The Practice of International Trade

The trade liberalization and the constant lowering of tariff barriers, coupled with the mounting industrialization of developing countries, have had the effect that our past “client countries” have become “supplier countries”. Since the creation of the World Trade Organization (WTO) which replaced the (General Agreement on Trade and Tariff (GATT), we have less protection or privileged situations in our traditional markets, whether it is preferential customs treatment or rates of duties. We are therefore faced with increased competition, not only on our foreign markets, but also on our domestic markets. However, there is a positive aspect to all this. The firms that succeed in holding onto the domestic markets in the face of foreign competition, either through modern technology or improved product lines, are proving that they can also compete internationally, even if they never exported before. In their efforts to keep their place in world trade or in entering markets, small and medium sized enterprises (SMEs) can call on Trading Houses (THs) which can be strong allies in export development initiatives. All parties will profit by working together. In practical terms, manufacturers and producers serve a given market, whereas THs serve the manufacturers and producers. THs are dependent on their suppliers for exportable products, while manufacturers have two choices: to work with a TH or create their own in house export department.