Visualize data in numerical format

Numerical data should be presented as charts, tables or graphs wherever possible. Researchers can use a wide range of tools to present material in an attractive and clear format. Spreadsheets can organize numerical information and generate graphs and charts. Graphics packages can also be used to portray both numerical and non-numerical information.

Tables are one of the easiest methods of presenting quantitative data, but they must be well organized. Tables must have clearly labelled rows and columns and be organized consistently.

Graphs and charts present numerical information in a visual form. Each part of the graph or chart should be labelled clearly. There are various styles of charts to choose from. For instance, pie charts are used when the components of the data being shown must add up to 100 percent. They are most often used to show market-size data, classification data or market shares.

1. Pie Charts

2. Spider charts

This type of visual representation is sometimes used to present comparative numerical information in a way that quickly and easily highlights differences among categories.

3. Bar charts

Bar charts or histograms are a common tool for illustrating data and are most commonly used with rated data. They can be used to show customer satisfaction levels, market size for different companies and trends within a group.

Present data in qualitative format

There are many effective ways to visualize data if it’s qualitative as well. Information can be presented in the form of a flow chart that communicates processes or decisions, or it can be explained in relation to marketing frameworks. Quotes can add emphasis to a point, because they indicate the thoughts of the consumer. However, quotes should never directly identify an individual.

Looking to determine if your new trade opportunities are viable? Check out the FITTskills Feasibility of International Trade online course!

4. Flow diagrams

This is a very simple and effective way of presenting organizational data. Flow charts should be labelled clearly, and the flow of a decision or process through the various stages should be clear and easy to understand. The reader should be able to start at one point and follow a path through to the conclusion.

The post 4 ways to visualize data more effectively for reports and presentations appeared first on Trade Ready.

Business growth often has to include an eye to international expansion and FITT was there to connect women entrepreneurs to the know-how they need to be successful in global markets. In this article, we will cover 10 of the key learnings that were shared at this productive event.

1. Stay on top of the changing landscape of global challenges

It’s essential for business owners and entrepreneurs to stay informed about the critical issues and trends that may impact their operations and decision-making. The global challenges which are currently affecting businesses worldwide include the debt ceiling, fallout from banking turmoil, inflation, interest rates, China’s reopening, geopolitics (war in Ukraine), and climate change.

Each of these factors can significantly impact the global economy and have a ripple effect on businesses in various sectors. Staying informed about these challenges will enable entrepreneurs to make well-informed decisions and adapt their strategies accordingly.

2. Re-globalization is shaping supply chains

After experiencing both globalization and deglobalization, the world is now witnessing a process known as re-globalization. This process is characterized by a renewed emphasis on global interconnectedness and can be seen as a response to previous trends of isolationism in certain countries and regions.

This transition involves the adoption of new trade policies, such as switching trading partners, revamping supply chains, and focusing on domestic production.

3. Friend-shoring may be the best way to react to China’s “de-coupling”

Another notable aspect is the concept of “de-coupling,” where countries like China aim to reduce their dependence on the United States. While re-globalization offers potential benefits, such as increased stability and reduced vulnerability to disruptions, it also presents risks.

Friend-shoring, a strategy of engaging in trade with friendly nations, ensures continuity, but may come at higher costs and potentially disrupt global trade leading to inflationary pressures.

4. Closely monitor inflation trends

Inflation has been a significant concern in 2022-23. The goal is to bring inflation rates down from their current levels, such as Canada’s 4.4%, to a target of 2%. The decrease in goods inflation can be attributed to a decline in demand as China reopens, and supply chain stability improves.

However, services inflation remains elevated, mainly due to higher wages and salaries. Business owners should closely monitor inflation trends and consider the potential impact on their costs, pricing strategies, and overall financial health.

5. Beware of currency risks and other economic shifts

In the face of these challenges, business owners must remain vigilant and prepared.

Monitor the economy for signs of a potential downturn or recession, which some experts predict may occur in Q2 and Q3.

In addition, the persistence of sticky inflation calls for a cautious approach and the expectation of restrictive monetary policies in the foreseeable future. Markets, including currencies, interest rates, and equities, are likely to remain volatile, demanding attention and proactive risk management.

6. Global ambitions require global skills

Having a strategic mindset is crucial when venturing into international trade. Instead of relying on opportunistic approaches, businesses must develop a well-thought-out strategy, including an organizational pillar, financial pillar and operational pillar.

This mindset ensures that decisions are based on thorough research and analysis, and identifying opportunities aligned with long-term goals.

Going global requires trade-capable individuals within the team who possess the necessary skills and knowledge to navigate global markets effectively.

7. Consider the “double half rule”

The “double half rule” highlights that it often takes twice as much time and efforts to achieve only half the value (compared to domestic business) when expanding internationally. Never underestimate factors such as the amount of time, money, and effort required.

Cultural differences and language barriers can also pose significant obstacles. In addition to that, being up to date with customs regulations, policies, trade agreements and other regional regulations will be the base to establish and maintain the relations with partners.

8. The power of networking

Networking and leveraging available resources play a vital role in addressing these challenges. Establishing connections with organizations such as chambers of commerce, Trade Commissioner Service (TCS), Export Development Canada (EDC), Business Development Centers (BDCs), and Small Business Development Centers (SBDCs) can provide valuable support and guidance throughout the export journey.

Being a part of WPO 2023 Entrepreneurial Excellence Forum proved this point of the value of leveraging the network and mutual support of female leaders.

9. How to determine if your business is export ready

A strong export plan is a critical component of success in international trade. Research is the foundation of such a plan, enabling businesses to make informed decisions. We highlighted five key considerations while creating an export plan:

1. Clearly define objectives
2. Select the right market based in extensive research
3. Choose the right product(s) to enter the market gradually (sometimes you don’t need to go with all your products at once)
4. Establish an appropriate financial model
5. Determine the most suitable fulfillment process

It is important to continuously update and adapt your export plan based on new insights and market dynamics.

10. Get the right people on the bus

Great organizations make sure they have the “right people on the bus” and the right people in the key seats before they figure out where to drive the bus.

Does your business have the right talent in place with solid experience in international trade?

It does not matter where your business originates from or what it does – your priority is to recruit the right talent with relevant experience. So, when it comes to business expansion, you need a team that understands how to:

• Research target markets effectively
• Manage international finance and FX intricacies
• Navigate the complex landscape of international shipping, logistics and transportation
• Engage in appropriate cross-cultural marketing and sales
• Adapt products and services to the many regulations in international markets

Regardless of the position, what is exceptionally important for the success of your team is the amount of professional experience and training they have.

Additional resources:

• How to Take Your Business Global – 5 Important Steps for Female Leaders
• How To MacGyver Your First Export- Laurel Delaney
• EXPORTING: The Definitive Guide to Selling Abroad Profitably

The post Top 10 things we learned at the WPO 2023 Entrepreneurial Excellence Forum appeared first on Trade Ready.

Editor’s note: This content was last updated May, 2024. There are ongoing developments in the trade relationships between CUSMA members that are not reflected in this article.

