
Powered by Exoro International	International trade news and resources from World Trade Center Utah

PRESIDENT'S MESSAGE

Dear Friends,

At this busy holiday season, and as we focus on year-end Lew Cramer, president of the World Trade Center Utah sales, numbers, and opportunities, here’s a quick idea for a gift to a young student you know: consider a gift subscription to an internationally based periodical (such as the Economist, Financial Times, BusinessWeek or Forbes), or Tom Friedman’s books, or a language training course. And sit down with your child (or grandchild) and ask questions about current foreign events while at the same time looking at a globe together. Guaranteed memorable way to spend some holiday time this month (even video games will get boring sometime!)

Warm holiday greetings,

Lew Cramer
President and CEO

CHINA WEEK

Accessing China's Markets

The delivery service provider DHL Worldwide Express recently announced its intentions to build a $175 million delivery hub in Shanghai (near the Pudong International Airport). DHL’s competitors, UPS and Fed-Ex, are already in the middle of production expansion in China. Western consumer product companies, who have struggled over the last few years in their efforts to distribute product directly to Chinese consumers, should be encouraged by the large expansion of these express-delivery companies in China.

* * * * * * * * * * * * * * *
IAC/InterActiveCorp., the parent company of such well know internet sites as Ask.com, Citysearch.com and Match.com, recently announced its intention to invest $100 million into a new China-based Internet company. No real details of the new Internet website, which is expected to be operational as soon as next year, have been disclosed. IAC’s bold plans for the new website are significant because other such ventures by Western Internet companies (i.e. Google, eBay and Yahoo) over the last few years have, for the most part, failed as they struggled to gain traction against domestic companies like Baidu.com and Alibaba. Those looking to penetrate China’s Internet market should watch closely because IAC’s success (or failure) in China could serve as a good roadmap for what to do (and not do) in China.

* * * * * * * * * * * * * * *
Over 100 CEOs from some of the top businesses in the U.S. (i.e. Coca-Cola, GE, Microsoft, Intel, etc.) recently submitted an open letter to Congressional leaders encouraging restraint on many of the bills (considered anti-China and anti-China trade) currently pending in Congress. The letter argues that the US-China trade relationship was good for both countries and has created jobs in the U.S. market and profitability in many important segments of the U.S. economy. The CEOs are lending their voice in an effort to contradict an anti-China and anti-China trade mood which seems to be fairly pervasive in Congress.

The China Week column is sponsored by: Holme Roberts & Owen LLP, Attorneys At Law.

For more information email: robert.lamb@hro.com.

International Trade Finance Resource Guide Available from USEAC

Produced for clients in the states covered by the Denver U.S. Export Assistance Center (USEAC) -- Arizona, Colorado, New Mexico, Utah, and Wyoming -- the International Trade Finance Resource Guide was developed to provide exporters with information on the various private and public sector organizations that can help a firm with its export financing needs.

Download the Guide as a MS Word document from the Web.

View the Guide in HTML here.

The Denver USEAC provides trade financing coverage and support to businesses in the five Rocky Mountain / Southwestern states.

The Guide was compiled by Dennis R. Chrisbaum, regional manager, international trade programs for the U.S. Small Business Administration, stationed in the U.S. Export Assistance Center.

TRADE FACT

Source: International Trade Administration

The U.S.-South Korea FTA will be of particular benefit to U.S. small- and medium-sized businesses (SMEs), enterprises with fewer than 500 employees. In 2005, U.S. SMEs exported $8.2 billion in merchandise to S. Korea, representing 33 percent of total U.S. exports to S. Korea—above the 29 percent SME share of U.S. exports to the world.

