A good Friend of my Jae Chung of JYC Custom Brokers, sent me the following article on on the US’s new Free trade Agreements (FTA’s) with Korea, Panama and Columbia.

In the article Ms. Ross, states the protection of US Intellectual Property (IPR) is one of the big winners in these agreements, which is critical to protect one of the US’s greatest factors of endowment — our creativity and intellectual property.

She notes, one of the many important questions being asked at the start of 2012 is when should international traders expect to take advantage of the new free trade agreements (FTAs) with Korea, Panama, and Colombia? Once President Obama issues the authorizing Executive Orders, Customs and Border Protection (CBP) will still need to publish proposed regulations. Based on the number of FTAs already enacted under U.S. law, it appears the general format and content of those regulations are fairly well set.

In the meantime, there are a number of ways international traders may prepare for that inevitable implementation. From public reports, it is well known that one of the most fruitful ways CBP raises revenue is by auditing trade preference program claims, since many importers are not able to support them. Having proper documentation in hand before making the claim, therefore, is key. To that end, the first thing to do is read the agreement to determine its requirements as they apply to you, along with the rules of origin relevant to your goods. Relying on what your supplier tells you is not enough, nor can you simply tell your buyers the goods you are selling are compliant. You must have supporting documents. You must be able to document compliance. While Korean customs officials have said publicly that Korea intends to certify its companies, it is not clear what will be certified or what certification will mean, and similar certification assurances have not been forthcoming regarding companies in Panama or Colombia. The best thing for you to do is document your compliance regardless of any “certifications.”

Next, consider how you are interacting with your suppliers. If you rely on purchase orders, what needs to be added to your standard terms and conditions? If your orders are placed via emails or phone calls, what documentation should you be routinely requesting from your suppliers? Just how far into the supply chain will your suppliers be willing to let you go?

If you are an exporter, what can you expect your buyers to demand? What documentation are you currently gathering from your suppliers? What may need to change regarding your method of product acquisition or production? What more will be demanded of you? Remember, just because you purchased something in the U.S. does not mean it qualifies as U.S.-made, even under these FTAs.

Most products will likely be eligible based on tariff shift, the rule of origin that requires an analysis of all the components, input, raw materials, and consumables in a given shipped product to make sure the necessary change in classification has occurred. These classification changes are driven by the Harmonized Tariff Schedules and not Commerce’s EECNs or State’s ITAR classifications. In some cases, value added will need to be considered. Will you be able to get the value breakdowns you need from your vendors? Are you willing to provide such sensitive information to your buyers? It’s time to start having conversations with your business partners on these and related topics. Can you obtain the origin certifications you need from your suppliers and others? Do you have the records necessary to support any origin certifications you issue to your buyers? Can you put together a costed bill of materials that accurately discloses the origin and cost of each component, input, raw material, consumable, and anything else that went into making the product you are buying or selling, including labor and general overhead? If you do not qualify based on tariff shift, can you still qualify based on the di minimis rule or some other exemption? Are you confident that you will be able to support your own origin certifications should you get audited in the future? Do you have the proper record-keeping program in place? If you have these important conversations now, enlist the help of your trade professional team, and adjust your way of doing business accordingly, you will be ready to take full advantage of the free trade agreement of interest to you as soon as it takes effect.

According to Wharton’s Lauder class,  several authors pointed out  that Brazil’s labor demand outstrips its Supply.

How will that effect your Brazilian business opportunities?

they pointed out that Brazil’s shortage of qualified labor is little more than a supply-demand imbalance. With the Brazilian economy firing on all cylinders — and in the context of a legacy of dramatic government underinvestment in education — firms operating across a number of industries and sectors are demanding more skilled workers than the labor market currently offers, leading to unmet hiring quotas, increased pressure on existing employees and slower firm growth. The shortage is especially pronounced for firms in need of technicians and engineers. Given their demand for large numbers of these specialist employees, the oil and gas, real estate and aerospace industries have been hit particularly hard by the shortfall.

