Global trade is not your great-grandfather’s trading post anymore. Sure, we’ve always had trade. In fact, we’ve been trading for as long as we’ve been civilized. But up until more recently, there were a lot more of what I call “gentlemen’s agreements” (informal agreements between countries) than formal FTAs like CETA and NAFTA.

In today’s global trade environment there are also government policies to grapple with; and if that’s not enough to navigate, there are the near-constant changes in government that also affect trade agreements.

Changes in government, such as the outcome of the recent U.S. election, can also bring major shifts in policy, like President Trump’s rejection of the TPP free-trade deal.  Now, we know change isn’t always a negative thing, as sometimes it can bring opportunity. But sometimes it can also bring uncertainty, which is not a good scenario for those engaged in expanding their markets.

Imagine, people running around aimlessly making ill-informed decisions, decisions made out of fear and panic. DON’T PANIC.

So, what does this mean for North American businesses?

U.S. companies are looking for clients in their own domestic market, because of the uptake in the “buy local” movement and uncertainty elsewhere. Conversely, companies in other markets, such as Canada, are looking to diversify their markets, and quickly, in order to protect their revenue stream.  After all, at $350 billion in exports, the U.S. is Canada’s biggest trading partner by a landslide (Canada’s second biggest trade partner is the EU at a distant $40 billion). If they’re not buying, we must quickly find who is, to sustain our economy.

Take Atlantic Canada, for example. If the U.S. steers sharply to the “buy local” movement, who is going to buy our steady demand of seafood, lumber, agri-food, oil/energy, metal ore, and manufactured goods?  If we can’t export across a land border, because of new duties or restrictions being imposed, what does that do to the cost of exporting across an entire ocean?

Even for agreements that have not been squashed, such as CETA (between Canada and the European Union), the phasing out of tariffs will take several years. Our major industries will have to figure out how to restructure themselves quickly to rely less on the movement of exports across U.S. borders.  And it’s not just the movement of exports that is affected, but also the movement of people and labour.

Yet, as we concern ourselves with our volume of exports, with an aim to increase that volume to create jobs, we also need to think about the volume of imports.

Ideally both will be increasing, because an expansion of two-way trade means that we are nurturing not only our own job-creating industries, but also our consumers, whose standards of living are improved when they have a wealth of affordable imports to choose from.

Protectionism only hurts those it aims to protect

Falling back into a mode of protectionism is a bad idea.  First of all, who pays the cost of any tariffs we impose on imports?  It is our own consumers who are punished with higher costs.  Secondly, if we are depending on making imports pricier (or on making our currency cheaper) to support an increase in export manufacturing, we must remember that we are also increasing the prices that our manufacturers must pay for any imported inputs into their production process.

The interplay of global trade in supply chains has become so important that we should be careful not to shoot ourselves in the foot as we attempt to give ourselves a boost up.

On the other side of the Atlantic, the Brexit disrupted global markets, including currencies, and caused the British pound to fall to its lowest level in decades. On the bright side for Canada, this could create an opportunity for Canadian exporters to fill the void in the EU left by Britain’s exit. Assuming that the EU boycotts Britain’s exports, currently valued at £130 billion (compared to Britain’s exports to non-EU valued at £170 billion), this may also open a door for Canada to grow their exports to the EU.

In times of uncertainty, stay balanced

It seems clear we are entering what may be a difficult era in global trade, perhaps even of trade wars and currency wars, where many economies are convinced they must export their way to prosperity.  But danger lies in the fact that rewarding protected industries and their employees may involve punishing the citizens at large, with higher prices and fewer choices.

It is a complex balancing act, one often oversimplified by politicians and economists alike.  And any balance is subject to dramatic shifts as oil and commodity prices rise and fall, exchange rates shift, potential recessions and financial crises loom, and robotics and technology take their toll on some traditional jobs.

The post Today’s shifting global business environment – a view from Atlantic Canada appeared first on Trade Ready.

It’s no secret that the international business environment is currently going through a pronounced period of change, politically, geographically, and economically.

Some of this year’s biggest headlines followed trade-related events such as the Brexit and the U.S. presidential election, successful and halted trade deals such as CETA and the TPP and some major currency fluctuations around the world.

All of this change begs the question for businesses of all sizes considering going global for the first time – is now a good time to pursue importing and exporting your products and services?

We decided to pose the same question to some of the most knowledgeable global business professionals in the Twittersphere in our latest #TradeElite chat, and here’s what they had to say.

Moderator: Adrian Mutton (@AdrianMutton) Founder and CEO of Sannam S4 and U.S. Business Centers, based out of Washington D.C. and London, England.

