Thank You from NDTO

Thank You from NDTO

Posted on September 2, 2020

NDTO appreciates the service of both ND Commerce Commissioner Michelle Kommer, and Peter Christianson for your dedication, leadership and enthusiasm on the NDTO Board of Directors.

Since 2019, Commissioner Kommer has served with a zeal for North Dakota, trade and economic development for the state. Her insight and guidance were always thoughtful and will be missed.

Peter Christianson served on the NDTO board starting in 2014, he had a keen eye for financials and strived to make NDTO even better.  His leadership and guidance have made NDTO flourish.

NDTO thanks you both for your years of service and governance.

Connecting with Canada through Trade

Connecting with Canada through Trade

Posted on September 2, 2020

Canada is one of the US’s largest trading partners and with renewed connections with USMCA, supply chain disruptions and border restrictions, there are more reasons than ever to work closely with our neighbors to the north.  Currently, there is a non-essential travel ban in effect through at least September 21, 2020 between Canada and US borders. This restriction may be increased through the end of 2020 due to the global pandemic; however, goods can still be moved across the borders.

In 2019, North Dakota exports to Canada are more than $6 billion, primary sectors include fuel/mineral Oil ($4 billion), machinery and agricultural equipment ($3.5 million) and cereals primarily corn, wheat and buckwheat ($1.5 million), respectively. Canada in-turn exported more than $2 billion into North Dakota in 2019 in machinery ($4.3 million), machinery and repair parts ($4.1 million) and fuel/mineral oil ($2.4 million).

Opportunities

Canadians import more goods from the US than any other country in the world, so it is good business continue cooperation between these borders.

With global uncertainty, and updated free trade agreements in 2020, doing business with Canada has many layers of appeal. USMCA has brought forth opportunities in dairy and wheat to be held to the same standards for grading.  Modernization of NAFTA creates improved access to E-commerce, which is picking up with Canadian consumers, especially with the increased de minimis rates on consumer goods crossing the borders.  With the global pandemic, having close relationships with our northern neighbors shortens supply chains and has many companies refocusing on goods closer to home.

North Dakota companies could find success in serval Canadian markets with a little time and effort. Canada is the fifth largest market for aerospace technologies, specializing in civil flight simulators, civil aircraft production and civil aircraft engines. With ND having several companies on the forefront of aerospace engineering and products, there are opportunities to explore this booming Canadian industry. Additionally, renewable energy is a top-of-mind sector for Canada as 65% of their electricity generation in 2019 was renewable according to the International Trade Administration.

Pandemic Effects

According to the Conference Board of Canada, Canadians are gaining confidence in spending and more than 400,000 jobs were created in July 2020. Many restrictions have been lifted, but only about half of the jobs lost due to the pandemic have recovered (most of which are in the service industry). Canada is has seen a decrease in seasonal labor, which in-turn could cause increase need for some agricultural and food products from the US. The pork industry, like the US, had a shortage in meat processing, and an overabundance of piglets selling at below cost. As markets are adapting to the global pandemic, countries such as Canada are opening borders for trade, but being mindful of safety, PPE and protective measures to ensure quality of goods. Global trade, as the world is working towards normal, is just moving slightly slower than usual.

USMCA

With USMCA in effect since July 2020, the details are still playing out on impact for all parties involved. Updates in the USMCA have increased opportunities for dairy farms and ranchers as well as small and medium sized businesses across ND. With more than 80% of NAFTA regulations still intact with USMCA, focus shifts towards the differences in doing business. Modernization of the agreement comes in several forms including security in e-commerce, intellectual property rights and quota adjustments.

In a January 2020 press release North Dakota Agricultural Commissioner Doug Goehring commented upon ratification of the USMCA “With U.S. agriculture facing uncertainty in the global marketplace, the USMCA will provide a much-needed boost to producers and rural communities. The new agreement ensures U.S. farmers, ranchers, and food processors can continue to access and grow exports to two of their most important global markets.” More now, than pre-pandemic; weak points in supply chains and labor have come to light. Taking more cooperative action with Canada will only strengthen ties for the future.

Increased access to Canada’s dairy market which includes including cheeses, eggs and milk, along with wheat are to be held with the same standards as Canadian goods under the USMCA. Historically US exports have been deemed ‘lesser’ or ‘sub-par’ than in-country products. A more even playing field will ensure reliable access to these products across the board.

