Exporting to the United States Info-Guide

This Info-Guide is intended for use by product manufacturers and service providers interested in the U.S. market as an export destination. This document covers most aspects of the export process as they relate to the United States and includes many links for further investigation. It is to be used as a guideline only and therefore additional research should be performed, in order to make informed exporting decisions.

1. The U.S. Market

The American market offers great potential to the Alberta exporter. As our wealthy neighbour and our largest trading partner, the U.S. market offers more than 300 million potential customers known worldwide for their purchasing power, brand loyalty and consumer savvy. While American companies provide for many of their own consumers, there are tremendous opportunities for progressive and innovative firms to gain a foothold in the market.

The  North American Free Trade Agreement (NAFTA)  has provided for easier access to the U.S. market through the elimination of most trade barriers, the recognition of products manufactured in North America, the protection of intellectual property and the permission for business travel across borders. For more information on NAFTA, see http://www.dfait-maeci.gc.ca/nafta-alena

Given the sheer size of the United States, both geographically and demographically, it is impossible to target the entire country all at once. It is recommended that each firm narrow their focus to include only a couple of cities or states at one time. It is also important to treat each state as a unique market as consumer habits and competition differ greatly. For more information on researching a market, see Selecting and Researching Foreign Markets

A great way to learn about all of the aspects of exporting to the U.S. is to participate in a New Exporters to Border States mission, a key export education tool offered by trade offices in the U.S. that targets Canadian companies not yet exporting to the United States. NEBS provides companies with vital practical orientation by introducing them to the essentials of exporting as well as by giving them first-hand exposure to markets located in U.S. border states. For information on the next NEBS mission, see the document ExportUSA.

2. Methods of Selling

Companies in Alberta have many options for selling their products or services to the U.S., including methods commonly used in Canada. It is up to each firm to decide which method best suits their export objectives and business capacity. Each method has its advantages and disadvantages.

A product manufacturer or service provider might consider selling directly to the customer through catalogue mail order, direct marketing, trade shows or by e-commerce through their Web site. A very common method of selling is to appoint a manufacturer's representative or agent, just as you would in Canada, to represent your firm and promote your products south of the border on a commission basis. Distributors can purchase your products and sell them directly to their existing customer base along with other similar product lines. Perhaps a partnership is the best route for your firm to take by establishing a joint venture or licensing agreement with a complementary American company in order to take advantage of their marketshare, location and manufacturing capacity. Finally, many Canadian companies find it useful to maintain a U.S. address to facilitate warehousing, shipping services, customer returns, etc.

Each selling method will impact your company's costs and profit margin differently and must be worked into the pricing. Other issues to consider are returns, service and repair, warranties, shipping, insurance, competition and receiving payment. 

3. Labelling, Marking and Packing

An important aspect of successful exporting involves the preparation, and sometimes testing of your product to meet the guidelines of the export destination. The United States maintains packaging and labelling guidelines for various products crossing the US border just as we do here in Canada. Every item must be marked indelibly with the country of origin ("Made in Canada").  

If product testing is required by the importer, the Canadian Standards Association offers certification and testing services that will meet U.S. requirements see http://www.csa-international.org. Many health-related, food and beverage products will require additional documentation in the form of a certificate, obtained from the Canadian Chamber of Commerce for a small fee. Some examples are: Certificate of Hygiene, Certificate of Free Sale and Certificate of Inspection, see http://www.chamber.ca These products might also have particular labelling and marking requirements. Please see the appropriate U.S. government agency for guidelines for your products.

Clothing and textiles, are considered "trade sensitive", and subject to more regulations than other goods. The Federal Trade Commission is responsible for the enforcement of regulations for these products. Since quotas may apply, it is recommended that you contact a Customs Broker for assistance.

The U.S. Food and Drug Administration (FDA) maintains guidelines for the labelling of food and beverage products. These guidelines under the Nutrition Labeling Act (some exemptions for Canadians may apply), cover the size of the label, font type and size, weights and measures, etc. It is recommended that you submit your food or beverage product label to the FDA for examination to ensure compliance before exporting a shipment.

For ease of exporting, your goods should be packed so they arrive in good condition, labelled appropriately for timely arrival and documented correctly for both Canadian and U.S. customs. You will want to consider your shipping options before you send orders to the United States for efficiency, cost and reliability.

Boxes should be labelled clearly with the details of origin, details of destination, transit instructions, details for consignee, dimensions and weight, serial number and invoice number. A freight forwarder can assist your firm in making the best shipping decision based on your needs and can advise you on packing guidelines for the U.S. To find a freight forwarder, see the Canadian International Freight Forwarders Association http://www.ciffa.com or the telephone directory.  

