However, many firms, especially SMEs, need to understand them, their benefits, and how to apply them to their market diversification strategies. Let’s get into the details in this article.

What are Free Trade agreements (FTAs)? A practical definition

A Free Trade Agreement (FTA) is an arrangement or pact between two or more countries committing to reducing or eliminating restrictions on trade. According to the OECD:

“Globalisation creates opportunities for workers, consumers, and businesses and has helped lift millions out of poverty. Open markets strengthen economic resilience and diversify supply chains.”

In other words, with FTAs, participating countries can establish business rules that make everyone happy. In practice, FTAs create economic advantages by:

• Reducing or eliminating tariffs on many goods
• Simplifying customs procedures
• Opening access to services markets
• Providing rules on intellectual property, investment, sustainability, and procurement
• Making trade more predictable by establishing clear legal frameworks

For exporters, these benefits translate into competitive pricing, smoother logistics, and reduced regulatory challenges. However, when a comprehensive FTA is missing, friction or trade wars happen. For instance, the recent US-China trade wars were a result of an incomplete FTA covering all their trade partnerships.

It was also due to policies that exempted specific products from tariff-free status to protect local producers and manufacturers from foreign competition in their industries.

Types of FTAs and what they mean for your business

FTAs come in different forms, depending on the sort of arrangement or understanding between the involved parties. Here are the three most common types of FTAs and how you can benefit from them as an importer/exporter.

1. Bilateral Free Trade Agreements

A bilateral FTA is a trade deal between two countries. The goal is to reduce or remove barriers such as tariffs, quotas, or restrictive regulations. These agreements are direct in structure. Each partner sets clear terms that make it easier for their businesses to trade.

Bilateral FTAs often lead to lower costs for exporters. They also create simpler customs procedures. Companies entering a new market can gain predictable rules and fewer administrative hurdles.

2. Regional FTAs

These agreements involve several countries within the same region. The countries come together to form a trading bloc. The bloc allows goods to move more freely across its borders.

Take, for instance, the has a shared framework that supports mutual benefits among partner countries. It also helps create freer markets and stronger economic growth.

Companies with highly integrated supply chains typically benefit from Regional FTAs.

The agreements provide access to several markets under one regulatory system. Businesses do not need separate compliance strategies for each country. They also avoid extra levies when trading within the region.

3. Comprehensive Economic Partnership Agreements (CEPAs)

These kinds of agreements often cover services, investments, e-commerce, mobility of professionals, and deeper regulatory cooperation, instead of just goods. It is a free trade agreement between two countries that is more ambitious than a regular FTA, with the goal of promoting other kinds of investments while opening up trade.

The comprehensive scope of CEPAs makes them better suited to service providers, digital firms, engineering companies, or legal or consulting services. With CEPAs in place, partnering countries can facilitate mutual digital trade and open up the market for professionals

However, it’s crucial to note that the World Trade Organization (WTO) sets global rules that bind all FTAs. The regulator ensures that the advantages of an FTA are not granted to non-parties and that the agreement doesn’t lead to unfair trade practices.

How to read an FTA: A step-by-Step approach

FTAs are similar to legal documents, so they are usually voluminous, with hundreds or thousands of pages. However, they follow a similar structure. According to the EU’s Access2Markets guide:

“Reading a trade agreement becomes easier once you know what you are looking for.”

So, what should you look out for? We highlight them below:

1. Start with the Table of Contents

FTAs follow a structured format, with important chapters such as tariff elimination, rules of origin, customs procedures, investment provisions, and technical barriers to trade (TBT) being essential to review early on.

With these details, you can easily determine which parts relate to your product or service and take action, if necessary.

2. Check for tariff commitments

The tariff schedule is essential for exporters. First, find your product’s HS (Harmonized System classification ) code, then identify the correct tariff line, and check if tariff reductions are immediate or phased.

3. Understand Rules of Origin (ROO)

Preferential tariffs only apply when your goods qualify as originating in the partner country. If you do not meet the rules of origin (ROO), you will not receive the advantages of a free trade agreement, even when the tariff under the FTA is officially set at zero.

There are three common ROO tests to check:

• Value-add test
• Change in tariff classification
• Specific processing requirements

Manufacturers managing intricate supply chains may encounter challenges with rules of origin (ROO), yet accurate interpretation remains crucial. Misinterpretation, whether inadvertent or deliberate, can result in penalties, processing delays, and loss of preferential treatment.

4. Review customs and documentation requirements

Most FTAs outline simplified procedures, such as:

• Self-certification of origin
• Advance rulings
• Express shipment provisions
• Digital documentation

These details matter for operational planning and cost forecasts.

5. Check sector-specific annexes

Many industries, including automotive, pharmaceuticals, agri-food, financial services, and telecoms, have dedicated annexes that clarify specific licensing rules, standards and conformity requirements, limits on quotas, and professional mobility conditions

For service providers, these annexes often determine what you legally can and cannot do in the target market.

6. Check for services (If you’re not a goods exporter)

Service-focused businesses should also examine the core details of FTAs. These include market access commitments, national treatment obligations, intellectual property protections, and digital trade rules.

How FTAs fit into your market entry strategy

Using FTAs effectively requires understanding the law and finding legal advantages that support commercial goals. Here’s how they support market entry and diversification:

• Better Pricing Through Reduced Tariffs: Lower tariffs give you margin advantages. In price-sensitive markets, this can decide whether your product succeeds.
• More Predictable Costs and Logistics: FTAs reduce uncertainty around delays, documentation, and compliance.
• Access to New Markets for Services: Professional services such as IT, consulting, architecture, and engineering often gain new rights under FTAs.
• Safer Investment Conditions: Chapters on investment protection reduce risk for foreign-invested subsidiaries or joint ventures.
• Lower Market Entry Costs: Simplified customs, faster approvals, and recognized certifications can reduce time to market significantly.

How to apply FTAs to your business

• Identify relevant FTAs for your target markets
• Classify your product or service correctly
• Analyse tariff schedules
• Map your supply chain against rules of origin
• Prepare documentation and compliance processes
• Engage customs brokers or trade advisors early
• Incorporate FTA benefits into your market entry strategy

Common errors to avoid when using FTAs

Even experienced businesses can misinterpret FTA provisions. So, it’s best to maintain the best practices and avoid mistakes. Common mistakes include:

• Assuming all products benefit from zero tariffs
• Using the wrong HS code
• Overlooking ROO requirements
• Failing to maintain origin documentation
• Ignoring service commitments
• Assuming all FTAs cover digital trade
• Miscalculating input costs for ROO compliance

Why do modern businesses need to understand FTAs?

Trade patterns continue to shift. Geopolitical uncertainty is rising. FTAs are adjusting to these new realities. Businesses that understand how FTAs work gain an advantage.

Those who know how to read these agreements can build stronger resilience. They also position themselves for better international success.

In other words, FTAs are not just legal documents. They are strategic agreements that can shape where you source materials, where you establish distribution centres, how you price your products, and how you expand internationally with fewer complexities

Companies that have FTA analysis as a solid part of their market entry strategy are better positioned for sustainability than those that treat FTAs as negligible.

Make FTAs work for your business

FTAs are essential tools for many businesses Understanding them will better equip your business to compete globally, reduce trade costs, and enter new regions with greater confidence. That way, you can create new opportunities for growth, diversification, and competitiveness.

The post Understanding FTAs and how they apply to your business appeared first on Trade Ready.

To qualify for preferential duties, exporters must meet ROO rules, but these are complex – and strict compliance is essential to avoid costly customs audits. In this article, we outline what companies need to understand about rules of origin – and highlight the key points exporters must manage to avoid failing an audit.

What rules of origin actually do

Rules of origin are fundamental to international trade because they gatekeep access to Free Trade Agreements (FTAs). ROOs determine the economic nationality of a product, i.e., where a good is truly considered “from” for tariff purposes.

Rules of origin are the laws, regulations and administrative guidelines that governments use to determine an imported product’s country of origin, not always an easy matter when the raw materials, manufacturing, processing or assembly of a product can be provided in several different countries.

For example, simply shipping a product from, say, Canada to the EU, does not automatically grant it preferential treatment under the Canada European Union Comprehensive Economic and Trade Agreement (CETA).

