Studies show Canadian SMEs want trade barriers in place; SMEs on both
sides of border prefer to remain within continental comfort zone
Mississauga, ON, March 4, 2009 - The majority of Canada's
small and medium-size enterprises (SMEs) would prefer to see trade barriers
remain in place, while most SMEs on both sides of the border plan to limit their
import/export activity to only North America.
According to the UPS Business Monitor Canada, 53 per cent of Canadian SMEs
would prefer to maintain current trade restrictions, with the sentiment highest
among SMEs in the construction, manufacturing and retail sectors. The numbers
were gathered in December 2008, prior to the "Buy America" clause controversy
that recently swept through both Capitol Hill and Parliament Hill.
The data is in direct contrast to the Canadian federal government's support
of open borders to trade, which U.S. President Barack Obama also has committed
to support. It additionally runs against Ottawa's ongoing efforts to engage
Columbia, Japan, India and the European Union on the possibility of entering
into free trade agreements with Canada in the near future.
"There has been a lot of hand wringing recently in the Canadian media in
response to the 'Buy America' clause, but the truth is that the protectionist
sentiment is just as prevalent among the grassroots here in Canada," said Steve
Flowers, President of Americas, UPS. "These views are not unexpected given
the current recession. The natural instinct among SMEs and business in
general is to shelter the market from outside forces over which we have little
control. Yet historical data shows that market diversification through
international commerce will serve to strengthen profitability and competitive
advantage much more than putting up more restrictions and barriers to
trade."
The UPS Business Monitor Canada study revealed 65 per cent of SMEs intend to
target the U.S.'s shrinking consumer market, compared with only 19 per cent who
intend to take advantage of Asia's new middle class and 38 per cent who intend
to target Europe. In the U.S., 42 per cent of SMEs predict growth in trade
between Canada and the US over the next three years. In comparison, 48 per
cent predict similar growth between the US and Asia Pacific and 42 per cent
predict future trade growth between the U.S. and Latin America.
Canadian and American SMEs' focus on North American-oriented trade stands in
stark contrast to the study's findings that most SMEs also predict the U.S.
economy will remain in recession until 2010 or later -- a sign that traditional
trading habits are hard to break, even in the face of declining continental
business opportunities.
In Canada, SMEs' reluctance to engage in international trade stems from an
ongoing and widespread state of inertia with 49 per cent of respondents claiming
they have enough business to deal with in Canada. U.S. respondents on the other
hand, cite a limited knowledge of the global marketplace as their biggest
stumbling block.
"In these trying times we understand what our SMEs are going through and we
want to help, which is why we think it's imperative that businesses expand their
horizons in order to weather the economic storm," said Geoff Light, Vice
President, International Marketing, UPS. "It doesn't have to be difficult
or involve a huge investment if companies rely on existing infrastructure and
expertise. UPS already helps hundreds of SMEs overcome obstacles and take
advantage of global opportunities."
SMEs can take advantage of services such as UPS World Ease®, which
allows multiple shipments to be consolidated into one movement across borders,
reducing costs and paperwork and streamlining the distribution process.
Sentiments against globalization are much more rampant south of the 49th
parallel where one-third of U.S. respondents said the shrinking global village
is detrimental to business, while an equal number described it as beneficial.
Conversely, in Canada 45 per cent of businesses viewed global trade as a
positive development for their business and only nine per cent saw it as
detrimental.
Steve Flowers joined UPS colleagues in discussing the Business Monitor Canada
survey and the impact of the results in a webinar that is now available at http://events.snwebcastcenter.com/ups/20090304/
for 12 months.
The UPS Business Monitor Canada survey was conducted by TNS Canadian Facts
between November 12 and December 3, 2008, and surveyed a total of 505 SMEs
across the country. The study has a margin of error +/- 4.4 per cent.
About UPS
UPS (NYSE: UPS) is the world's largest package
delivery company and a global leader in supply chain and freight services.
With more than a century of experience in transportation and logistics, UPS is a
leading global trade expert equipped with a broad portfolio of solutions.
Headquartered in Atlanta, GA., UPS serves more than 200 countries and
territories worldwide. The company can be found on the Web at UPS.com. To
get UPS news direct, visit pressroom.ups.com/RSS.
About TNS
TNS is a global market information and insight
group. Its strategic goal is to be recognized as the global leader in delivering
value-added information and insights that help its clients make more effective
business decisions. TNS delivers innovative thinking and excellent service
across a network of 80 countries. Working in partnership with clients, TNS
provides high-quality information, analysis and insight that improve
understanding of consumer behaviour. TNS is the world's leading provider of
customized services, combining sector knowledge with expertise in the areas of
Product Development & Innovation, Brand & Communications, Stakeholder
Management, Retail & Shopper. TNS is a major supplier of consumer
panel, media intelligence and audience measurement services. www.tnsglobal.com
TNS is the sixth sense of business™.
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