WISCONSIN WORLDWIDE

Vol. 6 #4, March 2007

  State of Wisconsin Trade Mission to China and Japan

  Wisconsin Exporters Set a Record

Wisconsin firms shipped $17.2 billion worth of products to international markets in 2006.  That was a 15.1 percent increase over the previous year’s record of $14.9 billion.  Products originating in Wisconsin were sent to 202 countries and customs territories around the globe.  Canada continues to be the state’s largest customer, buying $5.4 billion worth of Wisconsin exports, a 4 percent increase over 2005.  Nearly 36 percent of Wisconsin’s exports to Canada are industrial machinery.  Major subcategories include engines and engine parts, parts for material handling machinery, and pumps and compressors.

Exports to Mexico, Wisconsin’s #2 export destination grew by 39 percent in 2006 and totaled $1.9 billion.  China moved up to third place with a 29 percent increase to $870.3 million, and Japan ranked fourth with a 6 percent increase to $738.8 million.  The United Kingdom took fifth place with a 6 percent increase to $686.5 million.  If the European Union was counted as a single country, it would rank as the #2 destination, accounting for 20 percent of Wisconsin’s exports ($3.5 billion).

Industrial machinery, including computer equipment, continues to be Wisconsin's top export commodity, growing by nearly 8 percent to $5.5 billion.  Electrical machinery ranked second with a 42 percent increase to $2.6 billion.  Medical and scientific instruments ranked third with an increase of 3 percent to $2.1 billion.  Transportation equipment ranked fourth with a 46 percent increase to $1.5 billion.  Rounding out the top five was paper and paperboard, with a 2 percent increase to $800 million.

Wisconsin's agricultural exports increased by 6 percent in 2006 to a record level of $1.4 billion, with meat and dairy products, animal genetics, and fats and oils all showing solid growth. Top destinations for Wisconsin agricultural products in 2006 were Canada ($576 million), Mexico ($96 million), Japan ($77million), China ($74 million) and Taiwan ($53 million).

  Canada’s Booming Oil and Gas Market

Few people in Wisconsin realize the size of the oil and gas reserves that the Province of Alberta in Western Canada possesses and the business opportunities that exist for Wisconsin exporters.  With 175 billion barrels of oil sands reserves, Canada ranks 2nd only to Saudi Arabia in global oil reserves.  Our northern neighbor is the 3rd largest producer of natural gas in the world.  Canada also has huge coal reserves.  Wisconsin’s only oil refinery receives all of its crude oil from Western Canada.

Because of the economic boom associated with the energy sector, Calgary, Alberta’s largest city, and Edmonton, the capital, have reached their growth potential.  Rather than encouraging additional in-migration, Calgary Economic Development is seeking new firms that can supply products or services from elsewhere around the globe.  While Wisconsin has strong trade ties with the Province of Ontario in Central Canada, in many cases a separate distribution network is needed to meet the demands in Alberta.

Over $31 billion will be invested in Canada’s energy sector in 2007.  Five major projects in the Albertan oil sands region will account for $12.5 billion, while $18.5 billion will be spent by over 100 firms involved in conventional oil and gas extraction in the province.  Demand is extremely strong for pipe, couplings, valves, pumps, metering equipment, tanks and vessels, and construction equipment and supplies.  Wisconsin’s Canadian Trade Promotion Office has been actively cultivating contacts among the distributors, wholesalers, and other market intermediaries in Alberta.  A delegation to attend the GO Expo, Canada's largest petroleum show with over 18,000 visitors and 400+ exhibitors is also being organized for June 12 - 14, 2007.  Participating companies will receive:

• Access to the tradeshow 
• Pre-screened one-on-one business appointments with interested distributors, agents, etc.
•  Detailed information about each company in advance of the meetings
• An average of 6 meetings during the show, both onsite and possibly offsite
• In-country market research
• Assistance with the follow-up after the show

The cost for joining the GO Expo delegation is $550.  It does not include transportation or lodging.  For more information about Canada’s booming energy sector or other trade opportunities in Canada, contact Mr. Stanley Pfrang, ph: (608) 267-0639, stanley.pfrang@wisconsin.gov.

  Mexican Market Potential

The Mexican market continues to be a strong one for Wisconsin firms.  Prospects for the Mexican economy in 2007, according to Latin American Monitor, include a 3.6 percent growth in GDP, a drop in oil output that could spur the country to allow private investment in the industry (currently prohibited by the constitution), and growth in the construction sector for both infrastructure and housing.  Concerns include the impact of a slowing US economy, and public outrage over a shortage of corn caused by increased demand by the US ethanol industry.

