Advice on Exporting
Getting the Government to Do What You Want
Let's look at some major sources of support that may give extra information and assist with implementation now that you've had a chance to think about your export strategy and how to conduct the market research that will be a part of filling it out. Your organization may get a lot of aid for little or no money, which makes the exporting process much easier. The Global Entrepreneurship Ecosystem (GEE), which we have covered in this blog, is one way to think about this assistance. It includes a checklist for mapping the GEE in your neighborhood. Beyond the names on a checklist, this blog gives a fast synopsis of the help available through federal, and local government entities, as well as the business sector. Remember that one of the primary contributing factors in producing successful exporters micro-multinationals or "export superstars" is their interaction with external aid, particularly in the form of government export assistance providers.
Local Commercial Service Offices in the United States
The United States Commercial Service maintains a network of foreign trade professionals to assist American businesses in exporting their goods and conducting business internationally. To help U.S. exporters, particularly small and medium-sized businesses, international trade specialists are engaged at offices around the United States and Puerto Rico. Because they combine the US Commercial Service's trade and marketing knowledge and resources with the financial expertise and resources of the US Small Business Administration and the Export-Import Bank of the United States, US Commercial Service offices are known as "one-stop shops."
International trade experts will advise your firm on the stages involved in exporting, as well as assist you to analyze the export potential of your products, discover markets, and find possible international partners. They collaborate with worldwide counterparts in more than 75 countries to deliver turnkey solutions in foreign markets to U.S. businesses. Each office of the United States Commercial Service can provide information on:
• International trade prospects
• Services to discover and assess international customers and representatives, distributors, resellers, and partners
• Industry data
• Foreign economic statistics
• Export financing
• Export paperwork requirements
• Export license requirements in the United States and foreign country import regulations
• Export trade finance possibilities
• Participation and certification in international trade shows
• Export seminars and conferences
• E-commerce tactics
• Additional local export support and networking
There are several conferences, seminars, and workshops available to help local business communities learn about international commerce in addition to individual counseling. Each year, around 5,000 events on topics such as export paperwork and licensing, country-specific market prospects, export trading businesses, and US trade promotion and trade policy efforts are held by US Commercial Service offices. District Export Councils, local chambers of business, state agencies, and other trade groups frequently host seminars.
Overseas Posts of the United States Commercial Service
Officers and U.S. Commercial Service country experts acquire most of the information regarding trends and real trade leads in foreign countries on the ground.
These individuals are well familiar with the local market circumstances and business procedures in the countries where they work. Officers from the United States Commercial Service serve in more than 150 offices in more than 75 nations. They provide a number of services to help firms sell in international markets, including:
• Agent-distributor locator services
• Background information on international enterprises
• Business communication in a cultural context
• Business counseling on entry strategy, pricing, and marketing
• Appointments with important buyers and government officials
• Representation on behalf of enterprises negatively affected by trade obstacles
• Support at international and domestic trade shows
This blog discusses some of the more essential services. You can get these services by calling a US Commercial Service location near you. Before you go, the US Commercial Service can help you plan your business trip by setting up appointments with embassy employees, market briefings, and other services in the places you'll be visiting.
Trade and Development Agency of the United States of America (ustda.gov)
The US Trade and Development Agency's (TDA) industry and international trade specialists assist with individual firms and manufacturing and service associations to identify trade possibilities and barriers by product or service, industrial sector, and market. TDA analysts participate in the establishment and negotiation of trade policies, as well as identifying market obstacles and advocating on behalf of American businesses. TDA's statistical data and analysis are beneficial to the growth of exports. TDA personnel also creates export marketing campaigns and seeks trade advice from business. TDA's industry and foreign specialists conduct executive trade missions, trade fairs, marketing seminars, and business counseling, as well as supply product literature centers, to support U.S. firms in their export endeavors.
The Export-Import Bank of the United States (exim.gov)
The United States Export-Import Bank (Ex-Im Bank) is a government agency that facilitates the export of goods and services from the United States. Ex-Im Bank serves as the federal government's export credit agency, providing export credit insurance, lender loan guarantees, direct loans to exporters on market-related credit terms, and loans to overseas purchasers. Ex-Im Bank's insurance and loan guarantees are designed to encourage exporters and financial institutions to support U.S. exports by lowering the commercial and political risks of international trade (such as buyer insolvency and failure to pay) that could result in nonpayment to U.S. exporters by foreign buyers. The funding made available through Ex-Im Bank's guarantees and insurance is on market terms, and Ex-Im Bank bears the majority of the commercial and political risks. The lending program of the Ex-Im Bank is intended to offset interest rate subsidies provided by foreign governments. Ex-Im Bank's response with financial support allows U.S. funding to compete with that offered by foreign exporters.
