International Sales and Marketing - Research Paper Example

International Sales and Marketing Introduction The world of trade is highly dynamic and it is rapidly changing to the extent that it has become to be a ‘Global Village’. It is very clear from what happens in one part of the world having greater effects and impacts on the trade and related transactions in any other part of the world. The recent economic crisis that hit almost all the industries around the world has brought greater changes in both the home and international trade. It was just ‘interest defaults of US bank customers’ from the beginning but it has rapidly grown to be the severe economic turmoil that hit all the companies worldwide so badly. There are many issues related with exports and imports of goods or services with US. This research paper identifies major issues in international trade, especially in exporting and importing of goods or services with US. EU countries, China and other major countries that have long maintained good relation with US in international trade have been facing a number of challenges and issues like intellectual property issues, tariff and non-tariff related issues etc. This paper presents these major issues in detail and analyzes factors that affect the exports and imports with US. Export and import issues in foreign trade with US Even though U.S and almost all the countries maintain export and import relation, U.S and European Union countries are the main trading partners accounting the largest bilateral export and import relationship in the world. U.S and E.U economies are accounted to be 58% of the Global GDP. They represent around 37% of the world trade accounting to be around EUR 420 billion (European Commission, 2007, p. 5). As US maintains good relations of trade with EU countries and China, this research paper considers the examples of EU countries or China for illustrating the foreign trade issues of U.S. Tariffs related issues It is generally argued that almost all the countries that import goods and services from U.S seem to take advantages of the open U.S market as they put barriers in the way of U.S exports. A good example is Japan. Japan has many trade barriers and increased tariffs rate that U.S manufacturer and exporters are unable to sell in Japan as much as, in turn, Japanese companies sell in the United States markets (Cateora and Graham, 2007, p. 27). One of the major issues that U.S manufacturers who export goods or services to other countries face is high rate of tariffs and other barriers that are imposed by other governments on the importers. France protects their film and broadcast industry from foreign competition by limiting the number of American movies shows that can appear on French television and by limiting the percentage of songs that can be broadcast on French radio (Cateora and Graham, 2007, p. 27). These governmental proceedings of tariffs or quotas can have greater impacts on the exporters of U.S and it limits how much U.S companies can sell or provide services abroad. Many of the countries increase the prices of imported goods from the U.S than they sell in the United States The U.S is considered to be the leader in free trade and it has been frequently taking actions against those countries as unfair trade partners. The US government is authorized, according to section 30 of the Omnibus Trade and Competitiveness Act, to investigate and retaliate against specific trade barriers and also to impose 100 % tariffs on exports to the United States from those countries that are proclaimed to be unfair trade partners (Cateora and Graham, 2007, p. 38). Despite the fact that US exporters experiences high tariffs and protectionism in various countries, the U.S retains a number of significant duties and tariffs peaks for some sectors like textiles, footwear, leather goods, ceramics, glass products etc. EU countries exporters have been experiencing high tariffs for these sectors and this has been impacting the exporters to U.S (European Commission, 2007, p. 8). Eckes (2009) emphasized that protectionism, with high tariffs, has been considered to be a badge of honor as it could shelter emerging domestic industries from well established foreign competitors. The U.S markets of textiles, apparel etc are high import-sensitive-industries and hence protectionism should be viewed as methods to protect domestic producers (p. 4). Non-Tariffs related issues Regulatory issues The U.S has long been experiencing the difficulty in terms of international trade, especially with E.U countries is that U.S exporters face major difficulty because of lack of transparency in the application of relevant laws or regulations that are set by international standardizing bodies (Buckley, Lo and Boulle, 2008, p. 148). U.S exporters from EU and other countries face regulatory barriers because products are required to conform to technical regulations regarding consumer protection and environmental safety measures. Eckes (2009) argued that tariffs, quotas and customs regulations are not broader issues for large businesses, but internal regulatory issues like product standardization, investment policies, intellectual property protection and government procurement are the major problems faced by large businesses (p. 41). Standardization of certain goods that are to be imported to the U.S has become major challenge for many exporters in other countries. For example, distribution and marketing of certain goods like wins require labeling and electronic goods must conform