Particularly popular articles featured the basics of importing and exporting, as well as how and what you need to know to start your own business. The wider factors affecting Canadian businesses involved in international trade also had people reading.

Whatever matters most to you, we hope this will give you a chance to catch up on some of the hottest articles from the past year that you may have missed, or refresh your memory as we head into 2017.

10. How the lower Canadian dollar is reshaping our economy

The Canadian dollar’s diminishing value has begun to leave its impact on the economy. When compared to United States’ dollar, which has improved in value over the same time period, it might appear to some that Canada is in poor economic shape. While businesses have a reason to be cautious, a weakened dollar actually brings tremendous benefit to Canadian businesses in a variety of industries.

9. Wondering if you should start an import/export business? Here’s what it takes

Global trade is growing, and with it opportunities to increase sales and profits, grow your market share and client base, expand your workforce and reduce the risk to your business. So how can you get in on this trend, and do you have what it takes to be successful in this type of endeavour? We asked two global trade experts who have experience running their own successful businesses about the realities of starting an import/export business.

8. How 3 major challenges to China’s economy will affect Canadian businesses

Recent reports state that China’s economy is showing signs of improvement, after a volatile few years for Canada’s second largest trading partner. However, China continues to face major economic challenges, contributing to what is largely considered to be an unsustainable growth rate.

7. Face Off: Buy Local vs. Buy Global

In the past few decades, the call to support local businesses by patronizing locally sourced and sold products over those that are imported and sold at corporate chains has gained momentum. While there seem to be many benefits to supporting the neighbourhood “mom n’ pop”, not least of which is a warm feeling of doing “the right thing”, is it really best to buy local?

6. Canadian exporters: here’s how to register to do business with the U.S. government

 The good news is that U.S. Government procurement represents a wealth of opportunities for Canadian exporters who are enterprising enough to do the legwork. And, the even better news is that a U.S. Government-wide resource exists, providing details on all proposed procurement actions and contract awards over U.S. $25,000: the Federal Business Opportunities (FBO) website.

5. 5 ways importing and exporting will be more challenging in Trump’s America

Following the global trend for political change, the United States elected a candidate who has promised to shakeup both the political and economic fabric of the country. Donald Trump has promised to reform his country’s approach to global trade, claiming that he can revive the American economy by bringing back jobs that America has, for decades, exported to other countries. In consequence, those looking to enter the U.S. market may find protectionist measures which will create challenges in bringing their products into the country.

4. Statistics prove these 4 benefits to importing and exporting in global markets

According to several recent studies in Canada, the U.S. and the UK, statistics prove that there are significant benefits for companies who export. While going global will never be completely risk-free, these numbers prove that the potential benefits can outweigh any negatives, and help your company excel like never before.

3. What are service exports, and why are they suddenly so important?

Exports are a hot topic these days, but generally when people talk about exports, they are referring to product exports.   Did you know, though, that the fastest growing type of exports is services?   More and more companies are finding profit in exporting services, and several trends ensure that these exports will grow rapidly.

2. 10 books for import-export professionals that you need to read

Books can be incredibly powerful tools for gaining knowledge on a particular topic. When it comes to international trade, there are a number of books that can help you gain real insight and appreciation for this bustling industry. Here are some excellent books to help you broaden your understanding of global trade.

1. The 5 essential stages in developing a successful supply chain

Supply chain management encompasses such a wide range of functions that it can seem daunting, even to the most experienced international businessperson. However, the process can be effectively modelled by breaking it down into several main strategic areas. One common and very effective model is the Supply Chain Operations Reference (SCOR) model, developed by the Supply Chain Council to enable managers to address, improve and communicate supply chain management practices effectively.

The post Top 10 most popular global trade articles from 2016 appeared first on Trade Ready.

The “buy local” movement has been around in some form since international trade and globalization began. But what about buying global? The buy local vs buy global debate is raising some questions on whether buying local is always best.

In Canada, a “Buy Canadian” movement began as early as 1914. This  when the First World War economy saw imported products as a threat for the first time.

In the U.S. the “Buy American Act” of 1933 required the U.S. government to prioritize American-made products in its procurement purchases.

Over the past few decades, the call to support local businesses by patronizing locally sourced and sold products over those that are imported and sold at corporate chains has gained momentum.

While there seem to be many benefits to supporting the neighbourhood “mom n’ pop”, is it best to buy local?

1. Buying local helps the local economy

Buy Local: In the Time Magazine article “Buying Local – How it Boosts the Economy”, evidence is presented on how keeping your purchases local will benefit that same economy:

“The New Economics Foundation, an independent economic think tank based in London, compared what happens when people buy produce at a supermarket vs. a local farmer’s market or community supported agriculture (CSA) program and found that twice the money stayed in the community when folks bought locally.”