There is good news for small businesses and consumers regarding increased de minimis rates for cross border goods. De minimis rates are defined as a small amount of money or goods with minimal value. By increasing the minimal value rate there is no additional taxes or duties on purchases below that level.   In the past, consumers would pay duties on purchases over $20, but new regulations increase those levels to $150, essentially increasing movement across borders with less expense to the consumer.

With the updated agreement, exporters should be aware of new country of origin paperwork. The customs and border patrol announced understanding and working with the new regulations as we move into 2021, as everyone gets more comfortable.  It is, however, still essential to have the correct paperwork in order to make cross border transitions move smoothly.

Supply Chain/Shipping/ De minimis

Shipping and movement of moving goods has become more transparent as the USMCA requires of documentation, paperwork, and online regulation postings from each party involved.

Doing your research as your company exports is one the first time-savers to ensure everything moves smoothly under the new regulations.  Both US and Canada have their updated shipment and border clearance policies available online (links in the resources below). Customs and Border Protection emphasizes that making sure that country of origin paperwork is complete as it will aid in reducing border clearance delays. When crossing Canadian borders, it is recommended that extra time be built into shipments, considering new regulations as well as the weather in northern climates can be cause for delay.

Business Culture

With opportunities for expansion into Canada, there are some cultural differences when doing business that may help you build successful relationships for the future. With Canada being so expansive, there are some cultural variations that may be applied generally:

  • The overall value of a business deal will be seen more favorable than a personal connection.
  • The value and quality of your products will speak highly of your business.
  • Canadian business people may be slower to build relationships.
  • In general, keep closer to universal topics when initially making connections.
  • Be sure to use formal titles when addressing people, always use last names and titles until otherwise told.
  • It is not uncommon for some Canadians to be quite animated when speaking, it is even considered rude in some circles to speak with your hands in your pockets. Western Canadians are often more relaxed, but direct in their business dealings.
  • When working with Ontarians (those from Ontario), more formal business etiquette is practiced.
  • While English is widely used, French is the preferred for much of Eastern Canada; having materials printed in both French and English is recommended.

Political Voices

Recently, the Trump administration has been enforcing a 10% aluminum tariffs and the Canadian government lead by Prime Minister Justin Trudeau has vowed to respond in equal measure. The Canadians make clear that they would work together with the US to support life and jobs as much as possible.

Overall, Canada has many opportunities that can benefit a variety of different sectors in cross-border trade. New rules and regulations will need review for any company doing business under the USMCA, but with increased access to resources trade will move smoothly across borders for the future. Looking towards to future of trade with one of our closest neighbors in Canada there are many opportunities for both ahead.

Here are some useful resources for a deeper look:

Resources

Canadian Border Information for Businesses

Canada Border Service Agency

The Conference Board of Canada

International Trade Administration- Doing Business in Canada

What is website localization and why is it so important for global business?

What is website localization and why is it so important for global business?

Posted on September 2, 2020

Well, when you ask Siri, or Alexa ‘what’s the weather?’, the response might be something like “right now, its 23⁰ Celsius and rainfall is expected up to 12 millimeters.” She’s not wrong, but you may be left scratching your head (and wondering if you should grab an umbrella). Website Localization projects would have the intelligence to identify what unit of measurement is the most appropriate for the target audience.  In this case, Fahrenheit and inches are more commonly used for measuring the weather in the US.

While we understand that so much of our day-to-day business is being conducted online, and we want to reach the right people in the right places at the right time, there isn’t always a clear path on how to get there. “Website Globalization” is a term you will hear often in this sphere; it is broad approach to make your website ready for global consumption. Globalization is for a general audience and not just limited to one or two target markets. Just as the term suggested, it is a globalized approach.

“Website Localization” on the other hand, is a fine-tuning process that can be part of a global market expansion strategy to benefit to your company’s products, services, and offerings. The localization of a website is much more involved. Beyond a simple translation, localization requires specific identification of a target market. Then, you will work with cultural and website experts to hone-in on the subtleties to make your website user friendly, visually appealing, and easy to read for that specific market. All of which contribute to a positive user experience, which, is ultimately the goal!

