{"id":95121,"date":"2025-07-24T09:18:02","date_gmt":"2025-07-24T13:18:02","guid":{"rendered":"https:\/\/www.rbcroyalbank.com\/en-ca\/?post_type=rbc_my_money_matter&p=95121"},"modified":"2025-07-24T09:18:04","modified_gmt":"2025-07-24T13:18:04","slug":"how-canadas-free-trade-agreements-could-open-new-markets-for-your-business","status":"publish","type":"rbc_my_money_matter","link":"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/how-canadas-free-trade-agreements-could-open-new-markets-for-your-business\/","title":{"rendered":"How Canada\u2019s Free Trade Agreements Could Open New Markets for Your Business"},"content":{"rendered":"\n
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When exploring opportunities abroad, Canadian businesses tend to first look immediately south. However, with ongoing\u00a0trade and tariff instability<\/a>\u00a0between Canada and the United States, cross-border trade has become\u00a0more volatile and unpredictable<\/a>. In this new reality, businesses may plan to reduce their reliance on the United States as a primary market. With diversification becoming a priority business strategy, leaders may plan to explore new markets further from home.<\/p>\n\n\n\n

Free trade agreements could be the gateway to international markets for Canadian companies. Canada has 15 active\u00a0free trade agreements<\/a>\u00a0(FTAs) with 51 global markets, whose\u00a0combined GDP represents 66%<\/a>\u00a0of the global economy.<\/p>\n\n\n\n

The value of free trade agreements<\/h2>\n\n\n\n

Canada\u2019s FTAs include major, multi-country agreements, like the\u00a0Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)<\/a>, The Canada-United States-Mexico Agreement (CUSMA)<\/a>, and The Canada-European Union Comprehensive Economic and Trade Agreement (CETA)<\/a>; and bilateral agreements with trade partners like South Korea<\/a>, the United Kingdom<\/a>, Ukraine<\/a> and Colombia<\/a>.\u00a0 \u00a0\u00a0<\/p>\n\n\n\n

Free trade agreements<\/a> allow Canadian companies to sell products directly to consumers in those markets without facing additional customs tariffs. Not only does that allow Canadian businesses to reach those customers at a lower cost, but it allows them to remain on a level playing field, as Canadian-made goods can hit those foreign shelves at a price point that\u2019s closer to local competitors.<\/p>\n\n\n\n

FTAs also come with standardized regulations, which can help to make foreign markets more accessible, and countries within agreements will prioritize partner companies, giving Canadian businesses a competitive advantage. <\/p>\n\n\n\n

The opportunity for Canadian business to expand internationally<\/h2>\n\n\n\n

Canadian businesses also benefit from having a stellar reputation in the global market.<\/p>\n\n\n\n

Whether it\u2019s the relatively high health and safety requirements imposed on our livestock, agricultural and food products<\/a>, or the relatively low levels of corruption and criminality in its major industries, the \u201cMade in Canada\u201d label holds significant cache abroad<\/a>. Even if it comes at a slightly higher price than local alternatives, international consumers could be willing to pay a premium<\/a> to purchase Canadian goods.\u00a0<\/p>\n\n\n\n

International trade, however, isn\u2019t for everyone. Business leaders will need to prepare for the time, energy and financial commitments of expansion\u2014and not everyone who attempts to expand into foreign markets will find guaranteed success. With that said, expanding internationally could be one of the most effective ways for businesses to manage the volatility of the domestic market, and the unpredictability of cross-border trade with the U.S.. According to Export Development Canada (EDC),<\/a> businesses that export generate stronger earnings, grow more quickly, and display greater resiliency during economic downturns.<\/p>\n\n\n\n

How to identify potential new markets<\/h2>\n\n\n\n

Getting started in a new market requires significant research and planning<\/a>.<\/p>\n\n\n\n

The first step is identifying which market or markets are a strong fit for your offering. Depending on the product, service or industry, picking a suitable target could come down to sheer population, cultural similarities, existing competition, regulatory landscapes, to name a few factors.<\/p>\n\n\n\n

For most Canadian businesses, the simplest first step out of North America is to one of the large markets to the east or west. Given the practicalities of geographic regions, companies based in eastern provinces may choose to begind with countries across the Atlantic that are part of CETA, while those in the west often first look to CPTPP partners across the Pacific.<\/p>\n\n\n\n

RBC offers a free tool, RBC Global Connect<\/a>, that can help Canadian businesses determine which markets are most suitable for their global expansion. \u00a0<\/p>\n\n\n\n

Things to consider when assessing new markets<\/h2>\n\n\n\n

Those looking to expand overseas typically face a handful of hurdles along the way. Coming up with solutions ahead of time can ensure a smoother ride.<\/p>\n\n\n\n

For example, Canadian businesses looking to expand internationally should consider language, time zone, and cultural barriers<\/strong>. Often, that means working with a translator in each new market, connecting with a trade commissioner, or potentially setting up a field office to establish a local presence.  <\/p>\n\n\n\n

It\u2019s also important to investigate whether there are any legal or regulatory requirements<\/strong> that apply to your product or service in the market you\u2019re looking to sell into, especially those you haven\u2019t had to confront at home.<\/p>\n\n\n\n

Finally, it\u2019s important to consider how you\u2019ll move your goods<\/strong> to their new destination. For example, certain higher-end products might be worth moving by air, others may be more suitable to move by sea, and some may require temperature-controlled freight options.<\/p>\n\n\n\n

Before moving into a new market, it\u2019s important to understand how much shipping will cost, how long it will take and how to maintain quality control standards along the way.<\/p>\n\n\n\n

Find partners to help with your trade expansion plans<\/h2>\n\n\n\n

One of the best ways to explore international opportunities is by working with experts who have been there before.<\/p>\n\n\n\n

Accounting<\/h3>\n\n\n\n

Your accounting partners should also be able to help you consider potential cash flow requirements that may be necessary in the short-term, tax implications, and whether you need to register or file any other paperwork to do business in the foreign market.<\/p>\n\n\n\n

Logistics<\/h3>\n\n\n\n

Shipping and logistics partners can similarly help you understand your options for getting your product into the global market, including potential costs, timelines and unique challenges based on what you\u2019re shipping. \u00a0<\/p>\n\n\n\n

Trade commissioners<\/h3>\n\n\n\n

Trade commissioners, meanwhile, can connect you with local partners to help you navigate foreign markets, assist with translation and cultural barriers, or manage any emergencies or challenges that arise.<\/p>\n\n\n\n

Banking partners\u00a0<\/h3>\n\n\n\n

Finally, your banking partner can be instrumental in facilitating international transactions and currency exchange needs, managing cash flow, providing working capital loans, and trade products like letters of credit. They can also help connect you with the other partners listed above.<\/p>\n\n\n\n

RBC\u2019s four to six week Trade Accelerator Program (TAP)<\/a> provides Canadian businesses hands-on support from industry experts, research and planning expertise, ministry support services, information about funding and grants, and introductions to potential partners. The program is entirely free for RBC referred clients and has been instrumental in helping Canadian businesses of all shapes and sizes successfully expend their operations internationally.<\/p>\n\n\n\n

International trade isn\u2019t for everyone, but those who navigate new markets successfully often enjoy more successful and resilient businesses as we result. With free trade agreements across much of the global economy, a strong international brand, and increased volatility south of the border, now could be an opportunity for Canadian businesses to explore new opportunities abroad.<\/p>\n\n\n\n

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