ERIC ED367879: International Trade: A Small Business Primer. Growing Businesses.

19 Pages·1992·0.57 MB·English

by  ERIC

DOCUMENT RESUME
CE 065 987
ED 367 879
Axtell, Roger E.
AUTHOR
International Trade: A Small Business Primer. Growing
TITLE
Businesses.
PUB DATE
92
NOTE
19p.; Small Business Forum, volume 10, number 1,
p47-62, spring 1992 (reprint).
Small Business Development Center, 432 North Lake
AVAILABLE FROM
Street, Room 425, Madison, WI 53706 (reprint no.
AR201: 1-9 copies, $4 each plus $2 shipping; 10-99,
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PUB TYPE
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MF01/PC01 Plus Postage.
Adult Education; Business; Business Administration;
DESCRIPTORS
Business Education; Economics; *Entrepreneurship;
Government Role; *Information Services; Information
Sources; International Relations; *International
Trade; Marketing; Public Agencies; *Small
Businesses
ABSTRACT
The United States' declining share of world trade is
connected with the fact that hundreds of thousands of medium- and
small-sized businesses are ignoring trade and exports. The cure for
their fear of the unknown is information and education. Exports have
a number of advantages: increased profits, spread of overhead costs,
smooth seasonal fluctuations, increased productivity and
competitiveness, tax advantages, and extended product life cycles. In
many ways, international trade is not different than expanding into a
new region of the United States. It is different in some ways: new
needs and tastes; different forms of distribution duties, quotas,
licenses; more complicated and costly shipping, documentation, and
insurance; and different financing and payment terms and methods. The
best place to begin is at the nearest office of the U.S. Department
of Commerce. Its International Trade Administration offers
information services through Commercial Information Management System
in three categories: identification and assessment of markets,
contact services, and promotion. Books on exporting are available
from the government. Other useful government agencies are the
Export-Import Bank of the Small Business Administration and the
District Export Council. Individual states are becoming increasingly
active in encouraging, stimulating, and servicing medium and small
businesses that wish to explore and expand into exporting. World
Trade Centers, local trade associations, private consultants, export
management companies, and private trade firms offer market research
services and other support. (YLB)
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Published by the University of Wisconsin-Extension
The Journal of the Association of Small Business Development Centers
GROWING BUSINESSES
International Trade: A Small Business Primer
Roger E. Axtell
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International Trade:
A Small Business Primer
Roger E. Axtell
f you have any doubt that we live in a
machinery, followed by industrial supplies and
As the former vice
material, then food, feed, and beverages. Until
shrinking world, ask yourself this series
president of
of questions:
recently, agricultural exports have been the
worldwide market-
winner in the U.S. export competition. About
ing of The Parker
one of every three acres of American farmland is
Ten years ago, or even five years ago,
Pen Company, Mr.
harvested for export. However, embargoes
did you ever think that:
McDonald's would sell more hamburgers on
placed for political reasons in the past decade or
Axtell has lived and
the streets of Tokyo each day than in New
so have caused buying nations to either become
traveled abroad for
York City?
more self-sufficient or else to find other sources,
over 30 years. Now
The president of Peru would be named Alberto
with the results that U.S. agricultural exports
retired, he is the
Fujimori, of Japanese descent, who earned his
have been hurt.
author of four
master's degree in Milwaukee?
While exports are clearly vital to the United
books on interna-
Your medical insurance form would be
States, we are not doing all we can, in compari-
processed by a computer operator in Ireland?
son to other nations. In this decade, exports
tional business and
A top symphony conductor in the United States
account for about 8 percent of the U.S. GNP; in
behavior, including
would be Japanese, and the top sumo wrestler
Japan, exports represent 13 percent of GNP; in
The Do's and
in Japan would be an American?
Great Britain, 22 percent; and in West Germany,
Taboos of Interna-
They would be selling bits of the Berlin Wall at
24 percent.
tional Dade: A
K-Man?
How does the vaunted American marketing
We are wimessing the internationalization of
machine do when it comes to exporting? The
Small Business
the marketplace. Is this good? Is it desirable for
answer, in baseball terminology, is wabout 22
himer. Currently,
us as a nation? And, is participation in this
games out of first place."
Mr. Axtell is a
international marketplace desirable for you, as a
Consider these facts as determined by the U.S.
national speaker
small-business owner?