Panelists: 

Clarecia Christie, CITP|FIBP (@ClareciaChriste) Project Manager and Team Lead, Trade Information Services at Trade Facilitation Office of Canada, based out of Ottawa, Ontario.

Idalia Obregon (@Idalia_Obregon) Executive Director at Belgian Canadian Business Chamber, based in Toronto, Ontario.

Craig Atkinson, CITP|FIBP (@CraigAAtkinson) Director, International Trade and Development Consulting with Lexmerca, formerly with the ITC, based in Halifax, Nova Scotia.

William Bush (@BillKBush) International Business Consultant, and Professor of US Foreign Policy, International Relations, Emerging Markets, Latin America-Caribbean, based in New York, NY.

Petra Benes (@PetraBenes) Owner of export development company @TopLatinExport, and Partner at Alliance Exports, based in the Netherlands.

Erica A. Murray, PhD (@EricaAMurray) iHeart Syndicated Radio Host, Author, Keynote Speaker, Dr. of Philosophy and International Business Consultant, based in Houston, Texas.

Bernadette Fernades (@On_the_varanda) Founder of the Varanda Network and international development expert, based out of New Brunswick.

Are nations’ imports and exports likely to a) increase b) remain the same or c) decrease with current global politics/economics?

A1 Countries always prefer to export more than to import but some really have to because of economic situation, like Brazil. #TradeElite

— Petra Benes (@PetraBenes) December 8, 2016

A1 there are a lot of variables to consider such as a country’s exchange rate, who are their trading partners #TradeElite

— Clarecia Christie (@ClareciaChriste) December 8, 2016

#TradeElite Despite Brexit and other economic and political developments, countries will increase their exports A1

— William Bush (@billkbush) December 8, 2016

#TradeElite While this economic environment may not be ideal for everyone, it has created the perfect opportunity for Canadian companies A 1

— William Bush (@billkbush) December 8, 2016

@craigaatkinson Are we likely to see a new set of cross border #Trade flows then? #TradeElite

— Adrian Mutton (@adrianmutton) December 8, 2016

@craigaatkinson @adrianmutton strongly agree. Issue is transition measures to cushion impact on protected sectors moving to free trade era

— John Treleaven CITP (@jht4x4) December 8, 2016

We will have to see but some political factors can definitely change the rules, for example with bans towards Russia. #TradeElite https://t.co/E2sZdm3ySj

— Petra Benes (@PetraBenes) December 8, 2016

How much should SME’s be following currency rates, and do they make a big difference to their export prospects?

A2. Currency rates greatly impact #buyerdecision so keep an eye out to determine priorities of where to #export your goods #TradeElite https://t.co/VORcL7BuPD

— bernadette fernandes (@on_the_varanda) December 8, 2016

A2: Both SME/large businesses, esp. those in GVCs, should be following currencies that impact operations and & where opps may be #TradeElite

— Craig A. Atkinson (@craigaatkinson) December 8, 2016

A2. Currency affect B2B transactions: selling price quoted to a buyer in a country where a drop in rates may be a loss to seller #TradeElite

— Clarecia Christie (@ClareciaChriste) December 8, 2016

A2 Currency is of huge importance to SMES, especially with globalized operations. #tradeelite

— ericaamurray (@ericaamurray) December 8, 2016

How aware are SME’s of FTAs (free trade agreements) and do these agreements really impact their import export potential?

A3 #TradeElite #CETA they’re definitely incentives for SME’s, however, its hard for governments to get feedback from SME’s and get…1/2

— Idalia Obregon (@idalia_obregon) December 8, 2016

A3 2/2 #TradeElite #CETA ..and get the right agts, plus is hard for SME’s to get the right info on agts from governments..

— Idalia Obregon (@idalia_obregon) December 8, 2016

A3 Lack of FTA should not be a reason not to/export. Must step up your game and it is then possible to get ahead of competition. #TradeElite

— Petra Benes (@PetraBenes) December 8, 2016

Q3 UNFORTUNATELY, SMES are unaware of FTA, but need to read more data to be well informed #tradeelite

— ericaamurray (@ericaamurray) December 8, 2016

A3. Most SME don’t know FTAs that exist I have had occassion where even an export promotion agency is not aware of one with Cda #TradeElite

— Clarecia Christie (@ClareciaChriste) December 8, 2016

A3 FTAs do facilitate trade but trade will happen with or without them #tradeelite

— Caroline Tompkins (@carolineFITT) December 8, 2016

Has exporting become a)harder b)easier c)much the same in the past 5-10 years? Why or why not?

