Despite the fact that international trade is more streamlined and interconnected than ever before, there are still a number of issues prevalent in the industry right now. These issues are creating problems and making things more difficult for supply chains around the world to function at optimal levels. Here is a look at three of the most important issues that are affecting global trade right now.

1. Rising tariffs

As the world’s largest economy, the United States has a lot of economic power and influence. However, under President Trump, the United States has decided to engage in a series of trade wars, using tariffs as its main weapon. Throughout his campaign, Donald Trump repeatedly stated that he believed that the United States was suffering from a series of bad trade deals and currency manipulation tactics from nations such as China.

Once he got into office, President Trump started imposing several different tariffs on imported goods. He justified them as an attempt to make trade conditions more favorable for the United States.  In the past two years, Trump has put 10-25 % tariffs on hundreds of billions of dollars’ worth of Chinese goods. These goods include solar panels, steel, aluminum, and many others.

In response to these tariffs, China has also put tariffs on hundreds of billions of dollars’ worth of American imports. Currently, the United States has more tariffs on Chinese goods than China has on U.S. goods. However, this tit-for-tat trade war seems to have no end in sight. Now China has put a ban on buying U.S. agricultural products and has also devalued its currency as a further attempt to win the trade war with the United States.

This protracted trade war is disrupting the free flow of trade between the world’s two largest economies. This trade war and its consequences will be felt around the world for some time to come. The levels of trade that exist between the two nations will impact many other countries.

2. Intellectual property theft and counterfeiting

This issue also is primarily between China and the United States. President Trump has accused the Chinese of participating in rampant intellectual property theft via cyberattacks and forced technology transfers. Many different parties have accused the Chinese of counterfeiting numerous brands and products.

The continuous theft of intellectual property by Chinese companies is a very serious issue. Even China’s President Xi Jinping has spoken out against it and expressed his belief that stronger punishments for infringement and violators are needed. The Federal Reserve Bank of Minneapolis conducted a study in 2015 that determined that roughly half of all of the technology owned by Chinese companies was obtained by foreign companies.

IP theft is a major global trade issue because companies are unlawfully profiting from breakthroughs made by other companies. The incentive for business to innovate reduces and often leaves markets flooded with counterfeit products. This increases competition, thus reducing prices for businesses who spent the initial research and development money to improve their products. These businesses should therefore be able to charge more to recoup those costs of development.

When nations believe that other nations are stealing their trade secrets, the consequences can be severe. For example, President Trump claimed that one of the primary reasons why he levied such strong tariffs on China was to get back some of the money that American companies lost through intellectual property theft by Chinese corporations.

Despite the growing awareness around the issue and actions being taken to deal with it, intellectual property theft continues to be a major issue. In fact, multiple Chinese citizens working for Apple as engineers were recently arrested for attempting to steal trade secrets from Apple regarding the company’s upcoming autonomous vehicles.

3. Governments confiscating shipments

Although international trade companies have long been forced to worry about pirates from places like Somalia interfering with shipments on the oceans, governments are now actively intercepting vessels and their cargo on a much larger scale. For example, the nation of Iran has recently seized three oil tankers in the Persian Gulf.

Iran is doing this as a retaliation for the strict sanctions that the United States government has placed on it. Trump’s sanctions are an attempt to choke off Iran’s oil sales, which are the backbone of its economy. President Trump has long criticized the 2015 nuclear deal that was struck between the two nations, and is using the sanctions to try to pressure Iran to renegotiate the deal.

The recent seizures made by Iran have irritated President Trump. As a result, he has appealed to the United States’ Western allies to create a military force that can guard vessels passing through the Strait of Hormuz and other dangerous Middle Eastern waterways. Some of these allies, such as Germany, have said no.

It appears that many nations do not want to partake in the conflict between the United States and Iran.  Considering the fact the United States’ previous long, drawn-out conflicts with Middle Eastern nations were extremely unpopular with many nations, it is not a surprise that countries are not rushing to join the United States in a military conflict with Iran. This is especially true considering the fact that nuclear weapons are at the heart of the conflict.

There’s still lots of hope for the future of trade, despite current tensions

Thanks to increases in modern technology, international trade is still thriving. However, the extensive amount of rising tariffs, counterfeiting and intellectual property theft, and government seizures of vessels are all creating problems for global trade right now. These problems appear to revolve mostly around three nations: the United States, China, and Iran. All three of these nations have vastly different political ideologies and all three are very powerful.

It is unclear how the three nations will resolve the tension in the future. However, for people around the world who work in and depend on global trade, export numbers continue to grow worldwide. With new trade deals signed regularly, the hope will be that current problems can be solved quickly and peacefully.

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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.

There are currently 164 countries who are WTO members, 36 of whom have joined since 1995. The organization has been working to uphold trade policies, settle disputes, conduct economic research, help government officials, and educate the public about trade on behalf of its members for over twenty years.