Department of Commerce:
and dollar-a-year
Let's look at the issues that concern us as a
Only about 100,000 U.S. firms are now
nation first. The U.S. Department of Commerce special assistant to
actively exporting.
calculates that every $1 billion in exports of
Nearly twice that many some 175,000
Wisconsin Gover-
manufactured goods creates 20,000 jobs. That's
U.S. firms are capable of exporting, but are not
nor Tommy G.
a pretty solid reason to sPport exporting right
doing so.
Thompson.
there. The Department of Commerce also
Less than one percent of American firms, or
about 2,000 firms, account for 70 percent of
reports that in the past five years, nearly five
million new jobs in manufacturing were export-
U.S. exported manufactured goods.
related. Presently, one of every six manufactur-
100 U.S. companies account for about 50
ing jobs is directly dependent upon foreign trade.
percent of all U.S. exports of manufactured
Clearly, exports are vital to a healthy economy.
goods.
Heading the list of exports are capital goods
Back to the market share for a moment Take the
such as aircraft, supercomputers, or heavy
total of all trade done in the world and picture the
United States in 1960 as accounting for one-quarter,
or 25, percent of all trade. By 1970, the U.S. share
This article contains updated excerpts from The
of that market had slipped to about 16 percent In
Do's and Taboos f International Trade: A Small
1990, the U.S. thare was 12 percent. Any business
Business Primer, copyright 1989. Reprinted with
permission from John Wiley & Sons, Publishers,
with that dismal of a decline in market share should
NY, 1989.
be scrambling for solutions.
1
3
Small Business Forum Spiv* 11,2
BEST COPY AVAILABLE
Is there a connection between that declining
UNESCO study in nine countries placed
share of world trade and the fact that hundreds
American students next-to-last in their
of thousands of medium- and small-sized
comprehension of foreign cultures. Only a few
American businesses are ignoring trade and
years ago, 40 percent of high school seniors in
exports? The answer from almost all observers is
a national poll thought Israel was an Arab
a resounding "yes."
nation.
Consider another related fundamental
America's labor and management pool is
marketing term
competition. The U.S.
critically deficient in skills required for
National Foreign Trade Council estimates that
competence today. Only 3.4 percent of
Why are
about 80 percent of all U.S. industry now faces
M.B.A.s major in international courses.
international competition. America, whose
Curricula have not been internationalized to
American
shores have never been invaded successfully by
provide American graduates with the knowl-
businesses,
hostile forces in our 200-year history, is now
edge today's manager needs to maintain a
especially those
host to our foreign competitors in a bloodless
competitive edge in the international arena.
battle for sales and profit. Lennie Copeland and
Nor are multinational organizations bringing
critical medium-
Lewis Griggs, in their excellent book Going
managers up through the international
and small-sized
International (Random House), described the
divisions. Nearly two thirds of the presidents
incursion this way:
businesses,
and chairmen of the largest international firms
International no longer means outside the
are guiding those companies without having
shunning
country. So many foreign firms operate here
had any experience in the international
international
that foreign is as close as across the hallway.
divisions or overseas.
For the first time a non-U.S. company,
trade?
Meanwhile, other nationalities tend to be
Germany's KNU subsidiary of Siemens, has
better informed about Americans. Mitsubishi
won a contract to manage a U.S. nuclear
has 650 to 800 employees in New York
plant. We are buying Japanese cars and
simply for the purpose of gathering informa-
electronics, Korean ships, Philippines under-
tion about American rivals and markets. One
wear, Hong Kong watches, Taiwanese
of the Japanese businessmen in the Going
clothing, and Malaysian calculators. No
International films had been sent by his
black-and-white television sets sold in the
company to St. Louis to do nothing for the
United States are made in the United States.
first few years but learn to understand
Foreigners now own such American symbols
Americans.
as Howard Johnson's, Baskin-Robbins Ice
Cream, Saks Fifth Avenue, Alka-Seltzer,
The Japanese are not alone. The so-called
Chesterfield cigarettes, Bantam Books, and the
sleeping giant, the People's Republic of China, is
Village Voice. A Saudi Arabian owns a
hardly asleep when it comes to preparing its new
majority interest in the National Bank of
generations for international trade. Television
Georgia. Australians have bought Utah
analyst and commentator Robin MacNeil
International. Kuwaitis own Santa Fe Interna-
reports that there are presently more people in
tional. A Caliadian company owns Paul
China studying English than there are people in
Masson wines. Swiss Nestle's acquired Libby
the United States.
and Stouffer Foods, and more recently
doubled its presence in the United States by
Why are we shunning trade?
buying Carnation.
