The Top Ten Export Business Markets
The best way to predict your future is to create it.
—Peter Drucker, management consultant, educator, and author
Knowing is not enough; we must apply. Willing is not enough; we must do.
—Johann Wolfgang von Goethe
By now, you’ve learned what it takes to find fulfillment and fortune beyond your national borders as an export business executive. Now it’s time to get started, and there’s no time like the present. So where are the hot export markets? I won’t leave you guessing for long.
In this chapter, I discuss America’s ten best export trading markets. It is likely that your domestic competitors could already be taking advantage of these markets, which may or may not influence your decision to export to them. Check with your state trade office to see what kind of exporting support it provides. It could be anything from helping companies land new overseas opportunities to determining if an overseas inquiry is a scam or even offering export financing ideas. In Illinois, where I am based, there is fantastic support through the Illinois Department of Commerce and Economic Opportunity, the International Trade Association of Greater Chicago, the Export Assistance Center Illinois, the US Department of Commerce and Economic Opportunity, and the International Trade Centers.
The Illinois Department of Commerce and Economic Opportunity alone operates nine foreign trade offices in cities ranging from Mexico City to Shanghai. Both, as you will see, are top export markets for American companies. What does that mean for small businesses operating in Illinois? Free assistance to conduct business in those nine countries. Most people don’t even know about this magical gem of a resource offered by Illinois or that their own state has international trade office support. So, again, reach out to your state before you get started to see what kind of support it offers.
Once armed with your state’s best-kept secrets on export trade resources, it’s up to you to take action and expand your business into the hot markets. Let’s go!
Here’s a look at the exporting facts related to America’s top ten export trading partners year to date through July 2013 according to the United States Census Bureau.1 All numbers shown are in billions of dollars and reflect exports from the United States to a specific country. The data are for goods only.
More than $366.4 billion worth of US goods were traded with Canada year to date July 2013, and the total exports from the United States year to date equal $174 billion (19.2 percent of export trade)2 Given its closeness in geographic proximity, the similarity in business cultures, and the North American Free Trade Agreement (NAFTA), Canada offers excellent business opportunities for qualified US firms, especially those operating in such key sectors as aerospace, energy, travel, tourism, automotive, and government procurement.
Tip Looking for importers in Canada? You can contact the US Commercial Service in Canada (http://export.gov/canada/), or you can get an even-faster idea of companies importing goods into Canada by product, by city, and by country of origin through the Canadian Importers Database (http://www.ic.gc.ca/eic/site/cid-dic.nsf/eng/home) on the Industry Canada site. The information is based on 2011 data collected by the Canada Border Services Agency (CBSA).
The total exports from the United States to Mexico so far this year are $130.3 billion (14.3 percent of export trade). Mexico was the second-largest goods export market for the United States in 2012. This is in part based on the North American Free Trade Agreement (NAFTA), which has fueled international trade activity between the United States, Canada, and Mexico due to the elimination of duties and other trade restrictions. In 2011, the latest data available, $500 billion worth of US goods and services were traded with Mexico. In 2012, the exports of goods reached $224 billion, while the exports of services came in at $25 billion.3
According to the Office of the United States Trade Representative, the top export categories for Mexico in 2012 were machinery, electrical machinery, mineral fuel and oil, vehicles, and plastic. Mexico ranks as the third-largest US agricultural export market, reaching $18.9 billion for that year. The leading export categories are coarse grains, red meats (fresh/chilled/frozen), soybeans, dairy products, and wheat. Business, professional, technical, and financial services, as well as the travel industry accounted for most of US services exports to Mexico.
Tip All small business owners worry about getting paid on exports. When doing business in Mexico, it’s no different. Keep your payment options open. The fifteen-page PDF report Getting Paid by Your Mexican Buyer (http://tinyurl.com/mb8yexx) will help you minimize risks associated with each payment option and ensure you get paid.
3. China
The total exports from the United States to China year to date 2013 are $63.8 billion (7 percent of export trade). Trading with China—the 1.3 billion-person Goliath—strengthens our economy and at the same time creates jobs for American workers. As reported in March 2013 by export.gov, “U.S. exports to China have increased 468 percent since China’s 2001 World Trade Organization (WTO) entry, and it is likely to maintain its position as the third-largest buyer of American goods after Canada and Mexico in the coming year.”4 Opportunities abound for businesses of all sizes in China. You don’t have to look far. The following Web sites, organizations, and programs provide valuable information for doing business with China:
- Commercial Service China: (http://export.gov/china/doingbizinchina/leadingsectors/index.asp). Every year, this site analyzes the best opportunities for exports from the United States to China—from education and training to automotive components markets and travel and tourism.
