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Business Leaders on a Mission

As featured in Mississauga Business Times, October 2000


Talking trade in foreign lands can pay off big-time for firms.

They travel to foreign, picturesque locations to eat, drink and shake hands with new friends.

If it weren’t for the business suits, their photographs in front of the best tourist spots would have one believing they were on vacation or a sightseeing tour.

They are company executives who travel the globe on official and unofficial trade missions in an effort to drum up business and investment with international firms.

While critics allege these missions are nothing but glorified sightseeing tours, bringing no new business to Canada, some in the Mississauga business world beg to differ.

"We are talking to three potential partners in China about a deal right now," said Mike Scott, President and Chief Executive Officer at PBB Global Logistics, whose company (with an office in Mississauga) headed up a private 18-day trade mission to China earlier this year.

"The success rate for the companies that went with us was higher than expected," Scott said. "We took 15 companies with us and out of those 11 have made significant contacts resulting in business."

The government-run Team Canada trade missions have also been successful, according to Francois Lasalle, spokesperson for the Department of Foreign Affairs and International Trade.

The last five trade missions involved more than 1,800 Canadian businesses, 900 business deals in 13 countries, dealing with about $24.5 billion, Lasalle said.

"And that’s just in the last five missions," he said, who said the list of companies set to go to the next Team Canada trade mission to China has not yet been released.

Meanwhile, the government’s recent move to sell the right to sponsor the November Team Canada trip to China to the Bank of Montreal and Canada Post sparked some controversy last month.

Critics, including the head of the Canadian Auto Workers Union Buzz Hargrove, said the move was simply a way for powerful companies to lobby the prime minister and his key aids while taking "wonderful trips."

"I don’t think the trade missions are an opportunity for business, they are just an opportunity for these big companies to lobby the government on particular issues, like taxes," Hargrove said.

However, Lasalle said the sale of sponsorships was a necessary move.

"Sponsorship of major government events is a practice that has been going on for a long while," he said. "What this has done is allowed more small and medium businesses to participate because of the costs involved. The only way small and medium-sized companies can join is for us to go another route, like sponsorship."

Critics also allege the trips are a waste of money, citing Statistics Canada figures showing trade with Canada actually dropped in eight of the 12 countries the first three Team Canada trade missions visited. "It just shows that they don’t do anything," said Hargrove.

But Lasalle said these trade statistics have been misconstrued.

"A lot of the missions have been to Asian countries and in the past couple of years Asia has gone through the worst economic situation it has seen in years," he said.

While overall trade with Canada may have gone down in the past couple of years, Lasalle said this is a result of the economy. He stressed that Canada has still been able to drum up business in Asia, with the help of trade missions, despite this.

Mississauga’s Metform International was one of the companies that joined PBB on the trade mission to China this winter.

"It was definitely a success," said Peter Hawley, vice president of marketing at Metform. "I was looking to increase my knowledge of China, its market, geography, culture."

Selling large-scale machinery, Metform executives were not expecting to come away from the mission with any large orders, Hawley said. "There’s been no business come from it directly yet, but we expect it to (result in some business). In our industry, the sales cycle is very, very long."

While this was Metform’s first trade mission, it won’t be its last, Hawley said. "As we want to continue to expand our business we are going to have to look to other markets," he said.

The City of Mississauga has not conducted its own trade mission in the past couple of years, however, the city has been working with the Greater Toronto Marketing Alliance to give Mississauga businesses access to missions, said Larry Petovello, the city’s director of economic development.

"We find we get more mileage out of it by doing it co-operatively," he said.

"Generally they have been very successful in attracting large numbers of German and Japan-based companies," said Petovello, who said Mississauga is home to 90 German-based companies and 100 companies based in Japan.

Typically, the city focuses on trade missions in the automotive and technology industries, areas of business that stand to benefit most from such missions, Petovello said.

Last September, representatives from the city, including Mayor Hazel McCallion, attended a Team Canada trade mission to Japan.

While there is no official fee to join a trade mission, companies must pay the cost of the trip’s logistics, in addition to their own travel and accommodation costs, said Jean Charles Joly, a trade commissioner with Industry Canada’s International Trade Centre and the Department of Foreign Affairs.

"We provide the logistics of the trip, but they must pay for it," said Joly, who organizes government-run trade missions for Ontario firms to Asia.

The cost of taking part in a trade mission starts from $1,000 and can go up significantly from there, Joly said.

With a network of trade commissioners around the world, Joly’s department sets up meetings between the mission participants and potential business partners, industry officials and government officials in the country of choice.

Organizers usually approach potential participants to see if they would be interested in participating, Joly said.

"We have a database of firms that are registered with us," he said. "We know the companies that might be interested in certain markets. Then, we approach them by phone or email."

Aside from drumming up business and investment, the missions give the participating companies the chance to get to know the country, the people and the way business is done there, said Scott.

"In China and Japan, you must establish a relationship before they will do business with you," he said. "They want to get to know you before they are prepared to do business with you. Meals are also a very important part of the process."

With competitors making their way to these countries to create relationships, Scott said trade missions are a vital competitive edge.

Travelling to seven cities in just over two weeks on the China mission, Scott said the trip was "a grind," not a sightseeing tour.

Joly said most trade mission participants would concur. "When you go on a trade mission, you spend $5,000- $6,000 dollars, you don’t want to throw that out the window," he said. "Business is too tough. People don’t have time to waste. When a company president goes out of town for 10 days, that’s 10 days that he’s not watching over his company."

The City of Brampton organizes several trade missions each year, focusing on target markets, including the Great Lakes basin of the United States and Central Europe, said Dennis Cutajar, director of economic development for the city.

"Our trade missions usually focus on certain industry trade shows," he said. "Our objectives are to look for new investment opportunities for Brampton, to help companies gain access to us and to create strategic alliances matching up Brampton companies with companies in the US."

These Brampton-sponsored missions usually focus on one industry at a time, as focus is a key to a successful trade mission, Cutajar said. Doing a series of open sales receptions is a less-effective way of conducting a trade mission, he said.

The last trade mission the city sponsored was in Detroit in February. Four Brampton companies in the automotive industry attended a show presented by the Society of Automotive Engineers.

"It was very effective," said Cutajar. "One of the companies that came along is interested in a plant expansion in Brampton."

Meanwhile, Jeff Cullen, president of the Mississauga and Brampton logistics firm Rodair International Ltd., was expecting a Team Canada trade mission to Hungary last month to bring in some more business for his company.

"Going on trade missions with the government heightens our profile in these countries," said Cullen. "It lends credibility when your government is there arranging the meetings… we’ve been exploring the possibility of a joint venture in Hungary and this is just one more opportunity to look into this." Previous European trade missions have resulted in "a fair bit" of business for Rodair, Cullen said.