Too Many Businesses Are Missing This

Dr Sarita Jackson
Sarita D. Jackson, Ph.D. is the President and CEO of Global Research Institute of International Trade (G.R.I.I.T), an Los Angeles based start-up think-tank. She is also the founder of and contributor to International Trade Examiner.com, a blog that provides its readers with in-depth analysis about trade policy and free trade negotiations.
Dr Sarita Jackson
Dr Sarita Jackson
Dr Sarita Jackson

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Dr Sarita Jackson
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If you manufacturer goods, do you know what ROOs are? If you share your written work via a blog or other online source for easy access to many around the world, can you tell me about TRIPS? Your business is a part of the food industry, but do you know what SPS measures are?

This is not a quiz. However, if your answers are no, then you should really pay attention to what you are missing out on by not knowing. I mean, after all, if you are a business owner, you want to thrive, not just survive, regardless of the state of the domestic economy, right?

One way to continue to thrive is for businesses to become a part of the global market.

Why Many Businesses Remain Solely On Domestic Shores

The United States is currently negotiating two large free trade agreements simultaneously with Asia-Pacific countries and the European Union. A number of agreements have already been signed and implemented with countries such as Canada, Mexico, Panama, Colombia, South Korea and Morocco. Thus, U.S. business owners have special access to these countries vis-à-vis trade agreements. Yet, the majority of U.S. businesses fail to take advantage of this special market access.

In fact, less than 1% of all of U.S. companies export to foreign markets. Therefore, 99% of U.S. companies are missing out on the opportunities provided by free trade agreements.

Many small business owners expressed three different sentiments to me to explain why they have not gone global: 1) Not sure why they should care, 2) Just too confusing, and 3) Too much time required to understand all of the processes, rules and regulations.

The RTSs of Technical Regulations That Impact Your Business

Rules of Origin (ROOs). Refer to the rules stating that a product must consist of material that originates in a specific country or

countries in order to qualify for the duty-free benefits offered by a particular free trade agreement.

Trade Related Aspects of Intellectual Property Rights (TRIPS). Many trade agreements set rules to protect the intellectual property of inventors, researchers and others who produce or publish creative content.

Sanitary and Phyto-sanitary Standards (SPS). Standards that foods must meet before entering into another market. SPS regulations are designed to ensure that food that is imported and exported is safe for human consumption.

Even within free trade deals to promote global economic integration, regulations are put in place to protect businesses and/or give them a competitive advantage as they trade with other markets.

Spread Your Business Around the World

Taking advantage of free trade agreements allows businesses to do the following:

  • Identify alternative markets
  • Expand their customer base
  • Gain additional profits
  • Save costs (e.g. duties on goods imported by another country)
  • Become more competitive both at home and internationally

Resources to Help Businesses Enter the Global Market

I have listed a couple of useful resources here that can provide guidance and help to simplify all of the technical rules and regulations:

  • U.S. Department of Commerce – International Trade Administration (www.trade.gov)
  • Small Business Administration – Office of International Trade (www.sba.gov)

There are a number of state and local resources that also work with companies to help them export. Check with the commerce department in your state and local chambers of commerce.

Conclusion

While all of the technical terms of free trade agreements may be daunting, the process itself does not have to be. Businesses can benefit greatly from diversifying their market base and reaching consumers in different parts of the world. Free trade agreements present an opportunity for businesses to do just that without facing tariff and regulatory barriers to trade and investment. 

Comments


  1. Twitter:
    Re: Domestic shores.

    I think that the majority of small businesses are concerned about non-payment, and the majority of clients about non-delivery – at least in the beginning. It took us 4 visits to see an overseas client before they finally placed an order with us, and a small one at that. Over the months we built up a good trading relationship, and now business levels are starting to look healthy. As with most things, it’s a matter of trust, which takes time. Too many business want to see fast rewards for their efforts.
    Chloe Bergman recently posted..Height of letter boxes and DDA (Disability Discrimination Act) complianceMy Profile


    • Twitter:
      Hi Chloe. Thank you for sharing your experience moving away from domestic shores into the international market. That is definitely something that businesses must keep in mind–it will take time to cultivate the proper relationships in order to be successful both at home and overseas.
      Dr Sarita Jackson recently posted..The T-TIP Team (Update)My Profile