4.  Shipping

Goods entering the United States do so in one of two ways: by Formal Entry or Informal Entry. The following are a few guidelines to help you determine which entry you should use.

Formal Entry
Your shipment enters by Formal Entry when:

• it is over US $2 000; or
• it includes controlled or regulated goods (require Canadian or U.S. permits, certificates or licenses)
  Formal entries must be cleared by a U.S. Customs Broker.

Documentation required:

• NAFTA Certificate of Origin (can be found at http://www.cbsa-asfc.gc.ca/E/pbg/cf/b232 );
• Commercial Invoice including type of currency, freight charge, the type of containers, who is paying the U.S. duty and if it is included in the invoice, and if the shipper and consignee are related through ownership or blood.

See Canada's Export Control List at http://www.dfait-maeci.gc.ca/eicb/ for a listing of Canadian goods that require extra documentation and/or permits. For U.S. import regulations, contact a U.S. Customs Broker (see your telephone directory) or visit http://www.customs.ustreas.gov/xp/cgov/import/

A license or permit from the appropriate U.S. agency is required for the following goods:

For additional information on regulations, see http://www.customs.ustreas.gov

Informal Entry

Your shipment enters by Informal Entry when:

• it is under US $2 000;
• goods are not controlled or regulated;
• it includes Business-to-Business and Business-to-Consumer transactions
  These shipments do not require a U.S. Customs Broker unless the shipment is unaccompanied (consignee not present to accept the goods at the border)

Documentation required:

• NAFTA Certificate of Origin (can be found at http://www.cbsa-asfc.gc.ca/E/pbg/cf/b232);
• a Commercial Invoice stating "Informal Entry as per Section 321" as well as the name, address and phone number of your customs broker should a formal entry be required.

Some shipping choices include: mail, courier, express shipments, bus, truck, rail and air. For more information on shipping visit Team Canada Inc at http://www.exportsource.ca , see "Entering Your Market".

INCOTERMS are a set of 13 terms used in international trade to describe the nature of a foreign contract and obligations of the buyer and seller. Some commonly used Incoterms include: FOB (Free on Board), CIF (Cost, Insurance and Freight) and FCA (Free Carrier Multimodal). For more information on Incoterms, see the International Chamber of Commerce's "Incoterms 2000" at http://www.iccwbo.org .  

5.  U.S. Customs and Border Protection

Providing timely and accurate documentation at the border crossing can ensure faster processing and eliminate future hassles. If your paperwork is not correct, your company might be flagged and subsequently inspected as each shipment crosses the border.

Any product found on the list in Section 4 (Shipping), under Formal Entry, will likely be examined at the border by U.S. Customs and Border Protection on behalf of over 40 government agencies. Please refer to the appropriate agency (e.g. Food and Drug Administration (FDA), Environmental Protection Agency (EPA) for the rules and regulations that pertain to bringing your product into the U.S.  

Some goods, such as motor vehicles, apparel, textiles, fur and wool, that are not controlled or regulated, might still require additional documentation at the border. Please refer to the appropriate U.S. government agency for guidelines (in these cases, Department of Transportation at http://www.dot.gov and Federal Trade Commission at http://www.ftc.gov).  

It might be useful for you to obtain a U.S. binding ruling on the tariff classification of your goods by U.S. Customs. This ruling provides for consistency and speed at the border by determining a specific tariff classification for your goods that can be used repeatedly. Requests should be sent to the following address:

Director, National Commodity Specialist Division
U.S. Customs and Border Protection
Attn: CIE/Ruling Request
One Penn Plaza-10th Floor
New York, NY 10119

or to any service port office (http://www.customs.ustreas.gov/xp/cgov/toolbox/contacts/ports/ ) of U.S. Customs and Border Protection

Canada has an agreement with the U.S. government whereby U.S. Customs tracks Canadian imports on behalf of the Canadian government therefore it is not necessary to submit Form B13A (Export Declaration) to the Canada Border Services Agency (CBSA) as you would for exports  to other countries. For more information on Canadian customs regulations for exporters, visit http://www.exportsource.ca, see "Entering Your Market" then "Customs, Laws and Regulations".

Consider the benefits of using a customs broker to do your paperwork and to ensure Customs clearance in a foreign country. Canadian customs brokers are licensed under the authority of the Customs Act. The services provided by customs brokers include the processing of customs' import and export documentation and the release of commercial goods through local customs authority.