Here are some tips on what to consider when looking into website localization projects:

  • Identify Your Target Market- This is the best place to start when thinking about localization. The target market will drive all the content, context, and cultural nuances needed.
  • Language- While translation can be a great start to showcasing your company and its goods in other languages, it is only a piece of the puzzle. With localization, experts can take your website and translate the information (yes!), but cultural, linguistic preferences and education level of the audience are all considered.
  • Visual Appeal- Images, videos and overall aesthetics can also be customized to appeal to the target audience. This may include style, colors, cultural norms, marketing trends, and people within the images. Graphics and pictures may also need to be updated to appeal to the intended audience. Localization can also mean adapting your website to fit into a foreign market with stylistic preferences in doing business.
  • Navigation- Taking into the account how people in other parts of the world generally access and navigate websites, a version of your site that is sensitive to these preferences can greatly increase usability. We have all been on websites that are hard to navigate, not visually appealing or we find the language a bit clunky. By taking the culture, traditions, beliefs, educations and habits of a specific audience, localization can make the experience for your user much more pleasant, and less frustrating.
  • Formatting- This may include the date and time format, measurement units, as well as currency formatting to ensure your buyers are seeing the correct details. Depending on the products or company, websites can also be programmed to ensure buyers will only see products available for their specific location/country within your target market.
  • Technology- Beyond the language and pretty pictures, the website platform itself may need to be localized to ensure the platform is compatible with the technology available to the target country or market. Here we are talking about internet speeds, bandwidth and technology available.

As you can see, there are a plethora of items to consider when localizing your company’s website for a target market. If this seems overwhelming, there are plenty of resources and professionals to assist in your localization projects. NDTO also works with IBT Online to help North Dakota grow through online global programs which can be found here. The US Commercial Services details on localization can be found here . If website localization is in your near future, NDTO will be hosting an upcoming webinar with IBT Online in October. We also have  funding available through SBA for qualified applicants for this type of project. Feel free to reach out to STEPnd@ndto.com.

NDTO Member Profile: WCCO Belting, Inc.

NDTO Member Profile: WCCO Belting, Inc.

Posted on September 2, 2020

Belts are everywhere! As explained by Karley Serati, Marketing Manager at WCCO Belting. With so many applications, when you start looking around you will see them in machines, agricultural processes, industrial plants, distribution centers, manufacturing, and even at the checkout lines at your grocery store. 

The roots of WCCO Belting, Inc. date back to the 1950s. Based in Wahpeton, ND, this family-owned business is continuing to make strides into the future. With so much activity from the announcement of several new patent-pending products, the company continues to move forward despite the recent global pandemic. “Farmers will plant, farmers will harvest, and they need belts to do it. We’ve continued operating with safety measures in place,” says Serati. 

Wahpeton Canvas Company (WCCO) started in 1954 when Ed Shorma bought a shoe repair shop. The business grew and morphed into its niche for crafting high-quality, custom rubber product solutions. The company demonstrates the value of superior belting with its customers. When belts are built with a specific job in mind, the whole operation is more efficient. Serati explains, “Our belt for sawmill applications, for example, has seen a 70% increase in lifespan. With improved performance, there is less time spent repairing or replacing and more time driving the bottom line.”

WCCO belts are well-known in the agricultural industry, and they are reaching more and more into the industrial markets. “Innovation is key at WCCO Belting. We love to work with companies who are learning right along with us, so we can all get better at our craft together,” highlights Serati. Take their patent-pending Direct X belting solution for instance, as it was just announced with a splash at CONEXPO this spring. The Direct X, used in mobile recycling applications, is specifically designed to capture more material and increases capacity over 25% compared to the industry standard.

The company had many plans to ramp up its production with the new product lines. Much of this has still happened despite the global pandemic. “We have been very fortunate to be able to continue,” Serati said. With minimal supply chain interruptions, much of their business operated with food production, infrastructure, and other conveyor-belt-type products still in need.

WCCO has a history of working alongside Original Equipment Manufacturers (OEM) to build their products to directly suit the OEM’s requirements. Serati says, “There is a benefit to building our products alongside the manufacturers. Coming up with agricultural OEMs, we had to be ahead of the curve and engineering new designs that could stand up to modern technology.” She goes on to say, “The belt is the heart of the conveyor system, it will improve the quality and quantity of output as well as operational efficiency.” Their customized approach has changed the way some companies feel about their belts. Oftentimes, belts are treated as if they’re just a basic component part, but WCCO is changing that perspective. Their team is dedicated to designing solutions to turn belts into successful tools right along with the equipment utilizing them.

The skilled and devoted employees at WCCO also make this company a success, with teams that constantly work on improvements to both the products and their approach to work. “When new employees join WCCO Belting, they have little to no knowledge of what we do,” explains Serati. That’s WCCO developed a robust training program with over 90 courses on job skills, as well as created a committee dedicated to improving the work environment. This cross-functional committee meets weekly to discuss employee ideas, and since its launch, WCCO has implemented over 1,600 employee suggestions which has improved processes and culture.