In July 2021, Mary Ng, Canadian Minister of Small Business, Export Promotion, and International Trade, along with Tatiana Clouthier, Mexico’s Secretary of Economy, and Katherine Tai, United States Trade Representative, marked the one-year anniversary of CUSMA, also known as the Canada-United States-Mexico Agreement. This historic all-female gathering took place in Mexico and saw all three women converge, in person, to mark “their commitment to North American supply chains and economic competitiveness, which have created significant economic growth and benefits for people and workers in all three countries,” according to the official Trilateral Joint Statement.  

New 2023 Trilateral Joint Statement

For many, the acronym CUSMA is still not second nature—even prompting some to refer to it as the “New NAFTA” (the North American Free Trade Agreement) or “NAFTA 2.0,”—and there are many reasons for this. For starters, the countries that are part of CUSMA each refer to it differently, with the U.S. calling it “USMCA” and Mexico often calling it “T-MEC.” Beyond the name, the details surrounding CUSMA aren’t as clear-cut as they were with NAFTA (which came into effect January 1st 1994), prompting many questions about the trade agreement that have yet to be answered to this day.  

To understand what CUSMA is, the history leading up to its enactment, and where it stands today, read on below: 

What is the Canada, United States, Mexico Free Trade Agreement (CUSMA)?

Many refer to CUSMA as the “New NAFTA” or “NAFTA 2.0” because it is largely a revised version of NAFTA. Similar to NAFTA, it is a free trade agreement between Canada, the United States and Mexico that defines the National Treatment and Market Access for Goods between the countries, determining rules and regulations on tariffs, rules of origin, customs administration, trade facilitation, and many other trade-related matters.

The CUSMA trade agreement covers a long list of items, from agriculture and textiles to regulatory matters such as government procurement, macroeconomic policies, Intellectual Property (IP) rights, and rules for Small and Medium-Sized Enterprises (SMEs). 

The tumultuous history of CUSMA 

CUSMA was created at the insistence of former U.S. President Donald Trump. He was outspoken about his dislike of NAFTA during his presidential campaign and pushed for a new trade agreement that favoured American interests—even going so far as to threaten to terminate the agreement altogether if the other countries did not acquiesce to a new agreement. Unsurprisingly, the negotiations for many of these changes were tense, and leading up to the signing, the U.S. increased the tariffs on specific imports from Canada to the U.S., causing Canada to do the same in retaliation. Mexico also had criticisms of the trade deal agreement in many areas.  

Eventually, CUSMA was ratified on March 13, 2020, with Canada being the last country to ratify. Following this, the agreement officially came into effect on July 1, 2020. In a State of the Union Address, former President Donald Trump said of the agreement, “The USMCA will create nearly 100,000 new high-paying American auto jobs, and massively boost exports for our farmers, ranchers, and factory workers. It will also bring trade with Mexico and Canada to a much higher degree, but also to a much greater level of fairness and reciprocity.” Meanwhile, critics noted that Canada, in particular, was consistently treated as an “enemy” instead of a partner throughout the negotiations. 

What were the main changes in CUSMA? 

To ensure that the new trade agreement was beneficial for all, the participating countries used the new trade agreement as an opportunity to revise items from NAFTA, adding new sections on digital trade, labour, the environment, and small and medium-sized businesses.

Additionally, there were increased incentives for automobile production in the United States, a higher duty-free limit for Canadians who buy goods from the U.S. online, and greater access to the Canadian dairy market from the U.S.—a move which has had large financial repercussions on the Canadian dairy industry. However, many see the provision on labour, especially for workers’ rights in Mexico, as largely positive and progressive. 

How is CUSMA doing today? 

The views on CUSMA’s impact in North America one year after it came into effect are varied. Many, especially those with U.S. interests, view it as a success, while critics say that other countries were forced to make unfavourable agreements. Currently, there are disputes in several areas including labour rights violations in Mexico and a USMCA dispute panel has been initiated over dairy tariff rate quotas (TRQs) applied by Canada. 

Learn more about trade tariffs and quotas in our FITTskills course, Feasibility of International Trade.

To complicate the matter, COVID-19 delayed the implementation of many CUSMA measures, with all countries focusing their efforts on pandemic relief. As such, much of the impact of CUSMA remains to be seen, though, initial predictions found the economic impact to be modest, with Global Affairs Canada projecting that Canada would benefit from CUSMA by 0.249 percent of GDP by 2025 when compared to a scenario without NAFTA in play. 

In a news release on the Government of Canada website, there were noted next steps for CUSMA, including the following: 

“As our countries continue to combat the COVID-19 pandemic and continue our shared recovery from an economic downturn that has disproportionally impacted SMEs and underrepresented communities, we recognize that the CUSMA has an important role to play in revitalizing our region. As we continue implementing the CUSMA and ensuring that this Agreement benefits those that have historically been left behind by trade agreements, the Parties have agreed to continue to hold engagement meetings with underserved communities and to hold a Trade Deputies meeting before the end of this year to assess progress on the areas highlighted today and identify ongoing opportunities for future engagement.” 

CUSMA and SMEs 

CUSMA’s chapter on small- and medium-sized commercial goods businesses could be very beneficial for these businesses. The CUSMA additions for SMEs are moving forward with items like establishing a committee that will study how small businesses engage in trade and determining how SMEs in all countries can benefit from the agreement.

This is especially important now, as many SMEs have suffered great financial losses due to the pandemic. 

Perhaps on future anniversaries of the agreement, SMEs in all three countries may conclude that the true legacy of CUSMA  is that it serves as a catalyst for equitable growth, a model for competitiveness, and a stoke for innovation while also protecting the shared environment in North America.

Decision No. 5 of the FTC of the CUSMA, T-MEC, and USMCA

In February 2023, the Free Trade Commission (FTC) sought to enhance coordination and consultation to support the region’s trade flows in times of emergency, acknowledging how such situations can harm North America’s domestic economies. As such, the FTC required the participating countries to identify relevant agencies or maintain domestic committees to ensure that trade isn’t disrupted, or at least only minimally affected, by emergency situations.

In such events, the United States, Canada, and Mexico must also proactively consult and coordinate with relevant industries and non-governmental stakeholders (including workers) who may be involved, and inform them promptly of important mechanisms on a free and public website for transparency.

The FTC also set to establish a Trilateral Coordination Sub-Committee on Emergency Response to handle the delivery of information and the coordination of activities related to matters affecting trade during an emergency. Each country must designate a contact point for the Sub-Committee, which shall be endorsed to the other countries, and provide information on domestic procedures for emergency responses. The Sub-Committee must then reconvene annually to discuss comprehensive risk management as they see appropriate.

The FTC also directed the North American Competitiveness Committee, through its Sub-Committee, to develop a proposal on procedures for coordination and consultation during specific emergency events. It was also tasked to establish a trilateral Working Group to share each country’s approach to defining and protecting critical infrastructure under CUSMA and to reconvene periodically to update reviews and reports and to make any modifications as appropriate.

In all this, the FTC emphasized the importance of labour rights and worker health and safety, especially in emergency situations. The Sub-Committee must ensure the protection of these while maintaining trade flows.

The Latest on CUSMA in 2023

Three years after CUSMA entered into force, North America has felt the effects of the agreement. These were discussed in the third meeting of the T-MEC/USMCA/CUSMA (Agreement) FTC on July 7, 2023, in Cancun, Mexico.