If the product uses inputs from outside the FTA zone, it must undergo substantial transformation in the exporting country to be deemed “originating” in that country.

Exporters must meet the strict, product-specific criteria laid out in each FTA, in order for the product to qualify as “originating” and become eligible for reduced or zero tariffs.

Two main types of rules of origin

Rules of origin are generally categorized into two distinct types, each serving a different purpose in international trade: preferential and non-preferential.

Preferential ROO

These are the rules that matter most to exporters seeking a competitive edge. Preferential ROO are applied exclusively within the framework of FTAs, such as USMCA (formerly NAFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), or the Regional Comprehensive Economic Partnership (RCEP).

Meeting these rules is how a product qualifies as “originating” under the terms of the agreement, which in turn grants it preferential tariff treatment. In practice, it means that importers pay either a reduced or a zero-duty rate.

Non-Preferential ROO

Non-preferential ROO determine a product’s origin for general commercial purposes and are applied unilaterally by a country (or by multilateral organizations like the WTO) in cases where no FTA benefits are being claimed.

These rules do not usually grant any special tariff advantages, but countries still impose these rules for various administrative and trade remedy reasons, for example:

• Trade statistics: Accurate recording of import and export data.
• Country-of-origin labelling: Determining the “Made In…” label required on goods.
• Trade remedies: Applying specific measures like anti-dumping or countervailing duties against goods determined to originate from a specific country.
• Government procurement: Determining the eligibility of a product for public tenders.

While both rule types are legally required, for the specific goal of maximizing profit and offering cost savings to your buyers through lower import duties, preferential ROO are the primary focus for any company using an FTA.

How to figure out the rule for your product

Determining origin starts with classification. Every product in global trade is assigned a specific harmonized system (HS) code by the World Customs Organization (WCO).

The World Customs Organization says that,

“At the heart of international trade, the harmonized system is an essential tool for harmonizing and facilitating the movement of goods around the globe.”

The HS code is the anchor for all trade rules. Once you have the correct HS codes for your exported product, you can look it up in the relevant FTAs’ annex or schedule, which will detail the product-specific rule (PSR) you need to meet. These rules fall roughly into four categories:

Wholly Obtained (WO)

This is the most straightforward rule. Here, goods must be entirely sourced or produced within the territory of one FTA member country. None of the materials used to produce the goods can be non-originating. Wholly obtained goods automatically qualify as originating.

Clear examples include minerals extracted from the ground, live animals born and raised, or fish caught by vessels registered and flagged to that country.

Change in Tariff Classification (CTC)

CTC rules are the most common method for manufactured goods that use imported components. The core principle is that non-originating inputs must undergo sufficient production or processing within the exporting country.

In other words, the finished product is classified under a different HS code than the inputs. There is a minimum shift in classification required for this rule to apply. Depending on the rule, the required “shift” can be at a high level – implying a change in the applicable chapter of the HS code.

Some rules allow more granular changes in how to find HS code, for example, a change in subheading. It depends on the specifics of the free trade agreement.

Regional Value Content (RVC)

The RVC rule dictates that a certain minimum percentage of the final product’s value must originate from within the FTA region.

According to Export Development Canada,

“The imported components must undergo significant transformation during manufacturing to be considered as originating from the trade agreement countries.”

This rule is often used for products where a tariff shift alone is not considered a sufficient transformation. Think about really complex assemblies, such as a car or industrial machinery.

The FTA will specify the calculation method to be used, but the common ones are the transaction value method, which looks at the selling price of the product, and the net cost method, excluding costs such as marketing and royalties.

Specific Process Rules

For a limited set of international business contracts, origin is determined by requiring the completion of a specific, non-tariff-based manufacturing or chemical process.

This rule is often applied to industries like textiles, chemicals, and refined metals (steel), where the process itself is the measure of substantial transformation, regardless of the resulting HS code.

Key points exporters must manage

ROO compliance requires diligence across multiple parts of your supply chain and record-keeping system, including:

• HS code accuracy: Incorrect classification is the most common and costly mistake, as using the wrong HS code immediately leads to an inaccurate ROO determination. This can result in your buyer being denied the preferential tariff.
• Understanding the applicable rule: Different FTAs have different rules, so a product that qualifies as originating under CETA may not qualify under USMCA due to varying RVC thresholds or CTC requirements.
• Tracking inputs: For any product not wholly obtained, you must trace the origin and processing of your components. That includes where inputs are from, the relative value of each input, and its transformation status.
• Maintaining documentation: Exporters are required to keep records to back up every origin declaration, including bill of materials and supplier declarations. Cost breakdowns and production records are also critical.
• Issuing the certificate of origin: The required format depends on the FTA and can vary from self-certification (USMCA, CPTPP, and CETA) to government-authorized certificates, particularly in the case of older regional agreements.
• Importer responsibilities: The importer is the party legally responsible for claiming the preferential tariff rate and ultimately liable for any inaccuracies. Importers must retain the origin documentation provided by the exporter.

Note that under certain FTAs (like RCEP), the importer is permitted to issue the origin declaration themselves, placing the compliance burden directly on them.

Common pitfalls

Navigating rules of origin is complex, with even experienced exporters making mistakes. Common pitfalls include:

• Assuming “Made In X” means “Originating in X”: The country where a product is made is not the same as its origin according to trade rules. Something can be made in one country, but fail to qualify as originating in that country according to an FTA.
• Trusting supplier classifications: Exporters often assume the materials provided by their suppliers meet the origin criteria – but should instead verify via a formal supplier declaration or certification.
• Ignoring the De Minimis rule: The de minimis rule is a tolerance that allows a small percentage of non-originating inputs to be used without affecting the origin status, provided the product otherwise meets its ROO.
• Origin when suppliers change: A change in your supply chain, even switching suppliers within the same country, can alter the origin status of your materials.

It’s also worth noting that when a regional value content rule applies, errors in calculation, including the wrong valuation method or non-allowable costs, can invalidate the entire origin claim.

ROO knowledge is core to the correct trade declaration

Ultimately, understanding and mastering the rules of origin is just non-negotiable. Strict compliance ensures your product is correctly documented, which protects your company during customs audits.

Achieving assured originating status directly translates to financial benefits by allowing your product to access lower tariffs (often zero duties) under FTAs, which immediately helps with competitive pricing in new markets.

It’s a win-win, but the rules are complex. Close adherence is an absolute must.

The post Rules of Origin: What You Need to Know appeared first on Trade Ready.

In this article, we illustrate where companies often go wrong, and how proper management of your trade documents can help you avoid similar mistakes.

What are the common customs compliance errors that lead to a violation?

Whether errors are intentional or not, they tend to fall into the following  5 categories of customs violations:

• Incorrect classification: Assigning the wrong HS code or description to goods to pay lower duty rates.
• Undervaluation: Intentionally or unintentionally declaring a value lower than the actual price paid, or failing to declare “assists” (like raw materials provided for free).
• Sanctions violations: Shipping goods to restricted countries or denied parties, direct or through a middleman.
• Inaccurate documentation: Discrepancies between commercial invoices and customs declarations, missing certificates of origin, or incorrect international trade documents.
• Tariff engineering: Modifying a product temporarily (like adding seats) specifically to bypass duties, without a

Ultimately, avoiding customs penalties comes down to transparency and management across your documentation efforts. However, as we’ll see, this is easier said than done.