In 2016, WCCO won their second Presidential "E" Star Award for Export Success. The award recognizes excellence in exporting on a national level. Since this award, WCCO has been able to expand further throughout the world, adding an office in Spain and continuing to export to more than 20 countries. The company was also recently named as a recipient of the 2020 Manufacturing Leadership Award for Operational Excellence from the National Association of Manufacturers. WCCO is also regularly named as one of the areas 50 Best Places to Work by Prairie Business Magazine.

Looking toward the future, with a strong foundation, WCCO Belting is full steam ahead as they continue to produce products for both agriculture and industrial applications. For more information on WCCO Belting, visit their website https://www.wccobelt.com/

NDTO Member Profile: SkySkopes

NDTO Member Profile: SkySkopes

Posted on August 5, 2020

“Drones are a pandora’s box of value” says Matt Dunlevy, CEO & Chairman for SkySkopes, a professional Unmanned Aircraft System (UAS) company based in Grand Forks, ND. The company started in 2014, after Dunlevy picked up the idea that Grand Forks was the perfect place to start a UAS company with skilled pilots and UAS subject matter experts.

Dunlevy drives the vision for SkySkopes with his unwavering passion for aviation that “runs in his blood”.  He was hooked with his first solo flight in a glider at the age of 14 and first UAS system piloting at age 15. Inspired by his grandfather, a pilot in WWII and having piloted gliders throughout his lifetime, Dunlevy has shared his passion with students as an instructor at the University of North Dakota (UND) since 2014.

As part of the teaching staff at UND, Dunlevy is proud of UND students, highlighting that North Dakota pilots are impressive - they have great situational awareness, a huge emphasis on safety, solid aviation decision making abilities, and components training. SkySkopes hand picks students from some of the best institutions including UND, Kansas State and Embry Riddle to plan and fly their missions.

SkySkopes has built a reputation for problem solving using UAS systems in a variety of ways to safely and effectively get the job done.  Dunlevy touts that “every day is different, garnering a lot of our passion, nothing in the world is quite like it, when getting out on a drone operation.” So many hours of preparation go into each mission. Using their drone-based powerline stringing operation as an example, with intensive preflight planning, utilizing the right drones to be able to articulate and maneuver the powerlines and carry the literal weight that the job required was “half of the fun”. This is where, Dunlevy says, so much of the team’s passion and skills come out. Safety is top priority, and if drones with skilled pilots and teams like SkySkopes can safely and efficiently do what has traditionally been dangerous work, passion can be rewarded. Each achievement continues to push imaginations and capabilities of drone use further and further into the future.

With tight regulations from the Federal Aviation Administration (FAA), the US has some of the safest airspace in the world, but there are still regulations with beyond visual line of sight (BVLOS) missions. “The pilots in the US have lot of hoops to jump through to get advanced permissions such as BVLOS, and that makes our skies more safe” says Dunlevy; that also means pilots are well trained and take on many new challenges. With the FAA moving towards drone operation beyond line of visual sight, there will be more ingenuity on what can be accomplished with UAS pilots and systems. North Dakota Legislature has backed UAS technology with several players in the state with the hopes that ND will become a leader for this industry.

SkySkopes has been at the forefront in advocating innovation as boundaries BVLOS are being pushed, with successes internationally. The future of UAS is BVLOS, flying in similar ways to manned aircraft, miniaturizing the UAS technologies, such as radar and onboard equipment to make many projects safer, and more efficient.

SkySkopes is also making international and local impact during the recent pandemic, showing that drones can effectively be used to deliver supplies and sanitize high traffic areas, such as playgrounds and other community areas.

Working with the NDTO’s professional networks we were able to assist SkySkopes in procuring ethically sourced materials for their operations. The NDTO team connected SkySkopes with companies able to assist in procuring antiseptics, sanitization chemicals and other products needed for the drone chemical application project. as well as promoting their capabilities domestically and internationally. SkySkopes is expanding in many directions with innovative solutions as the need and uses for drones are boundless.

For more information on SkySkopes, please visit https://www.skyskopes.com/

USMCA Overview

USMCA Overview

Posted on August 5, 2020

The United States-Mexico-Canada Agreement (USMCA) was initiated by all three countries on September 30, 2018 at the G20 Summit. Final ratification of the agreement came to fruition on March 30, 2020 with USMCA passing through each government’s authority and took effect on July 1, 2020. The new agreement will replace the 25-year-old North American Free Trade Agreement (NAFTA).

