Interview With a Canadian Trade Commissioner: Part IV

(At the end of September, I was fortunate to be granted an informal interview with one of the Canadian Trade Commissioners abroad. This is the last in a four-part series of articles based on that talk.)

One of the most interesting parts of out talk was learning about the various areas where the International Trade Office helps Canada. To be honest, before meeting with the Trade Commissioner, I thought their main role was helping to bring smoked salmon and Blackberries abroad (only half-joking). In fact, there are 5 main areas that the combined Departments of Foreign Affairs and International Trade operates. The last two categories, unfortunately, we didn’t get into great detail about.

Environment, Bioengineering, and Energy

As mentioned in part III, there are several foreign companies investing in the energy sector in Canada. This ranges from solar and wind farms to the oil sands.

The environment and sustainable energy is a focus, however, and the Department of International Trade is involved with endeavours like Globe Vancouver, a trade show and conference (dubbed “the Davos of Sustainability”) dealing with the link between business and the environment.

Agriculture and Food

Because it is less noticeable than a shiny Blackberry or a towering wind turbine, agri-food is sometimes forgotten, but it is a major component of international trade.

Regulation is important, and the exchange rate is a large variable. Because of the strong yen recently, Japan has increased its purchases of Canadian commodities like grain and canola oil.

Other large players in this category are seafood, meats, maple syrup, ice wine, and though some readers may not like to know this, horse meat to Japan, where it is a delicacy. (Don’t knock it till you try it!)

High Tech, ICT, and Medical

Information and communications technology (ICT) is a large component of the trade between Canada and other countries, and RIM is only a small part of the pie.

Within ICT, Canada and Japan have worked together on Intelligent Transportation Systems (ITS). This is technology using Middleware to link smart cars and smart roads. These systems are being designed to help with fuel efficiency, and can reduce traffic accidents and congestion.

Companies like Bombardier, Bell Helicopter, and Toyota also fit into this category, as the aerospace and automotive industries are large links between Canada and Japan. The cities of Hiroshima and Montreal, for example, are trying to deepen bilateral ties.

Building and Consumer Products

Canada is considered and advanced housing materials provider, exporting both unprocessed and cut lumber, insulation, flooring, and pre-fabricated components such as cabinets, doors and kitchens.

General Economy and Culture

All the other odds and ends of trade, as well as the areas that fall under the jurisdiction of the Department of Foreign Affairs.

Through these 5 categories the Department of International Trade plays a major role in connecting Canadian businesses to the world.

Closing Thoughts

Unlike visiting the Canadian Embassy (which is like a fortress to gain access to) I found the Office of the International Trade Commissioner to be very open, and inviting. When I first walked into the reception area of the office, they were surprised (I hadn’t called in advance), but extremely friendly and excited about the idea of this article series. After a brief description of what I proposed to do, the Trade Commissioner quickly opened his schedule and we came up with some possible times to have our discussion. He emailed me personally that night with some requests to avoid red-tape (If I were to use his name or give the specific location of his office, this process would have had to go through official channels). We met a few days later.

My talk with the Trade Commissioner was a lively and informative talk. It moved through many topics and geographic locations. He is young, energetic, and has a genuine desire to have Canadian businesses succeed in Japan.

I would encourage anyone interested in International Trade to contact their local Trade Office to see if an informal chat could be set up. From my experience, they are more than willing to help educate at the grass-roots level.

Interview with a Canadian Trade Commissioner: Part III

(At the end of September, I was fortunate to be granted an informal interview with one of the Canadian Trade Commissioners abroad. This is Part III in a series of articles based on that talk. )

My last post dealt with Canadian export to foreign countries, but the Department of International Trade is also very much involved with Foreign investment in Canada. In the case of Japanese investment in Canada, a good and widely known example can be found in the Toyota plant in Cambridge Ontario.

Here we have the reverse of the trade route. Toyota executives made contact through a Trade Office located in Japan. The Trade Office then contacted officials in Canada as well as at many Regional Offices in Canada. Eventually an agreement was made to create Toyota’s first plant in Canada.

The inflow to the Canadian economy didn’t stop with the creation of the plant. In order to have the factory (which produces the Lexus brand) run smoothly, several executives from the Kyushu plant in Japan were relocated to Southern Ontario. The Kyushu plant produces Harriers, which is a high-end model of car. These executives and engineers moved to Ontario to provide expertise and guidance.