- AccessAmerica:(http://export.gov/china/services/accessamerica/index.asp). This program promotes the services of US-based firms to customers and investors in China, giving access and exposure to Chinese clients seeking US expertise in trade finance, branding, legal, insurance, and other needs.
- E-to-China.com:(http://www.e-to-china.com). Have a look at the only Web site authorized by the General Administration of Customs of P. R. China (GACC) to provide comprehensive China customs information in English.
- The National Bureaus of Statistics of China:(http://www.stats.gov.cn/english/). This organization is the authoritative source of trade statistics collected by the Chinese government.
Caution China continues to be a challenging environment for intellectual property protection. To safely market your products and services abroad, visit http://www.STOPfakes.gov.
The total exports from the United States to Japan at this point in 2013 equal $37.4 billion (4.1 percent of export trade). Japan is the fourth-largest buyer of American products—$70 billion worth of US goods were exported to Japan in 2012 alone.5 The top export categories for Japan are: products for house pets; precious metal (jewelry and luxury); housewares; fitness equipment; the smart/renewable energy industry sector (including solar, wind, fuel cell, smart grid, battery technology, and eco-house/eco-building); health care services; medical devices and dietary supplements; information and communication technology (including cloud and tablet computing, smart phone market, and web apps); safety and security-related products and services; transportation (motorcycle, space, and automotive parts industry); and travel and tourism, to name just a few.
Due to Japan’s “silver” market, where one-quarter of the country’s population will be sixty-five-years-old or older by 2015,6 home care products, nursing homes, and hospital products are very much in demand.
Tip For a comprehensive look on what it’s like to do business in Japan, download Doing Business in Japan: 2013 Country at http://tinyurl.com/mzwm3z5. For additional support and help with your exports to Japan, try the Japan External Trade Organization (JETRO) Web site at http://www.jetro.go.jp/usa/. JETRO helps American companies enter and expand in the Japanese market.
Exports from the United States to the United Kingdom total $28.0 billion (3.1 percent of export trade) as of this point in 2013. According to the CIA’s 2012 World Factbook, the United Kingdom is a major international trading power, holding the position of the second-largest economy in Europe after Germany.7 According to export.gov, the United Kingdom has few trade barriers and is the entry market into the European Union for more than forty-one thousand US exporters.8
Major export categories for US companies to the United Kingdom include aerospace (such as wings for Airbus and Rolls Royce aircraft engines); automotive; electronics (including mobile handsets, HD-ready TV sets, and Blu-ray players); medical equipment (for example, telemedicine, electronic monitoring equipment, home care technology, and rehabilitation equipment); cybersecurity (particularly antivirus software, content management software, and security audits); telecommunications; franchising (retail and service); safety/security equipment (related to crime scene management, physical screening products at airports, access management solutions, and electronic security systems); products for house pets (such as dog treats, wet cat foods, especially those that are organic or “sports” nutrition based or geared to miniature purse dogs); construction products and services (including design, architecture, and various government and industry initiatives); and agricultural products (such as food and beverage products, and fish and forestry products).
Tip For a comprehensive look at conducting business in the United Kingdom, download Doing Business in the United Kingdom: 2013 Country Commercial Guide for U.S. Companies from http://export.gov/unitedkingdom/static/2013%20CCG_Latest_eg_gb_062586.pdf.
The total exports going from the United States to Germany so far in 2013 are $27.3 billion (3.0 percent of export trade). Germany is considered the largest market in the European Union for American exporters. It is the largest European trading partner of the United States and is the sixth-largest market for U.S. exports for 2013. Further, Germany is the largest consumer market in the European Union, with a population of 80.5 million in 2012.9
The primary US exports to Germany (the latest available data is from 2011) are: transportation equipment (25.5 percent), computer and electronic products (14.9 percent), chemicals (14.4 percent), machinery, electrical (10.9 percent), and miscellaneous manufactured commodities (5.7 percent). According to export.gov, “Germany boasts one of the highest Internet access rates in the EU and new products in the multi-media, high-tech and service areas offer great potential as increasing numbers of Germans join the Internet generation.”10
Tip The eighty-five-page PDF report Doing Business in Germany: 2013 Country Commercial Guide for U.S. Companies (http://export.gov/germany/MarketResearchonGermany/CountryCommercialGuide/) offers a look at how to sell US products and services to Germany; the leading business sectors for US export and investment; and trade regulations, customs, and standards. If you are interested in moving to Germany, try Expatica (http://www.expatica.com/), an online portal of news and information for the international community. Women should try the Berlin International Women’s Club (http://www.biwc.de/).
