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United States of America
country brief
contents
overview ............................................................................... 2
key economic indicators .................................................... 3
politics .................................................................................. 3
imports and exports............................................................ 6
sector opportunities............................................................ 8
market entry......................................................................... 9
freight ................................................................................. 13
doing business in the united states ................................ 14
visa requirements and immigration ................................ 15
time difference................................................................... 15
contacts.............................................................................. 16
useful websites.................................................................. 17
This document is one of a series of free information tools for exporters produced by New Zealand
Trade and Enterprise. New Zealand Trade and Enterprise provides a wide range of standard
services and sophisticated solutions that assist businesses through every stage of the export
USA process.
Country
Brief For information or advice, phone New Zealand Trade and Enterprise on 0800 555 888, visit
www.nzte.govt.nz, or contact your Client Manager.
March 2006
1
overview
The United States has a powerful, diverse and technologically advanced economy. It is the
richest economy in the world and its GDP accounts for about 25 percent of the global GDP. The
US is arguably the nation with the most global economic influence.
Partly, the US strength lies in its size and market diversity. Besides having a variety of natural
resources, including both petroleum/natural gas and ores, it also has an agricultural sector, a
developed industrial base, a growing service sector, dominance in high technology and a skilled
and educated labour market.
Currently, US regional growth is predominantly in the Southwest (California, Arizona, New
Mexico, Texas, Nevada, Utah and Colorado) and in Florida. Current growth sectors include
defence and aerospace, software and high technology, biotechnology, and the service sector.
The US government and the states’ governments are some of the largest purchasers in the
economy, as are large corporations.
US Economic Mix
The US has one of the most advanced economies in the world and leads the way in the
information technology revolution and in many other areas of technical innovation. Its
manufacturing base accounted for around 12 percent of GDP in 2005 down whereas its
agricultural sector, while small, is still very productive.
The US is by far the world’s leading economic power with a GDP totalling USD$13 trillion in
2005; assuming international purchasing power parity (PPP), this was three times the size of
Japan’s output, almost five times the size of Germany’s, more than six times the size of the
United Kingdom’s, and China’s is rapidly growing at over 5 percent growth per year, should reach
the US within the next decade and a half. Although the volume of its exports and imports
exceeds that of any other country, the value of the US’s external sector as a percentage of its
GDP is comparatively low. Exports of goods and services accounted for only 9.2 percent of GDP
in 2005, down from 10.3 percent the previous year.
The US has an exceptionally diverse economy and is self-sufficient in most raw materials, with
the notable exception of oil even though it has its reserves available in Alaska. Leading industries
include motor vehicles, aerospace and defence, telecommunications, chemicals, electronics, and
computers and software. In the 1990s some traditional manufacturing sectors grew strongly by
embracing new technology and increasing labour productivity. Other sectors have struggled and
have relied increasingly on imported components and even finished products.
Services accounted for 60 percent of GDP in 2005, up 6 percent since 2000, with distributive
trades, real estate, transport, finance, healthcare and business services being the most
important. The impact of new technology has also been felt in the services sector, especially in
the delivery of many services over the Internet. In this economic mix, driven by information and
communications technology, it is becoming increasingly difficult to distinguish between services
and manufacturing in the traditional sense. Outsourcing to India, China and other larger
developing nations has become a political and economic issue in recent times.
The US Census Bureau now publishes a more detailed classification of service-producing
activities, including 47 industries in professional, scientific and technical services and 34
information industries in information services.
Sources: The Economist, Washington Post and the US Census Bureau
USA
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key economic indicators
Economic Indicator United States
Population 288.4 million (as of July 1, 2004 – based on US Census Bureau)
GDP US$11.6 trillion (2005, Economist Intelligence Unit)
GDP Growth Rate Approximately 1.1% annualised (as at Q4, 2005)
GDP Per Capita US$36, 406 (2004, US Bureau of Economic Analysis)
- Median Real Income US$42, 000 (2004, Economist Intelligence Unit)
- Disposable Income US$26, 400 (2005, US Dept Commerce)
- Personal Consumption
Expenditure US$25, 310 (2005, US Dept Commerce)
Consumer Price Inflation 1.3% (2006 – using the Moore Inflation predictor)
Total Imports US$1,996.9 billion
Total Exports US$1272.1 billion
Current Account Balance - USD$665 billion (as of July 2005; about 6% of GDP)
Exchange Rate: NZ$ 1NZD$ = USD$0.6657 (as at Friday, 3 March 2006)
Purchasing Power Parity NZD 5% undervalued against USD (Economist “Big Mac Index”
January 2006)
Economic Overview
The United States has recovered from a recession and growth has been slow but steady since
the previous country brief in 2004. The recovery has been led in part by a real-estate bubble and
military spending on the wars in Afghanistan and Iraq. The US was also hit by several strong
hurricanes in the 2005 season, which slowed supply of gasoline.
