International Trade 101
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Transcript of International Trade 101
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International Trade 101
Session 1: Export 101
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1. Assessing your Organizational and Product Readiness for Export
2. Market Research and Assessing the Competition3. Developing an Export Strategy and Marketing Plan
– Assessing Market Characteristics4. Promoting Products in Target Markets5. Complying with U.S. and Foreign regulations6. U.S. Government Agencies for Assistance to
Exporters
Agenda
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Assessing Your Organizational and Product Readiness
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Evaluating Your Product Readiness
What has contributed to the success of your product or service domestically? Does a similar demand exist overseas?
What are the unique features of your products? Do theses features enhance the demand for
your product in certain markets or regions?
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Evaluating Your Product Readiness
Other areas to think about Labeling changes, altering components or
ingredients, instructions or may need to be translated, ability to provide after sales service or support.
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Organizing For Exporting
A company new to exporting generally treats its export sales the same as domestic sales. This is a mistake.
Two key advantages of separating international from domestic business are: The centralization of specialized skills
needed to deal with international markets. A focused effort on export sales.
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Organizing For Exporting
Separating international from domestic business may be done at different levels in the organization.
Depending on your firm, some international sales people may specialize by product or by geographical region
Commitment from your firm’s CEO or President is critical to the success of the export initiative.
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Market Research and Assessing the Competition
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The Importance of Market Research
Your company may begin exporting without any market research if it receives unsolicited orders from abroad. But, you will find even more promising
markets by conducting a systematic search. Businesses that invest time in market research
increase their chances of succeeding more cost effectively.
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The Importance of Market Research
Researching potential markets can help your company by: Finding where your products are most likely to
sell Identifying market segments and niches Determining both domestic and international
competitors
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The Importance of Market Research
Discovering how to overcome barriers to market entry
Understanding customers’ needs and accommodating as appropriate
Identifying new trends Determining your price competitiveness
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Market Research Sources www.export.gov country and industry specific
reports from the U.S. Commercial Service www.buyusa.gov/eme Industry specialized
reports and bulletins from the U.S. Commercial Service
www.strategis.ic.gc.ca U.S. and Canadian statistical trade information
www.census.gov
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Fee Based Resources
Harris Selectory On-Line Database Kompass.com On-Line USA Trade Online Statistics BNA Export Reference Guide On-Line Distributor Match
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Developing an Export Strategy and Marketing
Plan
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Export Plan ContentAn export plan should contain the following information: Executive Summary Export Policy Commitment Statement
Mission statement Objective of exporting
Background Analysis Why your company is ready to export
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Export Plan Content Market Analysis and Implementation Strategy
Identify and rank markets, products, and possible distribution channels
Financial Analysis Export budget
Addenda Facts to back up the export plan
Background data Research information
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Promoting Products in Target Markets
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Promotion Techniques Tapping into foreign visitors at domestic shows
you may already be exhibiting at Exhibiting at key foreign trade shows Overseas industry publications Identifying distributors by seeing who other
firms with complementary products have appointed
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Promotion Techniques Working leads and referrals from other
overseas distributors Networking through key international industry
associations Holding targeted training or informational
seminars in a key market Promoting Assistance through U.S.
Commercial Services, ODOD (Int’l Trade Division), ITAC
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Complying with U.S. and Foreign Regulations
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Complying with U.S. Regulations
Why should you do your homework? U.S. Export Enforcement fines can be very
steep, even if mistakes are unintentional. Does your product require an export license?
U.S. Department of Commerce, Bureau of Industry and Security http://www.bis.doc.gov
U.S. Department of State, Directorate of Defense Trade Controls http://www.pmdtc.org
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Plan Ahead – Be Prepared Determine jurisdiction of your item Classify your item Identify the reasons for control Cross-reference the controls against the Country
Chart Screen all parties to the transaction Ensure no prohibited end-uses Export using appropriate ECCN and authorization
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Determine Your License Requirements
What is my item? Where is it going? ECCN and Destination
Who is involved? What are they doing with it?
End-user/End-use
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What is My Item? Check with the manufacturer Work with company engineer/someone who
knows the item Submit formal classification request to BIS
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Who is Involved?“List to check”
Denied Person’s List Entity List Unverified List General Order No. 3 of Supp. No. 1 to part 736 Specially Designated Nationals List – Treasury
Department, Office of Foreign Assets Control Nonproliferation Sanctions List – State
Department Debarred Parties List – State Department
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Red Flags or Indications of Unlawful Transaction
1. Customer or purchasing agent is reluctant to offer information about end-use of a product.
2. Product capabilities do not fit the buyer’s line of business; i.e., a small bakery places an order for sophisticated lasers.
3. Product ordered is incompatible with the technical level of the country to which the product is being shipped.
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Red Flags or Indications of Unlawful Transaction
4. Customer has little or no business background.
5. Customer is willing to pay cash for a very expensive item when the terms of sale call for financing.
6. Customer is unfamiliar with the product’s performance characteristics, but still wants the product.
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Red Flags or Indications of Unlawful Transaction…
7. Routine installation, training or maintenance services are declined by the customer.
8. Delivery dates are vague, or deliveries are planned for out-of the-way destinations.
9. A freight forwarding firm is listed as the product’s final destination.
10.The shipping route is abnormal for the product and destination.
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Red Flags or Indications of Unlawful Transaction…
11.Packaging is inconsistent with the stated method of shipment or destination.
12.When questioned, the buyer is evasive about whether the purchased product is for domestic use, export or re-export.
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General Prohibitions1. Export and re-export of controlled items to
listed countries2. Re-export and export from abroad of foreign-
made items incorporating more than a de minimis amount of controlled U.S. content
3. Re-export and export from abroad of the foreign produced direct product of U.S. technology and software
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General Prohibitions4. Engaging in actions prohibited by a denial
order5. Export or re-export to prohibited end-uses or
end-users6. Export or re-export to embargoed destinations7. Support of Proliferation Activities8. In transit shipments and items to be unladen
from vessels or aircraft
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General Prohibitions9. Violation of any order, terms, and conditions10.Proceeding with transactions with knowledge
that a violation has occurred or is about to occur
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Complying with Foreign Regulations & Requirements Why should you do your homework?
Each country’s requirements may be different. They can also change without notification.
Is product registration required with their ministry? Is outside lab testing required?
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Complying with Foreign Regulations & Requirements For entry, what documents are required?
Certificate of Free Sale Certificate of Origin Sanitary Certificates BSE Certificates
Some of these documents may need to be stamped by their consulate in the U.S.
Consider the market’s regulatory standards UL, CE, and CCC marks Labeling
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Exporter Responsibilities Record Retention – 5 years Anti-boycott Regulations – prohibits U.S.
persons from participating in or supporting foreign boycotts
Foreign Corrupt Practices Act (FCPA) – addresses bribery to foreign government officials
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Papa Omar DiopInternational Trade & Assistance Center
Columbus State Community College
Tel: 614-287-3850 Fax: 614-287-6311E-mail: [email protected]
sbdcfreeadvice.ning.com