Why Canadian Businesses Should Consider Exporting to the EU | Tradalaxy blog
Small and medium-sized businesses (SMEs) from Canada are seeing increasing success in exporting to the EU. Thanks to recent treaties, like the Canada-EU Comprehensive Economic and Trade Agreement (CETA), reaching new markets in the 28 EU member states has never been easier.
Why consider exports? Statistics show that Canadian SME exporters generate significantly more revenue than non-exporters according to 2015’s research by the Canadian government.
“On average, SME exporters generated more than twice as much revenue as non-exporters ($3.5 million versus $1.6 million respectively) and high-intensity exporters generated about 1.6 times as much revenue as moderate-intensity exporters ($4.8 million versus $2.9 million respectively). This illustrates how powerful exports can be in helping to build higher revenue generating businesses,” according to Canadian government statistics.
“ Using the internet, they can connect to opportunities that previously never have knowledge about, or access to, without months of research, travel and networking; saving these small companies precious time and money,” comments Benoit Daignault, former President and CEO Export Development Canada.
The EU is a vast market, including both developed and developing nations. This means that Canadian SMBs can target many different types of opportunities, and also make use of special access rules that the EU offers.
In the past, the UK was the preferred target for Canadian exporters, but this is changing as Brexit evolves. France, in particular, is increasingly targeted for Canadian exports, but Canadian SMEs are also reaching the rest of the EU — 32% of Canadian SME exports go to Europe, and 49% of that total is goods.
All of this is easily accessible to SMB Canadian exporters, thanks to the EU-Canada Comprehensive Economic and Trade Agreement, or CETA. “CETA helps us compete even more effectively in Europe and allow us to get into more segments of the market there,” says Eli Gershkovitch, the owner of Steamworks Brewing Company, a Vancouver craft brewery with sales in Germany, Austria, Switzerland, and Italy.
CETA benefits Canadian companies by getting rid of 99% of the taxes they have to pay at EU member states’ customs. Most customs duties ended as soon as CETA came into effect. After seven years, all customs duties on industrial products will disappear. Also, the other requirements, such as special testing for certain products, have been removed.
Cost savings may also be achieved through CETA commitments on customs and trade facilitation, which are aimed at reducing processing times at the border and making the movement of goods cheaper, faster, more predictable and efficient. This includes providing access to advance rulings on the origin or tariff classification of products, the automation of border procedures where possible, and an impartial and transparent system for addressing complaints about customs rulings and decisions.
With CETA, there are additional benefits available to Canadian exporters to the EU — most certifications are no longer required. For example, the EU regulates products in terms of Rules of Origin, because nowadays a product may claim to come from one place, but actually have had most of its components added in other places. But, under CETA, Canadian exporters enjoy preferential rules of origin, and that takes away a major hurdle to access.
More good news for Canadian exporters: Finance Minister Bill Morneau this year announced more than $1 billion of initiatives aimed at coaxing more Canadian companies to export, including $44.1 million to expand the Trade Commissioner Service which is of great utility to SME exporters.
With offices in all major cities around the world, the Trade Commissioner Service is well-positioned to help Canadian SME exporters.
The Service helped beer maker Steamworks to expand its markets in the EU. Eli Gershkovitch founded Steamworks 21 years ago, and now has 425 employees. Last year, the company started exporting its craft brews to the EU and Switzerland, which now represent about 5% of its market. However, Gershkovitch aims to acquire 20% because he sees it as a prime region for expansion and thinks that its organic ingredients from British Columbia have a unique appeal there.
Another entrepreneur from British Colombia, Tara Bosch, decided at age 22 that she would create a global business selling healthy, low-sugar candies — to help people reduce sugar consumption. With financial backing from Futurpreneur Canada, Bosch set up an e-commerce website and campaigned in social media, eventually reaching 450 stores around the world — with many in the EU. With $2.2 million in sales, Bosch is working to penetrate the UK market, where the government is coming down hard on sugar. The Trade Commissioner Service is helping Bosch to establish the business there ahead of Brexit changes.
Now, as the e-commerce industry finally turns its attention to SMEs and international trade, buying goods from abroad and selling your products is easier than ever. Especially with Tradalaxy — a free, specialized platform to help small businesses become exporters. Our platform will help you find foreign buyers and suppliers and manage orders in one place. With our help, you’ll get the most out of tariff-free export and import with Free Trade Agreements, and trade safely in a secure environment.
A company like Steamworks is just one of the great examples of how the EU market can be enriched with high-quality products from foreign small and medium-sized businesses. Your company can easily become a part of this global exchange: whether you’re interested in import, export or both, there’s now an amazing opportunity for small and medium businesses to go global and benefit from Free Trade Agreements just as the big enterprises do.
Originally published at https://blog.tradalaxy.com on August 28, 2019.