Financing for pre-export
The working capital guarantee allows lenders to provide the funds that an exporter requires to acquire or manufacture a product for export, as well as to fund short-term accounts receivable. If an exporter defaults on a loan guaranteed under this scheme, Ex-Im Bank reimburses the lender for the guaranteed component of the loan (usually 90 %), minimizing the lender's overall risk. Ex-Im Bank can raise its guarantee coverage to 100 percent for approved loans to minority, woman-owned, or rural enterprises. Working capital guarantees can be utilized to support continuing export sales or to cover a one-time cash flow requirement resulting from a single export transaction. The working capital guarantee provides exporters with favorable advance rates, allowing them to expand their borrowing capacity. The following rates apply:
• Inventory—up to a 75% advance rate (including work-in-process material, which is material that has been delivered to manufacturing, engineering, design, or other services)
• Foreign receivables with up to a 90% advance rate Export-related accounts receivable and inventory (including work-in-process) associated to an export order get guaranteed working capital loans. (For letters of credit given as part of a guaranteed loan, Ex-Im Bank simply requires security equal to 25% of the letter of credit's value.)
Post-Export Financing
Export credit insurance is provided by the Ex-Im Bank to help mitigate the commercial and political risks that come with international trading. The insurance covers an exporter's short-term credit for consumer products, raw materials, commodities, spare parts, and other things with payment terms of up to 180 days. For up to 360 days, capital goods are eligible. Ex-Im Bank reimburses the exporter if the buyer fails to pay according to the conditions of the policy. The primary federal program supporting short-term export finance is Ex-Im Bank insurance.
Multi-Buyer Credit Insurance, Small Business Insurance, and Single-Buyer Insurance are all Ex-Im Bank insurance programs for exporters. Ex-Im Bank's insurance typically covers up to 95 % of defaults resulting from defined political risks and commercial risks. Short-term single-buyer insurance gives ninety percent coverage. Exporters must typically adhere to U.S. content rules and, in some cases, insure all qualifying international sales.
Export credit insurance, which covers political and commercial risks, is also available from a number of private firms. Private insurance is provided to established exporters with a track record, generally at competitive premium rates, albeit underwriting in certain markets may be limited.
Ex-Im Bank gives insurance or a guarantee to encourage banks and other lenders to issue export loans to creditworthy overseas buyers of U.S. products and services via distinct programs, such as the bank buyer credit policy. Ex-Im Bank enables either medium-term financing (1 to 5 years for repayment after delivery or equipment installation) or long-term financing for heavy equipment and capital projects, such as power plants, telecommunications networks, and transportation facilities and equipment (up to 10 years for repayment).
As an alternative to guarantees, Ex-Im Bank also offers medium- and long-term loans.
Ex-Im Bank loans are similar to guarantees in terms and conditions, with the exception that the bank determines the interest rate in line with international agreements. In many circumstances, the cost of an Ex-Im Bank guarantee is less than the cost of an Ex-Im Bank loan.
The Commercial Service Advocacy Center (export.gov/advocacy) of the United States of America
Exporting nowadays might imply more than just offering a good product at a competitive price for a US firm competing on a foreign government procurement contract. Dealing with foreign governments and complicated laws might also be a part of it. If you believe the bidding process is not open and transparent, or if you believe it is skewed in favor of your overseas competitors, you should contact the Advocacy Center. The Advocacy Center brings together 20 US government entities active in foreign commerce to coordinate their efforts. Advocacy aid might include a high-ranking US government official paying a visit to a senior foreign official, direct support from US personnel stationed overseas, letters to foreign decision-makers, and coordinated action by US government agencies and enterprises of all kinds.