The penetrating question is: why are Ameri-
can businesses, especially those critical medium-
And if that isn't startling enough, as Griggs
and small-sized businesses, shunning interna-
and Copeland point out, one of the six largest
tional trade?
exporters in the United States is actually a
The Department of Commerce and other
Japanese company, Mitsui & Co. USA, Inc.
counselors offer this simple but shocking
How has this happened? Why are we so poor
answer: fear of the unknown. It is human nature
at trade and exporting? Again, Copeland and
that what we don't know or understand, we
Griggs offer this evidence:
dislike...even fear. When confronted with
Fewer than eight percent of U.S. colleges
proposals to export, American business people
and universities require knowledge of a
throw up their hands in protest, saying "How
foreign language for entrance. Fewer than five
will I get paid? I don't understand foreign
percent of America's prospective teachers take
currencies and I don't want to get paid in pesos
any courses in international subjects as part of
that will be worth who knows what. Also, I
their professional training. Some years ago a
don't know anything abour how to ship overseas
2
Small
Forum Spring 1992.
54.1UMSS
all that special documentation and insurance.
apprehensions and insecurities to prevent them
And what about licenses to export? What about
from venturing overseas. The American spirit of
duties and tariffs? And besides that, they deal in
enterprise and success in business is much too
metric. And if that isn't good enough reason, I
strong.
don't speak any other language. No, sir. It isn't
Third, the cure is information and education.
worth the trouble."
Famed educator Glenn Frank stated it succinctly:
This attitude is understandable
myopic
"We all too often underestimate the intelligence
but understandable. We live in the largest,
of the public and overestimate their stock of
wealthiest and most competitive county in the
information." An intelligent and informed
world. Succeeding in the U.S. market is an
business public will brush away misunderstand-
Repeated studies
achievement in itself. Many medium- and small-
ings and fears and get the job done.
have shown that.
sized companies have yet to enter certain regions
companies that
within the United States, so why venture
The advantages of exporting
abroad?
export grow
It is time to ask the big question: "What's in it
Seeking answers to that question, some 7,500
for me? What are the advantages for me and my
faster and also
independent businesses in the United States were
company?"
profit more than
surveyed in 1985 by the National Federation of
Here are some of the answers:
Independent Business to determine exactly what
Increase profits Repeated studies have shown
companies that
prevented them from exploring or expanding
that companies that export grow faster and also
do not export.
into exports. The replies were as follows:
profit more than companies that do not export.
Obtaining adequate, initial knowledge about
Spread overhead costs Incremental sales and
exporting (72 percent);
production have the obvious benefit of spreading
Identifying viable sales prospects abroad (61
all overhead costs, from research and develop-
percent);
ment to rent and utilities. This can favorably
Understanding business protocols in other
affect product costs, margin!. And pricing.
countries (57 percent);
Smooth seasonal fluctuations Export sales
Selecting suitable target markets on the basis of
often have longer lead times or operate on
the available information (57 percent).
different seasonal patterns than in the U.S.
What about those few small businesses that
market. This permits filling in slack periods in
do venture into exports? How do fledgling
production with products for export.
exporters get pushed out of their comfortable
Create new markets, repeat orders As new
American nests? Again, the survey by the NFIB
markets are opened and distribution is arranged,
showed that most frequently:
repeat orders begin to appear month after month
The initial order was unsolicited. The interna-
and year after year.
tional buyer found the U.S. supplier.
Cushion declines in the U.S. market Exports
The initial order was of modest size.
offer some natural hedge against the possible ups
The initial order came from an English-
and downs in your U.S. market.
speaking country.
