Intrnational MKT research Canada



TABLE OF CONTENTS

Preface

Introduction

Canada -- USA\'s Largest Trading Partner

NAFTA
Introduction
Exporting Guidelines
Incentives

Customs Contacts
Trade Contacts
Company Specific -- Massasoit Machine, Inc.
Manufacturers\' Representative
Recommendations

Appendices

A Country Data
B Canadian Domestic Economy
C Canadian Trade Statistics
D Canada - New England Trade Summary, 1997
E NAFTA: A Partnership at Work
F (SIC-3081) - Machine Shop Industry
G List of Major Industries for SIC-3081 (Machine Shop)
H Internet Access for International Business, Economics,
Marketing and Trade Information

PREFACE

Massasoit Machine, Inc. requested the Rhode Island Export Assistance Center to perform a research study of the Canadian market for its product as a first step in the consideration of an increased effort to expand their market in Canada. If successful this could provide a methodology to address other international markets.

This report presents the results of this research study. It includes an overview of Canada and of the market which Massasoit Machine, Inc. could address. It includes a comprehensive presentation of the North American Free Trade Agreement (NAFTA) which is an agreement between United States, Canada and Mexico that provides almost unlimited access to these markets for American manufacturers. It also provides details of the custom requirements and procedures for exporting to Canada.

A number of key contacts, manufacturers\', distributors are listed. Also presented are details of the Canadian machine shop industry.

INTRODUCTION

Canada -- USA\'s Largest Trading Partner

The trading relationship between the United States and Canada is, by far, the largest in the world. Two-way trade in goods and services accounts for approximately US $1 billion per day, every day of the year. The U.S. share of total Canadian import is about 71 percent and the United States remains by far Canada\'s largest export market, taking 76 percent of total Canadian exports. Economic growth in Canada is projected in the 3 percent range in 1997 and 1998 -- good news for U.S. exporters! Housing starts, retail trade and automobile sales have been particularly strong sectors in the first quarter of 1997, and domestic demand is expected to be its strongest in years throughout the first half of 1997. In addition, machinery and equipment investment should remain strong as ongoing upgrading of Canadian manufacturing plants and equipment continues. Despite some well-publicized trade disputes, overall market conditions are unlikely to experience any significant changes. U.S. Companies will continue to find Canada, the largest trading partner, an extremely attractive and easily accessible place to do business.

With a population of about one tenth of that of the United States, the Canadian economy mirrors that of the United States in approximately the same ratio, and has developed in many ways along similar lines. This has made Canada an ideal export and investment destination for many U.S. companies that have found an environment and marketplace very similar to that of the domestic United States. Country specific information about Canada has been annexed as Appendix A.

We believe that for the export-ready U.S. firm, "Canada First" is an appropriate approach. Canada offers an ideal first stop for U.S. businesses seeking to begin export marketing, with business practices, attitudes, conditions and environments here more similar to those found in the United States than in any other country in the world.

Proximity to the United States also reduces a company\'s time and expense while exploring opportunities in Canada. Notwithstanding these similarities, however, some cultural and linguistic differences, which vary across each of Canada\'s five distinct regional markets, allow first-time U.S. exporters to develop an appreciation of the complexities of overseas marketing. Experience gained here can provide a solid basis for success in markets worldwide. Canadian Domestic Economy - Appendix B gives a glimpse of the Canadian economy.

Best Prospects for U.S. Firms

Business opportunity in Canada falls within virtually the full spectrum of industry and agricultural sectors, and in virtually every business activity. More specifically, however, the five top best prospect sectors for U.S. products include: computers and peripherals; computer software; telecommunications equipment; automotive parts and service equipment; and pollution control equipment. Geographic proximity, cultural and historic ties, and strong awareness of business and other developments in the United States are key accelerators for the sale of U.S. goods and services in the Canadian market. Third-country competition tends to be far less prevalent in Canada than in most other international markets. NAFTA helps U.S. exporters in the Canadian market relative to their competitors from Europe, Asia and elsewhere.

Beginning of January 1, 1998, there has been introduced a duty-free trade between the United States and