CALENDAR

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Dec. 7 -- Enjoy a free lunch on Pearl Harbor Day with China experts Rob Lamb and Chad Lewis. When: at your convenience between 11:30 a.m. to 1:00 p.m. Where: Holme Roberts & Owen, Wells Fargo Building, 299 South Main St., Suite 1700. RSVP by December 4 to Eagan Lopez (801) 323-3257, or email: eagan.lopez@hro.com

Mar. 3 - 11, 2008 --Commercial Service Trade Mission to Sub-Saharan Africa. Unique package, three cities. This mission is offered as an entire package. Israel will lead the delegation to Accra, Ghana; Lagos, Nigeria; and Johannesburg, South Africa. Recruitment closes December 10, 2007. Space is limited to 15 qualified U.S. firms. Contact: Jessica Arnold (phone: 202-482-2026), Lisa Huot (phone: 202-482-2796), or Mara Yachnin (phone: 202-482-6238). Website.

Salt Lake Chamber's events calendar

Utah International Calendar

WEB LINKS

Logistics

- FREIGHTLink
- CargoLink International
- Freight Transportation Database
- Cargo Ports of the World

International Trade Information

A Basic Guide to Exporting

News and Information Updates from the Export-Import Bank

Webinars Provide Tips for Entering New International Markets

Dictionary of International Trade

Export Institute USA

Export.gov Trade Leads

National Trade Data Bank

Eport.gov Country Database

Subscribe to the Business Week Asia Insider

Subscribe to the China Economic Review

Get the latest annual and quarterly trade data with TradeStats Express

News and Audio in 33 Languages
The BBC provides audio news broadcasts in multiple languages

U.S./Mexico Border Directory -- Provides information useful for conducting business in the U.S./Mexico border region

Advertise in Global Utah

Does your business or organization offer a product or service to Utah's global business community? Now you can advertise in Global Utah, the best resource for Utah-related international trade information. Call now for more information: (801) 814-4219.

Volume 1 Number 23 Nov. 30, 2007

INTRODUCING UTAH GLOBALISTS:

Rusty Butler and UVSC's
Utah-Russian Institute

By Erin Stewart
Freelance Writer

Rusty Butler never imagined a routine business trip to Russia would evolve into a life-long relationship with the country’s rich culture and business community.

Butler, director of the Utah-Russia Institute at Utah Valley State College, first traveled to Russia at the cusp of the Soviet Union’s collapse. On a business mission with the Rusty Butler, director of the Utah-Russia Institute at Utah Valley State College Boeing Corporation, Butler was sent to Russia to look into the conversion from military to commercial aircraft.

That one trip launched Butler into a relationship with Russia that has put him at the center of Utah-Russia affairs and business partnerships.

“It snowballed very rapidly into far, far more than what I’d anticipated,” Butler says.

That relationship continues today with the Utah-Russia Institute, which was created under Gov. Michael Leavitt in 1993. The institute promotes cultural and business understanding between the two countries through events, lectures and exchanges.

After an initial visit with Prime Minister Yegor Gaidar, Utah representatives impressed Russian leaders with their “lack of a backdoor agenda,” Butler recalls.

“So many American entities had been coming to Russia and essentially had only one motive – to get rich quick at whatever expense with no concern or care for the Russian people or the Russian economy,” Butler says. “Gaidar sensed there was something very different in Utah, that there was a genuineness that went far beyond just being successful at business.”

The-Utah Russia Institute strives to broaden the scope of business relationships with Russia, featuring cultural events and humanitarian projects. The Springville Museum of Art, for example, recently opened an exhibit of Soviet art, emphasizing art as an agent of social change.

The Institute also hosted a series of Youth Games, sponsoring a group of Moscow youth who came to Utah to compete, and sending a group of Utah youth to Russia in 2004. More than 300 youth flew between Utah and Russia, forming friendships and finding similarities between cultures. “Both the Russian youth and the Utah youth are the future leaders,” Butler says. “For many of them, this was the first time they had ever been out of North America; they had an incredible experience seeing a very different foreign city and foreign culture.”

That in-depth understanding of Russian culture and history is essential to good business partnerships, Butler adds. Along with the World Trade Center Utah, the Utah-Russian Institute will continue to work to promote understanding of foreign countries to foster better trade relations.

“We, in the West, tend to go straight for the deal. In so many nations the deals are dependent upon relationships and it takes time to develop relationships,” Butler says.

