Participating in global trade opens up an abundance of opportunities for your business. The potential market for your products is, on the surface, limited only by the constraints of your industry. When you trade in a country that fits your market, your revenue will grow. Simple. However, there is another aspect to global trade that causes many international businesses to miss out on potential revenue.
Free trade agreements (FTAs) are a vital component of conducting international trade. Yet FTAs are too often an afterthought. You must consider FTAs in every step of market identification. You’ll need to learn and understand the nuances involved with a prospective FTA. Sourcing, vendor relations, sales volume, documentation requirements, timing, and manpower are just a few examples of what must be considered to participate in any FTA. But precise FTA knowledge is the key. How do you ensure that your business is not diving into a money pit of FTA pain?
Implementing an innovative global trade services (GTS) solution is crucial to long-term FTA success. You’ll also want a global trade compliance consultant (GTCC) on the team to navigate FTA minefields. Ultimately, the goal is to reduce the risks that come with international trade and FTAs.
Use a GTCC for Long-Term Free Trade Agreement Success
Participating in international trade brings your business into some highly dynamic and volatile environments. You must avoid running afoul of FTAs. That’s why using a GTCC will contribute greatly towards your long-term trade success. They are well-versed in the FTAs that apply to your operations and industry, so they’ll reduce international trade risks.
Typically, any FTA your business runs into will be in place for several years. So you’ll need a GTCC’s analysis of your company’s strategy to ensure that you can meet its requirements, or if a particular market will be too costly to pursue. Here’s some FTAs with red tape that brought clients to us:
- Israel FTA (ILFTA)
- Australia FTA (AUFTA)
- Korea FTA (KORUS)
In many cases, certificates of origin get special scrutiny in order to prevent falsified information. Knowing the details required to be compliant with a specific FTA makes having a GTCC on-hand critical for reducing risk.
Pursuing a Logical Approach in Utilization of FTAs
Risk reduction is the key to ensuring that every market you trade in is profitable. Any potential misstep can leave your organization liable for both short-term and long-term financial losses. Identifying and understanding how to use FTAs well is the difference between long-term success and a fizzled opportunity.
Your FTAs must be selected strategically based on your industry, product offerings, and anticipated labor costs (to qualify items for FTAs). They must have long-term benefits; if an opportunity will grow unprofitable over time, a GTCC will give you fair warning.
Your GTCC makes sure that your operations are ready to handle and benefit from FTAs. Their analytical FTA management approach will help you ask the right questions at the right time. They also advise on FTA management software architecture, turning any GTS solution into a powerful trade management tool.
FTAs Require Software Decisions
A GTS software system is a wise investment once you become involved in FTAs. When configured correctly, it’s a sharp tool that gives you the edge in global trade. You’ll have the processing power of a GTS system that’s been customized to meet your needs. A GTS software solution puts global trade process automations in motion. Combined with the efforts of your GTCC, you’ll seize every viable opportunity for trade growth.
GTS allows a company to manage all pertinent documentation, including vendor solicitations and certificates, and will provide invaluable recordkeeping for your issued certificates and storage of related data. A properly-configured GTS system uses automation to run qualifications, , using product classifications, bills of materials (BOMs), and rules of origin (ROOs)—doing all of the heavy lifting for you.
With experienced GTCC input, automation frees up time, money, and resources. Innovative audit controls are now at your fingertips. This leaves you with a logical, well-considered FTA management solution. Your competitors will look at your organization as the one to beat.
Add Expertise To Navigate Complex FTAs
Navigating the rough waters of FTA requirements requires precision. A GTCC is a must. Their experience and trade knowledge will translate your daily actions into SAP GTS functional processes. You’ll automate daily operations, saving time and money while greatly reducing risk.