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. This document covers most aspects of the export process as they relate to the United States and includes many links for further investigation.

TABLE OF CONTENTS

1. The U.S. Market
2. Methods of Selling
3. Labelling, Marking and Packing
4. Shipping
5. U.S. Customs
6. Business Travel
7. Intellectual Property
8. Canadian Export Information

1. The US Market

The American market offers great potential to the Ontario exporter. As our wealthy neighbour and our largest trading partner, the US 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 American market is complex and constantly changing. Before entering the market it is generally a good idea to have a clear understanding of both its trends and possibilities. Doing some form of market research into burgeoning sectors would provide information that could help accurately target those that might prove profitable.

For further information:
visit the web site: Organisation for Economic Co-operation and Development - United States

The North American Free Trade Agreement (NAFTA) has provided for easier access to the US 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 further Information:
see the document North American Free Trade Agreement (NAFTA)

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 further information:
see the document Exporting - Entering World Markets Info-Guide

A great way to learn about all of the aspects of exporting to the US is to participate in a New Exporters to Border States mission. These 2-day missions run six to eight a year, to either Detroit, MI or Buffalo, NY. For information on the NEBS mission, see New Exporters to Border States - NEBS (Ontario).

Exporting to the United States - A Guide for Canadian Businesses

Exporting to the United States - A Guide for Canadian Businesses, is an online guide for Canadian small- to medium-sized businesses who want to export to the United States.

For further information:
visit the web site: Exporting to the United States
see the document Exporting to the United States

CanadExport: Trade and Investment Publication

CanadExport, Foreign Affairs and International Trade Canada's flagship newsletter, is designed to promote Canadian exports abroad through columns on trade and investment opportunities, potential markets, upcoming trade fairs and missions, trade policies and agreements and general market intelligence. And you will find a section on the United States.

For further information:
visit the web site: CanadExport: Trade and Investment Publication

2. Methods of Selling

Companies in Ontario have many options for selling their products or services to the US, 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 market share, location and manufacturing capacity. Finally, many Canadian companies find it useful to maintain a US 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, Canadian Standards Association's certification and testing services will help you meet US requirements. 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. These products might also have particular labelling and marking requirements. Please see the appropriate US government agency for guidelines for your products.

Clothing and textiles, are considered "trade sensitive", and subject to more regulations than some 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.

For further information:
visit the web site: US Federal Trade Commission - textiles

The US Food and Drug Administration (FDA) maintains guidelines for the labelling of food and beverage products. These guidelines under the Nutrition Labelling 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 US 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 US To find a freight forwarder, see the Canadian International Freight Forwarders Association (CIFFA)

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:

i. Formal Entry

Your shipment enters by Formal Entry when:

Formal entries must be cleared by a US Customs Broker.

Documentation required:

• NAFTA Certificate of Origin ;
• Commercial Invoice including type of currency, freight charge, the type of containers, who is paying the US 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 Export and Import Controls for a listing of Canadian goods that require extra documentation and/or permits. For US import regulations, contact a US Customs Broker.

A licence or permit from the appropriate US agency is required for the following goods:

• alcoholic beverages, Bureau of Alcohol Tobacco and Firearms ;
• animals and animal products, US Department of Agriculture ;
• artefacts and cultural property, US Customs and Border Protection ;
• biological materials, US Food and Drug Administration ;
• firearms and ammunition, Bureau of Alcohol Tobacco and Firearms ;
• fish and wildlife, US Fish and Wildlife Service ;
• fruit and nuts, US Food and Drug Administration ;
• hunting trophies, US Fish and Wildlife Service ;
• meat and meat products, US Department of Agriculture ;
• medicines, narcotics and certain drugs, US Food and Drug Administration ;
• milk, dairy and cheese products, US Food and Drug Administration ;
• pets, US Fish and Wildlife Service ;
• plants and plant products, US Department of Agriculture ;
• poultry and poultry products, US Department of Agriculture ;
• petroleum and petroleum products, US Department of Energy ;
• trademarked articles, US Customs and Border Protection ;
• vegetables, US Department of Agriculture .

For further information:
visit the web site: Export Information Spotlight

ii. Informal Entry

Your shipment enters by Informal Entry when:

• it is under US $2000;
• goods are not controlled or regulated;
• it includes Business-to-Business and Business-to-Consumer transactions.

These shipments do not require a US Customs Broker unless the shipment is unaccompanied (i.e.., consignee not present to accept the goods at the border).

Documentation required:

• NAFTA Certificate of Origin ;
• 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 ExportSource.ca - Entering Your Market , and ExportSource.ca - Transportation and Logistics .

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 .

5. US Customs

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 US Customs 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 US

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 US government agency for guidelines (in these cases, Department of Transportation and Federal Trade Commission , respectively).

Canada has an agreement with the US government whereby US 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. Visit the web site: Exports to the United States , and click on the link "Exports to the United States". For more information on Canadian customs regulations for exporters, visit the web site: Canadian Customs Regulations for Exporters .

