IMPORTING

Importing products into countries is often dependent on what product, commodity, or service is being imported. In the United States the Harmonized Tariff Schedule is the directory for determining what if any tariff is imposed on the product in question. Importing into any country should involve communicating with that country's customs agency to determine the necessary licensing and logistics issues. Often a customs broker is necessary to facilitate the smooth transfer of goods and services between countries. Inherently, importing involves exporting from one country; thus many of the issues involved in exporting are relevant and necessary for importing goods and services.

BARRIERS TO EXPORTS

Barriers to the export and import of goods have been widely established by governments. These barriers serve a number of purposes such as protecting industries, national employment levels, and improving trade balances. The United States and many other nations have made efforts to lower trade barriers, although many countries still have an intricate network of barriers that greatly impact the world export market.

The two major classes of trade restrictions are tariff and nontariff. Tariffs are duties imposed on goods leaving or coming into the country. Among other uses, tariffs are used to penalize other countries for trade or political actions. Nontariff barriers include quotas, taxes, and exchange rate controls. These can be broken down into six major categories that include specific trade limitations, customs and administrative entry restrictions, standards, government participation, import charges, and miscellaneous categories. Many governments offer various global export initiatives to encourage free trade. The General Agreement on Tariffs and Trade (GATT), which was signed by the United States and the majority of developed and developing countries, calls for a decrease of both tariff and nontariff barriers worldwide. Other important developments include the North American Free Trade Agreement of 1993, and the European Union's gradual evolution toward economic unity. These agreements significantly reduce trade barriers within the affected regions. In the United States, most governments support specific industries or companies through financial aid, lower tax rates, loans, and grants.

REASONS TO EXPORT

The most important reason a company begins exporting is to maximize profits by exploiting opportunities in foreign markets that are not available in domestic markets. A product may become obsolete in one country, but may be able to be sold abroad. By doing so, a manufacturer can reduce new product development costs and take advantage of learned efficiencies related to the product dealing with production, distribution, and marketing. When markets for products in the United States begin to mature and become saturated, producers can continue to receive continuous sales and profit gains through exporting. Markets in other countries are often less saturated and less competitive, allowing manufacturers to gain faster sales growth and higher profit margins. Foreign markets can provide shelter not only from maturing domestic markets, but also from increased competition in the home market. As manufacturing volume increases, benefits related to economies of scale aid the exporter's competitiveness in both foreign and domestic markets. Market risk diversification is also another benefit of exporting. A company can usually decrease its exposure to cyclical economic down-swings or regional problems by increasing its geographic opportunities. Exporting also decreases risks associated with seasonality of some products, e.g., warm-weather-related products might be marketed in the Southern Hemisphere when it's winter in the Northern Hemisphere.

As trade barriers continue to fall through the work of the World Trade Organization the value for a company to export their products will increase noticeably. The significant consumer buying power of many industrialized countries, especially the United States, is creating an ever expanding market for the exporting and importing of goods and services.

 












BY: JORGE R. DIEGO H. AND WILLIAM S.