Hossein Mashatan, MBA, CITP|FIBP, has been living and breathing international trade, in one form or another, for over 35 years.

After earning his BBA degree from Tehran Business College in 1973, he went on to receive a full scholarship from the Central Bank of Iran to attend the MBA program at the American University in Washington D.C. He earned his MBA degree in 1975.

Reflecting on his time in academia, Hossein states, “My academic background and passion for researching and analyzing international trade’s contribution to the economic development of nations provided me with a solid platform to pursue my professional career in this field.”

His first professional foray into international trade came a few years later when he had the opportunity to join a center for bulk importation of steel products in Iran as an executive. He was charged with negotiating with major steel mills around the world, unique experience he would carry with him to future endeavors.

Over the next twenty years Hossein oversaw international trade activities in several sectors, including energy, automotive, and textiles. He also managed multinational companies involved in manufacturing auto parts, heavy machinery, and water treatment. One of the most enjoyable aspects of his work during these two decades involved immersing himself in his target markets.

“The last enriching flavour to the above period was my management of solo trade exhibitions in the selected target markets, such as Canada, Mexico, Italy, and Dubai, in the mid-nineties.”

Tackling complex projects in a complex environment

Also in this period, up until the early 2000s, Hossein faced challenging international business conditions. These included volatile economies, unforeseen changes in regulations and political instability in his region of the Middle East.

I was personally was under constant pressure for timely delivery of items needed by the production lines, setting up the supply chain systems for automotive manufacturers with diversified bill of materials, inquiries with already set quality standards, and expected quantities and arrival times, during a time of economic upheaval.

But Hossein persevered and met with success in his business, in no small part due to his skills with international diplomacy and intercultural competencies.

“Interactions with international suppliers with different cultural and business values have always been critical, and an inspiring part of my professional life. Procurement plans and scheduled purchasing orders necessitated visiting suppliers’ facilities in various origins, and receiving them reciprocally to discuss pending issues. This sometimes involved lengthy technical negotiations, working towards mutually satisfactory terms of contracts.”

“In particular, I have been fortunate to have visits and negotiate trade deals with major auto manufacturers such as Mercedes Benz, Volkswagen, and Toyota. I’ve also visited steel mills in Japan, South Korea, and Europe, and textile raw material producers in Europe, China, and India. For all these trade deals, I had face-to-face negotiations with their top executives, through which I honed my skills in providing amicable solutions for complexities arising in international trade practices.”

Building a procurement network stretching across the globe

Hossein put his learned skills and considerable experience to work starting his own firm in 2002, Mashimex Inc, offering industrial procurement and engineering solutions.

He says that every single procurement and export business had its own unique attributes in terms of financial engineering, payment methodologies, logistics, multi-modal transportation, risks, after sales services, inspections, guaranties, and laws and regulation considerations on both sides. To facilitate the above functions, Hossein founded and managed several trading arms in major business hubs around the world.

“In particular, our companies in Dusseldorf-Germany, Dubai-UAE, and Toronto-Canada have facilitated market entry strategies and provided direct access to the local vendors, chambers of commerce, banks, tenderers, trade associations, specialized fairs and exhibitions, research facilities, and information centers.”

For the past 15 years, Hossein has lived and managed international trade activities in Canada, which he has found to be a positive opportunity and he has been able to find great success working from this new home base.

“I have been able to effectively identify Canada’s competitive advantages to introduce to my associates, contacts and affiliates as well as end-users in the Middle Eastern market.”

Leadership is built on a foundation of proven knowledge

Throughout Hossein’s professional career, teaching and executive training have been his passion and consistent side-activity.

I believe that in the ever-changing international trade environment bursting with new innovations such as e-commerce, practitioners and professionals need to attend professional development training courses and seminars.

Not long after setting up in Canada, Hossein discovered the Forum for International Trade Training and wanted to get involved.

“On a daily basis, I go through the inquiries I receive and manage proper sourcing.  My job necessitates that I follow the news and events in international trade topics and try to bridge the gap between the players in Canada and other markets I deal with. This includes checking WTO, EDC, and of course FITT’s (FITTforTrade.com and TradeReady.ca) websites every day.”

“After approaching Seneca College in pursuing my passion for teaching, I learned about the elite CITP®|FIBP® designation. Considering my level of experience, I applied via the executive path with confidence, and was honoured that my application was accepted by the committee. This designation means a lot to me and opened an exceptional window to the world of international trade professionalism.”

Hossein recognized the value in the FITTskills training and certification, and has been a strong advocate for the program ever since.

“As a practitioner and instructor in international trade, I found FITT to be a unique organization with a perfect assortment of courses needed by individuals pursuing international trade related services.”