The last two years have seen aggressive steps towards increasing dynamism and competitiveness in the region, particularly through trilateral workforce development events held in all three participating countries. These gatherings are expected to continue as they present an opportunity for each country to exchange best economic practices and explore solutions to regional and national challenges.

SMEs continue to be a hot topic, as organizations push these businesses (primarily indigenous organizations) to actively participate in international trade, as facilitated by CUSMA.

Workers’ rights are also increasingly emphasized as the agreement highlights a commitment to uphold these, including freedom of association and collective bargaining rights. In relation, CUSMA leaders are taking steps to ban the importation of goods produced by forced labour consistently, and to give labour stakeholders (particularly those in Mexico) a voice in trade policies.

CUSMA plays an important role in empowering North American economies, and with occasional reviews and assessments, it’s expected to continue to bring benefits and opportunities to the United States, Canada, and Mexico.

The post What is CUSMA? An overview of the trade agreement appeared first on Trade Ready.

Officially enacted in 2000, the African Growth and Opportunity Act (AGOA) has shown promising results, with ITA (International Trade Administration) noting, “Since its implementation, AGOA has encouraged substantial new investments, trade, and job creation in Africa. It has helped to promote Sub-Saharan Africa’s integration into the multilateral trading system and a more active role in global trade negotiations. It has also contributed to economic and commercial reforms which make African countries more attractive commercial partners for U.S. companies.” 

For international business professionals looking into new markets, especially U.S. markets, this trade act is compelling in many ways. However, many details cannot be overlooked, and any international trade plans using AGOA require strict oversight, guidance, and strategy. That’s why FITT and our partner Africa Business Venture held a joint event on AGOA on July 7, 2021.

This event, Understanding the African Growth and Opportunity Act (AGOA) and How It Can Benefit Your Business with U.S. Trade featured CITPs, International Trade Lawyers and African Business Experts—each of whom gave insights into some of the most common questions about Africa, AGOA and international laws pertaining to business between Africa and the United States.  

With fantastic questions from attendees and detailed answers from the panelists, the event provided a wealth of information for anyone interested in AGOA, international trade in Africa, and overall global trade practices, highlighted below: 

Event Panelists:

• Host: Sonia Galat, Director, Africa Business Venture 
• Moderator: Rob Howard, CITP, Of Counsel, Canada, Givens & Johnston PLLC 
• James (Gar) Hurst: Partner, Givens & Johnston 
• Karl Miville de Chêne: CITP, MBA, Partner at TFO Canada 
• Nilesh Mistry: Customs & Trade Consultant Misca Advisors Ltd. 

Why was AGOA created? 

Karl Miville de ChêneKarl Miville de Chêne: CITP, MBA, Partner at TFO Canada:  

AGOA has been put in place in order to favour less developed countries in the southern part of the continent of Africa. These countries produce all kinds of things: edible food, minerals, arts and crafts and, also, technical objects. Now they’re producing cars and airplanes…you’d be surprised what they can offer. In regard to services, tourism, the IT and IP sectors in countries like Rwanda or Nigeria are humongous and can be used in many ways for American companies.

Now, one of the reasons AGOA was put in place was to be favorable to exporting African producers, but it also was put in place to build a commercial bridge between the United States and these parts of the African continent. There are all kinds of training and support trade missions in different African countries when they adapt to the AGOA requisite… [together] it helps create a better commercial environment.

What kind of services and products does Africa have to offer? 

Nilesh Mistry, Customs & Trade Consultant, Misca Advisors Ltd: 

In terms of products and services, Africa’s got a diverse range of products and services to offer. You’ve got tourism opportunities, you’ve got IT opportunities… Africa is really a growing continent, especially the youngsters who are getting into a lot of technology products that are really quite world-class. But, again, understanding a market means having to spend time in that market, having to do due diligence to find out who you can talk to and who can give you what you need.

You’ve got to be very careful. Yes, international trade is a good business, but it’s a very risky business and, as a business, you’ve got to ask, “How can I reduce and minimize my risks?” Don’t go in thinking, “I can make a lot of money.” Instead, go in asking “What are the risks involved and how can I avoid them?” Africa, like every other country, has its share of shocks, so  you can use distributors and agents, but make sure that you’ve vetted them thoroughly and know what they can offer you and what you can give them. 

What is required to be an AGOA-eligible country? 

 Rob Howard, CITP, Of Counsel, Canada, Givens & Johnston:

To be an AGOA-eligible country, a country has to prove that it’s establishing and following market-based economies and the rule of law. Things like the elimination of barriers to U.S. trade, investment protection of intellectual property, efforts to combat corruption, policies to reduce poverty, increasing the availability of health care and education, protecting human rights, worker rights, and the elimination of childhood labor practices.

When I first heard about AGOA, I thought, why would it be in the country’s best strategic interest to just lower all their tariff barriers and then not demand anything in return? The answer is, I think the U.S. is looking at this as a way to put forward their values and develop these relationships with countries. Kind of like Karl was saying, that’s in their best interest as well. 

What’s the difference between qualifying for AGOA and claiming the country of origin? 

James (Gar) Hurst, Partner, Givens & Johnston: 

There are actually two different things: there’s qualifying for AGOA, which means that 35% of the costs have to be realized in the AGOA country. And then there’s shifting the country of origin which is a slightly different concept. There’s a number of rules and tests that have to be looked at but, essentially, the idea is this: if all you’re doing is repackaging, cleaning, washing, or, in some cases, just merely assembling already manufactured parts, then that is not going to be sufficient work in the country to determine the origin.

What is transshipment and why is it such a concern for US customs? 

James (Gar) Hurst, Partner, Givens & Johnston: 

Transshipment means a couple of different things. Most of the world thinks of transshipment as “Hey, you know, we took the ship from Legos to Rotterdam, and we took the container off of that vessel and put another vessel and went from Rotterdam to the United States. A lot of people think of that.

Transshipment in customs means something different. It means that you’re taking goods from one country, China, for example, and are trying to pass them off as products of another country. That’s important because a lot of goods from China are subject to extremely high duties—in some cases, well over to 300%—in the United States. So, there’s a real temptation there for those producers who now have lost their market to sell to anyone who will take it, then stamp Made in India or Made in Bangladesh, and then try to turn around and sell it to the United States. That is a crime. It’s a crime if you’re doing it fraudulently.

If you’re doing it just sort of negligently the problem is that those goods are still subject to those duties which can be a really nasty surprise for your customer when they’re importing these goods. And now, suddenly, the government comes to them and says, “Oh you owe us you know hundreds of hundreds of thousands or millions of dollars in duties that you weren’t expecting to pay—that would be a problem for profit margin.”

To discover more questions and answers about AGOA, watch the event recording. To learn more about FITT and Africa Business Venture’s partnership, read Looking to diversify? Here’s how and why you should consider entering African markets  

The post Understanding the African Growth and Opportunity Act (AGOA): Event Recap  appeared first on Trade Ready.

A challenging hill to climb

The global pandemic has modified our planning and tested our resilience, determination and commitment to not only free and open trade but inclusive and collaborative solutions. For the global and Canadian economies, analytical results for 2020, as expected, weren’t stellar: The International Monetary Fund (IMF), for instance, estimated that the global GDP would drop by 3.5%; the World Trade Organization (WTO) calculated that the volume of world merchandise trade would contract by 9.2%; and the United Nations Conference on Trade and Development (UNCTAD) projected that global foreign direct investment (FDI) flows would dramatically decrease by up to 40% in 2020.

