Congratulations! After lots of hard work, your business is ready to start thinking about exporting to other markets, and the most viable option is Mexico.
So, you start researching about how to become an exporter. But, the more you research, the less you seem to understand…
Even though Mexico is our next door neighbor, all the different rules and regulations involved in an importing-exporting transaction, can make you feel lost and overwhelmed. And on top of that, the language is different, the culture is different , how on earth are you going to get through all that??
Relax… While your best move is to contact a business strategist with experience doing business in Mexico instead of trying to figure out everything on your own, here are some important things to consider in the early stages of your international trading venture.
Mexico is our second largest export market. Even though Minnesota’s main exports are agricultural products such as turkeys, pork, beef, soybeans, corn, and wheat, the possibilities are endless. Car components, electrical parts, and plastics are only some of the main products we export to Mexico, and more recently vehicles, engines for military aircraft, machinery, iron and steel products, and many others, are growing rapidly.
Mexico presents a huge advantage to U.S. exporters, which is that transportation options are not only limited to air or sea. Land transportation could be a cheaper, and even faster alternative that may positively affect the pricing and availability of your products in the Mexican market.
Unlike other Latin American countries, Mexico has a strong distribution infrastructure, which makes it easier for exporters to make timely deliveries at competitive prices, whether by sea, air, or ground (rails or roads).
NAFTA eliminated most tariffs and simplified the process to exporting goods to Mexico. However, as a savvy exporter, you must be well informed about the appropriate tariff treatment of each of your products and its components.
As you can imagine, there are necessary documents required by Mexican authorities that need to be prepared in advance, in order for the shipment to go as planned. Some of these documents are the invoice, the Certificate of Origin, certificate of free sale, any required sanitary (or otherwise) requirements, proper labeling (it has to be in Spanish), and others that may vary depending on your product. By following the appropriate procedures, and preparing the right documentation in advance, your shipment will pass through customs swiftly and smoothly.
If you don’t want to get totally involved in the exporting process, at least at the beginning, a good option is to employ an agent or a distributor to sell your products. A distributor buys your products directly from your location in U.S., whereas an agent receives a commission on the sale. That way, you can start testing the waters, without having to go through a learning curve that might not get you the results you want, as quickly as you’d like.
In any case, a good business advisor is the safest way to go. Visit trade shows, contact Pro México and the U.S. Commercial Service , and start visiting the country and making connections with legitimate organizations. After all, going global gets easier every day with the help of today’s technology, and it can be just the right move for your business.
The driverless car industry is hot and super-competitive. That’s a given. Here’s what’s not hot if you are Waymo, the self-driving car business that was spun out of Google’s parent company:
Recently, there was a trademark spat between Adidas and Tesla. The story piqued my interest because the big players make mistakes that are instructive for small businesses (only on a grander scale)—and because it illustrates the importance of brand identity and underscores why it’s smart to register your mark.In a nutshell, here’s what happened: Tesla filed with the US Patent and Trademark Office (USPTO) to register its Model 3, three-bar logo as a trademark. If the registration had been for the purpose of using the mark on a car, there would not have been a problem. BUT, Tesla registered to use its three-bar “E” on clothing. Adidas, a company known for rigorous policing of its brand identity, challenged Tesla’s right to register the mark as confusingly similar to the Adidas three-bar logo. Tesla withdrew its application. Adidas protected its three-bar brand identity.
The Trans-Pacific Partnership (TPP) is the largest regional trade agreement in history, between the United States and 11 other Pacific Rim countries. Following in the footsteps of the North American Free Trade Agreement (NAFTA) between the US, Mexico, and Canada, the TPP expands upon this to establish new rules for global trade by eliminating 18,000 tariffs, promoting an open internet, disciplining state-owned enterprises, and establishing environmental and worker protection. Its aim is to increase Made-In-America exports, grow the US economy, support higher-paying US jobs, and strengthen the middle class.
You've probably heard references to the TPP in recent campaign coverage. It is the result of years of trade negotiations, and has been hailed as a hallmark victory for the Obama administration. However, the agreement is still in limbo, pending ratification by Congress--a delay that hardly comes as a surprise. And, both presidential candidates for the major parties have come out against the TPP. Given this, the future of the TPP is up in the air.