A4 #TradeElite a)easier because of globalization, however we have new challenges too i.e. security, but we create new rules, we adapt & grow

— Idalia Obregon (@idalia_obregon) December 8, 2016

A4 #exporting is harder with increased competition; easier with FTAs & collaboration; the same cuz no nation is self-sufficient #TradeElite

— bernadette fernandes (@on_the_varanda) December 8, 2016

A4. According to EDC CAD Businesses can expect a 3% growth in exports of goods & services in 2017 @on_the_varanda @FITTNews #TradeElite

— Lynda Arsenault (@LyndaEllenA) December 8, 2016

A4 Its become harder and more difficult. At the same time there easier access to knowledge resources to support SME trade #tradeelite

— Caroline Tompkins (@carolineFITT) December 8, 2016

Will Donald Trump’s policies affect companies’ abilities to import supply chain components to the U.S.?

A.5 @realDonaldTrump will protect US businesses and jobs. Too early to tell what this platform means for the #supplychain. #TradeElite

— Michael Green (@MJGreen0101) December 8, 2016

A1 I agree Bill! Trump’s Trade War with #China & #Mexico provides an opportunity for non-US markets to step up their #exports #TradeElite https://t.co/Ap6IjCuME5

— bernadette fernandes (@on_the_varanda) December 8, 2016

A5 True. In addition to potential #supplychain impacts, we need to how the affects other country’s #trade policies & relations #TradeElite https://t.co/uBnCmClSbv

— bernadette fernandes (@on_the_varanda) December 8, 2016

Good question! I wonder whether @realDonaldTrump himself already has any idea? #TradeElite https://t.co/3OSPS0g2vV

— Petra Benes (@PetraBenes) December 8, 2016

Which countries are best placed to capitalize on global trade trends right now?

A6: As businesses trade, not countries, it is vital that gov ensures an enabling environment for trade #TradeElite

— Craig A. Atkinson (@craigaatkinson) December 8, 2016

I second that however government needs to engage business on expectation for international trade #TradeElite @carolineFITT @craigaatkinson

— Clarecia Christie (@ClareciaChriste) December 8, 2016

A6. I think Mexico could start to open up as I’m reading about how it’s trying to invest in infrastructure. #TradeElite

— audrey ross (@tresAudrey) December 8, 2016

A6 Countries that are positioned to trade #imports & #exports with #EmergingMarkets will see a reciprocal market capitalization #TradeElite https://t.co/3yMDdUIMUy

— bernadette fernandes (@on_the_varanda) December 8, 2016

Will Brexit and other political decisions make importing more restrictive/costly in the future?

A7. #Brexit will make us more creative to continue moving forward #TradeElite

— Idalia Obregon (@idalia_obregon) December 8, 2016

A7: Certain bilateral relationships will change, but multilateral efforts (esp. #Tradefacilitation) will net reduced risk/costs #TradeElite

— Craig A. Atkinson (@craigaatkinson) December 8, 2016

A7 Businesses are now hesitant to make major moves, opting to ’wait and see’… don’t wait, find an #InternationalTrade expert #TradeElite https://t.co/ok0KZl1TGR

— bernadette fernandes (@on_the_varanda) December 8, 2016

Is now a good time to start importing or exporting or both?!

A8 If you have the right strategy and the right people to implement it then its a good time to trade if it is profitable #tradeelite

— Caroline Tompkins (@carolineFITT) December 8, 2016

A8: It depends, but rhetoric is not a reason to dismiss opportunities associated with the promise of global #trade #TradeElite

— Craig A. Atkinson (@craigaatkinson) December 8, 2016

A8. Absolutely. More data available to help you make choices. More funding avail to help small biz get started. #TradeElite

— US Commercial Svc (@USCommercialSvc) December 8, 2016

A8 Now is the BEST time, but do ur homework 1st: do you know where ur buyers are, state of #freetrade agreements/tariffs, etc. #TradeElite https://t.co/8x0CK5Cjfb

— bernadette fernandes (@on_the_varanda) December 8, 2016

Read the rest of the chat and follow future discussions by following the #TradeElite hashtag. Stay tuned for the next #TradeElite chat, coming up Thursday, January 12 at 2:30-3:30PM ET.

The post Is now a good time to start importing or exporting? appeared first on Trade Ready.

NGOs, once considered voices of the fringe and hardly worth a glimpse in the landscape of international trade and global business, are now very much at the centre of fundamental issues shaping the current reality of global business.

Historically in an adversarial relationship with other major players in the global business environment, the NGOs, which form part of what is collectively referred to as “civil society”, have garnered significant political currency as the issues they champion become higher profile and priority across the globe.

