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Atlantic Canada Guide to Exporting, Vol 1




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F
orward

With approximately $18 billion in exports, Atlantic Canada enjoys a small, but healthy share of Canada’s export sales, now topping $400 billion. When discussing Atlantic Canada export markets there is often a difference of opinion as to whether the Region should continue building on its present strengths, or further diversify, either by pursuing new products, new markets or both.  Atlantic Canada presently trades primarily with the United States (82%); a trend that has been increasing since the Free Trade Agreement in 1989.  However, with about 18% of the Atlantic Region‘s exports going to markets outside the US, versus 13% for the country as a whole, the Region does demonstrate some noteworthy initiative in international diversification. Moreover, the seemingly high dependence on trade with the US can be defended, perhaps even justified, for the following reasons, as noted by several authors in a recent APEC publication1:

  1. Distance works against exporting; increasing distance by 100% can reduce trade by between 50% and 130%, depending on the sector. (Brown, M.) 
     

  2. US markets typically account for only 10-13% of total sales (with local and inter-provincial trade accounting for most of the rest); thus, not showing a high dependence on the US. (Chaundy, D.)
     

  3. Large exporters are 3 times more likely to trade with both US and non-US markets than small exporters.2 Small and medium size exporters (SME’s) are typical of Atlantic Canada and are properly the ones needing more guidance and support. The US market is a good launching point. The challenge for larger, experienced, exporters is usually to consider markets outside of the US.

With more than 70% of total Atlantic Canadian exports tied up in three basic categories: 1) mineral fuels, 2) agri-foods and fisheries and 3) wood and pulp and paper products, there is also an argument for greater product diversification, especially in terms of value-added products. It is often pointed out, for instance, that Atlantic Canada’s traditional, resource based exports represent the slower growing segments in the country’s total export picture. However, this begs the question “Which faster growing products/segments, and how many, can be efficiently pursued?”

The purpose of this Guide is to assist Atlantic exporters and potential exporters (individuals and firms) in identifying new products and new strategies and preparing for export.  In doing so, the author discusses some of the considerations of competitiveness of the Atlantic Canada economy and suggests how this might influence industrial development and trade strategy. The information was meant to complement existing export information produced by governments and export organizations, not duplicate it.

Export marketing can take many forms; for example, direct distribution, product licensing, joint venture partnerships and investment in a foreign country. Moreover, the differences in the marketing of goods and services and the challenges of different cultures and languages call for different strategies and tactics. To simplify considerations, the author of this Guide chose to focus primarily on entering the US export market, through a distributor, as many of the lessons learned here can be transferred to other export market situations. In this volume, we are also primarily focused on the marketing of goods, rather than services, in US markets.

ISBN 0-9693595-6-X

Atlantic Canada Guide to Export Marketing Volume 1, Introduction to Exporting © is published by Canadian Marine Publications, P.O. Box 34097, Halifax, Nova Scotia, Canada, B3J 3S1.

Copyright: Robin W. A Rodger, December, 2002. All rights reserved.  No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission from the author.

Telephone:  902.425.1320

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2008 © CMP Publications