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World TradeWinds



September - October 2012 - Issue N. 166
A Publication of the Monterey Bay International Trade Association (MBITA)

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MBITA EVENTS

October 30th, 2012
Branding the Monterey Bay Region to the Global Marketplace
Luncheon
Santa Cruz, CA

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MBITA Partner Events

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MBITA BOARD OF DIRECTORS

President
Tony Livoti
MBITA

Vice President

Shay Adams
AIM Medical Sales

Members


Dr. Edward Valeau
Els Group LLC
Hartnell College
President Emeritus

Marcelo Siero
IdeasSiero

Jim Faith
Jim Faith & Associates

Cristina Polesel
MBITA
General Manager


MBITA
Contact Info
P.O. Box 523
Santa Cruz, CA 95061
U.S.A.
Phone: 1-831-335-4780
Fax: 1-831-335-4822
Email: info@mbita.org
Web: www.mbita.org


If you would like to have an article published in this newsletter please contact the editor by email.

This newsletter has been
created by MBITA's editor
Cristina Polesel
cristina@mbita.org



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IN THIS ISSUE

MBITA New Member:
Union Bank, N.A.

MBITA visits Amsterdam and their evolved business start-up culture

MBITA New Member:
SideKarr Inc.

Exciting Changes for MBITA Member Monterey Institute of International Studies (MIIS)

What's NewFinance for Trade
Bank Payment Obligation: An Opinion on a New International Payment Method

What's NewNational Export Initiative (NEI) Update

Panama And California Laying A Path For Sustainability

Ayse's Corner
Singapore: An Economic Powerhouse


MBITA's UPDATE

As we begin the 2nd half of our business year we have some new, notable MBITA members, a review on our 9th annual Global California Conference on Panama, the beginning of a new initiative between California and Holland, and a new section on trade finance. Enjoy…

See MBITA upcoming events at www.mbita.org/events/home.php

Tony Livoti
 
Tony Livoti
President.

 

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New Member

 
Union Bank logo  

MBITA welcomes new member Union Bank

Trade Finance at Union Bank

Union Bank (“UB”) is the second largest commercial bank headquartered in California based on assets at June 30, 2012, serving corporate clients across the country and has a retail customer base of approximately 1 million households, primarily in the major metropolitan areas of the U.S. West Coast. UB is a member of the Mitsubishi UFJ Financial Group (MUFG, NYSE:MTU), one of the world’s largest financial organizations, headquartered in Tokyo, Japan, with operations in more than 40 countries. This combination of financial stability and global reach enables UB to provide a wide range of products and services, including foreign exchange, global treasury management, securities services and trade finance.

UB helps US exporters expand their global sales with financing options such as Letters of Credit and US government loan programs.

Pre-export Vendor Finance
Use a Letter of Credit to help arrange financing for foreign suppliers from local lenders.

Export-Import Bank of the U.S. (Ex-Im Bank) Financing
Helping US exporters grow their export business with UB's proven experience with Ex-Im Bank-guaranteed loan programs: Ex-Im Bank working capital loans provide financing to support export sales of their goods and services by allowing the purchase of materials, equipment, products, services, and labor the exporters need.

Post-export Vendor Finance
Importers can benefit from post-export vendor financing, which can provide attractive U.S. rates to your foreign suppliers.

Giancarlo Vestri

Contact:

Giancarlo Vestri
Vice President & Export Finance Specialist
Union Bank, N.A.
Tel. (415) 705-7588
email:
giancarlo.vestri@unionbank.com

Web: www.unionbank.com

MBITA visits Amsterdam and their evolved business startup culture

 

by Tony Livoti, MBITA President

Amsterdam MapAs an organization located on the outskirts of Silicon Valley, we’ve noticed an increased interest from business groups from all parts of the world asking us to assist them in learning more about the business culture of  Silicon Valley and why it is so successful and
how can it be replicated in their countries. 

As a result, MBITA created its Strategic Alliance Program which helps match foreign startups with startups in Silicon Valley and throughout California to collaborate, share marketing channels, provide in-country support, share resources and even technology in some cases.  These kind of strategic startup alliances increase the value of both companies for ground floor investors.