In particular, while many developing countries are suffering from a similar phenomenon, the labor problem is especially severe in Brazil, which recently placed third in a global ranking of countries coping with labor shortages. Indeed, according to the study, in which human resources firm Manpower interviewed more than 40,000 employers across 39 different countries, 57% of employers in Brazil are unable to find the skilled workers they need to operate their businesses. Claudio Lampert, chief legal officer of Brazilian logistics firm Grupo LLX, is one these employers. “Lack of qualified labor isn’t a problem for the future; it’s a problem we’re facing today,” he states. “At this very moment, we’re in need of an additional 3,000 employees.” This acute labor shortage has dramatic implications for Brazilian citizens, Brazilian firms, foreign job seekers and the future of the Brazilian economy in general.

So when doing business in Brazil make sure you are working with someone who has the right labor force, and/or this could be an opportunity for your company to add value when doing business in Brazil. Either way, you need to be working with someone who can navigate the waters.

For more information on this article please go to the original article

I hope everyone had a Merry Christmas, Happy Holidays and a Happy New Year!

After a holiday hiatus, we are continuing the blog and article from several contributors.

In the meantime, I was wondering if anyone had any special “New Year’s Resolutions”?

At the Holt house we  decided a couple of  years ago to try life without TV. Much to my surprise everyone adapted well, and the amount or reading going on in the house is impressive.

This year, we are going to focus more on family quality time.

Merry Christmas everyone! May Love, Peace and Joy came down on earth on Christmas day to make you happy and cheerful. May Christmas spread cheer in your lives!

May God shower his choicest blessings on you and your family this Christmas!

here is an interesting article from Ricardo Geromel looking  at some of the challenges in investing in Brazil. We have been aggressively doing business in Brazil for the past 3 years. However, Brazil is unlike other fast moving, developing countries. Brazil is steeped in tradition and culture and this new growth spurt will be challenging to the country’s infrastructure and traditional bureaucracy.

Ricardo writes, THIS” in the post title refers to SEBRAE. Where Sebrae is the mecca for reliable information about entrepreneurship in Brazil; from working visas for foreigners to schedules of entrepreneurs gatherings, Sebrae has all the official answers foreigner investors need. … But to say it’s slow would be a minor understatement.

Sebrae is The Brazilian Service of Support for Micro and Small Enterprises and serve as a hub for people interested in entrepreneurship in Brazil. It was founded in  1972 and counts on a network of 4.433 employees and 9.223 external consultants.

Brazil’s economy has been booming in the past few years. Quoting a  Forbes writer, “Brazil has been adding 19 ‘millionaires’ per day since 2007 — and that statistic will likely be repeated over the next three years as Latin America’s economic super-power continues to deliver stellar GDP growth and consumption rates, according to bankers.”   Brazil’s huge consumer market tempts many entrepreneurs, willing to open a company in “the country of the future.”

However, starting a new business in Brazil is anything but easy. Brazil ranks 127 out of 183 countries in the ranking Ease of Doing Business Index by the World Bank.

In Brazil, it takes up to 120  days to start a business and around 4 years to close it down mainly due to high levels of bureaucracy. By contrast, in the US, it takes only 6 days. Yes, you read it correctly, it takes 20 times longer in Brazil !

While in China it costs about 155$ to open a company and in Colombia 670$, in Brazil it costs 1125$ !

To read more please go to http://www.forbes.com/sites/ricardogeromel/2011/12/12/you-must-know-this-before-investing-in-brazil/

Regardless of understanding the rules of doing business in Brazil, which is the challenge in and of itself, there are a lot of cultural and/or hitting cost that you have to be aware of as well. No question, do we believe that the Brazil market is an incredible opportunity for everyone. However, you have to have long-term objectives and a great team on the ground.

I know Thanksgiving is traditionally a North American Holiday. However, I hope my friends and colleagues around the world will take a few moments out today to remember how blessed we are and take a few moments to remember all that we have to be thankful for.

Happy Thanksgiving Everyone!

What is Supply Chain and how does it affect your business?

There is a basic pattern to the practice of supply chain management. Each supply chain has its own unique set of market demands and operating challenges and yet the issues remain essentially the same in every case. Companies in any supply chain must make decisions individually and collectively regarding their actions in five areas:

1. Production - What products does the market want? How much of which products should be produced and by when? This includes the creation of production schedules that take into account the suppliers’ capacity, workload balancing, quality control, and equipment maintenance.