NGOs have gone from “fringe” to mainstream in the international trade and global business environment.

Reducing competitiveness or saving the planet?

Corporate social responsibility, anti-corruption measures, environmental issues, and questions of sustainability and transparency (in trade, export and project finance, for example) are all very central to the activities of NGOs.

The fair-trade movement, which seeks to direct a larger proportion of export revenues to the producers of goods in developing markets—as opposed to wholesalers and other intermediaries—is also gaining increasing support and becoming a characteristic of the global business environment.

Some argue that the efforts of NGOs—active in influencing the funding of large infrastructure projects based on the monitoring of local and environmental impacts, as well as advocating and promoting standards in the extractive industries—have the net effect of reducing competitiveness.

Others contend that nothing less than the long-term health of the planet is at stake.

At any rate, those who lead in these areas become market makers in new lines of business such as “green” products.

Environmental issues, from the all-encompassing climate change situation, to specific considerations about the environmental impact of long-range road transport, are at the core of political dialogue.

Sustainability has taken centre stage

These issues are also increasingly at the centre of calculations related to business and economics. Sustainability is a factor or requirement in every major endeavor.

The development of markets for trading carbon emissions represents a creative mix of NGO green-friendly efforts driven through mechanics and disciplines that closely mirror those present in leading stock-exchanges and securities markets around the world.

Carbon markets enable countries that generate high emissions to “purchase” carbon credits from nations that are low emitters, effectively imposing an economic cost on polluters and creating a windfall benefit for those whose emissions are below agreed levels.

Sophisticated trading and financing models have been developed (and continue to evolve) around carbon credits.

And these mechanisms are shifting from macro, country-to-country models down to the level of individual farms, businesses and consumers.

Several international institutions, including the European Bank for Reconstruction and Development (EBRD), are active supporters of carbon credit programs and investment vehicles, as indicated on the EBRD website.

Increasing customer demands for “greener” supply chains

Exercising stewardship in terms of sourcing practices to ensure the “greening” of supply chains (i.e. the design and management of eco-friendly supply chains) is now a matter of good business practice, and is increasingly an effective brand differentiator in the market, as consumer concerns over issues of sustainability and environment continue to evolve.

The global sourcing of wood products, for example, with increasing activity from China, Russia and other sources, is increasingly influenced by concerns related to the source of the woods used. This includes clear-cutting practices, the use of endangered woods, and increased interest in the use of reclaimed timber.

Automotive developments in hybrid technologies, the gradual shift to ethanol-based fuels and other crop-based inputs to chemical processes provide another illustration of the increasing demand for sustainable solutions and product offerings.

In many instances, NGOs have succeeded in raising the profile of important issues to the highest levels of government, and to the senior levels within multilateral institutions.

Many corporations and multinationals now have codes of ethical conduct and statements about CSR. Additionally, banks are acknowledging and adopting guidelines, such as the Equator Principles, meant to ensure that social and environmental issues are considered in assessing project finance.

Issues that were once considered “fringe” now drive global agendas and shape policy.

The international attempts to address global warming through the Kyoto Protocol are examples of the growing profile of NGO-promoted issues.

The specifics around corporate social responsibility, such as proactive attempts to address corrupt practices and promote ethical business standards, illustrate the scope and impact of NGOs. They also demonstrate the increasing political effectiveness and leverage of these organizations and their global networks.

What “fringe” issues do you see becoming mainstream in global business?

The post One time “Fringe” NGO’s have become a vital part of the global business environment appeared first on Trade Ready.

Chris is a professor of International Marketing, Business Presentation, and Entrepreneurship in the School of Business at Algonquin College in Ottawa, Ontario.

He is also an entrepreneur himself, as founder and CEO of BizZen, an online marketplace and resource helping small businesses looking to sell their companies to find buyers. BizZen is set to launch internationally in the upcoming year.

Chris has a passion for financial markets, business development, lifestyle design, education and social capital. He has over 18 years of experience in the private sector in various key business roles, including investor relations, business development, public relations and finance.

He channels his dedication and experience into helping others develop their businesses, careers and goals for the future.

A truly international education

After completing a Bachelor of Commerce with honours at Laurentian University in 2002, Chris decided to make a bold move.

My motivation was to learn as much as I could about other countries and cultures, as I believed it would set me apart from many other students in Canada. I also love to travel and this was a way for me to see the world.

Looking for opportunities to complement his degree with specialized education, and developing growing interest in travel, he decided to pursue a Masters of International Business at Yonsei University in Seoul, Korea.

“My international trade career started when I was in my twenties and I moved to study my Masters in International Business at Yonsei University in Seoul, South Korea. It was my first out-of-country experience, which was the spark to my passion for international activities.”

