North East companies looking to export to America are being urged to look for opportunities beyond its major cities.
John Dickerman, head of the Washington DC office for the CBI, was speaking on a visit to the North East where he met with firms in the region to update them on the trading climate between the UK and the US.
He said the famed “special relationship” built on shared history, language and the rule of law was still intact, but that those bonds needed attention in the wake of the UK’s vote to leave the European Union.
Tensions surrounding the US presidential election, with both candidates looking to protect American jobs, and the failure to agreed the TTIP trade deal, also showed the fragile nature of trade links between the two countries.
Those issues make it more important than ever for North East companies to look for export opportunities in the US, but Mr Dickerman said too many firms targeted places like New York and Los Angeles and ignored the chances to do business in smaller regional centres.
He said: “It may seem like a simple market to invest in because of the shared law and language links but in reality it’s 50 different markets.
“Make sure you have the right location picked out, make sure you have the right partners in that location and understand that if one week you invest in California, it doesn’t mean that next week you can open an office in New York as well.
“Making sure you look at location is very important. The notion of regional centres is as important in the US as it is in the UK. We would have the tendency to call some of these places secondary markets in the US, but they’re not secondary, they’re just smaller than the established markets. Cities like Denver, for example, of Portland Oregon, or Seattle. There are fantastic opportunities and, talking practically, there are huge tax breaks too and it can be much easier to get your goods to market.”
In a bulletin to members earlier this year, the CBI highlighted the extensive nature of trade links between Britain and America, pointing out that UK firms were investing in every state while many US firms, such as Procter & Gamble, were major players in regions like the North East.
But the bulletin said that “there is so much work to be done to make it easier for British and American businesses to invest in each other’s economies, trade with one another, and move across each other’s borders.”