Likewise, Canadian estimates for last year were not encouraging either, with a GDP estimated to drop by 7.1%, goods exports falling by 12.3%, and services exports declining by 18%. Amid exceptional uncertainty, the world and Canadian economies are projected to grow 5.5% and 3.6% in 2021, respectively.

Two reasons why the Indo-Pacific approach needs to be considered

It must be highlighted that the estimated economic growth in the global and Canadian economies, this year, follows an unprecedented economic collapse that has had severe adverse effects on business activity.

Considering the uncertainty and challenges in both the Canadian and global economies, a recovery strategy that prioritizes Canada’s commerce and investments around the world could promote much-needed sustainable growth and resilience for the country.

Keeping this in mind, there are two main reasons why Canada should seriously consider drafting and implementing an Indo-Pacific approach as a strategic trade policy to support economic recovery:

1. It would bring trade diversity and import-export opportunities to Canadian businesses

First, Canada needs to diversify its trade. Official reports point out that Canada’s exports are the fourth most concentrated by destination out of 113 economies [1]; this is true due to a large share of exports going to the US market. In this regard,

formal engagement with the Indo-Pacific region could represent new alternatives for businesses, including small and medium-sized enterprises, to export their products and services and engage in regional supply chains.

To be successful, the key step in this diversification imperative would be for Canada to take a more proactive role in trade agreements where it is already a member—namely the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It should also consider doing the same for agreements that are in the negotiation stage. For instance, Canada currently has talks in different stages with the Association of Southeast Asian Nations (ASEAN), India, Mercosur, and the Pacific Alliance.

2. It would streamline relations to focus on beneficial trade agreements, such as the CPTPP and the CUSMA

Second, Canada needs to consolidate trade relations with its current trading partners. It must promote and ensure that its businesspeople are reaching their full potential in trade and investment opportunities.

To reach this full potential, Canadians must take better advantage of the 14 Free Trade Agreements in force, giving their business access to 1.5 billion consumers across 51 countries.

In the Indo-Pacific, particularly, Canada currently has access, via trade pacts, to thirteen dynamic economies that could complement its economy perfectly. In order to consolidate these ties, Canada needs to tap the benefits of its membership in trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada-United States-Mexico Agreement (CUSMA).

Two challenges to the Indo-Pacific approach

There are a few challenges that Canada could face in the process of the construction of this Indo-Pacific approach:

1. Contending with differing views on multilateralism

One, it would have to clearly define an approach that represents Canada’s values and legitimate interests and offer a compelling value proposition for the Indo-Pacific region. Canada has characterized its commitment to multilateralism by championing an international order based on recognized standards and rules, such as those established by the United Nations, the WTO and the World Health Organization (WHO), among others.

In this regard, Canada must keep itself away from Indo-Pacific visions that have a goal of the containment of China’s rise and influence in the region.

2. Logistics: The Indo-Pacific region is vast and would require a prioritization of markets

Another challenge that Canada might face with an Indo-Pacific approach is logistical: The region is so diverse and large in geography and includes many countries across the Indian and Pacific oceans. For this reason, Canada’s approach must prioritize markets that can leverage economic recovery in a post-COVID stage and increase the trade and investment presence of Canadian businesses in regional and global supply chains. In this respect, Canada could operate selectively in the Indo-Pacific rather than adopting a region-wide approach. It could, carefully, define its priority markets, initiatives and engagements to support and participate in.

To overcome the challenge of the large capacity of the Indo-Pacific region, Canada could also join efforts and work together with like-minded and APEC economies to find solutions together for common trade and investment issues that require attention in the face of protectionism and unilateral measures.

Without a doubt, Canada’s Indo-Pacific approach could support economic recovery, but it will need to commit itself to a mid-term and long-term action plan that creates and strengthen relations with the Indo-Pacific countries—all supported by a strategic vision. This is an important decision for Canada’s future and it demands a collective effort from both the private and public sectors. The Indo-Pacific approach, if implemented effectively, might represent a milestone for Canada in the post-COVID era and beyond—one that’s based on equitable, diverse and inclusive trade.

[1] 20th annual edition of the State of Trade Report for 2019, Global Affairs Canada

Want to learn more about international market entry for free? Download our FITTskills Lite series Adapting Products and Services to see if your services need to be adapted when entering global markets.

The post How an Indo-Pacific approach could support Canada’s economic recovery strategy appeared first on Trade Ready.

Trade-related organizations play a critical role in ensuring the viability of businesses all around the world. They set and create needed median standards for all trade professionals and the broader business community. This community benefits from the comprehensive and strict oversight in regards to rules, laws, regulation and access to trade and business-related resources.

The Forum for International Trade Training (FITT), for example, has developed global competency standards for the knowledge and training required to succeed internationally, supported by educational credentials and the CITP®|FIBP® professional designation. In this way, we ensure that professional standards and educational resources are always relevant and current for the changing needs of international trade.

In the same way that our organization creates fair and formalized standards and processes for trade training, other trade organizations set standards for the global community in a broad range of other categories. Most people recognize the names of the organizations such as the World Trade Organization (WTO) and the International Monetary Fund, but may be surprised to find out that there are many others.

What are the other key organizations that international businesses and business people should be aware of and how exactly do they govern trade and impact international businesses?

To help answer these important questions, we’ve compiled a quick guide to international trade organizations that touches on some of the most important players and how they influence international trade and business ecosystems. Here they are:

World Trade Organization

Since 1994, the World Trade Organization (WTO) has worked to maintain open lines of communication regarding international trade with its 164 member countries. It oversees existing trade agreements, ensuring that countries are upholding the terms of their agreements, and also helps settle disputes about those agreements.

The WTO also helps countries negotiate and forge new agreements, and it calls out unfair trade practices. With its current membership, the WTO serves all major world economies. Through the WTO, international businesses and organizations can find data and regulatory information related to trade.

International Monetary Fund

While the WTO focuses on supporting the international economy by facilitating trade, the International Monetary Fund (IMF) focuses on establishing sound monetary and economic policies to support the global economy. To do so, the IMF monitors economic policies within its 190 countries to identify potential risks and provide advice. IMF also issues loans to countries to help stabilize economies and provides training programs that help countries modernize their economic policies and workforces to spur economic growth. The IMF also upholds the system that allows for foreign monetary exchanges.

World Customs Organization

The World Customs Organization (WCO) brings customs officials from around the world together to work toward making customs processes easier to navigate for international businesses. It also influences the WTO’s rules of origin and customs valuation processes. International businesses may recognize the work of the WCO through the Harmonized System—the numeric system that is now used by more than 200 countries to help code and classify internationally traded goods.

International Chamber of Commerce

While the above organizations deal with world governments,

the International Chamber of Commerce (ICC) represents companies that do business on an international scale. The ICC seeks to promote the free trade of goods internationally. It advocates on behalf of businesses to the WTO, United Nations and other organizations that affect international trade and business.

Organizations for trade development, trade law, sea and air transportation and economic funding

There are many other organizations that enable international trade and support businesses that trade globally. The United Nations Conference on Trade and Development (UNCTAD) helps developing countries find entry points to international markets, and the United Nations Commission on International Trade Law (UNCITRAL) brings nations together to modernize their economic policies and workforces to spur economic growth.

