Over the years we have seen how international trade can be a powerful engine for economic development and poverty reduction. Trade liberalization, through the reduction of tariffs at a multilateral level, as well as through a growing number of free trade agreements in the world and in the region, contribute to crystallizing this trend.
Colombia, in particular, has had an important policy of negotiating trade agreements, which has been essentially focused on aspects such as: linkage to the World Trade Organization, the WTO, which is for the IDB “the great agreement of the countries, the agreement to facilitate trade at the global level has had many delays in its negotiating rounds, with which many countries have chosen to negotiate bilateral trade agreements”
However, today at a global level there is talk that there are more than 615 regional (Latin American) trade agreements, which have been notified to the WTO, and more than 400 of them are already in force, that is, the world is, in what they have called the technicians in foreign trade, a great “Spaghetti Bowl” (bowl of spaghetti), which in practical words translates a crossroads of bilateral negotiations between countries, more than 400 agreements that are between developed economies and developing economies.
The above scenario leads us to consider three challenges facing the internationalization of SMEs and MSMEs proposed by governments and international cooperation entities: 1. taking advantage of free trade agreements that have already been signed; 2. The reduction of logistics and transportation costs and 3. Productive integration
That is why in this article we want to share with you the following tips to keep in mind before making your exports.
Prepare the technical specifications of your product
This is the first step and the basis of any intention of international business growth. This technical profile seeks to define the parameters in the international markets and the possible scenarios of homologation of standards such as labeling, sizes, presentation, among others. A validation of the commercial promotion agreement is also carried out according to the projected destination, in order to subsequently prepare an outline of the possible criteria of origin.
Define a customs profile of your exportable offer
The customs profile must establish the practical variables that allow evaluating the impact of the internationalization program. For this, the position or code of the products within the universal harmonized system must be determined in such a way that the customs criteria in the destination markets can be determined (tax burden, for tariffs and customs duties for the importer). This information will allow the formulation and definition of the real internationalization needs in the destination market.
Establishes a minimum and maximum projection of the logistic spectrum
Care must be taken to carry out an adequate critical path design that includes all the actors that participate in the supply chain or the distribution network (as the case may be) for the construction of an import / export platform. This will allow you to make a cost forecast that will support your sale price according to the responsibilities assumed by each of the parties. We suggest that these costs be defined as established by INCOTERMS 2010, respectively the terms FOB/FCA and CIF/CIP. Thus, it must also include in it the exchange impact according to the money flows in the operations. This minimum and maximum projection of the logistics spectrum will allow you to mitigate the levels of risks and costs in operations.
Determine a commercial scheme according to the target market
Some consider it important to have a market study that allows considering bases close to the reality of the target market. However, based on the customs profile established for the products to be marketed, it is possible to analyze the purchase history of the destination market, reading at comparative levels each value, quantity and available buyer according to the nature of the product and possible substitute products. The presentation of the exportable offer in an alternate market will require the elaboration of a commercial file, which establishes for each buyer the variables of the offer in terms of productive capacity, production times, forms of payment, and in general it must be a commercial that describes the attributes and benefits of the product.
These tips will allow the variable configuration of productivity improvement in a basic supply chain, implementing the main tools in the management of any production process and thus orienting your processes to the optimization of trade with national and international purposes.
Author: Juan Sebastian Quiceno Calderon