On February 20, the Consul General for Mexico in Chicago, Carlos Sada Solana, spoke at the University of Wisconsin - Milwaukee to address key economic and political issues under the new President, Felipe Calderón, who took office on December 1, 2006, after a contentious election.  (See our July 2006 issue for more details regarding the July election.)  Mr. Sada, who will be transferring to a position at the Embassy in Washington DC, highlighted key investment, labor, and energy reforms required to continue their economic growth.

On February 23, the US Ambassador to Mexico, Tony Garza, announced a one-year pilot program to allow cross-border trucking and further NAFTA’s integration of our North American economies.  Approximately 100 Mexican trucking companies will begin to carry international shipments to and from destinations in the United States.  American trucking companies will soon begin the same cross-border transportation in Mexico.  US Department of Transportation agents began their review of the Mexican trucks and drivers that will take part in the pilot program.  For more information about market opportunities in Mexico, contact our Latin America Specialist, Ms. Susan Dragotta, susan.dragotta@wisconsin.gov, ph: (262) 691-5147.

  European Delegations Visiting the Midwest

Two European trade and investment delegations, one from Spain and the other from Sweden, will be coming to the Midwest in mid-April and this may be your opportunity to identify potential customers, suppliers, investors, or joint venture partners.

  The United States, Brazil, and Biofuels

Biofuels were a major topic of discussion during President Bush’s trip to Brazil last week.  The world's two top ethanol producers, the United States and Brazil, announced on March 2 the creation of an international forum to help expand the global market for renewable energy resources.  The forum will also include South Africa, China, India and the European Union.  According to the Brazilian Ministry of Foreign Relations, the objective is to develop worldwide use and sustainable production of biofuels.  Two working groups will be created: one on exchange of information and another on setting standards and norms.

This year, Brazil will produce 17.4 billion liters of ethanol.  Domestic consumption will require 14.3 billion liters, and the remaining 3.1 billion liters will be exported.  By 2012, output is expected to reach 35.7 billion liters, with domestic consumption of 28.7 billion liters.  As the biggest consumer of biofuels, the Brazilian automotive sector is seriously concerned about development of the sector and fear that demand will be greater than production capacity.  At present, ethanol is blended with gasoline in Brazil at a 23% level.  Four out of five Brazilian cars can run on pure ethanol or gasoline or any combination.

Brazilian producers admit that it will be necessary to invest in productivity to satisfy the growing consumption of the fuel.  This creates a market for Wisconsin equipment exporters.  Brazil currently maintains a trade surplus and saw its exports grow by 16.9 percent last year, but imports, including capital goods, have been growing faster.  For more information about market opportunities in Brazil, contact our Latin America Specialist, Ms. Susan Dragotta, susan.dragotta@wisconsin.gov, ph: (262) 691-5147.

  Chinese Domain Name Scam

U.S. companies report receiving a “notice of domain dispute” email from a company in Shanghai.  The sender claims to be an authorized arm of the China Internet Network Information Center (CNNIC), which oversees domain names in China.  The message says that the sender has received an application by a company that is using a brand name and keywords that are the same as those owned by the U.S. company.  The sender asks the recipient U.S. company to contact the sender and dispute the domain name.

The goal of this scam is to get the U.S. firm to purchase additional domain names.  Our advice is not to respond and ignore this type of email. 

Instead, state businesses should proactively register their trademarks in China if they are receiving a lot of correspondence from Chinese businesses.  China is a “first to register” country, which means that a firm is not protected there unless its brand name and trademark are registered in China.  In addition, should a Chinese company register the trademark first, the burden of proof is on the other firm to show prior ownership and that it is a ‘famous and recognizable’ mark.  Most U.S. companies eventually end up winning local court cases, but only after considerable legal and travel expenses.

Trademarks can be registered by using the services of U.S. law firms.  The Wisconsin trade office in Shanghai also has a fee-based service for trademark searches and registration.  For more information on protecting intellectual property and trademarks in China, contact Commerce’s Asia Specialist, Ms. Beng Yeap, beng.yeap@wisconsin.gov, ph: (608) 266-1480.

  Nominations Sought for 2007 Governor's Export Achievement Awards

Each year, the Governor recognizes Wisconsin firms and organizations that have achieved extraordinary results in international markets or have contributed to Wisconsin's ability to compete globally.  Nominations can be submitted between now and April 13.  The 2007 awards will be presented on May 15, 2007 at the 43rd annual Wisconsin International Trade Conference in Milwaukee.

Any agricultural, forestry, industrial, high-technology or service enterprise successfully engaging in or assisting in the export of Wisconsin-origin products or services can be nominated.   Nominations will be evaluated for innovation, effectiveness, and special effort in growing exports, and enhancing employment, the economy, and the international prestige of Wisconsin.   Nominations can be made by an employee of the firm or organization or by a knowledgeable person from outside the organization.