During his time in South Korea, he took on a role as a government official for the Gyeonggi Provincial Government, the largest province in South Korea, a role seldom given to foreign-born individuals.

Making a name for himself in Korea

The position was a high-profile one. Chris was responsible for developing foreign direct investment, marketing and promotions, foreign investment relations, PR, and advertising.

He also created the Chamber of Commerce/Embassy network for the province’s Investment Division, organized North American and European investment tours, and provided counsel to senior officials.

During his time with the Gyeonggi government, he also made many trade investment tours, satisfying his love of traveling and meeting people from diverse cultural backgrounds.

In 2004, Chris moved to a new role as International Public Relations Manager with the Hyundai-Kia Automotive Group. One of his favourite projects was launching the new Kia Sportage vehicle with a sensational publicity campaign.

“We launched the new Kia Sportage at a distributors’ conference during which I introduced the vehicle. We also created a publicity campaign to garner attention to the launch. It was challenging working with other employees whose first language was not the same as my own.”

The cultural aspects of working in South Korea were challenging, but rewarding when overcome.

Chris moved to an Investor Relations Manager position with LG Philips LCD in 2005, where he implemented external financial communications with the investment community, enhancing the reputation of LG through analyst meetings, conferences and road shows. He is proud to have been part of the $1.4 billion follow-on equity offering of the company.

He looks back very fondly on his formative years in South Korea, where he was given such great responsibility at the beginning of his international trade career, and helped to found the Yonsei Severance Annual Marathon, one of South Korea’s most successful charity events at the time.

He learned a great deal about business, not only from his education and professional experiences, but from the people as well.

“I still love kimchi and dokpoki, largely because of a wonderful street vendor who took me under her wing. Whenever I walked by she would feed me and try to teach me a bit about South Korea and her language. She was an amazing person, full of energy and enthusiasm.”

In business, I learned that professionalism, the ability to build trust and a smile can get you far.

When insight leads to inspiration

Chris moved back to Canada in 2006, where he served as Vice President of Western Canada at Christensen Investor Relations, before moving to Canetic Resources Trust as Senior Investor Relations Advisor in 2007.

He made the move from Calgary to Ottawa to be closer to friends and family, where he became a Wealth Advisor for ScotiaMcLeod from 2010 to January 2015, specializing in business succession planning for professionals and business owners moving on with their careers or retiring.

This position sparked an interest and inspiration for a new service that would help people overcome obstacles in a very specific niche. Chris started developing BizZen to fill that niche.

“While I was a wealth advisor, many of my clients were business owners and many of them wanted to retire but did not know where to start the process. I helped my clients as their quarterback throughout the process and found that the service was lacking in the small business sector in regards to support for transitioning out of a business. Also, I just really enjoy helping others succeed.”

Leadership was in his bones

Chris recently began teaching FITT’s Global Business Environment course, as well as several other international business courses, at Algonquin College in Ottawa, Ontario. He says teaching was a natural next step for him, and a great way to pass on his wealth of international experience. It also runs in his family.

“My passion for teaching comes from a father and grandmother whom were teachers. I find teaching to be one of the noblest professions.”

Applying for his CITP®|FIBP® designation was a way of further proving his global trade expertise in a leadership role.

“I was awarded the designation through the Executive Path. However, I believe teaching some of the FITT-accredited courses has enhanced my knowledge, and it has been an honour to help others achieve the designation.”

Chris says the role has a real significance for him as a knowledgeable, experienced professional, and one in a position to pass that knowledge on to others.

“I am very proud to receive the designation. It is an award for all the effort and work I have done internationally.”

It sets me apart from others and also signifies that expertise that is so important in this day and age. I look forward to being an active part of the FITT and CITP community.

He has also taken a very active role during his short time at Algonquin College, participating in the mentorship program.

“The program plays matchmaker and introduces mentors to startup student entrepreneurs. Mentors are expected to be available one hour a month to support their entrepreneur and provide accountability, as well as next steps.”

“In addition, I am the curator for TedxAlgonquincollege, lead in a mentoring program for entrepreneurs at the College and part of the Algonquin College experts program.”

We look forward to hearing more about Chris’s many exciting projects in mentorship, entrepreneurship and education in the years to come.

The post Christopher Doré, CITP|FIBP – Business Educator and Entrepreneur appeared first on Trade Ready.

Apple, Adidas, Hewlett Packard and First Solar are among the many companies that have chosen to use third-party manufacturing companies to help fulfill the demand for their products. Shifting manufacturing operations to other countries can be a massive undertaking. There are several important factors to be considered in such a major decision….