For a listing of customs brokers that have access to the on-line permit application system – Export Import Controls System (EICS) – of International Trade Canada, visit the website http://www.dfait-maeci.gc.ca/eicb/general/brokers-en.asp

For a listing of customs brokers by city, look at the Members Directory at the Canadian Society of Customs Brokers website http://www.cscb.ca

6.  Business Travel

Under the NAFTA, Canadians are permitted to travel and conduct some forms of business in the United States. The Agreement allows for Canadians to attend trade shows, business meetings, perform market research, negotiate contracts and take orders, without a work visa. Direct selling is prohibited in the U.S. unless you have a work permit, are a dual citizen or hire a U.S. citizen to do the selling. Any further questions on this matter should be directed to the U.S. Citizenship and Immigration Services at http://uscis.gov/graphics/index.htm, not U.S. Customs and Border Protection.

When travelling to the U.S. for business, it is best to carry a letter on your Canadian company's letterhead, signed by the senior executive of your firm, stating the following:

• Purpose and length of your trip;  
• where you will stay;
• that it is a business trip;
• that it is international in nature;
• which companies you will be visiting;
• the fact that you are not receiving any remuneration from a U.S. source and that your salary is paid by the Canadian company.

Be prepared to show identification (i.e. passport or drivers license) at the border crossing. For more information, see "Cross Border Movement of Business Persons and the NAFTA" at http://www.dfait.gc.ca/nafta-alena/cross-en.asp

Persons travelling to the U.S. to perform a service (e.g. consulting, training), must have either a work permit or their profession must be listed in Chapter 16 of the NAFTA and the services they intend to provide must be related to that profession. For the list of professions see "Cross-Border Movement of Business Persons and the North American Free Trade Agreement" at http://www.dfait.gc.ca/nafta-alena/cross-en.asp

If you are travelling with samples, your samples must be made unsuitable for sale by tearing or perforating them and marking indelibly "Sample" on them. A Temporary Import Bond (TIB), obtained from your U.S. Customs Broker, on their advice, may be required for samples and/or tradeshow displays. Controlled and regulated goods will most likely require a TIB.

A carnet is a document that allows those travelling with professional equipment (e.g. laptop computer) or commercial samples to reduce paperwork at U.S. customs offices. If a person or group arrives at a customs office without a carnet they must either purchase a temporary import bond or pay all tariffs and excise taxes on entry, then file for a refund on departure. Carnets are issued in Canada exclusively by the Canadian Chamber of Commerce http://www.chamber.ca and must be validated by the Canada Border Services Agency before departure.

Business gifts valued under US $2 000 can enter under Informal Entry (see section 4 of this document). Gifts made from textiles and textile articles (e.g.T-shirts, hats) valued over US $200 must enter under Formal Entry as quota restrictions apply to textiles entering the U.S.
 
7.  Intellectual Property

Intellectual property includes patents, trademarks and copyrights; however, your work is only protected in countries where you have applied for protection or ones that are signatories of the Berne or Universal Copyright Convention. The United States is a signatory to both these conventions. Patents are granted for new technologies or processes, for 20 years and are valid within the U.S., its territories and possessions. A trademark (or servicemark) protects a word, name or symbol from others using a similar mark. A copyright provides protection for written material, literature, music and software. For information on how to apply for patents and trademarks see http://www.uspto.gov and for information on copyrights see http://lcweb.loc.gov/copyright.

8.  Canadian Export Information

Further information on exporting to the U.S. can be obtained by calling the Team Canada Inc export information service line at 1-888-811-1119, available through the network of Canada Business service centres and speaking with one of our trained Information Officers. While general export information is provided directly, clients who require more expert advice or export counselling are referred to appropriate domestic export development services.

The Business Link Business Service Centre
Suite 100
10237 - 104 Street N.W.
Edmonton, Alberta  T5J 1B1
Telephone: Library: (780) 422-7780
Fax: 780-422-0055
Toll-free (information): Export Information Line: 1-888-811-1119
TTY Toll-free (hearing impaired): 1-800-457-8466
E-mail: exportlink@cbsc.ic.gc.ca
Web site: http://www.cbsc.org/alberta
Hours of operation: Monday - Wednesday, Friday: 9:00 a.m. - 5:00 p.m. Thursday: 9:00 a.m. - 8:00 p.m.

• ExportUSA
• Export Alert! - RegWatch - Standards Alert!
• Tariffs and Market Access Information for Canadian Exporters
• Export Link
• Trade Team Alberta
• North American Free Trade Agreement (NAFTA)

DISCLAIMER
Information contained in this document is of a general nature only and is not intended to constitute advice for any specific fact situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.

Links Policy
Some of the hypertext links lead to non-federal government sites which are not subject to the Official Languages Act and the material is available in one language only.