Is small better?

This is probably the most delightful feeling that came with my first steps in international sales development, over 10 years ago now. This feeling that the world is not that big, that it is actually possible to be at the other end of our planet within a few hours, and to get by with it.

This feeling that all over the world, there are passionate people who care about their business and wish to grow it. When people and companies are bound together by this will of developing their activity, there are very few things that can get in their way.

I fell into international sales development by curiosity at first. I come from a small town in south west of France, where exporting is everything but a natural expanding strategy. Growing up amongst fantastic local products that very few people know outside our area, I set myself into one target : understanding what makes international sales development so challenging, and studying how to overcome these issues.

The deeper I got into it, the more passionate I became as the world did feel like a smaller place, and exporting actually is very exciting. Of course, going global is not an easy task. It requires strong foundations (good concept / product / brand), perseverance, willpower, pragmatism and a solid action plan. One must learn from mistakes that will happen along the way, and try not to give up when a difficulty appears (and it will, many will…)

But this is all worth it. Export sales represent a great growth potential for small businesses. I am not talking here about heavy industries, or huge multinationals with branches all over the world. This blog is about smaller, human-sized companies : processors, producers, artisans, manufacturers, and any small & medium-sized businesses who might get the misleading feeling that developing their activity overseas is not set for them.

Through my experience, I have come across great companies, and amazing people, passionate about their work. Should you find the right partner, who shares the same values, motivation and attachement to a product or project, the world will definitely feel like a smaller place, in which many things become possible.

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Diplomatic update : it happened in October 2016

WORLD : The Portuguese Antonio Guterres (former Prime Minister of Portugal) is elected Secretary-General of the United Nations. He succeeds to the South Korean Ban Ki-moon. During his first speech, he mentioned that he wishes to make the fight against populism and terrorism a priority.

COLUMBIA : In spite of the referendum failure in September (see September geopolitic update http://www.approachingexport.com/diplomatic-geopolitic-update-happened-september-2016 ), Colombia’s president Juan Manual Santos is awarded the Peace Nobel prize.

THAILAND : The King Bhumibol Adulyadej died after 7 decades of ruling the country. There are now concerns of political instability since the Prince Maha Vajiralongkorn has asked for time to mourn before he is appointed.

LEBANON : Michel Aoun is elected President.

CANADA-EU : after having been seriously questioned by the Belgium Wallonie Premier Paul Magnettethe, the Ceta (Comprehensive Economic and Trade Agreement) is now enforced. This agreement should initiate increased exchanges in between the 2 continents. Click here to read my post on the CETA

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What is the deal with free-trade deals?

Canada-EU blue

Before its recent approval, the CETA (Comprehensive Economic and Trade agreement in between Canada and the EU) has been seriously questioned by the Belgium Wallonie Premier Paul Magnette. While being flooded with contradictory news and updates about this agreement, it seemed important to me to take a step back, and write about FTAs (Free Trade Agreements).

There are dozens of FTAs worldwide, and many countries have at least one agreement in place. Among the most famous ones, we count the NAFTA (Canada – USA – Mexico), the European Union, the MERCOSUR (Argentina – Brazil – Paraguay – Uruguay – Venezuela) or the ASEAN (Brunei Darussalam – Cambodia – Indonesia – Laos – Malaysia – Singapore – Viet Nam – Thailand – Philippines – Myanmar).

They are enforced by the WTO (World Trade Organization – http://www.wto.org ) which makes sure that the GATT (General Agreement on Tariffs and Trade) is respected.

Those agreements are in place to make trade exchanges easier in between the countries of the agreement (less documentation needed, less import/export taxes, …) The ultimate goal of such agreements is to benefit to all partners by giving easier access to each other’s specific supplies and facilitate exchanges.

For example, the CETA will benefit to meat exporters from Canada who will have better and easier access to  meet the European demand, and the dairy products manufacturers  from Europe will be able to export in greater and safer extend to meet the Canadian demand.

Over the years, the enthusiasm of creating larger trading areas has declined quite drastically. This is a fact, protectionism has become trendy.

Donald Trump in the US and the increasing populism in European countries are good illustrations of public opinion’s animosity towards opening-up actions, not only for trade, but also for people. « Chacun chez soi, et les moutons seront bien gardés » is a French idiom which is quite appropriate to the situation.

It is simple to look at economic issues that most developed countries face, and blame the globalization for high unemployment rates and other problems. Sure enough, FTAs may encourage companies to relocate their manufacturing plants in cheaper places, and governments generate less income from import/export taxes.

However, protectionism may cure these symptoms for a brief period, but eventually, it may severely damage local economies which may stagnate in a non-competitive market.

It is also important to keep in mind that most job cuts in the past decades have been due to technical progress (automatization..) and not relocations.

Societies change, employment as we know it changes too, and we should not be too afraid of these transitions which are part of the entire evolution : things have always changed, from generations to generations.

Free Trade Agreements represent a great growth potential, and also a real development incentive for many countries. It boosts local economies and makes the markets more dynamic.

When opening up on trade, nations are bound together, and eventually, they work on the global leveling up of their population lifestyles. This does not mean that we loose our national identities, but this means that we acknowledge to be part of a wider group (aren’t we all citizens of the world?)

Also, we should keep in mind that even if cross-country trade is made easier by agreements, domestic demand will always prevail : one will not travel 1000 miles to get bread if the same bread is available next door.

Encouraging this dynamism, local governments should of course, adapt their policies according to their domestic needs, and make sure their populations are prepared to enjoy the benefits while having strong foundations in basic areas such as education or healthcare for example.

In my opinion, opening barriers may destabilize local economies for a short period, but if well implemented by local governments, it has the power to create a dynamism that everyone will enjoy.

Please, do not hesitate to leave your comments and views on this controversial topic, so we can exchange and discuss it together.

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