CANADIAN SMEs REMAIN SKEPTICAL ABOUT INTERNATIONAL TRADE

Lack of interest and investment despite countless opportunities overseas

MISSISSAUGA, ON, Oct 5 /CNW/ - Newly-released data shows that small to medium-sized enterprises (SMEs) are still hesitant to engage in international trade, despite the vast opportunities in the worldwide marketplace.

In part two of its three-part series to study SME's global trade habits and attitudes, the survey, commissioned by UPS Canada, revealed that 52 per cent of SMEs would not take advantage of a free-trade deal with the EU — not because it's with the EU, but because they have no interest in engaging in trade activity at all.

UPS Canada President Mike Tierney said the results are not surprising, but do present a concern about the future economic competitiveness of Canada's businesses. "Given the turmoil taking place in the U.S. and European markets and much talk about the possibility of a double-dip recession, it's understandable that many SMEs are reluctant to invest in expanding their enterprise beyond Canada," said Tierney. "However, it's very important that Canadian SMEs realize that in order to remain relevant and competitive in the future, they should leverage the economic opportunities emerging in overseas markets."

Despite consistent encouragement to go global from business pundits, including Bank of Canada governor Mark Carney, the recent UPS survey conducted by Leger Marketing has found 61 per cent of SMEs would not be willing to invest - at all - to take their business beyond Canada.  Just more than a quarter would only be willing to invest less than 20 per cent of their business capital.

In addition, almost 40 per cent of respondents believe that businesses should confine their commerce within Canada in order to sustain the country's currently strong level of competitiveness. The numbers do not bode well for Canada's growing trade deficit, which currently stands at record levels.

Tierney said he empathizes with the struggles that many businesses go through when it comes to expanding their businesses and notes that entrepreneurs are often discouraged from investing because they mistakenly believe they have to make massive investments into their own proprietary supply chain infrastructure.

"It's important that SMEs understand that as Canadian businesses they are currently in a very competitive position to enter the global market," said Tierney. "There are many organizations, such as UPS, that can provide resources to help them identify new, strategic markets, plan strong supply chains and realize cost efficiencies that will expand the profit margins of their global commerce."

According to the Leger study, 46 per cent of respondents are unaware that there are third-party organizations available to help SMEs expand into international markets.

UPS offers a wide variety of resources to help Canadian SMEs conduct international business.  Information is available online with UPS TradeAbility^® services, including tools to help determine tariff codes, forms for international shipping, a tool to calculate the total costs of international shipments and more.  For more information about these and other services, please visit UPS.com^®.

The Leger survey was conducted among a random sample of 300 small business respondents across Canada between August 31 and September 13. This method simulates a probability sample, which would yield a maximum margin of error of +\-5.7%, 19 times out of 20.

The full survey will soon be posted on the UPS Pressroom website at www.pressroom.ups.com.

About UPS
UPS (NYSE:UPS) is a global leader in logistics, offering a broad range of solutions including the transportation of packages and freight; the facilitation of international trade, and the deployment of advanced technology to more efficiently manage the world of business.  Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. The company can be found on the web at UPS.com and its corporate blog can be found at blog.ups.com.  To get UPS news direct, visit pressroom.ups.com/RSS.

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