  2. Twitter:
    Well some of the really great points you have mentioned here. And it implements to all kind of Business!
    Prakash recently posted..Vector for PC Download or Vector for Computer (Windows 7/8/XP)My Profile


  3. Twitter:
    yes spreading the buisness around the world really works well. Gather as many pair of eyes as you can . ;)
    myles recently posted..[Review] Zyma Hosting | The Worst Host to ChooseMy Profile


  4. Twitter:
    Yes , Business taking an advantage of free trade agreements certainly have a greater advantage over other businesses considering the cost benefits and the exposure you get .You have written the article very well Sarita .Thanks for sharing .

    -Pramod
    Pramod recently posted..Motorola Droid Maxx, Droid Ultra, Droid Mini: Specs, price and featuresMy Profile


  5. Twitter:
    How does TRIPS have any teeth? Is there anything that keeps a Canadian or Bangladeshi from using material from my website, whether photos or text?
    Kirby Hopper recently posted..Social Media Lead Generation – An Oxymoron?My Profile


  6. Twitter:
    Most of the people are unaware of business tricks to expand their business i think these would be too cool to reach your audience quickly.
    himanshu recently posted..How to backup messages on iPhone or iPad using iTunesMy Profile


  7. Twitter:
    Free trade sounds really interesting ;)
    Vineet Gupta recently posted..How A Common Man Can Become Rich ?My Profile

  8. A very interesting post. Certainly some things to think about there. Thanks. Mark.


  9. Twitter:
    I had no clue TRIPS and SPS measures. I have head about Rules of Origin before and also why certain companies decided to operate from certain countries to get discounts/ benefits. Taking advantage of free trade agreements helps business diversify and can reduce risks in the long term. I hoping for significant increase in free trade agreements to be signed between different governments in the next 5-10 years.
    chang recently posted..Apple ID LoginMy Profile


    • Twitter:
      Hi Chang. Thank you for sharing your knowledge of rules of origin. I am glad that you learned two new terms from the piece. Currently, the US is negotiating a free trade agreement with 11 other countries from the Pacific region and the 28 member states of the European Union. Many of these same benefits are being negotiated with these two regions, which will provide US businesses increased access to large regional markets.
      Dr Sarita Jackson recently posted..The T-TIP Team (Update)My Profile


      • Twitter:
        Thank you Dr Sarita. I currently live in Taiwan. After nearly two of negotiations and its complicated political situation with China, Taiwan finally signed a free trade agreement with New Zealand. Hopefully there will be many more in the near future probably not as much as USA.
        chang recently posted..Wizard101 LoginMy Profile

  10. Rishabh Misra says:

    Awesome Article so informative information as a novice so useful ans essential points ascribe this post and i implement these tips in my newly business. Thank you for sharing this good niche.

  11. Establishing a business that operates internationally has been always possible, but as you mentioned the free trade agreements really abolish so many obstacles and help also to make the business more profitable due to less custom fees and other liabilities the company has to handle…
    Thank you for such a nice article…
    Ahmad recently posted..استضافة مواقع و خصوم لا مثيل لهاMy Profile


  12. Twitter:
    Hi Sarita,

    1. You are talking from a very high level. Businesses? What do you mean? Here, on this site you won’t find too many international corporation or big companies. Maybe you refer to small businesses… .

    2. In this case, as far as I know from years of internet searching, there is a powerful and growing tendency to go local. People are more and more educated to launch and market local businesses. Geo-targeting and geo-location were designed especially for that : local businesses.
    So, education and internet promotes local. Why should people (and most of them are normal, common people) pay any attention to the global market?

    Have a nice day
    Silviu recently posted..Net Market Success Manifesto and Mainstream WisdomMy Profile


    • Twitter:
      Oh dude your are ideas are really brain storming and have to think deep on this really had deep impact on me!!
      himanshu recently posted..How to backup messages on iPhone or iPad using iTunesMy Profile


    • Twitter:
      Hi Silviu. Thank you for raising great questions.

      Both small and large businesses can benefit from the points made in the post. Regarding your point about going local, one may be defined as a local businesses, but that business may still import inputs for lesser expensive products from other countries and manufacture a good in their home country. From what I have seen with small businesses in my former home state, the “go local” trend refers mainly to purchasing products from goods produced at home. Again, somewhere along the supply chain could include a global component.