The Pros of moving your manufacturing abroad

1. Using third party companies, such as Foxconn in China, can provide access to labour that is cheaper and more efficient.  

There are a number of reasons why the labour is cheaper. China, for example, has a vast population, estimated to be at around 1.4 billion people, or approximately nineteen percent of the global population. The work force is therefore also enormous. This leads to competition for any available positions, and gives employers an advantage.

The combination of this competitive job market with a lower cost of living than many Western countries means many Chinese workers are willing to work for less, which presents an opportunity for global companies to save on labour costs.

It is not just the Chinese who are willing to work for less. In fact, companies often outsource to India, Southeast Asia, Mexico, and Central America because workers in these areas are willing to work for less as well.

Because wages are smaller, payroll taxes are also smaller. There are far fewer unions in these countries, so there is a reduced risk of workers going on strike as well. There are also less work regulations for companies in these areas, such as required increases for overtime pay rates, which can save time and money.

2. The quality of the labour is often still great, despite the reduced costs.

Most people who have ever used an Apple product, for example, can attest to the high quality. Apple is known throughout the world for its precision and impeccable design. The fact that Apple’s sophisticated products are manufactured by Chinese workers who often make less than seventeen dollars a day does not reduce quality at all. In fact, in the first day that pre-order sales went live for the IPhone 6 and the iPhone 6 Plus, 4 million phones were ordered.

There were some concerns about the iPhone 6 Plus bending, but that didn’t stop people all around the world from waiting in massive lines to get their hands on one of these new phones.

3. Moving manufacturing overseas can mean that companies can close plants in their own countries.

Shutting down these plants can save large amounts of money in real estate costs, as real estate is likely to be cheaper in the outsourcing country.

The Cons of moving your manufacturing abroad

1. Despite the fact that third party companies can often provide quality labour at a drastically reduced cost, there are sometimes moral issues that can accompany this type of labour.

For example, working conditions for employees in these companies can be extremely difficult.

To return to the example of Foxconn, the manufacturing company that makes products for Apple, Amazon, Hewlett Packard, and others, workers there often have to sleep in dormitories that have up to thirty people living in a three-bedroom flat. Workers also frequently have to work extremely long hours, to the tune of eighty hours per week. Furthermore, workers often have to stand, or are only allowed to use one third of a chair to sit on in order to keep them more focused.

Life at these types of companies can be very difficult for the workers, and it is definitely something to consider when it comes to making business decisions for major corporations.

Another key point to consider is that sometimes the factories and buildings in which these workers work often aren’t safe. These countries have fewer building regulations, and sometimes accidents happen.

For example, in April 2013, an eight storey commercial building in Bangladesh that housed a clothing manufacturing company collapsed after cracks appeared in the structure. Over one thousand people were killed in this accident.

2. Outsourcing your manufacturing or other aspects of a domestic business means transporting large amounts of jobs elsewhere.

Although this can increase a company’s bottom line, it can also require putting large numbers of domestic workers out of work, which can be hazardous to the company’s global brand management. In an age of increasing social responsibility, firing five thousand domestic workers is not exactly great for a brand’s image.

Displacing so many people from their jobs is a very significant decision. Also, the workers who are losing their jobs are often the people who have helped grow the company into what it is. So, transporting so many jobs can often create resentment from, and hard times for, domestic workers.

Between 2001 and 2011, around 2.7 million jobs were outsourced from the United States to China. A large percentage of those jobs were from the textile industry. While textile companies saved on their bottom lines by relocating operations to China, millions of workers lost their jobs in America. That is a heavy social cost to pay.

There are both pros and cons to outsourcing manufacturing. Ultimately, it is up to the individual company to decide whether or not using a third party company to meet its manufacturing needs is the right decision.

If a company can find a third party company which can provide cheaper labour, less regulation and fewer taxes, but also treats its workers fairly and provides them with a safe working environment and better quality of life, as many do, it can be an excellent option.

The negative brand implications for putting domestic workers out of the job, and the possibility of forcing foreign workers to work in what are sometimes harsh conditions, however, may lead other companies to continue their domestic manufacturing practices.

In an increasingly globalized world, opportunities for third party manufacturing will surely increase. The extent to which these opportunities will be taken advantage of is yet to be determined.

Have you made the decision to start outsourcing your manufacturing, and what have been the results?

The post Pros and cons of outsourcing your manufacturing in the international business environment appeared first on Trade Ready.

Importing: second-string no more?

Under the integrative trade model, imports and global sourcing are critical to the success in exports and export development, and therefore are afforded greater focus and resources. Successful importing is now a matter of competitive advantage.

