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.