Emerging markets are changing where — and how — companies do business. A majority of emerging economies in Asia are projected to experience a steady growth rate of 2-3% annually until 2050. In contrast, the United States and many countries in western Europe should witness a comparatively lower average growth of around 1-2%.
Global trade is not static, and certainly not immune to political wrangling. Predicting the future is an uncertain business. However, growth minded organizations cannot afford to ignore the opportunities that emerging markets represent.
Opportunities and Risks
As well as opportunities, expanding into new markets always requires understanding the risks. You need a clear understanding of the laws and regulations of each country in which you trade. It is important to have expertise to ensure you have an appropriate global trade compliance program for every market.
In addition, there may be geopolitical considerations. In some emerging markets, political unrest, weak democratic environments and corruption may be an issue.
Manufacturers — particularly those in the technology sector — can face supply chain and export management challenges when they expand into an emerging market.
Some products may face significant export restrictions or licensing controls. This is particularly true of dual use products.
Furthermore, there are risks with sharing sensitive information, intellectual property or technology. These could be shared with unfriendly governments or commercial rivals. In short, ensuring that your trading partners are trustworthy is a key consideration.
Your company needs to know the risk factors that exist in each market. Due diligence includes reviewing the political situation and legal framework in the country, as well as any cultural concerns.
When conflicts occur, trade sanctions, increased regulations, and new compliance and documentation requirements generally result. All of these factors create more work and headaches for shippers. Non-compliance is not an option — the penalties can be severe.
The Benefits of Automating Export Management
Automated export management software helps ensure that every shipment and business partner receives the due diligence required to reduce risk.
Automated solutions offer updates in real time of trusted content from regulatory agencies. This includes licensing lists, and lists of sanctioned countries, entities, and persons. This allows you to ensure that your customers and trading partners are not subject to embargoes or sanctions, and that they are authorized to handle your shipments.
Trade compliance solutions streamline compliance processes by:
- Offering real-time monitoring of changes to compliance regulations against international and government lists
- Automatically running background checks on countries, carriers or prospective partners. This mitigates the risk of engaging with any parties with red-flags or embargos
- Recording compliance data and license information. As a result, shippers can quickly identify and complete license requirements with minimal manual research or input
- Track and report past compliance metrics to continuously improve compliance processes and workflows
Compliance is not merely the cost of doing business. By investing in export compliance solutions, companies gain:
- New efficiencies
- Better shipment visibility
- Decreased global trade costs
- Improved risk management
By using data driven visibility tools, you have access to operational statistics, metrics and trends. This allows your organization to respond accordingly. Done right, compliance leads to improved profit margins and competitive advantages.
All shippers need to ensure that they operate within the letter of the law. When you are working across multiple regulatory environments, mistakes can be easily made.
By leveraging automated export management solutions as you expand into emerging markets, your company can make the most of these opportunities, while mitigating the risks.
