How to get your small business plugged into free trade with the neighbors.
Has NAFTA – the free trade deal in effect since 1994 – had an impact? You bet. The dollar value of total trade – exports plus imports – between Mexico and the United States rose 136% over the ensuing decade, while total trade with Canada jumped 85%. (U.S. trade with the entire world rose 76%, including its Nafta partners.) Nearly 37% of all U.S. trade is with those two countries, about two-thirds of that with Canada, which has had free trade with the United States since 1989. The deal phases out tariffs once as high as 250%. It includes intellectual property agreements and extends to both goods and services. The tri-country bloc moves $6.5 trillion worth of those goods and services – equal to about half of U.S. economic output – each year. While plenty of kinks remain, the fundamental reorganization of our economic relationship with Canada and Mexico has generated jobs and investment on all sides of the borders. Getting a piece of this massive business opportunity needn't be daunting. Here are some starting points:
Action Steps
The best contacts and resources to help you get it done
Learn the ropes
If you're a beginner to exporting, you'll need to understand a lot of complex ideas, beginning with customs.I recommend: U.S. Customs has a good, simply written FAQ-style guide for newcomers to NAFTA trade. Canada publishes a detailed guide to selling in the country. Mexico does as well. The San Diego World Trade Center has handy links to the actual forms you'll need. And the United States government's Trade Compliance Center follows closely any disputes over continuing barriers.
Start building your network
Finding out where your product fits in the trade flow can be time consuming. Luckily, the government thought of that and has built up a steady flow of data on how to get business done.I recommend: The U.S. Department of Commerce Trade Information Center has extensive Nafta background data, including phone and address contacts by business sector, customs details, labeling rules and names of trucking firms.
Leads! Leads! Leads!
After the deal was signed, a number of Web sites promising trade leads proliferated, then died as companies made their own connections. But some still provide specific opportunities to buy or sell across NAFTA borders.I recommend: One of the better-managed sites is at the World Trade Centers Association home page (registration required). New Mexico's International Business Accelerator has one, too. The granddaddy of them all, though, is the Federation of International Trade Associations Buy/Sell Exchange database.
Develop a government sales program
Part of the benefit of free trade – often overlooked – is selling to the biggest of all buyers, city, state and federal governments.I recommend: Signatory countries to the World Trade Organization's agreement on government procurement are listed by the U.S. Trade Compliance Center, including links to Canadian and Mexican purchasing sites.
Tips & Tactics
Helpful advice for making the most of this Guide
- Products that are made from materials produced in the block can qualify, as can items that are assembled, if minimum content levels are met.
- Customers administrator in each country will give advance rulings to your product upon request. They don't want you hanging around the border any longer than needed.
- Find friends on the ground at American Chambers of Commerce (many countries have them) and U.S. Commercial Service offices in each U.S. embassy abroad.
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