Unemployment is currently at 4.6 percent (Bureau of Labor Statistics – 6 February 2006), the
lowest since 11 September 2001.
The price of energy in the US has sky-rocketed since the last update and crude oil is currently
trading at US$64 a barrel (February 2006). Although this has not impacted consumer spending, it
has impacted businesses that rely on transportation of goods and raw-materials, and the airline
industry.
The Federal Reserve increased interest rates and as at February 2006, were 4.5 percent. This
has been done to cool high US productivity, in an economy that has reached capacity. It has also
affected exchange rates between New Zealand and the US.
politics
Overview
USA
Country The United States is a Federal Republic with a written Constitution, comprising 50 states, 1
Brief district (District of Columbia) and 1 Protectorate (Puerto Rico). Its traditions are largely
democratic, with universal suffrage for those 18 and older. The government is broken down into
March 2006
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three branches, with the intent of “checks-and-balances”. It comprises an Executive, which
encompasses the President and his appointed cabinet; the Legislature, comprised of a bicameral
Congress (a House of Representatives and a Senate – where bills can originate in each); and a
Judiciary, headed by the US Supreme Court which is the court of review and maintains supreme
interpretative powers of the US Constitution.
The US Constitution
The US Constitution of 1787 is based on a federal republic and the principle of the separation of
powers between the three branches of government. The Executive (the presidency and affiliated
offices), the legislature (Congress) and the Judiciary (the Supreme Court and auxiliary federal
courts) consequently act independently. The Constitution states unambiguously that certain
matters are meant to be overseen by the federal level of government; these are foreign affairs,
national defence, and maintenance of the currency and the regulation of interstate commerce.
State executives, legislatures and courts deal with issues not cited in the constitution as federal
matters. Thus state law covers such things as criminal law, civil law, the chartering of many types
of business, labour, education and charities. Below the level of state governments there are city
and county governments. Each of the 50 states of the Union has a separate constitution and an
associated division of power across the three branches of government.
The practice of federalism tends to vary according to whether a Democrat or a Republican holds
the presidency. Democrats since the 1930s have typically favoured “co-operative federalism”,
under which all states are offered subsidisation of welfare, education and various other
programmes in return for following policies set at the national level. Republicans usually adhere
to the classical view of federalism—the belief that federal and state governments are two
separate streams of government, which, as far as possible, ought to raise their own revenue to
finance respective government expenditure.
The Executive Branch
The President must be a US citizen by birth, at least 35 years old, and have been resident in the
US for at least 14 years. A presidential election is held every leap year on the day after the first
Monday in November. The president’s period in office is limited to two terms of four years each.
In the case of the death, resignation, removal or failure to qualify of the elected individual, the
presidency passes to the vice-president, then to the speaker of the House of Representatives,
then to the acting president of the Senate.
The Executive Office of the President, which is based in the White House, includes senior policy
advisers and offices responsible for the president’s correspondence and communications, the
Office of the Vice-President, the Office of the First Lady and the office of the vice-president’s
spouse.
The president nominates prospective members of the cabinet, each of whom then faces a
confirmation hearing by the Senate. Cabinet secretaries head the respective government
departments, which collectively constitute the national administration, and include agriculture,
commerce, defence, education, energy, health and human services, homeland security, housing
and urban development, interior, justice, labour, state (i.e. foreign affairs), transportation,
Treasury and veterans’ affairs.
The Legislative Branch
USA The US Congress consists of a Senate and a House of Representatives, and is the national
Country legislature. Each state elects two senators, each of whom serves for six years; one-third of the
Brief Senate is re-elected every two years. All bills, except revenue bills, can be introduced in the
Senate. The Senate also has the prerogative of providing its “advice and consent” to all foreign
March 2006
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treaties. The House of Representatives consists of 435 members. Each state has a quota of
representatives that is determined by the decennial census. Large states like Texas, California,
New York and Pennsylvania each elect more than 20 federal representatives.