Foreign trade is an essential ingredient in the economic development and prosperity of most nations.

Many countries have entered into trade pacts or agreements and, through negotiation, have established rules and regulations to govern orderly trade. These trade agreements, along with the relative reduction in trade barriers that ensue, make it simpler to import from abroad.

Importers of materials, finished goods or products for resale either identify unfilled niches in the domestic market and seek to fill them from foreign sources, or identify promising foreign products for which they try to develop domestic demand.

In either case, importers run the risk of importing products for which there is no viable resale market. Effective market research is the key to minimizing that risk.

1. Take time to carefully evaluate your in-market supplier

Similarly, once a promising market opportunity has been identified, a rigorous approach to product sourcing and supplier evaluation can reduce the risk of entering into arrangements with unreliable suppliers.

Supplier evaluation may involve a considerable investment of time and effort, but it is well worth it if the result is a smoothly functioning and mutually beneficial long-term business relationship.

It is usually best to evaluate different foreign suppliers before settling on one. Even after a deal has been initiated, it may be wise to keep track of several alternative suppliers. This helps to avoid dependence on one source and to minimize risk if the foreign supplier selected turns out to be unsatisfactory.

Once a potential foreign supplier has been identified, the buyer initiates the process with a purchase order or with a request for a quotation to supply the goods required. The initial request may open up a process of offer and counter-offer as the importer and the foreign supplier clarify, negotiate and agree upon trade terms. Once an offer has been accepted, it constitutes a legal contract.

2. Make sure the price is right for your foreign imports

Negotiating price is a critical element of the process, and several key questions ought to be kept in mind:

• What volume is being purchased?
• Are discounts available as volumes increase?
• What logistics costs related to importing the products are covered in the price?
• Does the price include packing, transportation, cargo insurance and customs duties? Each of these items will be borne by either the exporter or the importer and will be included or excluded from the quoted price of the goods.
• When do the seller’s responsibilities end and those of the buyer begin? The importing firm should clearly set out its requirements in writing. The importer should also respond in writing to the exporter’s requests for clarification in a clear, direct style and in as much detail as required. The aim is to avoid misunderstanding and to secure a deal that will benefit both parties.

Additional considerations include agreement on payment methods and terms and clear agreement on the documents (including content and format, specified to the appropriate level of detail to ensure payment as well as transport and clearance of the goods).

The sales contract will typically be complemented with a purchase order, which may serve as the basis for issuance of a documentary letter of credit—a payment and financing mechanism provided by banks in support of trade transactions.

3. How are the items you’d like to import classified?

Another important consideration includes the classification of an imported item, which determines any associated tariff due, as well as import-valuation procedures.

It should be noted that, in the same way the importer verifies the reliability of the potential foreign supplier, that supplier also investigates the reliability and creditworthiness of the importer.

Recognizing this fact, the partners can go a long way toward instilling mutual confidence while accelerating the validation process by providing each other with appropriate information and references.

What else is important for companies to consider before importing products or raw materials from abroad?

The post 3 things you must consider before you import from abroad appeared first on Trade Ready.

When we have goods and services ‘tour’ across international borders, we call it international trade.

There is an underlying similarity between tourism and international trade that brings out the explorer within us.

Sounds like fun already, doesn’t it?

Seeing your products on the shelves of a department store in a foreign country, or accepting a two year work assignment overseas are naturally pleasing experiences.

They satisfy our social nature of having others like and approve of what we do. The more lives we can positively affect by our products and services, the higher our satisfaction.

International trade sets the stage for greater satisfaction and higher profits which may be difficult to achieve if we elect to remain in our local markets. Challenging yes, but it also brings rewarding opportunities.

During the exchange of products and services across international borders, we showcase what we pride ourselves in whether it is quality, unique solutions, signature items or simply high manufacturing standards.

Your products and services tell a story

Countries tend to have signature items that are defined by elements these countries feel strongly and proudly about. For example, what items come to mind when Switzerland is mentioned? You will probably think of chocolate or watches, and you would be correct.

Have you thought about your country’s signature items? What about your company? What is your signature brand item and why? Are you ready to show it off to the world?

If you are an entrepreneur or an established business with international trade aspirations, think of yourself as an ambassador.

The products and services you export will tell stories about who you are and where you come from.

People in this field have a lot of passion for what they do and will capitalize on every chance to proudly announce it.

Get your basics right

International trade can be a very rewarding when the right steps are taken.

When I took my first Forum for International Trade Training (FITT) course called FITTskills Global Business Environment, we learned three important elements to consider when evaluating your company’s international trade readiness:

1) You have to have it going on at home. This means that you have an up and running business in your home country and you are doing well.

