Canadian trade mission leads to success for small Seattle firm

Business America, Nov, 1997 by Jay Field

President Calvin Coolidge once said that "the chief business of the American people is business." Yet, increasingly, the chief business of America is small business because small- and medium-sized enterprises (SMEs) have become the engine of economic growth for the U.S. economy. In the United States, SMEs comprise about half of the GNP, create two out of every three new jobs, and invent more than half of new innovations. They are important to the United States' trade flows as weld; their efforts account for half of all export-related jobs and 30 percent of the value of U.S. exports. The performance of the SME in international markets is impressive, and becoming more so everyday. However, there is an export gap. SMEs account for 25 percent of all domestic manufacturing sales, but only 12 percent of U.S. manufactured exports.

To an extent, this export gap can be explained by imperfections in the way the marketplace provides information and access -- a process that tends to skew opportunities towards larger firms, thus leaving SMEs at a competitive disadvantage. The Department of Commerce is committed to assisting SMEs erase this competitive disadvantage by helping them sell globally and fulfill their export potential through an aggressive program of advocacy, information dissemination, and trade promotion. One of the most important methods the Department uses in opening doors for SMEs is the trade mission, led by high ranking government officials, including the Secretary of Commerce.

Many executives at small firms feel that trade missions are only useful for multinational companies pursuing transactions in the multimillion-dollar range. A small Seattle manufacturer's experience on a recent trade mission to Canada refutes this theory nicely. An executive from Aguirre Industries, a leader in the hydraulics and pneumatics industry, accompanied Secretary of Commerce William M. Daley on a business development mission to Montreal, Ottawa, and Toronto, Canada, last August. Senior executives from 16 U.S. firms accompanied Secretary Daley, SBA Administrator Aida Alvarez, and New Hampshire Governor Jeanne Shaheen to Ontario and Quebec. The mission's goals included introducing delegation members to Canadian government ministers and other senior government officials; potential buyers, agents, distributors, and joint-venture partners; embassy and consulate commercial specialists; and other members of the U.S. and Canadian business communities.

Carlos Aguirre, CEO of Aguirre Industries, became involved with the trade mission after working for several months with International Trade Specialist Jay Field of the Department of Commerce's U.S. Export Assistance Center (USEAC) in Seattle. The strength of the Canadian economy, predicted to lead the industrialized world in economic growth in 1997 and 1998, made Canada an excellent target for expanding Aguirre Industries' international activities. Two of the company's divisions seemed especially prime candidates for expansion into Canada: the Flight Line Logistics division, a market leader in the design and fabrication of aviation ground support systems; and Jack Ogle Company division, a distributor of hydraulic and pneumatic systems, primarily for the industrial, aerospace, hydroelectric, and military industries. After speaking with commercial specialists at the U.S. Embassy in Ottawa and the Department of Commerce in Washington, D.C. to determine his prospects, AgUirre decided to go ahead and apply for inclusion on the mission.

Reflecting upon his reasons for participating, Aguirre states, "Obviously, participating in the mission was an important step for my company. While we have had great success in the Pacific Northwest and will continue to expand in this area, I recognize that a plan of measured expansion into international markets represents the future of Aguirre Industries. The Canadian trade mission was the perfect vehicle for this, and the fact that Secretary Daley led the delegation speaks well for the Commerce Department's desire to promote small-to medium-sized businesses like Aguirre Industries."

The bottom line of this mission and every other Secretarial mission is to provide access to key business contacts in the foreign country -- contacts that result in solid business agreements and eventual exports for the American firms. In Canada, Aguirre was put in contact with a number of potential business partners, including agents, distributors, and original equipment manufacturers. To date, these meetings have resulted in a formal Request for Quote, a signed agreement for Aguirre Industries to be represented in Quebec, and a constructive business dialogue with a major aerospace manufacturer. Aguirre sees a great future for exporting his company's products to Canada and in working with a new Canadian partner on a joint-venture basis in the Middle East and Africa.

Aguirre states, "This was my first opportunity to work with members of the Commerce Department and most of the rest of the United States government, for that matter. I was thoroughly impressed by the exceedingly professional manner in which all the members of the Commerce Department performed their respective duties. I truly believe it is most unfortunate that a vast majority of our nation's citizens fail to take advantage of the opportunity to see their government in its finest possible light. My company will do its utmost to `spread the gospel' concerning the overwhelming benefits of using the Commerce Department's vast and easily accessible resources."