Increase productivity More sales tend to
For almost 20 years, I have participated in
lower per unit fixed costs and more fully utilize
classrooms, workshops, seminars and one-on-
company personnel.
one counseling in an attempt to wipe away fears
Increase your competitiveness As you
and encourage American businesses of all sizes
become more aware of competition and com-
to examine the opportunities in international
petitive products in other markets, you will
trade. I did this for three reasons.
become more aware of opportunities for
First, 36 years ago, I happened to join a
modifications and new products. Competing
company that discovered early in this century the
overseas also helps you become stronger when
values of word trade
The Parker Pen Com-
competing against foreign firms entering the U.S.
pany. My company encouraged me to contrib-
market.
ute my time proselytizing others because they
Offer tax advantages The U.S. government
knew the multitude of benefits to both indi-
encourages exports through the formation of
vidual companies and to the nation in the form
what is called Foreign International Sales
of profits, expansion, new jobs and even world
Corporations of FISCs.
peace. "Countries that trade together rarely go
Extend product life cycles Exports to new
to war with one another," our chairman,
markets often allow you to prolong the life of
Kenneth Parker, often said.
your current models and even help dispose of
Second, I refuse to accept that American
obsolete models.
business managers will continue to allow
Timing This list should be sufficient evidence
Small business Forum Spnrut 1991
5
market research reports offered by the U.S.
that exporting is advantageous at any time. But
Department of Commerce.
the opportunity is more timely now than at any
At the end of this first stage, you will then face
juncture in recent history. The reason is dollar
another crossroad with the question "Does this
exchange rates. During 1985-1989, the dollar
still look attractive?" If the answer is "yes," then
declined nearly 40 percent against other curren-
a more serious decision is required, one centering
cies. In exporting, that is directly comparable to
on commitment: "Am I, or my management,
offering your customers a 40 percent reduction
willing to draft a marketing plan, commit some
in your price without you suffering one dollar
time, money, and other resources to have a whirl
loss in revenue. This has made more American
at this new venture?" This matter of manage-
An open mind
products fall within the reach and purchasing
ment commitment is crucial to everything else
power of more people around the world than
and a willingness
you may do thereafter.
ever before.
toadapt int two
This last factor, timing, makes international
How international trade is different
trade and exporting more attractive and more
qtaitks that will
exciting than ever before. Yes, current conditions
Is it different? The quick answer is that in
pay handsome
will change. Yes, the cyclical nature of our
many ways it is no different than expanding into
rewards.
economies will bring changes to dollar exchange
a new region of the United States. It takes time,
rates. But a solid assault on new markets for
research, planning, travel, adapting to new
export now might be the wisest strategic deci-
conditions, finding new customers or distribu
sion a company can make for the future growth
tors, and
as always
some risk.
of that company.
It is different, however, in these ways:
New needs and new tastes are likely.
How and where to start
There are new and different forms of distribu-
tion duties, quotas, licenses; other new burdens
America was outer space to Christopher Columbus.
Anonymous
are added.
Distances are greater and therefore shipping,
documentation and insurance are more
Columbus set out to find a passage to the
complicated and more costly.
Indies for trade and failed; he found America
Financing and payment terms and methods are
instead. In the rest of this article, I hope to
launch you on your private exploration of the
often different; even pricing can be different.
Cultural peculiarities pop up.
world of trade. I will offer suggestions on exactly
Time zones are an early nuisance (but quickly
what to do at the beginning, and more impor-
overcome).
tantly, where to go for help. Like Columbus, you
These differences are what this article is all
may be in for some surprises, but they can be
about. An open mind nd a willingness to adapt
rewarding surprises.
are two qualities that will pay handsome
We will assume that you presently have a
rewards. The worst attitude is one that says
good base of U.S. operations. Maybe you have
"American methods and marketing techniques
even had an occasional inquiry or order from
are the most advanced in the world. All I have to
overseas. Or, perhaps you have simply decided
do is export my methods along with my prod-
to examine exporting as a business venture by
uct." Wrong! Here is a classic example:
itself. Maybe you are driven by one of the
The American pharmaceutical industry is
"reasons for exporting," such as to smooth
known as one of the most sophisticated market-
seasonal fluctuations, to use up extra capacity
ing machines in the world. The reason is that
and spread overhead costs, or that most com-
is, at
their market
the medical profession
mon motive of all, to seek new markets for more
the same time, the most clearly defined, best
growth and profit.
educated, highest paid target audience ever
The first step is to ask the following question:
assembled. Consequently, advertising and
Am I ready and willing to spend a few months
promotional material for new drugs are pre-
doing desktop research, traveling to government
sented in slick four-color presentations filled
offices, learning the fundamentals of the game,
with artistic quality and content.
and generally schooling myself on what's
One of these pharmaceutical firms introduced
involved and who is out there to help me?
