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24 March 2010Exporting 101 Why Export State and Federal Support, commercial shippers –Best friends Controlled Growth in Predictable Markets –Who needs what, and how much Manageable Risk –Pick your place Exponential Growth Potential –Only so much of any product needed in state/country
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24 March 2010 Exporting 101
Building International Sales
Assessing Risk & Opportunity
Craig A HarveyChair, MSDEC
24 March 2010 Exporting 101
Topics
• Why Export• Taking Advantage of Free Trade Agreements• Assessing & Managing Country Risk
– Regional Opportunities and Challenges
24 March 2010 Exporting 101
Why Export
• State and Federal Support, commercial shippers– Best friends
• Controlled Growth in Predictable Markets– Who needs what, and how much
• Manageable Risk– Pick your place
• Exponential Growth Potential– Only so much of any product needed in state/country
24 March 2010 Exporting 101
Why Export
• Untapped Markets– New technology highly desired in certain
regions/countries Dollar a bargain vs. many other currencies
• Leverage Existing sales forces (agents)• Improve on profits, simple transactions• Market values based on local economy
– Diversify markets/customers/economies
24 March 2010 Exporting 101
Why Export - www.export.gov/FTA/index.aspCountry 2007 Million USD 2008 Million USD Percent ChangeNAFTA 332,499 353,931 6.45%Canada 213,118 222,424 4.40%Mexico 119,381 131,507 10.20%CAFTA-DR 21,274 23,922 12.45%Costa Rica 4,224 5,047 19.50%Dominican Rep 5,793 6,293 8.60%Guatemala 3,872 4,493 16.00%Honduras 4,327 4,699 8.60%Nicaragua 846 1,030 21.70%El Salvador 2,209 2,357 6.70%Australia 17,916 20,948 16.90%Bahrain 565 779 37.80%Chile 7,610 11,366 49.40%Israel 9,940 10,238 3.00%Jordan 831 904 8.70%Morocco 1,333 1,506 12.90%Oman 1,034 1,380 33.40%Peru 3,764 5,686 51.10%Singapore 23,576 25,655 8.80%Total 420,348 456,319 8.60%
24 March 2010 Exporting 101
Leveraging Free Trade Agreements
• What is a Free Trade Agreement? www.export.gov– Improving intellectual property right protection – Enhancing labor rights – Government procurement – Opening service sectors to competition – Enhancing rules on foreign investment – Environmental standards – Improving customs facilitation – Dispute settlement
• Bilateral Trade Agreements– Australia, Bahrain, Chile, Israel, Jordan, Morocco, Peru, Oman, and
Singapore• Multi-lateral Trade Agreements
– North American Free-Trade Agreement (NAFTA)– Central America-Dominican Republic Free Trade Agreement (CAFTA)
24 March 2010 Exporting 101
Why Free Trade Zones
• Free Trade Agreements– CLOSE (travel)– Usually English 2nd language– Similar Laws, (different applications maybe)– Easier Entry, more core knowledge– Cheaper shipping
• Free Trade Agreements are considered priority markets by:– Federal Government– State Government
24 March 2010 Exporting 101
Assessing & Managing Country RiskRegional Opportunities• Where to attempt to export first
– Risk• Financial• Personal• Security (Intelligence)
– Support• US Commercial Service
– MSDEC• State Department• MDA• EDU• Shippers/Logistics (FedEx. Etc)
24 March 2010 Exporting 101
Assessing & Managing Country Risk
• Challenges– Understanding Environment
• Crime• Legal system
– Understanding Culture• Customs• Society
– Understanding when and where to adhere to customs (legality)• Support
– EXIM– US Commercial Service– MDA– Shippers/Logistics Partners (FedEx, etc.)
24 March 2010 Exporting 101
Summary
All opportunity involves risk, International opportunities have risk too but you have the support of entire federal
and state agencies to mitigate those risks
Do your homework, if you approach exporting and remain ignorant the costs can be high
Exhaust available help/support, most is free or available for a nominal charge
24 March 2010 Exporting 101
Questions?