Considering everything, there are actually several layers of investment and participation in the Canadian economy with such a venture. Construction companies were contracted to build the plant, workers hired, materials and resources purchased, parts manufacturers contracted, and taxes paid. There is also another effect, albeit small, which is the result of all the Japanese executives and their families moving to Ontario; these 50 or so families need to rent homes, buy food and other products, and pay taxes.

Another situation of Japanese companies investing in Canada has been in the renewable energy sector. Over the past several years, Japanese companies have been investing in the Canadian solar industry, either through investment in Canadian companies, or by setting up their own solar farms and stations.

A recent rule on wind power in Ontario has caused a trade row between Japan and Canada, as the Japanese companies say that the support for wind power creates a trade barrier for them, and is especially painful because the ruling came after their large investment in the province.

The dispute is unresolved as of yet.

The next article in this series will talk about the five specific areas that the Trade Office deals with, as well as some examples within each sector. They very much overlap with my last post and this, and will hopefully give some further clarification into how deeply intertwined countries and countries are. Toyotas and Blackberries are only the suface.

Interview With a Canadian Trade Commissioner: Part II

(At the end of September, I was fortunate to be granted an informal interview with one of the Canadian Trade Commissioners abroad. This is Part II in a series of articles based on that talk. )

There are several ways in which the Department of International Trade can help Canadian companies and the Canadian economy. While Japanese export to Canada is not a focus, the Trade Office does deal with it a lot because of Japanese companies coming to them for that reason. Their main mandates, however, fall under the goals of Canadian export to Japan, and Japanese investment in Canada (or the country of said Trade Office).

In the case of a Canadian company wanting to sell its product or service abroad, they would first go to their regional trade office. While we did not get into the specific details, we did talk in general terms, and Research in Motion came up, so let’s use them as an example.

Research in Motion would go to a regional Trade Office (say in the Kitchener-Waterloo area) and state their desire to sell Blackberries in Japan. They would register with the Trade Office to gain access to the database of market research. The regional office would contact the office in Japan and pass on any important information to them. From that point onward, RIM would be in direct contact with the Trade Office in Japan.

The Trade Office would then introduce RIM to the big cell phone players in Japan, and it would then be up to RIM to decide which provider is best suited for their needs. As Blackberries are only available on the DoCoMo network, we can guess what their decision was.

Another route for Canadian companies to gain access to a foreign market is through trade fairs. This may be as simple as setting up a booth at a foreign fair (think Bombardier sending planes and staff to the Dubai Air Show to gain orders) or in the case of at lease one Canadian company, being more proactive and setting up something yourself.

Clearwater Seafood of Canada, for example, was very proactive in Japan. In July of this year they sponsored the “Homard Festa,” in which they teamed up with about 80 restaurants in Fukuoka Prefecture, to highlight Atlantic seafood for the entire month.

The Trade Commissioner and I didn’t talk about the results of this endeavour (as it was only a couple of months ago, so not enough data is in) but my assumption would be that if a restaurant experienced consumer satisfaction resulting from the Atlantic seafood, they may add it to their permanent menu, in which case they would continually import from Clearwater.

In both of the above examples, we have situations where Canadian companies have made efforts to sell their products abroad. Of course, it is not always that direction. Sometimes foreign companies want to invest in the Canadian economy.

And we will deal with that in the next post: specifically, Japanese companies wishing to invest in Canada’s infrastructure.

Interview With a Canadian Trade Commissioner: Part I

(At the end of September, I was fortunate to be granted an informal interview with one of the Canadian Trade Commissioners abroad. This is Part I in a series of articles based on that talk. )

Walking into the office of the Canadian Trade Commissioner, I am met with memories of home: maps of Canada and the individual provinces line the walls, a small Canadian flag sits on the cabinet by the entrance, about 20 bottles of Canadian wine and maple syrup are on display, and the assistant to the Trade Commissioner (who doubles as receptionist) ends her sentences with eh.

I’m thrown for a little bit of a loop, however, as I quickly realize that all three of the people who staff the small office (The Commissioner of International Trade, The Commissioner of Foreign Affairs, and their assistant) are Japanese citizens. Through my talk with the Trade Commissioner, however (whose Blackberry sat on the table throughout our interview) I found out that there are two types of employees working at Canadian offices abroad.

