January 4, 2018      wtcutah.com   Facebook Twitter   LinkedIn   Instagram

Helping Utah Companies Think, Act and Succeed Globally

CEO Derek Miller

President's Message
Derek B. Miller, World Trade Center Utah

It's a new year and with it comes new opportunities to engage in global trade. We are currently accepting registrants for the Governor-led Trade Mission to Mexico, which will occur April 9-13. Registration forms, which can be found on our website, must be submitted by Jan. 31.

Mexico's trade agreements with the U.S. and proximity to Utah make it an ideal location for Utah companies looking to expand internationally. We hope you will join us on the Mexico Trade Mission to explore the country's business environment, make valuable connections and potentially sign business contracts. Among the benefits, you'll experience, market-specific briefings and seminars by in-country experts; pre-arranged and customized business-to-business meetings through the U.S. Commercial Service's Gold Key Matchmaking Service; company site visits and VIP networking receptions for business leaders and elected officials.

To give you insight into the opportunities in Mexico, this newsletter features a market highlight produced by the U.S. Commercial Service. We'll include highlights on other markets in upcoming newsletters.

Happy Exporting!

Going Global: Wavetronix LLC

Imagine an intelligent transportation system, where vehicle detection devices act as the eyes and ears of the roadway, seeing and tracking all vehicles across all lanes, at all intersections, to ensure saftey and increase efficiency.

Wouldn't it be exciting if such a system could predict movement, monitor for pedestrians and cyclists, adjust to changing conditions and even ensure safety in the "dilemma zone," that dangerous flicker of time when the traffic light turns yellow and a driver must make a split-second decision to stop or go.

No need to imagine. Intelligent transportation systems (ITS) are the present, and Provo-based Wavetronix is at the forefront of the industry with the most capable, reliable and complete selection of ITS solutions deployed across the globe. Launched in 2000, the company has grown to become a global leader in ITS, with offices in North and South America, France, the United Kingdom, China and Singapore, and a global network of dealers.

Ensuring safety and increasing efficiency is what Wavetronix does. For example, in 2008, when China's infrastructure construction couldn't keep up with population demand prior to the Beijing Summer Olympics, Wavetronix was engaged to develop a traffic detection solution.

The company notes that China is one of the fastest growing vehicle markets in the world, with an estimated 20,000 new vehicles hitting the road each day. Wavetronix successfully embraced the challenge to quickly and easily install an ITS powerful enough to handle Beijing's tough traffic problems throughout the Olympics and beyond. The solution was SmartSensor HD technology that accurately detects vehicles on up to 22 lanes of traffic and communicates directly with the Traffic Management Bureau.

Similarly, the company's ITS solutions were deployed to manage traffic and ensure safety around construction zones at London's Heathrow Airport during the airport's massive expansion and renovation project in preparation for the 2012 Olympics.

And in Kazakhstan, where the city of Astana has experienced a population boom expected to top more than one million residents and a tourist trade that exceeds 500,000 visitors annually. The city needed powerful, accurate and flexible vehicle detection to form the basis for its ITS infrastructure. What's more, the detection system had to withstand extremely cold temperatures dipping below -40 degrees Fahrenheit. Enter Wavetronix. Unaffected by cold temperatures, its SmartSensor technology allows Astana's traffic infrastructure to keep up with the growing and changing population.

Having outgrown its current location, in Q4 2017, Wavetronix announced its acquisition of 68 acres in Springville for its global headquarters. The company says construction will begin this spring. Located south of Hobble Creek on the east side of I-15, the land provides room for future growth and the opportunity to interface the Wavetronix campus with the natural environment and waterway.

Although Wavetronix has offices and employees across the globe, the company is still a tight knit family and its customers are partners that share a passion for making transportation more safe and efficient. Hence, the company not only sells ITS products, but also provides training opportunities to help its partners understand how those products can solve their real-world traffic and safety challenges.

To learn more about the company visit Wavetronix.com or call 801-734-7200.

