The Global Big Ten

Top U.S. export markets hold promise for international shows and pavilions

By Rayna Skolnik

As show managers try to decide where in the world to go next, their prime concern is identifying venues that represent the greatest potential for their exhibitors. One way to focus that search is to target the 10 largest U.S. export markets, as defined by the U.S. Department of Commerce (DOC). In 1995, those markets were Canada, Japan, Mexico, the United Kingdom, Korea, Germany, Taiwan, The Netherlands, Singapore and France. Together these 10 countries bought $378 billion in products and services from the United States last year.

The following thumbnail sketches present information that can not only help show managers select the most appropriate markets, but also help them and their exhibitors enter those markets. Each country profile includes:

• Context: The economic, political, regulatory and/or cultural characteristics that make the country a good trading partner for the United States (based on data from various DOC sources).
• Best Bets: The key industries with potential for U.S. companies -- based mainly on data from DOC's Office of Trade and Economic Analysis, with supplementary information from other DOC reports.
• Facilities: Cities that have major exhibition space.
• Clues and Caveats: Inside tips to help show managers and their exhibitors be more successful. (See "Don't go it alone" for names of individuals and organizations that can provide more information and support services, or act as liaison.)

Context: The U.S. share of the Canadian import market is 70 percent and climbing. Our largest market is also one of the easiest to trade with. "Canada is especially good for new-to-market exporters," says Sara Kent, International Trade Specialist in DOC's NAFTA office. "It's stable, many marketing trends are the same as in the U.S., and there's a lot of brand-name recognition." Other pluses: highly developed transportation and communication systems.

Best Bets: Computer software, computers and peripherals, telecommunications equipment (Canadian Telecom no longer has preferred status) and pollution-control equipment, thanks to stricter Federal and provincial regulations. Also strong: automotive aftermarket, furniture, medical equipment and electronic components.

Facilities: Major exposition cities are Montreal (two facilities), Quebec City (the new convention center opens, and the existing one closes, in late summer), Toronto (three; Exhibition Place will be incorporated into the new National Trade Center, opening next March) and Vancouver (one).

Clues and Caveats: Customs isn't the monster it once was, especially if you use a customs broker. All major facilities offer portal-to-portal service: customs officers on site can clear shipments delivered by brokers. "We take shipments from the airport right to the facility, so they are not delayed at customs," says Bernard Brault, Sales Manager for Schenker Customs Brokers in Montreal.

• The favorable exchange rate keeps exhibit costs down.

Context: Japan is wealthy, politically stable and recovering from its recent depression, notes Eric Kennedy, International Trade Specialist in DOC's Japan Export Information Center. Moreover, distribution systems are changing, and many retailers now buy directly from U.S. companies. "The Japanese banking industry is in turmoil, but that won't affect exporters," says Kennedy. Still, he cautions companies to do financial background checks on any Japanese firms they work with.

Best Bets: Computers and peripherals; electronic components; automobiles; medical equipment; computer software; architectural, engineering and construction services; building materials.

Facilities: Osaka (two facilities), Tokyo (four; the Tokyo Fairground is closed and has been replaced by Tokyo International Exhibition Center, known as "Big Sight," which opened in April) and Yokohama (one).

Clues and Caveats: So eager is Japan to attract exhibitions that in 1994 it passed the Convention Promotion Law. Cities that meet specified standards for convention facilities, accommodations and tourist interest are designated International Convention and Tourism Cities and receive government support. To date, 42 cities have qualified. "A key feature of the law is that corporate and individual contributions to event organizers are tax deductible, thereby encouraging such sponsorships," says Bruce Kanfer, Director, Sales and Marketing, for the Japan Convention Bureau in New York City.

• The keiretsu -- families of companies that prefer to buy from each other -- still exist, says DOC's Kennedy. But it's becoming easier to get them to buy from foreign companies.
• Business is extremely competitive. "Unless you have a brand-new or novel product, it will be difficult to penetrate the market," Kennedy says.

