexico and
the United States. The NAFTA marking rules do not apply to exports or to goods that
are produced and sold domestically.
Marking must be sufficiently permanent to remain in place unless deliberately removed.
Acceptable marking methods include stampings, moldings, stickers, labels, tags and paint.
Imports do not have to be marked with their country of origin when:

1. the cost of marking would discourage importation
2. marking would materially impair the function of the good
3. marking would substantially detract from its appearance
4. the good is a crude substance
5. the importer will substantively transform the good
The tariff classification and origin status of your merchandise should be determined
before you start exporting.
Advisory classifications and origin determinations may be obtained from your customs
broker or from one of the member government customs agencies.
Ü64
Written, binding, rulings on classification, origin status and marking requirements may
Part II
now be obtained in advance from Canadian, United States and Mexican customs
headquarters.
Rulings must be obtained in the country into which you are shipping your goods.
For information on NAFTA-related customs matters, advanced rulings on

classifications, and tariff rates visit the following website:
http://www.dfait-maeci.gc.ca/nafta-alena/menu-en.asp
Duty Drawback
Duty Drawback is the refund of customs duties levied on materials and components
imported from other countries when they are incorporated into goods that are
subsequently exported.
Under NAFTA all duty drawback programs were eliminated (US in 1996 and Mexico in
2001). Each country is still able to adopt a partial duty-refund procedure for those goods
that do not benefit from the preferential NAFTA tariff.
Goods Standards
NAFTA includes provisions to help prevent standards from becoming trade barriers.
It promotes the use of compatible standards, technical regulations and conformity
assessment procedures. In time this should reduce the burden of compliance with the
different standards for different countries.
To reduce exporters’ costs, NAFTA encourages mutual acceptance of test results and
certification procedures. Approved facilities will eventually be able to certify that goods
meet the standards of all three countries. The Canadian Standards Association is now
able to certify that certain goods meet the more than 360 U.S. health and safety
standards. Underwriters’ Laboratories of Illinois has been granted approval to certify
that goods comply with Canadian standards.
NAFTA requires that the three countries seek to ensure that provincial, state and local
governments, as well as non-government standard-setting bodies, comply with the
provisions described. This clause was negotiated to help Canadian manufacturers who
face a myriad of U.S. state regulations.
Not withstanding these improvements, Canadian firms exporting to Mexico or the

United States must still ensure that goods meet the safety regulations, labeling
requirements and other technical standards of the country into which they are being
exported. Relevant information is available from the Standards Council of Canada.
65Û
Pricing
Under NAFTA, exporters may be seen as a local supplier by many U.S. firms. In this
case, it’s customary for the American importer to request prices for Canadian goods
delivered duty paid in U.S. dollars to the customer’s receiving dock. Exporters need
to be sure to specify who is responsible for the freight charges to final destinations.
Ontario firms exporting to the United States. will benefit by having several agents or
distributors to cover states or regions. The size and diversity of the U.S. market
demands that extensive coverage.
Legal Compliance
Imported goods must comply with the appropriate code, just like their domestic U.S.
counterparts. All goods sold in the United States must comply with local, state
and/or federal codes. Some are familiar: for example, food and drug goods and their
packaging are controlled by codes. Less commonly known but equally potent are the
controls imposed on residential, commercial and industrial equipment. Goods must
be listed by the proper testing laboratory and display its seal.
Marking and Labeling Requirements

Exports to the United States are required to meet strictly enforced marketing and
labeling requirements to ensure the end user is aware of the origin of the good. Any
item that enters the United States in a retail condition or substantially the same
condition in which it will be sold or distributed must be conspicuously, permanently
and legibly marked in English with the name of the country in which it is produced.
Liability
Anyone in the chain of manufacture, distribution and/or sale of a good has a legal
liability exposure. Because of adverse lose experience, difficult and changing
legislation and the attitudes of society and courts, many insurers have at times
withdrawn from providing this class of insurance, especially with respect to the
United States.
This problem has recently modified to some extent and some of the major insurers
in Canada are prepared to consider providing protection against this risk. This is an
essential consideration when doing business in the United States and needs to be
recognized in your company’s pricing procedure.
Ü66
B. Implications of FTA/NAFTA for Service Exporters
Part II
The North American Free Trade Agreement (NAFTA) expands on the initiatives of
the Free Trade Agreement (FTA) to create internationally agreed disciplines on
government regulation of investment and trade in services. NAFTA provides wider
coverage of investment and cross border trade in services than does the FTA through
the broader scope of investments covered by NAFTA rules and the inclusion of
additional services, such as land transportation and specialty air services.
However, each country has designated a number of exclusions to the investment and
services rules. In Canada’s case this includes, among other measures, health and social
services. In addition to the general exclusions, each NAFTA country may retain current
laws and other measures that do not comply with certain rules of the NAFTA.
Such federal laws and measures are listed in the Agreement. Provinces and states have
up to two years to list the measures they want to be preserved.
The good news for service firms is that the coverage of government procurement has
been expanded. Canadians may bid along with American and Mexican firms on U.S.
federal government and agency contracts for goods and services worth US$50,000 or
more and on construction-related contract work for projects in excess of US$6.5 million.
The threshold for goods and services purchases by U.S. government enterprises such as
power authorities is US$250,000 and US$8 million for construction procurement. The
major new agency now open to Canadians is the U.S. Army Corps of Engineers, which
contracts out millions of dollars of service work every year.
The best source of information on upcoming contracts is the Commerce Business

Daily. However, firms will want to have already talked with the contracting department
before the request for proposal is issued.
In order to be eligible to bid on government contracts, firms must already be registered

with the particular department (and often with the particular district office of the
department). There is no central registration in the United States. Once you are registered,
you need to indicate in writing when you do not intend to bid on a proposal on which you
have been invited to bid or you risk being dropped from the registration database.
67Û
C. Case Study: Setting the Right Price

A Sample Case History: Canadian Sales Inc.
Complete this sample pricing form for an imaginary Ontario company, called Canadian
Sales Inc. The purpose of this exercise is to illustrate pricing techniques.
This form has three columns. The Domestic Market column entry helps you assign all
domestic costs in their correct order. It does so by showing you exactly how your
domestic price is made up, including any domestic tax exemptions. The second column is
for the “Other Export Market” and the third column is for the United States Market.
For the sake of this example, some simple assumptions about the sample company have
been made:
• cost figures chosen for inclusion in the example are arbitrary
• having decided to enter these markets, Canadian Sales Inc. has 50 employees
• it produces an electronic item that retails at a suggested list price of $64.95 CDN
• it sells 7,000 of these units per month in the domestic market
• although the company has just begun exporting, market research shows strong
potential in both the “Other Export Market” and the United States
• company sales in the “Other Export Market” are 10,000 units in the first quarter
and 25,000 units in the United States in the same period
• GST should not be shown in the hypothetical costing illustration as it can be
reclaimed by Canadian vendor
• U.S. exchange rate is 20 per cent
• U.S. duty rate for fictitious product assessed at 5%
• please visit the NAFTA Customs Duty Database at http://www.naftacustoms.
org/engfram.html to determine if your product is exempt
• export freight and insurance charges are billed at cost
• company’s targeted profit is 10 per cent per unit
Ü68
1. Product Unit Cost Domestic Other Export U.S.A.
Part II
Market Market Market
Materials $3.15 $3.15 $3.15
Labour $5.35 $5.35 $5.35
Factory Burden $1.30 $1.30 $1.30
Administration $5.75 $2.75 $3.15
Total Domestic
Market Selling Costs $5.25 N/A N/A
Total Export Admin.
Market Selling Costs N/A $1.95 $1.55
Advertising Costs $1.05 $.25 $.25
Total Costs $21.85 $14.75 $14.40
2. Export Costs Domestic Other Export U.S.A.

Crating N/A $1.30 N/A
Documentation N/A $.60 $.45
Sub Total $21.85 $16.95 $15.15
Deduct-Duty Drawback
(if applicable)
(See note below) N/A -$.80 -$.80
Cost before Profit $21.85 $16.15 $14.35
Add-Targeted Profit $2.20 $1.60 $1.40
Basic Selling Price $24.05 $17.75 $15.75
Add Agents
commission abroad
(% of BSP) N/A +$2.67 +$2.37
Add bank interest on term sale
(check with banker) +N/A +N/A +N/A
Ex Works Sales Price CDN $ $24.05 $20.42 $18.12
3. Export Shipping Costs Domestic Other Export U.S.A.

Inland Freight +$1.40 N/A
Wharfage Charge +$.35 N/A
Total (FOB Cdn Port) CDN $ $22.17 N/A
Ocean Freight $1.70 N/A
Marine insurance +$.35 N/A
Total (CIF Port of Entry) CDN $
(Cost Insurance & Freight) $24.22 CDN N/A
Final Other
Market Sales Price
(Exchange rate conversion,
Other Market Exchange
Rate or USA dollars) $19.38 US N/A
(May be in currency of Buyer)
69Û
4. USA Exporting Costs Other Export U.S.A.

Market Market
Factory Sales Price CDN $ $18.12
Convert at current USA exchange rate (20%) US $ $14.58
Add US $ costs of:
-US Duty (Based on converted factory sales price) US $ $ .54
-Freight-Factory to US final destination US $ $ 1.70
-Insurance US $ $ .10
-US Customs Brokerage US $ $ 2.00
Final USA Sales Price-D.D.P.
(Delivery Duty Paid to US Buyer) US $ $18.92
Product Cost
It takes the same materials, labour and factory burden to produce the item no matter
where it’s sold.
Note: If only domestic sales were being produced, costs should be higher than those
used here for three shifts.
Material cost savings should be apparent through bulk buying. Labour supervision
costs may decrease although additional shift premiums may increase in volume of
production. Factory burden is usually a fixed total cost and will vary per unit as
production volumes vary.
Administration
As the head office is in Canada, the greatest administration costs are against the
domestic market. These include the cost of such things as:
• billing/invoices
• salaried employees
• legal and accounting fees
• overdraft charges
• computer facilities, office equipment and supplies
• mailing costs
Domestic Market Sales costs appear as a separate total. Total Export Administrative
Selling Costs refer to all expenses incurred by the executives responsible for dealing
with export markets.
Costs for brochures are usually higher for the domestic market because camera-ready
art and colour separations must be applied against domestic versions. Costs written
against the foreign brochures are for translation, press time and paper stock only.
Ü70
Crating, Forwarding and Duty Drawback
Part II
Crating to ship to the United States is the same for all of Canada; no special charges
are added for the American market. But Canadian Sales Inc. makes an electronic device
that will be shipped by sea, so a special wrapping is needed to protect it from salt air
corrosion. Overseas crating must be strong enough to withstand the worst imaginable
aspects of shipping.
Forwarding costs for documentation and insurance apply to both United States and
other foreign markets.
Cost-before-profit totals show that everything has been taken into account except the
company profit. In our sample, Canadian Sales Inc. targeted a before-tax-profit of
10 per cent per unit. It may be necessary to modify this target after testing the market’s
reaction.
Sales Commission and Interest

Long-term bank interest only applies on very large dollar values and where the
customer needs special financial arrangements. It does not apply here. At this point,
Canadian Sales Inc. has determined its ex works sale price for all three markets.
Note: both export prices are considerably lower than the Canadian domestic price.
Freight,Wharfage and Insurance

Export shipping costs include inland freight charges from factory to dockside, plus
wharfage/loading charges. The item’s price is now Free On Board (FOB) the ship and is
still in Canadian dollars.
With ocean freight and marine insurance added, we now have the C.I.F. price to the
specified port of entry (for example, London, England). At this point it is wise to
convert to the appropriate currency. To illustrate the principles involved, U.S. dollars
have been given in this example. However, British sterling could be used.
The Importance of C.I.F.