The Senate has the power to confirm or reject presidential appointments, including the cabinet,
and to ratify treaties; the House of Representatives has the sole right to initiate revenue bills,
although they may be amended or rejected by the Senate
The Judiciary
The Supreme Court, which consists of a chief justice and eight other justices, is the ultimate
court of appeal on questions of federal law. The president, with the approval of the Senate,
appoints justices for unlimited terms of office. There are also 13 federal courts of appeal that
conduct trials according to federal law. These, in turn, supervise the 94 district courts. A separate
system of state courts tries cases arising under each state’s criminal and civil legislation.
Stability of Institutions and Transfer of Power
Transfers of power in the US are carefully described in the federal and state constitutions, and
are carried out with little controversy. The outcome of the US presidential election in November
2004 presented another constitutional challenge to a transfer of power, as accusations of voting
fraud has rebounded since the 2000 election. In this case, the election was disputed in the state
of Ohio. Part of the dispute lay in voting laws which govern not just different states, but also
counties, which was further exacerbated by some counties requiring paper trails from electronic
voting machines, while others still had 1960’s era punch card systems. As in the 2000 election,
while Senator John Kerry conceded defeat, the Supreme Court ultimately was given power to
hand the election to George W. Bush. However, the US remains a stable democracy based on
the rule of law and it is this as an affirmation of the inherent stability of the US political system.
State Legislatures
Each of the 50 states, except Nebraska (which has a unicameral system), has a bicameral
legislature which follows the model of the federal legislature; the states have certain fiscal and
legal rights; some states now limit the number of terms that can be served by their elected
representatives
Source: The Economist
Other Key Political Information
Politics in the US is dominated by two major parties. They are Democrats and Republicans, with
ostensibly 90 percent of support from the voting electorate. Minor-status parties include the
Green Party, the Libertarians, Natural Law Party, America First Party, and the
Reform/Independence Party all of which combined garner about 10 percent of the electoral vote.
USA
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March 2006
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imports and exports
Recent Trade Trends
Canada represents the US’s largest trading partner contributing to about 20 percent of overall
trade, even though trade has been in decline between the two nations since about 2000, and
despite the NAFTA treaty.
Mexico and China both rank second and third respectively, at about 11 percent each with China
increasingly significant to the US, and despite Mexico belonging to NAFTA. Chinese imports to
the US in 2005 totalled US$243.5 billion, although the US is concerned with Chinese imports of
textiles, “fake-goods”, China’s currency flexibility and its demand for raw materials.
In August 2002, Congress gave the President power to fast-track bilateral trade agreements
under the Trade Promotion Authority Bill. Under this piece of legislation, Congress only has the
power to reject or approve trade agreements as they are presented to them, and no amendments
may be made. This step has been a key in the ability for the President to make trade agreements
with other nations, especially in the DR-CAFTA area of Central and South America.
The US has recently concluded free-trade agreements with Morocco, Singapore, Chile, and
Australia.
Other recent key acts of Congress or pieces of legislation include the Bio-terrorism Act (2003),
the Farm Act (2002), and the Energy Policy Act (2005), as well as the aforementioned TPA Bill
and the four free-trade agreements.
Mr Bush's enthusiasm for trade liberalisation has concentrated on the DR-CAFTA region even
though bilateral trade agreements, such as Australia and Singapore’s have been forthcoming.
However, in 2002 the Administration placed tariffs on steel imports and signed into law a farm-
subsidy bill and in 2005, threatened China with textile tariffs and Canada with legal action on its
softwood lumber subsidies.
Recent Trade Trends Affecting New Zealand
New Zealand exports have increased to the US by roughly 4 percent in 2005 and closer to 6
percent since June 2001 in raw dollar values. Significant imports of lamb, fish and apples have
all seen increases to the North American region, particularly to the US.
Currency fluctuations and interest rates continue to influence exporters. At the time of writing, US
interest rates were 4.5 percent. Some US legislation, including labelling requirements, export
compliance and other requirements, could affect New Zealand exporters, but should not pose
many difficulties. Should you require information on specific conditions written into these laws,
please contact New Zealand Trade and Enterprise for a full explanation of requirements and
export advice.
