April 10 2012 03:49 PM

Statistics tell us that Canada is our biggest trading partner. Yet, and sadly enough, thousands of US companies are not aware of that fact and, worse, not many have heard of the advantage NAFTA brings to the trading table with Canada. 

Let’s start with a look at NAFTA, what is it and what does it mean to me as a business owner, operator or the head of marketing and international sales for your company? NAFTA is the North American Free Trade Agreement, an agreement signed by the governments of Canada, Mexico and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994.

The agreement opened the door for open trade, ending tariffs on various goods and services, and implementing equality between Canada, America, and Mexico. NAFTA allowed agriculture goods such as eggs, poultry and other meats and crops to be tariff-free. This allowed corporations to trade freely and import and export various goods on a North American scale. For more details on NAFTA, please visit this link: http://www.ustr.gov/trade-agreements/free-trade-agreements/north-american-free-trade-agreement-nafta

Important Statistics: 

• In 2010, Canadian companies spent $248.2 billion to purchase US goods. 
• US goods exports to NAFTA in 2010 were $411.5 billion, up 23.4% ($78 billion) from 2009, 149% from 1994 (the year prior to Uruguay Round) and up 190% from 1993 (the year prior to NAFTA). US exports to NAFTA accounted for 32.2% of overall US exports in 2010.
• The top export categories (2-digit HS) in 2010 were machinery ($63.3 billion), vehicles (parts) ($56.7 billion), electrical machinery ($56.2 billion), mineral fuel and oil ($26.7 billion), and plastic ($22.6 billion).
• US exports of private commercial services, excluding military and government, to NAFTA were $63.8 billion in 2009 (the latest data available), down seven percent ($4.6 billion) from 2008, but up 125% since 1994.

Are You Ready to Trade with Canada?

Eighty percent of Canadians live within 100 miles from the border cities of the USA. The good news is that your product can reach the end user faster than you previously thought. However, what tools do you need when exporting to Canada? 

1. A Canadian agent that will act like a selling office for your goods in Canada. The US Department of commerce office in your area will help you to set that up. They will come to you, learn about your business, products and your competitive advantage. They will help you select the right selling agent in Canada. Please contact your local office and set up the appointment.
2. A logistics expert that will provide you with services that will transition your exported goods in a timely fashion while reducing your cost of doing business and maximizing your profit. There are many companies that provide those services, choosing the right company is the key.

Many first time exporters to Canada will find it challenging to deal with documentations and other regulatory compliances. Therefore, finding the right logistics expert is the most important key to your success in Canada.

Remember, Canada is the number one importer of US goods, so take advantage of the opportunity and keep in mind, it is not the size of the logistics company that determines their expertise; it is the history of successful practice that makes a company an expert. Choose wisely.