a new drug for curing intestinal worms in
You can plan on two to three months' time
humans. It was an immediate success in the
for this, plus some out-of-pocket expense for
United States and so the firm decided to market
mileage, phone calls, and maybe overnight
the product overseas, especially in certain
accommodations. Additional costs might be
African markets where they were certain the
incurred if you choose to buy some of the
Small boons Forum Spnng 1992
4
U.S. Department of Agriculture: A case study
I decided to test my own advice in these pages and play the role of neophyte exporter. I
had worked with Department of Commerce officials for more than 25 years, but had scant
experience in agriculture. I was aware that the United States wa the world's largest exporter
of agricultural products and that our farms were among the most productive and efficient in
the world. But I was curious to see how the system worked if I simply picked up the tele-
phone, called the nearest government agricultural agency and said "I am interested in
The FAS is
exporting agricultural products. Can you help me?"
responsible
six inches high and eight pounds of it. I
The answer arrived in the mail three days later
received three hefty packets of leaflets, reprints, booklets and guides. The accompanying
for market
letter explained that each packet pertained to a special category of exporting, including
intelligence,
the three most common agricultural exports.
forestry products, food, and cattle
market access
If your state has a state department of agriculture, begin there. They will outline state
services and quickly acquaint you with the variety of aids provided by the U.S. Department
and market
of Agriculture (USDA) or, more specifically, the Foreign Agricultural Services (FAS) which is
development.
Department, USDA does not
a part of the Agriculture Department. Unlike the Commerce
have field offices. Most states have a cooperative agreement with Washington, and so the
be your key linkage to all
agency within state government responsible for agriculture will
state and federal services.
"We try to offer one-stop shopping services," David Hammer, my local state official,
explained. "When someone contacts us for help with exporting, we provide information on
unusual agricultural exports
state services, federal services, and any specialized services for
leather hides, for instance."
The FAS is responsible for four areas: market intelligence, market access, market develop-
credit programs and foreign
ment, and it is the lead unit in administering the USDA's export
assistance.
Providing information is the job of about 100 professional U.S. agriculturalists who are
posted in about 70 American embassies around the world. They provide information on
agricultural policies, analysis of
more than 100 different countries: foreign government
supply and demand conditions, commercial trade relationships and market opportunities.
This intelligence is digested and issued in periodic reports on a commodity-by-commodity
basis. FAS publications include:
Ag Exporter Magazine, a monthly magazine on foreign agricultural conditions, market
development and trade
FAS Circular, a specialized commodity report covering global production and trade for
many commodities
Weekly Roundup of World Production and Trade, which highlights of current develop-
ments in international agriculture
World Crop Production Report, a monthly report of USDA production estimates for grain,
of the world.
cotton, and oilseeds in major countries and selected regions
To subscribe to any of these publications, contact the FAS Information Division, Room
5918-S, USDA, Washington, DC 20250.
Of special interest is the Ag Export Connections, a computerized system to handle trade
inquiries from foreign importers for specific products. This service is available by contacting
the FAS High Value Products Division, Room 4939-S, Washington, DC 20250.
If you are part of a commodity trade association, the FAS is probably already working
with your association through its "cooperator program." These market development
projects involve some 75 trade associations, from grains and soybeans to leather and logs.
Other marketing services offered by FAS include:
*Trade Leads Now is a weekly trade letter containing all inquiries received each week. The
FAS advises that this is more appropriate for exporters and trade associations dealing with
a range of products.
Trade exhibits help introduce and promote agricultural products overseas.
Risk protection against nonpayment by foreign banks is offered to U.S. exporters through
the USDA's Export Credit Guarantee Program.
Small Business Pinion Spring 1992
7
After becoming acquainted with all of these federal services, the next step is to meet with
a representative of your state agricultural agency. At that meeting, they will run an assess-
ment of your exporting capability: management commitment, capital resources, and
product suitability. "We then arrive at a 'red light/green light' decision point," my state
official explained. "If signs do not point to exporting, we turn them over to our domestic
service which may help them find new markets within the United States."
Farm equipment and machinery products are the responsibility of the Department of
Commerce, while commodities or processed foods or value-added products (e.g., leather,
The best singk
forestry products) and biotechnology-related products are the responsibility of agricultural
trade specialists.
piece of advice is:
The FAS has developed a list of 10 steps to marketing success which concisely enumerate
Run, don't walk,
the exporting process regardless of product. Here they are:
to the nearest
Seek out potential customers overseas.
Determine product tastes and preferences.
Department of
Encourage removal of import barriers where necessary.