The Canadian Basis Staff (CBS) are Canadian citizens and are brought over from Canada. CBS make up the various Ambassadors and Diplomats that act on behalf of Canada abroad.  Locally Engaged Staff (LES) also represent Canada, but are hired by the Canadian government in the foreign country.

What I found interesting from this is that while LES are mostly citizens of the foreign country in question, anyone could become a LES. A Canadian citizen in China, for example, could be hired as a LES if he or she spoke Chinese at a native level. In practice, however, LES are almost always citizens of the host country, as not only language ability, but also a deep understanding of the local culture is very important when dealing with international trade.

The Trade Office works under the Canadian government and Embassy as “The Department of Foreign Affairs and International Trade,” which is a merger of the two departments. The International Trade department is further broken down into two components: Regional Offices located in Canada, and Foreign Located Offices located abroad; the two offices work closely together.

The main function of the International Trade Department is to give assistance to Canadian companies in establishing links abroad. A company wanting to sell its product or service abroad would first go to the regional office in Canada. After determining certain criteria, the regional office contacts the foreign located office, which then offers further and more specific advice to the company.

During this process, the company would register with the Trade Office to gain access to a government database of local market data where they could research market reports, gain more understanding of a region’s area and market timing, as well as see lists of trade shows in the area.

The government and Trade Office provide this service free of charge. They can help regarding advice on local logistics or to introduce interpreters, but they do not act as mediators or agents, and are not involved with any ensuing negotiation. Most importantly, they can introduce Canadian business people to Japanese counterparts through Embassy sponsored events. It is these introductions and networking opportunities that are the seeds of international trade.

Part II of this series will deal with some of the company to company, as well as country to country, connections that can occur.

The Salt Shaker: Facebook Down, RESP Book, and Credit Card 2.0

It seems that  Facebook was down for a couple of days in late September. I’m not a big Facebook user (I check it every few days, and am always met with the “300+ recent posts” icon ) so didn’t even know about the problem until recently.

A Completely Fictional Chart

In possibly related news, here’s what Canada’s GDP numbers looked like for September. Looks like productivity went through the roof around the 22nd and 23rd. Wonder why?

(The Facebook downtime to GDP chart is a creation of ISO Salt Corp. and is in not to be used as fact.)

On to some interesting things I came across this past week:

Blogs

• Mike Holman of Money Smarts has written a book on RESPs. I’ve ordered 5 copies from Amazon already (4 gifts and one for me). So check out his post and swing over to Amazon to pick up a copy if you, or someone you know, have kids.
• Larry MacDonald has a good little list of some scholarly papers on investing. I liked the asymmetrical investing paper. I don’t really have to worry about it too much, as Japanese Boards of Education don’t issue stock, but something to think about for the future.
• Canadian Capitalist writes a review of “Pensionize Your Nest Egg,” saying that it is well written and easy to understand.
• Andrew Hallam points out that Canadian schools are starting to teach the truth about actively managed funds… the banks are not impressed, it seems.
• Invest it Wisely featured a guest post entitled “If you enjoy financial obligations, don’t read this.” I didn’t read it for a while as I was trying to decide what a financial obligation is, but I finally did, and it’s about re-financing a mortgage at a shorter term.
• Balance Junkie says investing in the stock market is like crossing the street: you should pay attention to the cars more than if the little guy is says walk or don’t walk.

Articles

• Bad news for Bombardier and Canada; Japan’s Mitsubishi Heavy looks to have its own regional jet in the air by 2012.
• Investing Thesis has a great article on household debt. Some very shocking numbers there.
• Since the F/X intervention didn’t do too much to the yen, the BOJ has now lowered interest rates to effectively 0%. More reason to keep my cash flowing abroad.
• I heard about this first on the Wall Street Journal This Morning, but BankNerd has an article about the credit cards we may be carrying in the future.
• The TMX Group announced their intent to launch a new ATS called TMX Select. I can only assume this is their answer to losing market share to the Alpha platform. The question remains, when will the supposed price battle of the exchanges be passed onto the retail investor? I think I’ll keep holding my breath for cold fusion over that one.

Carnivals

• The Canadian Personal Finance and Investing Carnival, hosted by Investing Thesis,  included my article on Scholarships, Bursaries and Used Books. There are many good articles in the list.
• Rachelle at Landlord Rescue has started the Canadian  Real Estate Carnaval. There are a lot of articles to browse through.