For shipping companies, the International Maritime Organization and the International Air Transport Association provide guidance and support to marine and air logistics companies, respectively. Meanwhile, The World Bank seeks to reduce poverty globally by offering loans and other support to developing nations.

All of the organizations that impact global trade play specific roles in creating a healthy international economy. While they are all separate, they also coordinate their efforts and support one another to reach their common goals.

Want to learn more about international organizations and business law? Read our article The role of international organizations in international business law.

The post A quick guide to international trade organizations appeared first on Trade Ready.

It’s an understatement to say that 2020 was an unpredictable year. But, with it done and businesses around the world adjusting to the new normal, there are many silver linings to be found. Namely, we’ve seen that with unpredictability, companies have become more resilient and adaptable, pivoting in record-breaking time to ensure their viability from now and into the future. 

Bearing this in mind, our global trade trends for 2021 all focus on the theme of adaptability—each showcasing the innovative solutions that businesses and trade professionals are adopting to innovate with the ever-changing circumstances.

Of course, the pandemic remains a top concern in all regards, but this year is less about reacting to the unexpected and more about coming up with solutions that push us into flexible, future-forward planning.

With that said, here are 10 global trade trends that we’ll be keeping our eye on throughout the coming months.

1. Virtual trade missions (VTMs)

Before COVID-19, trade missions saw government officials and businesspeople travel from one country to another to promote trade between the two. A hands-on, in-person social affair, these missions explored a multitude of business and networking opportunities that solidified key contacts, suppliers and government networks.

Of course, with today’s travel restrictions, in-person trade missions have mostly been postponed, and virtual trade missions (VTMs) are now taking their place.

What does this mean?

For starters, virtual missions focus on video chat and virtual conference meetings that cover the fundamental topics of interest, such as trade, markets, import and export opportunities, contact introductions, Q & A sessions and more. With zero travel and all networking and mission business occurring in a virtual environment, VTMs provide a practical solution for those seeking to keep their trade missions moving and active.

Bernadette Fernandes, Founder & CEO of The Varanda Network, in FITT’s Save Money & Recover Faster webinar saw these VTMs in action, stating:

I’m seeing a lot of virtual trade missions and site visits that we weren’t seeing before. And in some cases, when physical site visits are absolutely necessary to visit a supplier or a buyer, I’m seeing a lot of temporary outsourcing. An example of temporary outsourcing, as I call it, would be contracting local boots on the ground to visit and gather the decision-making criteria that you need.”—Bernadette Fernandes, Founder & CEO of The Varanda Network

Of course, there are some caveats to VTMs. Elements like meet and greets over meals and general cultural exposure cannot accurately be accomplished through virtual settings—but many businesses are working within the confines of the limits to ensure that the most important details are conveyed through online discussions and presentations. 

As more countries get used to executing VTMs, we expect an onslaught of new formats to evolve—from schedule planning and the order of events all the way to the individual meetings and how they are conducted to maximize time. Specifically, with VTMs, participants will have to be mindful of time zone differences, virtual chat/conferencing fatigue and technical snags.

While most believe VTMs to be an interim solution to the current pandemic restrictions, they do have benefits. Such as lower costs (no hotels, airfare or food expenses) and new approaches to international business in an online setting. 

2. Increased cross-industry collaboration

As experienced in the latter half of 2020, many businesses will branch out to other industries to stay afloat. Dr. Halia M. Valladares, panellist in FITT’s TradeElite chat last year said of this trend:

“It is a great time to find new partnerships; by collaborating you can share the costs and reduce your risks, plus increase your reach.”—Dr. Halia M. Valladares, CITP and Chair of Internationa Business, Entrepreneurship, NPRO and Aviation

Dr. Valladares’s sentiments have been seen in action too. Many innovative cross-industry collaborations and partnerships between companies around the world have made waves over the past few months. A report by Deloitte, for instance, showcased how OpenTable, a restaurant reservation platform, “entered into new partnerships with a variety of supermarket chains and other essential businesses to turn a visit to grocery and other retail stores into a reservable event.” 

In other cases, companies pivoted and collaborated across industries to provide essential products to consumers during COVID-19. Cosmetics giant LVMH, for example, switched its perfume manufacturing for Christian Dior, Guerlain and Givenchy to hand sanitizer production. Working with the French health authorities, this sanitizer was offered for free to help prevent the spread of COVID-19. 

Similarly, governments also reached out to other industries to provide support for SMEs. The Government of Canada partnered with Shopify to create Go Digital Canada, a central resource hub for Canadian entrepreneurs to help their businesses get online and grow with Shopify resources and tools.  

How these collaborations will transform in the post-pandemic era remains to be seen, but the same Deloitte survey found that

78% of executives said that they “would retain the new partnerships to some extent after the pandemic—the highest of all business model changes.”—Deloitte report, Fusion: Organizations can better help the people they serve by creating innovative experiences through cross-industry fusions.

3. Localization

Localization was a hot topic in 2020 in response to COVID-19 related travel and trade restrictions. But it was on the rise even prior to the pandemic, with growing nationalism in many countries and grass-roots movements to “buy local” and keep supply chains local.

The trend continues to gain steam in 2021. Supply chains are still feeling the strain of restricted travel, resources and suppliers. However, many see this not as a restriction on using international supply chains, but more of a modification. One that keeps chains open to specific regions that can provide reliable trade support during challenging times.

In an IMD article Carlos Cordon, Professor of Strategy and Supply Chain Management, noted this. Stating that “Global trade is going to become much more regional than before. Companies realized the risk of having either a single supplier or suppliers that are located in the same region or country.”

However, some experts, such as Pierre-Olivier Bédard-Maltais, an Economist who contributed to the BDC blog, argue that international business and exporting in particular, will benefit in the long run by keeping their trade relations international: “Businesses that export have higher sales, grow faster and are more resilient in an economic downturn.”

Sonia Galat, Co-Founder and Managing Director of Africa Business Venture echoes these sentiments. In our last webinar, she suggested that now is actually a great time for new markets:

“Especially now, this is the period where everybody’s at home, everybody’s more open to discussion, so this is a very good time for SMEs to position themselves in a market they may have never previously considered.”—Sonia Galat, Co-Founder and Managing Director of Africa Business Venture

4. Agility

For many businesses, agility in 2021 will come from becoming virtually nimble. From bringing brick-and-mortar sales online to turning in-house teams into remote teams to transitioning from travel-based events, negotiations and missions to virtual equivalents, companies who are succeeding at being agile will continue to innovate in the online arena. 

Companies will have to look outside their traditional business plans to re-think their customer bases and consumer needs. The pandemic has drastically shifted the commodity demand, whether it be for online learning, masks, sanitizer and beyond.

5. Market diversification

While some believe in the benefits of localization, others feel market diversification is the best route to success in 2021. According to Beiling Yan, Senior Research Economist at Export Development Canada, “Exporters tend to perform better than non-exporters for several reasons: They specialize their production and enjoy economies of scale; they interact with, and learn from, foreign consumers and suppliers; and they face stronger competitive pressure that prompts them to make investments and improve their business practices.”