to the safety requirements etc. Intellectual Property Protection Export.gov (2010) identifies intellectual property infringement as one of the main issues that US exporters face in marketing their goods and services abroad. Many of the U.S based companies and exporting manufacturers are not well aware of the piracy, counterfeiting and theft of their intellectual property like patent and trademark in the countries to which they export the goods or services. The brand name, products, packaging style and even business plans of some American companies are often copied by businesses in other countries like China. For this reason, it is strongly recommended that businesses must go for obtaining trademark and patent protection in their concerned foreign markets so that any misuses of these intellectual properties can be avoided. The intellectual property protection varies widely from country to country. As intellectual property has become more important issue international trade, the difference between different intellectual property protections acts have become sources of problems in international economic relation as well. In 1994, the Trade Related Aspects of Intellectual property Rights (TRIPS) has been negotiated in Uruguay round of GAAT which was administered by the World Trade Organization. TRIPS has brought strict rules regarding how countries should meet rights for protecting copyrights, integrated layouts, patents etc. U.S has been following the ACTA (The Anti-counterfeiting Trade Agreement). ACTA have imposed very strong enforcement of intellectual property rights and protection pertaining to the internet activities and information based trading. Documentation and Customs procedures US trade documentation is required for the exporter from other countries identifying the specific particulars like shipping, buyer and seller details and quantities etc. there are complicated documentation like an importer must obtain an import license before he can purchase goods overseas and these are forms of non-tariff trade barriers. Import license is a government-issued document to the importer by permitting him to import by specifying the commodities with quantities, prices, specification etc (Wood, 2002, p. 311). European Commission (2007) identified customs procedures as one of the main issues that EU countries face while exporting to U.S. E.U is not being recognized to be a customs union in the U.S and the outcome is that EU certificate of origin is not accepted by U.S customs (p. 9). Import Prohibitions National security has become a serious issue especially since the event of 9/11. U.S manufacturers are to seek protection on the grounds of national security. US industries can petition for the imports from third countries if there are issues related to national security because national security and protecting it is an interest of all trade partners and thus trade prohibition is applied (European Commission, 2007, p. 10). Public Procurement One of the main US trade barriers is that a number of clauses in state, federal and local legislation and regulations give priority to domestic producers and suppliers and it thus discourages foreign bidders as well as products and producers. There are federal restrictions on the use of federal money which is known to be ‘Buy America’. There are greater emphases on buying American products rather than imported goods and this is an issue that countries that export goods to US face as a trade barrier (European Commission, 2007, p. 11). Boycotts and Embargoes A boycott is an absolute restriction on purchasing and importing of certain goods and services from other countries. An embargo refers to the complete ban on importing certain goods and services from other countries. Both boycotts and embargoes often raise issues to the importers in the US. The United States may implement boycotts and embargoes against those countries with which it has disputes (Cateora and Graham, 2007, p. 42). Anti-dumping penalties Antidumping law has emerged as a non-tariff barrier in international trade. Anti-dumping laws were designed to prevent foreign manufacturers from predatory pricing by which manufacturers from other countries export goods to US and sell for less than the cost of production in order to be highly competitive and thus to dominate the market (Cateora and Graham, 2007, p. 44). But this has been legally restricted by anti-dumping laws. This law has brought issues to many manufacturers in China and other countries that practiced predatory pricing. Conclusion This piece of research work has focused on various issues related to international marketing. The major issues that are faced by US exporters and importers are detailed in this paper. Both tariff and non-tariffs barriers like regulatory issues, intellectual property infringement issues etc are detailed in this paper. References Buckley R.P, Lo V.L and Boulle L (2008), Challenges to multilateral trade: the impact of bilateral, preferential and regional agreements, Kluwer Law International Cateora P.R and Graham J.L (2007), International Marketing, Thirteenth edition, McGraw Hill Eckes A.E (2009), U.S. Trade Issues: A Reference Handbook, ABC-CLIO European Commission (2007), United States barriers to trade and investment, Report for 2006, European Commission Export.gov (2010), Help with trade Problems, export.gov, retrieved from http://www.export.gov/tradeproblems/index.asp Wood D.F (2002), International logistics, Second and Illustrated Edition, AMACOM Div American Mgmt Assn Read More