5 examples of multi-million dollar fines for customs violations

The high stakes of global trade compliance come into focus when we look at real-world cases. From technical misclassifications and missing certificates and approvals, to strategic tariff engineering, the following five cases highlight just how vigilant customs authorities are:

2. Ford Motor Company — US: In one of the largest customs penalties in recent history, Ford agreed to pay $365 million to settle allegations that it misclassified its “Transit Connect” cargo vans. The vans were imported from Turkey with temporary rear seats to classify them as “passenger vehicles” (subject to a 2.5% duty). After importation, the seats were immediately removed to sell them as cargo vans.
3. Satisloh — US: A fine of $3,320,425 was collected by U.S. Customs and Border Protection (CBP) for entry violations. It was to resolve alleged customs entry violations under 19 U.S.C. §1592, which refers to false or misleading customs entries, such as incorrect descriptions or classifications. Even if not fraudulent, incorrect entries can trigger very large §1592 penalties; so strong invoice and declaration controls and post-entry reviews matter.
4. Access USA Shipping, LLC — US: The company faced making a $27 million settlement for export-control evasion charges. It covered numerous charges including evasion and unlicensed exports. It highlights how package-forwarding, consolidation, and re-export activity carry heavy risk for EAR violations and “evasion” allegations.
5. Samsung — India: The Indian branch of Samsung faced a large tax demand for dodging import duties, totalling $601 million in back taxes covering tariff evasion on imports of telecom equipment. It shows how local structuring or valuation that reduces duties can provoke very large retrospective assessments.
6. Roseline Logistics — United Kingdom: UK tribunal cases and First-tier Tribunal decisions highlight that customs service providers or declarants can be held jointly and severally liable for import VAT and customs debts and that HMRC post-clearance C18 demands have been upheld in significant sums (examples show demands exceeding £1m in aggregate).

Collectively, these cases are a reminder that organizations must prioritize accurate classification, valuation, and end-user screening before goods ever cross a border.

Smaller companies commonly get hit with fines too

While the billion-dollar fines against multinational giants make the front page, small and mid-sized businesses are arguably the most frequent targets of customs enforcement, often due to getting items such as a certificate of origin wrong. Consider the following examples:

• Alexis: A popular womenswear brand paid $7.6 million to settle False Claims Act allegations that it failed to declare the value of “assists”. These were things like fabric, beads, and trim that were provided free of charge to their foreign manufacturers. The company attempted to reduce its unit costs to sidestep customs charges, but it triggered a multi-million dollar audit.
• Córdoba Music Group: Falling foul of a “Distributor Loophole” myth, this guitar and ukulele manufacturer paid over $41,000 for shipping its instruments to a distributor in the UAE. The problem? The company knew the goods were ultimately destined for retailers in Iran. In this instance, the company tried to insulate itself from sanctions by using a middleman, but companies that know their goods will end up in a sanctioned country are still liable for a violation.
• Precision Cable Assemblies: This mid-sized manufacturer agreed to a $10 million settlement for an alleged scheme where their Chinese suppliers provided two sets of invoices. No surprise here, one had a lower-value, essentially a fake invoice for US Customs (to lower taxes) and a higher-value real invoice for payment.

It didn’t work – after all, customs are on to the oldest trick in the book – and this is the easiest form of fraud for auditors to detect.

This shows how trying to skirt customs rules just won’t work, and that skipping intensive due diligence is unwise.

How your business can avoid paying customs penalties

The most effective way to avoid penalties is to treat your documentation as your primary line of defence. In international trade, accurate records facilitate shipping and serve as the legal evidence of your compliance.

This content is an excerpt reproduced from the FITTskills Global Value Chain course. 

Document management is a supporting function of global value chains and helps avoid customs charges. Your documents are evidence and proof of your organizations’ business activities from when they are formed to when they close their doors, and sometimes beyond.

An organization’s ownership, decisions, transactions, personnel, finances, taxes, and compliance to regulations are all documented, filed and stored.

In international trade, documents are critically important as proof of compliance and due diligence.

Exporters and importers need to ensure the laws and regulatory requirements of two or more countries are met and that the increased exposure to risk (e.g. financial, political, logistical risk) resulting from complexities of international trade transactions is mitigated.

Certificates and approvals

Besides commercial and transport documents, exporters must organize certificates, documents and approvals that will satisfy foreign customs as to the value, country of origin, weight, quality, and safety of the goods being shipped and demonstrate approval to trade controlled goods.

These certificates and approvals required by customs are dependent on the type of goods being shipped (e.g. food, plant material, electrical tools, used clothing), and the regulations of the country accepting the goods.

It is important to ensure that all the certificates and approvals are in place prior to reaching the border to prevent delays or extra costs, e.g. storage.

Provision of such documents should be specified as one of the terms of a sales agreement/contract. Importers need to ensure they inform exporters of the importing requirements so that goods can meet the standards and proper certificates can be obtained.

The certificates and approvals include:

• Certificates of origin
• Importer/exporter licences and permits
• Packing declarations
• Consular invoices
• Certificates of quality and safety
• Importer/exporter declaration

Learn everything you need to manage your supply chain including customs compliance, inventory management, procurement, and international distribution. Explore the Global Value Chain online course. 

Actionable steps to expand your compliance toolkit

Robust documentation is the foundation of compliance, but external expertise and specialized tools can help mitigate risks.

Consulting a licensed customs broker or freight forwarder is a good start. These professionals are authorized by customs authorities to manage the classification, valuation, and entry process on your behalf – and can make sure your commercial invoices and declarations are fully compliant. On an ongoing basis, you could also consider:

• Using classification resources: Consider both the World Customs Organization (WCO) provides the global Harmonized System (HS) framework.
• Binding rulings: Where uncertainty prevails, consider applying for Binding Rulings from customs authorities, which provide a legally binding determination of the correct HS code for a specific product.
• Implement global trade management software: GTM software centralizes trade data and automatically screens your customers and partners. It reduces manual error in sanctions compliance and ensures all required documentation is generated correctly for each shipment.

Do not assume compliance ends at the border.

Regularly audit a sample of your import and export entries to proactively catch internal errors in classification or valuation before an official audit by customs or a retrospective tax assessment is issued.

Finally, consider consulting with a trade attorney for high-stakes or complex legal issues like tariff engineering, sanctions evasion concerns, valuation disputes (e.g., correctly declaring “assists”), or setting up your internal compliance program.

The bottom line: documentation is your best defence

Our examples demonstrate that customs authorities are vigilant and that the costs of non-compliance are high, regardless of your company’s size.

Certainly, don’t attempt to circumvent customs rules. The authorities have seen it all, and they’ll likely catch any attempts to go around cross-border trade rules.

Pleading ignorance of misunderstood rules or a lack of due diligence won’t work either. Ultimately, a strong compliance strategy relies on strong internal organization and documentation.

By treating your commercial invoices, proofs of origin, and safety approvals as critical business assets rather than just paperwork, you significantly reduce the risk of audits.

The post 5 customs violations that lead to costly penalties – and how to avoid them appeared first on Trade Ready.

Add in shifting geopolitics, rising demand from emerging markets, and the need for stronger, more secure supply chains, and it’s clear that agility and foresight are more important than ever.

In our annual look ahead, we break down the top 10 global trade trends we’ll be watching, reacting to, and writing about in 2026.

Read on for our 10 2026 trends.

Curious about our past predictions? Check out what we thought 2017-2025 had in store.

1. Global trade hits record high in 2025 but faces slower growth in 2026

Global trade reached a record US$35 trillion in 2025, demonstrating strong resilience despite rising geopolitical tensions, higher costs, and increasing trade barriers. According to UN Trade and Development (UNCTAD), trade expanded by about 7% year over year, driven by higher volumes in both goods and services, with particularly strong contributions from East Asia, Africa, and South–South trade.

However, UNCTAD warns that momentum is slowing and expects weaker trade growth in 2026 as economic uncertainty, higher trade costs, and fragmentation weigh on global flows.

The World Trade Organization (WTO) echoes this outlook. Global merchandise trade grew faster than expected in early 2025 as firms front-loaded imports ahead of anticipated tariff increases and demand for AI-related products surged, especially in Asia and North America.

As a result, the WTO revised its 2025 merchandise trade growth forecast upward to 2.4%, while sharply lowering its 2026 forecast to just 0.5%, reflecting a cooling global economy and the full-year impact of higher tariffs.

Trade in commercial services remains more resilient but is also slowing. The WTO expects services export growth to ease from 6.8% in 2024 to 4.6% in 2025, and 4.4% in 2026, as weaker goods trade and slower output growth spill over into services.

Together, the UNCTAD and WTO assessments point to a global trade environment that is structurally strong but increasingly constrained, supported in the short term by technology investment and resilient demand, yet facing slower growth ahead as protectionism, economic cooling, and fragmentation reshape global trade dynamics.

2. Sustainable & carbon-sensitive trade

Sustainable policies (Electricity Demand & AI)

As electrification and digitalization accelerate, trade policies are increasingly aligning with climate and energy goals to support clean energy infrastructure and carbon-sensitive trade.