And while many may instinctively want to reduce their exports in a time of financial duress and travel restrictions, experts are warning that limiting your market to one country or region may reduce your sales, especially if your base market is a small portion of the global market.

“Diversify your markets geographically,” advises the Business Development Bank of Canada (BDC) in their blog, “Don’t abandon a market in which protectionist sentiment is on the rise if it’s still a viable market. On the other hand, it is worthwhile to consider other markets or contemplate expanding into other Canadian provinces.”

They also point out that the Canada-European Union Comprehensive Economic and Trade Agreement is creating new opportunities for Canadian exporters who can benefit from the elimination of tariffs.

6. Supply chain as a service (SCaaS) 

Adequately managing and executing all your supply chain tasks in-person, in-house and with only one team isn’t easy. Especially in our current times. Many companies are outsourcing these tasks to outside vendors who provide this support as an on-demand service.

Taking a cue from the SaaS acronym, SCaaS, or supply chain as a service, provides supply chain services on-demand. Both through innovative software integrations and external support systems. Some areas where these systems are prominent include logistics, accounting, transportation management and distribution services.

In light of travel restrictions, many are relying on these outsourced services. They ensure that people are on the ground to assist with in-person tasks in place of their own teams. Providing convenience and peace of mind, many believe that even after the pandemic these SCaaS relationships will remain strong. Being that they make managing a supply chain easier overall.

7. Supply chain risk mitigation

Business supply chains were hit hard by the pandemic in 2020. In our article “How COVID-19 delays could affect your supply chain from contracts to insurance and customs clearance,” Rahim Mohtaram, Professor of Business and Supply Chain Management at Saskatchewan Polytechnic, pointed out the many difficulties, such as

– The delay and non-delivery of goods and services

– Factory shutdowns 

– Production with low capacity 

– Governmental prohibitions and restrictions on export and import 

– Drastically increased prices for certain goods 

– Transportation and logistics companies’ limitations

– Order cancellations by the customers

In order to mitigate these risks moving forward in 2021, businesses are reassessing their supply chain strategies and developing innovative solutions, such as focusing on only the products that have the highest returns, developing stronger contract stipulations and reaching out to government trade agencies, legal, trade, finance compliance teams, insurance companies, transport and shipping companies, banks and financial institutions to discuss the changes to operations and systems in the current climate. By reaching out to these contacts, companies can better understand where their supply chain deficiencies exist. And furthermore, how they can work with stakeholders to find solutions.

8. Elastic logistics

Much like the name suggests, elastic logistics is all about flexibility. In 2021, some businesses will pivot away from a lean and streamlined approach to logistics that reduces costs and improves profit. They, instead, will diversify their activities and investments so they can compete with a rapidly changing global economy. This could mean the integration of new technology like transportation management systems (TMS) or branching out to international partnerships and outsourced support in other countries. 

The focus here is to have the nimble ability to scale at the drop of a hat. As well as having systems that can assist with tasks that were hampered by travel restrictions, economic downfalls or emergencies. A larger up-front investment might be hard to hand out in these times. Although many argue that the short-term costs provide monumental long-term returns.

Having enhanced technological insights and capabilities, better global partnerships and an expanded reach all make the elastic approach compelling and attractive.

9. Exporting rebound 

EDC’s Global Export Forecast-Autumn 2020 predicted a moderate improvement in the overall conditions for 2021. Specifically, they saw exports rising by 9%.

Meanwhile, a more recent BDC blog found that “Canada’s 2021 economic outlook is similar to that of other developed countries: After the largest economic contraction since 1945 (a dip we estimate at 5.5% of GDP), the economy should grow sufficiently to largely offset the losses of 2020.”

Of course, experts warn that these forecasts are not set in stone and heavily rely on the current pandemic situations. Especially the vaccine roll-outs and case rates.

Luckily, government support initiatives have helped consumers keep spending throughout the pandemic. However, the postponement of business investments across the board by cautious companies means a slow recovery overall.

10. Transparent messaging and sustainability

It’s hard to emphasize the importance of your business when the pandemic is really at centre stage. Businesses want to sell their products and services but they don’t want to appear insensitive to the real struggles of the public during COVID-19. Unsurprisingly, this awareness has changed the way businesses approach communications in 2021. Not only are companies are making it clear that they are prioritizing health and safety during business operations, but they are being transparent about their business struggles, letting customers know about supply delays, transportation setbacks and product or service delivery modifications.

Businesses are also noting how consumers, who are spending more time outdoors, want more involvement from brands on sustainable initiatives, whether it’s through waste reduction or better manufacturing practices.

The changes we see in 2021 will pave the way for new forms of international trade, business and communication. Proving that not only are international businesses resilient in the face of adversity, but they are innovative too. That’s one point of consistency that we can always rely on, no matter the global situation.

The post 10 global trade trends we’ll be watching in 2021 appeared first on Trade Ready.

These are the risks attributable to the actions of a country’s government. In its extreme form this can mean confiscation of the firm’s assets without compensation, which is what happened to American businesses in Cuba when Fidel Castro came to power.

A milder form of this tactic is expropriation whereby the government seizes assets but provides some compensation. Both of these forms of asset seizure are less common today, in part because countries need to trade with each other.

However a form of ownership transfer known as “domestication” is still common. Under domestication, foreign investments are transferred to national control and ownership through a series of government decrees. This form of asset seizure is common in countries that are trying to encourage local ownership.

Political risk requires rapid adjustments when changes occur

Firms like to operate in a stable political environment which is business friendly and enables them to make long range plans with a degree of certainty. Many developing nations, and some developed nations, have a history of rapid political change and subsequent shifts in policy and direction, which can often have a major impact on business.

An example of this is India, which has seen frequent changes of government since independence. Earlier governments were not favourable to foreign investment and their policies discouraged businesses from locating there.

Recent governments, however, have reversed course. Many western companies, particularly software companies, have been locating in India, initially to take advantage of lower wage rates, and more recently to tap into a well-educated workforce.

A more extreme form of political instability is caused by civil wars and coup d’états many of which are brought about by the rise of nationalism and accompanying ethnic hatred. Such conflicts can result in physical damage to a company’s property, but more problematic is the danger of being seen to be allied to one side or the other.

A businessperson has no control over these issues but it is often possible for a business to operate during periods of political instability, as long as it is permitted to operate within the country and make a profit.

Can you weather the storm or will you be blown away?

The manner of changing government is an important indicator of political stability, whether through free and fair elections or by military takeovers. From a business standpoint, even the latter need not necessarily be alarming. For example, until recently Thailand had a long history of coups, which were usually bloodless and allowed business to go on as usual.

There is very little that the international manager can do to influence the course of political events in foreign countries. The best that can be hoped for is to understand the situation, determine what the attitude of the current government is toward foreign business, and assess the likelihood of the current attitude persisting, either because the government stays in power or because any replacement would follow the same general line toward business.

A good strategy is to study the recent history of the country, talk to local experts and use up-to-date country risk assessment guides published by export credit agencies to get some sense of the most likely future scenarios.

Once all factors are evaluated, the manager can decide on the degree of exposure he or she is willing to accept.

Want to learn more about analyzing and planning to mitigate risks caused by currency/foreign exchange, economic, social or political circumstances? Check out the FITTskills Risk Analysis and Management online workshop!