New Zealand Trade and Enterprise’s aim is to maintain New Zealand’s position in the current
market situation. Those indications are for a continued slowing of the US economy, a
strengthening of the US dollar, and high priced petroleum. New Zealand exporters new to the US
market will need to bear this in when planning to consolidate their foothold in the US market and
gain good intelligence on the ground to facilitate a market entry strategy.
The tables below show a snapshot of the US market from a statistical point-of-view. We
recommend that this only be used as a guide.
USA
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Top Fifteen Countries with which the US Trades
This table shows the top 15 US trading partners. The values given are for Imports and Exports
added together. These countries represent 74 percent of US trade in goods.
Rank Country Exports (Year- Imports (Year- Total, All Percent of
to-Date) to-Date) Trade Total Trade
--- Total, All 904.3 1,671.4 2,351.3 100.0%
Countries
--- Total, Top 15 653.1 1,254.6 1,907.6 74.1%
Countries
1 Canada 211.3 287.9 499.2 19.4%
2 Mexico 120.0 170.2 290.2 11.3%
3 China 41.8 243.5 285.3 11.1%
4 Japan 55.4 138.1 193.5 7.5%
5 Germany 34.1 84.8 119.0 4.6%
6 United Kingdom 38.6 51.1 89.7 3.5%
7 Korea, South 27.7 43.8 71.4 2.8%
8 Taiwan 22.0 34.8 56.9 2.2%
9 France 22.4 33.8 56.2 2.2%
10 Malaysia 10.5 33.7 44.2 1.7%
11 Italy 11.5 31.0 42.5 1.7%
12 Netherlands 26.5 14.9 41.4 1.6%
13 Venezuela 6.4 34.0 40.4 1.6%
14 Brazil 15.3 24.4 39.8 1.5%
15 Ireland 9.3 28.6 38.0 1.5%
Source: US Census Bureau – Foreign Trade Statistics
* New Zealand is outside of the Top 15
US Top Ten Exports
This table shows the State’s top ten exports
State’s Top Ten Exports USD$ Billions
Machinery 132.6
Electrical goods 110.4
Motor vehicles 60.0
Aircraft 43.2
Medical products 41.8
Plastics 26.2
Chemicals 18.6
Pharmaceuticals 12.5
Gems and precious stones 12.3
Petroleum 11.0
Defence and security products 10.0
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US Top Ten Imports
This table shows the US’s top ten imports
US’s Top Ten Imports USD$ Billions
Machinery 162.0
Motor vehicles 156.3
Electrical goods 146.4
Petroleum 105.2
Medical devices and products 33.5
Chemicals 31.5
Apparel 30.0
Gems and precious stones 29.0
Furniture 24.5
New Zealand’s Top Ten Exports to North America, incl. US
This table shows New Zealand’s top ten exports to North America (NAM), incl. USA
New Zealand's Top Ten Exports to NAM NZD$ Millions
Beef 1,104
Casein 516
Wood products 396
Lamb 390
Cheese 240
Fish 214
Water and alcoholic beverages 103
Mussels 94
Apples 94
Source: Statistics NZ
sector opportunities
Some Key Opportunities
Marine
Opportunities for New Zealand manufacturers continue to lie in custom-built rather than
production boats and in high-end, high-spec marine equipment and accessories. Manufacturers
should continue to capitalise on the quality reputation they hold in this sector and on New
Zealand’s high profile in the Marine sector.
Wood Products
Opportunities exist for New Zealand manufacturers through DIY retailers, supply stores,
USA professional contractors, and other building companies. New Zealand pine has made some
Country headway into the market, partly due to supply constraints increasing the demand for the highly
Brief workable coniferous timbers with good machining properties.
March 2006
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Food and Beverage
US sales of imported food and beverage, especially in value-added goods, and private labelled
foods have increased. US consumers have a positive and strong image of New Zealand food
and beverage products. New Zealand Trade and Enterprise has been working closely with
specialty food companies in market, especially using programmes and promotions to expand
sales, and there is a need to continue to expand and attract export ready New Zealand food and
beverage companies.
Wine
There has been a strong expansion in New Zealand wine sales in the US and many wineries are
represented in the market. Sauvignon Blanc, Pinot Noir and Chardonnay continue to be popular,
and Americans are becoming increasingly sensitive to differences in regional varieties.