Global power demand is surging—driven in part by data centers and AI workloads—forcing energy systems to evolve and integrate more renewables.

Policies are beginning to incentivize renewable electricity generation, grid modernization, and clean technology exports to manage this growth sustainably while maintaining climate objectives.

Trade in renewable energy technologies (e.g., solar, wind, electrolyzers) is expanding rapidly, reshaping energy markets from fossil-fuel dominance toward clean trade flows that include grid equipment and storage systems. Export of these technologies supports carbon-sensitive value chains and opens new trading corridors as countries compete to lead in clean tech deployment. News Release Archive

At the policy level, many countries are implementing clean electricity investment tax credits, carbon pricing, and regulatory frameworks to encourage grid upgrades and clean power trade. For example, Canada’s Climate Competitiveness Strategy aims to boost clean energy and critical mineral supply chains globally, enhancing trade competitiveness while cutting emissions. Canada

Sustainable supply chain management

In 2026, sustainable supply chain management is becoming central to reducing climate impacts across international trade. Trade agreements and sustainability initiatives are increasingly tying environmental performance to supply chain practices, encouraging cleaner logistics, emissions tracking, and resilient value chains.

A recent OECD working paper emphasizes that trade policy can foster environmentally sustainable supply chains by integrating sustainability standards and climate objectives into trade agreements and corporate practices.

AI and advanced analytics are playing a transformative role by enabling companies to monitor emissions, optimize logistics for lower carbon output, and enhance transparency across multi-tier networks, helping firms make data-driven decisions that reduce carbon footprints while improving efficiency.

These developments reflect a shift from cost-only supply chain metrics toward carbon and environmental risk evaluation, with sustainability strategies embedded into procurement, production, and logistics planning.

Stronger collaboration among trading partners on carbon disclosure and low-emission practices would build resilience while aligning commercial incentives with net-zero goals.

3. Rise of emerging market demand

Emerging markets, particularly those in Southeast Asia and Africa, are becoming increasingly important demand centers in global trade. Countries in the ASEAN region, including Vietnam, Indonesia, the Philippines, Malaysia, and Thailand, are expanding their imports of manufactured goods, agricultural products, pharmaceuticals, and electrical machinery, driven by robust industrial expansion and stronger trade partnerships.

Africa’s major economies like Nigeria, Kenya, Egypt, Tanzania, South Africa, and Ghana are also growing their imports of food products, engineering goods, consumer goods, and medicines as rising populations and urbanization boost domestic consumption.

This shift is widening export opportunities for suppliers outside traditional Western markets and encouraging exporters to diversify into high‑growth developing regions where demand is rising faster than in advanced economies.

4. Competition & customer service shortening delivery times

In 2026, last‑mile delivery remains one of the most complex and important parts of the supply chain, shaped by evolving consumer expectations and ongoing market challenges. Logistics providers will need to address three key areas to stay competitive:

Big and bulky items: Demand for doorstep delivery of oversized goods like furniture and appliances is growing, but many carriers avoid these due to complexity. Specialized networks can turn this into a strategic advantage.

Reliability over speed: A shift in customer priorities shows that most shoppers (about 90%) prefer reliable delivery within 2–3 days rather than ultra‑fast service, highlighting the importance of consistent performance.

Transparent options: Providing clear estimated delivery dates at checkout and flexible delivery choices reduces cart abandonment and improves customer satisfaction.

Overall, successful last‑mile strategies in 2026 will combine specialized services, reliable performance, and delivery transparency to meet shifting consumer needs.

5. Scenario planning a strategic necessity for international businesses

In 2026, international businesses face geopolitical fragmentation, rapid technological change (especially AI), economic volatility, and rising sustainability and regulatory demands.

Scenario planning moves beyond traditional forecasting by exploring multiple plausible futures, helping companies build resilience and agility in global operations.

It uses “digital twins” to simulate different outcomes. Such a tool becomes critical in an unpredictable market. Any situation, even truly disastrous, can be simulated, tested, and solved virtually. So, the company gets a clear action plan before issues happen.

Key drivers include shifting trade alliances and tariffs, accelerating AI and automation with new cybersecurity and workforce implications, fluctuating interest and exchange rates, and increasingly complex ESG and data regulations. Supply chains remain vulnerable to natural disasters, conflicts, and strikes, highlighting the need for diversification and visibility.

Common scenarios that are run through scenario planning technology: Multipolar Patchwork (fragmented global blocs), Global Managed Trade (negotiated flows with policy shifts), and Localization/Self-Sufficiency (nearshoring to reduce geopolitical risk).

6. Shortening supply chains & localized manufacturing

Many companies are working to shorten cross-border supply chains and bring manufacturing closer to end consumers, whether on a national level or within regional trade blocks. For instance, many energy companies are acquiring manufacturing assets in, or shifting production to the Middle East to service regional customers, regardless of where the business is headquartered.

Additionally, there is a desire among multinational companies to develop close relationships and bring local partners into overseas markets where they might historically have sought to grow organically.

That is in part a recognition of a broader desire among customers to work with local counterparts and it often results in joint venture transactions that can bring local operational knowledge.

7. Services trade outpacing merchandise

The World Trade Organization (WTO) and other forecasting bodies indicate a steady, albeit slightly decelerated, growth for services trade in 2026. This contrasts with a significant slowdown projected for merchandise (goods) trade due to ongoing geopolitical tensions and increased tariffs.

Key global trends and factors include:

• Steady Growth: Services are expected to continue outpacing goods trade growth in 2026.
• Service exports a large proportion of Canadian trade growth: Between 2014 and 2024, Canadian service exports more than doubled to $232 B, now representing 23% of total exports and over 7% of GDP, accounting for 62% of the country’s real export growth while goods exports remain largely flat.
• Key Drivers: Growth is particularly strong in digital and business services. The demand for AI-related goods and services is also a significant driver.
• Headwinds: The overall global economic environment remains challenging, with trade disputes, high operating costs, and rising business insolvencies creating uncertainty.

8. Digital currencies transforming cross-border payments

Digital currencies issued or regulated by governments—such as Central Bank Digital Currencies (CBDCs) and stablecoins—are becoming a faster, cheaper way to move money across borders.

Today’s global trade payments still rely on slow, complex banking networks that add delays and fees.

CBDCs and regulated stablecoins offer a modern alternative, allowing funds to move almost instantly between trading partners while maintaining the stability of traditional currencies.

Unlike cryptocurrencies that fluctuate in value, stablecoins are backed 1:1 by real-world currencies, making them suitable for everyday trade, treasury, and settlement payments. Their digital design also enables automated payments tied to delivery or contract milestones.

For businesses, the benefits include quicker settlement, lower costs, and greater transparency. Studies show many companies are already achieving double-digit cost savings, and financial institutions expect digital currencies to handle a meaningful share of global payments by 2030.

As regulators in major economies advance real-world adoption, the biggest opportunities will be for platforms that support digital-currency payments seamlessly across international trade.

9. AI becomes the defining competitive advantage for manufacturing in 2026

Deloitte’s 2026 Manufacturing Industry Outlook highlights that artificial intelligence (AI) will be a key driver of competitiveness as manufacturers respond to lingering challenges from 2025—including rising costs, trade policy uncertainty, and slower growth.

According to the report, many manufacturers plan to increase investment in smart manufacturing technologies such as automation, advanced analytics, cloud platforms, and agentic AI, which can independently make decisions to improve productivity, quality, and capacity.

AI’s role is expanding beyond traditional automation to include functions like identifying alternative suppliers during disruptions, capturing retiring workers’ expertise, and improving customer service processes.

Advanced physical AI, such as autonomous robots and robotic systems, is also set to grow, with adoption expected to more than double within two years.

Manufacturers are increasingly using AI to strengthen supply chain resilience, employing AI-driven analytics to monitor risk, forecast disruptions, and rebalance networks in real time. The technology also supports a shift from reactive to predictive services, boosting equipment uptime and customer satisfaction.

Despite talent shortages, AI itself can help capture workforce knowledge and accelerate training. Deloitte concludes that companies that invest strategically in AI and smart manufacturing will be better positioned to navigate uncertainty and widen their competitive advantage in 2026.