Awards Categories
1.    Agricultural Exporter - food, farm, or forestry products
2.    Manufacturing Exporter - non-agricultural manufactured products
3.    Service Exporter - services provided to customers in other countries
4.    High Tech Exporter - scientific, medical, or other cutting edge products
5.    Export Assistance Provider - for firms or organizations that do not have direct international sales, but provide assistance to Wisconsin exporters.

Nominees/Applicants will be evaluated in relation to other firms in their same size category: small (1-49 employees), medium (50-299 employees), large (300 or more employees).  Export Plus categories may be created for nominees that have won in the past or have engaged in substantially superior efforts.

Submission
Nominations/Applications must include the following five sections:

• Cover Page with:
• Name of the nominated company or organization
• Street address
• City, state, zip
• Name of the firm's President or Chief Executive Officer
• Name of the firm's international sales executive, if different
• Telephone and FAX number and e-mail address of the international sales executive
• Award category—a) Agricultural, b) Manufacturing, c) High-Tech, or d) Service Exporter or e) Export Assistance Provider
• Nominee size—small (1-49 employees), medium (50-299 employees), large (300 or more employees)
• Also include: Name and title of the person making the nomination
• Relationship to nominated company or organization
• Telephone and FAX numbers and e-mail address of the person making the nomination
• Nominee Profile - describing the company, its products or services, and the customers to which it sells
• International Activities - describing the actions taken or strategies pursued by the nominee to increase international business over the last three years
• Examples of International Success - achieved over the last three years, such as increased number of export destinations, increased market share in existing international markets, or increased employment in Wisconsin to meet international demand
• Additional Contributions - made by the nominee that have led to the recognition of the importance of international business to other companies or individuals in the state

The Nomination/Application submission should be no more than four pages; however, appendices containing samples of promotional literature, press reports, or other supporting material can be included. Nominations/Applications must be received by 4:30 pm on April 13, 2007.  They can be sent by courier, mail, fax, or e-mail to:

Wisconsin Department of Commerce, International Division
attn: Tru Mwololo
201 West Washington Avenue, 6th floor
Madison, WI 53703
TEL: (608) 267-0587
FAX: (608) 266-5551
truphosa.mwololo@wisconsin.gov

Follow the links to view past Export Achievement Award winners by year or by category.

  New Way to Contact International Offices

In addition to phone, fax, and e-mail, you can now contact the Wisconsin Department of Commerce’s international offices by Skype.  Skype is an on-line service letting you communicate by voice or text over the internet for free with anyone else who also has the service.  It also allows you to make reduced-rate calls on a per-minute basis to any phone number, anywhere in the world.  Skype names for the directors of each of our international offices are:

Brazil – magda_volker or cmtomaselli or vaniazulatto
Canada – councilcanada
China – thechinahand
Europe – khsmith or katherineclarke1
Mexico – vincent.lencioni or marcosaints

More information on Skype can be found at www.skype.com.

Our China office has had to suspend its regularly scheduled extended office hours that coincide with regular Wisconsin business hours.  When Wisconsin switches to Daylight Savings Time, China will be 13 hours ahead of Wisconsin.  Mr. Paul Swenson, the director of our China Office, can stay late or arrive early when a Wisconsin business person needs to speak with him on a “real time” basis.  Requests should be made at least 3 days in advance by e-mail, paul.swenson@thechinahand.com with a cc: to beng.yeap@wisconsin.gov.  Because of his travel schedule, Mr. Swenson may not be available on certain days.

  Wood Packaging Material Certification

What do the Asian Longhorned Beetle, Emerald Ash Borer, and pine shoot beetle all have in common? Besides being environmentally destructive invasive species, they all entered this country as hitchhikers on non-heat treated or non-fumigated wood products and packaging materials.  Proper wood treatment and the International Standards for Phytosanitary Measures (ISPM 15) are essential to reduce environmental and economic harm associated with the introduction of invasive species.  Wood treatment is also critical in the efficient export process.  A Wisconsin exporter can suffer serious shipping delays if the pallets, boxes, crates, or skids on which their product is shipped do not meet the international standards.  Delays at the border can mean lost time, money, and contracts.

Wisconsin companies can ensure their wood packaging materials meet the ISPM 15 standards by having the wood treated at any one of many Wisconsin-based Northeastern Lumber Manufacturers Association (NeLMA) certified facilities.  NeLMA is accredited by the American Lumber Standard Committee (ALSC) as a rules writing and inspection agency for lumber, timbers, treated wood products, and wood packaging materials.

All solid wood components of the wood packaging materials (both hardwood and softwood species of the wood) need to be treated with heat treatment and/or fumigation depending on the destination country.  ISPM 15 requires wood packaging materials to reach a minimum of 56 degrees C (133 degrees F) for 30 minutes at the core of the material, and verified through a recognized and certified program.  Items such as plywood, particleboard, oriented strand board, and veneer are exempt from the standard.