Commerce
Introduce product offerings to potential customers.
Provide quality products that meet customer needs.
District Office.
Price products competitively.
Take advantage of USDA credit programs.
Follow up sales to ensure satisfaction of buyers.
Demonstrate commitment to export market sales.
Be attuned to business etiquette.
tion (ITA), and so closely a part of the ITA as to
problem of intestinal worms was highly preva-
be almost one-in-the-same is the United States
lent. They used the U.S. advertising-promotion
and Foreign Commercial Service (US&FCS).
campaign but nothing happened. No demand
This is the place to begin. This is the starting
occurred even though they were absolutely
line, the first tee, and home plate all wrapped
certain the product was needed.
into one. Their number is 1-800-USA-TRAD.
A local advertising agency in Africa ap-
The best single piece of advice for the new-to-
proached them saying "We think we know what
expo:t researcher is: Run, don't walk, to the
the problem is. Your fancy American advertising
neatest Department of Commeice District
approach is too indirect, too delicate. Let us
Office. Make an appointment to meet one of thc
have a try." They were told to proceed.
trade specialists there, or ask him or her to visit
The new agency produced an ad showing a
you in your own office. These trade specialists
pile of human excrement with worms crawling
spend a great portion of their time on the road.
in it. The results were almost instantaneous;
However, you will probably want to personally
victims said "That's what 1 have." And the sales
visit the DoC office in Order to become ac-
curve began climbing.
quainted first-hand with the multitude of
As crude as that true story may seem, the
services offered to businesses interested in all
message is clear. What was crude to Americans
forms of international trade.
was clear communication in another culture.
Some who made that journey complain "Yes,
American ways are not always effective in new
I went to the local Commerce office and I ran
markets. Among your research tools, insert a
into a snowstorm of paper." You have to realize
open
mental reminder saying, "Remember
that the trade specialists can hardly be expected
mind, willingness to adapt."
to provide immediate and detailed data on your
whether it be pool pumps or
specific product
U.S. government services
pool cues. First, it is essential to review the full
Good news for the first step forward in your
menu of services offered by the US&FCS, as we
odyssey: there is probably universal agreement
will do shortly in this article. Then, it is essential
that the best single place to begin is at the
to determine the precise category that your
nearest office of the U.S. Department of Com-
product fits within the huge government classifi-
merce. Within DoC, as it is referred to resides a
cation system. For example:
group called the International Trade
Administra-
Small Rowlett Forum Sprmit 1992
()
access the information you need about your
A manufacturer of navigational equipment
product category and about the geographic
had the Commerce office do a computer search
regions that interest you. Furthermore, where
manufacturing certain
on which countries were
previous printed materials often dealt with
navigational devices. The answer turned up:
general information on industrial segments, the
Canada. From practical knowledge, the firm
information supplied by CIMS can be more
thought this was wrong. Further digging
tailored to your situation, whether in manufac-
discovered that the proper terminology for the
tured goods or the service industry.
search was "electronic radio directional instru-
The cost for CIMS, at the time of this writing,
ments." The computer was looking in the wrong
DoC has
is $10 per report.
cubbyhole. The right answer turned out to be
A synopsis of some of the valuable informa-
1,300 trade
Japan.
tion services offered by CIMS and the DoCJITA/
Although it may seem that you have been hit
professionals
US&FCS follows. It is a rich platter of services
by a deluge of paper, remember, DoC is like a
to help your
fully
presented in condensed form here
large haystack full of information and, With their
deserving close examination and understanding.
company export
help, you are searching for your particular
Your Commerce office has leaflets describing
needle.
around the
CIMS and the other services described here, but
DoC advertises that it has 1,300 trade
world.
for best results, visit the office and carefully
professionals to help your company export
review each one. The services are divided into
around the world. These specialists are located
three categories:
in 67 cities across America and in 127 cities
Identification and assessment of markets for
responsibility of these
overseas. The full-time
your product,
trade specialists in each district office of DoC is
ways to put you in touch
Contact services
in interna-
to reach out to businesses interested
with specific markets,
tional trade. The Commerce Department reports
ways to help promote your
Promotion
that over 100,000 one-on-one counseling
product overseas.
sessions are held each year with U.S. companies.
