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World TradeWinds



August - September 2013 - Issue N. 171
A Publication of the Monterey Bay International Trade Association (MBITA)

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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
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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
Azerbaijan Export and Investment Promotion Foundation


MBITA New Member Transmetrics, Inc.

Sub Sahara Africa (SSA) - The Right Move Now

California Promotes Wine Exports in Solvang, CA by

What's NewTrade Finance Update

What's NewNational Export Initiative (NEI) Update

Ayse's Corner
International Trade Education Matters

Other Global Trade News

 


MBITA's UPDATE

The issue features new members from the country of Azerbaijan and one of the longest-standing and leading transportation private consulting firms in the U.S. It also features selected articles from thought leaders from around the country in export marketing, trade finance and 'branding'.

Also, make note that we have included a link below to all of the thought provoking, information packed presentations given at the MBITA/TradePort events in 2012 and 2013. Great resource!
Enjoy!


Tony Livoti

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Tony Livoti
President.

 

MBITA TradePort Event Presentations

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MBITA New Member
Azerbaijan Export and Investment Promotion Foundation (AZPROMO)

AZ Promo logoMBITA welcomes new member Azerbaijan Export and Investment Promotion Foundation (AZPROMO)

AZPROMO is a public/private initiative that aims to increase the FDI volume into non-energy sectors of economy in Azerbaijan, and to stimulate the strengthening and expansion of the country's non-hydrocarbon export capacities.

Azerbaijan MapAZPROMO's Representative Office in the United States seeks to build bridges between the United States and Azerbaijan through establishing business connections and mutually beneficial partnerships.

AZPROMO serves as a "one-stop-shop" and provides advisory services for individuals and businesses on a number of issues related to doing business with Azerbaijan.

AZPROMO's activity in the United States is two-fold:

  • Export Promotion. AZPROMO's objective is to enhance Azerbaijan's image as an efficient producer and exporter of a wide variety of goods and services. In order to increase Azerbaijan's export potential, our team provides business advisory and support services to export-oriented Azerbaijani companies in market entry to the United States, including relevant regulations compliance, labeling and packaging review, assistance in shipping and customs clearance, warehousing, as well as assistance in location and acquisition of food processing, packaging and labeling equipments from manufacturers and suppliers in the United States.

  • Investment Promotion. AZPROMO's objective is to attract US investments into Azerbaijan via promoting Azerbaijan as favorable investment destination in the region, making specific country presentations, providing prospective investors with information on priority investment areas and certain investment projects in Azerbaijan.

    We encourage you to discover what Azerbaijan is and learn more about the opportunities of doing business with Azerbaijan through our dynamic organization!
Elshan Baloghlanov

Contact:
Elshan Baloghlanov
U.S. Representative
Azerbaijan Export and Investment Promotion Foundation (AZPROMO)
Tel. (310) 464-1949
Fax (310) 494-9354
Email: elshan@azpromo.us
Web: www.azpromo.az

Transmetrics

MBITA New Member Transmetrics

Founded in 1981, Transmetrics, Inc. is a civil engineering firm specializing in the design of roadways, railways, ports and harbors. Based in Campbell, California, the firm has also expanded its services to include medical facilities, schools, and the relocation of the major utilities.

Transmetrics has built its reputation on quality products and high performance reliability. While the firm is certified as a small business enterprise, it is one of the most respected small firms in the U.S. transportation industry. The President and founder of the firm is Jack Ybarra who has built a diverse group of technical specialists and has associated the firm with several large international firms such as Geodata S.p.A of Turin, Italy.

As of June 1, 2013, Transmetrics has become the U.S. representative for Geodata, the designer of the giant Bioceanico Aconcagua tunnel linking Chile with Argentina through the Andes Mountains. Among the services Transmetrics provides is the design of light, heavy, commuter, intercity, and high speed railways.

The firm is currently assisting with the oversight of the BART extension into the city of San Jose for Federal Transit Administration. Transmetrics past work includes railways in San Diego, Los Angeles, San Jose, and now the California High Speed Rail Project.

Jack Ybarra

Contact:
Jack Ybarra
President
Transmetrics, Inc.
Engineering & Construction Management
Tel. (408) 371 6800 x14
Email:
JYbarra@transmetrics.com
Web: www.transmetrics.com

Sub Sahara Africa (SSA)
THE RIGHT MOVE NOW

By MBITA Member The Outback Company

MBITA member Jack Bass, President of Outback Company Inc., a San Diego Outback Co.based manufacturer, distributor and importer, will be relocating to his home town of Cape Town, South Africa later this year.

