As more free trade agreements are reached and come into force, such as the recent ratification of CETA, opportunities are opening up for companies of all sizes to do business in new international markets.
However, at the same time that regions are making history with bilateral and multilateral trade agreements, the threat of protectionism and increased trade barriers is also giving importers and exporters pause in some markets.
This brought us to a natural question – how can businesses overcome trade barriers of all kinds in markets with potential (and should they)?
To explore this complicated topic, we asked the experts who are directly involved in trade policy, helping businesses overcome barriers to trade in new markets, and those who have “been there – done that” in this month’s #TradeElite Twitter chat. Here’s what they had to say.
Moderator:
Maxim Berdichevsky, CITP|FIBP (@MaximMGL), Deputy Director of Investment at Global Affairs Canada, based out of Ottawa, Ontario
Panelists:
Craig Atkinson, CITP|FIBP(@craigaatkinson) Director, International Trade and Development LEXMERCA International Trade based in Halifax, Nova Scotia
Darryl Anderson, (@DarrylWavepoint) Managing Director of Multi-modal Freight Transportation at Wave Point Consulting Ltd in Victoria, British Columbia
Doris Nagel, (@DorisNagel) Managing Partner at Globalocity a sales channel management consulting firm based in Chicago, Illinois
Anna Schlegel, (@annapapallona) Cofounder of Women in Localization and Sr. Director of Globalization Programs Strategy Office and Information Engineering at NetApp, in Sunnyvale, California
Gustavo Zentnor, CITP|FIBP (@GZinterpoc) President of InterPOC – International Point of Commerce and Trade Champion for Canadian Manufacturers & Exporters, based in Winnipeg, Manitoba
Ross Miller, (@rnmiller99) Deputy Head of the FTA Promotion Task Force at Global Affairs Canada based in Ottawa, Ontario
What comes to your mind when you think of trade barriers?
A1 – Barriers can be external, imposed by legislation of other countries, quota, and others #tradeelite
— Gustavo Zentner (@GZinterpoc) June 8, 2017
A1. Tariffs, non-tariff barriers such as regulations, phyto-sanitary requirements. #TradeElite
— Ross Miller (@rnmiller99) June 8, 2017
A1. I associate #tradebarriers with #nontariffmeasures (#NTMs), yet tariffs remain a significant barrier for SME #trade. #TradeElite
— Craig A. Atkinson (@craigaatkinson) June 8, 2017
A1: High tariffs & unclear customs practices. A reputation for corruption. Geo-Political issues & conflict. #TradeElite
— audrey ross (@tresAudrey) June 8, 2017
Speaking of TBTs, what are some strategies to avoid technical barriers to trade?
A2 -Part1 - to avoid #TBTs look for competitors and study their market entry and export activities #tradeelite
— Gustavo Zentner (@GZinterpoc) June 8, 2017
#TradeElite un-encrypt your products
— Anna N Schlegel (@annapapallona) June 8, 2017
A2. In some cases, they may be unavoidable. There may be trade offs between compliance costs and products chosen for export. #TradeElite
— Craig A. Atkinson (@craigaatkinson) June 8, 2017
So, be accurate and diligent with your documentation and sometimes just live with it... #TBTs #TradeElite
— maxim berdichevsky (@MaximMGL) June 8, 2017
A2 Have you heard about the Canada Tariff Finder: https://t.co/u73tslcHoH Lok up HS codes and find tariffs for all Cdn FTAs. #TradeElite
— Ross Miller (@rnmiller99) June 8, 2017
What is the role of rules of origin (RoO) in overcoming (or creating?) trade barriers?
A3 Rules of origin importance is derived from the fact that duties/restrictions in depend upon the source of imports.#TradeElite https://t.co/YcQzRExGrf
— Darryl Anderson (@DarrylWavepoint) June 8, 2017
P 2/2. #tradeelite - There is ongoing consultation for NAFTA countries to provide feedback which determines future barriers. Participate!
— Gustavo Zentner (@GZinterpoc) June 8, 2017
A3. Rules of Origin are a nitpicky way to ensure Customs collects the duties they want to collect. #TradeElite
— audrey ross (@tresAudrey) June 8, 2017
A3 Try sourcing from country where a preferential trade agreement is in place #TradeElite
— Darryl Anderson (@DarrylWavepoint) June 8, 2017
Q3 - RoO are fundamental to determine the national source of a product. RoO are not your enemy, they also protect your market #tradeelite
— Gustavo Zentner (@GZinterpoc) June 8, 2017
A3 #tradeelite Unfortunately the more diverse & nimble your supply chain is, the more complex CoO compliance becomes
— Doris Nagel (@DorisNagel) June 8, 2017
A3 How popular is Global Trade Management software among SMEs? This can help with RoO issues and a lot more. #TradeElite
— Ross Miller (@rnmiller99) June 8, 2017
Can finance be an international trade barrier?