Silicon Valley’s business culture is not hidden to the global marketplace as it proudly showcases itself to the rest of the world as a business model with an innovative and integrated infrastructure of investors, educational institutions, business development and trade promotion service providers on the local, state and federal levels, plus, an entrepreneurial culture of energy and innovation spawning numerous startups with cutting edge technologies that lead the world in all industry sectors.

This knowledge of Silicon Valley's unique business culture lead me to my visit this past summer when I had the pleasure to visit the founders of the Startup BootCamp in Amsterdam, Holland to discuss potential collaboration. During my visit I noticed that Silicon Valley isn’t the only place in the world with a strong and historical business culture that spawns innovation, business acumen and financial power. I met personally with each of the Startup BootCamp featured companies to discuss our strategic foreign alliance services in California, and I also participated the day before in a special event organized by Startup BootCamp at the ABN AMRO headquarters in Amsterdam where each startup gave their presentation pitches to a high powered audience of over 350 angel and VC investors, financers, bankers, entrepreneurs and marketing guru’s.

As one of the conference participants I didn’t feel like I was at a conference in another foreign business culture, but a conference being held in California. This event in Amsterdam was a conclusion to a 90 day business development program managed by Startup Bootcamp where they provided business development services to the ten startups finalists all designed to help them get launched and funded. Everyone at this conference spoke English and I felt that high-powered, action-orientated feeling you get after a major conference in Silicon Valley, especially in the lobby after this event as the large crowd discussed the various presentations.

StartUp Bootcamp photo
The Startup BootCamp team and the staff of the ten finalists that gave presentations

These Startup BootCamp companies were on a par with any new, hot Silicon Valley start-up showcasing their innovative technologies in mobile marketing, enterprise social media, data management, search technology and a very innovative solution to body imaging and measurement using smart phones and webcams.

I left Amsterdam concluding that there are very strong similarities between the Dutch business culture and that of California. We both share progressive business strategies, a transparent and casual business environment, a strong and efficient business infrastructure and a business acumen that goes back hundreds of years for the Dutch.

MBITA is now working on establishing a program where we can match up Startup BootCamp companies with start-ups in California for strategic alliances that will further spawn growth and innovation. Stay tuned for these exciting developments.

New Member

 
sIDEkARR LOGO  

MBITA welcomes new member SideKarr Inc.

SideKarr is a specialized consulting firm that helps startups and other companies in need of planning, financing and organizational preparation. With many decades of entrepreneurial and operations experience in technology, communications, real estate, sports facility development and other business areas, the company is familiar with the range of organizational challenges and financial constraints that young ventures face.

Any early stage company that is seeking funding is competing today in a very challenging world . . . Great ideas and technologies often are not enough. The business formation, planning and financings also need the benefit of seasoned entrepreneurial skills and proven professional experience. SideKarr's mission is to equip its clients with the advice and components needed to succeed with business formation, financing and growth.

As their name implies, SideKarr rides beside its clients to help them steer through the maze of formation, legal, financial and operations issues that challenge the young company. Within their mission are methods for preserving the founders’ equity and control while providing a fair deal to investors and employees.

The company offers a fully integrated set of cost-effective services that establishes a young company as a well-grounded organization - both from a planning and legal standpoint – fully prepared to raise capital and proceed with technology development and marketing efforts. Their associates and affiliates are all seasoned professionals who share our high standards and enthusiastic commitment to the support of innovation and new business endeavors.

George Sidman

Contact:

George Sidman
Managing Director
Strategy, Planning, Operations
SideKarr, Inc.
Tel. (831) 601-1776
email:
sidman@sidekarr.com

Web: www.sidekarr.com

Exciting Changes for MBITA Member

MIIS logo
trade negociations Trade education at MIIS is going through an exciting transformation. What started with the Commercial Diplomacy program in the 1990s, training U.S. and international students for careers in their Ministries of Trade, has grown and evolved.

The addition of two new faculty members strengthens the policy-making expertise in trade and negotiating skills while extending the offerings in areas of expanding career opportunities, including trade and development, aid for trade, trade capacity building, trade compliance, trade-related investment measures, and more.