“That means those purchases are twice as efficient in terms of keeping the local economy alive,” says author and NEF researcher David Boyle.”

Buy Global: The Wikipedia page for local purchasing presents an alternative argument, shedding a different light on the possible effects that prioritizing local products can have on the region’s economy:

“The argument that “buying local” is good for the economy is questioned by many economic theorists. They argue that transportation costs actually account for a fraction of overall production prices, and that choosing less efficient local products over more efficient nonlocal products is an economic deadweight loss.”

“Moreover, the community as a whole does not actually save money because consumers have to spend so much more on the more expensive local products. Karen Selick argues that the buying local trend is just a watered-down version of protectionism, and would not benefit communities as proponents envisage.”

In an article recently published on TradeReady.ca, Michelle Hustler, CITP|FIBP reminds us that buying global helps local businesses too:

“Let us be cognizant that importing products actually supports local services such as shipping, transportation and distribution.

2. Buying local helps build thriving communities

This is a multifaceted argument for supporting local businesses, which ranges from economic protection, to culture, to health and jobs. But there are two sides to this argument as well.

More money goes to non-profits

Buy Local: According to Sustainable Connections Org:

“Non-profit organizations receive 250% more from small business owners than they do from large businesses.”

Buy Global: According to a National Retail Federation study:

“Imports improve American families’ standard of living. They help families make ends meet by ensuring a wide selection of budget-friendly goods, like electronics we use to communicate and many clothes and shoes we wear, and improve the year-round supply of such staples as fresh fruits and vegetables.”

Import/export jobs in Canada and the U.S total in the millions.

Maintains economic diversity

Buy Local: The Institute for Local Self Reliance says:

“A multitude of small businesses, each selecting products based, not on a national sales plan, but on their own interests and the needs of their local customers, guarantees a much broader range of product choices.”

Buy Global: Limiting purchasing to locally available products means less access to globally sourced items. Such as items unavailable in the local region or inefficient, and at times detrimentally resource-intensive to produce and source.

Better jobs

Buy Local: Amy Robinson,  Founder and Co-Executive Directorof LOCO BC, an organization designed to promote local business, says:

“Much of this value created [by buy local programs] is in fostering good local jobs—the higher-paid management, sales and marketing positions that a local company creates right in its community.”

Buy Global: In his article “The Top Ten Reasons NOT to Buy Local”, Zachary Barowitz says:

“There is no reason to believe a local boss is any better than a corporate one, and due to the threat of class-action lawsuits, corporations have some incentive to behave. What’s more, national chains can more easily offer a better benefits package. Who has better salary/wages and benefits: Borders or Books Etc., Whole Foods or Paul’s Food Center, Starbucks or Coffee by Design?”

Better service

Buy Local: According to an article by Nicole Leinbach-Reyhle on Forbes.com:

“Small local businesses have a more hands-on role within the company, therefore building a stronger sense of care for the job they do. Additionally, smaller companies are more flexible in their customer support – with a willingness to bend rules if necessary (such as alter a return policy) or deliver VIP treatment when least expected (such as home delivery for a customer during a rain storm).”

Buy Global: Big global chains face a fair amount of regular criticism over their customer service performance. But there are a few things at play here: Big companies are more often in the public eye. Meaning you hear of a higher proportion of bad experiences than small businesses, which can distort appearances.

Also, big chains like Hertz, Westjet, Marriott, Apple and Amazon are taking full advantage of social media and big data. They’re doing this to build stronger connections and better experiences with their customers. In an era where customers have a louder voice than ever, it’s no wonder.

3. Buying local is better for the environment

Buy Local: David Suzuki focuses on the benefits of buying locally produced food on davidsuzuki.org:

“Currently, the average meal travels 1200 km from the farm to plate. Food that is grown closer to home will therefore have fewer transportation emissions associated with it, and also be fresher and support local farmers. And as the distance food travels decreases, so does the need for processing and refrigeration to reduce spoilage.”

Buy Global: In his New York Times article “Don’t Buy Local!”, Richard Coniff argues that:

“The ‘local’ label says little or nothing about a product’s actual environmental friendliness. A resident of Sacramento, for instance, can take comfort in buying ‘local’ rice, but it’s likely to be rice grown in a heavily irrigated desert, at huge environmental cost. In the overall carbon footprint of a product, the cost of transport turns out to be surprisingly trivial.”

4. Buying local is the ethical choice

Buy Local: Buying local is a form of ethical consumerism.

When you shell out a little extra to support your neighbour’s business, reduce your environmental impact, purchase fair trade products that don’t profit from unsafe or unfair working conditions, and promote diversity and the community, you are making a moral purchasing decision that you can be proud of and benefit from.