I would strongly recommend all recruiters and employers to either require FITTskills courses as a prerequisite, or to invest in their staff by sending their employees to take FITTskills courses as professional development.

“I have always advocated for FITT among my friends and colleagues here. At the moment two of my family members are taking the courses based on my recommendation, and have found them extremely helpful.”

Seeing a wealth of opportunities for Canadian exporters in largely untapped markets keeps Hossein motivated and confident in the work he does with businesses of all sizes.

“I believe for Canadian exporters there are still markets, such as in the Middle East, that have the potential to be explored further with efficient market entry strategies. I can assist institutions such and individual exporting companies as a consultant to enhance these trade activities.”

The depth of Hossein’s experience in international trade from more than three decades of extensive engagement as a top executive in large manufacturing and trading companies will no doubt continue to benefit international businesses in Canada and beyond.

The post Hossein Mashatan, CITP|FIBP – President of Mashimex Inc. appeared first on Trade Ready.

“[NAFTA] is…a disaster.” – Donald Trump

“[NAFTA]…needs to be reassessed and adjusted.” – Hillary Clinton

These quotes illustrate how the two U.S. presidential candidates currently view NAFTA. The twenty-two year old North American Free Trade Agreement has long been controversial and blamed for lost U.S. jobs, but quantifying its impact has been difficult.

Some analysts have blamed the trade deal for 700,000 to 800,000 lost American jobs, while the U.S. Chamber of Commerce has attributed the creation of 1.7 million U.S. jobs to NAFTA.

How has NAFTA changed trade for member countries?

The passage of NAFTA established a free-trade zone in North America between Canada, Mexico, and the U.S. As part of the agreement, the three countries phased out numerous tariffs with a particular focus on those related to agriculture, textiles and automobiles.

About one-fourth of U.S. imports come from Canada and Mexico, which are the United States’ second and third largest suppliers of imported goods. In addition, about one-third of U.S. exports are destined for Canada and Mexico.

According to the U.S. Bureau of Transportation Statistics, total NAFTA trade in terms of value of goods has increased at a compounded annual growth rate of 3.75% since 2004.

By country, the Canada – U.S. relationship has the highest value of goods traded, compared to Mexican trade with either country. However, since 2004, the compounded annual growth of Canadian trade with the U.S. has increased only 2.16%.

This slow growth can be attributed to it gradually losing ground to Mexico over the years, primarily due to the growing Mexican automotive industry. As a result, Mexican trade with the U.S. has grown faster than Canada-U.S. trade, at a compounded annual growth rate of 5.91% since 2004.

Canada is America’s top customer

According to the Canadian government, Canada is the U.S.’s largest customer, purchasing US$338 billion in goods and services in 2015. Nearly nine million U.S. jobs depend on trade and investment with Canada.

In addition, Canada is the top export destination for 35 U.S. states. While Mexico grabs headlines with its auto industry, Canada also has a sizable auto industry which continues to hum along and innovate. Still, it’s a more expensive location to assemble automobiles due to union activity and higher wages, and the concern of Canadian jobs heading south is real.

Despite this, GM announced in June that it would increase its engineering and research and development team in Ontario by 700 workers over the next three to four years, focusing on electric, connected and autonomous vehicles.

Cross-border trucking industry crowding the border since NAFTA

All modes of transport have benefited in terms of volumes and finance thanks to NAFTA, but perhaps the two transport modes to see the greatest gains have been trucking and rail.

Trucking is the largest mode of transport for trade between Canada and the U.S.

For the first quarter of 2016, truck crossings were up 3.2% and in Detroit, the focal point for the automotive industry, the number of crossings increased 8%.

Despite the strong growth, it has raised concerns of growing congestion at the border between Canada and the  U.S. Detroit-Windsor is a particular area of concern as one of the busiest border crossing points between the two countries.

To alleviate the congestion, the six-lane Gordie Howe International Bridge, linking Detroit and Windsor, is expected to begin construction in 2017 with a completion date anticipated for 2020.

Meanwhile, the U.S. Federal Highway Administration has awarded $256,470 to deploy technology to provide information on wait times and give truckers advance notice of crossing conditions. The program began earlier in 2016 with a handful of trucking firms and limited border points, and the number of truck border crossings using it may continue to increase if the new pilot program is successful.

Rail continues to grow between Canada-U.S. since trade deal

U.S. and Canadian Class I railroads have also greatly benefited thanks to commodities exports, such as agriculture and petroleum. In addition, the growth of intermodal transport has spurred innovative solutions linking the two countries. For example, in 2015, Canadian National (CN) signed a memorandum of understanding with the Alabama State Port Authority and APM Terminals for the Mobile port’s intermodal gateway project.

A similar agreement was made at the New Orleans port a few months later. Described by the Journal of Commerce publication as a “third coast”, these agreements have given CN a new region in which to operate from.

