When evaluating New Jersey through the lens of international trade and foreign investment, it is clearly evident that the state’s diversity is its strength. The attributes that make New Jersey an attractive destination for foreign investment also make the state an ideal spot for domestic companies who want to sell their products to foreign markets.
“Companies from around the world find New Jersey’s assets very appealing,” Michele Brown, president and CEO, Choose New Jersey, Inc., says. “Our state offers them a highly educated workforce that makes talent recruitment easy; a strategic location with access to 40 percent of the US population; a world-class transportation infrastructure with access to the busiest port on the East Coast and flights to more than 110 US cities and 130 international destinations; and a multi-cultural environment that makes them feel at home.”
She adds that New Jersey is home to more than 1,100 multi-national companies and 270 foreign company headquarters, and is ranked No. 5 in the US for both integration into the global economy and for incoming foreign direct investment, according to The Information Technology and Innovation Foundation’s most recent “New Economy Index” report.
In terms of countries that are New Jersey’s top trading partners, Canada led the way, accounting for more than $6.3 billion in exports from New Jersey in 2016, according to data from the US Department of Commerce. The same data shows Mexico as the second largest market, accounting for nearly $2.6 billion in exports in 2016.
The US currently has 14 free trade agreements (FTA) with 20 countries, including the North American Free Trade Agreement (NAFTA) with Canada and Mexico. Since 2006, exports from New Jersey to FTA markets have grown by 22 percent, according to data from the US Department of Commerce, with NAFTA seeing nearly $1.3 billion in growth during that time. In 2016, New Jersey exports to US FTA partners totaled $12.6 billion, according to data from the same source.
Chemicals are the state’s top export, accounting for nearly $8.3 billion, with computer and electronic products the next closest category at $4.2 billion. Transportation equipment ($2.7 billion) and petroleum and coal products ($2 billion) were also top exports in 2016.
However, when it comes to a company trying to decide what country it should look to do business with, it needs to do more than just look at a list of the state’s top trade partners or industries.
“The top trade partners with New Jersey [as a whole] are not necessarily the top countries for certain companies,” Eddy Mayen, director, Office of International Business Development & Protocol, points out. “While Canada is the No. 1 export market for [the state] by far, that doesn’t mean that Canada is every company’s top foreign market. [The company] may be making a product that is specific or more ideal to a different continent or a different part of the world.”
This is why it is important to seek guidance from the often free resources available through various organizations such as the US Department of Commerce, Small Business Administration (SBA), US State Department and the New Jersey District Export Council – all of which want to see companies succeed and grow.
“One of the important things to point out to companies is that there is a network of trade professionals – from Raritan, New Jersey to nearly any corner of the world – that we have a trade relation with. These professionals talk to each other and work to assist companies to get their products sold abroad,” Mayen says.
For example, the US Commercial Service, which is the trade promotion arm of the US Department of Commerce’s International Trade Administration, has trade officers in more than 100 US cities and in more than 75 countries abroad that help US companies get started in exporting or increase sales to new global markets. “They are our eyes and ears abroad,” Mayen adds.
The officers have teams set up in their respective countries that gather valuable information first hand, such as consumer and industry trends. That information is then shared back with the network of export service organizations in the US, and can be used to help businesses in New Jersey.
For companies new to exporting, trade shows specific to their industry, and seminars such as the programs hosted by Fairleigh Dickinson University’s Global Enterprise Network are great places to begin the search for what international market to enter.
“Rather than a company getting on a plane and flying to, [for example], India and trying to align all these different people and contacts, we would rather bring everybody [abroad] to them, so they can get a feel for the market,” Mayen says.
Additionally, the NJ State Trade Expansion Program (STEP) has been paramount to aiding smaller companies in their efforts to export.
The NJ STEP program has helped businesses like Trenton-based LED lighting manufacturer Tektite Industries travel to international trade shows in France and London. Participation in these shows allowed Tektite to secure purchase orders with companies based in the United Kingdom and Kenya.
“Thanks to the NJ STEP grant, we have broken records in export sales, up 20 percent in the last three years,” Scott Mele, president, Tektite Industries, says. “The trade shows that we have attended with funds from the NJ STEP grant have had a tremendous impact on our business. There is a real market looking for our products overseas and the NJ STEP Grant can give local businesses the opportunity to explore that.”
“While Canada, Mexico and the United Kingdom have always been strong trade partners, we’ve found that businesses from around the world are interested in growing in New Jersey,” Brown says. “In addition to companies from [those three countries], Choose New Jersey’s opportunity pipeline includes companies from India, Israel, Brazil, France, Sweden, Spain, Austria, Belgium, China, Japan and the Netherlands, among others. There has been very strong interest from companies in Italy and Germany, where we have spent time and built relationships with trade organizations and other economic development organizations, which have been excellent referral sources.”
Foreign companies that make the decision to set up operations in New Jersey, or anywhere in the US, face many of the same challenges that New Jersey business owners would face if they were expanding overseas. Language barriers, cultural differences and understanding new and potentially complex laws and regulations are the immediate hurdles, but finding the right location and fostering relationships with business professionals that they can trust – a dynamic that is paramount in ensuring a business succeeds – can be extremely difficult.
“Choose New Jersey offers companies interested in locating or expanding in New Jersey a full range of complimentary economic development services to ensure a smooth process from planning through move-in,” Brown says. “Our services include market assessment and planning services, site visits, state assistance information as well as connections to a wide range of services provided by our public and private partners.”
For example, she says, “[Choose New Jersey] frequently connects foreign food companies with the Rutgers Food Innovation Center (FIC) in Bridgeton, the only Soft Landings incubator in the world focused on food. The FIC and its network throughout the state provide a unique food industry resource that centers its focus on supporting domestic and international companies seeking to establish a presence in the US.”
The relationships and interactions made through foreign direct investment also strengthen the interconnected export service network, and the information and opportunities available to New Jersey companies becomes richer as a result.
“This October, the Choose New Jersey team travelled to Germany to exhibit at Airtec, a trade show for the aerospace supply chain, where we met with more than 30 European companies interested in learning more about New Jersey,” Brown explains. “This year, we also travelled to Italy for the Tutto Food show and Innovate Finance, a fintech conference in London, among others. Each year, Choose New Jersey partners with BioNJ, Healthcare Institute of New Jersey (HINJ) and the state to host the New Jersey Pavilion at BIO International, the world’s largest trade show for the biotech industry.”
Other examples of foreign companies that have recently moved into the state include Ferring Pharmaceuticals, a Switzerland-based company that invested $135 million to expand its footprint in Parsippany; Bridor USA Inc., a French baked goods maker that completed a $32-million expansion of its US headquarters and manufacturing facility in Vineland; and UAE-based Y International, one of the largest importers of US food and household products to the Persian Gulf region, which is expected to employ up to 250 people at its site in Lyndhurst.
“Foreign direct investment plays an essential role in ensuring our state’s economic growth. It creates jobs, drives innovation, and creates opportunities for our citizens and New Jersey companies,” Brown says.