Read any article, enter any conversation or try to fill out any paperwork in the global trade realm, and you might just find your head swimming. Like most industries, the global trade business has its share of acronyms. To help you navigate, here are 10 common global business acronyms and their meanings:
If you are navigating the waters of international trade, you are sure to study up on FTAs. Free Trade Agreements are trade deals entered into by two or more countries to ease the passage of goods across borders. Exploring FTAs will lead you to even more acronyms, including NAFTA (North American Free Trade Agreement), CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), EFTA (European Free Trade Association) and USMCA (United States-Mexico-Canada Agreement), among others.
An FTZ — foreign trade zone or free trade zone — is a location, usually near a port of entry, that is considered outside a country’s trade boundaries. Goods that are stored within an FTZ do not have to go through customs. FTZs have a variety of uses for businesses that are trading internationally.
3. CPB and CBSA
Depending on where you’re trading to and from, you will be working through U.S. Customs and Border Protection (CPB) and/or Canada Border Services Agencies (CBSA). These are the agencies responsible for the safety of their respective country’s borders, giving them an active role in overseeing imports and exports.
4. ECCN and CCI
If you are dealing in exporting from the United States or Canada, you will be concerned with your goods’ ECCN or CCI. In the United States, exports must have an ECCN, an Export Control Classification Number. In Canada, exports must have a Canada Customs Invoice.
5. C of O
A Certificate of Origin (C of O) is a document that verifies where an item originated. Many countries require Certificates of Origin for an import entering through customs.
Nearly every country has a list, or rather several lists, of people or organizations they prohibit trade with. Within every country, there are usually several governing bodies with separate lists of people they forbid trade with, and these lists are constantly changing. To avoid illegally trading with a denied party, most organizations employ Denied Party Screening (DPS), a method for constantly checking trade partners against denied parties lists.
Tariffs, trade restrictions, denied parties — businesses who import and export globally have a lot of regulations to deal with. For that reason, its recommended that all importers and exporters have an Export Management Compliance Program (EMCP). A documented ECMP provides a solid framework that helps companies stay within trade regulations, and it can be a protecting document should the company ever be audited for compliance with trade regulations.
If you’re exporting goods, your Shipper’s Letter of Instruction (SLI) tells your shipping company what is expected to happen with your exports. It also provides them with all of your company’s contact information and any of the shipment’s documentation, should it be needed.
9. CM and CF
When dealing with the international shipping of goods, you will have to be able to quantify the physical size of your boxes, pallets and shipping containers. Cubic Meters (CM) and Cubic Feet (CF) are commonly used to describe the volume of shipments. For larger shipments, a typical cargo shipping container is Twenty Foot Equivalent Units (TEUs).
Tariffs, denied parties and other trade regulations often occupy the time of trade organizations. Those are the only aspects of trade to be concerned with. In some areas, trade organizations also will deal with Non-Tariff Barriers (NTBs). NTBs refer to any trade restriction that goes beyond the usual tariffs or custom regulations.
When it comes to the many acronyms involved in international trade, it seems that it would take a special course of study to master them all. While the acronyms are many, they will become second nature to anyone who works in the international trade industry after some time and practice.