As we mentioned in our previous post, May is World Trade Month. Although not a new resource, A Basic Guide to Exporting, published by the US Department of Commerce, serves as an excellent starting point to help facilitate overseas sales.
The Basic Guide, which was first published in 1936 and is now available it its 11th edition, can be a useful reference to companies of all sizes. However, it is specifically intended for small and medium-sized businesses that are new to exporting and for those already exporting but would like expand customer reach into new markets. The Guide is divided into 19 chapters that cover “virtually every issue a company looking to export might face.” Some of the topics include “Developing an Export Strategy” (Chapter 2), “Preparing your Product for Export” (Chapter 8), and “Financing Export Transactions” (Chapter 15).
Not only is May World Trade Month, but 2015 has also been described as the “Year of Trade” due to the amount of significant international trade issues being debated in Congress, ranging from Trade Promotion Authority (TPA) to new free trade agreements (FTAs) to preferential programs like the Generalized System of Preferences (GSP) and the African Growth and Opportunity Act (AGOA). Fortunately, exporters do not have to wait until the conclusion of the Trans-Pacific Partnership (TPP) or the Transatlantic Trade and Investment Partnership (T-TIP) to get preferential access into key markets.
The United States has concluded FTAs with 20 countries, including Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, South Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, and Singapore, which can mean lower tariff costs for US-origin products. Chapter 18 of the Basic Guide covers the “preferential rules of origin (ROO),” which are the criteria to determine whether your product can qualify for lower tariffs under these agreements. Although each FTA may differ in specific ROO negotiated, this chapter clarifies the reasons ROO are developed, basics steps exporters must take to meet the requirements for their products to qualify for lower tariffs, and helpful examples that illustrate what certain product-specific ROO mean from a business perspective. We also recommend reviewing the Free Trade Agreements Chart (Appendix C) which compares important provisions under each US FTA currently in force.
We hope you find the Basic Guide a useful tool for your current or future international trade operations. If you already use the Guide, comment below to let us know what chapters or topics were most helpful to your business.