Objective: Mr. Bass carries extensive knowledge of the very fast developing trade in Sub Saharan Africa, considered by many in the know as "the final frontier". This gapping opportunity is open to many industries that export from the USA: Retail, Agriculture, Safety/Security, Green Energy, Nutritional/Food Products, Medical products, to name a few.

South Africa is natural conduit into SSA, with its first world infrastructure, developed banking system, legal and other business related services.

Having been born and raised in Cape Town. Mr. Bass brings with him many strong South African based trade contacts and has a slew of business relationships to bolster inroads into these markets.

South Africa alone makes up over 50% of Africa's GPD and is home to over 50% of the top 500 African companies.

Having lived in the US for 20 years and being a dual citizen, he is well versed in US business and work ethic and also has a strong knowledge of the knowhow and culture of business in South Africa and SSA.

Mr. Bass would be very interested in looking at all opportunities to further USA-based companies looking to enter the SSA market effectively, cost efficiently and would do so on a number of levels.

Jack Bass

Contact:
Jack Bass
President
Outback Company Inc.
Tel. (858) 202-1841
Web:
www.outbackcompany.com
Email:
jack@outbackcompany.com

California Promotes Wine Exports in Solvang, CA

By MBITA Member Elias Salo Wine Associates

When I set out to grow my business I established three phases that would serve as my success road map. Industry event attendance and networking is a key piece of the first phase.

On June 20th I attended the Exciting Export Opportunities for California Wine & Gourmet Food Products conference in Solvang, presented by Trade Connect and the Port of Los Angeles.

Solvang conference

This event was a great networking opportunity and allowed me to make several connections that will be key sources of information in growing my business.

One of the panel discussions was about the importance of working with a good freight forwarder that has product familiarity, a history in specific niche markets, and established relationships in overseas markets. Playing off of their experience will help streamline the complex and rapidly changing trade process.

Julia Son, marketing manager for the Hong Kong Trade Development Council, explained how the demand for imported wines increased by 66% from 2006-2011. When I explained my plan to increase the visibility of Monterey Bay wines she confirmed that most foreign markets know California wine only by Napa and Sonoma and that education is needed to show these markets the uniqueness and high quality of Monterey Bay wines.

In the near term, building my network and participating in industry events will be paramount in defining my brand. Following that, identifying and connecting the key parties to create mutually beneficial relationships will bring the vision to life.

Elias Salo

Contact:
Elias Salo
Principal
Elias Salo Wine Associates
Tel. (831) 566-4248
Email: salo_elias@yahoo.com

What's New

MBITA's finance column features articles from the experts in TRADE FINANCE for exports.

Trade Finance

Getting Paid by Your Latin American Buyer

Payment Terms and Financing Options to Maximize Sales While Protecting Against Nonpayment

The Americas Latin America and the Caribbean is a large and natural market for U.S. exporters due to the region's geographic proximity. The region has a total population of 546 million people and a Gross Domestic Product (GDP) of nearly $2.5 trillion. The region is also home to two of the world's largest economies, Brazil and Mexico, whose combined GDP is over $1.5 trillion.

Despite the sheer size of this market, many U.S. exporters are unsuccessful in selling to Latin America or increasing their exports to Latin American buyers. Frequently, U.S. exporters lose sales due to the payment terms they demand of their Latin American buyers.

U.S. exporters should be aware that Latin American lending rates are far higher than those faced by companies in the U.S. For example, Brazilian lending rates range from 20 percent to 30 percent per year and Mexican lending rates range from 9 percent to 14 percent per year (as of January 2007). U.S. exporters are losing sales to Latin American buyers because they are frequently demanding payment either by Confirmed Letter of Credit or Cash In Advance. This can result in the following situations:Payment

1. U.S. exporter fails to win new sales contracts or loses existing Latin American clients because other foreign competitors are willing to provide the Latin American buyer with open account terms. Some Latin American companies pay more just to get 30 or 60-day open account terms.

2. U.S. exporter sells less to a Latin American client. One Latin American company interviewed stated that it would purchase four times as much from its U.S. supplier if it was given 90-day terms rather than having to pay cash in advance.

3. U.S. exporter loses medium term sales contract because a foreign competitor assists the Latin American buyer in achieving better financing terms.

While it is prudent for U.S. exporters to insist on secure payment terms, it pays for them to consider the broad variety of payment terms available to them in order to become as competitive as possible.

