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 ten 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 ten 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!
America’s Best Export Markets
Here’s a look at the exporting facts related to America’s top ten export trading partners this year to date through April 2016, according to the United States Census Bureau. i 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.
Note
Review the Trans-Pacific Partnership Agreement ( http://trade.gov/fta/tpp/?utm_source=hero&utm_medium=tradegov&utm_campaign=tpp ) and North American Free Trade Agreement ( https://ustr.gov/trade-agreements/free-trade-agreements/north-american-free-trade-agreement-nafta ) to see how these agreements might eliminate tariffs, lower service barriers, and increase competitiveness in some of these markets.
1. Canada
More than $176.7 billion worth of US goods were traded with Canada year to date April 2016, and the total exports from the United States year to date equal $87 billion (18.6 percent of export trade). ii 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 ( https://www.ic.gc.ca/eic/site/cid-dic.nsf/eng/home ) on the Industry Canada site. The information is based on 2014 data collected by the Canada Border Services Agency (CBSA).
2. Mexico
The total exports from the United States to Mexico so far this year are $75 billion (16.1 percent of export trade). Mexico was the second-largest goods export market for the United States in 2016. 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 2016, according to the latest data available, $170.5 billion worth of US goods alone were traded with Mexico . iii
According to the Office of the United States Trade Representative, the top export categories for Mexico in 2015 were machinery, electrical machinery, mineral fuel and oil, vehicles, and plastic. Mexico ranks as the third largest US agricultural export market, reaching $18 billion for that year. The leading export categories are corn, coarse grains, pork and pork products, beef and beef products, soybeans, and dairy products. U.S. exports of services to Mexico were an estimated $30.8 billion in 2015. Travel, intellectual property (computer software), 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 (2012) Mexico: Financing Options for your Mexican Buyer ( http://www.buyusainfo.net/docs/x_5718905.pdf ) 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 2016 are $33.9 billion (7.3 percent of export trade). Trading with China—the more than 1.3 billion-person Goliath—strengthens our economy and at the same time creates jobs for American workers. As reported by export.gov, “China is currently our largest goods trading partner with $598 billion in total (two way) goods trade during 2015. Goods exports totaled $116 billion; goods imports totaled $482 billion.” iv 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://www.export.gov/china/ ). 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 Chinese 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.
The Sinocism China Newsletter: ( https://sinocism.com ). This free email newsletter helps readers better understand China with commentary and curated links to the important English and Chinese news of the day.
A Pocket Guide to Doing Business in China: ( http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/a-pocket-guide-to-doing-business-in-china ). McKinsey & Company provides trends shaping the world’s second-largest economy to explain what companies must do to operate effectively.
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 . Also review the Inernational AntiCounterfeiting Coalition site, where several big companies such as Tiffany & Co., Gucci, and Michael Kors withdrew their participation due to the organization admitting Chinese e-commerce company Alibaba Group Ltd.—a company that doesn’t combat fakes online—as a member in April 2016: http://www.iacc.org .
4. Japan
The total exports from the United States to Japan at this point in 2016 equal $19.7 billion (4.2 percent of export trade). Japan is the world’s third largest economy, after the United States and China. Japan is the fourth largest export market for U.S. goods and services, exporting over $66.5 billion (8 billion yen) worth of goods to Japan in 2015. v The top export categories for Japan are: civilian aircraft engines, equipment, and parts; medicinal equipment; pharmaceutical preparations; meat and poultry; and corn, to name just a few.
Due to Japan’s “silver” market, where in 2014, twenty-six percent of the country’s population is sixty-five years old or older, vi 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, visit Japan Commercial Country Guide at http://www.export.gov/ccg/japan090820.asp . 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.
5. United Kingdom
Exports from the United States to the United Kingdom total $18.4 billion (3.9 percent of export trade) as of this point in 2016. According to the CIA’s 2015 World Factbook, the United Kingdom is a major international trading power , holding the position of the third largest economy in Europe after Germany and France. vii According to export.gov, the United Kingdom has few trade barriers and is the entry market into the European Union for more than forty-three thousand US exporters. viii However, with the recent news that the UK has removed itself from the European Union, referred to as Brexit, Britain must seek new trade accords with countries around the world. Watch closely for how Brexit pans out in the future and whether trade between the US and the UK is impacted, if at all.
Major export categories for US companies to the United Kingdom include aerospace products; building products and sustainable construction; cyber security; medical equipment; pet products; low-carbon energy and smart grids; and travel & tourism.
Tip
For a comprehensive look at conducting business in the United Kingdom, access Doing Business in the United Kingdom: 2016 Country Commercial Guide for U.S. Companies from http://export.gov/unitedkingdom/doingbusinessintheuk/eg_gb_026650.asp . For more on Brexit, visit http://importexport.about.com/od/TradePoliciesAndAgreements/fl/Stunned-UK-Votes-to-Remove-Itself-from-European-Union-EU.htm .
6. Germany
The total exports going from the United States to Germany so far in 2016 are $16.3 billion (3.5 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 fifth largest market for U.S. exports for 2015. Further, Germany is the largest consumer market in the European Union, with a population of 81.3 million in 2015. U.S. exports to Germany in 2015 were $49.9 billion. ix
The primary US export and import commoditites to Germany (the latest available data is from 2013) are: apparel, chemical goods, electrical equipment, beverages, machinery, and cars and car parts.