A4. #Accesstofinance and associated administrative costs / competencies can certainly be an indirect barrier, esp. for SMEs. #TradeElite
— Craig A. Atkinson (@craigaatkinson) June 8, 2017
A4. Totally - Trad'l Banks are still quite local minded & some don't have the global knowledge needed to help SME's. #TradeElite
— audrey ross (@tresAudrey) June 8, 2017
A4 Lack of finance may limit ability to expand but not a trade barrier in most cases. But in some 3P infrastructure Yes. #TradeElite https://t.co/rN1oYtaNJZ
— Darryl Anderson (@DarrylWavepoint) June 8, 2017
A4 p.1 - Int'l finance can be a deterrent, but it can also represent your unique value proposition to close a transaction.
— Gustavo Zentner (@GZinterpoc) June 8, 2017
have to pay for risk mitigation, literally and figuratively, no? #TradeElite
— maxim berdichevsky (@MaximMGL) June 8, 2017
What can an exporter do to improve access to finance for themselves or customers?
A5 Export Development Canada trade finance solutions #TradeElite https://t.co/lUG59YG0TF
— Darryl Anderson (@DarrylWavepoint) June 8, 2017
Q5 #tradeelite Dig in & get fully educated. Many great gov't & private company resources to help.
— Doris Nagel (@DorisNagel) June 8, 2017
A5. Build domestic credibility before engaging in international #trade. #TradeElite
— Craig A. Atkinson (@craigaatkinson) June 8, 2017
A5 - I have encountered situations where my clients abroad requested credit background on us before proceeding to negotiations #tradeelite
— Gustavo Zentner (@GZinterpoc) June 8, 2017
Sanctions as a trade barrier - Is it possible it to overcome them?
A6 - Yes, possible to overcome. It will be very costly, tedious and difficult to do. Best approach is TRADE COMPLIANCE. #tradeelite
— Gustavo Zentner (@GZinterpoc) June 8, 2017
A6 Is it really worth the business risk and reputation to overcome trade sanctions?#TradeElite https://t.co/iaNqDlFqiH
— Darryl Anderson (@DarrylWavepoint) June 8, 2017
A6. That's a tough one. If possible, avoid the market entirely. #TradeElite
— Craig A. Atkinson (@craigaatkinson) June 8, 2017
Do SMEs today have capacity to overcome trade barriers in global trade?
A7. Increasingly so. The emergence of #TradePolicy 2.0 and Single Access Windows is improving the inclusiveness of global mkts. #TradeElite
— Craig A. Atkinson (@craigaatkinson) June 8, 2017
A7 For may Canadian SME importers & exporters capacity is outsourced to Custom Brokers, 3Pls & trade compliance fols. #TradeElite https://t.co/J5ag5GmHDt
— Darryl Anderson (@DarrylWavepoint) June 8, 2017
A7 Under FTAs, zero tariff rate are often not used by the importer. Exporters becoming the importer of record may help.#TradeElite
— Ross Miller (@rnmiller99) June 8, 2017
Still on SME theme... What are some of the resources SMEs can use to succeed in global trade?
A8. Given capacity constraints, it is critical that SMEs use services of #trade promotion organizations like @TCS_SDC in Canada. #TradeElite
— Craig A. Atkinson (@craigaatkinson) June 8, 2017
Q8
Contact your
local @TCS_SDC trade commissioner to discuss #CETA opportunities for your businesshttps://t.co/KIhl2oo61u #TradeElite— Ross Miller (@rnmiller99) June 8, 2017
A8 - Working through your industry association. @cme_mec / Understand what solutions are offered to your customers abroad #TradeElite
— Gustavo Zentner (@GZinterpoc) June 8, 2017
A8 I believe Canadian Manufacturers Association has Trade Officials embedded in regional offices. #TradeElite https://t.co/OfynSdC3eM
— Darryl Anderson (@DarrylWavepoint) June 8, 2017
A8 - There is an abundance of cash in Canada - use investors as mentors and sources to increase your network and reduce risk #tradeelite
— Gustavo Zentner (@GZinterpoc) June 8, 2017
Provincial agencies are often underestimated or underutilised. #TradeElite https://t.co/2DMAxo2bZn
— maxim berdichevsky (@MaximMGL) June 8, 2017
A8 the FITTskills courses can help SMES gain the expertise they need to do business globally https://t.co/tYQ9OrWIWc #tradeelite
— FITT (@FITTNews) June 8, 2017
A8 We can also help by providing #export resources and directing #SMEs to our very helpful friend at @TCS_SDC & @ExportDevCanada #tradeelite
— FITT (@FITTNews) June 8, 2017
A8. Join the @FITTNews #TradeElite chat every 2nd Thursday of the month & get free info from people who are IN IT every day. ?
— audrey ross (@tresAudrey) June 8, 2017
Any final thoughts on overcoming trade barriers?
Barriers: read about positive adaptation and work through your INTERNAL barriers to growth, before you jump on a plane. #tradeelite
— Gustavo Zentner (@GZinterpoc) June 8, 2017
Want to learn more about how to build your team, act on the latest trends, technology and policies, and plan your future in global markets? Learn from Gustavo, Maxim and other experts in their fields, and ask your burning questions at Your Future in Global Markets international business conference October 2 -4, 2017.
Read the rest of the chat and follow future discussions by following the #TradeElite hashtag. Stay tuned for the next #TradeElite chat, coming up Thursday, July 13 at 2:30-3:30PM ET.
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