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Should You Be Exporting?

Are you successfully doing business within the United States?  Why aren’t you trying to export overseas?

If you are already doing a good job doing business with your product within the United States, you may be ready to take it a step further and go overseas.  If you are not familiar with any foreign language, you may first want to explore how competitive your product is in an English-speaking language, such as Canada.  You can also assess the possibility of taking your product to other countries that may be out of your “comfort zone.”  These countries may have different languages and cultures but may offer your product a good opportunity to succeed in their market and be competitive.  Mexico may be a good option for you.  For that to happen, you would need to ensure to do your homework.

What does “doing my homework” mean?

A lot of preparation is required before exports can leave the ground.  For starters, you need to become familiar with the market that you are trying to enter.  A good source of information are the Country Commercial Guides (or CCG), produced by the U.S. Commercial Service offices at U.S. Embassies and Consulates in more than 75 countries overseas.  You can visit their webpages at www.buyusa.gov and get to know what services they offer U.S. exporters throughout the world.   

Your marketing material may need to be in a language other than English.  You may also need to check to see what languages the product packaging must include.  Some goods require that ingredients and the phrase “Made in the U.S.” be printed in the national language on the packaging.  You may have to travel to that market to choose your agent or distributor at some point.  You may end coming back for a vacation if you are lucky and you really like it!

How do you know if you are “ready to export”?

You would benefit from doing a self-assessment and figure out whether you are ready to export.  You can visit our website www.export.gov as many times as you can but please do yourself a favor and register first and then read, at your own pace, all the material regarding export basics, including the archived webinars.  You may also want to order the book “A Basic Guide to Exporting” and visit www.trade.gov to learn more about commercial issues.

Can someone discuss with me my personal concerns face to face?

The Export Assistance Centers have more than 100 offices throughout the United States.  We have trade specialists that can sit down with you and discuss your plan and strategy.  They can discuss planning, legal and regulatory issues, documentation and product requirements, trade problems, and financial matters.  They will guide you as to what trade shows and trade missions to attend, how to interpret data and how to best take advantage of our resources overseas.  If you think in exporting to Mexico and you are not sure where to start, contact the Mexico Business Information Center at MexicoBIC@trade.gov and they will guide you through the export process.  Otherwise, contact the U.S. Commercial Service in Mexico’s industry specialists who will be able to provide you with trade counseling, market intelligence, Mexican trade contacts, and access to trade promotion opportunities and trade advocacy.

You may also want to go to http://www.usatradeonline.gov and/or http://web.worldbank.org.  Don’t forget that the United States have Free Trade Agreements with several countries and that this has created advantages by having zero tariff on importation of goods.   Going to one of those markets may make much sense.  For example, before the NAFTA free trade agreement was implemented, U.S. goods exported to Canada and especially to Mexico were taxed at a high rate.  These tariffs discouraged the sale of much U.S. merchandise, including cars, car parts, computers, and food, in its neighbor countries.  As a result of the agreement, these duties were reduced over time, and most of them were eliminated by 2008.

Why does the government require so many documents?  Why do I need to learn so much about Schedule B/Harmonized Codes?

Census requires that all transactions larger than $2,500 be reported through their Automated Export System (AES), a way of keeping track of all exports and reflected in http://www.census.gov/trade.  Other U.S. government agencies may require other documents such as export licenses.  In brief, exports need to be identified somehow and the way to so is by giving them a 10 digit number called Schedule B or Harmonized Codes, which in turn helps determine how much duty and tariff your product will pay when entered in the foreign country.

How do I figure out my duties and tariffs?

Duties and tariffs are paid by the importer.  Your shipper or freight forwarder can help you with that question.  If not, you may contact the Trade Information Center at 1 (800) USA TRADE.  They cannot only help you with determining duties and tariffs but can help you with your general questions as well.  If they don’t know the answer they will find someone who will!

By Wanda Barquin, Foreign Commercial Service Officer.