Negotiations and Compliance with Trade Agreements (tcc.export.gov)
The Office of Trade Agreements Negotiations and Compliance (TANC) of the United States Department of Commerce ensures foreign compliance with international trade agreements. TANC (via the Trade Agreements Compliance Program), which is part of the Department of Commerce's International Trade Administration, routinely monitors, examines, and analyzes foreign government compliance with our international trade agreements. This free program is open to all U.S. exporters and investors who are encountering trade restrictions, but it is especially beneficial to small and medium-sized businesses, who typically lack the means or knowledge to address these issues on their own. It is the United States government's one-stop-shop for obtaining assistance in lowering or eliminating such hurdles.
The TANC website has a fully searchable database with the texts of around 250 international trade agreements. To help, TANC has compiled a list of the most prevalent trade restrictions imposed by foreign governments at 1.usa.gov/1yRJbr5. This program allows exporters in the United States to register complaints about trade restrictions imposed by foreign governments or unfair commercial circumstances in foreign markets.
Industry and Security Bureau (bis.doc.gov)
The Bureau of Industry and Security (BIS) is in charge of export control for national security, foreign policy, and shortages, such as "dual-use" commodities that may be used for both military and commercial purposes. Assistance with export restrictions and, if necessary, export permits can be acquired directly from your local BIS district office or through the BIS's Office of Exporter Services in Washington, DC's Outreach and Educational Services Division. BIS also has two field offices that focus on export control and regulation advice.
Agency for Minority Business Development (www.mbda.gov)
The Minority Company Development Agency (MBDA) of the US Department of Commerce is the sole government agency committed to the growth and worldwide competitiveness of the US minority-owned business sector. Their programs and services help minority-owned businesses generate employment, develop regionally, nationally, and worldwide, and grow their scale and capability.
MBDA offers information on market and product requirements throughout the world and discovers methods to access education, funding, and technology to assist minority firms to prosper, thanks to a partnership with the US Department of Commerce. Many MBDA counselors have received certification in advising exporters. MBDA and DOC, for example, manage minority company participation in trade shows. The network of Minority Business Development Centers also assists minorities in developing foreign marketing strategies and promotional materials, as well as locating financing resources. Information kits and details on local seminars are provided by the MBDA and ITA field offices.
Small Business Administration of the United States (sba.gov)
Export counseling, training, and finance are all available through the US Small Business Administration (SBA) and its countrywide network of resource partners. Trade finance managers are also co-located with some US Commercial Service offices by the SBA. You may also learn more about exporting by visiting:
District Offices of the Small Business Administration (1.usa.gov/1vCIcb0)
In every state and territory, the SBA has district offices staffed by small business development professionals. DITOs (District International Trade Officers) may assist small enterprises in exporting by linking them with suitable local resources. DITOs are available in all 68 district offices.
Offices of the United States Commercial Service (1.usa.gov/1tACR7m)
In various US Commercial Service offices around the country, SBA trade finance managers work alongside US Commercial Service professionals. These professionals may provide companies with trade finance solutions to support their export sales, such as how to organize international payments, manage foreign commercial risk, and secure the operating cash required to execute export orders.
SBDCs (1.usa.gov/1obQitC) are small business development centers.
Small firms, particularly those new to exporting, may take use of the almost 1,000 SBDCs around the country for a comprehensive variety of export support services. Counseling, training, management assistance, and export planning are among the services they provide. Small company exporters receive free counseling services, but minor fees are charged for export training seminars and other SBDC-sponsored export activities. Your local SBDC, as experts in business planning, may assist you in developing your own export strategy, which may involve utilizing other local resources such as the US Commercial Service.
SCORE stands for Small Business Consultants of America (score.org)
Working and retired executives and business owners give their time and knowledge as free business counselors, providing confidential counseling and mentorship. SCORE has a large number of members who have worked in international commerce. They can assess your company's export potential and help you improve your domestic operations by identifying financial, managerial, and technological issues and possibilities. Score counselors may also help you build and implement basic export marketing plans that define where and how your items might be sold worldwide.
USDA (United States Department of Agriculture)
The Office of Outreach and Exporter Support of the United States Department of Agriculture provides export assistance (OOEA). OOEA is the initial point of contact for exporters of U.S. food, agricultural, and forest products. It is part of the Foreign Agricultural Service (FAS, www.fas.usda.gov). It provides aid in obtaining information regarding export-related programs run by the US Department of Agriculture and other federal agencies, as well as counseling, referrals, and access to foreign market information. Many U.S. embassies across the world have FAS officers and market specialists. It also acts as a point of contact for minority- and small-business owners looking for help in these areas. Basic export counseling will be provided by OOEA, and you will be connected to the appropriate export program, such as the Market Access Program.