      In today’s economy, it is difficult to ignore the global market. Businesses that look solely inward will have a rude awakening when having to compete against foreign providers of the same good or service in their home countries. Many countries no longer have the closed-market, protectionist economies where the government can protect local producers from foreign competition. The reality of competing against local and global competitors is the reason that businesses should pay attention to the global market.
      Dr Sarita Jackson recently posted..The T-TIP Team (Update)My Profile


    • Twitter:
      Hi Silviu. Thank you for raising great questions.

      Both small and large businesses can benefit from the points made in the post. Regarding your point about going local, one may be defined as a local businesses, but that business may still import inputs for lesser expensive products from other countries and manufacture a good in their home country. From what I have seen with small businesses in my former home state, the “go local” trend refers mainly to purchasing products from goods produced at home. Again, somewhere along the supply chain could include a global component.

      In today’s economy, it is difficult to ignore the global market. Businesses that look solely inward will have a rude awakening when having to compete against foreign providers of the same good or service in their home countries. Many countries no longer have the closed-market, protectionist economies where the government can protect local producers from foreign competition. The reality of competing against local and global competitors is the reason that businesses should pay attention to the global market.
      Dr Sarita Jackson recently posted..The T-TIP Team (Update)My Profile

  13. hi thanks for this nice post so many obstacles and help also to make the business more profitable due to less custom fees
    vaibhav recently posted..Free download skype application for android,symbian,iosMy Profile


  14. Twitter:
    Well you have mentioned some useful points. Indeed free trade will help the business to flourish overseas.
    Mia Taylor recently posted..TAT in the Medical Transcription IndustryMy Profile


  15. Twitter:
    In my opinion, social media can help a lot to increase our sales and website traffic..
    Akhil recently posted..3 Reasons Why OLED Is The Coolest Technology Ever CreatedMy Profile

  16. siddhartdas says:

    Hi Dr. Sarita,
    Very Valuable Post and I am impressed with you, Actually These points are effective and helpful for our business. Well i have not ever used but i have heard about it.. when i saw your post that i realized that really i was missing alot in my business..but now i will keep remember of your points and i like it..and i must say thanks to you for sharing this points….keep it up…Dear


    • Twitter:
      Thank you Siddhartdas for your positive feedback. I am encouraged by the fact that this post is making you think seriously about expanding your business to the global market. As I write more posts on this subject, I would love to hear about your experiences using some of these strategies.
      Dr Sarita Jackson recently posted..The T-TIP Team (Update)My Profile

    • Puneet gupta says:

      HI Siddhart,
      Really i like your comment and Well i am not professional business man but same here bro when i Did read post about it of Dr. sarita. then I did feel that i am too many missing business. but now i am doing proper business by the help of Dr. sarita post and i am thankful to Sarita which you have told us about the buiness and now i have remember ..


  17. Twitter:
    These technical terms are far too advanced for me to comprehend, anyways, i get the outline of it and think the same could be implemented in blogging industry.
    Gautham Lurk recently posted..SPMCIL Recruitment http://www.spmcil.com 2013My Profile


    • Twitter:
      Hi Gautham. Thank you for your comment. Your concern about the technical terms has been expressed to me by a number of business owners. For this reason, many fail to take advantage of the global market. That is where my public speaking and work at Global Research Institute of International Trade comes in; I make “free trade” much easier to understand without all of the technical jargon. (There are a lot more than the few mentioned in this post.) So I am glad that you grasped the main point of my blog post and find the information useful. Thanks again.


  18. Twitter:
    Thank you Dr. sarita for informing people about what their business is missing. Some of the countries are making the most of these FTA between countries, e.g China, korea & Japan. They are promoting their businesses to go global & reaching out everywhere. At the same time they promote their business at home as well so that they don’t lose their hold on domestic market.
    raj recently posted..SoundHound for PC Download, SoundHound for Windows7/8/Vista ComputerMy Profile

  19. With the advantages of the internet, any business can actually grow and actualize its potential for expansion. However, the entrepreneurs would then be consumed by the question of assurance with regard to collecting the payments for the services they render. This is especially true for online businesses, in which not only the owners are taking risks, but more so the consumers because they have to give full trust to merchants whom they have never encountered face to face.
    Ria Dancel recently posted..Maximina’s PensionneMy Profile