MIIS entrance New professor Robert Rogowsky is the former chief economist of the U.S. ITC, and brings a wealth of professional experience and contacts to MIIS. New professor Jeff Dayton-Johnson, formerly at the OECD in Paris, contributes broad perspectives on trade, aid, investment, and migration in Latin America and Africa. These additions augment the institute’s considerable strengths in trade-related topics in North America, Asia (especially China), and Middle East/North Africa.

Indeed, the new program name is Trade, Investment and Development, highlighting both the importance of trade to national governments, business, and international organizations, as well as placing trade in the broader context of international flows and their impacts. For more information on degrees, local events such as the recently completed student-run trade conference, and other educational opportunities at MIIS, please contact Program Chair Robert McCleery (rmccleery@miis.edu) or watch their web site

Yuwei Shi

Contact:

Yuwei Shi
Dean and Professor of Strategic Management
Graduate School of International Policy and Management
460 Pierce Street, Monterey, CA 93940
Tel. 831-647-4155
Web: www.miis.edu

MBITA would like to introduce a new ongoing section called, ‘Finance for Trade’. Feature articles from the experts in trade finance will comment and inform us of this very important aspect of a successful global business.
What's New

Bank Payment Obligation: An Opinion on a New International Payment Method

Trade Finance

by Roberto Bergami

International paymentOne of the prime considerations for exporters (sellers) and importers (buyers) is the question of payment security. The letter of credit (L/C), an instrument of trade finance, is commonly accepted to be the safest form of payment, while the open account is typically considered the least safe payment option from the seller's view point.

The BPO was devised by the Trade Service Utility (TSU) of SWIFT, the financial industry's own communications network. The BPO works by electronic matching of data through the TSU between a purchase order (these data are called the baseline) and shipping documents, such as invoices, and transport and insurance documents. If the data supplied electronically by the seller matches that required in the BPO baseline, automatic payment is triggered.

The payment obligation in a BPO comes from the Obligor Bank, the bank that establishes the BPO, and is transmitted to the Receiving Bank. The BPO, therefore, is an inter-bank payment arrangement, but it must work through the TSU. This means that the arrangements to set up and advise the BPO are outside its scope. These arrangements need to be independently and individually negotiated between the buyer and the Obligor Bank, and the Receiving Bank and the seller—a situation that is essentially the same as L/C transactions. There is, therefore, an issue of trust that arises between the traders and their respective banks, as well as between the seller and the Obligor Bank as the Receiving Bank is under no obligation to underwrite the Obligor Bank's pledge to pay. Nevertheless, it is not difficult to see that the BPO does provide a better payment security alternative than the open account as, after all, the BPO offers bank underwriting while open account does not.

There are advantages and disadvantages in the operations of a BPO. One advantage is electronic matching of data so as to remove as much human intervention as possible and thereby reduce documentary risk through different interpretations of what are compliant documents. This is one of the problems with L/C trade. Another advantage is that the BPO should be much cheaper to use than comparable L/C transactions as its functions are automated.

However, the BPO also presents challenges. All electronic transmissions need to be done through the TSU and, for traders, this means having systems that are capable of communicating with specific message types, mainly ISO20022 compliant messages. This may mean expensive IT solutions, although as the data will be submitted through the banks, hopefully they will offer suitable IT solutions to traders. These are likely to be proprietary rather than generic solutions, so as to lock in the client's (trader) business. Traders may well find themselves pursuing different IT solutions if they deal with more than one bank.

The BPO does have disadvantages. The data requirements for L/C transactions are governed by an established set of rules (UCP 600) and are further supplemented by a set of guidelines (ISBP)—both issued by the International Chamber of Commerce (ICC)—to assist in the documentary data checking process. However, to date, there appears to be no such codification of BPO transactions. Rather, data mismatches are resolved between the banks and traders. This may be a risky situation depending on the market circumstances at the time.

To try and foster greater confidence in the BPO, SWIFT and ICC have formed a working party and announced a formal relationship. The aim is to produce a set of BPO rules with the backing of the ICC leveraging on the well-known and respected UCP 600. It is likely that a large degree of success will depend on how easily banks will issue BPO and what level of security they will demand.

View full original post of this article.