10. Growing focus on cybersecurity in supply chains

Heading into 2026, cybersecurity is rising as a core priority in international trade supply chain management, driven by the increasing digitalization of global logistics, manufacturing, and trading systems.

As cross-border commerce relies on interconnected IT systems, cloud platforms, AI-driven operations, and third-party partners, vulnerabilities are expanding, making cybersecurity essential not only for IT teams but for strategic supply chain and trade risk management.

Key aspects shaping this trend:

• Expanded attack surface: Complex global supply chains now include multiple vendors, logistics systems, and digital interfaces. Cyber threats exploit weak links in this ecosystem, with third-party and multi-tier vendor vulnerabilities increasingly leveraged by attackers.
• Regulatory drivers: Standards and regulations like the EU’s NIS2 and broader risk disclosure requirements are pushing businesses involved in international trade to embed cybersecurity compliance and governance into their supply chain protocols.
• Operational risk and resilience: High-impact cyber incidents—such as ransomware attacks disrupting freight operations—underscore the operational risks to global trade flows and reinforce the need for robust cybersecurity measures across partners and transport networks.
• Integrated visibility and trust: In 2026, firms are moving toward end-to-end security visibility, continuous monitoring, and zero-trust frameworks that secure data and operations from origin to delivery across international borders.

In 2026 cybersecurity will no longer be a niche technical concern but a strategic imperative for global trade supply chains. Protecting digital infrastructure and partner networks is critical to ensuring uninterrupted trade operations, regulatory compliance, and confidence among trading partners.

The post Top 10 global trade trends we’ll be watching in 2026 appeared first on Trade Ready.

Brand loyalty is high since IKEA delivers what its customers expect. Despite IKEA’s track record, its team occasionally makes mistakes. In the late 1990s, a failed foray into inflatable furnishing exposed how sometimes an innovative idea isn’t enough.

An exciting idea and promising beginning

Swedish teen entrepreneur Ingvar Kamprad founded IKEA in the 1940s, originally as a small mail-order business selling pens and wallets. By 1948, he started selling furniture, but packing and shipping furniture mail-order was a major pain point. This led to IKEA becoming an innovator and disruptor. It developed quality flat-pack furnishing like shelves and tables. Fast forward to the mid-1990s, Kamprad and his team found it challenging to create a durable, comfortable upholstered sofa that could be shipped flat-pack.

Meanwhile, Swedish designer Jan Dranger had an interest in inflatable furniture dating back to the 1970s when he and his design partner created a range of inflatable easy chairs and mattresses that were briefly sold by the Swedish Cooperative Union (KF). Unfortunately, these furnishings deflated quickly, but Dranger persisted in developing inflatables using better materials and new techniques.

In the early 1990s, he approached IKEA and met privately with Kamprad. He had prototypes for inflatable furniture, including a sofa. The idea seemed promising since this sofa was lightweight, could be shipped flat-pack, and consumers could easily assemble it at home using an ordinary hair dryer. The idea addressed one of Kamprad’s biggest pain points.

Several IKEA managers were invited to an unveiling of these prototypes. When they arrived,  they saw inflatable sofas draped in loose covers. The covers made the sofa more attractive and also helped maintain its shape.

As former IKEA business area manager Tomas Paulsson told the IKEA Museum, “No one was allowed to look underneath the furniture, but we were allowed to sit on it. It felt a bit like an inflatable mattress or water bed.”

Dranger didn’t want to share technical details before signing a contract with IKEA. In theory, the inflatable sofa required 85% less material than a standard sofa, and the plastic material used was 100% recyclable. Especially notable for the team at IKEA, the inflatable sofa reduced transport volume by 90% compared to their existing products. IKEA formed a spin-off company, SoftAir, in anticipation of the line’s success.

In 1998, the Toronto Star reported that a consumer could bicycle home with an unassembled sofa in their backpack, then walk upstairs to their apartment and quickly assemble it.

Laurence Martocq, an IKEA spokesperson at that time, said: “We expect the line to appeal to university students, young people living in apartments and condos and first-time home buyers… We’re also targeting people who look to us for innovations and new trends.”

IKEA launched the A.I.R line in 1998, including an inflatable sofa, easy chair, and an ottoman. The furnishings came with a ten-year warranty, washable slipcovers, and a patch kit. The design featured a series of small air pockets or compartments, so damage to one pouch wouldn’t cause the whole thing to quickly deflate.

How the A.I.R. line….deflated

First, according to Paulsson, it cost more to manufacture the A.I.R. products than originally anticipated. And when they launched the line in IKEA stores, shoppers reacted in unexpected ways.

One selling point was that it was very lightweight. A promotional illustration portrayed someone lifting the sofa with one hand to vacuum underneath. In the stores, this selling point also proved to be a downside. The sofas would easily slide around if someone bumped against them.

Shoppers reportedly picked them up and moved them or even tossed them around the showrooms. According to the IKEA museum, an IKEA team member said they looked like “a group of swollen hippos” compared to the other sleek designs in the stores.

IKEA project manager Lena Brandt Persson said, “Customers found it so much fun that even adults would jump up and down on the sofas.”

It didn’t get better once the inflatables made it to the shopper’s home. The instructions didn’t clearly warn the buyer to use the cold setting on their hair dryer, so some inflated their new sofa with hot air. Not only did this pose a risk of melting the plastic, but it also resulted in the sofas deflating as the inflated hot air cooled down.

It turned out many people didn’t love inflatable furnishings as much as they hoped. When sitting on the chair or sofa, a sudden movement could cause an embarrassing squeaking sound.

Too many of the A.I.R. products were returned. In September 1999, IKEA announced it was ending its involvement in the SoftAir spin-off company but continued to sell the designs. In 2013, they stopped selling the A.I.R line.

Key takeaways and lessons learned

The story of IKEA’s inflatable furniture launch flop can serve as a cautionary tale for other inventors, designers, and entrepreneurs. Sometimes, enthusiasm for an exciting concept can fall short if you don’t back it up with testing and market research.

Deviation from core principles?

Consumers trust IKEA in part because its design honors five core principles: form, function, quality, sustainability, and low prices. The A.I.R. line was an interesting concept. In reality it didn’t hold true to these core principle according to Ikea’s global design head, Marcus Engman, who admits he was partially responsible for it.

He told Sidney News, “This is one of the biggest mistakes in Ikea’s history. An amazing fiasco.”

They missed many of the product’s flaws. So many of the problems would have been obvious if people tested the prototypes for longer, facing real-world challenges.

For example, the team saw the very light weight as a benefit, but a few days of watching the sofa slide around an office or living room may have proved otherwise. They would have also noticed how the furnishings would gradually deflate despite the innovative design.

Engman also commented that they were excited about a product, but didn’t really know how the general public would respond. The designs may not have fit many people’s homes.

“If you want to do new engineering maybe put it into something people can relate to from the beginning instead of something that is such a new form because it’s hard to relate to,” he said.

The missing link: Where product testing failed

The collapse of IKEA’s A.I.R. inflatable furniture line demonstrates the importance of product and testing, even if you have an innovative idea.

Despite promising sustainability benefits—85% less material and 90% lighter shipping weight versus traditional sofas—the series ignored critical market realities. According to the IKEA Museum, prototypes were tested in controlled labs but never subjected to real-world user scenarios.

For example:

• Engineers used ideal conditions (e.g., precise inflation methods) but overlooked how customers might misuse the product. Many users inflated their products using the hot air setting from hair dryers, causing warping and accelerated wear.
• IKEA assumed users would value eco-friendliness over convenience. They failed to anticipate that daily re-inflation and valve leaks would frustrate customers. The “pffft” sounds when sitting became a notorious pain point.
• The 1990s saw IKEA expanding into markets like the U.S. and Asia, yet no adjustments were made for regional preferences.

How to do thorough product testing

This case study illustrates why product testing in real-world settings is so important for anyone interested in international trade. This includes cross-cultural validation and iterative testing.

Products must be tested in the actual environments of target markets with diverse user groups. IKEA’s oversight of these steps turned even an industry pioneer into a cautionary tale.

