It has been well known since the founding of our country that exporting is the most profitable form of trade. It can be noted that there are tariffs on imports, but no tariffs on exports – our government does not want to hinder a good thing.

As a trade compliance lawyer, the first thought that comes to your mind when you hear the word “export” is controlsthat is, which products are prohibited for export from the United States, or which countries are we not supposed to do business with. While export control compliance is extremely important, you don’t want government officials literally knocking on your door about how some of your company’s products got into the wrong hands overseas. Note that there are other aspects of US government involvement and policy that are very helpful to companies wishing to grow their businesses through export sales.

This article aims to explore some of them and hopefully equip the burgeoning exporter with more knowledge and tools to grow their business through exporting.

  1. Government-based export development resources

The US government, as well as state and local governments, are well aware of the benefits of exporting from the United States, as well as regional and local economies, and are always looking to increase exports from the United States. The U.S. Census Bureau tracks all exports from the United States, and it’s never good when the government reports that the trade deficit is increasing, which means U.S. imports relative to exports are increasing.

A key government entity that provides significant resources to exporters is the United States Department of Commerce, the International Trade Administration (ITA), and in particular the US Commercial Service, which is part of the ITA. The U.S. Commercial Department has more than 100 offices nationwide and more than 70 offices around the world located in U.S. Embassies that provide English-speaking business advisors and resources to companies looking to explore or expand their presence in a foreign market. given. These advisers are also valuable resources in resolving business issues such as trade disputes or in helping to secure payment for goods or services provided.

Another benefit is the Gold Key program, with services that include identifying and raising awareness of potential foreign matchmaking companies, sending client information to identified matchmaking companies, preparing a profile of interested companies, attending meetings and providing a report with profile and contact details. for interested companies. See for more information.

Other government resources, as well as non-government resources, exist at the state and local level and include state government funded small business associations, regional growth initiatives, and local chambers of commerce that offer valuable advice on customizing and marketing your products for export, as well as how to navigate export compliance requirements such as classifying your goods, preparing export documentation, and obtaining legalization or certification documents if necessary.

  1. Export financing and transactional assistance

While traditional commercial banks can be a reliable source of export sales financing, the United States government, as well as state and local government agencies, offer programs that can help you obtain bank loans or obtain loan guarantees for the development of your business, your working capital and project financing needs. In addition, these government resources can provide transactional risk management services to minimize risk, such as export credit insurance, currency risk management, and advice to help avoid potential payment issues. from your buyer. See Other resources include the Export Import Bank, the US Small Business Administration, the US Department of Agriculture, the Overseas Private Investment Corporation, as well as state and local export finance programs.

  1. Free trade agreements

To make American products more attractive and competitive in international markets, the United States has entered into Free Trade Agreements (FTAs) with 20 countries or groups of foreign countries. Examples include the recently adopted United States Mexico Canada Free Trade Agreement (USMCA), the United States Australia FTA and the United States Korea FTA. A list of all agreements is available on the Office of the US Trade Representative (USTR) website – One of the main advantages of trade agreements is that goods that qualify under established rules of origin receive preferential treatment when traded between countries. The most important preference is that eligible products receive duty-free or reduced-duty treatment when traded between FTA members. This can make US products much more attractive to FTA partners, especially in countries with high import tariffs.

Important considerations when using FTAs ​​are to ensure that you follow all established rules to ensure that products traded between FTA countries claiming preferential treatment are indeed products of FTA countries. as defined by the rules of origin of the FTA. Rules of origin may vary from FTA to FTA; however, all FTAs ​​require that goods undergo significant production in one or both of the respective FTA countries, and that products originating in non-FTA countries, or with substantial non-FTA content, are not eligible for the FTA countries. advantages of the FTA.

Other requirements include detailed certification requirements and the need to obtain product origin information from suppliers of purchased products. As part of these requirements, companies certifying their goods under an FTA must keep careful records so that they can verify that products certified as originating for the purposes of the FTA in the event of a compliance audit.

  1. Legal guidance

No trade lawyer could conclude without mentioning that exporters should understand the various legal implications associated with exporting. These include business-oriented practical considerations such as entering into appropriate contracts or agreements with customers, understanding the legal compliance requirements associated with preparing export documents and keeping records, and compliance with FTA requirements. Additionally, exporters should be made aware of any export restrictions that may apply to their products, as well as any countries or entities that US companies are not permitted to do business with. For this reason, it is standard good practice for exporters to screen all foreign customers to ensure that they are not on a restricted party list or are not subject to US sanctions.

The resources described above can provide a good start to understanding these requirements, and not everyone needs to consult a lawyer to start their export business. However, exporters should understand that there are legal compliance requirements associated with most stages of the export process and that an exporter of any size should understand the specific requirements that might apply to their transaction. Proactive consultation with a legal or commercial professional early on could be the proverbial “ounce of prevention” that can save someone from bigger problems developing in the future.

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