 

What's New National Export Initiative (NEI) Update

 

U.S. Exports in April Hit $182.9 Billion

The United States exported $182.9 billion in goods and services in April 2012, according to data released on June 8th by the Bureau of Economic Analysis of the U.S. Commerce Department. Compared to the same time period in 2011, there has been increased activity in Australia ($9.9 billion, +26.3%), the Middle East ($2.1 billion, +23.1%), and China ($3.5 billion, +4.3%). Additionally, fiscal year-to-date authorizations through May 31 for the Export-Import Bank of the United States (Ex-Im Bank) are up from $20.4 billion in 2011 to $21.9 billion in 2012.

“These results demonstrate that U.S. exports remain strong even though there has been economic uncertainty throughout Europe, said Fred P. Hochberg, the chairman and president of Ex-Im Bank. “Exports continue to offer American companies extraordinary opportunities to boost sales to the 95 percent of the world's customers that are located outside the U.S."

Exports of goods and services over the last twelve months totaled $2.145 trillion, which is 35.8 percent above the level of exports in 2009 and a record for the United States. Over the last twelve months, exports have been growing at an annualized rate of 14.0 percent when compared to 2009.

Over the last twelve months, the major export markets with the largest annualized increase in U.S. goods purchases were Panama (37.2 percent), Turkey (33.0 percent), Argentina (29.8 percent), Chile (29.5 percent), Honduras (29.4 percent), Hong Kong (28.9 percent), Peru (27.9 percent), Russia (27.0 percent), Brazil (24.6 percent), and Ecuador (23.0 percent). Of these, Brazil and Turkey are among the nine countries that Ex-Im has identified as having the greatest sales potential for U.S. companies. The other seven countries are Brazil, Colombia, India, Indonesia, Mexico, Nigeria, South Africa, and Vietnam.

This press release was published on June 8th by Ex-Im Bank. For more information about Ex-Im Bank visit www.exim.gov

Press release source article

##########
The National Export Strategy is available also at
http://trade.gov/NEI and http://export.gov.
International Trade Update at
http://www.trade.gov/publications/ita-newsletter/
United States Department of Commerce
Office of Public Affairs - Tel. 202-482-4883
##########

  Global California conference banner
 

Panama And California Laying A Path For Sustainability

 

By Richard Andrews, Questpointsolarsolutions

The 9th Annual Global California Panama Conference was held on Friday June 22 in San Jose California. The all day information packed conference was presented by TradePort, the United States Panama Business Council – West (USPAW), the Monterey Bay International Trade Association (MBITA, GlobalCalifornia.com and the City of San Jose.

Robert Krieger, President of Krieger Worldwide and a featured panelist described Panama as the next Hong Kong. The new Free Trade Agreement and the fact that the Panama Canal is set to double its capacity  mean a boast for Panama, California and the Americas.  Panama is now the largest free trade zone in the Western hemisphere.

Keynote speaker Juan Sosa the Former Ambassador to Panama and current President of United States – Panama Business Council said “the Panama Canal is now operating at 95% capacity. Panama is experiencing double digit growth with only 1% of the population in Latin America. Now as a logistic hub we believe that ports on the west coast, the Gulf and the Atlantic will benefit by our new capacity if they too can upgrade their capacity.”

Port of Oakland
’s Ron Brown who also spoke welcomed Panama’s expansion as a sign of growth for California.

Juan Sosa
Keynote speaker Juan Sosa, U.S.-Panama Business Council (USPA)

The heightened economic activity in Panama is not just about the canal. Panama City the nation’s capital and once dubbed “Panhatten” is a dynamic city. Real estate, banking, ecotourism and renewable energy are key industries poised for growth throughout the nation.

Alvaro Cabal Lachman also a panelist and head of USPAW and CEO of Nearshore Developments provided key insights on real estate in the country today and with Juan Sosa, former Ambassador to Panama rounded out a full day of panelists and presentations including in the future. Participating panelists and sponsors shared valuable insight on doing business in the country. In attendance were representatives of Morgan Stanley, Citibank, Small Business Administration (SBA), FedEx, Panama Pacifico, Colon Free Trade Zone, the Greater San Jose Hispanic Chamber of Commerce, the U.S. Commercial Service, Daryl Ries who spends half the year in New York city and the other half selling homes in Panama to retiring Americans and Daniel Robin, a Senior Partner with In3 Finance Group who has worked on agricultural and renewable energy projects and ventures in Latin America and suggested that PPA’s (Power Purchase Agreements) could provide an affordable solution to bringing solar energy to Panama.