Rigorous processes would have flagged:

1. Frequency – How often users would need to re-inflate (daily vs. weekly).
2. Intensity – How real-world stressors like pets, children, or humidity affect material integrity.
3. Technical – How well did the valve perform in varied home environments

[This content is an excerpt reproduced from the FITTskills Products & Services for a Global Market course]

Prototype and test marketing offer opportunities to test the product and its performance, and to put the product into a limited, but real-life field situation to collect data for product and marketing plan modifications or improvements. Refinements to initial prototypes, concepts and ideas resulting from customer feedback can also allow engineers, procurement managers and production  designers to better quantify the projected unit costs for the product when it finally reaches production.  

Some techniques that can be used to evaluate consumer response to new or adapted products are: 

• The use of select groups of product users to test prototypes (often referred to as beta testing)  
• Tasting panels (for food products) 
• Product demonstrations at select venues  
• Follow-up with consumers after purchase 

As part of product development and adaptation, product testing is carried out throughout the product life cycle to ensure compliance with specifications and regulations. There is a wide range of product tests.  

Learn more about how and why to test products thoroughly BEFORE bringing them to market.

Get Test Marketing and the 15 Point Market/Concept Assessment Questions templates, the full Product Testing Process and much more – explore Products & Services for a Global Market

FITTskills content adapted from: FITTskills Products and Services for a Global Market. Forum for International Trade Training (FITT), © 2023.

The post How IKEA’s inflatable furniture flop teaches us the value of rigorous product testing appeared first on Trade Ready.

Whether you’re involved in export strategy, supply chain management, trade finance, or policy analysis, you’ll find something to dig into in this curated list of the top 10 podcasts every global trade professional should listen to in 2025.

1. Export Impact

Export Impact, produced by Export Development Canada (EDC), is a podcast dedicated to sharing the stories and strategies of Canadian entrepreneurs and business leaders who have successfully expanded into international markets. The show features in-depth interviews with founders, CEOs, and industry experts who discuss the challenges and opportunities of global trade, from navigating supply chain disruptions to breaking into emerging markets.

Each episode of Export Impact offers practical insights into exporting, investment strategies, and market expansion. Listeners hear first-hand accounts of building global brands, overcoming funding and regulatory hurdles, and leveraging Canadian innovation abroad. The podcast covers a diverse range of industries—including technology, agri-food, fashion, and manufacturing—making it a valuable resource for trade professionals seeking inspiration and actionable advice on international growth.

Check out this episode featuring FITT President & CEO Caroline Tompkins, CITP, discussing how to build in-house trade expertise and succeed internationally in a niche industry.

2. The Trade Guys

The Trade Guys, produced by the Center for Strategic and International Studies (CSIS), is a leading podcast that demystifies the complexities of global trade policy and its real-world impact. Hosted by veteran trade experts, the show breaks down current events, policy shifts, and trade negotiations in an accessible and often entertaining format.

Listeners can expect regular discussions on hot-button topics such as tariffs, trade wars, supply chain resilience, and the evolving landscape of international agreements. The Trade Guys offer expert analysis on how these issues affect businesses, policymakers, and the global economy, making it essential listening for professionals who need to stay informed on the latest trade developments

3. Let’s Talk Supply Chain

Let’s Talk Supply Chain, hosted by Sarah Barnes-Humphrey, CITP, is a top-rated podcast that explores best practices, innovations, and pressing challenges in the supply chain industry. Each episode features interviews with leading professionals, technology innovators, and thought leaders who share their expertise on topics ranging from procurement and logistics to digital transformation and sustainability.

The podcast delivers actionable insights on building resilient, agile supply chains, leveraging technology like AI and data analytics, and navigating disruptions such as tariffs and changing consumer expectations. With a focus on both strategic and operational perspectives, Let’s Talk Supply Chain is a go-to resource for professionals seeking to future-proof their organizations and stay ahead in a rapidly evolving sector.

4. EMBARGOED!

EMBARGOED! is hosted by seasoned trade lawyers and compliance experts.

The show examines the legal and regulatory frameworks shaping global commerce.

Each episode dives into the latest developments in sanctions, export controls, and trade compliance, providing practical guidance for businesses navigating complex regulatory environments.

EMBARGOED! is particularly useful for professionals responsible for risk management, compliance, and legal affairs in international trade.

5. Tradesplaining

Tradesplaining aims to make sense of global trade, economics, and policy for a broad audience.

Hosted by trade professionals, the show blends expert interviews with humor and accessible explanations, making complex topics engaging and understandable.

Listeners gain insights into the latest trade news, economic trends, and policy debates, with episodes often featuring guest experts from international organizations, academia, and the private sector.

Tradesplaining is ideal for professionals who want to stay informed without getting bogged down in jargon or technicalities.

6. SupplyChainBrain

SupplyChainBrain’s podcast series brings together top voices from across the supply chain and logistics industry.

The show features interviews with executives, analysts, and innovators who discuss the challenges and solutions shaping global supply chains.

Topics range from digital transformation and supply chain visibility to risk management and sustainability.

Each episode provides practical advice and thought leadership for professionals looking to optimize their operations and adapt to new market realities.

7. Trade Experettes

Trade Experettes focuses on elevating women’s voices in global trade.

Hosted by female trade professionals, the show spotlights the experiences, challenges, and successes of women working in international business and policy.

Episodes feature interviews with trailblazers, discussions on gender equity in trade, and deep dives into policy issues affecting women entrepreneurs and leaders.

Trade Experettes is a source of inspiration and practical advice for anyone interested in diversity and inclusion within the global trade ecosystem.

8. Trade Finance Talks

True to its title, Trade Finance Talks is dedicated to the world of trade finance, banking, and cross-border payments.

Hosted by experts from Trade Finance Global, the show unpacks the financial tools and trends enabling international commerce.

Listeners learn about the latest in trade credit, supply chain finance, fintech innovations, and regulatory changes.

The podcast features interviews with bankers, policymakers, and business leaders, making it a must-listen for finance professionals and exporters seeking to understand the financial underpinnings of global trade.

9. Inbound Logistics

Inbound Logistics delivers insights on – you guessed it – logistics, transportation, and supply chain management.

The show features interviews with industry leaders, solution providers, and analysts who share strategies for optimizing inbound logistics operations.

Topics include freight management, warehousing, technology adoption, and supply chain trends.

The podcast is designed for logistics professionals seeking to improve efficiency, reduce costs, and adapt to shifting market demands.

10. Art of Procurement

Art of Procurement explores the evolving role of procurement in driving business value.

Hosted by procurement leaders, the show features conversations with practitioners, consultants, and C-suite executives on best practices, innovation, and leadership in procurement.

Episodes cover topics such as supplier relationships, digital transformation, risk management, and procurement’s strategic impact.

Art of Procurement offers actionable insights for professionals aiming to elevate their procurement function and contribute to organizational success.

The post Top 10 podcasts for global trade professionals to listen to in 2025 appeared first on Trade Ready.

“Who’s paying them?”

Small businesses in the U.S. have reportedly been hit hard by the tariff announcements. Many of them import goods from overseas and are the ones responsible for paying the tariff costs, which are essentially taxes placed on foreign products brought into the import country. Big-box retailers like Walmart don’t face this same financial burden. They have the competitive advantage and the leverage to pass tariff expenses onto their overseas suppliers if necessary.

Amid new trade policies, buyers and suppliers are reviewing the terms of their trading partnerships. Some are negotiating proactive solutions in response, including how to address payment and any new added costs from tariffs.

Whether it’s the overseas supplier who will have to absorb tariff prices or the importer who ends up covering them, trade finance can be used to protect and improve cash flow for both buyers and sellers across the international supply chain.  It’s also a means for buyers and sellers to negotiate more favorable payment terms with one another, so all players can proceed with strong, stable cash flow when doing cross-border business.

Win-win tool for dealing with tariffs

For businesses trading internationally, sorting out payments during the tariff rollouts is likely a top priority. Small, midsized and larger companies are all involved in this new trade playbook and are all part of getting a product to market.

In this trading web of exporters, importers and other supply partnerships, someone will have to either absorb, pass on or split tariff charges.

Just like it has been during other supply chain events, including COVID-19 and geopolitical disruptions, trade finance can be a solid tool to help companies bridge cash flow between raw material procurement, production and payment receipt. It can be used to finance longer payment terms between the buyer and seller, so that sellers get funded right away while the buyer can pay at a later date.