The benefits for CN include the ability to take advantage of the Panama Canal widening by moving goods through the New Orleans and Mobile ports, and transporting them through Memphis, Chicago and into Canada.

Another benefit for U.S. shippers who prefer to move goods via Canadian ports is the ability to import goods via the Prince Rupert port and then transport the goods into the heartland of the U.S. without transferring to another railroad, truck or other means of transport.

Likewise, U.S.-based Class I railroad CSX opened an intermodal terminal in Montreal, which gave it access to the Eastern Canada market. Trains serving this terminal connect to its Northwest Ohio intermodal hub.

NAFTA shouldn’t be scrapped – it should be expanded

Can NAFTA really be described as a “disaster”? Hardly.

Trade between the member countries is strong and should continue to flow with little, if any disruption. Should the agreement be “reassessed” or “reexamined”?  Perhaps – in terms of opening the borders even further.

Creative logistics solutions have resulted in more efficient flows of goods, and in turn reduced time to markets for the final customer.

The post Does NAFTA still matter to Canada-U.S. trade relations? appeared first on Trade Ready.

In January, the Canadian dollar fell to the lowest level seen since spring of 2003, settling at around 70 Canadian cents to the U.S. dollar.

The Bank of Canada has continuously lowered the interest rate, as part of a bid to redistribute the economic pain from low oil prices and bottom-level commodity prices to other regions and sectors of the economy.

The sharp drop in the dollar’s value has had a demonstrable impact on the Canadian economy, most notably in international trade.

Natural resources benefiting from payment in U.S. dollars

Broadly speaking, any product manufactured or produced in Canadian dollars and sold abroad, especially in the U.S. market, has benefitted.  However, industries relying on U.S. imports at any point in their business have been stung by unfriendly economics.

At the moment, natural resources being exported to the U.S. are receiving an unexpected boon.

This includes forestry products, energy products – including oil – and minerals and metals products.

The economics are easy to grasp: if natural resources are produced, excavated, and refined in Canada, using Canadian equipment and employees, the costs of production remain the same.

Once these are sold in U.S. dollars – which all metal commodities are priced in, as a default – then the economic rewards for Canadian producers are higher.

Another unexpected boon from the low loonie is the sale of used Canadian cars to U.S. buyers. According to a report from Desrosiers Automotive Consultants, nearly 200,000 used cars were exported from Canada to the U.S. in 2015.

Sales of used Canadian vehicles to American consumers are at their highest levels since 2002, and are substantially higher than the roughly 75,000 used cars sent to the American market in 2014, the report said.

However, the focus on the American market is constraining the availability of used vehicles for Canadian consumers, which drive up prices for used cars in the Canadian market.

Cooling dollar makes Canada a hot destination

Another winning industry in the loonie downturn is travel, with foreigners, particularly Americans, flocking to Canadian tourist attractions to take advantage of a favorable foreign exchange rate.

Because the Canadian dollar is so weak, many Canadians are opting to forego international travel – and may increase the amount of travelers to these Canadian sites.

Canada’s geographic position is a major boost for its economy, as it sits atop the country which arguably has the best performing economy in the developed world at the moment. This reality has softened the blow of the falling dollar, and made it possible for export-oriented industries to continue to thrive.

Canadian manufacturers urged to source locally

Canadian companies suffering from the shift in the Canadian dollar are those which rely on U.S. imports for any part of their supply chain, either in securing parts for their manufactured products or relying on raw materials only available from the U.S.

Canadian economists have advised Canadian companies to aim for all their value chain to be based in Canada as much as possible.

One major drawback for Canadian households as the loonie drops is the cost of fresh fruits of vegetables, largely sourced from California, Florida, and other warm-weather climes.

The price of fruits and vegetables climbed by roughly 10% in 2015, and are slated to go up by as much as 4.5% this year, according to a report from the University of Guelph’s Food Institute.

Headlines in the last few weeks have focused on the increases to cauliflower prices in particular, which are driven skyward not only by the poor exchange rate, but also because of the shortage in the cauliflower crop this year.

High food prices will cut into the budgets of Canadian households, and even more so for those living in the north – where food prices were already sky-high due to high transport costs.

Canadian officials warn that the working poor, students, and senior citizens are likely to suffer most from these price changes.

Has the drooping Canadian dollar affected your business? What are you doing to protect from currency fluctuations like this?

The post Low loonie is a boon for Canadian exporters appeared first on Trade Ready.

Canada is a trading nation. Roughly 60% of our GDP is generated by international trade. It’s therefore important to get an accurate picture of international trade in this country to highlight trade stats which matter in a meaningful way.

If only 5% of our total economy was wrapped up in international trade, we could afford to report only the top level numbers, but when 60% of our economy is generated by international trade, we have to be more granular in the way we analyze and publish the statistics.

