Expenditures and Activities of
Cairns Group Countries
The Canadian Government funds agricultural export market development through a number of programs, which are operated cooperatively between Agriculture and Agri-Food Canada (AAFC) and the Department of Foreign Affairs and International Trade (DFAIT) to benefit the agriculture, fishery, and forestry sectors. Other Canadian government agencies and provincial governments also fund export market promotion. Federal and Provincial export promotion funding for 1998 was estimated at $9.5 million. The Canadian Wheat Board, a Crown Corporation, helps fund export promotions through the Canadian International Grains Institute. It is estimated that the Canadian government provides about $1 million to the Canadian Grains Institute. Industry funding for all export promotion was estimated at $9.5 million for 1998. Government, producer and industry funds totaled $19 million. The primary target areas for Canadian agricultural export promotions are the United States, Mexico, and Asia .
Canadian Government Activities
Agriculture and Agri-Food Canada’s (AAFC) Market and Industry Services Branch (MISB) takes the lead in developing Canada’s agricultural trade. Despite massive budget reductions, the Canadian government restructured export promotion of agricultural products, and increased funding for the promotion activities to help boost exports. AAFC also operates information, intelligence, and analysis services for Canadian agricultural exporters, including an electronic commodity bulletin board, electronic trade leads, market assessment, and advisory reports.
To be eligible for export promotion funding under any of several Canadian government programs, private companies must participate through non-profit agri-food associations that represent a majority of the exporters in a particular sector either on a national or regional basis. These associations must participate in the Agri-Food Market Strategies or AIMS process. Under AIMS, associations are required to develop a long-term export market strategy that is reviewed by an interdepartmental (usually AAFC and DFAIT) Steering Committee. Branded promotion applicants require an export strategy acceptable to the AIMS Steering Committee. The strategy must demonstrate that the industry represented is hurt by brand promotions supported by the U.S. Market Access Program, or similar programs of other exporting countries. Export promotion funds are available through the Program for Export Market Development (PEMD), which is administered by DFAIT, for exports of all Canadian products, including agricultural products.
PEMD is a financial risk-sharing program that includes access to international market information and provides services in facilitating export links. Financial outlays are allocated as individual proposals are approved. If export sales result from a PEMD plan or mission, the companies are required to reimburse a portion of the PEMD contribution. Each agreement contains a repayment clause that stipulates the terms under which the applicant will repay the Government of Canada. One element of the PEMD is the Special Activities plan, directed at agricultural trade associations. FAS estimates that 60-70 percent of the PEMD agriculture budget is directed under the Special Activities Program. Activities by these associations must be for the benefit of their members and may include the generic promotion of the association's products or services. Canada’s forest industry received approximately $1.5 million of PEMD funding in FY 1998. Funds allocated to trade associations are not repayable. PEMD provides financial assistance of 50 percent on selected travel, trade fair participation, and other export- and export promotion-related costs. PEMD also includes a small branded cost-share promotion program. Provincial governments also operate export promotion programs.
World Information Network for Exports (WIN Exports) is DFAIT's computerized database of Canadian exporters and their capabilities. WIN can be accessed only by DFAIT's Trade Commissioners and by Team Canada partners--the federal and provincial government departments involved in international business development--as well as the International Trade Centers. Company information supplied to the WIN Exports database can be quickly printed and provided to prospective foreign buyers, importers, distributors, and partners.
The WIN Exports database is used by Canadian Trade Commissioners to learn more about Canadian exporters in response to the tens of thousands of requests they receive each year from potential foreign buyers. Trade Commissioners also use the fax function of WIN Exports to keep registered companies informed of events of interest, such as trade fairs and missions, seminars, and business opportunities. Canadian companies can register free of charge.
Team Canada is a partnership between the federal government, provinces, territories, and municipalities, which pool their resources to work with business and help Canadian businesses succeed globally through export missions. Since 1994, business delegations led by the Prime Minister, and including provincial leaders and municipal officials, have traveled to emerging markets to conclude important business deals for Canada.
The New Exporters to Border States Program (NEBS), is a key export education tool that targets Canadian companies not yet exporting to the United States. NEBS introduces the essentials of exporting, including practical export information and first-hand exposure to markets in U.S. border states.
NEBS Plus serves Canadian companies already exporting to the U.S. border states with sales of less than C$2.3 million. NEBS Plus’ focus is to expand the markets of these successful exporters to other regions of the United States. NEBS or NEBS Plus is a cooperative program that, through the efforts of its Team Canada partners, supports the government's initiatives to increase the number of active exporters to the United States.