View speaker presentations from the event agenda at http://www.mbita.org/gc2012/agenda.html

Organizers
L - R: Alvaro Cabal Lachman, U.S. - Panama Business Council West (USPAW); Tony Livoti, Monterey Bay International Trade Association (MBITA); Joe Hedges, City of San Jose Economic Development, Sonia Anton, Colon Free Zone Administration; Juan Sosa, U.S.-Panama Business Council (USPA); Ted Bohrer, U.S. - Panama Business Council West (USPAW).

View conference picture gallery

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Ayse Oge

Ayse's Corner

Ayse Oge is a published author and global trade marketing expert. She is the author or the book Emerging Markets. Ayse's Corner is a periodic feature for the World TradeWinds eZine'.

Singapore: An Economic Powerhouse
by Ayse Oge

Singapore is an island nation the size of Chicago but with twice as many people – it has a population of over 4 million. However, while it’s an island nation, its innovation and economic growth ambition is, in fact, continent-sized. One of the Singapore’s strategic achievements (along with digital media and clean technology) involves being the leader of biotechnology in the global economy. Singapore focuses heavily on nurturing and leveraging human capital in bio-tech areas to establish itself as a dominant power. For example, it recruits world-renowned scientists and arms them with the tools they need to find cures for major diseases. They also plan to educate a generation of native and immigrant Singaporeans to carry on that highly specialized work.

Singapore has had great success in attracting foreign talent; but at the same time, it also provides its local people with the best opportunities for growth to eliminate the brain drain. The country’s brand identity for education – “Thinking Schools, Learning Nation” – rewards high-performing teachers and experiments with new learning technologies. It comes as no surprise that one of Singapore’s most important national icons is its futuristic National Library. Here are some facts about the nation that cause a huge envy from the rest of the world:

  • It’s the easiest place in the world to do business.
  • It’s the best landing opportunity for dynamic Asian market through its modern port.
  • It’s the world’s leader in high-tech exports.
  • It ranks highest in the science, technology, engineering and mathematics education among the industrialized countries, including the USA (Source: World Economic Forum Global Competitiveness Report 2011-12).
  • Its exports share of GDP is 211%. The U.S. finished last place with 13% in 2010 (Source: World Bank).

Singapore is an important hub for the South-East Asian region. Its economy has always been dependent on international trade. In recent years, the Government has moved to reduce reliance on the manufacture and export of electronics by developing its own service sector, as well as independent biotechnology, chemical and petrochemical industries.

Exports are the main source of revenue for the Singaporean economy. Its primary export partners are Hong Kong, Malaysia, the U.S. and China. Singapore’s major imports include commodities, machinery & equipment, mineral fuels, chemicals and consumer goods.

Singapore’s strong Intellectual Property protection, its American styles of doing business and its predominantly spoken language (English) have made this country a favorable destination for U.S. exporters. Some of the hot markets for exports are health care, energy, aerospace, and educational & training services.

Singapore has truly achieved the economic miracle by investing in human capital – it showcases people with talents, ideas, and knowledge, as well as leaders with entrepreneurial motivation, vision and organizational ability. Singapore is one of the globe’s smallest countries in the world, yet it’s responsible for the largest global footprint in the 21st century.

Ayse Oge is President of Ultimate Trade, International Trade Consulting, Speaking and Training. Her work has been featured by Fox Business Online, Bloomberg Business Week Online and she was quoted by Investor's Business Daily and American Express Open Business Online. She is the author of “Global Business Guide” and a new book, “World Wise Children,” which helps children develop international skills and qualities needed to create future opportunities and realize their dreams. She is Counselor at SCORE, conducting export seminars and webinars for entrepreneurs and small businesses. She can be reached at oge@earthlink.net

 

Contact:

Ayse Oge
President
Ultimate Trade LLC
Tel. 818-609-9196
email: oge@earthlink.net
Web: www.goglobaltowin.com


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