These home-based technicians are supplemented
Identification and assessment
by commercial offices attached to U.S. embassies
Erport statistics are available that tell you the
and consulates overseas who collect foreign
U.S. exports for a single basic industry, product-
market data, search for sales leads, identify
by-product and country-by-country, over each of
qualified buyers and government officials, and
the last five years. Data are often ranked in order
counsel firms frustrated by trade barriers.
of dollar value to quickly identify the leading
One of the first steps taken by the trade
products and industries. This information was
specialist in your district office will be to
originally called Export Statistics Profile (ESP)
pinpoint your SIC numbet. This stands for
before the CIMS program, but the same basic
Standard Industrial Classification, which is a
information can now be accessed automatically
standard numerical code system used by the U.S.
from computer diskettes virtually as you sit in
services.
government to classify products and
Memorizing your particular SIC number is as the ITA office. This information consists of
tables showing the sales of each generic product
useful as knowing your own telephone number,
in the industry by country, as well as competitive
because it will help you again and again in your
information, growth, and ex9ectations for the
research.
These include briefs oa export markets
On your first visit to the ITA office in your
future
.
first
narrative analyses highlighting the industry's
region, after discussing the preliminaries, the
prospects, performance and leading products.
important acronym you will learn is CIMS,
These export statistics have been prepared by
which stands for Commercial Information
Commerce for several dozen basic industry
Management System. This new automated
classifications, with more being added each year.
information
system electronically links the
worldwide. It was
When you want to zero in on U.S. exports to a
resources of all ITA offkes
partiadar country, CIMS provides five-year trends
installed in 1988. Prior to this, you would have
of U.S. manufacturing and agricultural exports to a
had to apply for market information which
particular country. You can also obtain a compari-
would arrive later in the form of leaflets,
that category
printouts, printed reports, spread sheets and
son of U.S. and workl growth rates for
with the
over five-year periods. When combined
pamphlets.
export statistics described above, you can begin
CIMS allows your trade specialist to sit down
terminal, access the
measuring the export potential of your product
at a computer information
country-by- country.
data base in Washington, and immediately
7
9
Small Business Forum Spring 1992
A Guide to the Acronyms of International Trade
ADS
Agent Distributor Service
ASBDC
Association of Small Business Development Centers
CD-ROM
Compact Disc-Read Only Memory
CIMS
Commercial Information Management System
CNUSA
Commerce News USA
Be patient. The
DEC
District Export Council
DoC
United States Department of Commerce
early research
EMC
Export Management Company
process is one of
ESP
Export Statistics Profile
sorting and
ETC
Export Trading Company
FAS
Foreign Agricultural Services
sifting.
FET
Foreign Economic Trends
FISC
Foreign International Sales Corporation
FTZ
Foreign Trade Zone
GATT
General Agreement on Tariffs and Trade
GNP
Gross National Product
IMS
International Market Search
IOGA
Industry-Organized Government-Approved Trade Mission
ISAC
Industry Sector Advisory Committee
ISBN
International Standard Book Number
ITA
International Trade Administration
NASDA
National Association of State Development Agencies
NFIB
National Federation of Independent Business
NTDB
National Trade Data Bank
OBR
Overseas Business Reports
Small Business Administration
SBA
SBDC
Small Business Development Center
SCORE
Service Corps of Retired Executives
SIC
Standard Industrial Classification
SOGA
State-Organized Government-Approved Trade Mission
TOP
Trade Opportunities Program
UNESCO
United Nations Educational, Scientific and Cultural Organization
US&FCS
United States and Foreign Commercial Service
USDA
United States Department of Agriculture
VITC
World Trade Center
VrrDR
World Traders Data Report
One possible early frustration will be that
customs and practices, competitive situation,
these statistics will deal with, say, medical
trade barriers and trade contacts.
instrumentation and your product pertains to
In addition, basic import information,
as well
only one thin slice: let's say it electronically
as country-specific, industry specific and indus-
monitors heart performance. Be patient. The
try-country information can be obtained from
early research process is one of sorting and
the DoC's National Trade Data Bank (NTDB),
sifting. Stick with it.
available on CD-ROM for $360 annually
or $35
International market research is also stored in
per disc.
CIMS and you can receive reports that are in-
Market research is also available for 50 key
depth analyses for one industry in one country.
industry groups such as agricultural machinery/
Reports include information such as market sizc
equipment, communications equipment, com-
and outlook, end-user analysis, distribution
puters and peripherals, electric power systems,
channels, cultural characteristics, business
electronic components, equipment and materials
8
Smt 11 Rumen Forum Spring 1992
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