Context: Mexico's imports continue to grow, thanks to ongoing trade liberalization. More than 60 percent of U.S. goods now enter Mexico duty-free. However, the economy remains volatile, despite the government's austere fiscal policies and a package of international financial support. The country's GDP was down 7 percent last year but is expected to show growth for 1996, says Kent in the NAFTA office. "We encourage people to continue to export," she says, "but to take extra care with insurance programs, letters of credit and credit checks through Dun & Bradstreet."

Best Bets: Auto parts, pollution-control equipment, telecommunications equipment, building products and apparel. The country's infrastructure deteriorated in the 1980s, and emphasis on redevelopment continues. There are opportunities for U.S. companies to partner in this effort with Mexican firms. Also, U.S. companies may respond to the Energy Ministry's recent request for bids to build five electricity-generating plants.

Facilities: Three in Mexico City, one each in Guadalajara, Leon and Monterrey.

Clues and Caveats: Credit is tight in Mexico. But U.S. exporters can benefit, says Kent, by offering good financing terms, such as longer repayment on a letter of credit. "This may give them an advantage over foreign competitors," she says. "It's also a way to establish good business relationships."

• To avoid delays in shipments of exhibit materials -- and, later, exported goods -- be sure that customs documents are absolutely in order. The best way to do that: Use a customs broker.
• The exhibit industry is still very young. Although there are some purpose-built facilities, others are conversions that don't meet U.S. show managers' expectations. Also, "Some services are not as mature as those offered by U.S. facilities," says Bobbin Blenheim Group Senior Vice President Betty Webb. "U.S. exhibitors expect a higher degree of telephone, fax, taxicab and shuttle service."

Context: With no trade or language barriers -- and, presumably, no post-Revolution hard feelings -- the United Kingdom is an extremely attractive market for U.S. companies. The healthy U.K. economy led the European recovery. Although growth rates have slowed somewhat, they're still favorable. Opportunities for U.S. exporters in a wide range of industries are enhanced by pollution-control legislation, plans for further privatization of state-owned industries, National Health Service reforms and increased deregulation of telecommunications.

Best Bets: Computer software, pollution-control equipment, telecommunications, utilities, transport, drugs and pharmaceuticals, and medical equipment.

Facilities: Four in London; others in Birmingham, Harrogate and Glasgow.

Clues and Caveats: Unions are less prevalent and less powerful than they were. Or, as W.S. Richards, Executive Secretary of the Exhibition Industry Federation in London, puts it, "Our unions are more like those in Louisiana than in Chicago or New York."

• Be sure to find out in advance the procedure for reclaiming the Value-Added Tax, a sales and service tax levied in all European Union countries. Reclaiming can be complicated, but worth the effort. The U.S. consulate can provide details, as can currency-exchange firms.

Context: The Korean economy continues to thrive and is expected to remain stable. "Despite what's in the press, it's strong politically," adds Dan Duvall, International Trade Specialist in DOC's Asia Business Center. "It also has a good international credit rating -- it pays its debts." The government's plan to spend more than $100 million on infrastructure opens up many opportunities for U.S. exporters.

Best Bets: Computer software (this market is expected to grow 40 percent annually until 1999); power-generation equipment, especially for nuclear and thermal power, transmission/distribution equipment and turbines; telecommunications, especially broadcast and cellular telecommunications equipment; pollution-control equipment; transportation infrastructure, including high-speed rail and transport systems; and computers and peripherals.

Facilities: In Pusan, Seoul and Taejon.

Clues and Caveats: There's a lot of red tape -- what Duvall calls "non-tariff barriers" -- such as import licensing and registration procedures for certain products. Also, he says, "Korea writes many regulations in a way that leaves room for interpretation by the authorities case-by-case. So U.S. firms get conflicting messages about the requirements." But, he stresses, these problems are the exception, not the rule, and affect only certain types of business or industry sectors. "The overall market is very good; there are many successful companies. And new-to-export companies do start here because Korean companies seek out suppliers for the goods they want."

• Korea's chaebol -- the trading conglomerates -- are less structured than Japanese keiretsu, says Duvall. And U.S. companies get much business from chaebol subsidiaries.

Context: Europe's largest economy. Unification, despite its difficulties, has made the country even more important for U.S. exporters. The short- and mid-range outlooks in the eastern states may be mixed, but forecasters maintain that long-term prospects are good. The rewards should be there, for those who can handle the rough ride. Meanwhile, the western states maintain their high standard of living and are good prospects now.