Read full article and download a full guide to identify the main financing and payment mechanisms available to support U.S. exporters selling to Latin America in general and to understand the costs, advantages, and disadvantages of each mechanism.

This article is published by the U.S. Department of Commerce.

Ex-Im Bank Authorizes $130 Million To Finance Export of U.S.-Manufactured Aircraft and Engines to Ethiopian Airlines

Ethiopia mapThe Export-Import Bank of the United States (Ex-Im Bank) has authorized nearly $130 million in financing to support the export of Boeing long-range aircraft and installed GE-90 engines to Ethiopian Airlines.

The transaction will support an estimated 700 American jobs in the aircraft and aircraft-engine manufacturing industry, according to an Ex-Im Bank estimate derived from U.S. Departments of Commerce and Labor data and methodology.

Ex-Im Bank Chairman Fred P. Hochberg announced the transaction in Addis Ababa. Hochberg was in Ethiopia conducting meetings with government and business leaders as part of a week-long business development trip to India, Ethiopia and South Africa.

Shipments"Ex-Im Bank is pleased to add another transaction in our successful partnership with Ethiopian Airlines, which is supporting hundreds of jobs in the U.S. aerospace industry. This transaction also demonstrates the tremendous potential of Africa for U.S. exporters," said Ex-Im Bank Chairman Fred P. Hochberg. "Our financing of high-quality, 'Made in the USA' aircraft and engines is also helping Ethiopian Airlines continue to expand its service throughout Africa and beyond the continent."

From 2003 through 2013, Ex-Im Bank has approved more than $2.2 billion to finance exports of U.S.-manufactured aircraft and aircraft engines to Ethiopian Airlines. In May 2012, Ex-Im Bank authorized financing to support 10 Boeing 787 Dreamliner aircraft to Ethiopian Airlines. Four of the aircraft were funded through a capital-markets bond issuance in November 2012.

This press release was issued on June 27 by Ex-Im Bank.
Press release source article.
Contact Linda Formella, (202) 565-3200

What's New

National Export
Initiative (NEI) Update

Year-to-Date U.S. Travel and Tourism Exports Contribute $57.9 Billion to the U.S. Economy

Francisco SanchezWASHINGTON-U.S. Under Secretary for International Trade Francisco Sanchez highlighted new data that show spending by international visitors to the United States in April 2013 totaled nearly $14.5 billion, an increase of more than 5 percent when compared to April 2012. International visitors have spent an estimated $57.9 billion on U.S. travel and tourism-related services year to date in 2013 (January through April), an increase of 8 percent when compared to the same period last year.

Travel"The latest data confirm the positive impact that travel and tourism is having on our economy," said Under Secretary Sanchez. "An increase in international visitor spending is helping us reach the goals of the President's National Export Initiative, by increasing both exports and export-supported jobs. In addition, we are making progress toward our goal to welcome 100 million international visitors annually to the United States. This administration is committed to making America the number one tourist destination, which will further support millions of American workers who are employed by the travel and tourism sector."

Purchases of travel and tourism-related goods and services by international visitors traveling in the United States totaled $11.2 billion during April. These goods and services include food, lodging, recreation, gifts, entertainment, local transportation in the United States, and other items incidental to foreign travel. Fares received by U.S. carriers (and U.S. vessel operators) from international visitors totaled nearly $3.3 billion for the month. The United States enjoyed a favorable balance of trade for the month of April in the travel and tourism sector, with a surplus of nearly $4.2 billion.

TravelTravel and tourism-related industries as a whole support nearly 7.7 million American jobs. President Obama's National Travel and Tourism Strategy, which was announced last year, aims to attract more than 100 million international tourists per year by 2021, visitors that would spend an estimated $250 billion per year, supporting more jobs and spurring economic growth in communities across the country.

Increasing U.S. travel and tourism will not come at the expense of national security. The President's plan for common sense immigration reform includes a number of proposals to support his commitment to increasing U.S. travel and tourism while maintaining our nation's security. Specifically, the President's immigration proposal reforms the Visa Waiver Program to strengthen law enforcement cooperation while facilitating more efficient trade and tourism to the United States, securely streamlines visa and foreign visitor processing, and strengthens and improves infrastructure at ports of entry. These priorities are reflected in recently introduced bipartisan immigration reform legislation, which the entire U.S. Senate is currently debating.