The total year-to-date 2013 exports going from the United States to Brazil are worth $25.4 billion (2.8 percent of export trade). According to export.gov, there are few, if any, sectors in Brazil that do not have excellent short-term opportunities for US companies, making it a good place for US exporters. Brazil is a large and diversified economy, the seventh-largest economy in the world, and by 2010 it is projected to be the fifth-largest consumer market in the world.11
The leading export prospects include: aerospace/aviation; airports, agriculture (food, equipment, and services); architecture/construction/engineering services; computer software and services; defense; drugs and pharmaceuticals; education and training; electrical power; environmental technologies; medical equipment; mining; oil and gas, renewable energy; safety and security; sporting goods and recreational equipment industry; telecommunications; transportation; and travel and tourism.
Tip For more information on the top US export prospects for Brazil, visit http://export.gov/brazil/doingbusinessinbrazil/eg_br_023965.asp. Download the complete report Doing Business in Brazil: 2013 Country Commercial Guide for U.S. Companies at http://export.gov/brazil/build/groups/public/@eg_br/documents/webcontent/eg_br_034878.pdf.
The total exports being delivered to Hong Kong from the United States are $24.1 billion (2.7 percent of export trade). Some reasons the country is good for US exporters are that Hong Kong offers a great base from which to enter China, it has a fairly reliable financial and legal infrastructure, and it has experienced local trilingual (English, Mandarin, Cantonese) executives and consultants that can be hired, making it easier to establish and conduct business there. More important, “Hong Kong is a free port that does not levy any customs tariff and has limited excise duties.”12 The best prospects for US exports include: electronic components; medical equipment and pharmaceuticals; environmental technologies and services; aviation and airport equipment; transportation infrastructure; environmental technologies, safety and security equipment, financial services, education and training services; travel and tourism services; retail; and consumer goods, such as packaged food, wine, cosmetics, and toiletries.13
The leading sectors for US export and investment include: aviation, computer/information technology equipment, cosmetics and toiletries, education/training, environmental technologies, film, franchising, medical equipment, safety and security equipment, and travel and tourism.14
Tip To download the latest (2013) report Doing Business in Hong Kong and Macau: 2013 Country Commercial Guide for U.S. Companies, visit http://www.buyusainfo.net/docs/x_5858984.pdf. For more details on import/export policies in Hong Kong, visit http://www.gov.hk/en/business/global/importexport/index.htm.
The total exports from the United States to South Korea to this point in the year are $23.8 billion (2.6 percent of export trade). The United States is the third-largest exporter worldwide to Korea, with a 9 percent total market share. US firms are in stronger competitive situation to sell more made-in-the-USA goods, services, and agricultural products to Korean customers following the United States-Korea Free Trade Agreement (KORUS FTA).15
The leading sectors for exports from the United States to Korea include: aerospace industry (complete aircraft and airplane parts, for example); specialty chemicals (dyes, paints, and surfactants, especially in the medical, pharmaceutical, and cosmetic industries); cosmetics (natural or organic skincare products, functional cosmetics for both men and women, and hair care cosmetics); defense industry equipment (military aerospace—fighters, avionics, and maritime defense electronics and systems and aircraft upgrades); education services (exchange programs for elementary and secondary-school students and community colleges); energy (wind power, fuel cells, and marine energy); entertainment and media (TV content, animation, and online music service providers); franchising (food service, education, and retail and service providers in wellness and environmentally friendly industries); medical equipment and devices (stents, MRI services, soft contact lens, and dialysis equipment); pollution control equipment (pollution-free and low-emission vehicles, advanced water-pollution-control technology, and environmentally friendly construction materials); semiconductors (automobile and digital TV); travel and tourism (group package tours, family vacation, and honeymoon packages); and agricultural (bulk commodities and processed foods).
Tip For more information on how to do business with Korea, download Doing Business in Korea: 2012 Country Commercial Guide for U.S. Companies from http://photos.state.gov/libraries/korea/49271/June_2012/business_Commerical_Guide_for_US_Companies.pdf.
