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Also in this issue:Boost Your Bottom Line by 6 PercentCommunicating Worldwide – How To Avoid Getting Lost in Translation
Quiz: Holiday Celebrations Around the World
Free Trade AgreementsWhat Takes so Long?Free Trade AgreementsWhat Takes so Long?
International Business NewsDecember 2013
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Free Trade Agreements – What’s Taking So Long?
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Boost Your Bottom Line by 6 Percent
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Lost in Translation
Article continuations – FTAs, Bottom Line
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12 Holiday Quiz
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COVER STORY Free Trade Agreements (FTAs) – How they get held up and caught up in US politics and theirImportance to Small to Medium-sized businesses in the Heartland. See page 4.
page 3 December 2013
ince the founding of our nation, free trade has been argued as both helpful and
harmful to America’s economy and job growth. Things haven’t changed much.
Despite the fact they coalesced to block George Bush’s proposed FTAs with Colombia, Panama and South Korea, even Democrats see the ben-efits of trade and FTAs. The centrist Democratic Leadership Council in-sisted, “While many Democrats find it tempting to ‘Just Say No’ to Bush trade policies..., this would squander real opportunities to boost U.S. ex-ports... and keep this country com-petitive in a global marketplace from which we cannot possibly isolate our-selves.”
The US Trade Representative (USTR) Office reports, “US exports are at re-cord highs and a larger share of US GDP comes from international trade than did twenty years ago – but fu-ture US economic growth depends on the ability to capture a larger share of emerging markets that
are creating a global middle class of consumers.
According to a senior USTR official, “USTR negotiators are working with countries in the Asia-Pacific region and Europe to negotiate FTAs, that when completed will result in free trade with approximately 65 percent of the world economy. According to a recent Gallop poll, the American pub-lic’s support for trade is at its highest point in nearly two decades, with 57 percent viewing trade as an opportu-nity for economic growth through US exports.”
Despite these efforts, the US has only 20 FTAs, while Mexico, for example, has 34 FTAs in force. Impeding con-tinued US FTA proliferation are the opposing opinions of special interest groups, trade unions, environmen-talist and others who ultimately find their points of view aimed at the floor of the US Congress. So, how does this opposition affect elected officials in their efforts to unblock FTAs? To answer this, IBN interviewed selected congressmen and senior business ex-ecutives.
Iowa US Senator Chuck Grassley, a key member of both the Senate Fi-nance and the Agricultural commit-tees, put it this way, “What is needed is the President’s Trade Promotion Au-thority (TPA) to get FTAs through. The president needs to personally stand up and ask for it from Congress. In his first term he never did ask for TPA. It wasn’t until last winter that he finally did – at least as far as the Finance Committee is concerned, of which I am presently a Senior Mem-ber.”
With TPA, proposed FTAs are sent directly to Congress sans special inter-est earmarks and other barriers, which is supposed to speed up the process of congressional approval.
“Without TPA, every proposed FTA will come under negotiation and that can take years because Congress will seek all kinds of amendments before it is passed.” Sen. Grassley continued. “We haven’t passed a TPA bill since ’02. Views will be taken into con-sideration when Congress invites the USTR to come in for consultation.
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Even fast track doesn’t prevent unions and the Demos from raising objec-tions.”
Sen. Grassley reminded IBN that here in the Heartland, “Agriculture is the locomotive that drives other exports.”
When we asked him how US agricul-tural products to EU will fare in the Transatlantic Trade & Investment Partnership (TTIP) negotiations, he replied, “I hope agricultural trade is opened further between the US and the EU. One of my top priorities is to move the EU forward on its treat-ment of biotechnology. Also, the EU has prohibited US poultry imports since ‘97, so that is another issue I’ll be watching for in agriculture. Trade
agreements, like legislation in Con-gress, require give and take on both sides, so we’ll have to let TTIP move forward and see how things start shap-ing up.”
According to the recently released “TTIP and the Fifty States: Jobs and Growth from Coast to Coast” study IBN reported in our October edition, a fully implemented TTIP will add an estimated 68, 830 jobs to the 9-state
Heartland region.
