By IAN ROSS
The elimination of trade barriers in eastern Europe and the induction of 10 new members to the European Union (EU) poses “significant opportunities” for Northern Ontario firms looking for partnerships abroad, says Sudbury’s trade advisor.
Paul Finley, the City of Greater Sudbury’s International Trade Advisor, says the EU represents a “wonderful market opportunity” for technology transfer to a trade block of more than 450 million people. Emerging markets in Poland, Czech Republic, Hungary and other former Iron Curtain countries are in great need of technological assistance that exists in North America.
“Trade is no longer boatloads of steel, it’s technology, intelligence and data.”
Innovative small- and medium-sized companies in the now-25-member country economic giant are waiting with state-of-the-art technologies for Canadian investors to strike joint venture deals with, as a means to expand into North American and eastern European markets.
Dr. Wilhelm Benfer, head of the Germany’s Barnim Region’s Office of Economic Development, and Peter Schreiber, Sudbury’s trade agent in
Europe, delivered a primer on potential opportunities in the New Europe to a group of Sudbury business people and community development officials during a conference at Sudbury’s Contact North office, May 10.
The event was hosted by the Greater Sudbury Development Corp. and Team Northern Ontario, a FedNor-sponsored trade initiative to promote increased opportunities for small and medium-sized enterprises to develop international markets and partnerships.
Through the brokerage of partnerships, they are trying to build a trade block relationship with Germany for the last four years and are now making in-roads into eastern Europe.
A visiting German delegation from Barnim spent the week of May 9-14 shuttling between Manitoulin Island, Sudbury and North Bay for meetings
with mayors, economic development teams, tourism officials, educators, First Nation community developers, mining and biotechnology researchers, and various companies.
In 2002, the City of Greater Sudbury signed a co-operation agreement with Barnim County, a region bordering the City of Berlin and the Republic of Poland with more than 8,500 registered companies.
Benfer finds there may be potential matchmaking opportunities in e-learning, health care, renewable energy and metal processing. Both suggest using German partners as a way to penetrate these new EU member countries.
Cultivating overseas partnerships and utilizing their contacts helps make business and social situations go more smoothly, says Finley. “If you have a local partner that you trust, that you can deal through, that knows the local market conditions...certainly that sets the stage for a greater acceptance of your product.”
The city is encouraging cross-Atlantic partnerships as a means to build business opportunities in both countries.
Finley says German and eastern European companies “are looking for beach heads here,” wanting to use private sector contacts in Northern Ontario to gain access to the U.S. market.
In the opposite direction, investment in these new member states is becoming easier. Foreign internationals can buy property if they are members of the EU, something that is close to impossible in some countries for Canadian firms. “That’s why joint ventures make sense, you have a different standing,” says Benfer.
The expanded EU means greater harmonization of economic and social systems, and environmental regulations with no limitations on the free movement of goods, services and labour across borders. Unlike ongoing NAFTA trade disputes, EU countries are bound by regulations to “play-by-the-rules,” says Benfer.
And subsidies for small- and medium-sized enterprises are available through state-run institutions like investment banks.
The history of the EU has shown a mechanism to improve the internal situations in new member countries. In 2000, the GDP per capital among the new EU countries was 50 per cent below the EU’s average.
But for those thinking eastern Europe might be a good source of cheap, Mexican-style labour, Benfer says forget about it. Based on experiences with Spain, Portugal and Greece, he expects wage rates in these countries will gradually rise through trade to reach western European standards.