Software
The US software industry is one the largest segments of the US economy and continues to grow
even in the current economic conditions. Software sales are estimated to be in the US$200
billion range, and New Zealand software companies are encouraged to target niche markets
such as Health IT, RFID, and automation software. Exporters should keep in mind the
competitiveness of the US software industry and products should be uniquely positioned to gain
a prospective buyer’s attention. Pricing alone is not sufficient differentiation and that pricing
below the market value for the product will likely position the product as inferior in quality.
market entry
The US is a good market for a wide range of quality imported product, due to large numbers of
consumers with high disposable incomes. In looking at the US as a market for New Zealand
products, companies should consider the following.
Research regional markets to prioritise – the US is too large for most New Zealand
companies, so a regional or sector approach is a better consideration.
Research competitor information rigorously to ensure competitiveness and maximise
returns.
Produce sufficient quantities to meet the market size.
Cover high marketing and promotion costs.
Spend time and money travelling to and from the market.
Purchase insurance against product liability, but especially where personal injury is a risk.
Many successful companies find it easier and more effective to segment the market by region –
for example one country and 52 markets. It is important to bear in mind that some states are
significant global players in their own right. For example, California has a GDP per capita ranking
that would place it in sixth position if it were sovereign. There are also regional differences
between Southern and Northern California.
Depending on the product too, different regions in the US have different tastes and demands.
This difference is particularly pronounced between east and west and north and south, and can
USA
be profound in the Southwest, where there is a high demand for Hispanic goods. It is important to
Country
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undertake some assessment of which regions are likely to have the best consumer profile for
your product or service. Once a successful entry has been achieved in the market, and a
March 2006 distribution point established, it is easier to further penetrate other regions.
9
Collective activities embraced through New Zealand Trade and Enterprise programmes can be
beneficial for New Zealand companies that have excellent products to offer the US market, but
are unable to overcome volume and resource gaps. Many retailers require a steady supply of
large volumes of product. They will be particularly concerned that access to stock is readily
available as they will be aware of the distance to freight product from New Zealand.
Smaller specialty retailers who demand lower volumes often provide better prospects for New
Zealand companies. Competition for shelf space is fierce. Retailers like to reserve space for
items with the best turnover. Sometimes retailers charge sizeable slotting fees, which are
essentially product space rental.
New Zealand companies should consider entry points other than retail. The hotel, restaurant and
institution sector (HRI), for example, allows a New Zealand company to introduce its products
(initially with lower volumes), side-stepping issues of brand recognition, packaging, labelling
requirements, and competition for shelf, refrigerator, and freezer space. The experience can also
be a springboard to the retail market.
Agents/Distributors
The role of agents and distributors cannot be ignored. Rarely will retailers purchase directly from
manufacturers, particularly overseas manufacturers – they don’t have the time, resources or
warehouse space. Instead they rely on distributors and agents.
Some distributors have the capacity to import products, other however, rely on agents to manage
the import of the product and marketing the product to end-users. In this respect the agent acts
as an offshore salesperson for the exporter. A good agent can be an invaluable asset in the large
US market because distributors tend to focus their sales staff on existing major lines rather than
introducing new products. When considering representation an exporter should rarely deviate
from appointing regional agents/distributors.
Fulfilment Centres
Fulfilment centres are specialist operations in warehousing and US distribution. They have
become increasingly important in the supply-chain network, especially since the growth of e-
business services. They can allow a more competitive margin in the market by replacing a
traditional distributor with agents working in conjunction with lower cost fulfilment centres. This
approach is better suited to non-perishable items and consumer products. There is information
available on fulfilment centres that may be worth considering as part of a distribution strategy.
Setting up an Office in the US
Increasingly, companies are finding that it is critical to establish a presence in the US market to
achieve their foreign exchange earnings goals. This is particularly true of the software and high-
tech industry. Establishing a presence in the US brings the exporter face-to-face with end-users,
helps address after sale service and support, and enables the company to get detailed feedback
on its products and/or services. The following websites are useful. They have helpful hints on
incorporation, setting up a business and business filings:
www.mycorporation.com/incorporation.htm
USA
www.bizfilings.com
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www.corpcreations.com
March 2006
10
Product Liability Insurance
Products imported to the US have potential product liability exposure, but especially where they
may cause personal injury. Unfortunately with litigious US business conditions, the cost of
defending where the product is not at fault is often more expensive than settling out of court.