The House Small Business Commit-tee Chairman, Rep. Sam Graves of Missouri, told IBN that, “The main problem with addressing FTAs is the congressional calendar – the Federal budget, Affordable Care Act, and oth-er pressing issues taking precedent. Our small businesses need to take ad-vantage of FTAs.”
He pointed out, “The majority of markets are outside of USA borders. For small businesses to excel, they need to access these markets. Our GAO study really shows that the gov-ernment is not really helping small to medium-sized enterprises (SMEs) get help with exporting. We would like
to have the USTR testify before our committee, but so far he has not re-sponded to our invitation. He would get our interest and help to promote FTAs and fast track if he would come and ask.”
Is there a breakdown of communica-tion between the USTR and congress? Chmn. Graves told us, for example, that he had no knowledge of a USTR 90-day consultation with Congress on
the TTIP. “Even with fast track, and the great interest in FTAs, each rep-resentative must answer to their own districts and deal with issues there,” he said.
As complex as the politics behind FTAs are in Washington, SMEs here in the Heartland simply want to see progress, and many we spoke with support TPA. In fact, the more FTAs the better for many Heartland com-panies.
One medium-sized consumer goods company that exports to countries around the globe not only favors the TTIP and the Trans Pacific Partner-ship (TPP), but would also like to see the US get involved in Mercosur to
help tap down the 40% duties it faces in countries like Uruguay.
Bob Rebori, President of the waste water treatment company, Bio-Mi-crobics in Shawnee, Kansas, has a unique point of view on FTAs. “At best, FTAs haven’t hurt us,” he said. “They’ve kept us from being shut out and put us on a more level playing field with overseas competitors.“FTAs” continued on page 10
Chairman (Representative) Sam GravesBio-Microbics’ Bob ReboriSenator Chuck Grassley
page 5 December 2013
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December 2013 page 6
According to the newly released HSBC SPOTLIGHT ON U.S. TRADE, “highly Internationalized” Midwestern com-panies, or companies with international sales or operations, have profit margins 6 percent higher than those of their Midwestern domestic counterparts.
The HSBC report, prepared by The Economist Intelligence Unit analyzes the relationship between Midwestern companies’ international trade, and interna-tional operations against profit margins, and equates the connection between international expansion and corporate prosperity.
The HSBC report shows that globally focused Midwest companies: • had better and more consistent profit margins than their more domestically-oriented peers • companies in the consumer goods sector, which dominate the Midwest sample in the report (nearly 52 percent), have benefited from global trade. Highly international consumer goods compa- nies were twice as profitable as their domestically-oriented peers (8 percent vs. 4 percent).• were successful at gaining access to new markets or producing goods with cheaper inputs.
“The report clearly shows that a diversified geographic customer base or opera-tions have an impact on business performance,” said Steve Trepiccione, senior vice president and managing director of commercial banking for HSBC’s Mid-west Region. “Highly international Midwestern companies were able to insulate themselves from domestic market fluctuations throughout the past six years and
remain consistently profitable.”
The study sampled 259 publicly-list-ed US companies in four sectors and five geographical regions including 50 from the Midwest. From public docu-ments and interviews, it considered both international sales and interna-tional operations to determine their level of internationalization. The four sectors included were consumer goods, healthcare, industrials, and informa-tion and communications technolo-gies.
The report references the Midwest re-gion’s long history in supplying the world with both agricultural and in-dustrial products. It also notes the impact global competition has had on the region and the region’s efforts to reinvent itself, particularly in places such as Des Moines, where Rockwell Collins had become instrumental as a US space program supplier, providing technology for astronauts in older pro-grams, but now has expanded its focus on pursuing key global aerospace and defense markets in other countries.“Exporting” continued on page 10
Steve Trepiccione
Can Exporting Boost Your Bottom Line 6 Percent?
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Continuing our series on How to Ex-port, here are some tips to keep in mind when venturing into an inter-national business relationship.