2) You have to have excess capacity, which means that you are able to satisfy any additional demand generated by international trade efforts.

3) You have to be committed with a lot of passion.

Connect and contribute to the global village

I heard from an Export Development of Canada (EDC) executive that “exporting is not a matter of if, it is rather a matter of when“. There is only so much expansion you can do in your local market before you realize the need to do more.

This focus on international trade has driven Trade Agreements like NAFTA and the recently signed Canada-Korea Free Trade Agreement (CKFTA). Others are still being put together, like the Comprehensive Economic and Trade Agreement (CETA) with Europe, which is to be finalized within the next couple of years. Such serious efforts between countries signify the importance of international trade and how it will shape the future.

International trade is a strong contributor to making our world a true global-village.

Once you make the decision to go international, the globe is the limit. If you are running a successful business in your home country, if you know you can handle additional demand, and if you have the resources and passion, then start exploring your options with international trade.

Start thinking about your target market, marketing to different cultures, shipping options, working with agents and distributors, and most importantly, how to get paid. You may also consider the option of contracting with an export trading company that can act as your export arm and get you to your desired markets.

Connecting with people who are in the field is very valuable, and social media is proving to be a very powerful tool. You can tap into global wisdom from the comfort of your office. Remember, these people—like you—have a lot of passion for what they do, and they enjoy meeting new people; they are natural tourists.

Clearly this is not for every business. Even if you think you are ready, ensure that you have an exit strategy in case things do not turn out as you envisioned.

No, this is not being pessimistic, it is being ready and prepared with the right expectations. If the tourist or explorer or ambassador within you is calling, start your engines and start your tour of our global village.

The post The global village is waiting for your products. How ready are you? appeared first on Trade Ready.

Since sanctions have been lifted and Iraq has started on a journey to becoming a more open market for international trade, its population is becoming aware of its growing need for global commerce skills training.

They have rich resources, including oil, but they don’t necessarily have the skills they need yet to start trading them globally.

At the end of October, Bill finished teaching the Legal Aspects of International Trade course to a group of 10 professionals. They studied for ten days in total, five hours per day to learn everything they needed to know to take their final exams.

But there are other barriers to learning these skills beyond the lack of widely available training options in the country.

Internet connectivity can be a real challenge. This has been especially hard on individuals trying to complete their final FITT exams online. One student had the internet go out 13 times during the course of his exam. He was able to finish eventually, but this certainly added a level of stress and frustration to the process.

Safety is another issue, especially in the city of Baghdad, as the potential for bombings and gunfire is ever present. In fact, a break had to be taken in the midst of delivering the Legal Aspects course because of unsafe conditions. USAID, which is funding the delivery of the FITTskills courses in Iraq, wanted neither the instructors nor the students travelling around the city for training until safety conditions improved.

After the completion of Legal Aspects, a bomb threat was made on the Central Bank of Iraq, where courses were being taught. Future courses in the city of Baghdad will now be taught in a safer location, as the last bomb threat on the Central Bank several years ago turned into more than just a threat. As many as four explosions resulted in twelve tragic deaths in 2010.

The latest course, Global Business Environment, was delivered in the much safer city of Erbil in Iraq’s semi-autonomous Kurdistan Region. Referred to by locals as ‘the other Iraq’, Kurdistan seems to have gotten a handle on security issues.

Erbil is booming, and it’s safer to walk around there than in downtown Ottawa.

Erbil is also a prime example of how Iraq is opening up to global opportunities. There are plenty of shopping malls with a growing number of Western brands, including Carrefour, Second Cup, La Vie En Rose and Pizza Pizza.

That said, the city wasn’t without its issues during the two weeks of Global Business Environment training. On November 22^nd and then again on November 24^th the region experienced two earthquakes that measured over 5.6 on the Richter scale. The epicentre was about 240 km away on the border with Iran, where widespread devastation occurred.

“I was staying on the 7^th floor of a hotel, and I felt the room swaying for about 5 minutes,” says Bill. “It was unnerving.”

Only three of the students who took Global Business Environment course actually reside in the city of Erbil. Two came from Tikrit over 3 hours away, but most travelled more than 6 hours from Baghdad to participate.

It’s clear though that the individuals taking FITTskills courses in Iraq aren’t deterred by barriers or challenges, natural or otherwise. They are thirsty for knowledge, says Bill, and they are always asking when the next course will be available. Several have already taken more than one of the FITTskills courses and are hoping to continue working toward earning the Certified International Trade Professional (CITP) designation.

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