WTC Utah Launches Monthly Podcasts

Stay connected with WTC Utah via our monthly podcasts. We're dedicated to helping Utah companies compete and succeed in the international marketplace and our podcasts support that effort via timely interviews focused on trade deals, immigration policy, tax reform, current affairs that impact global businesses and more.

New podcasts will be posted to our website each month. Tune in to our inaugural episode on SoundCloud to learn about Utah's corporate recruitment strategy and new cybersecurity laws that impact Utah businesses exporting to or doing business in the European Union. While you're on SoundCloud, remember to subscribe so you don't miss any of our future podcasts.

Utah Export Acceleration Grant Pitch Competition

Join World Trade Center Utah on Jan. 24 from 1:30-3 p.m. at the Sorenson Impact Center's Winter Innovation Summit for our inaugural Utah Export Acceleration Grant Pitch Competition! Seven of Utah's top 2017 Export Acceleration Grant recipients will compete for the chance to receive $15,000 (first place), $10,000 (second place) or $5,000 (third place).

This competition will bring together some of the top up-and-coming small businesses in Utah looking to sell their products in international markets. Competitors will have the chance to pitch their ideas to some of the state's most experienced international business leaders.

This break out session at the Sorenson Impact Center's Winter Innovation Summit is free and open to the public to attend. Click here for more details. To register for the Winter Innovation Summit click here.

Southern Utah Reception

Join EDCUtah, World Trade Center Utah and the Salt Lake Chamber at a Southern Utah Reception Jan. 10 from 7-10 p.m. The location is Entrada at Snow Canyon Country Club and the event is an evening full of networking and brief presentations focused on economic growth in Southern Utah. Click here for more details or to register.

Market Highlight: Exporting to Mexico

This article was written and prepared by the U.S. Commercial Service in Mexico. If you are interested in doing business in Mexico, consider a Gold Key Matchmaking Service to help your business get connected with valuable and vetted business partners in country. Reach out to Commercial Service Utah for additional market or service information.

Mexico's $1.1 trillion annual GDP makes it the second largest economy in Latin America and the 15th largest economy in the world. Mexico has a large, diversified economy, and its increasing prosperity is linked to its deepening trade and investment relations with the United States over the past two decades.

Today, Mexico is our third largest trading partner, after Canada and China, and second largest export market. Two-way trade in goods and services totaled nearly $1.6 billion daily in 2016, and this trade directly and indirectly supports millions of U.S. jobs. Mexico imported $231 billion of U.S. products in 2016 and U.S. exports of services to Mexico were $31.1 billion for 2016, for a total of $262 billion in U.S. sales to Mexico. Further, Mexico is the first or second largest export destination for 28 U.S. states and is the third largest agricultural export market for the United States, taking $18.7 billion in U.S. agricultural products, including corn, soybeans, dairy, pork, beef, fish and forestry products in 2016. Mexico brings in nearly four-fifths of its total food imports from the United States.

Both countries have nearly $130 billion in bilateral, reciprocal foreign direct investment (FDI). Mexico is the 16th largest investor in the United States, having invested a total stock of $34.4 billion at the end of 2016. The FDI stock between the two markets has risen more than six-fold since 1996. U.S. affiliates of Mexican-owned firms, in such diverse sectors as cement, baked goods, retail and publishing, employed 77,800 American workers in 2014. Over the last 20 years our supply chains have become increasingly integrated. On average, Mexican exports to the United States contain nearly 12 percent U.S. content, supporting U.S. jobs and production. In the auto sector, the North American content can reach upwards of 70 percent, according to industry sources.

The North American Free Trade Agreement (NAFTA), which came into force in January 1994, created a free trade zone for Mexico, Canada and the United States. As a result of NAFTA, there are no tariffs for qualifying goods and services traded between the three countries. In this time frame, U.S. goods exports to Mexico and Canada grew from $142 billion in 1993 to $496.9 billion in 2016.