It all starts with how to dress, timing and punctuality, greetings, manners in general, attitude to gender, age, authority; social responsibility and mobility; subjects to discuss (sports, recreation) and taboos (religion, in-country politics, racism, prejudices); how to address the foreign partner (subtly or directly); body language (including eye contact, touching, per-sonal space, flexibility; (non)show of emotions). Familiarize yourself with the local customs. Seek out books
or additional guidance on the sub-ject.
Consider hiring an experienced translator to translate your website, advertising materials and business documents. Local conscientious pro-fessional translators will take your goals and the audience into consider-ation, clarify and discuss terminology to globalize your documents. Write as clearly as possible for trans-lation. Write out abbreviations and acronyms, and “translate” in-house buzzwords to plain English. Illustra-tions and technical drawings can be very helpful to establish the func-tion of an item, so they don’t need to be translated. Translators appreciate written background information and any previous translations, which they use to establish context and match style and terminology.
lear and precise communi-cations are an important facet of successfully offer-
ing, negotiating, buying or selling products or services domestically or internationally and to take advantage of the benefits inter-national trade offers. Entering new markets means the same ev-erywhere: Understanding market opportunities, identifying trends, spotting challenges and plotting a successful course. Part of that course is communicating effec-tively across cultures. Fitting in with the linguistic, geographic, demographic, social, legal, eco-nomic, political, religious, intel-lectual, technological, environ-mental, family, sports framework in which a company or product operates is key to becoming a seamless addition to the foreign market.
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How to Avoid Getting Lost in TranslationThe Second in a Series of How to Export
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December 2013 page 8
In writing safety instructions, take into consideration that the people in other countries don’t comply with US EPA and similar regulations but the equivalent authority of their country. Syrup of ipecac may not be available in an African country and calling the Poison Control Center in Atlanta is probably not a choice. Related to safety, environmental protection and package labeling and inserts, it is al-ways a good idea to have an attorney review the copy for compliance with foreign regulations before sending it out for translation.
Be aware that translated material is of-ten wordier than the original English copy. This can affect the table of con-tents, references to page numbers, and general document layout. In addition to expanding, many languages can’t be abbreviated like English, so be aware that copy for tables may not fit in the English template.
Numbers matter! Don’t forget about conversions for temperature, length, mass, volume, currency etc. Most
countries use the metric system. A common risk lies in the US custom of omitting a zero preceding the decimal point; everyone doing business any-where beyond the US borders should write 0.5 (0,5) instead of .5 or go to the next smaller unit of measurement, e.g. 5 mm instead of 0.5 cm; it’s too easy to mistake the little dot as a speck on paper, even when writing in Eng-lish.
In addition to measurements, time can be a stumbling block for Ameri-cans doing business abroad. When Europeans tell you that a meeting takes place at 07:00, it means auto-matically 7:00 a.m., since for 7:00 p.m., they would use what Americans tend to call “military time”, i.e. 19:00 h.
When speaking through an inter-preter, provide as much background material as possible in advance. In-terpreters are not walking dictionaries or knowledgeable in all subject areas. The more detailed the materials you provide, the better the chance that your words come across as if you were speaking them yourself in the lan-guage.
Avoid funny business. Humor doesn’t translate well, since it usually depends on specific cultural references.
In all contacts with foreigners, wheth-er in formal or informal meetings, domestically or abroad, you will be well-advised if you put yourself in the other person’s position, look-ing at situations from the business partner’s point of view. Determine clearly beforehand what the purpose of your meeting should be and what result you expect: just getting a feel-ing for what a new business partner has to offer you, creating goodwill or serious negotiations and decisions on a proposal. Listen to what is being said and how it’s being said and listen even more carefully to answers, con-firm by carefully rewording questions to obtain “yes/no answers”, in order to avoid misunderstandings, no mat-ter whether you speak their language, they speak your language or you work through an interpreter.
Article written by Doris Ganser, President Transimpex Translators – Interpreters – Editors – Consultants: www.transimpex.com
See the Transimpex Portable Simultaneous In-terpretation Equipment ad on the preceding page Pg. 7) for a special discount.