Where exporters have minimum presence in the market their exposure may not require
insurance coverage. The exception will be where an importer/retailer specifically requests an
insurance certificate. An exporter can help protect itself by understanding the relevant city, state
and Federal regulatory requirements where product will be sold and by stating appropriate
warnings on the packages and labels.
Exporters without a US presence may be able to purchase public liability insurance less
expensively through a New Zealand insurance company, but that company should be affiliated
with a US insurer, or have an understanding of US liability issues.
Patents
Obtaining patent protection in the US can be expensive and the options for ensuring that any
such patent is waterproof needs to be closely examined. Some lawyers advocate using the
principle of getting into the market ahead of the competition as the most effective strategy.
Whatever approach is taken the costs and advantages of taking out patent protection need to be
carefully considered.
Companies should also consider the cheaper course of copyright and trademark protection if
brand names/logos are an important part of the market entry strategy. Companies should take
specialist advice in this area before going into the market.
Anti-Dumping and Countervailing Duty/Anti Trust Legislation
The US enforces laws against unfair trade practices, such as the Anti-Dumping Law, which
makes sales to the US at prices lower than for sale in the exporter’s market illegal, and the
Countervailing Duty Law, which restricts the sale of subsidised exports. If you are exporting
products which compete with strong local producer lobby groups in the US or command a
reasonable proportion of the market you should familiarise yourself with this law.
The US government polices this legislation strictly and a number of successful cases have been
brought against New Zealand products. Needless to say, dumping product in the US is a short-
sighted strategy.
Anti-trust legislation is particularly severe on companies “collaborating” to fix prices. The
Sherman Act only takes effect however, where the parties affected have more than a 20 percent
market share
E-Business
The US remains the key driver for the expansion of e-business. An important trend is for an
expansion of business-to-business (B2B) e-business and many of the large companies are
moving from use of e- business to assist make the procurement of supplies/services more
competitive. Retailers are also reporting significant online purchases.
USA
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Many large retailers such as Kmart and Wal-Mart are using large fulfilment centres to meet the
Brief
demand for online purchases, with others such as the Gap and Nordstrom’s building special
March 2006 warehousing/distribution facilities for this purpose. Online purchases are dominated by travel,
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stocks, apparel and music. The slow down in the economy is however, impacting on the more
optimistic predictions for the expansion of online sales.
There are prospects for New Zealand companies to make sales in the US through developing
specialist e-business websites. However, considerable care needs to be taken to ensure delivery
is performed efficiently (through smaller fulfilment centres) and issues of duties and state taxes
need to be clarified and spelt out to the prospective consumer in any pricing information.
The rules on state tax collection for e-business have tended to be a “grey area” in the past with
some form of business nexus (office, bank account etc) being required in a state before state
taxes can be collected. This area should be checked out prior to web site establishment.
Marking/Bar Codes
Many American retailers and distributors require that the products they handle have Universal
Product Codes (UPC). This helps them to efficiently manage the flow of goods through their
warehouses, stores and checkout stands. UPC differs from EAN-13, the codes typically used in
New Zealand. Many US scanners still cannot read the EAN-13 codes.
There has been confirmation that the two systems will merge by 2005. You should therefore
check with your importer if a UPC code will be required by the end-user.
The cost of securing a UPC code is around NZ$500. If a UPC code is required you should
contact:
EAN NZ Ltd, phone +64 4 801 0833, www.ean.co.nz
Uniform Code Council, www.uc-council.org
Packing and Labelling
It is important to research the packaging and labelling requirements in the US for your product.
The Federal Trade Commission, the Food and Drug Administration and the Department of
Agriculture all have guidelines that must be met, depending on the product.
While a lot of information is available on the web, unfortunately the relevant sites for information
are often widespread and it is difficult to get an overview of what agencies are involved. In
determining this information close liaison should be maintained with existing/prospective
importers who will be very familiar with industry requirements.
Under the new Bio-terrorism rules there are new labelling and exporting requirements that also
need to be met.
A very good food labelling guide is prepared by FDA and is available online at:
http://vm.cfscan.fda.gov/~dms/flg-toc.html.