Buy Global: Todd Hirsh of The Globe and Mail asks readers to:

“Do to others what you would have them do to you. When the U.S. introduced “Buy America” policies in the midst of the last recession as a way of boosting its own domestic economy, Canadians were angry. Not only does it fly in the face of free-trade deals, it just doesn’t seem very neighbourly. And when cities and countries care only about keeping their dollars within their own economies, the benefits of global trade start to shrivel.

5. Buying local encourages innovation

Buy Local: According to Susan Witt, Executive Director of the E.F. Schumacher Society:

“‘Buy local’ campaigns serve another function: alerting a community about gaps in the local market. For instance, if consumers keep turning to on-line or big-box stores for a particular product—say, socks—this signals an opportunity for someone local to make and sell socks.”

This is the way product innovations get made, says Witt. “The local producer adds creative elements that make either the product or materials used more appropriate to the place.” For example, an area where sheep are raised might make lambs wool socks and other goods.

Buy Global: Competition breeds innovation. The drive to outperform our competitors leads us to develop better, more efficient, feature rich products that consumers demand.

As Michelle Hustler pointed out in her “3 Reasons you shouldn’t buy local” article:

“The premise was that high duty rates would push Barbadians to buy locally manufactured products and give companies in these areas a chance to grow unperturbed by competition. This didn’t happen. Instead, these sectors, in the absence of the helpful push of competition, became less and less internationally competitive, while the tastes and needs of consumers kept up with global trends.”

6. Buying local means better quality

Buy Local: A plethora of “buy local” proponents champion the quality of locally sourced and lovingly produced goods over imports and items made on assembly lines in mass quantities.

Particularly poignant are arguments from buy local produce initiatives who highlight the advantages. Such as a much shorter farm-to-table journey, ensuring freshness and quality.

Buy Global: Wikipedia on Local Purchasing:

“The term ‘Buy Local’ has become subject to varying interpretations. While leading advocates of local independent business such as the American Independent Business Alliance say the term should apply only to locally owned independent businesses, some campaigns run by governments and Chambers of Commerce consider “local” to be merely a geographic consideration. Additionally, many corporations have manipulated the term in ways critics call ‘local-washing’.”

Trish Tully, CITP|FIBP adds:

“Almost every locally made good produced or service offered would not exist without imported inputs.”

We’ll let the parting shots go to Todd Hirsh from his Globe and Mail article “Buy Local: nice idea but does it make sense?”

“The main problem with “buy local” movements or policies is that they require us to discriminate between businesses based on ill-defined criteria. That can lead to poor choices and a misallocation of resources in ways that can be economically damaging. Purchasing from a vendor deemed to be local may end up costing more, and there’s no certainty those dollars will remain in the local economy anyway.”

Do you make an effort to support local small businesses by “buying local?” Or do you prefer to shop based on other criteria such as price, availability, and quality no matter where the products are made or sold?

The post FACE OFF: Buy Local VS Buy Global appeared first on Trade Ready.

The idea of supporting local businesses is inherently appealing.  It resonates with our sense of nationalism and supports a notion of “doing good” for our economy and our country – preserving jobs, supporting national development and keeping money in our country. But is it that simple?

No, it’s not.

In fact, I’m going to argue that “buy local” campaigns may even hurt the very same businesses these campaigns are designed to support.

Full Disclosure: While this piece has been written from the perspective of a Canadian-Barbadian about Barbados and considers the unique peculiarities of a small island economy, many of the supporting arguments used are relevant to other markets as well.

Here are three reasons not to buy local.

1. It impedes competitiveness

Whereas once there were many products protected by high import duty rates, the force of globalization has caused this to change.

High duty rates now exist only on a handful of protected products, such as jewelry, furniture, t-shirts, printed products and clothing – vibrant industries that the government hoped to preserve and develop.

The premise was that high duty rates would push Barbadians to buy locally manufactured products and give companies in these areas a chance to grow unperturbed by competition.

This didn’t happen.

Instead, these sectors, in the absence of the helpful push of competition, became less and less internationally competitive, while the tastes and needs of consumers kept up with global trends.

Eventually, the disparity between what was being offered locally and what was wanted by consumers, in tandem with increased online access to products from around the world, pushed Barbadians to buy these products from overseas, despite the high rates of duties.

For example, the number of wood furniture manufacturing enterprises has fallen in the past 10 years from 46 to approximately 20. Exports of wood furniture and wood products in 2013 and 2014 totalled USD $135,198 and USD $302,141 respectively, down from over USD $2 million in 2009.

Furthermore, protection offered to businesses in one area invariably impedes the development of businesses in other areas. For example, in the U.S., original t-shirt design is a US $262 million industry and the annual growth rate of this industry is over 20%.

There are also several small, young businesses seeking to enter this area in Barbados. However, these businesses are faced with the challenge of low quality, locally made t-shirts and duties of 115%, in addition to the requirement of an import license on imported t-shirts.

