basic-guide-to-exporting_Latest_eg_main_086196

give U.S. companies a competitive edge in international projects. U.S. companieswith expertise in specialized fields, such as electric-power utilities, construction,bioremediation, and engineering services, are similarly competitive.E-BusinessThis sector, which can be service or product oriented, is expected to growdramatically. It is estimated that there are already 600 million Internet usersworldwide—but that figure represents only a small chunk of the world’s population.China’s B2C e-commerce platforms have become a popular means for Chineseconsumers to purchase U.S. brands.Free Trade Agreements and Service ExportsMost free trade agreements include provisions that make it easier for participantsto sell services on a nondiscriminatory basis. The U.S. currently has agreements with20 countries. Consider targeting some of these countries for expanding your servicebusiness beyond U.S. borders. If you are a service provider seeking internationalcontracts, consider letting visitors to your website know that the U.S. free tradeagreements make it easy for purchasers in participating countries to work with you.Aspects of Service ExportsServices can be crucial in stimulating goods exports and are critical in maintainingthose transactions. Many U.S. merchandise exports would not take place if they werenot supported by such service activities as banking, insurance, and transportation.The many obvious differences between services and products include differencesin tangibility and customer involvement.Because services are intangible, you may findthat communicating a service offer is moredifficult than communicating a product offer.Also, services frequently must be tailored to thespecific needs of the client. Such adaptation oftennecessitates the client’s direct participation andcooperation. Involving the client, in turn, calls forinterpersonal skills and cultural sensitivity on thepart of the service provider.Service exports such asbanking, insurance, andtransportation are essentialfor many product exports.The intangibility of services makes financing somewhat more difficult—given that noform of collateral is involved—and financial institutions may be less willing to providefinancial support to your company. However, many public and private institutions willprovide financial assistance to creditworthy service exporters. Trade organizationsoffer two important finance services under various terms and conditions. One is aguarantee program that requires the participation of an approved lender; the otherprogram provides loans or grants to the exporter or a foreign government. Exporterswho insure their accounts receivable against commercial credit and political risk lossare usually able to secure financing from commercial banks and other institutions atlower rates and on a more liberal basis than would otherwise be the case.102U.S. Commercial Service • A Basic Guide to Exporting