Information about Standards and Certification from the National Center for Standards and Certification
The National Center for Standards and Certification Information (NCSCI) is a resource for information on international standards and certification systems. NCSCI also offers "Notify U.S." (tsapps.nist.gov/notifyus/data/index), which provides full information on existing standards and certification criteria. This free, web-based e-mail subscription service allows people, corporations, and organizations in the United States to evaluate and comment on proposed foreign technical laws that may have an impact on their enterprises and access to international markets. You can receive e-mail notifications regarding drafts or changes to domestic and international technical rules for produced items if you subscribe to the Notify U.S. service.
Regional Export Local authorities
The US Commercial Service has direct contact with seasoned exporters in all elements of export commerce, in addition to its in-house services. The US Commercial Service collaborates with 58 District Export Councils (DECs), including those in Puerto Rico and the US Virgin Islands, which are made up of almost 1,500 business and trade specialists who volunteer their time to assist US businesses in developing sound export plans. Many of the workshops and seminars on exporting organized by the US Commercial Service offices are supported by District Export Councils, and they also fund their own, such as Export University. Members of the District Export Council can also give direct, personal counseling to less experienced exporters, such as marketing tactics, trade relationships, and ways to increase success in international markets. District Export Councils can help you through the U.S. Commercial Service offices with which they are linked.
Governments at the state and local levels
Exporters frequently benefit from the aid provided by the state, county, and local economic development organizations, departments of commerce and development, and other government institutions. These organizations, many of which operate under the auspices of a department of commerce, economic development, or something similar, often provide the following services:
• Education can be exported.
Providing assistance to exporters in determining their export potential and exposing them to export procedures and tactics, maybe through group seminars or individual counseling sessions.
• Commercial missions.
Organizing travels to other countries to allow exporters to meet with prospective overseas consumers
• Attend trade exhibitions.
Organizing and funding international exhibits of state-produced goods and services.
Institutions of Finance
Many American banks have international divisions with specialists who are experienced with certain overseas nations, commodities, and transactions.
Correspondent connections are maintained by large banks in major U.S. cities with smaller banks around the country. In addition, banks in many foreign nations may have their own overseas offices, giving international customers a direct line of communication.
Even in sectors that lie beyond the traditional limitations of international banking, international banking professionals are generally well educated regarding export problems.
Because banks earn money from loans to exporters and fees for particular services like letters of credit and other types of financial transfers, they usually give free consulting and help to their clients. Many banks also provide materials to assist exporters.
These products are frequently devoted to specific nations and their business processes, and they may be an excellent resource for learning about a foreign sector. Large banks also hold seminars and workshops on letters of credit, documentary collections, and other financial topics of interest to exporters on a regular basis.
A commercial bank can provide a variety of services to its customers, including:
• currency exchange
• export finance
• collection of international invoices, drafts, letters of credit, and other foreign receivables
• money transfer to other nations
• Traveler introduction letters and letters of credit
• Credit information on possible overseas representatives or purchasers
• Credit help to the exporter's foreign buyers
Intermediaries in Export
Export intermediates range in size from global conglomerates to highly specialized small businesses. They offer a variety of services for a charge, including market research, hiring and maintaining foreign distributors or commission agents, presenting a client's products at international trade exhibitions, advertising, shipping, and document preparation. In other words, the intermediary can frequently assume entire responsibility for the export side of the firm, freeing the exporter of all responsibilities except satisfying orders.
Intermediaries may work for a number of exporters at the same time, earning a commission, salary, or retainer + commission. Some middlemen claim ownership of the items they manage, purchasing and selling in their own names. Although the commodities are typically not competing, the products of a trading company's many clientele are frequently connected. One advantage of hiring an intermediary is that it may provide rapid access to marketing tools that would otherwise take years for exporters to create on their own. Many export middlemen also finance sales and grant credit, allowing the exporter to get paid quickly. For additional information on how to use export intermediates, go here.
World Trade Centers, International Trade Clubs, and Local Chambers of Commerce are all examples of international trade organizations.