Best Bets: Computer software, computers and peripherals, information services, electronic components, telecommunications, laboratory and scientific instruments, auto parts, drugs and pharmaceuticals.

Facilities: The major exhibition cities are Berlin, Cologne, Dusseldorf, Frankfurt, Hannover (site of the next world's fair -- Expo 2000) and Munich. But there are many others throughout Germany -- after all, this is the country that originated the trade fair.

Because the entities that own the facilities also organize many shows, few dates are available, and U.S. organizers will find their best opportunity in organizing, or cosponsoring, a pavilion. "The one exception is Frankfurt," says Fetze Pylman, Director of Research and Development for Miller Freeman B.V. in Maarsen, The Netherlands. Frankfurt is much more receptive to what are termed "guest events." Miller Freeman has organized shows there for 10 years -- the newest, Eurobank '97, debuts in September.

Clues and Caveats: Although there are few barriers to trade with the United States, DOC reports that government regulation is a high art in Germany. Exhibitors should be sure they know which regulations apply to their products and obtain necessary certification in advance.

• Exhibitors who do their homework can expect good results at German trade fairs. They are a highly respected marketing medium; German decision-makers rank them as their most important purchasing influence.

Context: A rich country with a strong economy and sizable foreign-exchange reserves. Consumers have money, too, thanks to internal economic policies that encourage investing. "Taiwan is stable politically, despite the awkward diplomatic situation with China," notes Duvall in the Asia Business Center. Add to these advantages the close commercial relationship between the United States and Taiwan that dates from the days of Chiang Kai-shek. "We had relations with the Nationalists when they were on the mainland," Duvall says, "and that relationship remained when we didn't have contact with the Communists." The political and commercial relationships go hand in hand, he explains.

Best Bets: Electronic components (growing at 20 percent annually), computer software (expected to grow 20 percent annually through 1999), household consumer goods, laboratory and scientific instruments, travel and tourism services.

Facilities: Taipei World Trade Center includes an exhibition building.

Clues and Caveats: Increasingly liberal import policies are making it easier to do business with Taiwan. Certain foods, cosmetics and pharmaceuticals are subject to import licensing regulation, says Duvall, but the regulations are less restrictive than those in, say, Korea.

THE NETHERLANDS

Context: "Holland's trade and investment policies are possibly the most open in the world," says Isabella Cascarano, Benelux and Italy Desk Officer at DOC. Also, the Dutch guilder is one of Europe's strongest currencies. But the country itself is not as large a buyer of U.S. products as the numbers suggest. Rather, as Cascarano points out, Holland is a major transshipment center, with many U.S. goods passing through en route to their ultimate destination. Rotterdam is the world's largest seaport, and Schiphol airport is the fourth-busiest cargo exporter in Europe. Because of the distribution system, as well as warehousing and value-added manufacturing opportunities, 7,000 U.S. companies have agents and distributors in Holland.

Best Bets: Computers and peripherals, telecommunications equipment, pollution-control equipment (this is in especially great demand in Holland itself, a densely populated country with stringent environmental regulations), building products, automotive parts and service equipment, medical equipment and supplies.

Facilities: In Amsterdam, The Hague, Maastricht and Utrecht.

Clues and Caveats: Because of the open trade policies, "this is probably one of the safest places for new-to-export companies to start," says Cascarano.

• The exhibit industry is well developed and held in high esteem, and there's a solid support system for newcomers. KLM, the national airline, "is very strong on cargo handling, and that's important for trade shows," says Dorrit Gruijters, Meetings and Conventions Manager of the Netherlands Convention Bureau in New York City.

Context: One of the world's most developed industrial, commercial, financial and consumer economies. "Continuity in government is the key," says Gary Bouck, International Trade Specialist at DOC's Asia Business Center. "There's been one guiding presence since the 1950s. It's a strong government, but a free-trading country, and the economy is prospering. Singapore is a transportation hub and financial center, and many things are moving there from Hong Kong in anticipation of 1997." Its superb location makes Singapore the gateway to southeast Asia, but it is itself an excellent market for U.S. products. "And it's virtually free of tariffs -- there are tariffs only on gasoline, motor vehicles, alcohol and tobacco," Bouck adds.

