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What Are the Best Tips for International Trade Analysis?

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  • Written By: Peter Hann
  • Edited By: Angela B.
  • Last Modified Date: 07 November 2016
  • Copyright Protected:
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    Conjecture Corporation
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Companies trading overseas must constantly monitor world trade statistics to identify favorable new markets for business operations. They also should look for changes in existing markets that may require modifications to trading strategies. Trade statistics such as import and export volumes are issued regularly by governments and are a useful pointer to trends in world trade. Growth rates in individual countries and in specific industrial sectors within those countries are an important guide to businesses, and statistics on consumer and business confidence and trends in consumption also are important. Movements in tariff rates, import quotas and tax rates also are significant in international trade decisions and up-to-date information should be monitored.

International trade analysis may reveal those countries where the industry in which a business is engaged offers opportunities for growth. The business may offer a product or service that is becoming popular in a particular region of the world, and the growth rate for the industry in that area will be an indicator for this. This may be an initial pointer to the possibility of entering a new foreign market. International trade analysis can then be used to review other statistics, such as consumer confidence indicators and economic forecasts within the foreign country.

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International trade analysis within an enterprise should look at the historic figures for growth and sales within industries and at the trends and forecasts. These give a better picture of the state of the market and the possibilities for successfully entering the markets. More specific information, such as financial accounts and forecasts with respect to potential competitors within the country, must be taken into account. This will reveal the number of competing firms in the market and competitor statistics can be a guide for setting prices for products and services when entering the new market.

Changes in customs duties or indirect tax may have a direct effect on a foreign trader exporting to a particular country. International trade analysis can track changes in rates of customs duty and reliefs from duty relating to the relevant industry and assess implications for the enterprise. Any customs and tax incentives, such as the introduction of free trade zones or special economic zones within a country, should be monitored and a decision made as to whether location in such a zone would benefit the enterprise. Direct tax changes must be reviewed regularly, both in the home country and in the foreign markets, and any available reliefs must be identified. International agreements, such as investment protection treaties or double taxation treaties, must be reviewed for changes that may affect the enterprise or opportunities that may open up in new markets.

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