Butler also says Utahns need to be better prepared for the enhanced focus on international trade in Utah. In particular, Butler says anyone interested in business should know at least three languages to be competitive in the changing global economy.

“We can no longer compete successfully being a monolingual society. It just won’t cut it,” says Butler, who particularly encourages non-traditional languages like Japanese, Chinese, Arabic and Russian. This fact of modern global trade was apparent when Gov. Jon Huntsman Jr. traveled to China and was able to converse fluently in Mandarin with business and government leaders. Butler speaks Spanish and Portuguese, along with some German, Italian and Russian.

“I still hark back to when 9-11 happened and the United State’s government scrambled for people that were fluent in Arabic and could hardly find anyone,” Butler says.

Butler has always been active in the international arena, starting out as a university professor and working in the U.S. Immigration Service. He also worked as an aide in the Reagan administration before going on to work in Boeing’s military operations.

After landing at the Utah-Russia Institute, Butler also became the associate vice president for international affairs at UVSC and is an Honorary Consul General for the Russian Federation.

Although Russia isn’t one of the four key areas defined by Gov. Huntsman, Butler hopes the country doesn’t get overlooked. As one of the world’s largest suppliers of gas and oil, as well as the “world’s greatest storehouse” of natural resource such as gold and titanium, Russia is a major economic player, he says.

“It doesn’t have the kind of population base of Canada, Mexico, China and India, but it’s hard to overlook. It’s not an area that you want to just ignore,” he says.

Butler now lives in Provo with his wife and is expecting his 35th grandchild. He says he always tried to infuse his love of international relations into his seven children, taking at least one of his children on each of his foreign trips throughout the years.

In his spare time, Butler also trains for triathlons by running, cycling and swimming.

UPCOMING SEMINAR

Interested in Doing Business in China? Do you Have the Right Insurance Policy?

Deputy General Manager from one of China’s Largest Insurance Companies to Speak at Westminster Monday, Dec. 3

Are you currently doing business in China? Are you thinking about investing in China? Most importantly, do you have the right insurance policy to conduct business in China? The Center for China-America Business Studies in the Westminster Gore School of Business will host a lecture on the liberalization of the Chinese insurance market by Mr. Jing-ming Xiao, Deputy General Manager, Tai-Ping Life Insurance Corporation, on Dec. 3 at 12 p.m. in room 353 of the Dolores Dore Eccles Health, Wellness, and Athletic Center, 1840 South 1300 East, Salt Lake City.

Tai-Ping Life Insurance Corporation is one of the China's largest life insurance companies. Mr. Xiao will present a lecture on the liberalization of the Chinese insurance market since the country's accession into the World Trade Organization, and will also address the tremendous opportunities for foreign life insurance companies to become involved in China, soon to be the fourth largest insurance market in the world by 2020.

The lecture is free and open to the public. To RSVP, email workgore@westminstercollege.edu.

Free Lunch on Pearl Harbor Day

Remember HRO’s Lunch on December 7 with Rob Lamb and football star/ NFL ambassador to China, Chad Lewis. These fellows know China business and they’re ready to share their thoughts and tales with you.

Lunch is free at Holme Roberts & Owen, Wells Fargo Building, 299 South Main St. Suite 1700, any time between 11:30 and 1:00. Just contact Eagan Lopez at eagan.lopez@hro.com or 801 323 3257.

ZIONSFX System Lowers Costs
of FX Trades and International Payments

Overview

ZIONSFX has developed a PC-based system that makes it easy, convenient and affordable for businesses of all sizes, regardless of technical ability, trade frequency or credit rating to buy and sell foreign exchange and reliably send or receive foreign currency payments worldwide

Shortcomings of traditional payment systems

U.S. businesses with international operations are often faced with the challenge of exchanging US dollars for a foreign currency and delivering the foreign currency payment to another country. Unfortunately, this process can be expensive and time-consuming, particularly for a small- to medium-sized business.