  20. Hi Sarita
    I agree with you about advantages. In Vietnam, Big companies not only invest their market but also expand more and more other market. Example some companies produce milk but they expanded into real estale, investment fanancial,… named Vinamilk ( sorry my english not good)
    Jolice recently posted..FB Video Jacker Review – Useful Tools BonusesMy Profile


    • Twitter:
      Hi Jolice. Thank you for your comment. While the blog post emphasizes domestic and international markets, you are right that some large companies can also grow by expanding into other sectors, particularly those that may be related. Such an expansion requires a well thought out strategy so as to not stretch one’s resources too thin and/or lose focus.
      Dr Sarita Jackson recently posted..The T-TIP Team (Update)My Profile


  21. Twitter:
    Raw material is must to be have in Bulk as awarness needs bulk product which further enhances product and business !
    harshi recently posted..[Root/Unroot] Samsung Beam | Galaxy I8530 | SimpleMy Profile

  22. Thanks for the article Sarita, you mentioned some great points that will effectively aid my business!
    Ann-Elizabeth recently posted..3 top tips to sprucing up your brandMy Profile


  23. Twitter:
    Hi Ann-Elizabeth. You are very welcome. I am glad that this information will be useful for your business.

  24. rightly said most of the companies are far behind just because they do not think this way.thanks for sharing this


  25. Twitter:
    Creating a good product for worldwide market is hard job, in case we succeed with this, money will come for a lifetime and even more.
    Best regards from I. C. Daniel
    I. C. Daniel recently posted..Romanian Grubber v 1.0My Profile

  26. Pamela John says:

    Hi Sarita, Thanks for sharing publishing this article. Although i don’t base in the US , i find it particularly useful for my long term plans to Canada. One aspect i found interesting was the resources link that can provide guidance and help to simplify all of the technical rules and regulations. I hope to get more of such from you. Thanks


  27. Twitter:
    Good article, even It doesn’t mean all global businesses are more successful than local businesses… I knew few local business that earn more than global businesses n the same area!


    • Twitter:
      Hi James. Interesting point. Are you able to give examples or provide a resource that shows those local businesses that earn more than global businesses? Just for clarification purposes, when I refer to local businesses, I mean domestically based businesses that sell only to the domestic market. A global business does not mean one that is international, i.e., from another country. Rather, a global business is domestically based but exports to the global market. Thanks for your comment.
      Dr Sarita Jackson recently posted..Dr. Jackson’s Interview on LA Talk Live AvailableMy Profile


      • Twitter:
        Hi Sarita, I get your point… Yes, I don’t want name the businesses, but some of the Local ( National ) companies may do better than global companies… even-though they eventually and usually become Global companies after… Imagine a very famous local company within a country of 400,000,000 people ( like US ) , that their products are used by %90 of the population, can make much better profit than an Australian Company with 10 m local customers and 100 m Global customers… For example the Chinese company OICQ that’s know as QQ now, had more traffic and benefit more than so many global companies and websites when they had mostly Chinese users, even though they are known as global company now… it really depends …


  28. Twitter:
    Hello Sarita,
    I’m too agreed with your all points. Every business much keep track of these things to be succeed. Obviously people find your article great. I’m gonna share it.
    Thanks for this article. keep Sharing..
    Happy Blogging
    Pankaj Jain recently posted..Samsung Galaxy Note 3 Full Specification and Features LeaksMy Profile

  29. oliversmith says:

    Hello,

    I love your way of explaining about this business issues and as well as you are also replying the visitors frequently. Can you please tell me waht are the criteria should be a private investigators for china?

    Thanks
    oliver


  30. Twitter:
    Hi Oliver. I am glad that you find my blog post useful. Thank you for taking the time to read the post and send positive feedback. As far as your question goes, I am bit unclear. If you are asking what is required to be a private investigator in China, that is beyond the scope of my work where I look at requirements for access to other markets that are established under negotiated free trade agreements. For general information about entering other markets, check out this useful link – http://tinyurl.com/loldnw2. Thanks again.
    Dr Sarita Jackson recently posted..African Free Trade Area: Opportunities and ChallengesMy Profile

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