2. Inventory – What inventory should be stocked at each stage in a supply chain? How much inventory should be held as raw materials, semi finished, or finished goods? The primary purpose of inventory is to act as a buffer against uncertainty in the supply chain. However, holding inventory can be expensive, so what are the optimal inventory levels and reorder points?

3. Location – Where should facilities for production and inventory storage be located? Where are the most cost efficient locations for production and for storage of inventory? Should existing facilities be used or new ones built? Once these decisions are made they determine the possible paths available for product to flow through for delivery to the final consumer.

4. Transportation – How should inventory be moved from one supply chain location to another? Air freight and truck delivery are generally fast and reliable but they are expensive. Shipping by sea or rail is much less expensive but usually involves longer transit times and more uncertainty. This uncertainty must be compensated for by stocking higher levels of inventory. When is it better to use which mode of transportation?

5. Information – How much data should be collected and how much information should be shared? Timely and accurate information holds the promise of better coordination and better decision making. With good information, people can make effective decisions about what to produce and how much, about where to locate inventory and how best to transport it.

Is your supply chain  efficient?

According to the World Bank, in the bank’s latest Doing Business report, Brazil has fallen six places and is now ranked 126th out of 183 countries. It’s considered the 58th most difficult place to do business in the world.

Its tough but the growth potential is equally impressive.

Unfortunately the Brazilian government is not helping much. For example, in Brazil it takes 119 days to start a business, compared with 14 days in Colombia, which was among the 12 countries that most improved its business climate last year, according to the study.  Foreign companies have long complained that Brazil’s excessive red tape, what’s known as the “Brazil Cost,” discourages business.

The country’s investment rate, which stands at 17.8 percent of gross domestic product, is the lowest among major Latin American economies. It’s also less than a 40 percent investment rate in China, which was ranked 91st in the study.

However, if you invest for the long term the opportunities are there too (but its not easy!). You need the right team on the ground and or the right partners.

Good luck!!!

If you want succeed in business you need to succeed with people. The best book I have read on this subject is How to Win Friends and Influence People by Dale Carnegie. No matter who you are or where you live,  we all need to get the most out of her employees, partners, suppliers, and even client. Below is a summary of the key points in the book – dealing with people and leading them.

How to deal with people:
• Don’t criticize, condemn or complain
• Give honest and sincere appreciation
• Arouse in the other person an eager want
• Be hearty in your approbation and lavish in your praise
• Six Ways to Make People Like You
• Become genuinely interested in other people.
• Smile.
• Be a good listener.
• Encourage others to talk about themselves.
• Talk in terms of the other person’s interests.
• Win people to your way of thinking
• The only way to get the best of an argument is to avoid it.
• Show respect for the other person’s opinions. Never say – you’re wrong.
• If you are wrong, admit it quickly and emphatically.
• Begin in a friendly way.
• Get the other person saying “yes, yes.”
• Let the other person do a great deal of the talking.
• Let the other person feel that the idea is his or her own.
• Try honestly to see things from the other person’s point of view.
• Be sympathetic with the other person’s ideas and desires.
• Appeal to nobler motives.
• Dramatize your ideas.
• Throw down a challenge.

Be a leader:
• Begin with praise and honest appreciation.
• Call attention to people’s mistakes indirectly.
• Talk about your own mistakes before criticizing the other person.
• Ask questions instead of giving direct orders.
• Let the other person save face.
• Be “hearty in your approbation and lavish in your praise.”
• Give the other person a fine reputation to live up to.
• Make the fault feel easy to correct.
• Make the other person happy about doing the thing you suggest.

How to Win Friends and Influence People is a must read!

Happy Halloween everyone. Next to Christmas this is one of my children’s favorite holidays. As my son always asks, all I have to do is go to the door and say trick or treat  And  they will give me candy? He cannot believe that people  will give him candy just for dressing up  and being polite. Halloween may be a controversial holiday, but I can tell you that my children truly enjoy it. I hope you do too.