The total exports from the United States to the Netherlands at this point in the year are $23.7 billion (2.6 percent of export trade). The Netherlands is a good choice for US exporters because it is expected to be the best place in the world to conduct business over the next five years!16 The country is also a smart choice because it is considered Europe’s largest port of entry, making the country a gateway to Europe. The United States is the largest foreign investor in the Netherlands and its largest bilateral trade surplus is with the country.17
The Netherlands offers excellent business opportunities for qualified US firms, especially those operating in such key sectors as agriculture (seafood products, food preparations, tree nuts, vegetable oils and planting seeds) and commercial (clean technology, healthcare technology/medical devices, biotechnology, renewable energy, automotive parts and accessories, aircraft parts and associated equipment, and airport security equipment and systems).
Tip For a comprehensive look on what it’s like to do business in the Netherlands, see the Netherlands Country Commercial Guide at http://build.export.gov/Netherlands/marketresearchonthenetherlands/eg_nl_029644 or download the seventy-eight-page report Doing Business in the Netherlands: 2012 Country Commercial Guide for U.S. Companies at http://www.buyusainfo.net/docs/x_5869807.pdf.
Summary
Before you take on America’s ten best export-trading markets, check with your state trade office to see what kind of exporting support it provides. You will want to enter these exciting markets in a practical, effective, and cost-conscious fashion. And don’t be discouraged if you don’t see your products or services listed in the hot prospect lists. By the time this book goes to press, the markets will have changed, offering new and different opportunities that might present a better fit for your capabilities. If you want to get your products and services into these markets, you must anticipate having to work hard. But you can also anticipate transforming your business into a profitable export enterprise where you own, and are proud of, the result.
To succeed as an exporter, you must apply fortitude and practice—by starting to do—what you have learned. But before getting started, you should take into consideration what others have done in the export marketplace to overcome challenges and become successful. To gain some inspiration from some star exporters, turn to the next chapter.
1 “Top Trading Partners—July 2013,” United States Census Bureau, accessed November 8, 2013, http://www.census.gov/foreign-trade/statistics/highlights/top/top1307yr.html. The source for the listing is provided by the US Census Bureau News, Foreign Trade, Top Trading Partners.
2 Ibid.
3 “Mexico,” Office of the United States Trade Representative, accessed November 8, 2013, http://www.ustr.gov/countries-regions/americas/mexico.
4 “Doing Business in China,” export.gov, last modified March 13, 2013, http://export.gov/china/doingbizinchina/.
5 “Doing Business in Japan,” export.gov, last modified July 21, 2013, http://export.gov/japan/doingbusinessinjapan/index.asp.
6 “Doing Business in Japan: Education,” export.gov, last modified May 8, 2013, http://export.gov/japan/doingbusinessinjapan/education/index.asp.
7 “The World Factbook; Europe: United Kingdom,” Central Intelligence Agency, last modified October 29, 2013, https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html.
8 “Country Commercial Guide—Doing Business in the UK,” export.gov, last modified June 13, 2013, http://export.gov/unitedkingdom/doingbusinessintheuk/eg_gb_026650.asp.
9 “Country Commercial Guide—Doing Business in Germany,” export.gov, last modified September 26, 2013, http://export.gov/germany/MarketResearchonGermany/CountryCommercialGuide/DoingBusinessInGermany/eg_de_034823.asp.
10 Ibid.
11 “Doing Business in Brazil,” export.gov, last modified September 13, 2012, http://export.gov/brazil/doingbusinessinbrazil/index.asp.
12 “Doing Business in Hong Kong,” export.gov, last modified July 16, 2013, http://export.gov/hongkong/doingbusinessinhongkong/index.asp.
13 Ibid.
14 “Doing Business in Hong Kong: Leading Sectors for U.S. Export and Investment,” export.gov, last modified May 17, 2012, http://export.gov/hongkong/doingbusinessinhongkong/leadingsectors/eg_hk_029494.asp.
15 “New Opportunities for the U.S. Exporters Under the U.S.-Korea Free Trade Agreement,” Office of the United States Trade Representative, accessed November 8, 2013, http://www.ustr.gov/trade-agreements/free-trade-agreements/korus-fta.
16 “Doing Business in the Netherlands,” export.gov, last modified June 30, 2011, http://build.export.gov/Netherlands/doingbusinessinthenetherlands/index.asp.
17 Doing Business in the Netherlands: 2012 Country Commercial Guide for U.S. Companies, US Commercial Service: Market Research Library, http://www.buyusainfo.net/docs/x_5869807.pdf.