Best Bets: Electronic components, aircraft and parts, industrial process controls, oil and gas field equipment, electronic industry production and test equipment, construction equipment, laboratory and analytic instruments.

Facilities: The World Trade Centre and the Singapore International Convention & Exhibition Centre.

Clues and Caveats: As you'd expect in a wealthy country, costs -- including exhibiting costs -- are high. But you get a high return on your investment, says Kathleen Wilson, International Activities Manager, Expositions Division, for the Society of Manufacturing Engineers (SME) in Dearborn, MI. SME's Autofact Asia is in Singapore this year for the second time, and a third show there is being planned. The reason: "This is where the international traffic is," says Wilson.

• Some joke about not packing spray paint, but local laws are taken seriously and should be respected. Recent prohibitions: chewing gum in public, failing to flush a public toilet.

Context: The economic recovery is proceeding, but much will depend on the success of President Jacques Chirac's initiatives to create jobs and reduce the budget deficit. U.S. exports to France continue to grow, albeit more slowly than in recent years. The country remains receptive to U.S. industrial goods and services and high-quality, high-tech consumer goods. But because the market is mature, sophisticated and well-served by suppliers from around the world, major business breakthroughs are unlikely. Also, there is a growing tendency to buy within the European Union. Nevertheless, U.S. exporters can succeed with innovative products, new design, outstanding quality and service, and close attention to comparative advantages.

Best Bets: Telecommunications equipment, pollution-control equipment, computer hardware and software, plastics and resins, security/safety equipment, laboratory and scientific instruments. There are opportunities in niche markets: on the industrial side, in sectors of the packaging, printing and chemical industries; on the consumer side, in regional U.S. foodstuffs, software tailored to the French market and clothing featuring the "American look," such as Western wear.

Facilities: In Bordeaux, Lyons (two), Nice and Paris (four).

Clues and Caveats: An obstacle for new-to-market food exporters is the French consumer's unfamiliarity with the product. Exporters must emphasize education, including product demos, and invest in market development.

• Complex technical standards and lengthy testing procedures, mainly for electronics and telecommunications equipment, which usually must be done in France, increase costs for U.S. exporters. E.U. officials have simplified some procedures, and U.S. negotiators are also targeting them.

Don't go it aloneIf you're thinking about doing a show outside the country, your No. 1 source is the U.S. Department of Commerce. Show managers have high praise for its resources and services. "When I started my business, they went out of their way to offer information and support," says Patricia Farias-Barlow, President of Fapezel Comunicacion in Mexico City.

DOC's National Trade Data Bank, containing export promotion and trade information from 17 U.S. government agencies, is updated monthly and available on CD-ROM and the Internet, and at federal depository libraries. Partial contents: "A Basic Guide to Exporting," "Country and Industry Specific Market Research" and "Foreign Trade Barriers Report." Among DOC's services: promoting international shows, providing export counseling and financial support for exhibitors, and organizing trade missions. HBC Inc. International is launching three shows in Mexico this year that grew out of such a mission, says George Hoffman, President of the Fairport, NY, company. For guidance through the DOC maze, phone (800) USA-TRADE.

The World Trade Center Boston can act as liaison for the WTCs in the Top 10: KOEX in Seoul, CNIT in Paris, and the WTCs in Taipei, Mexico City and Singapore. (The WTCs in Osaka and Amsterdam have no exhibition space.) "We can refer show managers to local marketing organizations and provide logistical support," says Jon Leibowitz, Vice President at WTC Boston. "Many of the WTCs in the Far East are well-developed in their show-management abilities and represent tremendous partnering opportunities." Contact Leibowitz at (617) 439-5070.

The following country-specific assistance is also available:

JAPAN
Japan Convention Bureau offers show managers advice on selecting cities and facilities; arranges site inspections; provides contacts for facilities, accommodations, transportation and themed events; and helps associations contact their Japanese counterparts. Offices in Chicago, (312) 222-0874; Los Angeles, (213) 623-1952; New York, (212) 757-5641; and San Francisco, (415) 989-7140.