Essential requirements listed are:
statement of identity
net Quantity Statement
ingredient list
name and address
USA
Country country of origin
Brief nutritional information.
March 2006
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A beginners’ guidebook for exporting processed food products to the US is available from
www.nzte.govt.nz.
Tariffs
Tariffs are levied either as a percentage of the value of the goods being imported, or on the basis
of a specific amount of dollars per quantity of imports. In general, US tariff rates for manufactured
items and consumer goods are very competitive by international standards with most being
under 10 percent.
Punitive tariff rates occur in the agricultural, textile and sugar sectors where strict tariff quotas are
applied. Importing product outside the quota allocation normally attracts such punitive tariff rates
as to make import non-competitive (see below).
New Zealand Trade and Enterprise can provide free basic information on tariffs at an indicative
level to assist companies assess viability of market entry
Quotas and Restrictions
The US does operate strict quotas in certain product sectors, particularly beef, cheese, butter,
milk powder, sugar and textiles. It is recommended that exporters planning to export these types
of intermediate products consult with New Zealand Trade and Enterprise prior to export.
Detailed information on the operation of the beef and lamb tariff quotas is available from Meat
New Zealand. The dairy quotas in many instances provide specific quota volumes for New
Zealand products (e.g. cheese). These New Zealand-specific quotas are administered by
Fonterra until 2007 under the Dairy Industry Act. There is however still some prospects for import
of intermediate dairy products (covered by global quotas) which can be examined. Textile
products which are manufactured offshore (e.g. China) are also subject to strict quota rules
relating to country of origin and may be placed under China quota allocation typically if the origin
fabric is made there.
State Regulations
Laws and regulations governing certain businesses and products may vary from state to state on
such issues as, the sale of alcohol, environmental and safety controls and taxation. It is wise to
research these issues. As an example, while efforts are made to ensure harmony in building
construction codes, local municipalities have considerable jurisdiction to add local rules (e.g. no
cedar roofing tiles in fire risk areas) in the south-west US.
freight
Air Freight
A number of air freight liners including Air New Zealand offer air cargo services to the US through
Los Angeles. Exporters should note that space is limited and that careful planning in conjunction
with freight forwarders is important in ensuring access to the limited space available.
USA
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Direct shipping services to the US West Coast are operated by ANZ Direct Line, P&O,
March 2006 Columbus, Nedloyd and Fesco. These operators use a Vehicle Sharing Agreement (VSA), which
13
allows for two sailings to the West Coast per week. Sailing time to Los Angeles is approximately
17 to 19 days.
P&O Nedloyd/Columbus offer a service to the East Coast (Charleston, Norfolk, and Philadelphia)
which takes 23 days to reach Philadelphia. It returns via Houston. ANZ Direct Line operates a
transhipment service to the East Coast
Maersk Sealand offers a fixed day fortnightly service to the Americas. The service calls at
Tauranga, Timaru and New Plymouth in New Zealand and calls at various ports in the US,
Panama and Bahamas for transhipment to North and South America and Canada.
doing business in the united states
Cultural and Business Tips
Don’t fall into the trap of thinking that business in the US is similar to business in New
Zealand just because Americans speak English and part of the country was once a British
colony. There are differences not least of which, many Americans, especially in the south-
western states (California, Texas, New Mexico and Arizona), New York and Florida are of
primarily Mexican, Cuban, or Puerto Rican descent. The size and complexity of the market
and American culture impact on the way Americans conduct their everyday business.
American business people tend to be extremely busy and take the saying “time is money” to
heart. Make your requests, demands and dealings with Americans brief and to the point.
Often a telephone call is more effective than a letter when making initial contact with a
business.
Faxes and email are used widely. Try to respond to faxes and emails from the US overnight.
Non-response or ‘slow’ response is interpreted as a lack of interest.
Arrange an appointment with US business well in advance to ensure key personnel are
available. Once an appointment has been set, you may have as little as five to 20 minutes to
pitch your product. You must present your product with enthusiasm and verve and ensure
that the key advantages of your product or service are strongly emphasised at the outset!
Preparation of an “elevator pitch” may be helpful.
Cold-calling is usually a lengthy and frustrating process with an extremely low conversion
rate of calls to appointments.
Business is often conducted over breakfast, lunch or dinner. Don’t hesitate to initiate such
invitations and be prepared to pay.
