By JON WORREN
With $3.6-billion worth of goods and services crossing the Canada-United States border daily, it once seemed unimaginable that anything could truly disrupt this vital relationship.
Trade irritants have always been a reality, but nothing that the world’s largest two-way trade relationship couldn’t handle – or so we thought.
As President Donald Trump takes office for a second term and the tariff threat looms once again, Canadians must confront the risks of relying so heavily on this single relationship.
Complacency has become Canada’s Achillies Heel.
While the Canada-U.S. bond will likely remain long into the future, even the best partnerships face tests.
For Canadian businesses, especially SMEs, preparing for trade disputes is no longer optional – it’s imperative. Navigating rough waters with a single sail was always risky, but now with a storm coming, we’re ill-equipped for the challenges ahead.
It is worth noting that beyond the current threat, market diversification is a proactive strategy for resilience and growth. Data shows that companies engaged in global markets are more innovative, more productive and generate more jobs and higher wages. For most companies, winning in international markets helps drive improvement and change on a continuous basis.
I’m certainly not the first to say we need to diversify our markets beyond the U.S. – much ink has been spilled on broad economic benefits of this approach. Instead, I want to offer a perspective informed by working with thousands of SMEs on their growth strategies.
In short, going global is about more than just weathering the current threat from the U.S., because it forces leaders to take a strategic look at their business. For many leaders, it’s the first time since founding that they’ve stepped back to take a comprehensive review of everything from new market needs and business models to supply chain and operations.
Through my role with the World Trade Centre – Toronto, I speak with ambitious small and medium-sized businesses every day. Those who are currently exporting are predominantly trading with the U.S. For many, their first foray resulted from a meeting at a trade show, or simply an unsolicited call looking for a product supplier.
Proximity and shared language make it easy. But opportunistic doesn’t always equate to strategic.
Of course, going global is easier said than done. For SMEs looking to diversify, the process begins with deliberate planning and a commitment to long-term investment. The key takeaway from so many conversations I have with businesses, and a surprise to many of them, is that the U.S. is often not the best opportunity.
The first step for a prospective exporter is to understand where the opportunities lie.
Canada has an extensive network of free trade agreements, opening doors to more than 1.5 billion consumers across more than 50 global markets. Rapidly growing regions like Southeast Asia, Latin America, and Africa offer particularly promising for high-quality goods and services – areas where Canadian companies excel.
The number one determination between success and failure to export is dedicating a resource – do you have someone whose full time job it is to think carefully about the next market opportunity? This isn’t a side of the desk project and it’s not waiting for the phone to ring. It’s deliberate.
Whether spearheaded by the company founder, a dedicated executive, or a new hire with an explicit mandate, the pursuit of international business must consider some key factors.
First, every market is different, bringing its own customs, cultural norms, and customer preferences. Careful research and tailored outreach to align with these nuances is often the difference between capitalizing on opportunities and falling short.
Companies who demonstrate serious commitment to a market and a new customer are the ones who succeed. Make sure you have the financial runway to spend the better part of a year visiting new markets and building relationships. The payoff won’t be immediate, but the relationship will be more durable.
Getting started may seem daunting, but there’s a very rich ecosystem to help, including a suite of programs and services developed by the World Trade Centre – Toronto and operated by partners across the country. The rewards are significant. Graduates of our own Trade Accelerator Program report 62% revenue growth after just two years, and they’re in 79 markets plus the U.S.
A stronger economy and secure and resilient future depend on proactively exploring new markets and reducing dependency on a single trading partner. The next four years may be long and uncertain, but they can also fuel a more prosperous, and ambitious path – the choice is ours.
– Jon Worren is vice president of the World Trade Centre Toronto at the Toronto Region Board of Trade