Fun fact: Trade finance already supports 80-90% of global trade, according to the World Trade Organization. This financing ensures that both parties in a commercial transaction have the cash they need, especially if prices spike, like in the case of tariff charges.

Financial flexibility during times of transition

Tariffs are determined by the country of origin and the type of product being imported.

Right now, a lot of companies are talking about the uncertainty tariffs are causing for their business. Some however have anticipated tariffs and have already adjusted their business strategies accordingly, including price adjustments with suppliers, inventory stockpiling, diversifying their sourcing and supply chains, and focusing on additional markets outside U.S.

Those companies that haven’t already gotten the ball rolling on these adjustments are likely in the process of considering their options now that tariffs have shaken up trade norms.

As companies reassess their tactics, trade finance is a flexible solution that can adapt to a business’ evolving needs.

If a company, for example, shifts sourcing from one country to another, or partners with retailers in new markets, then a trade finance firm can help facilitate seamless transactions between buyer and seller – including the payment terms between the two.

The mechanics behind trade finance

Trade finance is a set of financial tools that improve cash flow, mitigate trade risk, and unlock business growth.

One type of trade finance is known as export factoring. Using export factoring, companies can sell their receivables or invoices to a financial intermediary. The financial intermediary then provides up to 90% of the invoice amount to the company upfront and in cash.

The concept behind export factoring is that businesses choosing to use it can get paid right away, rather than having to wait months to collect payment from their buyers.

For reference, recent data showed that a large U.S. buyer takes an average of 54.7 days to pay their invoices. Businesses can be strained financially if they have to wait that long to get paid.

Aside from the immediate liquidity export factoring provides, non-recourse export factoring also includes credit protection that ensures you get paid even if your customer defaults. Collection services are also part of export factoring arrangements, where the trade finance company acts as an extension of a business’s “back office”. With collections services, the trade finance company handles payment collections and supports exporters as they navigate and work with buyers in foreign markets.

Supply chain finance is another type of trade finance, but it is often initiated by the buyer, rather than the seller. Through supply chain finance, a retailer can offer its vendors early funding, equipping them with the cash to maintain operations and keep up with orders.

Like export factoring, supply chain finance helps suppliers get paid faster while giving buyers longer windows until payment is due. This dynamic ultimately allows buyers and sellers to have more cash on hand, a crucial element for general working capital – and with the handling of tariffs.

The upshot

As the tariff and international trade landscape evolves, trade finance, and the age-old technique of factoring your receivables to secure payment upfront can prove to be the right antidote to optimize cash flow.

No matter where the tide turns next, trade finance tools offer a potential safety net for companies engaged in international trade.

The post How to use trade finance tools to gain flexibility during trade policy upheaval appeared first on Trade Ready.

With a strong desire to travel and learn, Daiana Leandro moved to the U.S. from Brazil in 2013 as part of a one-year exchange program. Her goal was to familiarize herself with the English language, to better position herself for future travel plans.

When she went back to Brazil, she decided to enroll in university and wanted to incorporate her newly developed English speaking skills into her formal education as well. This prompted her to pursue a bachelor’s degree in international trade.

“I wanted to use language as well because I felt very good about my English language skills and decided to look for a course that would accommodate that skill.”

Beginning her international trade career and meeting her mentor

After moving back to Brazil, Daiana had a few months gap before starting university. She applied for a trainee job in international trade and was hired at Takata, a Japanese auto parts manufacturer. This is where she met Mario, who hired her and would go on to become her mentor. It was with his support and guidance that she transitioned from a trainee to an assistant, and eventually an analyst, towards the end of her four year tenure at Takata.

“I feel that it’s important to have gratitude for the people that support you and actually contribute positively to our growth.”

Once she left Takata, Daiana went on to work for various trade companies. During this time she had the chance to work in customs clearance, logistics management, and import/export operations. This experience gave her deeper insights and more visibility of international business as a whole.

“I was working with more products, and we also worked with customs which are very different, especially in Brazil, because it’s a very protective country. You need to understand lots of legislation to do that, and that was very interesting for me to understand from the inside.”

Switching sides – moving from production to transportation

Next, Daiana began a new role as logistics coordinator with freight forwarding company JAS.  This new role placed her on the opposite side of transactions she was used to in her previous roles. Now working on the transportation side, she was able to use the insights she’d gained as the importer/exporter to understand her customers’ challenges with carriers which allowed her to  empathize and ultimately better serve them.

“I knew people have limited budgets and I would go over their invoices with them checking every line item that was charged and walking them through how it was charged and why.”

Working in freight also familiarized Daiana with the strict processes and rules that are followed and all the people involved in different stages of these processes. Always with a mind to the possibilities of working abroad, she was pleased to build her know-how in the world of transportation since it’s a knowledge area that transfers well internationally.

Moving to Canada and becoming a certified professional

After having experienced so many great adventures during her stay in the U.S., Daiana and her husband were inspired to look for opportunities to travel and work abroad after completing university. They considered several options for relocation with a particular eye to countries where they would be welcomed and find decent professional opportunities.

Want to learn more about the Certified International Trade Professional (CITP®|FIBP®) designation? See why it’s the world’s most recognized designation for competency and credibility in global business.

During her research, Daiana discovered the FITTskills courses being offered through Nova Scotia Community College’s Advanced Diploma program for International Business, and realized that it lined up with her previous education. She was also attracted to the program by the opportunity to go on to apply for the CITP designation that FITT offers, after earning the FITT Diploma.

“One of my professors used to say that it’s not fair that lawyers study law and can call themselves lawyers. Like people who study medicine and become doctors. And for those of us who study international trade, there’s still too little recognition for us as professionals.”

“I think that having a professional designation is important to back you up. To show that you’re committed to what you’re doing.”

Ulitmately, Daiana has proven exactly that. The hard work she has put into her learning, both on the job and through her education, has helped her become a validated, competent and committed international trade professional.

“The FITTskills courses enhanced my education in international logistics by expanding my understanding of international trade. It provides thorough training in 15 competency areas, creating numerous opportunities for entering the job market or starting an international business.”

She shares that her favorite FITTskills course in was the Feasibility of International Trade course as it helped her pull together all the knowledge and skills she had gained in the past few years through both education and work, to conduct international trade research.

Doubling down on customs specialization and plans for the future

Today, Daiana is putting her skills and knowledge to work as Customer Success Specialist at Ocean Sonics – a manufacturer of hydrophones (microphones used to listen under the water). They have a large clientele worldwide and across a range of industries. Daiana’s role focuses on serving clients on the export side of the business.

“Day to day I don’t only deal with exporting items out, but with returns as well. I work with return naturalization of products that are under warranty. If I ship something to Tasmania and it needs to return to Canada I help customers to return this unit. And I work with customers to provide the best and cheapest option to save money and avoid expensive unexpected costs so that customers pay what’s fair.”

Daiana wants to learn everything that she can about customs processes as she believes that this knowledge is crucial for any business that does international trade. It allows them to smoothly navigate customs and take advantage of whatever’s available. This is why she wants to build on her CITP designation and international business training and become a Certified Customs Specialist.

“I’m in contact with the Canada Broker Association to do another course that’s going to lead me to another designation to become a Certified Customs Specialist. Building an understanding of the whole process will help me bring a lot of value.”

Daiana credits the FITTskills courses she took for providing her with crucial knowledge and hands-on experience to further her international trade career. She has plenty of ambitions for the future and becoming a Certified Customs Specialist and delving into procurement to widen supply options for Ocean Sonics are just the start.

“Many aspire to work in international trade for the travel opportunities, but the reality is that the field encompasses much more. As international trade professionals, we drive global commerce. I truly love my career it is dynamic, exciting and fulfilling.”

Her key piece of advice to anyone starting out in international trade:

“I’ll rephrase something that Mario used to tell me since day one. We never know everything. So that’s the exciting part of the job.”

The post CITP Spotlight: Daiana Leandro – Customer Success Specialist, Ocean Sonics Ltd. appeared first on Trade Ready.

Strategy at the core

A sustainability strategy acts as a guiding map with clear objectives and precise action steps to minimize adverse effects on the environment while maximizing lasting advantages for both the company and society at large.