This is because traditional payment systems charge high fees for converting dollars to other currencies when the transaction size is small. Companies can also count on paying wire transfer fees and incurring additional costs of filling out the accompanying paperwork each time funds are transferred. Moreover, transaction fees are often bundled with the exchange rate, leaving customers with little way of knowing whether the fees they pay are fair.

Not anymore.

The ZIONSFX System

Zions Bank has created a significant breakthrough product that reduces the costs of foreign exchange transactions and streamlines the entire international payment process. ZIONSFX enables organizations of all sizes to conduct online foreign exchange transactions and conveniently make and receive global payments in local currencies using the worldwide network of UBS (the global investment banking and securities leader in foreign exchange).

ZIONSFX is a PC-based foreign currency payment system that allow clients to buy non-U.S. currencies (at wholesale rates and a set fee) and deliver them to destinations in other countries from their desktop. ZIONSFX makes it possible for organizations to receive inter-bank rates that typically are not offered to corporate clients. Rates are not marked up and are disclosed so companies know exactly what they are being charged. Clients also save money because ZIONSFX waives wire transfer fees.

However, ZIONSFX is not for everyone. “This is not a system for currency traders,” says David Hemingway, executive vice president and Chief Investment Officer for Zions Bancorporation. “It was primarily created for small-to-large organizations that make repetitive global payments, such as smaller banks and international businesses of all sizes.”

Cost Savings

“We save a lot of money,” offers Michael Snow, controller of Apollo Light Systems Inc. in American Fork, Utah. “We are charged a flat rate regardless of the dollar amount transferred,” says Mr. Snow. “We really appreciate this transparency in pricing.”

Dennis Larsen, controller and treasurer of Wencor West, Inc. in Springville, Utah agrees. “Before ZIONSFX, making foreign exchange trades and payments to other countries was a real hassle, and quite expensive. The rates were too high. The Zions product gives us really excellent rates.”

Easy to use

“The system is easy to use,” said Susan Ivey, Accounts Payable supervisor at Wencor West, Inc. “We install software on our computers that gives us access to live, streaming foreign exchange rate information and we use that information to execute FX transactions quickly and accurately. Customers can be up and running in a short period of time without extensive training.”

Less hassle

Kristine Reese, vice president of ZIONSFX sales, explains how the system takes away many of the administrative chores typically associated with foreign currency trades and international payments. “Using our system,” she says, “clients don’t have to call the bank, send information to the wire room, or fill in documents for each payment sent. The information is pre-loaded into the system, which makes it much easier to use.”

Reliability

As far as reliability goes, Zions’ David Hemingway says, “We’ve had only one failed delivery in four years of operation. The bottom line is that clients get access to a great system at a better price.”

How the system works

Mr. Snow of Apollo Light Systems Inc. explains how the system works: “We preload information on vendors to whom we regularly send payments, adding wiring instructions and bank destination codes for each vendor. When it comes time to make a payment, we determine the amount to be paid, select the vendor to be paid, and are able to view live, executable exchange rates. When we see a rate that we like, we accept the quote, perform the transaction and choose the time we want the payment sent to the vendor in a foreign currency. The payment is sent without our having to retype wiring instructions and without any further intervention on our part. Our dollar denominated Zions account is debited. We then receive a confirmation of the trade and payment via email.”

Levels the playing field

ZIONSFX also levels the playing field for smaller companies making international payments by making it simple and affordable for them to access a large, technically sophisticated trading system. Small companies such as a two-person fabric shop that buys thread on the international market, or a medium-sized firm that buys Toyotas in Yen from Japan have found the system to be extremely cost-effective.

Greg Vidrine, CFO of Ogden, Utah’s International Armoring Corporation, explained it this way: “We have a significant customer base overseas and use foreign currency to buy vehicles from other countries such as Japan. The ZIONSFX system allows us to go through Zions Bank and tap into a much larger trading system that up until now, would not have been available to us. This in turn allows us to take advantage of a large international market using foreign currency.”