##########

This press release was issued on June 13 by the Office of Public Affairs, International Trade Administration of U.S. Department of Commerce. Press release source article.
Contact Mary Trupo: (202) 482-3809

To learn more about Commerce's ongoing efforts to promote international travel and tourism, visit http://tinet.ita.doc.gov/

##########
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
##########

ITA Spares Large Equipment Exporters from Unnecessary Costs in EU

Save moneyWorking with KLA-Tencor Corporation of California and other semiconductor equipment manufacturers, the Department of Commerce's International Trade Administration (ITA) persuaded the EU to clarify the scope of its revised Directive on the restriction of hazardous substances in electrical and electronic equipment (RoHS II). A narrow interpretation of the Directive regarding spare parts would have cost KLA hundreds of thousands of dollars per year, but a Commerce-wide advocacy effort encouraged the EU to clarify that spare parts for large-scale machines fall outside of the scope of RoHS II.
Learn more about this case.

Working closely with U.S. companies, ITA creates, expands, and defends market access for U.S. goods and services overseas through the Trade Agreements Compliance Program. "We promote policy that develops a more favorable business climate for U.S. companies in global markets; we employ commercial diplomacy to resolve trade barriers; and we leverage our bilateral and multilateral trade agreements to ensure our trading partners live up to their commitments so that our businesses can compete on a level-playing field." - Assistant Secretary for Market Access and Compliance, Michael C. Camunez.

If you have encountered a trade barrier you can report it to the Trade Compliance Center.
Learn more about the Trade Agreements Compliance Program.

Ayse Oge

Ayse's Corner

International Trade Education Matters


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'.

International Trade StudentsIn President Barack Obama's 2010 State of the Union address, he introduced NEI's (National Export Initiative) goal of doubling U.S. exports in five years.

Such an accomplishment fueled by international trade education would definitely invigorate the domestic economic recovery, and help produce and sustain new jobs in the local market. Based on the study conducted by the Small Business Administration, companies engaged in international trade are 20 % more productive per worker, pay about 10%-15% more in salaries, and are 9% more likely to stay financially solvent. With two-thirds of the world's purchasing power located outside the U.S., exporting could help businesses expand from U.S. market of 300 million consumers to a global market of more than six billion consumers.

The U.S. economy increasingly depends on globally-minded professionals who have acquired the right skill sets, knowledge and experience through international trade education. Because of technological advances in communication and ever-growing cross border flow of capital, talent, goods and services, foreign trade is growing at a faster pace. There has been strong demand on the part of companies to hire people who can conduct business beyond U.S. borders and help them to compete in the international marketplace.

Community colleges are the most cost-effective and flexible tool in training and developing a global business workforce. They have the unique ability to craft courses that meet the dual needs of the college credit and workplace knowledge and skill development at the same time. Even though two-thirds of community colleges have international business programs in place, we need college-business partnerships to pursue a more ambitious, comprehensive mission to expand its curriculum and programs in global business to equip students with much needed skills to compete in the hyper-connected world.

International Trade StudentsCommunity college administrators must design courses aimed at enhancing both students' and aspiring global entrepreneurs' proficiency in exports/imports and foreign language expertise, as well as focus on the professional development programs that prepare teams to work in a particular world region for their future employers.

In this era of globalization, community college and business partnerships are crucial when it comes to educating world-class workforces for businesses to grow and expand in overseas markets. Advantages for companies include reduced training costs, improved employee satisfaction, increased productivity and profit. The benefit for community colleges is that they can generate additional revenue in fulfilling their mission of putting together quality programs despite cutbacks in government funding.

Other promising partnerships between community colleges and businesses are:

  • The college's "Center for Global Business Initiative." The center focuses on mastering a particular knowledge pertaining to imports and exports, and providing insight to international marketing strategies. The students perform all the tasks involved.
  • Apprenticeship Program: College for Free and a Paycheck.

    Central Piedmont Community College and Siemens Energy in Charlotte, NC is testament of a 12-year-old partnership program that can be very well applied in the international trade arena as well. Here's how it works: The students work at Siemens while attending Central Piedmont Community College. Siemen's pays for each student's tuition costs, while participants earn a paycheck and receive intensive company-specific technical training and hands-on experience.

Community colleges are a remarkable resource of international trade education in preparing a better-educated and more highly-skilled workforce for businesses to promote exports and contribute to the nation's economic recovery.