NEBS or NEBS Plus missions vary by province and by Canadian posts in the United States, depending on the destination and size of the mission, and the industry sector interests of the participants. A mission can last from one to three days.
New Exporters to Overseas (NEXOS) exposes exporters to new markets in Europe. Special missions help participants decide whether, and how, to pursue European markets. Canadian firm eligibility is dependent upon being registered in DFAIT's WIN Exports database.
NEXOS arranges missions for groups of companies in the same general sector. Individual companies are advised to work with an organization, such as an industry association, chamber of commerce, international trade center, or provincial government to assemble a group of at least six companies on whose behalf a program can be arranged. The program emphasizes information in areas such as customs procedures, market access, shipping, labeling, distribution channels, and currency regulations. DFAIT and Canadian Consulates organize seminars and workshops to outline the market characteristics and explain how to develop strategies to achieve distribution and sales. Missions are usually built around an event such as national or international trade fair. Participants are responsible for their own transportation, accommodations, and living expenses. NEXOS covers associated program expenses.
Canadian Wheat Board
The Canadian Wheat Board Act of 1935 authorizes the Canadian Wheat Board (CWB) to control the export marketing of Canadian wheat and barley. Seventy-five percent of Canadian wheat and 20 percent of Canadian barley is exported. The CWB exports all western Canadian wheat and barley from Manitoba, Saskatchewan, Alberta, and Peace River area of British Colombia, and issues export licenses for wheat produced in other regions of Canada.
The CWB offers a host of services to its producers and foreign buyers. Price pools ensure the same price for all types of wheat. The CWB controls the procurement, storage, and shipment of grain for export. For foreign buyers, the CWB extends loans guaranteed by the Canadian government, and negotiates long-term agreements with foreign import monopolies.
The CWB’s market development staff works with overseas customers to develop new demand for prairie grain, organizing technical missions to customer countries and introducing new varieties, such as AC Karma,-- a Canada Prairie Spring (white) wheat developed for Asian noodle manufacture. In past years, the CWB arranged for 14 mills in five Asian countries to try the new variety.
The CWB's partners in market promotion are the Canadian Grain Commission (CGC) and the Canadian International Gains Institute (CIGI). The CGC is responsible for grain quality standards, and provides scientific and technical expertise to develop the understanding of end-use grain quality and the marketability of Canadian grain around the world. International programs are the core of the CIGI's activities. The CIGI holds training sessions that focus on handling and processing methods and technology for customer countries. The CIGI works closely with participating countries. In March 1998, for example, the CIGI received incoming missions from Tanzania and Lithuania.
Some important commodity groups and organizations are active in export market development and fund their own activities. Others are covered, at least in part, by the federal PEMD umbrella. Producer and industry groups promote canola, flax, soybeans, pulses, special crops, pork, furs, beef, dairy and livestock genetics, certified seed, and wine and specialty beers. Forest products are promoted by the Council of Forest Industries (COFI). COFI maintains an annual budget between $1-$1.7 million to work on market access issues for its commodities overseas. Priority issues include reducing trade barriers, advocating wood usage, adjusting discriminatory building codes, and creating a greater acceptance of wood products.
Some industry associations maintain offices abroad. For example, the Canadian Beef Export Federation has offices in Tokyo, Hong Kong, and Korea. These offices coordinate participation in foreign food shows, as well as organize trade missions of foreign buyers to Canada. Other organizations work through the local Canadian embassies and consulates.
Some Canadian organizations work with foreign governments to remove technical barriers for their products. For example, COFI activities included securing 15 new certifications of Canadian mills under Japanese standards (JAS) in 1997. COFI successfully participated in the re-drafting of the new JAS 111 for structural glulam products, and lobbied to ease other lumber-grade-related trade barriers.
The major market development activity used by competitors is trade shows, but Colombia, Iran, and Morocco have used television commercials to increase Canadian consumer demand for their products. Most others use print media advertising.
All major wine producers are active in the Canadian market, including France, Italy, Spain, Australia, Chile, South Africa, and New Zealand. Chile also promotes fresh produce, as do Mexico and the Netherlands. South Africa and Morocco emphasize fresh fruit, while tomato products are promoted by Italy and Romania, as well as Morocco. Australian beef and New Zealand lamb are the primary meats promoted. Several countries promote cheese, including Italy, the Netherlands, and Switzerland. Processed foods are the most important products for Germany, Austria, and the United Kingdom. Italy and Greece also promote olive oil, while Colombia advertises coffee and Iran advertises dried dates.