Dunnage (wood packaging materials used to secure or support a product, but which does not remain with the product beyond the port of entry) should be stamped with the DUNNAGE mark which many countries are beginning to require.  Although fumigation is not required, ISPM 15 requires the dunnage be made from bark-free wood free from pests in order to receive the stamp.

The U.S. Customs and Border Protection Service recently announced that it may start issuing liquidated damages and/or penalties for violations of the wood packaging material (WPM) regulations on imports into the United States.  The requirements for proper marking and treatment have been in effect since July 5, 2006 and non-compliance may result in liquidated damages and/or fines up to three times the value of the entered merchandise.

For more information, or to find a certified wood treatment facility, please contact: Mr. Robert Dahl, Chief - Plant Protection at the Wisconsin Department of Agriculture, Trade & Consumer Protection, robert.dahl@datcp.state.wi.us, ph: (608) 224.4573 or visit the NeLMA website: http://www.nelma.org/.

  UW Survey on Language/Culture Services

The University of Wisconsin is an international leader in foreign language research and education covering every region of the world.  The Office of Corporate Relations (OCR) at UW-Madison is surveying state firms on the international business needs that can be satisfied by various elements of the university.  You can participate in the project by visiting http://www.surveymonkey.com/s.asp?u=35933045499.   

  Trade Pact with the Dominican Republic in Force

On March 1, 2007, President Bush issued a proclamation to implement the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) for the Dominican Republic.  The trade pact went into effect for El Salvador on March 1, 2006, for Nicaragua and Honduras on April 1, 2006, and for Guatemala on July 1, 2006. U.S. Trade Representative Susan C. Schwab said that the United States will continue to work with the remaining signatory, Costa Rica, to put the agreement into effect as early as possible. 

  Enhanced Calendar of Events

The on-line Calendar of Events at the Wisconsin Department of Commerce website has been enhanced and can now be searched by date, event topic, or location.  Check the site for information on upcoming international trade seminars, conferences, and trade shows taking place in Wisconsin and around the world.

  5th Annual Northeastern Wisconsin Global Trade Conference

The 5th Annual Northeastern Wisconsin Global Trade Conference will be held on Tuesday April 3, 2007, at the KI Convention Center in Green Bay.  The full-day conference, being held in cooperation with Congressmen Tom Petri and Steve Kagen, offers a variety of individual seminars on topics designed to assist area companies become more competitive in global markets.  Session topics include:

• Export/Import Documentation
• International Forms of Payment & Risk Mitigation
• Legal Aspects of International Distribution & Agency Agreements
• Cultural Impact on Global Business

Mike Nowak, President, Co-Founder, and Co-Owner of Coating Excellence International will be the opening keynote speaker.  U.S. Trade Representative Susan C. Schwab is the invited luncheon keynote presenter.  Early Bird registration for the event is available at the reduced rate of $70 until March 23, 2007.  Complete information on the program, speakers, and online registration is available.  For more information, please contact Mr. Fred Monique, monique@titletown.org, ph: (920) 496-2118.

  International Business Matchmaker Service at BIO2007

The world’s largest marketplace and idea exchange for the biotech industry, BIO2007, will be held in Boston from May 6-9, 2007.  Participants will have the opportunity to make contacts with potential joint venture partners, investors, academics and researchers, and customers from over 60 countries.  To help Wisconsin attendees identify key contacts from among the 20,000+ participants and schedule one-on-one business meetings with international counterparts that may have complimentary interests, the Wisconsin Department of Commerce is again offering the International Business Matchmaker (IBM) Service.  We will work with our overseas trade offices and other international contacts to introduce Wisconsin’s biotech community to key players from Australia, Canada, Europe, Japan, and elsewhere in order to maximize international business contacts at BIO.  The IBM Service is free of charge and will be available during all three days of the conference.  For more information contact Mr. Brad Schneider, brad.schneider@wisconsin.gov, ph: (920) 420-1796.

  43rd Annual Wisconsin International Trade Conference

On Tuesday, May 15 Wisconsin’s international business community will gather for the 43rd annual Wisconsin International Trade Day at the Italian Community Center, 631 East Chicago Street, in Milwaukee.  The event is the largest meeting of international business professionals in the state drawing people involved in export marketing and sales, shipping, finance, and education.  The conference opens at 8:45 am with a meeting of the China Council.  Governor Doyle will present his Export Achievement Awards and Michael Maibach, President European American Business Council, will speak on Trans-Atlantic Trade for Globally Competitive Wisconsin.  During the afternoon there will be three concurrent sessions on 1) India, 2) Export Compliance Issues, and 3) Competing in a Flat World.   The program will conclude with a networking reception at 4:00 pm.  Throughout the day, there will be booth displays and plenty of meeting opportunities.  More details will be posted soon at http://www.mwta.com.

  International Trade Office Directors Coming to Wisconsin