While the terrorist attacks have disrupted both domestic and international business, a recovery is imminent and trade levels will reach new heights in the future. Why? Pure economics. International trade enables the citizens of the world to prosper to greater degrees than they could within the confines of their own borders, and recent history supports this claim.
International trade has grown at an astounding rate over the past 20 years, despite the fact that world security has been threatened by some of the most unscrupulous forces of all time.
However, the United States, which has long been the foremost trading nation, continues to conduct relatively little international business. For example, the United States trades approximately 20% of its goods internationally compared with some countries that have international trade ratios in excess of 50%.
One of the biggest hurdles preventing greater cross-border commerce for the United States as well as others is the complexity of international regulatory compliance. And, unfortunately, the aftermath of Sept. 11's terrorist attacks will likely complicate matters even further.
Some shipments already require more than a dozen documents to cross international borders, while others are prohibited from being shipped at all. Additionally, every party involved in an international transaction must be screened against "black lists," or denied parties lists, that can change daily. These lists are constantly maintained and updated by the Department of State, the Bureau of Export Administration, and the Office of Foreign Assets Control.
Most businesses do not take proper measures to ensure shipments are destined for "friendly" end use, and the unintentional placing of goods in the hands of "enemies" has become a great public concern. Many U.S.-based companies disregard America's stringent trade laws, even though failure to comply with these regulations may result in fines, loss of trade privileges, and possibly incarceration.
Companies typically blame the compliance problems on their shippers' lack of awareness of federal regulations and marginal enforcement. But tighter security and greater government scrutiny is forcing companies of all sizes to consider compliance issues more thoroughly. Many Global 2000 companies have already taken measures to embed compliance into their shipping processes. Those that haven't should do so quickly, in order to remain viable and competitive in today's ever-changing environment.
To legally and efficiently ship globally, companies may want to consider investing in global trade management solutions that incorporate comprehensive global trade content and updated tariff information for all of the world's participating trading countries. These solutions allow users to instantaneously calculate total landed costs, meet governmental trade requirements, and execute export and import logistics, from any location via the Internet.
The new era of global trade will mean greater accountability to regulatory bodies. Using global trade management compliance software is a safe, secure, and efficient way to automate and simplify international trading processes.
Rajiv Uppal is founder, chairman, and chief executive of NextLinx Corp., a Rockville, Md.-based provider of global trade management solutions.