Local or regional Global Trade Centers (wtca.org) and international trade clubs are made up of local businesses who represent international trade and shipping enterprises, banks, forwarders, customs brokers, government agencies, and other world trade service organizations. These organizations run international business education programs and host promotional events to pique people's interest in global commerce. Approximately 300 World Trade Centers or linked groups are located in nearly 100 nations' key commercial hubs. Be aware that some WTCs are primarily real estate ventures with no or limited membership services, such as export education or networking. A firm may acquire useful and timely advise on foreign markets and prospects from businessmen who are already educated in practically every aspect of international business by joining a local group. Services, savings, and relationships with linked clubs in other countries are just a few of the benefits of membership.
In the United States, several local chambers of commerce offer sophisticated and comprehensive services to members interested in exporting:
• Export seminars, workshops, and roundtable discussions
• Certificates of origin
• Trade promotion programs, such as overseas missions, mailings, and event planning
• U.S. pavilions at foreign trade shows
• Contacts with foreign companies and distributors
• Export sales leads and other opportunities to members
• Transportation routings and shipment consolidations
Associations of Business and Industry
Some trade associations and industry groups can provide precise information on product demand in specific countries, or they can connect members to export management firms. Sector trade groups usually keep track of international trade news and developments that influence their industry or line of business. Government research is frequently included in their publications and newsletters. Large regional, national, and international trade exhibitions are frequently organized by national and international trade groups. Visit uschamber.com to discover a chamber in your region.
Chambers of Commerce of the United States of America in Other Countries
In any foreign nation, the local chapter of the American Chamber of Commerce (AMCHAM) is a vital and dependable source of market knowledge. Local chapters are well-informed about local trade prospects, present and potential competitors, peak trading seasons, and other factors.
AMCHAMs are frequently the first point of contact for any business in the United States. For members of associated organizations, detailed services are usually supplied at no cost. Nonmember services are charged according to a defined timetable by several AMCHAMs.
Other Advisers and International Trade Consultants
International trade consultants may help a company with all elements of international marketing. Trade consultants rarely specialize on a single product, however they may provide advice on how to adapt a product to a foreign market. They look into domestic and international legislation, as well as commercial and political risk. They undertake international market research and develop links with foreign government agencies as well as other essential resources such as advertising firms, product service centers, and local attorneys.
International trade consultants may help companies find and qualify foreign joint venture partners, as well as perform feasibility studies for the sale of manufacturing rights, the placement and building of manufacturing facilities, and the opening of overseas branches. Following the completion of sales agreements, trade consultants may guarantee that implementation goes smoothly and that any issues that occur are appropriately addressed.
Typically, trade consultants specialize in a topic area as well as a worldwide region or country. These consultants may advise on whether agents or distributors are likely to be successful, what types of advertising are needed, who your rivals are, and how to do business with them. They also have a good understanding of foreign government rules, contract laws, and taxation. Some businesses are more focused than others. For example, some people may be quite informed about legal and tax concerns but not so much about marketing methods. International trade consulting services are offered by several big accountancy firms, legal firms, and specialist marketing organizations. When choosing a consulting firm, you should pay special attention to the consultant in charge of the project's expertise and competence. Seek guidance from other exporters as well as the other resources provided in this chapter, such as U.S. Commercial Service offices and local chambers of commerce, to select an acceptable firm.
Consultants are most useful to businesses that have unique needs. Because of this, and because private consultants are expensive, it pays to take full advantage of publicly financed resources before employing one.
Shipping companies and freight forwarders
Freight forwarders assist with the preparation of export documents, the booking of transportation for your goods, and, if necessary, customs clearance at the port of arrival. A freight forwarder is not essential, but they might be helpful, especially if you are exporting for the first time, exporting to a new nation, or prefer someone else to handle these legalities. Some of the larger shipping businesses, such as UPS, FedEx, and DHL, are also forwarders and customs brokers, providing a more comprehensive service to account holders. They also offer websites with a wealth of information for exporters, including the documentation that each nation requires. All three are strategic partners of the United States Commercial Service, which now has over 100 partners, including a hotel chain, a major IT services provider, a professional association of freight forwarders and customs brokers, and a variety of other businesses that want to encourage their customers to sell globally.
Providers of E-Commerce Services
Another important source of information on the export procedure, particularly documentation, tariffs and taxes, and laws, is e-commerce providers. From eBay and Amazon to specialist sites like Webport Global and Export Now, the sources are diverse.
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