For exhibitors, Japan External Trade Organization (JETRO) has a wide array of programs and services to help them develop their exports to Japan. Offices in Atlanta, (404) 681-0600; Chicago, (312) 527-9000; Denver, (303) 629-0404; Houston, (713) 759-9595; Los Angeles, (213) 624-8855; New York, (212) 997-0400; and San Francisco, (415) 392-1333.

MEXICO
Hoffman, who has organized shows in Mexico since 1981, urges newcomers to visit the enormous research library now in the U.S. Trade Center -- formerly at the Embassy -- in Mexico City. "The staff are Americans on the U.S. Government payroll and are very helpful." He also recommends the American Chamber of Commerce in Mexico City. And he notes that some 20 U.S. states have offices in Mexico -- DOC can provide the names -- that have information about local laws and can assist in event promotion.

For information on specific industry sectors, Paul St. Amour, Director General of E.J. Krause de Mexico, suggests two additional sources: the Commerce Dept. of Mexico, known as SECOFI, which has offices in both Mexico City and Washington, DC, (202) 728-1700); and BancoMex, which has offices in most major U.S. cities.

UNITED KINGDOM
British Tourist Authority's London office (+181-846-9000) can act as liaison with venues. Exhibition Industry Federation (EIF), in London, can introduce show organizers to contacts at various venues, recommend hotels and provide names of suppliers who are members of the British Exhibition Contractors Association. EIF also has several publications of interest to both show managers and exhibitors. Contact: W.S. Richards, +171-498-3306.

KOREA
Korea National Tourism Organization can act as information source, liaison, and coordinate hotel rooms. Contact: Sean Nelen, Marketing Manager, (201) 585-0909.

GERMANY
The largest facilities have U.S. representatives. Names and numbers can be obtained from the marketing department of the German-American Chamber of Commerce in New York City, (212)974-8830. The U.S. reps can provide information for show managers and offer extensive support for exhibitors -- travel packages, freight forwarding guidance, booth arrangements and promotional assistance.

THE NETHERLANDS
The Amsterdam RAI Group, which manages both the Amsterdam RAI and the Maastricht Exhibition and Congress Center, is also a show organizer and eager to assist U.S. show managers in The Netherlands and throughout Europe. "It can be difficult to take a show into Europe, but we know exactly where the difficulties lie," says Marketing Manager Ginel Van Weering. "We are tradespeople, we are neutral, and we can help." Amsterdam RAI Group has a U.S. office: (508) 664-6455.

Also, at Jaarbeurs Utrecht (Royal Dutch Jaarbeurs), an 80-year old trade show facility and organizer, you will find assistance in targeting the European market. "Being international trade show organizers ourselves, we know how to establish mutually beneficial partnerships," says Michael Renssen, Commercial Manager of Royal Dutch Jaarbeurs-Expo Services. "It makes it easier when a local organizer is sharing his network with you and sharing your risk." Contact Renssen in Utrecht, +31 30 295-5495; or the U.S. representative in Santa Rosa, CA: Maude Bronzman, (707) 573-0501.

The Netherlands Convention Bureau works closely with convention centers, hotels and suppliers and can help with promotion, budgeting and legal technicalities. Contact: Dorrit Gruijters, (212) 370-7360, ext. 15.

SINGAPORE
Singapore Convention Bureau, a department of Singapore Tourist Promotion Board (STPB), acts as liaison with facilities and suppliers, and will assist in planning, coordination and promotion of an event. Contact STPB offices in Chicago, (312) 704-4200; Los Angeles, (213) 852-1901; and New York City, (212) 302-4861.

In planning Autofact Asia, Kathleen Wilson, International Activities Manager, Expositions Division, for the Society of Manufacturing Engineers in Dearborn, MI, received support from Singapore's Economic Development Board and Trade Development Board. "They're very involved," she says. "They helped me identify a local meeting management organization, and their satellite offices around the world helped promote the show." She notes that the Economic Development Board put her in touch with the highly influential ministries. STPB offices can provide contacts at the two development boards.

FRANCE
International Exhibitions in France, based in Arlington, VA, is part of the 49-country Promosalons network. A non-profit promotional organization, it can provide contacts at facilities and supplier companies. Contact: Pierre Wagner, (703) 522-5000.