No surprise to anyone – the U.S marketplace has changed since NAFTA made world headlines in the 1990s. Since then the U.S has been buffeted in ways few would have contemplated. For Canadian companies to stay competitive in today’s U.S. marketplace, they must understand the changing tides and how best to take advantage of what they can offer. The years ahead will see more competition for Canadian products in the U.S., so the time is now to take every opportunity of our competitive advantage.
What has changed? Let us start with the tragic events of 2001 which spurred Congressional demands for a more “secure border.” American customers now look for good corporate citizens, with whom to do business. Canadian companies who have earned membership in U.S. and Canadian Customs anti-terrorism programs may wish to ensure that their U.S. business partners and customers are aware of this “trusted” status.
Second, Americans have grown anxious about the safety of imported consumer products. By 2005, the volume of imports started to raise alarm within the Administration and on the Hill. Congress passed sweeping product safety legislation that imposes new and tougher standards and product testing. Canadian companies are wise to get out ahead in product testing to U.S. regulatory standards. They may want to urge their U.S business partner to join them in support of the bilateral Regulatory Cooperation Council (RCC). Not as sexy perhaps as international trade policy, but the RCC Action plan is where the rubber hits the road in terms of real cost savings for manufacturers.
Third, Americans continue to worry about their economic security. The economic downturn of 2008 and beyond unleashed a level of anxiety among U.S. households not seen since the Great Depression. Washington then adopted a number of U.S. domestic preference legislation we know as Buy American. These have shut out too many Canadian component parts and wreaked havoc in well-established cross-border business partnerships. Granted, it’s infuriating but there is an audience here in DC for a North American approach to government procurement. This will take political as well as corporate leadership on both sides of the border.
Fourth, to spur export related job growth, the Administration has set an ambitious trade agenda. That will mean more competition from abroad for Canadian products. But here is the rub.
Washington will want to put its stamp on foreign companies doing business with the U.S. in the form of mandatory corporate stewardship policies. Here again, Canadian companies are well positioned – our business ethics and corporate social responsibility policies can be strong marketing advantages in the U.S. That can’t be said for many other trading partners. Those companies able to market their stewardship programs will be sought after, in Canada as well as in the United States.
And lastly, simply put, companies must stay in the game. Canadian companies are savvy and well-informed of the changing U.S. business environment. Our national compliance rate with U.S. import requirements has consistently topped the list of U.S. trading partners. American businesses will be looking for good partners – not the least expensive partner but long term and dependable partners – those with safe products made with ethical practices and at par with US product standards. Not many countries can make similar claims and this is where our advantage will be in the years ahead.
Good manufacturing practices? Yes. Good marketing? Even more so.
Birgit Matthiesen is a well-known voice in Canada and currently co-chairs the Canada-U.S. Cross Border Business Affairs Practice at Arent Fox LLP in Washington. She has worked for the Canadian Embassy in Washington and served as the Washington, DC representative and Special Advisor to the President and CEO of Canadian Manufacturers & Exporter (CME). She can be reached at firstname.lastname@example.org