We simply can’t afford to create a false impression, or be guided by false impressions.

So which of the international trade statistics available really matter and why?

Take the automotive industry as an example

With an industry such as automotive, which is extremely important, we tend to focus just on the high level number, the total exports. With only export numbers, you miss that most vehicles exported from Canada contain a significant percentage of imported components. This is true of the industry in most countries.

There’s nothing wrong with that. That’s what keeps those companies manufacturing here – the ability to develop international supply chains.

But the numbers we should be looking at are not the gross numbers of automotive exports. To get a clear picture of trade in Canada, we need to look at the net numbers.

Last year, there were around $89 billion in automotive exports, but in that same year we imported $58 billion worth of auto parts.

Both numbers are important, but in policy formulation terms, you’ve got to be very clear as to where the highest ratios of Canadian value-added are positive, and not to suggest any changes which might diminish those ratios, even if they would increase gross export statistics.

A significant portion of the components in the cars manufactured in Canada involved value-add, meaning that components were being imported from other regions and added to the vehicles before being exported. This number is far from insignificant.

But a few years ago when we did an input/output analysis of Canadian exports, and from the Canadian value-added perspective, the most important sectors were agriculture, mining and forestry.

It’s therefore important to use statistics which reveal what percentage of exports are truly domestic, and focus efforts around initiatives that will increase those numbers to have the maximum effect on the Canadian economy.

We are missing out on some of the positive

When the media report on monthly trade fluctuations, they can miss good news buried in the bad, and bad news buried in the good. The way trade statistics are typically reported, there may be a newspaper story triggered by a sudden drop in exports, right?

For example, there has been no shortage of news stories generated by the price of petroleum.

The price of oil is obviously important, but if the price and the volume of exports are dropping because of oil prices, yet it turns out that exports of automotive parts are up by 40%, and canola oil is up by 15%. That’s also important, and should be reported to give the full picture of what’s happening to understand the full net effect on Canada’s international trade.

Merely looking at the dollar value doesn’t tell you the entire story.

Re-exports are good, so let’s talk about them

This misreporting is occurring in the same way with trade stats that get talked about in several Canadian provinces. There’s a great deal of significance given to total exports in each province, but that becomes a problem when we start looking at provincial exports in competitive, rather than cooperative, terms.

If re-exports grow, that’s good! By re-exports I mean products that are imported from one province and exported out of another. For example, canola oil is imported from Saskatchewan and exported from British Columbia to other markets. It’s a re-export.

Since British Columbia is Canada’s Pacific gateway, a huge amount of what goes through B.C. ports comes from the rest of Canada, particularly the Prairies.

This certainly doesn’t diminish the important role of ports in British Columbia in Canada’s trade, but it shows the focus on re-exports from this province. Plus, it shows how significant the efficient running of B.C. ports is for the whole country, not just the province.

Re-exports are still important to the Canadian economy and that of each province but, if there was a strike in the port of Vancouver, which there was recently, the impact would not be solely on B.C.

Intuitively we know that.

But if we tracked the re-exports from B.C. and their source of origin, and put those measures out in press releases, the national impact of good public policy, on Canada’s West Coast specifically, would become more apparent than it may be the at the moment.

So how can Canada use these statistics to work to establish a strong trading environment?

That is a good question.

It’s a question that we are throwing out to the major trade associations, such as the organizations that stepped up to create FITT.

It’s well past the time that we took a good look at the private sector. From the private sector, what are the barriers, and how can we best measure them statistically? From the private sector, where can governments at all three levels intervene to assist business in achieving the goals they set up? We don’t want a government plan here, but one driven by the private sector.

I’m tired of governments trying to direct Canadian companies. Instead of directing, governments should be asking: Where are you going, what statistics do you need to know, and how can we help you get there?

We can’t compete on price alone

The reality is we are still heavily exchange-rate driven in our success in international trade, and that factor will always be there. But the more we can sustain our economy on the basis of creativity, innovation, trading smart, and the less we have to rely on a relatively cheap dollar to succeed, the better off we’ll be.

Canada should be building margins through knowledge gained from trade statistics and trade training, not through the movement of the Canadian dollar.

Long-term, we have to do whatever it takes to ensure that the capacity is built throughout Canadian industry that matches the best of our best companies.

There are a lot of fantastic companies doing wonderful things around the world and leading by example, who are clearly driven by innovation, market research, knowledge and skills.

What we need now is a better understanding of the statistics behind these companies, and how we can foster more companies with this same level of success.

How do you think Canada can better use trade statistics to strengthen the environment for trade?

The post Are we looking at the right international trade statistics to improve Canada’s export capabilities? appeared first on Trade Ready.