Designing e-commerce cross-border distribution networks for small and medium-size enterprises incorporating Canadian and U.S. trade incentive programs

E-commerce sales are growing more rapidly than non-e-commerce sales. This creates a great opportunity for small and medium sized companies to find and develop new customers in markets outside their domestic ones. However, there are substantial barriers to doing business across international borders — including differences in customs and duty regimes and tax laws. Some federal governments are trying to alleviate the impact of such barriers by providing government programs such as duty free zones for the import and export of products. However, there remain critical barriers that government programs cannot overcome — for example, exchange rate fluctuations. This paper explores the potential for e-commerce transactions across the borders of one of the most vibrant bilateral commercial markets in the world — the one between Canada and the United States of America. The federal governments of both countries have programs in place designed to facilitate cross-border business. This paper examines those programs to explore the question of whether or not participation in such programs can actually assist small and medium sized firms in overcoming the barriers to cross-border e-commerce transactions. Implications for company decision makers and government policy makers in Canada and the US, with application to other cross-border regions, are discussed.