Lights, Camera, Action: It takes a cast of characters to complete a trade transaction

20/10/2016

lights camera action trade transaction

lights camera action trade transaction

Trade is a people business

The business of international trade and global commerce is very much a business of people and partnerships. Few are masters of every aspect of trade or global business, even among experts or experienced veterans of the international business scene.

If we consider an international trade deal by way of illustration, there are many variations of these transactions, and even in the most straightforward structure, several “cast members” are required to make the production a success.

The actors

Exporter

Is an exporter a driven and internationally oriented business person, with entrepreneurial qualities, the heart of a deal maker and the soul of an explorer? The exporter’s interest in international trade may be purely profit or opportunity driven, yet many have a certain attraction to extending business activities (increasingly at the start-up stage of business) into the global marketplace.

The exporter’s primary concern, with apologies to Jerry Maguire, may be summarized as “SHOW ME THE MONEY!”

Importer

The importer is very comfortable operating in the familiar domestic environment. They may identify an opportunity to bring an innovative new product to the home market and could imagine a contribution being made to raising the standard of living at home by importing the latest new technologies or luxury items.

The importer is an acquirer and is focused on successfully sourcing and safely receiving that shipment, to be turned around at a profit on the home market or perhaps as a re-export. Both characters may have a dual role, particularly under a screenplay influenced by integrative trade.

Financier

This character finances the trade transaction, through a range of product and service offerings. The financier may require the participation of other financiers—bankers, export credit agencies, non-bank providers of trade finance—to be able to support the transaction adequately.

This character will earn revenue by granting access to monies (generally on a short-term basis, but possibly well into the five-to-seven-year medium term) required by either or both the importer and exporter.

Transporter

This actor is an expert at moving goods across the globe: he knows the most secure and optimal routes and is fully versed in the various components of freight costing and the regulations related to transport. The transporter and the exporter work very closely together to produce documentation that correctly describes the goods, ensures that they meet the standards of the importing market and clearly identifies and allows transfer of ownership and risk. 

Broker

The customs broker is often the first point of contact for the goods on arrival at destination. The broker may provide temporary accommodations to store the goods pending customs clearance and is an expert on the requirements related to the final import of goods into the receiving country after the transporter has completed his task.

The broker may collect any taxes and duties due.

Agent

This actor is skilled in the mechanics of commerce, is well-connected in the home market and most commonly represents the exporter in the country of destination. The actor assists in the sales process and, depending on the script, remains active as the local representative of the exporter in the destination market.

Government

This actor is always on stage, collecting taxes, regulating the interaction of the rest of the cast, negotiating with other governments and the various actors’ guilds, and providing financing or guarantees in support of the financier’s transactions. This role is broad and varies on each stage and with every deal.

Supporting Cast

There is a group of additional actors, such as the inspector, who verifies shipments and issues certificates attesting to their nature and condition, and the lawyer, whose presence is generally under-emphasized, and numerous others, depending on the exact nature of the production.

A major supporting actor is technology: this member of the cast is reshaping nearly every aspect of international trade and global business in ways that revise practices that are hundreds of years old—shifting business processes, documentation and even trade transaction decisions from the “real world” to the virtual world.

This content is an excerpt from the FITTskills Global Business Environment textbook. Enhance your knowledge and credibility with the leading international trade training and certification experts.

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About the author

Pamela Hyatt

Author: Pamela Hyatt

I am a Content Marketing Specialist for the Forum for International Trade Training (FITT). You can find some of my work on TradeReady.ca. My background is in copywriting, journalism and social media. My passion lies in connecting people to the stories that are most important to them.

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