No downside

ZIONSFX clients can be assured that they are partnering with a stable, reputable, credit-worthy institution that stands behind its products. According to Mr. Snow of Apollo Light, “There really isn’t a downside to using the system. Even customer service is way above expectations. The ZIONSFX staff is right on top of things. They provide personal service whenever a question or issue arises.”

Company contacts

Organizations that are interested in the system can get more information by emailing ZIONSFX at kristine.reese@zionsbank.com, going online at www.zionsfx.com, or calling (866) 946-6730. ZIONSFX will analyze the fees a company paid for their latest FX trades and compare those costs with the wholesale prices they would have been charged by ZIONSFX. ZIONSFX will then send an e-mail that discloses the amount that could have been saved if its system had been used.

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Culture Corner

Compiled by Elizabeth Goryunova

Director, International
and Executive Relations
Salt Lake Chamber

Country: Bolivia

Spanish-speaking Bolivians greet friends and acquaint-ances with a cheerful “Buenos dias” (Good morning), “Buenas tardes” (Good Afternoon), or “Buenas noches” (Good evening). Hola (Hi) and ?Como estas? (How are you?) are also common. You can add the title Senor (Mr.), Senora (Mrs.), or Senorita (Miss) for first-time introductions or when greeting strangers. Senorita is used for any woman, unless she is older or the speaker knows she is married.

Bolivians show respect for others by addressing them as Don (for men) and Dona (for women) before their first name. Greetings are accompanied by a handshake, however, if your hand is wet or dirty, you may offer an arm or elbow. Common Spanish farewells are Hasta luego (Until later) or Hasta manana (Until tomorrow).

It is important to greet everyone in a room/home/meeting. In cities, greetings for both men and women are always accompanied by a kiss on or near the cheek. Upon arrival, visitors are invited inside and offered a drink or light refreshments and refusing them is impolite.

Time is viewed differently in Bolivia. People enjoy getting as much pleasure out of an experience as possible, with less regard to how much time they spend. Scheduled visits begin late, as all understand arriving on time is not expected.

Bolivians maintain little personal space and stand close during conversations. Bolivians often use hands, eyes and facial expressions to communicate. Patting someone on the shoulder is a sign of friendship. Eye contact in conversation is essential. Avoiding eye contact shows suspicion, lack of trust, or shyness. A raised hand, palm outward and fingers extended, twisting quickly from side to side is a way of saying “no”. Waving the index finger indicates a strong “no”. Be sure to cover your mouth when yawning or coughing.

Bolivians admire honesty and frown on those who are too proud or talk about their wealth. Kindness, gentleness, and concern for another’s welfare are essential to friendship. Bolivians do not like confrontation and avoid disagreement.

They like to remind others that they are also “Americans” because they live in South America. They call U.S. Americans “norteamericanos.” Divisions exist in society between the ruling class (Europeans and mestizos) and indigenous groups, who have often been barred from participating in society because of their race. Those who have wanted to assimilate into society have had to speak Spanish and change their way of dress. Many also adopt Spanish names.

Gifts are appreciated. Urban visitors generally give flowers or small gifts to the host upon arrival. Hosts may also present visitors with gifts, however, such gifts should not be opened in front of the giver.

TRADE ISSUES

Open Account Terms Can Increase Your Sales in Global Markets

By Dennis R. Chrisbaum
Regional Manager of International Trade Programs for the U.S. Small Business Administration

The world has become an increasingly competitive marketplace. A flood of products from China, technical services from India, competitive financing packages from Asia, and government support for exporters from several countries. How can an American exporter win? An often overlooked option is for U.S. exporters to offer more competitive, open account payment terms, with the additional risk mitigated through credit risk insurance.

Traditionally, there are four main ways to get paid for export sales. From the most conservative to the most risky for the exporter, they are:

Cash-in-advance
Letter-of-credit
Documentary collections
Open account terms

Cash-in-advance is pretty straight forward: You are telling your buyer to send you the money, and you will send the goods—safe for you, but a big risk for your buyer! (When you receive the money, you have both the cash and the goods, and your buyer has neither!) So, some buyers may be rather hesitant to jump at this payment option. The risk to you the exporter, however, is basically zero if you have the products in inventory and ship them after receiving the funds, or if you only begin producing the order AFTER you receive the funds, using your buyer’s money to finance your working capital needs for the production cycle.