NAFTA has been at the center of the U.S.-Mexico commercial relationship. In 2016, with two-way trade totaling just under $580 billion, the United States had a $7.6 billion surplus in trade in services and a $63.2 billion deficit in trade in goods with Mexico. This trade deficit in goods represented 8.6 percent of the global U.S. goods trade deficit ($736.8 billion). While our economies and businesses have changed considerably over the last 24 years, NAFTA has not.

The United States seeks to support higher-paying jobs in the United States and to grow the U.S. economy by improving U.S. opportunities under NAFTA. A review of NAFTA will help make the United States, and North America, a stronger, more attractive place to do business and a model for the rest of the world in the 21st century. To this end, all countries began negotiations on August 16, 2017. Topics that will help inform the direction, focus and content of the NAFTA negotiations include: trade in goods; sanitary and phytosanitary measures; customs, trade facilitation and rules of origin; technical barriers to trade; good regulatory practices; trade in services, including telecommunications and financial services; digital trade in goods and services and cross-border data flows; investment; intellectual property; transparency; state-owned and controlled enterprises; competition policy; labor; environment; anti-corruption; trade remedies; government procurement; small- and medium-sized enterprises; dispute settlement; and currency.

Mexico is a member of the World Trade Organization (WTO), the Asia-Pacific Economic Cooperation (APEC), the G-20, and the Organization for Economic Cooperation and Development (OECD). Mexico has more free trade agreements (FTAs) than any other country in the world – 12 FTAs covering 46 countries – which include the European Union, European Free Trade Area, Japan, the Pacific Alliance, Israel, and ten countries in Latin America. For U.S. exporters, this means the Mexican market is one of the most open and competitive in the world.

Mexico is the most populous Spanish speaking country in the world. Seventy-nine percent of its 123 million inhabitants live in urban areas. Ten percent of the population is considered wealthy and about 46 percent live in poverty. The remaining 44 percent of the population is considered middle class. Mexico has a very young population with a median age of 28. It offers a large market with a GDP of approximately $1.1 trillion with a 2016 estimated per capita income of $18,864 (purchasing power parity). There is a large installed base of manufacturing in a wide range of sectors.

Although Mexico's GDP growth has slowed in the past few years, the growth rate has exceeded expectations. The International Monetary Fund recently revised its estimated real GDP growth from 1.7 percent to 1.9 percent in 2017, with growth strongly tied to the U.S. economy and world oil prices. In 2013 and 2014, Mexico passed sweeping reforms in the energy, telecom, labor, financial, and education sectors. These reforms should enable Mexico to increase its global competitiveness. The energy and telecom reforms particularly offer a multitude of new opportunities for U.S. firms.

Toolbox: Adapting Your Product

Earlier this year, World Trade Center Utah launched its "10 Tips to Help you Think, Act and Succeed Globally." Since the launch, we have featured corresponding articles in the export toolbox section of our newsletter. We are pleased to revisit these "10 Tips" and dig deeper into topics that will be important as you pursue international business opportunities. Our fourth tip, "Who Wants What You've Got," encouraged you to pro-actively search for promising foreign markets. This article provides valuable information on how to prepare your product to sell in a foreign market.

In order for your goods or services to be successful internationally, you need to ensure that your product or service is accessible, appealing and usable in each foreign market. In Tip #1 we discussed making sure you have buy-in from management before going global. This tip may test that buy-in.

Altering your product to meet the needs of a new environment is something you will need to consider. This type of market preparation will demand management support and resource commitment. Also, you should consider reaching out to in-country experts to supplement your knowledge of a foreign market's regulations, culture and consumer trends.

As you look internationally, you should consider what changes need to be made to your product prior to penetrating a new market. You may need to redesign your product, alter your service processes or change your packaging and labeling so your customers can use, understand and enjoy their purchase. If you currently offer a variety of goods or services and are considering product adaptation, we recommend that you start with a limited number, even just one product. Start by adapting what your research tells you will be most successful in your target market. By starting slowly, you can gain great insight from consumers' interactions with that single product, allowing you to better adapt your other products in the future.