Most offshore customers expect to be quoted C.I.F. (Cost, Insurance and Freight) at
the designated port of entry. When they know the C.I.F. price, they tack on final import
costs and profit to arrive at the competitive price.
71Û
U.S. Exporting Costs

The United States has a separate entry process because most American importers look
on Canadians as domestic suppliers. They generally ask for prices quoted in U.S.
dollars, delivered to their receiving docks. In our example we have used a U.S. exchange
rate of 10 per cent. In practice, as current a figure as possible should be used. The
10 per cent exchange rate has converted the ex works price from Canadian to U.S.
dollars. U.S. duty and brokerage charges are based on this figure. Now add the freight
cost to U.S. destination. The price reached covers delivery with duty paid to the
customer’s receiving dock.
Canadian Sales Inc. knows which export price can bring them a reasonable profit. The
company has not forgotten the targeted 10 per cent included in the ex works sales price
calculation. The foreign customer knows the landed cost and can quickly compare it to
the local competition.
Ü72
We can help you build
a successful export program.
For more information please contact:

Ministry of Economic Development and Trade
Investment and Trade Division,
Export Development Branch © 2006 Queen’s Printer for Ontario.
Hearst Block ISBN 0-7778-8559-X
900 Bay Street, 6th Floor
This information is provided as a public service, but we cannot
Toronto, Ontario, Canada M7A 2E1 guarantee that the information is current or accurate.
Tel: 416 314-8200
Toll Free in Ontario: 1-877-468-7233 Readers should verify the information before acting on it.
Fax: 416 314-8222
E-mail: trade.officer@edt.gov.on.ca
www.ontarioexports.com Printed in Ontario, Canada on recycled paper

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Exploring Our Export Opportunities

PART I Planning Your Export Strategy

2.2 NAFTA Implications for New Exporters .............................................................................10

2.3 Exporting to the United States under NAFTA ...............................................................11

2.4 The Mexican and Chilean Opportunities ............................................................................12

3. Your Export Market Access Plan

3.2 Preparing Your Export Marketing Plan ..................................................................................13

3.3 Export Entry Strategies .....................................................................................................................14

3.4 Strategies for Service Exporters ..................................................................................................15

3.5 Direct Exporting Options ................................................................................................................16

3.6 Exporting in a Changing World .....................................................................................................18

4. Selecting Your Local Sales Agents

4.2 Evaluating Potential Representatives .......................................................................................25

4.3 Agency and Distributor Agreements ........................................................................................27

4.4 The Canadian Trading House Option ....................................................................................28

4.5 Working with Strategic Partners ..................................................................................................30

5. Export Pricing and Financing

5.2 Pricing Considerations .......................................................................................................................32

5.3 Financing Your Export Program .................................................................................................34

5.4 Arranging Your Payment Terms ...................................................................................................36

5.5 Payment Tips for Service Exporters .........................................................................................38

6. Building Export Success

6.3 Delivery: Containers, Carriers and Customs ......................................................................42

6.5 Export Success Checklist .................................................................................................................46

PART II Export Resources:Where to Find Help

2. Low-cost Market Research Aids ...................................................................................................47

3. Searching for Export Opportunities on the Internet ..........................................49

4. Alternative Export Financing

4.2 Aid Financing Programs–CIDA ..................................................................................................54

5. Ontario Government Support to Exporters

5.2 Export Support Programs ................................................................................................................57

6. Federal Government Support to Exporters

6.2 Program for Export Market Development ..........................................................................59

6.3 Virtual Trade Commissioner Service .......................................................................................59

6.4 Canadian International Development Agency–CIDA .................................................59

6.5 Canadian Commercial Corporation–CCC .........................................................................60

6.6 The Export Development Canada–EDC .............................................................................60

6.7 The Federal Trade Commissioners ...........................................................................................61

B. Implications of FTA/NAFTA for Service Exporters ....................................................67

C. Case Study: Setting the Right Price .........................................................................................68

D. Sample Export Forms .........................................................................................................................73

1.1 Evaluating Your Strengths and Weaknesses

1.2 A Note to Service Exporters

In order to feel conveniently accessible to customers, many service firms need to

Remember that services can be exported in several different ways:

Requirements for Export Success

Your Current Position/Commitment:

Marketing Expertise & Resources:

Product Suitability & Certification:

Production & Communications Resources:

2.1 Doing Business in the United States

Political and Cultural Distinctions

U.S. Marketing and Communications Tips

2.2 NAFTA Implications for New Exporters

2.3 Exporting to the United States under NAFTA

Intellectual Property Rights

Further information may be obtained on intellectual property matters by calling the

2.4 The Mexican and Chilean Opportunities

3. Your Export Market Access Plan

3.1 Export Market Research Techniques