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Why Export ?

Why Export ?. Dr. Gauri S. Guha ASU, Jonesboro. Global signals to globalize. Examples of export led growth: Japan: 3 rd party resources, value added exports Asian Tigers (S Korea, Singapore, HK, Taiwan) Sleeping giants awake: India, China Removal of barriers to trade

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Why Export ?

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  1. Why Export ? Dr. Gauri S. Guha ASU, Jonesboro

  2. Global signals to globalize • Examples of export led growth: • Japan: 3rd party resources, value added exports • Asian Tigers (S Korea, Singapore, HK, Taiwan) • Sleeping giants awake: India, China • Removal of barriers to trade • Electronic Commerce = global outreach • Internet = instant knowledge • Global competitiveness • Great survival strategy • Stimulates innovation

  3. Gains from trade – your region • Revenue • Direct income earner • Indirect benefits of higher visibility • Spillover effects in region • Jobs, higher wages • Higher local procurement • Cash-in comparative advantage • Resource ownership • Know-how

  4. Gains from trade – your company • International demand for your product (can also create demand) • Higher prices abroad (less supply, weak dollar) • Local competition = low margins (export lets you “stay-in-the-game”) • Export revenue = leverage local market share (if you don’t use it, your competitor may!) • Export market can stabilize year-round production (beat the seasonality of demand)

  5. Look before you leap! On average new exporters generate $2m, but getting into this business requires… • Initial market research expenses • Knowing many new procedures • Foreign exchange • Lines of credit • Shipping methods • Standards, certifications

  6. So what’s new on the menu? A. Sealing the deal B. Dealing with the seals!

  7. A. How to seal the deal • Identify buyer, negotiate contract • Product transportation and risk of loss • Select of harmonized system number and tariff consideration • Forms of payment • Documentation for your export sale

  8. A-1. Contracting… • Initiate contact • Market research • Market visit • Trade fairs, expos • Contract - Offer - Acceptance • UN convention on contracts for international sales • Determine your price

  9. A-2. Transportation • Incoterms 2000: transportation and risk of loss • Freight Forwarders • Ocean Carriers and Shipping Rates • Air Carriers and Shipping Rates • Surface (Truck and Rail) • Insurance

  10. A-3. Tariff considerations • Choosing a Schedule B number • How to reduce your Foreign Purchaser's Tariff Liability (so that you get a price advantage • Dispute resolution • Other contract considerations

  11. A-4. Payment • Letter of Credit • Other terms of payment • Hedging against FOREX risk

  12. A-5. Documentation • Commercial Invoice • Packing List • Air Waybill • Dock Receipt, Warehouse Receipt • Bills of Lading (Inland and Ocean) • Insurance Certificate • Shipper's Letter of Instructions (SLI) • Certificates of Origin • Consular Invoice, Customs Invoice

  13. Now to deal with the regulations! • United states government export regulations • Copies of Documents and Distribution • Government Security Initiatives • Air Shipment Security Requirements - Federal Aviation Administration • Certificate Issued Upon Completion.

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