5 tips for managing your political risk

1. Effective research and planning

Action to limit political risk starts by researching the target country and developing a strategy to monitor changes there. This initial research should also include an analysis of the country’s past actions and attitudes toward foreign businesses so that these can be used as predictors of the future.

Once the research is done and a process put in place to gather intelligence on an ongoing basis, the firm should develop a contingency plan of possible reactions to potentially unfavourable future developments. This advance planning is critical as adverse foreign developments can move faster than the firm’s ability to react.

2. Foreign financial involvement

One strategy to mitigate foreign risk is to get the financial sector in the foreign country involved with the firm’s project. Once foreign financial intermediaries have a financial stake, they will act as champions for the firm in the event of a threat from the government.

3. Risk sharing

Potential risk sharing techniques include all of the partnership options discussed in the chapter on strategic alliances. Partners are able to provide local intelligence, share the financial risk, and offer advice on how to respond to events as they unfold.

Licensing is another form of risk sharing, whereby the firm risks the appropriation of its technology but does not risk any of its other capital or financial assets.

4. Planned domestication

If the firm feels that expropriation is a possibility, it is possible to take preemptive action by pursuing a strategy of planned domestication. This provides the firm with the possibility of recovering at least some of its investment prior to expropriation.

5. Good corporate citizenship

A firm will win many friends in its foreign markets if it acts as a good corporate citizen.

This starts with the realization that it is a guest in the target country and acts accordingly.

It is followed by setting out to achieve a win-win situation for the firm, the foreign country and its foreign employees. It can do this by remitting its share of country taxes, by paying local employees fairly and by investing in the country’s social fabric.

It is enhanced by making sure that its expatriate employees are culturally sensitive to local conditions and do not behave in a superior manner. By involving the local governments and populace and developing goodwill, it is possible to survive even violent political change.

The post Act now to minimize your political risk in foreign markets appeared first on Trade Ready.

The beginning of a new year is always a great time to catch up on some reading. Why not take the time to get up to speed on the latest industry trends and tips? Or take a deeper dive into a subject of interest? To help you on your journey, here are the 10 articles that TradeReady readers found most interesting in 2019. Happy reading!

10. Identify, analyze and mitigate the social risks to your business

Social risks arise from negative local perceptions of a business’ impact. Learn to identify and reduce these risks with corporate social responsibility.

9. Andreina Figuera, CITP|FIBP – International Sales Executive

Andreina Figuera, CITP|FIBP has built a wide global network, helped her company grow its sales around the world and is now teaching the next generation.

8. Read this Incoterms® overview to start preparing for the new Incoterms® 2020 updates

Learn more about what Incoterms® are and how they’re used in advance of the new Incoterms® 2020 rules that will come into effect on January 1, 2020.

7. The Canadian Chamber of Commerce and the Forum for International Trade Training establish partnership to train Canadian businesses on Incoterms® 2020

Read about how FITT and the Canadian Chamber of Commerce are partnering to deliver Incoterms® 2020 in-person training to Canadian businesses.

6. CanExport Grants: Expanded Eligibility Criteria for Businesses

Find out how your business can take advantage of new funding for international market development under the CanExport program.

5. Need a global market entry strategy? Ask these 12 questions

Ask these 12 key questions and devise a strong international market entry strategy for your business to ensure success in new markets.

4. 3 key issues affecting global trade right now

Rising tariffs, counterfeiting and intellectual property theft, and government seizures of vessels are all creating problems in the world of global trade.

3. 6 global supply chain trends to watch in 2020 and beyond

Current supply chain trends are being shaped by efforts to operate smarter, faster, more sustainably and in a more customer-centric manner.

2. Overcome 9 of the most common market entry barriers with these strategies

Without a full understanding of the different types of market entry barriers, organizations may choose an ineffective market entry strategy.

1. 10 global trade trends we’ll be watching in 2019

Here’s a preview of the 2019 global trade trends that could be dominating the headlines and your work conversations throughout the year.

The post Top 10 most read global business articles of 2019 appeared first on Trade Ready.

It’s that time again where we like to look ahead at the incoming year and pinpoint the biggest trends to keep an eye on in the global trade environment. 2019 was another year full of challenges, surprises, and continued volatility. This year looks to be less explosive, with fewer conflicts but a general slowdown in trade growth. However, more small businesses are jumping into international markets than ever before, and new trade deals and tech continue to bring ample opportunities for those willing to make the leap.

Here’s what we’ll be watching in 2020.

1. Slowing economic growth

After a difficult 2019, most global outlooks were projecting subdued 2020 global trade growth late this year. This was largely due to a sharp downturn in manufacturing activity and global trade volatility with Brexit and China-US relations.

“The weakness in growth is driven by … higher tariffs and prolonged trade policy uncertainty damaging investment and demand for capital goods,” stated the IMF blog.

In Canada, specifically, global growth forecasts were downshifted in EDC’s fall update to the 2020 outlook.

“With the slowing global economy and lingering trade tensions weighing more heavily on Canada’s exports than previously expected. EDC now forecasts export growth to moderate further to 2.6% in 2020, revised down from the 3.4% growth forecast in spring 2019.” – EDC Global Export Forecast 2019

However, with the very recent and significant progress made on the Canada-US-Mexico Trade Agreement and the “phase one” US-China trade deal, growth forecasts into 2020 may soon be revised again, to the positive this time.

2. Service export opportunities growing in new regions

Canadian trade in services continued to grow for the 9^th year in a row, with industries such as travel, finance, resource development, technology, transportation, and agriculture presenting the best opportunities. While the U.S. is still the biggest importer of Canadian services, the fastest growing relationship in commercial service exports was with African nations (13%).

In the U.S. service exports are increasing as well, reaching $71.1 billion for the year as of October.

Service exports also seem to have been immune to the downturn weakening goods exports.

“Goods exports have been more negatively impacted by softening global conditions and are expected to grow at a modest 3.3% in 2019, slowing further to 2.3% in 2020. ”

“Alternatively, services – exports have been resilient, and continue to be steady with forecasted growth of 5.1% this year and 3.9% next year.” –EDC Global Export Forecast 2019

3. China – “Decoupling,” or in “phase one” of renewing trade relations?

After almost three years of escalating tensions and retaliatory tariffs between the US-China and Canada-China, talk began to emerge of a “decoupling” strategy. This would see China drastically reduce trade with North America, replacing it with domestic inter-regional trade.

Already, China’s foreign direct investments in the U.S. dropped 88% from 2016-2018. The potential for a drastic drop in China-U.S. trade is raising alarms about possible tech wars, and remapping supply chains to leave out the west all together.

However, this fall saw the U.S. and China put much of the contention behind them and most recently, sign off on “phase one” of a China-U.S. trade deal. Details have yet to be released, but during a press conference it was announced that,

“Trump agreed to scale back some tariffs (which was China’s top demand and was cheered on Wall Street). In exchange, China said it will buy more U.S. farm products (which Beijing had wanted to do anyway), enhance its intellectual property protections and allow U.S. banks and credit card companies full access to China.” – according to the Washington Post

Canada is watching the developments between China and the U.S. closely, as increased trade between the two nations could have either a positive or negative effect on Canada’s energy and agricultural exports.

The shifting dynamics between China and North America will send shockwaves through the global market so we will certainly be watching for any developments.