Do not include academic credentials on business cards – they are seen as irrelevant and
pretentious.
Americans tend to be less formal than New Zealanders on first contact and the use of first
names is common.
USA
Country
Brief Business dress in the western US tends to be more casual than in the eastern US. There is
however, a strong trend to casual dress entering the market on both coasts led by the high-
March 2006
14
tech sectors. There are no hard and fast rules in this changing dress environment so when
in doubt a suit is the best option, on the grounds it is better to over-dress than under-dress.
Avoid using New Zealand slang – it’s not likely to be understood. Be aware that Americans
may not fully understand the New Zealand “ironic” or sarcastic sense of humour.
In general, Americans don’t know a lot about New Zealand. Be prepared to patiently answer
their questions and give them background material.
Tipping is normal and expected in restaurants (15 to 20 percent of the bill) and taxis (15
percent of the fare). Porters and bellhops should be tipped at least $1 a bag. Hotel maids
should also be tipped at least $1 a night. Valet parking attendants are usually tipped $1.
visa requirements and immigration
The US operates a visa waiver for New Zealand business and tourist visitors. A form is
completed on the aircraft prior to arrival. This is valid for up to 90 days. The immigration officer
will usually ask how long you will visit and provide the appropriate stamp. You should ensure you
tick business under visit purpose. People who abuse the visa waiver by working will be deported.
Such infractions will be noted on the computer and will prevent further visits. Please note – the
cost of infringing immigration rules is severe and the onus is on you to check you have the
correct visa.
Regular business visitors are able to request multi-entry visas from the US Consulate in
Auckland. These are recommended because you have more visit rights after you have been
through a process of embassy/consulate vetting. Extensions above the 90-day limit may also be
requested but will obviously be vetted more thoroughly.
New Zealand Trade and Enterprise has worked previously with Barbara Johnson, a New Zealand
Immigration attorney. She is available to assist New Zealand businesses for people wishing to
stay on in the US for extended stays. She can be contacted via email at barbara@johnson.co.nz.
time difference
The time difference between the US and New Zealand differs widely between 16 and 23 hours,
depending on the city and the time of year. Below is an indication of the time differences for
certain periods of the year.
Total numbers of hours American cities are behind New Zealand time
San Francisco, Phoenix, Denver New York, Detroit,
Los Angeles Atlanta
March 16 – April 6 20 19 17
April 6 – October 5 19 18 16
October 5 – October 26 20 19 17
USA October 26 – March 16 21 20 18
Country
Brief For the specific and current time in major American cities go to www.timeanddate.com.
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contacts
New Zealand Trade and Enterprise
Phone 0800 555 888
Websites www.nzte.govt.nz
New Zealand Trade and Enterprise in the US
Los Angeles
Postal Address New Zealand Trade and Enterprise
2425 Olympic Blvd, Suite 610 East
Santa Monica, California 90404, USA
Phone +1 310 633 7904
Fax +1 310 460 4450
Email info@nzte.govt.nz
New York
Postal Address New Zealand Consulate General
222 E. 41st Street, Suite2510
New York, NY 10017
Phone +1 212 832 7420
Fax +1 212 832 7602
Email info@nzte.govt.nz
Washington
Postal Address New Zealand Embassy
37 Observatory Circle NW,
Washington DC 20008
Phone +1 202 328 4887
Fax +1 202 265 9659
Email info@nzte.govt.nz
USA
Country
Brief
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useful websites
www.doingbusinessin.com
A useful Ernst &Young macro issues guide to doing business in the US.
www.business.gov
This is a site for anyone who has dealings with the US government on almost every subject.
Each state government also usually has a website with useful business set up advice, e.g.
for California, www.ca.gov
www.bnz.co.nz
Bank of New Zealand website – it shows the latest foreign exchange rates so you can
calculate New Zealand dollars into foreign currency.
www.xe.net/ucc
Universal Currency Converter website.
Disclaimer:
While New Zealand Trade and Enterprise has verified the information in
this document, we make no representation as to the completeness,
correctness, currency, accuracy or fitness for any purpose of the
information. New Zealand Trade and Enterprise will not be responsible
for any damage or loss suffered by any person arising from the
information contained in this document, whether that damage or loss
arises from negligence or otherwise.
USA
Country
Brief
March 2006
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