Tip
The PDF report Doing Business in Germany: 2015 Country Commercial Guide for U.S. Companies ( http://www.export.gov/germany/build/groups/public/@eg_de/documents/webcontent/eg_de_087922.pdf/ ) 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/ ).
7. Netherlands
The total exports from the United States to the Netherlands at this point in the year are $13.3 billion (2.8 percent of export trade). The Netherlands is a smart choice to export to because it is considered Europe’s largest port of entry, making the country a gateway to Europe. The Netherlands is an ideal European starting point for new-to-export companies looking for their first European distributor. The United States is the largest foreign investor in the Netherlands, and its largest bilateral trade surplus is with the country. x
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; computer and communications equipment; cyber security services; energy; healthcare technology/medical devices; biotechnology; renewable energy; marine supplies and pleasure boats; seaport security equipment and systems; automotive parts and accessories; aerospace; aircraft parts and associated equipment; airport security equipment; and systems and software.
Tip
For a comprehensive look at what it’s like to do business in the Netherlands, access the Doing Business in the Netherlands: 2016 Country Commercial Guide for U.S. Companies at http://www.export.gov/ccg/netherlands090862.asp .
8. South Korea
The total exports from the United States to South Korea to this point in the year are $12.7 billion (2.7 percent of export trade). The United States is the third largest exporter worldwide to Korea. US firms are in a 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). xi
The leading sectors for exports from the United States to Korea include: aerospace, agricultural products, cosmetics, defense, ecommerce, education services, energy (new and renewable), entertainment and media, environmental, medical equipment and devices, semiconductors, and travel and tourism.
Tip
For more information on how to do business with Korea, access Doing Business in Korea: 2016 Country Commercial Guide for U.S. Companies from http://www.export.gov/ccg/korea090824.asp .
9. Belgium
The total exports being delivered to Belgium year to date from the United States are $11.1 billion (2.4 percent of export trade). Belgium is strategically situated in Europe, and home to many European Union institutions, such as NATO, making it an extremely attractive place to do business. It also enjoys the highest per capita income in Europe. With its major ports (Antwerp is the second largest port in Europe) and excellent logistical infrastructure, a significant portion of bilateral trade either originates in, or is destined for, other countries in Europe. xii The best prospects for US exports include: aerospace and defense, agricultural products, civil nuclear energy, ecommerce and mcommerce, medical devices, renewal fuels and biomass wood pellets, safety and security, and travel and tourism.
Tip
To access the latest (2015) report Doing Business in Belgium: 2015 Country Commercial Guide for U.S. Companies, visit http://www.export.gov/ccg/belgium090679.asp .
10. Hong Kong
The total exports being delivered to Hong Kong from the United States are $10.8 billion (2.4 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, and 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.” xiii 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. xiv
Tip
To access the latest (2016) report Doing Business in Hong Kong and Macau: 2016 Country Commercial Guide for U.S. Companies, visit http://export.gov/ccg/hongkongmacau090680.asp . For more details on import/export policies in Hong Kong, visit http://www.gov.hk/en/business/global/importexport/index.htm .
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 and find out if any trade agreements are in effect. 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.
Notes
“U.S. Top Trading Partners—April 2016,” United States Census Bureau, accessed June 13, 2016, https://www.census.gov/foreign-trade/statistics/highlights/toppartners.html .
The source for the listing is provided by the US Census Bureau News, Foreign Trade, U.S. Top Trading Partners.
Ibid.
Ibid.
“The People’s Republic of China,” export.gov, accessed June 14, 2016,
https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china .
“Doing Business in Japan,” export.gov, last modified December 15, 2015, accessed June 14, 2016,
“Fear of Dying Alone: The State of Japan’s Aging Population,” The Wall Street Journal, accessed June 14, 2016, http://blogs.wsj.com/japanrealtime/2015/06/16/fear-of-dying-alone-the-state-of-japans-aging-population/ .
“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 .
“United Kingdom Market Overview,” export.gov, last modified April 17, 2016,
http://apps.export.gov/article?id=United-Kingdom-Market-Overview .
“Welcome to the U.S. Commercial Service Germany,” export.gov, last modified May 17, 2016, accessed June 14, 2016,
Netherlands Country Commercial Guide, US Commercial Service, last modified April 17, 2016, accessed June 14, 2016, http://apps.export.gov/article?id=Netherlands-Market-Overview .
“New Opportunities for the U.S. Exporters Under the U.S.-Korea Free Trade Agreement,” Office of the United States Trade Representative, accessed June 14, 2016,
http://www.ustr.gov/trade-agreements/free-trade-agreements/korus-fta .
“Belgium Market Overview,” export.gov, last modified April 17, 2016, accessed June 14, 2016, http://apps.export.gov/article?id=Belgium-Market-Overview .
“Doing Business in Hong Kong,” export.gov, last modified September 7, 2015, http://export.gov/hongkong/doingbusinessinhongkong/index.asp .
Ibid.