Our Weblog: Excerpts of Exports
Thursday, August 09, 2007
Freer Trade
As you would expect I am a fan of free trade, more aptly termed, freer trade. No matter what the trade agreement, NAFTA, CAFTA or the like, trade is not totally free. There are still provisions, protected industries and nontariff barriers. However that does not mean that export is an unlikely revenue stream. Most of the U.S growth of the last quarter is attributed to exporting. U.S. companies are looking to other countries to increase sales.
According to today’s Wall Street Journal, the economies in “China, Latin America and Europe have grown faster than the U.S. over the last 18 months.” This is good for two reasons:
1. while the US is a huge market in itself, domestic companies do not have to depend solely on domestic sales
2. with a growing economy comes a larger middle class interested in the quality and variety of U.S. goods
Not long ago, selling your product domestically was a very good business. But then something happened; freer trade. Domestic businesses are learning that they are competing globally right here in the U.S. Your competition includes products from other countries. No longer do you know your competitors firsthand.
With the rise of emerging markets like China and India comes a growth in the middle class. Producers of hair care products are selling travel size versions of shampoo and conditioner...great plan. Provide affordable sizes of the product and then as the middle class becomes more affluent, sell larger sizes of the product for which you have built demand.
The weak dollar also makes U.S. products very attractive.
There is help out there both in the public and private sectors. You can use the public sector for export services at little or not cost. You can also use the help of consultants for more comprehensive services. Or you can do both. Whatever you decide to do, investigating export markets is a good idea whose time has come. After all, foreign competition isn’t just in other countries anymore.