Economy

SMEs See Going Global as Risky Business

Plus: Talks stall on Trans-Pacific Partnership; major shake-up in the airline industry—in this week's Export Wire for Canadian small business

Written by John Lorinc

Exporting can be a risky business: While the federal government is preparing to launch a major promotional push to encourage Canadian SMEs to consider Europe as an export market (read: Feds Want YOU to Start Exporting), there’s evidence that entrepreneurs abroad believe that such growth plans are increasingly risky. According to the latest quarterly SME risk report from U.K.-based Zurich Insurance, British entrepreneurs believe there’s more uncertainty in off-shore expansion than a year ago, making the risk of business failure more likely. As Real Business reports,

” €˜The global risk environment is increasingly complex, which may be why nearly a third of SMEs feel there is more export risk in the current international market than a year ago,’ ” says Richard Coleman, SME director at Zurich Insurance.”

Trans-Pacific partnership talks stalled: Besides pushing the new trade agreement between Canada and Europe, Ottawa has also been part of a larger push to finalize the so-called “Trans-Pacific Partnership,” a twelve-nation trade agreement among the Pacific Rim countries. The TPP—which currently includes Canada, the United States, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam—represents a market of 792 million people and combined GDP of $27.5 trillion, or nearly 40% of the global economy, according to Canada.com.

But according to documents released last week by Wikileaks, the negotiators, including Canada’s, remain far apart on the issue of intellectual property protections, such as patent laws and copyright rules.

“The vastly differing positions on nearly 100 pages of text in the intellectual property rights chapter of TPP negotiations also show the dozen countries in the trade talks—including Canada—are nowhere close to completing the deal, argues University of Ottawa law professor Michael Geist, a specialist in intellectual property (IP).”

Shake-up in the airline industry: Thousands of business travellers, including Canadian entrepreneurs who travel to the U.S., can expect to see some significant changes in the air travel world thanks to the decision last week to allow the American Airlines-US Airways merger, despite earlier objections. The combined airline will be the world’s largest carrier. Aware of the impact on other airlines, the U.S. Department of Justice instructed the new company to give up slots at key hub airports to create more space for discount carriers, according to U.S.A. Today.

“The settlement will increase presence of low-cost airlines in Boston, Chicago’s O’Hare, Dallas Love Field, Los Angeles, Miami, New York’s LaGuardia and Washington’s Reagan National airports.

€˜This agreement has the potential to shift the landscape of the airline industry,” Attorney General Eric Holder said. “By guaranteeing a bigger foothold for low-cost carriers at key U.S. airports, this settlement ensures airline passengers will see more competition on non-stop and connecting routes throughout the country.’ “

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Originally appeared on PROFITguide.com