However, despite the wide reach and large membership base of the WTO, there are 34 nations who are not a part of the organization.

These countries face significant obstacles to increasing their trade, as they do not hold the Most Favored Nation status given to all WTO members, nor do they receive the same lower trade barriers all WTO members must grant one another.

Instead, they may face higher numbers of tariffs, import quotas and regulations when dealing with most of the world, and cannot resolve their trade conflicts through WTO courts.

Here are eight of the most important trading nations who aren’t currently WTO members:

1. Iran

Iran has the 27^th largest economy in the world in 2016, with a projected nominal GDP of $412.304 billion USD. Out of all the nations who are not already members of the WTO, Iran has the largest economy.

Iran has attempted to join the World Trade Organization over 20 times in the last two decades. However, there were objections, largely from the United States, about the nation’s nuclear activity.

The country is now much closer to becoming a WTO member after its recent nuclear deal in late 2015. But, it still has to comply with WTO requirements regarding subsidies, lowering of tariffs, transparency, and copyright laws before the process can continue.

Iran has a very strong economy. Its main exports include chemicals, natural gas, oil, plastics, fruits, and ceramic products. Joining the WTO could increase Iran’s ability to export even more of these items to major global markets by lowering tariffs placed against their goods, most notably their oil.

2. Algeria

Algeria has the 55^th largest economy, with a nominal GDP of $165.974 billion. It is not yet a member of the WTO because it is still in the process of amending its trade regime to meet the organization’s policies, such as reducing import, pricing and investment restrictions, limiting export subsidies and liberalizing service industries. However, Algeria has been in negotiations with the WTO for the last several years and is making progress toward this goal.

Algeria has the 10^th largest natural gas and the 16^th largest oil reserves in the world. It is also a major natural gas exporter, currently ranking 6th worldwide. Algeria’s access to the Mediterranean and proximity to the Atlantic Ocean puts it in a great location for international trade, a situation that could be taken even more advantage of as a WTO member with fewer trade barriers in these markets.

3. Sudan

Sudan has the 63^rd largest economy in the world with a nominal GDP of $93.729 billion. The country has been trying to join the WTO since 1994, during the late stages of the organization’s formation.

In order to become a member of the organization, Sudan has been working to lower tariffs and guarantee the rights of exporters and importers to abide by WTO policies. Sudan filed an application for membership again in 2015, but it has not yet been granted.

Sudan produces 70-80 % of the entire global output of gum arabic (also known as acacia gum).

Gum arabic is used in soft drinks and candy in the food industry, as well as in glue, paint, incense and several other products.

The economy in Sudan is also fueled by gold mining and oil production. However, oil production has been less predominant in the country ever since South Sudan seceded to become an independent nation.

4. Belarus

Belarus currently has the 83^rd largest economy in the world, with a nominal GDP of $45.887 billion. Belarus has applied for WTO membership and has been working for several years to try to reduce government intervention in the economy, and agricultural subsidies, in order to meet WTO requirements and make foreign exports more competitive. However, the nation has not been approved, largely because the government has made little progress on these fronts.

Belarus may be able become a member of the WTO once it makes the necessary changes, but the application process can take up to five years.

The top exports from Belarus include equipment, machinery, minerals products, chemicals, textiles, and metals.

5. Serbia

Serbia has the 92^nd largest economy in the world, with a projected nominal GDP of $37.755 billion for 2016.

Serbia first applied for membership to the WTO in 2004. Although the nation has not yet been accepted, it is getting closer to membership status. First, Serbia will have to complete several bilateral trade agreements with WTO members and get the endorsement of a multilateral working group at the WTO in Geneva.

Serbia’s primary exports include electronic equipment, vehicles, machines and engines, plastics, fruits, iron and steel. Serbia also imports large quantities of vehicle parts and petroleum. The country’s entrance to the WTO would therefore reduce tariffs on its exports and make it easier for Serbian companies to compete internationally.

6. Turkmenistan

Turkmenistan is currently the world’s 93^rd largest economy, and has a nominal GDP of $35.398 billion.

Agriculture is an important part of the country’s economy, representing 14% of its GDP, and both cotton and hydrocarbons are produced there in large quantities. The country’s main trade partners include China, Russia, and Iran.

Turkmenistan has not yet applied for WTO membership. Its government recently began studying the possibility of joining the WTO, but any membership application remains a long-term goal at best, as the process usually takes several years before countries are granted membership.

If it did eventually join, it could potentially open import and export opportunities with many new trade partners for this Middle Eastern nation, allowing it to diversify its economy.

7. Azerbaijan

Azerbaijan currently has the world’s 95^th largest economy, coming in with a projected GDP of $35.141 billion at the end of the year. Azerbaijan is located in southwest Asia. The government of Azerbaijan told the WTO that it “will enact all possible measures to accelerate our accession (to the WTO) process,” and is trying to alter its trade regime to comply with WTO standards. However, the nation is yet to be accepted into the WTO.