By adhering to global sustainability benchmarks, organizations manage ESG risks and also enhance their standing among various stakeholders, including clients, shareholders, and authorities.

These sustainability initiatives foster a culture of effectiveness and purpose within the organization, which also results in reduced expenses and enhanced competitiveness in markets increasingly demanding these efforts from the companies they patronize.

1. Cascades

Packaging and hygiene products producer Cascades Inc.’s sustainability action plan recently received accolades for its forward-thinking aspects, which aim toward a circular business model. The company has focused on building a legacy on their dedication maintaining a circular supply chain for their products and packaging.

For the 5^th year in a row, Cascades was ranked among the top 100 most sustainable companies in the world.

The company’s investment policy included proactive investments aimed at sustainability goals, with perhaps the most impressive point of this plan being a target to shift all packaging to recyclable, compostable, and reusable forms by 2030. Amidst the growing urgency to combat climate change, this bold vision reflects Cascades’ resolute application of its circular economy philosophy and waste reduction practices.

Furthermore, Cascades intends to be a pillar of North America’s recycling sector with 17 sorting facilities, while having an impressive high usage ratio of recycled fibers in its products at 83%. Through its guarantee that more than 90% of all the goods manufactured are compostable, it’s estimated that 2.2 million tonnes of fiber is diverted from landfill sites, which leads to the preservation of over 31 million trees. Cascades is a leader in demonstrating a strong commitment to the environment and to society.

2. IKEA

IKEA’s sustainability strategy is based on three fundamental pillars: living sustainably and healthfully, focusing on climate action and fairness, and safety first. Applying several programs and strategies, the “IKEA Concept” aims to expand the scope of its actions and expand the coverage of sustainability action through 2030 – to reach more than one billion people around the world.

It’s a broad-ranging program that may encourage a huge section of the global population to adopt sustainable lifestyles and minimize the adverse impacts of their activities.

IKEA acknowledges the increasing importance of the contribution of families to the health, environment, and resilience of today’s world. For instance, these groups are helping to take care of our environment by working towards the reduction of pollution and carbon emissions through promoting energy and water conservation, the use of renewable energy sources, as well as suggesting sustainable means of nutrition.

Among their efforts, IKEA is are 100% committed to sustainable cotton ensuring the cotton they use is grown with less water and chemicals, helping areas that are subject to erosion and water scarcity.

The company has also prioritized drastically reducing greenhouse gas emissions across the IKEA value chain and moved toward the use of only renewable or recycled materials by 2030.

All wood used in IKEA products is also sourced from responsibly managed forests which do not contribute to deforestation.

On top of that IKEA has become very popular by developing products that are not just the cheapest but also the greenest, hence people are observing IKEA’s green credentials and making some effort to follow their lead.

IKEA’s vision: through 2030, reaching zero fossil materials or fuels used. This should be a major contributor to the reduction of global warming.

3. Pact

Pact developed a sustainability strategy which is based on organic cotton, fair trade practices, and environmentally smart shipping. Its initial purpose was to be an underwear brand, which has extended into men and women’s clothing.

Being a label that offers all kinds of organic cotton with tops, dresses, and lounge wear, it now ensures it sells only GOTS organic cotton, and that its processes are also certified by fair trade factories.

A notable example of their circular fashion initiatives is their partnership with the “Give Back Box” program, whereby people can use free shipping labels distributed by Pact to send on their used clothing on to multiple charities.

Through teaming up with SimpliZero and organizations similar to that, Pact ensures that each one of its products is manufactured on a zero-emissions basis and completely carbon neutral.

Packaging with Pact is all about paper eco envelopes with FSC-certified 100% recyclable material and cardboard boxes constructed of recycled material. All in all, Pact’s sustainability plan consists of fair-trade alternatives, carbon emission offsetting and ecologically sustainable packaging, showing the company’s involvement in the environmental and societal responsibility of the fashion business.

4. Novo Nordisk

A pharmaceutical giant, Novo Nordisk manifests its dedication to the environment through an innovative program called “Circular for Zero”, which tries to get Novo Nordisk to a point where the company’s activities pose no harm to nature.

The company reported a more than 66% reduction in carbon emissions and progressed even more after achieving 100% renewable energy consumption in all production centers in November 2020.

Aware of the magnitude of the sustainability issue, Novo Nordisk emphasizes that it will shift its supply chain and zero emissions out by 2045 through a set of bold ambitions, justifying its unalloyed dedication to sustainability.

Novo Nordisk not only has to face environmental issues but also solve the matter of equal access to treatment and affordable treatment for all patients who are in dire need with the help of their company.

The company’s “Changing Diabetes® in Children” Program is global and in almost 380 hospitals in low and middle-income countries, the initial goal being to create a platform where children with diabetes would have access to the right medical treatment.

Collaborating with UNICEF as a partner helps the company build an operations strategy concerned with identifying environmental factors. The activities demonstrate how Novo Nordisk encompasses the whole approach to disease prevention.

5. Clif Bar

Clif Bar implements CSR through various environmental initiatives including waste reduction, using renewable energy sources and campaigning for protecting our forests. Moreover, Clif Bar aims to make all its packaging recyclable, compostable or reusable by 2025, and this process is going to begin with the classic Clif Bar packaging.

Reducing plastic usage stands as the main principle followed by the company, and it plans to minimize the consumption of plastic by 12% and to acquire 25% of its plastic from recycled or renewable sources by 2025. In addition, Clif Bar has committed to remove 1000 tons of plastics from the ocean within the specified years.

Besides that, Clif Bar has moved towards the harnessing of renewable energy which is one of the company’s main objectives, and to have all their production facilities powered by clean energy by the year 2030 as well as cutting down CO2 emissions by half.

The firm also aims at planting up to 1 million trees by 2030.

Clif Bar’s process-based approach in its value chain is an indicator of the organization’s determination to make the whole food system sustainable – from sourcing raw materials to the final product delivery – as healthy as possible.

Sustainability with purpose

The path to sustainability for companies no matter small or large is by way of combining purpose and faithfulness. It’s clear that sustainable management can be applied not just in the operations of business, but also can cover waste disposal, renewal of energy sources, procurement of raw materials, and reduction of plastic use.

These brands are serving as leaders, demonstrating how companies can start modifying their business practices by focusing on environmental issues and building a portfolio of green activities to create this future. The promotion of sustainability is not solely a decision, but also an obligatory commitment. Its advantages are not only for the company and its customers, but for the entire global community as a whole.

The post 5 brands leading with sustainable supply chains appeared first on Trade Ready.

Unsurprisingly, this year’s top stories included several focused on technology such as digital trade and AI. There was also a lot of interest in sustainable practices, tips for women leaders and the value that immigrant-led businesses can bring in Canada and beyond.

Enjoy this year’s top international trade articles.

1. 10 global trade trends we’ll be watching in 2023

10 global trade trends we’ll be watching in 2023

2. Why digital trade should be a cornerstone of Canada’s Indo-Pacific Strategy

Why digital trade should be a cornerstone of Canada’s Indo-Pacific Strategy

3. 7 emerging cleantech suppliers that can help you create a more sustainable supply chain

7 emerging cleantech suppliers that can help you create a more sustainable supply chain

4. Unpacking the Digital Transformation of Trade

Unpacking the Digital Transformation of Trade

5. How to Take Your Business Global – 5 Important Steps for Female Leaders

How to Take Your Business Global – 5 Important Steps for Female Leaders

6. Investing in immigrant founders to unlock the next generation of Canadian innovation

Investing in immigrant founders to unlock the next generation of Canadian innovation

7. 8 common global procurement mistakes made by small and medium sized businesses (SMEs)

8 common global procurement mistakes made by small and medium sized businesses (SMEs)

8.Top 10 things we learned at the WPO 2023 Entrepreneurial Excellence Forum

Top 10 things we learned at the WPO 2023 Entrepreneurial Excellence Forum

9. 5 ways AI is transforming international trade

5 ways AI is transforming international trade

10. Top 10 fastest growing international trade jobs in 2023

Top 10 fastest growing international trade jobs in 2023

The post Best of 2023: Top 10 most-read international trade articles from the past year appeared first on Trade Ready.