The updated comprehensive agreement builds off NAFTA and is characterized to have a more modern approach than the 1994 agreement. Included in the USMCA are more provisions on agriculture, intellectual property, automotive construction, environmental and labor standards.  Some of the most highly publicized sectors from this agreement are automotive and labor updates; however, there is much to be said for the updated agriculture and small/medium business changes as well.

Exports to Canada and Mexico are big business for North Dakota - in 2019, they accounted for $5.84 billion in exports combined. For North Dakota, highest exports to Canada and Mexico were mineral fuel/oil, machinery, and cereals, with cereal exports totaling $157 million to Canada and $84 million to Mexico.  As part of the new agreement, US originating wheat will no longer be subject to strict grading guidelines in Canada. New market opportunities and quotas have been created for dairy, poultry and eggs, and food. Remaining unchanged are zero tariffs on food and agricultural products. All tariffs that were at zero under NAFTA will remain at zero under USMCA.

Small and Medium sized Enterprises are also benefitting from the agreement, with a chapter devoted to their advancement, information sharing, and a committee to represent and promote these companies’ interests. The top two export destinations for US small businesses are Canada and Mexico, and with these new provisions, small businesses can anticipate reduced red tape, both at the borders with updated de minimis rates, online publication of laws required for customs clearance, and procedures to correct any errors. An online database for customs information will also be made available for trade communities.

Agricultural updates in the agreement will level the playing field for exports as well.  Canada has opened access to poultry (chicken, turkey and eggs), dairy markets with updated milk regulations, and no tariffs on whey and margarine. Mexico will have less restrictions on US cheeses. All countries agreed to non-discrimination for wine and distilled spirits and transparency commitments with distribution and labeling.   Trade distortion will be reduced to improve transparency, all parities have agreed not to use export subsidies, and Canada and the US have agreed to more regulations to ensure tariff-quotas are fairly administered.

In the manufacturing and the auto industry, it is now required that 75% of car components need to be manufactured in North America to avoid tariffs, which is an increase from 63% under NAFTA. Additionally, 40% of workers manufacturing automobiles must make wages above $16 per hour, on average. With updated labor laws, facilities with workers’ rights complaints must allow for easier accessibility for investigations.   The labor laws overall are believed to bring back some US manufacturing jobs by incentivizing US made goods, US manufacturing from manufacturing companies and automakers and allowing the US workers to compete on the same playing field.

Canada and Mexico are the largest trading partners with the US, and with updated regulations that include labor laws and environmental requirements all countries can be on the same page with the flow of goods under the USMCA.  For more specific information on USMCA, please see the links below.

US and Republic of Kenya Open Trade Negotiations

US and Republic of Kenya Open Trade Negotiations

Posted on August 5, 2020

The first round of virtual trade negotiations is underway between the US and Republic of Kenya, starting on July 8, 2020.   The comprehensive agreement seeks to serve as a model for trade across Africa and to mutually strengthen ties. For North Dakota companies there is much to be gained by strengthening these relationships.  According to the US Trade Representative Office, the top export categories to Kenya from the USA in 2018 were aircraft ($103 million), machinery ($41 million), plastics ($37 million) and electrical machinery ($31 million).

Increased market access to US farm and manufacturing equipment could occur with this new agreement, along with greater investment potential. Kenya imported $37 million in agricultural products from the US in 2018. Driving those numbers were grains ($10 million), wheat ($6 million), pulses ($5 million), vegetable oils ($3 million), and planting seeds ($3 million). In 2018, North Dakota exported $113,528 of product to Kenya, of that $103,000 was in agricultural machinery and parts. With more interest and a new reciprocal agreement, increases for in-demand products will likely be seen in the future.

This is only the second Free Trade Agreement the US has made with a Sub-Saharan African country since the FTA with Morocco in 2006.  This agreement has made Morocco the 55th largest export market for the US according the Office of the US Trade Representative.

Recent shifts in the US trade seek to ensure Africa is included in more trade talks moving forward. There has been a longstanding and steady relationship with the US and Kenya and hopes that renewed talks will expand throughout the continent and serve as a model for progress. Once finalized, the agreement is hoped to be a roadmap for other countries in the region doing business with the US.

With this agreement potentially years from completion, there is much more to come regarding US and Kenya relations. Here are some resources for a deeper dive: