Exporting to the United States - The Complete HandbookPublished: December 2008 378 Pages * No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Saskatchewan Trade & Export Partnership (STEP). SummaryThe complete guide to exporting into the United States. From business immigration, to custums regulations, to product labeling, this handbook provides complete coverage of exporting into the United States from an outsider's perspective. Table of ContentsSection 1: Regional Overviews The U.S. is Canada's largest trading partner with more than $1 billion crossing between our borders everyday. The fact that this large wealthy country is our neighbor, combined with their relative cultural similarity, makes the U.S. an attractive market for Canadian companies. However, it would be a mistake to think of the U.S. as one market, since attempting nation-wide distribution would likely spell failure for your goods. Rather, the U.S. needs to be regarded as being made up of several smaller regions, each with its own cultural characteristics and economic infrastructure. In order to make the best use of your exporting efforts, you must choose a target market/niche area and focus your energy and money in that direction. Section 2: Market Information Sources Market research is a very important part of export preparation. Overlooking this step could mean a few nasty surprises as you become more involved in your exporting process. By taking the time to complete the research stage you will have a much better idea of your sales performance in that market and thus making the export decision a much less stressful one. This report begins by giving you a quick run down on the kinds of information that you will need to look for and where to find them. It takes you through a four-step process to acquaint many of you with what the market research function is all about. The four steps are: Screening markets, assessing the industry potential, analyzing company sales potential and selecting target markets. Section 3: The Export Marketing Plan The Export Marketing Plan is very similar to a business plan as it maps out the company's direction and goals. Thus, this document can be a very important part of your export preparations by bringing to the forefront all of the market, product, distribution and financing issues that need to be considered. The export plan may be the most comprehensive tool you can use to make sure that you are prepared to take on the export function. The following report has outlined the benefits of the Export Plan and goes on to instruct you as to how to prepare one. An online planner (provided by the Department of Foreign Affairs and International Trade) has been used as the template for the export plan. Instructions on how to use the planner, both online and off, have been provided as well. Finally, a sample plan is also included to give you a glimpse at what the final document should entail. If the sample plan fails to clarify your questions, further sources of export plan information are also listed. Section 4: Expanding into the Unites States This section of the Handbook is designed as a short guide to assist you in establishing a business in the United States. There are differences between the Canadian and the United States business environment. Due to these differences, before you make the decision to expand your business into the United States you should gain knowledge on the business environment that you are entering. Prior to expanding, you should consider the different forms of operating your business, take advantage of the services of economic development agencies, select the site for your business, address financing and banking issues, and understand the United States tax system. These topics will be addressed in this chapter. Section 5: Business Immigration As an exporter to the U.S., it is very likely that you will want to visit your market in person at some point. It is very important that you understand and follow the correct procedures for doing so or else possibly suffer some very negative consequences. Conducting business in the U.S. without the appropriate work visa could mean expulsion for three to ten years (depending on the length of time you spent there without a visa). This report begins by making you aware of some general tips for U.S. entry such as whether or not you actually qualify to cross the border, where to go if you require help while there, medical insurance issues and information regarding the movement of currency. Next a general discussion of visas is provided to cover what a business visa allows you to do or not do and where you can obtain further information about these visas. Finally, a list of the four categories of business travelers (as under NAFTA) is given with a description of each visa's definition, allowable activities, and where you must go to get it. To complete the report, contact information has been provided regarding changing or renewing each of the discussed visas. Section 6: Customs This section of the Handbook is intended to give you a more clear idea of what to expect when moving your goods across the U.S. border. By understanding the process and anticipating each step, the passage will run smoothly thereby making your buyer happy. The first section 'Twelve Basic Steps in U.S. Customs Clearance' attempts to simplify this seemingly complex process. It outlines the players and documents involved at each stage. Following the Twelve Steps, further clarification is provided to ensure that you can recognize the needed documents and understand the functions of the players. Another all-important aspect of cross border sales is the business of tariffs and duties. This section provides a quick discussion of the impact of 'country of origin' on duty and the three methods of calculating duty. In order to assess the applicable tariff rate, you must know the tariff code for your good. Information regarding where to find the Tariff Catalogue (HTS) and how to interpret it has also been included in this section. A complete list of U.S./Saskatchewan border ports is also provided. The hours of operation, contact information, and types of services available are listed for each port. Furthermore, the customs brokers at each site have also been included. Section 7: Regulatory Agencies This section of the Handbook is intended to help you perform a thorough job of your export preparations. By making you aware of the various regulatory agencies, you will be more prepared for the transaction and therefore avoid any unwelcome surprises such as missed paperwork. The body of the following report is divided into three types of information: 1. Explanations and Definitions of Regulatory Requirements 2. Regulatory Requirements listed by Product Category 3. Regulatory Agency Descriptions and Contact Information The first part of this report gives an outline of the kinds of requirements these regulatory bodies enact on imports. Definitions and examples of import quotas, permits and licenses have been provided to clarify what it is that