4. Tariff workarounds

Because of the continued uncertainty between China – North America trade, companies have started looking for workarounds to avoid getting caught by tariffs. Other nearby regions, such as Vietnam, South Korea and Taiwan, as well as Mexico have been seeing increased imports as North American companies have tweaked their supply chains to reroute around China.

A little less on the up-and-up, some North American-based companies have been exploiting loopholes in trade policy to circumvent paying increased tariffs on Chinese-manufactured goods. Specifically, section 321 of the Tariff Act of 1920’s de minimis rule. Some are stretching the legitimate rules, which U.S. Customs is aware of and claims to be cracking down on. Others are using the rule to apply correctly to their goods.

Either way, some of those that can’t avoid China-North American trade uncertainty are finding ways around paying the tariffs, for now. We’re keeping an eye on new manufacturing hot spots as they pop up and trade policy continues to shift. It’s a good time to be a trade lawyer.

5. More new supply chain tech

The adoption of buzzworthy technology, such as artificial intelligence, blockchain, drones and robotics have been revolutionizing supply chains for the past few years. This is reaching a new level of maturity as companies big and small take agility and automation to the next level into 2020.

Some predictions we’re seeing illustrate the level of adoption of this technology,

“By the end of 2021, half of all manufacturing supply chains will have invested in supply chain resiliency and artificial intelligence (AI), resulting in productivity improvements of 15%. And,

By the end of 2020, half of all large manufacturers will have automated supplier and spend data analysis, resulting in a 15% procurement productivity gain.” – MH&L Magazine

Shippers are recognizing this and have gotten on board in a big way. Two of the world’s leaders in moving containers, Maersk and DAMCO, are doubling down on streamlining logistics processes with higher integration of inland services. This will help shippers to route their transportation at reduced cost, as the two companies connect sea and land, beyond the port of call. Digitization plays a huge role in this integration, giving them access to real-time data and creating more agile and efficient processes and operations.

See more 2020 supply chain trends to watch here.

6. Beyond greenwashing – Demand for truly sustainable products/services increasing

Research is showing that people are voting for sustainability with their wallets. According to a 2019 study by NYU Stern’s Center for Sustainable Business, 50% of the growth in consumer packaged goods from 2012-2018 came from sustainable products, accounting for 16.6% of the total market. That’s a 29% jump in that five year time period.

A recent report from the International Trade Centre found that consumers in the EU are increasingly seeking sustainable and ethical products and have increased savviness on what makes a product or company truly “sustainable.”

The numbers are compelling –

85% of retailers report increased sales of sustainable products over the past five years and 92% of retailers expect sales in sustainable products to increase in the next five years.

The message from the report is clearly summed up by Arancha González, Executive Director, ITC in the introduction:

“This report carries an important message for small businesses seeking to export to major industrial nations in the European Union: Retailers consider sustainability key, when buying from suppliers.”

We’ll be watching to see how impactful the growth of sustainable business practices and purchasing behavior is in 2020, and how businesses respond.

7. Localization in supply chains and communications

The last three trends – tariff work arounds, new supply chain tech, and increased demand for green/sustainable goods – together usher in a new era of localization. Businesses are looking for ways to bring manufacturing closer to their consumers, allowing them to sidestep tariff uncertainty. They are engaging new tech in wringing every last drop of inefficiency and waste out of their supply chains, a move that will please their climate conscious consumers.

As consumers are getting increased access to a wider range brands and products and the concern for climate issues accelerates, many are also turning to products and services that speak more directly to them and come from closer by. Here’s where the other type of localization – adapting your product or service to a local market – will be increasingly important into 2020.

The need for proper translation and transcreation is growing, alongside machine translation and video creation.

8. SMEs going global from the outset

Today, more companies are born with a global mindset than ever before. Companies are often factoring in global market entry from the outset, and a majority are planning on going into at least one international market within the first five years. This is a major change from the recent past where international business was seen as a large corporation’s game.

According to Rochester PR Group’s UK Market Entry Index,

“64% of Canadian respondents stated that the vision for their companies had always been global rather than local. The peak age of a Canadian business first starting to trade overseas was 2–5 years at 39%, compared to 23% for under a year.”

In an article for Hockeystick Deanna Horton, a Fellow at the University of Toronto’s Munk School of Global Affairs and Public Policy explains further,

“One always thinks that companies, especially small companies, need to be a certain size before they expand to other markets. But the digital economy is different. Canadian tech companies in particular are going global from a very early stage. For them, going global means opening a small office with a few people in another country. So, it’s not always as complex as it can be for manufacturers.”

But many SMEs still feel too intimidated or unprepared to make the international leap. Here’s where training in the right areas can make a big difference in a company’s global market entry success. Doing the right research to be prepared to face the local competition, draft your business plan, build the right team, and adapt your products/services are the main keys to success. Fortunately, there are a multitude of training, resources and support for businesses preparing to make the journey.

9. Consumer-driven data privacy

Privacy issues have been in the spotlight over 2019 with several large organizations being scrutinized for data leaks and questionable practices. With the implementation of the European Union’s General Data Protection Regulation (GDPR) in May, 2018 companies were more or less forced to sit up and take data protection seriously.

Into 2020 companies will continue to feel the implications of GDPR around the world, and other regulations are making their way through approval processes as well, such as the California Consumer Privacy Act (CCPA) which will come into effect on January 1, 2020. South Korea and Brazil are also working on similar protection policies.

E-Privacy and the transferring of personal data will also be under the microscope this year, along with the application of artificial intelligence technology. Companies who have put little priority into complying with privacy regulations should re-evaluate their stance, as more companies are being outed for breaches in privacy and data leaks, which comes with fines, fees, and often significant losses.

We’ll be watching to see how oversight and consumer behaviour changes alongside the developments in online technology in 2020.

10. Global trade volatility easing

After a few years of increasing uncertainty and upheaval, most outlooks are finally showing a trend for an easing of global trade volatility into 2020.

Towards the end of 2019 massive uncertainty around the state of North American trade relations started to dissipate with some of the last hurdles being cleared in the ratification of the United States Mexico Canada Agreement. Canada and the U.S. agreed to revised terms in December and it is expected to be signed in early 2020.

Tensions between China and U.S. that have seen the U.S. impose tariffs on more than $350 million worth of Chinese goods have been eased by “phase one” trade agreement reached last week. Already additionally scheduled tariffs have been cancelled and  some of the existing ones have been cleared as well. Exporters dealing in the regions can breathe a tentative sigh of relief for the year ahead.

In the UK, Brexit uncertainty seems to be clearing as well after a decisive election has paved the way for the conservative party to move forward on their plans to leave the European Union. It remains to be seen what Canada’s trade relationship with the UK may look like after the UK-EU split.

Another massive piece of trade policy is on track to be signed in 2020. The world’s largest ever trade agreement, the Regional Comprehensive Economic Partnership or RCEP, is made up of 15 mostly Asian nations and includes all 10 ASEAN members as well as China, Australia, New Zealand, Japan and South Korea.

If the last few years have taught us anything, it’s that in the global trade environment, nothing is certain and staying on top of the latest developments is the best way to plan for the years ahead.

Here’s to a peaceful and prosperous new decade!

The post 10 global trade trends we’ll be watching in 2020 appeared first on Trade Ready.