Regulatory and Industry Standards Adaptations
Government and industry regulations may very well be your largest hurdle to clear in preparing for foreign market penetration. These regulations may include product size, contents, specifications, origin of components, system of measurement and much more. While some regulations may not seem practical or reasonable, they should be seen as the rule in foreign countries. Not complying with these regulations may cause your shipment to be delayed or rejected upon arrival in a foreign country. If this occurs, you may have to coordinate and pay for the return of your shipment.

Be proactive about figuring out what the regulations are. For example, if you are looking to sell electronic devices in Europe, you will need to adapt your product's voltage capacity to meet the European "CE" (electronic) certifications. Other markets have similar regulations that will require an investment of time and money for compliance. WTC Utah can help you identify the organizations that can assist you through the process of receiving your CCC, UL, CSA, GOST-R, and CE markings.

If you feel the government regulations are significantly overbearing or unreasonable, contact the U.S. Commercial Service, who can request a review from the foreign country. In some cases, the regulations have been altered or even lifted.

Consumer Trends
Even if your product meets government regulatory, industry and technical standards, if the consumer isn't interested, your adaptations are useless. Remember that foreign consumers will have different tastes based on their unique trends in lifestyle, wealth, education, religion and culture. The factors that can drive a consumer either to or away from what you offer should be weighed heavily as you consider adapting your product for foreign markets and consumers.

For instance, if you were the producer of a popular line of toys based off of a children's television show in your domestic market, it would be beneficial to do some research on television programming trends in foreign markets before determining a country to export to. Just because something is popular in one country, doesn't mean it is in another. Studying consumer trends, adapting a new line of toys and aligning it with specific programming in the new international market would be a much better approach than trying to push what's popular in your domestic market.

In some cases, you may need to go beyond adaptation for one particular market and standardize your product across the globe. Standardization is a good option for companies selling in high volumes and in multiple international markets. Standardization simply means adapting your good or service to meet the regulations and certifications of all the foreign markets in which you sell. For example, if you produce a touch screen for cellular phones and your goal is to sell your screen to phone manufacturers across the globe, it would be wise to make one touch screen product that meets most countries' certification requirements.

Packaging and Labeling
In addition to product adaptations, you will likely need to alter your packaging and labeling for a foreign market. Often times, consumers are first introduced to your product through its packaging. As such, you must first consider translation if you are selling in foreign countries. Even though English is a commonly spoken language around the world, other countries' governments will likely require language translation on your packaging to help consumers understand your product and utilize it safely. Additionally, are the colors or graphics on your current packaging appropriate for your foreign markets? In some countries, certain colors or symbols can be reserved for sacred purposes, while others may be offensive. Finally, is the product information adapted to meet generally accepted local standards and local regulations? If you are selling to a country where the metric system is their system of measurement, make sure information on your package is adjusted accordingly. Similarly, do you have all the required information, instructions or disclosures on your package to meet government regulations?

As you go international, please consider all of the product/packaging adaptations that have been mentioned in this article. As we discussed in tip #5, Know the Rules of the Game, your product needs to be compliant with local regulations, otherwise it may be denied entry into a country.

To learn more about how to adapt your product for foreign markets, contact the WTC Utah Trade Services team at exportassistance@wtcutah.com.

Upcoming Events
Jan. 10 Diplomatic Breakfast – The Future of Transatlantic Trade: Views from Europe
Jan. 10 Southern Utah Reception
Jan. 12 Mobile Office Hours: Washington County
Jan. 16 Utah Economic Outlook & Policy Summit 2018
Jan. 18 Doing Business in Mexico Seminar
Jan. 23 Diplomatic Luncheon – Consul General of the UK
Jan. 24 Utah Export Acceleration Grant Pitch Competition
Jan. 29-Feb. 1 Arab Health 2018 Trade Show
March 6-8 JEC Composites World 2018 Trade Show
April 9-13 Mexico Trade Mission
June 17-20 OutDoor Trade Show
July 16-22 Farnborough International Airshow
September 2018 Taiwan Trade Mission

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