Convert measurements to Kilos, Meters & Kilometers
International Business News
page 9 December 2013
IBNewsmag TM
December 2013 page 10
“Exporting” continued from page 6Rockwell Collins’s international rev-enue shot up 36% in 2010, and is expected to reach 40% by 2015, ac-cording to Colin Mahoney, senior vice president of international and service solutions claimed in the HSBC report.
As William Testa, Chief Economist for the Federal Reserve Board in Chicago pointed out in the report, Midwestern-ers…understand globalization. Com-panies here are…nimble and global.”
In addition to profitability, export companies contributed significantly to Midwestern states’ GDP. Heartland states* measured included:(see chart: Right)
*This Midwestern study did not include IBN heartland states of Arkansas, Missouri or Oklahoma.
“Diversifying the markets in which a company operates allows businesses to capture lower cost resources that are available in certain markets as well as a more diversified customer base,” said Mr. Trepiccione. “This can create a broader supplier base.”
This broader supplier base contribut-ing to a stronger export program al-luded to in this report is a subject IBN will investigate and report on in a 2014 issue.
For a copy of the HSBC report, email: [email protected] IBN
“FTAs” continued from page 5They help us be more aggressive to talk business and reach beyond those treaties into other regions.”
Bio-Microbics, a small business win-ner of the 2012 President’s Excellence in Exports award, reports that more than 60 percent of its sales are ex-ports. www.biomicrobics.com.
“NAFTA has benefitted us tremen-dously well.” Mr. Rebori continued. He has a significant distributor net-work established in Mexico and Can-ada. “Colombia and the South Korea FTAs will help us with distributor relationships as well.” While both the TTIP and TPP are high on his list as beneficial FTAs, he believes it will take some time before they ever get enacted, and went on to describe others he would like to eventually see open up.
He pointed out that the Central Amer-ican Free Trade Agreement (CAFTA) has been a big help in leading to ex-tended relationships in the Andean countries. “Then If we can get sanc-tions lifted from countries like Cuba, Libya and Myanmar, it is like dating before you engage in something as formal as FTAs,” said Mr. Rebori.
“As far as renewed fast track authority for the President is concerned,” Mr. Rebori said, “if he can keep the broad perspective of trade in mind and not give in to any particular political as-pect, I’m really in favor of it. It’s when earmarks and other restraints are add-ed that I oppose it.”
While many assume that the TPP, and possibly, TTIP will be approved by Congress very soon, both Sen. Grass-ley and Chmn. Graves agree that al-
though they have hope for both the TTIP and TPP, realistically it will take some time – perhaps years - for Con-gress to work through the issues.
IBN
International Business News
page 11 December 2013
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Now in its 10th year of publishing by InterMark3, Inc., IBNewsmag is an independent online magazine for entrepreneurs and small to me-dium-sized enterprises (SMEs) to keep them current on compelling developments affecting exports and other international business de-velopments. In keeping with our conversion to an e-magazine, we’ve changed our name to IBNewsmag to better reflect it as a magazine, not a newsletter. Moreover, the title matches our website to make it easier to access.In each edition, and on our website – www.IBNewsMag.com – we’ll bring you the latest international BREAKING NEWS – current news items that may affect your international business and of a regional in-terest for our Heartland region readers. In addition to special events, we will announce company news as appropriate. So feel free to send your editorial suggestions and news releases. Email them to:[email protected].
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Holiday Celebrations Around the WorldAs we rapidly approach the Holiday season, we thought we would have some fun asking you how the holidays are celebrated in other countries. Here are some questions with the answers below. No cheating now.
Where is Saint Lucia Day celebrated on December 13? What is the name of the holiday in many Latin countries, on which Three Wise Men come on January 5 or 6? What is another name of the “Festival of Lights”? Where do the inhabitants surround themselves with Christmas Bush, a native plant with little red flowers Where, in addition to the US, is the traditional Christmas dinner “roast turkey”? Where does Santa Claus come “in person”, often accompanied by up to half a dozen elves? In what two main countries does Nikolaus come on December 6 bringing little presents? How many days of celebration does Kwanzaa comprise?
Answers:Sweden, Epiphany, Hanukkah, Australia, Canada, Finland, Germany/Austria, 7 days