Ayse Oge is President of Ultimate Trade, International Trade Consulting, Speaking and Training. Ayse Oge is Regional Director of Business Education Statewide Advisory Committee in Los Angeles, CA. She is also Board Member of California Business Education Association and Program Chair of CBEA Annual Conference, November 15-17 in San Diego, CA.

Ayse Oge

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

Other Global Trade News

Building Your International Brand

By Becky DeStigter, International Business Training (IBT)

Becky DeStigterA Canadian colleague and long-time friend recently asked me for marketing advice around how to create a successful international brand. My friend is a Chief Operating Officer who just joined a new venture with a young manager heading up the marketing effort. The marketing manager is highly concerned about developing a new logo and perhaps needs to widen his perspective of developing the venture's brand. Generally, I would define a brand as a customer's perception of a company based on their cumulative experiences with that company. This may include what someone has heard from a secondary source; what is published in media; any marketing, product or service usage; and any continued follow-up in customer service or sales. In the case of companies with widely diverse products and multiple industries, the brand would break down somewhat by industry (ex. General Electric).

BrandingGreat international brands in any industry are carefully built over time. As with most aspects of marketing strategy, it starts with the end in mind. What do you want your brand to be in five or 10 years? What value do you want your clients to perceive from their cumulative experiences of not only using your products and services, but in all of their interactions with your company? What adjectives would you want your clients and other stakeholders to use when describing your brand? Does the brand need to have the same reaction across all of your markets? International brands need even more attention to cultivation than domestic brands due to the complexities of multiple cultures, languages, legal systems, etc.

There are several factors to consider as you move forward in your international brand's development.

  • Start with consistency
  • Ending In-Country Relationships on a Good Note
  • Invest in Local Corporate Responsibility
  • Protecting Your Trademarks, Copyrights and Patents

Read full article.

The Pacific Alliance:
Market-friendly Integration

By Ryan Dube, Latintrade.com

While the Pacific Alliance involving Mexico, Chile, Colombia and Peru has gotten off to a good start, many observers say that grounds for skepticism remain. Will the member countries' pragmatic, market-friendly approach make the difference?

Pacific Alliance
Mexican President Enrique Peña Nieto, Colombia's President Juan Manuel Santos, Chile's President Sebastián Piñera and Peruvian President Ollanta Humala (from L to R) at a news conference after the Community of Latin American and Caribbean States (Celac) Summit in Santiago, Chile.
Photo: Agencia Uno/Xinhua/Sipa USA

The launch of the Pacific Alliance last year revived hopes that a Latin American project may finally be successful in promoting economic integration and free trade, while deepening ties with China and other fast-growing Asian countries. But though the four-country alliance has gotten off to a good start, many observers say there are still grounds for skepticism.

Other Latin American integration efforts have met obstacles despite starting off with similar optimism. Mercosur was formed more than 20 years ago as an ambitious project to create a common market of Argentina, Brazil, Paraguay and Uruguay. Today, analysts believe that Mercosur, which now also includes Venezuela, is at risk of breaking up partially due to increased protectionism.

Authorities from Chile, Colombia, Mexico and Peru - the members of the Pacific Alliance - are confident that their initiative will be different. Their optimism is largely based on the Pacific Alliance's strong foundation.

Unlike some of their Latin American neighbors, the four countries have been firm proponents of market-friendly policies, with each one signing several free trade agreements prior to the Pacific Alliance. Chile, Colombia, Mexico and Peru have also had good compliance records for international commitments in recent years.

"It is an important signal to Latin America, in the sense that regional integration and open markets are the best way to ensure greater volumes of investment, trade, and growth," the Colombian trade minister, Sergio Diaz-Granados, said last year after the alliance was officially created.

In addition, the Pacific Alliance's immediate objectives are more modest than other regional integration efforts. In January, the countries eliminated 90 percent of the tariffs on goods traded among their countries. They have a plan to lift visa requirements in order to facilitate travel, and create an exchange program for university students. Chile, Colombia and Peru have integrated their stock markets, while the Mexican Stock Exchange is expected to join them soon.

"The Pacific Alliance strikes me as more encouraging," said Michael Shifter, the president of the Inter-American Dialogue, a think tank. "They are trying to build a strong integration foundation around very concrete, clear steps and then take it to a higher level."

The main opportunity for the Pacific Alliance will come later on as it pursues its more ambitious objective of boosting commercial ties with Asia. The countries could look to strike a free trade agreement with regional groups like the Association of Southeast Asian Nations. Asean, as the group is known, is made up of 10 countries, including Indonesia, Singapore and Vietnam.

Read full article.

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