Azerbaijan’s economy has been growing steadily in recent years, largely due to its oil and gas exports.

The country’s real estate, banking, and construction sectors have also been growing. Azerbaijan’s trade with Turkey and the EU is increasing, so WTO membership could create opportunities to expand it even further by reducing tariffs faced by Azerbaijani companies.

8. Bosnia and Herzegovina

Bosnia and Herzegovina has the 113^th largest economy in the world, and the size of its nominal GDP for 2016 is $16.324 billion.

Bosnia and Herzegovina has not been accepted into the WTO yet because it has not been able to reach bilateral trade agreements with at least two nations. However, since 2015 it has been working harder to gain acceptance, so membership could come soon.

Bosnia exports metals, textiles, petroleum, and furniture in large quantities. The private sector in Bosnia and Herzegovina is continuing to grow slowly, despite a drop in foreign investment since 2007.

Moving closer to bringing the world under the same guidelines

The World Trade Organization is a powerful and expansive group that plays a crucial role in international trade by lowering tariffs, mediating disputes and creating more open global markets.

Unfortunately, there are still dozens of nations who are forced to conduct trade without the help of the WTO. Some of them are major players in global trade, whose membership would be beneficial for those individual nations and the global economy as a whole.

Bringing every country under the same basic trade policies as WTO members would mark a major milestone towards freer international trade. It would provide greater opportunities for businesses in more markets than ever before. Until then, keep an eye out for the WTO status of these country and others, as we await their next steps.

The post The 8 most important trading nations who aren’t WTO members appeared first on Trade Ready.

Morteza Azari, CITP®|FIBP®, is the Admissions Counselor at Stanford College of Business and Technology in Toronto, ON.

After over a decade of high-level international trade experience in Iran, where he played a crucial role in dramatically increasing national exports, he hopes that his new designation will help him to best make use of his extensive expertise in the Canadian market as well.

A promising start to an exciting global trade career

After completing both his Bachelor’s and his Master’s degrees in Business Administration, specializing for the latter in International Marketing, Morteza joined the Iranian Ministry of Commerce as an International Trade Specialist in 2001.

Morteza helped a wide variety of companies by conducting market research, preparing reports on export potential and new markets, and ensuring all trade documents and licenses were in place.

He also pioneered the ministry’s cross-channel promotion program, which increased visibility for local producers in national and international news and magazines, and assisted the ministry with events like trade shows and conferences.

Morteza excelled in every aspect of the role, and received the senior export ranking from the ministry for three consecutive years from 2003-2005.

As a result, he was quickly promoted to the position of Export and Marketing Manager for the Gilan province’s trade organization, where he was responsible for the entire province’s export plans and strategies, and given significantly increased responsibilities.

An impressive track record in increasing exports

Morteza’s new tasks were numerous and wide-ranging, such as managing the entire export department, developing new markets for Iranian goods, and spearheading all trade promotion events.

Morteza also took a leading role in developing an electronic exporters and importers directory, which became the initial channel for many local companies looking to enter the international markets and create partnerships.

Other responsibilities included leading a team to codify the province’s entire export development strategy, creating a new union for exporters, and establishing both an export development committee and business training centers for international trade professionals.

A passion for helping build global business skillsets

On top of his career in the Ministry, Morteza was also heavily involved with various training programs. After establishing business training centres, he spent a year managing one of them and taught courses there on sales engineering, import and export management and marketing.

He also ran a Business Management department in another institution where he planned out an entire business curriculum, and taught courses on international business, international marketing, marketing research and supply chain management in other colleges and universities for twelve years.

Morteza has always enjoyed mixing the academic and professional sides of his career, noting that “my hands-on experience inspired me to transfer the real cases from my career and apply a combination of science and practice to teach students at university and college.”

Reinforcing his global business career and becoming a CITP®|FIBP®

Though he was extremely successful in his position in Iran, Morteza left in 2012 to move to Canada, which he describes as “one of the world’s pioneering countries in international trade.”

Continuing to follow his passion for education, he has also pursued various professional development opportunities, including taking FITT-accredited business courses at Seneca College.

Morteza already had his MBA and is now also a Ph.D candidate in Management Sciences at the University of Waterloo, but he knew that earning his CITP®|FIBP® designation would be the ideal way to enhance his global trade career.

I recognize FITT as the ideal inspiration that prompted me to make my dreams come true and become a CITP®|FIBP®, the world’s leading international trade designation, and pursue my international trade career more enthusiastically.

Morteza now hopes to use all of his knowledge and experience to take on a similar international trade specialist role in Canada, and by doing so help the Canadian economy to flourish as Iranian exports did under his strong leadership.

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