First-time exporters advised to pursue business in the U.S.

Northern Ontario businesses looking to expand their markets need look no further than south of the border.

"There are obvious markets in the States. That is because three-quarters of our trade is done with them," says Richard Lecoq, a spokesman for External Affairs and International Trade Canada at the regional trade centre in Toronto.

"It (the U.S.) is our blessing and curse at the same time," adds Laurentian University professor Dimitri Sakellariou. "It is a large market just next door.

"The bad thing is we have become complacent about having this market next door and don't explore for other markets."

In addition, Canadian companies are overlooking opportunities to export services as well as manufactured goods, says Bill Rathbun, vice-president of client services with the Ontario International Corporation.

"Most of the export people are concentrating on manufactured goods," Rathbun says. "There is an enormous market across the world for this (services)."

He notes that the Canada/U.S. Free Trade Agreement gives Canadian service businesses treatment equal to their U.S. competitors' in the American market.

The corporation's international projects fund assists companies with funding to prepare bids for overseas projects.

"We are busy selling the brains of Ontario. We are looking for projects that require bidding on," elaborates Rathbun.

Jean-Guy Tardif, the manager of information services with External Affairs Canada, reports that Canadian exporters are surprisingly hesitant to enter U.S. markets south of Cincinnati, Ohio.

"I think it is cost," Tardif speculates. "Why go below Cincinnati when you have such a great market? The other thing is many of the products we make suffer from transportation costs."

Lecoq speculates that new opportunities for trade will emerge even further south with the signing of a trade agreement between Canada, the U.S. and Mexico.

However, Sakellariou believes it will take time for the Mexican economy to develop to the point where it becomes a major market for our products and services.

He advises exporters to investigate markets such as the United States, Europe and Japan, where there is growth in individual income.

"If I am not doing well, you can try to sell me your lumber dirt cheap, and I am still not going to buy," he points out.

Graham Clayton, director of the Centre of Entrepreneurship in Thunder Bay, notes that the formation of the European common market is creating one large potential market for Canadian goods.

Despite that potential, there is some reluctance by Canadian companies to pursue trade opportunities in Europe.

"I think there is a lot of hesitation for Eastern Europe. They are relatively poor and won't be able to buy (products). The attitude is, 'Let's wait and see once they get money,'" Sakellariou speculates.

"However, Western Europe is a market with great potential," he says.

Tardif speculates that Canadian companies are discouraged by the cost of exporting to Europe, as well as by differences in product standards and tastes.

Despite the obvious language and cultural barriers, Clayton says great potential for exporting exists in several Asian markets.

"The Japanese are hungry. The mini-dragons (Korea, Taiwan, Hong Kong and Singapore) are a good growing market. Now is the time to get a finger-hold," he advises.

The following are some of the export assistance programs offered by External Affairs and International Trade Canada:

* NEBS (new exporters for border states) is designed for companies ready to enter the export marketplace. Under the program, company officials visit a Canadian trade office in the US and are given a one-day course on the export process, as well as advice on marketing strategies and assistance in developing contacts. The program pays return transportation costs for participants.

* NEXUS (new exporters to the U.S. south) uses the NEBS' format to help exporters expand to other regions of the U.S. by providing information and contacts in the southern United States.

* NEXOS (new exporters to overseas) also utilizes the NEBS' format to provide information on doing business in Western Europe. Participants are taken on a trade mission involving a specific economic sector. The program pays return economy air fare, ground transportation costs and a portion of the cost of accommodation.

* PEMD (program for export development) funds 50 per cent of eligible expenses for participants in trade fairs or visits to identified markets outside of Canada, visits by foreign buyers and sales agents, project bidding or proposal preparation and the establishment of a sales office abroad. Applicants must be ready to begin exporting and be registered with WIN (world information network for exports).