Team Canada's changing profile: while Asia and Europe continue as key destinations for Canadian business, the way companies are participating on the ground is evolving.

It used to be hockey and lacrosse, lumber and ore. So just what is Canada exporting these days? Just about everything from resource-based expertise and technical knowledge to food, education and security.

Canada continues to have much to offer the world as a leading exporter, and this year more Canadian companies are getting involved at the grassroots level, setting up shop in countries that in the past were just destinations on a map.

It's a busy time. Despite concerns over a slowing world economy in the early part of the year, Canadian firms are poised to take advantage of new and emerging markets, not only through direct trade but also through investment in globalized operations and joint partnerships on the ground.

In January, Stephen Poloz, senior vice-president of corporate affairs and chief economist with Export Development Canada (EDC, the federal export credit agency), warned (in Export Development Canada's Trade Conference Index), that the confidence of Canada's exporters is faltering: "exporter confidence is likely to continue to decrease as tougher credit conditions take hold and demand begins to slow in line with the global economy."

Business would say otherwise, and analysts say Canada has much to offer, with trade partners looking here for companies with expertise in everything from aviation, agri-foods and biotechnology to education and training, energy transmission, nutraceuticals (health and nutrition-oriented food products), and security and development.

Service sector expertise

As one of the world's most open economies, Canada is its fifth largest exporter and importer; Canadian exports of goods and services represent 38.1% of the gross domestic product.

Two big areas of growth in 2006 are Asia and southeastern Europe. Asia is especially strong. According to Industry Canada, in 2005 Canada exported goods valued at $24.061 billion to Asian economies and imported a total value of $61.351 billion.

The latest statistics from the Asia Pacific Foundation of Canada (APFC), a Vancouver-based, not-for-profit think tank, show that in the first 11 months of 2005, Canada's trade with Asia increased 9% over the same period in 2004.

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Japan is Canada's top export market; China continues to be Canada's top supplier of imports and is our top Asian trading partner overall. And China's economy is on a powerhouse roll. A PricewaterhouseCoopers report predicts that China's economy could outrun all developed nations by 2050, doubling in size thanks to a young, low-cost workforce.

"For Canada-China business in 2006, trade in service, an area in which Canadian businesses have a lot of expertise, will be big, particularly in high-tech and finance. That's reflective of growth in China's service sector," said Kenny Zhang, APFC's senior research analyst. "The force of Gross Domestic Product growth in China is in the service sector."

Partnering for power

Globalized business deals are the new norm, said Zhang. For example, in February EDC announced debt financing support totalling US $10.5 million to Hanfeng Evergreen of Toronto in partnership with the Bank of China; the financing will be used to complete a fertilizer plant that Hanfeng is building in China's Jiangsu Province. It's the first time that EDC has financed Canadian direct investment in China.

The plant will provide more than 100,000 tonnes per year of controlled-release nitrogen fertilizer for the Chinese market. In a news release, EDC cited it as an example of the growing trend toward globalizing operations--and it's in line with EDC's move to more directly support Canadian direct investment and assisting with establishing global supply and distribution chains.

"Another example is Nortel, partnering with Huawei Technologies, a telecommunications equipment manufacturer," added Zhang. Nortel and Huawei announced in February a Memorandum of Understanding to establish a joint venture for developing ultra broadband access solutions, tapping into a US $9 billion global broadband access equipment market.

"Partnering together for the global market is a new business model--and it's something we believe is a good model to follow," said Zhang.

India is also growing fast. In 2005, two-way trade between Canada and India stood at $2.3 billion, up from $2.1 billion the previous year.

Nizar Assanie, senior economist with the Asia Pacific Foundation, said the focus in India is on biotechnology and information technology.

"India had growth of 8% last year and will see 8% growth again in 2006," said Assanie. "There are a lot of opportunities in global sectors--from biotech and infotech to telecommunications, wireless and airlines. A lot of deals are being signed for partnering ventures on the global market. As well, the non-high tech guys are establishing in India; Magna, for instance, will be establishing operations with a sales and engineering office. They'll sell their automotive products and design and engineer products for the Indian market."

Agri-food growth

Europe continues as a traditional revenue generator for Canadian business; Statistics Canada's figures for 2005 show Canadian exports to Europe valued at $435.6 billion and imports totaling $379.6 billion, with the top three trade partners being Britain, Germany and France. But southeastern Europe, especially Turkey, is capturing a lot of attention.

Trade talks to cement ties between the European Union and countries like Turkey, Croatia and Bulgaria are ongoing. Canadian business organizations are seeing new opportunities emerge; in March, the University of Toronto and the Canadian-Turkish Business Council presented a conference called Business Strategies in an Enlarging EU: Opportunities in Turkey and Southeast Europe. Its focus was on financing strategies for a market with 130 million people and a combined GDP of $852 billion--particularly important given that Bulgaria and Romania will enter the EU in January 2007 and talks with Turkey and Croatia are ongoing. With a large agri-food market, Turkey is a target for business; turkey producer Cuddy Farms of Strathroy, Ontario, for instance, has tapped into that market for the past three years by purchasing a Turkish operation to serve the Middle East market.

Mission creep?

Trade missions will continue to be important to Canadian business: last year, almost 400 Canadian companies took part in an International Trade Canada (ITC)-sponsored trade mission to China and companies like Arius3D of Mississauga, Pall Dynamics Limited of Montreal and Valdor Fiber Optics of Vancouver all came away with business deals.

Still, the federal government is currently reviewing its position on trade missions, while increasing its hand in providing support for on-site investments. In tandem with EDC's commercial support to Canadian businesses in 200 worldwide markets, ITC will continue to boost Canadian business opportunities internationally, said M. Ken Sunquist, Assistant Deputy Minister of ITC's World Markets Branch.

"Through an extensive network of regional offices, embassies, consulates and trade offices, (ITC's) Trade Commissioner Service helps companies assess their potential in foreign markets, provides market intelligence and advice on target countries, and resolves urgent business or market access issues," said Sunquist. "Each year over 20,000 companies use our services globally."

And increasingly, jurisdictions within Canada are recognizing--and capitalizing on--the strength of international markets; for example, the Ontario government opened an international marketing centre in New Delhi in February.

"By strengthening Ontario's trade relationships with India, we're building stronger ties between our two peoples, and ensuring our province is equipped to compete--and win--in today's global economy," said provincial trade minister Joe Cordiano. The province already has centres in Munich, New York and Shanghai and is planning centres in London, Tokyo and Los Angeles.

Also in February, Manitoba Premier Gary Doer led a delegation of Manitoba business people in a meeting with India's Economic Advisory Council.

Nizer Assanie cautions that there is a bit of an 'optics downside' to provincial jurisdictions setting up trade shops.

"In January and February you had the premiers of Ontario, Manitoba and Quebec all visiting India," said Assanie. "It's good that you have increased provincial attention being paid to India's markets. But there's a mixed feeling as to how much a provincial agenda can do to significantly enhance trading relationships. People want to see 'Canada' representing Canadian companies. They identify with it."

Indeed they do. And the name 'Canada' may not conjure up images of hockey sticks much longer--as more companies find themselves not just selling to markets, but getting established in those markets at ground level, Canada will come to mean much more.

John Cooper is a Whitby, Ont.-based freelance writer.