A documentary letter of credit is relatively safe, because it will ensure that money has been deposited in your buyer’s bank and, if you can document that you have met the terms and condition of the letter of credit, you will be paid. This instrument has been very effective in reducing the perceived risks between buyers and sellers who might not know one another very well, because they trust their respective banks: a) to not release the funds until there is documentary evidence that the order has been shipped (from the buyer’s perspective), and b) to be paid shortly after goods have been shipped (from the seller’s perspective).

Documentary collections use the banking system to ensure that goods are paid for (cash again documents) or a promise is made to pay for them (documents against acceptance) before the goods are received. The buyer can only receive the transportation and title documents when one of those conditions is met, helping to assure the exporter that he will be paid before the goods are released. While the banking system does not have enforcement powers (or any responsibility for ensuring payment), this method works well for known, reliable buyers using a developed, transparent banking system, typically in Western industrialized countries.

Open account terms generally are viewed as the most risky method of the payment for international transactions. Do you really know the credit worthiness of your buyer in Brazil or South Korea? Well, you can (and should) conduct standard due diligence by ordering credit reports on overseas buyers, just as you do for domestic buyers. Several companies sell these reports, such as Graydon America, Owens Online, Credit Risk Monitor, and Dun & Bradstreet International. But, once you qualify your buyer for open account terms, commercial and political risks still remain. While commercial risk exists for any buyer, there might well be additional risks related to your buyer’s country that could impact your customer’s ability to pay. These political risks will vary widely by country and over time, but they will exist, even when selling to Canada. When you cross the border, your exposure no longer is in the United States.

Fortunately, there is a well-established way to mitigate these commercial and political risks. Called credit insurance, it is specialized insurance coverage with all the standard insurance features: a policy, a premium, a deductible and a claims process in case of loss. You can get a free quote from special insurance brokers and will not incur any costs until you commit to a policy. Insuring overseas accounts receivable offers U.S. exporters several advantages:

1. You can sleep at night, knowing if there is a default on your foreign accounts receivable, the insurer typically will pay 90-95% of the invoiced amount.
2. You will be able to secure additional orders—and, generally larger orders—than you would by only offering cash-in-advance or letter-of-credit payment options, because your buyers will not have to come up with the money up front (cash-in-advance) or prior to receiving the goods (letter-of-credit).
3. You will be able to borrow against the insured, foreign accounts receivables—unlike uninsured foreign accounts receivables, which lenders typically kick out of any borrowing base. Credit insurance will enhance your ability to secure working capital to support your transactions or ongoing business. Importantly, the U.S. Small Business Administration’s Export Working Capital guaranty loan program can be used along with credit insurance to establish a revolving line of credit (up to $2 million) to fund your export transactions.

What is the cost? For a small business with less than $5 million in open account sales to foreign buyers over the past two years, the cost is only 65 cents per $100, or .65%, of the invoiced amount under the Ex-Im Bank small business policy—a pretty small mark-up to secure the three benefits listed above. And, typically this cost can be passed through to the buyer, who would much prefer having open account terms and avoiding the additional costs related to opening a letter-of-credit or paying cash in advance. For companies with more than $2 million in foreign, open account sales annually, an even less expensive credit insurance policy probably could be obtained from one of the large private insurers such as Coface, FCIA Management, Euler Hermes, or AIG.

So, as you think about how to expand your export business in the coming months, consider offering open account terms to your buyers—which you can do prudently by securing credit insurance on those sales. In a world that is becoming more competitive every day, being able to offer open account terms on an insured basis could very well make the difference in your international sales success.

For more information on this topic and international trade programs offered by the SBA, Chrisbaum can be reached at (303) 844.6623 x 18; email: dennis.chrisbaum@sba.gov.