Supporters hope for a vote during the lame-duck session, but the TPP's passage could very likely depend on the next presidential administration. In the meantime, we are left to consider the implications of passage of this agreement, as well as its impact on NAFTA, a pre-existing trade agreement of a similar nature.
The TPP is a piece of legislation I have been closely following, and recently had the opportunity to moderate a panel entitled, "The Impact of TPP on NAFTA: Opportunity for Strengthening Ties -- Or Recipe for Disaster." Panel members included Aristeo Lopez of the Mexican Embassy, Laura Sierra of Alston & Bird, Nicholas Guzman of Drinker, Biddle & Reath, and Greg Kanargelidis of Blake, Cassels & Graydon.
The American Bar Association Section of International sponsored this event with the intention of presenting US, Mexican, and Canadian standpoints on the TPP and the impact of its passage on NAFTA. What followed was a thoughtful and informative discussion, and although the topic is highly complex, I thought I'd share some highlights with you.
Ms. Sierra explained some of the political context surrounding the TPP, including that the US has historically been pro-trade, and this is the first time since 1992 that trade has been a significant issue in presidential election year politics. US FTAs are modeled after NAFTA. The agreement eliminates a significant number of tariffs that would be beneficial to US businesses, but there are dissenting voices. Some of the concerns include employment issues, the manipulation of currencies by various countries, and opposition in specific industries such as auto, segments of agriculture and pharmaceuticals and biologics whose concerns were not addressed in the agreement. For example, intellectual property protection for biologics is not included in the agreement.
Mr. Lopez pointed out the benefits of NAFTA--growth in trade between Mexico and the US, especially--and explained that the TPP is intended to expand upon this growth, with attention to subjects that were treated less comprehensively in NAFTA. Another goal of TPP, in Mr. Lopez' view, is to strengthen Mexico's ties to NAFTA and other FTA partners, allowing Mexican goods to reach new markets.
Mr. Kanargelidis noted that the TPP is not intended to replace or override NAFTA, but that the two agreements can co-exist. He pointed out US, Mexican, and Canadian businesses can operate under the clauses of whichever agreement is most favorable to them in a given transaction. For example, the "de minimis" value threshold is 10% under TPP, and only 7% under NAFTA.
An audience member posed the question of whether TPP shipments will be exempt from US Merchandise Processing Fees (MPF) like NAFTA shipments are. Mr. Guzman explained that even though TPP does away with "ad valorem" fees, US Customs might find another way to collect MPF that is compliant with the agreement. He also described the TPP's "focused value" methodology for determining goods' origin, which might be more stringent than NAFTA methods.
Opponents to the TPP often cite concerns about the Investor-State Dispute Settlement (ISDS) provision, which outlines the mechanism by which agreement disputes can be settled. Mr. Lopez explained that the TPP’s ISDS provisions are more transparent than those found in NAFTA.
At the conclusion of the panel, Ms. Sierra suggested that a full renegotiation of the TPP is unlikely, given that the agreement was difficult to reach in the first place, and that several countries have already ratified it. However, we might see some side letters that result in alterations to the text pertaining to certain issues. Panelists agreed that the TPP will pass. It’s a matter of time and final form.
The TPP has been negotiated between 12 countries who together form about 40% of GDP, and 1/3 of world trade. The agreement is of an unprecedented scope, and the implications of this agreement are huge. We will soon know if it can pass during the lame-duck session before the election, which is fast approaching!
Granville, Kevin. “The Trans-Pacific Partnership, Explained.” The New York Times. 20 August 2016. Web.“The Trans-Pacific Partnership.” Office of the United States Trade Representative. Executive Office of the President. 2016. Web.
In July, we reviewed the Defend Trade Secrets Act (DTSA) that passed in Congress by a sweeping majority, and was signed into law by President Obama on May 11—a rare piece of legislation that was largely agreed upon on both sides of the aisle!
In this post, “Trade Secrets: Part Two,” I want to emphasize the importance of understanding what a trade secret is, regardless of whether it is under the DTSA or state law. Surprisingly, many businesses I work with rely heavily on trade secrets for their economic livelihood, and they don’t know it. Not knowing and not tending to that little gold mine of yours can mean a significant financial hit to your business in many ways, not the least of which is losing your competitive advantage.
So, what are the components of a trade secret, and how do you protect it? Think of it in threes: the three key elements of a trade secret and three steps to protect it.