Eyeing Europe

Kerri Breen
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Manufacturing Exporter hopes trade deal will help companies like his get a piece of a great big pie

As the U.S. economy falters, local businessman Mark Battcock is looking to Europe to recover sales, and he hopes the proposed European Union-Canada trade deal will help him out.

Battcock is the export developer for Mount Pearl-based AbbyShot Clothiers, an online company that sells high-end reproductions of clothing from movies, video games, and television.

Mark Battcock of AbbyShot Clothiers hopes an EU-Canada trade deal will help him sell more goods to Europe. - Photo by Kerri Breen/Special to The Telegram

As the U.S. economy falters, local businessman Mark Battcock is looking to Europe to recover sales, and he hopes the proposed European Union-Canada trade deal will help him out.

Battcock is the export developer for Mount Pearl-based AbbyShot Clothiers, an online company that sells high-end reproductions of clothing from movies, video games, and television.

The six-year-old company sold about 65 per cent of its goods to the U.S. last year. This year, it's been less than 50 per cent so far.

Battcock says easier trade with Europe could give the company a much-needed boost.

"We've really had to look more towards Europe to compensate for the U.S. drop-off in purchasing. I can totally see the timing of (the trade deal)."

Days after last month's federal election, Prime Minister Stephen Harper met with French and European Council President Nicolas Sarkozy at the EU-Canada Summit in Quebec City to take the next step in trade talks that started in 2004.

Harper announced they were looking at defining "an ambitious, deeper and comprehensive and truly historic economic partnership agreement."

They presented a joint study that concluded freer borders could mean another $13 billion per year coming into to Canada by 2014.

The EU's 27 countries have more to gain, at almost $19 billion, but the figure is much less significant as a percentage of the union's gross domestic product.

The deal will involve removing regulatory barriers and possibly some tariffs - the barriers that Battcock says make breaking into the European market a challenge.

AbbyShot makes a lot of its sales directly to consumers, who end up paying customs and handling fees on top of the EU's Value Added Tax (VAT), which ranges from 15 to 25 per cent, depending on the country.

In total, customers end up paying 20 to 30 per cent extra - depending on the type of garment and the country it's being shipped to, Battcock says.

For a $499 Mad Max leather coat entering the U.K., for example, there's a five per cent tariff, 17.5 per cent in VAT, and Abbyshot's $89 shipping charge.

"It does make people a bit more wary of bringing in goods from Canada," said Battcock.

He says there are "boatloads of regulations and uncertainty in terms of how to get the goods across the Atlantic."

Ultimately, though, it's the duties he hopes to see removed but he worries the deal won't go that far.

"It may turn into lip service more than anything, you know? We got rid of some regulations. It's hard to know."

Innovation, Trade, and Rural Development Minister Shawn Skinner is optimistic.

"We ... look upon this Canada-European economic union as being a very positive thing for the province, a very positive thing for the country, and we're looking forward to it because we think there's going to be significant opportunities for our province," he said.

Skinner, who only became trade minister in the Oct. 31 cabinet shuffle, isn't entirely familiar with the details of the EU-Canada deal, but doesn't have any major concerns at this point.

"Generally speaking, agreements like this are positive opportunities to increase sales, they are opportunities to increase production, and increase employment," he said. "They are opportunities for us to be competitive in a broader marketplace."

The province currently has trade pacts with Iceland, Ireland and New England.

Europe is the province's third largest trading partner, accounting for almost 13 per cent of exports in 2006.

Recognizing the opportunities the trade pact could present, Battcock thinks Innovation, Trade, and Rural Development should educate local companies about trading with the EU.

The department currently supports programs like the Ireland Business Partnership, which fosters and promotes trade and partnership opportunities between the province and Ireland.

Skinner acknowledged the province might be able to beef up its trade resources.

"Maybe we might be able to enhance or do more," he said.

Organizations: European Union, European Council, EU-Canada Summit Rural Development Ireland Business Partnership

Geographic location: Europe, Canada, U.S. Quebec City VAT Ireland Atlantic Iceland New England

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