If your business engages in import/export activities with the European Union, or you’re in the food and beverage, agriculture, automotive, financial services, telecommunications, energy or transport industries, you’ve probably heard of CETA. But if you’re not familiar with the still-to-be-ratified Comprehensive Economic and Trade Agreement (CETA), you would be wise to sit up and take notice. Because even if you think your business won’t be affected, with the eventual elimination of over 98% of tariffs currently on EU-produced goods and services coming into Canada, chances are it will.
For some businesses there will be significant competitive risks and for some will come significant rewards. But with proper planning, there are potential benefits for all.
Should your business be one that may be faced with the pressures associated with increased competition, for example, due diligence and planning will go a long way towards not only protecting your business when the time comes, but it may even take your business to new heights.
A good first step is to take a close look at your operations to determine where improvements can be made and efficiencies optimized. A potential re-alignment of your business model in order to vie with lower-priced or higher quality goods is another activity that might be added to the “to-do” list. It might also be worthwhile to examine your product line to determine if some redundancies should be made, or whether expanding or diversifying are sensible options.
Another challenge for some business owners is how to best prepare for higher volumes that may or may not come—and to prepare for it without a considerable increase in spending. As such, adopting innovative and less costly solutions might be the best way to unlock capacity in your operations.
CETA will also present opportunities for many Canadian companies to become larger players on the global stage. Examining whether an acquisition, merger or partnership(s) in this market is a viable option for your business is a logical first step. This could allow you to more seamlessly take advantage of not only the EU market, but its proximity to other large global markets, specifically North Africa and the Middle East.
None of the above will, nor should, happen overnight. And many of the decisions you make may require financing, and that often takes a considerable amount of time to put in place. By planning well in advance, you are more likely to make well-thought-out and strategically sound decisions and plans that will give your business the best chance of success.
In fact, undertaking the above exercises have long been necessary components to the creation of, or changes to, any business or growth strategy. If it takes the onset of CETA for you to examine your business holistically, in an effort to achieve your strategic objectives, then it can’t be all bad.