A top Barbadian designer voiced his frustrations in a newspaper article in August 2014.

“These guys [local garment manufacturers], I swear they are committed to mediocrity. I am not seeing the evidence of them trying to upgrade their product.”

Are they just trying to stop other people from getting their thing in, so that they could maintain a monopoly? So that they can maintain a hold in the local market? I don’t think that is acceptable.

In a December 2013 newspaper article, the Executive Director of the Barbados Manufacturing Association expressed concern with the influx and preferential treatment of imports by supermarkets.

In the same article, however, the ED also observed that there had been a “noticeable increase in the production of unique products ranging from footwear, food and toys.” There is certainly a correlation between globalization and the development of new ideas.

2. It’s hypocritical

We speak out of both corners of our mouth when we discourage imports and encourage exports.

Given the small size of our national market, we depend on exporting for business growth.

We would not be OK with strong buy local campaigns in key export markets, or with these markets imposing high import duties on the products which we manufacture. In fact, there are international trade rules discouraging these practices.

Let us also consider just who is doing the buying. In 2014, Barbados had nearly 520,000 stayover visitors (note: the population of Barbados is 285,000). Is it not disingenuous to push buying local, when many of those actually doing the buying are not in fact local?

Lastly, on the point of hypocrisy, we in the region are members of the CARICOM Single Market and Economy, a union that seeks to establish a single economic space along with 11 other Caribbean countries. Buy local campaigns fly in the face of our region’s efforts to encourage economic integration.

In 2008, the WTO raised an eyebrow at Barbados’ buy local campaign (100% Bajan), claiming that it was anti-competitive and in contravention of the General Agreement on Tariffs and Trade (GATT), which speaks to national treatment.

In response, the buy local campaign was revamped – funded by manufacturers, rather than the government.

3. What Does ‘Local’ Even Mean?

The fact is, not much produced in Barbados is really “100% Bajan”. Even a product as inherently Bajan as Bajan pepper sauce (a mustard-based hot sauce) is made up of imported products.

Would you have guessed that the pepper mash used in this product is imported (as is the mustard, vinegar and, of course, the packaging)?

This holds true for almost every locally made good produced or service offered; they would not exist without imported inputs.

Let’s expand on this point – what qualifies as ‘local’?

If a foreigner moves to Barbados and opens a restaurant, is it local? What about buying a meal from a big franchise (i.e. Chefette with 15 locations on this 430 square kilometer rock) versus your neighbourhood rum shop; do both qualify as ‘local’?

How about buying a meal at a Burger King, a locally owned franchise (owned by the well-known Barbadian, Ralph “Bizzy” Williams)? Or supporting a restaurant owned by a Barbadian who lives abroad?

The definitions for ‘local’ are inconsistent and unclear.

Lastly, let us be cognizant that importing products actually supports local services such as shipping, transportation and distribution.

But, what about jobs?

In closing, let’s consider the most used argument in support of the buy local campaign – that buying locally made products preserves jobs.

In 1996 (the first year in which this data is readily available), the GDP composition by sector in Barbados looked like this:

• Agriculture – 7%;
• Industry – 17%;
• Services – 76%.

The unemployment rate stood at 16.2% that year.

In 2015, almost 20 years later, the GDP composition by sector looks like this:

• Agriculture – 3.1%;
• Industry – 11.8%;
• Services – 85.1%.

Despite the decline in the manufacturing sector, the unemployment rate is in fact lower (11.5%) than it was when manufacturing played a larger role.

In addition, the GDP per capita is higher now, even when inflation over this period is accounted for. Any jobs lost in the manufacturing and agricultural sector transformed into new, typically higher paying jobs in the services sector.

Conversely, over the last 30 years, with the rise of manufacturing in China, the number of Chinese families living in extreme poverty has dropped from 84% to under 10% – that’s 680 million Chinese people no longer facing possible imminent death (i.e. the entire population of Barbados almost 2400 times over).

There is nothing I enjoy more than to see a local business thrive in the face of competition. For many commodities, buying local is almost always a good choice, particularly when it comes to agricultural products like bananas, coconuts, mangoes, etc.

But businesses in this global marketplace don’t need protection in order to grow – not in the long term; they need to innovate, diversify and improve their international competitiveness.

Instead of focusing on whether a product is produced locally or not, consider the factors that are important to you, such as: Is it best priced? Is it well-made and well-designed? Is it conveniently available? Is it made/produced in an environmentally sustainable manner?

And then make the most sensible purchasing decision – whether that be local or imported.

This is a perspective from a 440 sq. km² island country of 280,000. I am interested in the perspectives from larger economies. Share your comments below!

The post 3 reasons why you shouldn’t buy local appeared first on Trade Ready.