Going International? Think Free Trade Agreements
Making the leap into exporting internationally can be intimidating. But it doesn’t have to be that way. Free trade agreements, coupled with the right shipping partner expertise, can help break down barriers in both understanding the ins and outs of exports as well as help companies gain access to a whole new world of customers.
Ron Shepherd, Global Operations Manager for UPS Trade Management Services in Aiken, SC, says that simply not understanding requirements or costs is one of the top reasons businesses don’t make the leap to doing business in foreign markets. Words like “duty,” “tariffs” or “certificate of origin” can seem daunting, but it doesn’t have to be that way.
“Many businesses don’t target certain international markets simply because they don’t understand the requirements or shipping costs involved,” Shepherd says. “And the documentation can be overwhelming if you don’t know what document is needed and then how to fill it out correctly.”
Target Free Trade Countries
Free trade agreements have loosened up the complexity and costs. In fact, for U.S. companies wanting to spur top-line growth through exporting, free trade agreement (FTA) countries can be excellent places to begin developing expertise in international trade. Simply put, FTAs are when two countries or regions work together to encourage the movement of goods by reducing or eliminating red-tape and tariffs.
If a company has already started doing business internationally, then these countries form a pool of markets in which to expand. It’s a win-win for economic growth and a boon to exporters. According to the International Trade Administration, 47 percent of U.S. goods exports went to FTA partner countries.
The United States has free trade agreements in place with 20 countries:
- Costa Rica
- Dominican Republic
- El Salvador
Shepherd says there’s no need to get anxious over not understanding whether your product qualifies for import into an FTA country. There’s also no need to buckle at the knees about not understanding the rules for documenting the country of origin. “Shippers can find information at export.gov, and shipping companies can advise on the topic as well,” he explains. UPS Trade Management Services regularly helps companies determine if their product is FTA eligible. They also assist with compliance in areas like the classification and landed costs.
Tips For Choosing Your International Shipping Partner
When selecting a shipping partner, Shepherd stresses the carrier should offer tools to help both the shipper and receiver better understand the final, bottom line costs of getting a package into a customer’s hands. If a customer gets hit with unexpected duties and taxes, it could mean a canceled order, no repeat business, and a dissatisfied customer.
Next, he explains, is that shippers should make it easier to return products. And whether it’s an outbound shipment or return, visibility into where the product is in the shipping process is desirable. Further, if a company is selling business to business, “having a direct link between the customer and the customs broker, proactively, is a positive to ensure the risk of delay for clearance is minimized,” Shepherd says.
Choose a shipping partner with experience in the countries you are targeting for growth. For example, UPS Worldwide Express service is available in 117 countries and territories and includes routine customs clearance and early delivery options for urgent shipments. Companies in the retail, high-tech, industrial manufacturing and healthcare industries find the speed and reliability of the service especially useful.
Choosing an established shipping partner along with targeting FTA countries as potential target markets can be impactful steps for making the leap into international shipping.