If you think international trade agreements matter only to big companies, think again. Firms of all sizes and in all industries are using treaties and preference programs to their competitive advantage to open up new markets, locate facilities and suppliers, and make strategic decisions.
The treaties tend to beef up intellectual property protection and guarantee other rights, as well as eliminate tariffs, quotas and subsidies. They often let U.S. firms conduct business "as if they were domestic," says Tom Travis, author of Doing Business Anywhere: The Essential Guide to Going Global.
The advantages of America's dozen-plus free trade agreements don't come automatically, though. Entrepreneurs need to thoroughly understand applicable trade agreements and preference programs, then integrate them into their businesses.
IMI Group is a case in point. Co-founder and COO Tim Kelley, 36, spent two years and several million dollars combing through NAFTA, CAFTA and various tax treaties to build an international mortgage lending industry in Latin America from the ground up. Until then, "it was almost impossible to get mortgages [there] at a reasonable rate," Kelley recalls, and property ownership was sometimes called into question. "I don't think [building this business] would have been feasible without the treaties," Kelley says. Now in its third year, IMI has structured more than 75,000 loans, increased its staff to 20, and given clients an affordable, regulated real estate industry that is above sovereign laws. This year's revenue is projected to hit $3.6 million.
Although the presence of trade treaties and preference programs "isn't the only reason to do business" in a region, Travis says, they can provide strategic advantages for companies that are assertive enough to pursue their benefits. That means lobbying your legislators and the U.S. Trade Representative aggressively to initiate or amend programs or to keep beneficial programs. Also, be willing to work within your industry to lobby for beneficial trade programs. "Become involved with all aspects," says Travis, and press the other benefits of treaties, like promoting capitalism, progressive labor and environmental standards, as well as foiling offshore competition.Finally, stay up-to-date on international trade issues through the Federal Register and the free World TradeInteractive newsletter, both at strtrade.com/wti, and through the Office of the U.S. Trade Representative.