Operation Safe Commerce (OSC) and C-TPAT (Customs-Trade Partnership against Terrorism) are key security measures that have been put in place. They aim at enhancing security throughout international and domestic supply chains while facilitating the efficient cross-border movement of legitimate commerce through the United States. Canadian SME that will be CT-PAT compliant will have to go through a different process. The expected process for the next five years is as follows:

C-TPAT Application Process

1.1. Conduct self- assessment of company's security according to specified guidelines
1.2. Complete supply chain security profile questionnaire
1.3. Develop enhanced corporate supply chain security program according to feedback from Customs
1.4. Explain to Customs how company will self-monitor security
1.5. Communication of security guidelines with supply chain partners
1.6. Demonstrate acceptable level of trade compliance
1.7. CT-PAT Certified carrier and driver

Technology requirements

2.1. Electronic manifest 4 hour prior to border crossing
2.2. Data accuracy audit
2.3. Driver: NEXUS card or biometrics
2.4. Container: electronic door seal3
2.5. Truck: CVISN transponder
2.6. Traceability and visibility of shipments through the supply chain via Radio Frequency Identification (RFID)

For further information:
visit these web sites:
C-TPAT and the Impact on Canadian Exporters
Lean Logistics Technology Roadmap
C-TPAT: Customs-Trade Partnership Against Terrorism  
Radio Frequency Identification (RFID)   
see these documents:
Security Compliance Loan
Partners in Protection (PIP)

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 US unless you have a work permit, are a dual citizen or hire a US citizen to do the selling. Any further questions on this matter should be directed to the US Citizenship and Immigration Services, not US Customs.

For further information:
visit the web site: U.S. Citizenship and Immigration Services  

When travelling to the US 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 US source and that your salary is paid by the Canadian company.

Be prepared to show identification (i.e. passport, drivers licence) at the border crossing. Since January 23, 2007, a new American law requires everyone entering the United States BY AIR to have a valid passport. In order to continue to be able to travel to the United States by air after January 23, 2007, Canadians are advised to have a valid passport. In the case of travellers crossing into the United States through the Vancouver International Airport, where there is a NEXUS Air program – a joint Canada-US trusted traveller program – a NEXUS Air membership when used at a NEXUS Air kiosk is also acceptable in place of a passport.

As of January 31, 2008, if you travel to the U.S. BY LAND or WATER, a U.S. law will require you to present:

• a government-issued photo ID, such as a driver's licence;

      AND

• a birth certificate or a citizenship card;

      OR

• A valid passport;

      OR

• A NEXUS or a Free and Secure Trade (FAST) card;

      OR

• For those 18 and under, a birth certificate.
  

Persons travelling to the US 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 further information:
visit these web sites:
Cross-Border Movement of Business Persons
Passport Canada - Frequently Asked Questions
Travel Documents for Entering the United States - CBSA
NEXUS
New Entry Requirements to the United States

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 US 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 US 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 and must be validated by the Canada Border Services Agency (CBSA) before departure.

For further information:
visit the web sites:
Canadian Chamber of Commerce  
Canada Border Services Agency (CBSA)

Business gifts valued under US $2000 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 US

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 US, its territories and possessions. A trademark (or service mark) 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 visit the United States Patent and Trademark Office web site: and for information on copyrights visit the US Copyright Office web site:.

For further information:
visit the web sites:
United States Patent and Trademark Office
US Copyright Office

8. Canadian Export Information

Further information on exporting to the US can be obtained by calling the ExportSource.ca export information service line at 1-888-576-4444, 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.

Support to the Export Industry

CMHC International assists exporters in expanding their business internationally by helping them to identify new housing export opportunities in select high potential markets. CMHC provides promotional support, organizes trade missions, provides matchmaking services, and promotes Canadian know-how abroad. In turn, facilitating export contracts that create jobs contributes to the well being of the Canadian economy.

For further information:
visit the web site:: CMHC International - Support to the Export Industry

Exporting Cultural Property

The Cultural Property Export and Import Act ensures the preservation of important objects related to Canadian heritage by establishing export restrictions for certain categories of objects of historical, scientific and cultural significance. The Canadian Cultural Property Export Control List identifies the categories of cultural property for which a permit is required before the object can be exported. The Cultural Property Export Regulations states that anyone exporting cultural property falling within one of the identified categories of the list will require an export permit.

For further information:
visit the web site:: Canadian Heritage

The Canadian Standards Association (CSA) is a not-for-profit membership-based association serving business, industry, government and consumers in Canada and the global marketplace.

Export Controls On-Line (EXCOL) is a user friendly web-based application where exporters are able to submit applications for export permits and certificates, as well as request amendments. EXCOL also offers the functionality to submit online, quarterly utilization reports for military goods, as well as the ability to print selected permits in your office.

For further information:
visit the web site:: Export Controls Online (EXCOL)
see the document Export Controls Online (EXCOL)

The EXPORT Finance Guide from Export Development Canada helps Canadian small businesses understand and access information tools relating to exporting at each stage of the export transaction cycle.

For further information:
visit the web site:: EXPORT Finance Guide
see the document EXPORT Finance Guide 

Need more information?

Click: Canada-Ontario Business Service Centre
Call: 1-800-567-2345
Visit: visit our Regional Access Program Locations page to locate an office near you

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Some of the organizations listed below are not subject to the federal Official Languages Act or the French Language Services Act of Ontario. Their services may not be available in both official languages.

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• Customs Offices - Supplement
• Exporting - Entering World Markets Info-Guide
• Exporting - Preparing for World Markets Info-Guide
• Business Guides

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.