these agencies are asking of you. The second portion looks closer at the exact kinds of requirements that are placed on products. It lists products by category (i.e.: 'Agricultural Products' or 'Electronic Pro-ducts') and identifies which agency's jurisdiction they fall under. Once you have determined which agency is in charge of your good, section three provides contact information and a short description of their jurisdiction and functions. Section 8: Trade Finance The topic of trade finance is usually one met with many questions. Questions such as: - How should I request payment from my buyer? - Is there any way I can fund expansion needed to fill an order? - What if I cannot financially afford to offer open account to my buyer? The following information is intended to give you an overview of the payment and financing options that are available, and specifically which options are best suited for the U.S. market. This trade finance section covers topics such as common Methods of Payment like Cash in Advance, Letters of Credit, Consignment and Open Account. Each method is described in terms of how it works, the risks involved and the situations in which that method should be considered. The most common financing mechanisms used in the U.S. are also covered. These mechanisms include Factoring, Contract Financing and Floor-plan Financing. Descriptions of how each option works, the risks involved and when they should be used is provided. Also discussed is risk mitigation in the event of buyer default through the use of credit insurance and the need to address the need for 'due diligence.' At the close of the section, contact information has been provided so as to point you in the right direction of further information and sources of financing. Section 9: Distribution and Market Entry Strategies There are many options available for distribution into the United States. This report defines and expands on many exporting terms that you have likely heard before. There are basically three different methods of entering the U.S. market: indirect exports, direct exports and partnering or alliances. Each of the entry strategies have been described to include the advantages/disadvantages, the types of companies best suited for each method, and any other information deemed helpful. Finally, the topic of warehousing is tackled to give you an indication of where such facilities can be found and the payment options associated with them. Section 10: Export Assistance Programs Exports are becoming increasingly important as the world opens up through the proliferation of communication and transportation technologies. Being able to sell into foreign markets is a competitive advantage and, more so today, a necessity. However, this new role for exports has come about rather quickly leaving many scrambling to make their way into international markets. This may be difficult or even impossible for smaller companies Canada-wide. Through government programs these organizations can access the resource or knowledge bases required for effective international penetration. The following report outlines those programs that are currently available (as of July 2003) to specifically help exporting businesses. (Note: This list of programs is by no means exhaustive, but rather examines those programs that are most commonly used) Section 11: Product Liability The days of caveat emptor ('let the buyer beware') are over in the United States. Today the laws have changed to strict liability for manufacturing defects that make a product unreasonably dangerous. Lawsuits abound and a more fitting phrase would be "manufacturers beware"! Product Liability in the U.S. is generally considered a strict liability offense. Strict liability wrongs do not depend on the degree of carefulness by the defendant. Translated to product liability terms, a defendant is liable when it is shown that the product is defective. It is irrelevant whether the manufacturer or supplier exercised great care; if there is a defect in the product that causes harm, he will be liable for it.This report attempts to enlighten you as to the kinds of defects brought forth in liability suits and the types of liability offenses that exist. Defects can arise in the design of a product, the manufacturing of a product or even in the marketing of that product. These defects can be defined in a case of negligence, strict liability or breach of warranty. Section 12: Product Labeling Globalization of business has brought about strict labeling standards for many countries to follow. Proper labeling techniques are required for your product to gain access to any foreign market, including the United States. Country of Origin labeling is especially important when shipping products across the US border due to NAFTA regulations. There are many organizations and associations throughout the world currently attempting to standardize rules and regulations of product labeling and marking. Canada's leading authority in this respect is the Standards Council of Canada (SCC) and the US counterpart is called the American National Standards Institute (ANSI). These organizations set the standards for companies to follow while other organizations certify that products have met these standards. The main certification body for Canadian companies is the Canadian Standards Association (CSA) International. CSA International is affiliated with its US counterpart and is qualified to certify products for the US market. This makes certification easy as Canadian companies do not have to send their products to the US to be certified. Bar coding has been used for many years in the grocery industry and is now being applied to every other facet of business. The use of Universal Product Codes (UPC's) is becoming commonplace in all environments as it eases the pain of inventory and shipment tracking. Companies no longer need to manually check what is in each boxed order or use excessive amounts of paperwork. Bar codes are the way of the future as eventually the entire industrialized world will be using this product tracing system. Finally, there are several labeling requirements from specific agencies in the US regarding certain products. It is advised that you contact any agencies that may have jurisdiction over your product to see if there are any special labeling issues. A few of the more common agency requirements have been outlined in this section. Click here to view the full table of contents. (pdf) |
Member LoginReasons to Purchase from STEPReginaP.O. Box 1787320-1801 Hamilton St. Regina, Saskatchewan Canada S4P 3C6 Phone: 306-787-9210 Fax: 306-787-6666 Toll-Free: 1-877-313-7244 in North America Saskatchewan Exporter Hotline: 1-888-XPORTSK (9767875) (toll-free in North America) Saskatoon400 - 402 21st Street E.Saskatoon, Saskatchewan Canada S7K 0C3 Phone: 306-933-6551 Fax: 306-933-6556 Toll-Free: 1-877-313-7244 in North America Saskatchewan Exporter Hotline: 1-888-XPORTSK (9767875) (toll-free in North America) |
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