International trade, be it bilateral, regional or global is a complex undertaking. The increased international integration, application of modern technology in trading, and increased competition are some of the key factors which have brought about significant changes in the international trade. The United States and Brazil have been close trading allies for many years. This makes trading between the two countries attractive and commended. However, there are some underlying factors including cultural influence, compliance requirements, and security requirements as well as the steps required to initiate import/export trade from United States, which should be put into perspective (Foreign Affairs and Trade, 2010).
Cultural influence is one of the significant aspects affecting international trade from one country to the other. This is because of the fact that each country has different cultural aspects affecting the trading environment for imports/exports from other countries. Cultural factors affecting trading between the United States and Brazil should be analysed so as to develop appropriate strategies for the trading between the two countries. Brazil is characterized by several regional differences despite the fact that there is a single national and official language applied. The single language applied in the economy is one of positive factors which can assist in establishing a smooth undertaking of business activities in the country. It is also worth to note that Brazil constitutes of multicultural societies. There are Africans, Europeans, and Native Americans living in the integrated society (Julieta, Rik, Auke & Jeroen, 2011). This implies that a trader has to identify all the cultural requirements for each of the targeted markets in the economy. The multi-racial status of the society implies that there are different purchasing and consuming habits. An exporter or an importer from United States should put into considerations some of these aspects.
There are three aspects which a trader either the importer or exporter from United States should put into consideration. First, the trader should be in a position to communicate in the official language applied by Brazilians. This will assist in effective communication which is vital when it comes to trading. Language is essential for both the written and oral Communication to facilitate trade negotiations and transactions. Secondly, an importer/exporter from the United States should understand the cultural behaviour in each culture devoid of the Brazilian people. This will ensure that a trader develops an appropriate marketing mix and strategy to satisfy the market (Julieta, Rik, Auke & Jeroen, 2011). Lastly, the trader should understand cultural beliefs and practices which should be incorporated in the production and supply of the commodity/service involved in trading.
Hofstede indicators can be used to understand some of general cultural aspects of trading in Brazil. The first aspect presented clearly is that Brazilians have very high uncertainty avoidance. Their index is relatively high at 76 which imply that an importer/exporter from the United States should avoid products or services with a lot of uncertainties because they will perform poorly in the market. Secondly, Brazilians are long term oriented as their index in this aspect is at 65. This implies that they are highly patient and can wait for better results in the future at the expense of today’s pleasures. Lastly it is clear that Brazilians are less individualized than it is the situation in the United States. In this case, purchasing and consumption in the market take place in most cases after a collective decision making. This implies that a trader should understand key decision makers in the target market. Despite the fact that a decision is reached after consultations there are those who have a higher and the final say as far as decision making is concerned. These are the people to be highly targeted when it comes to promotional and trading strategies (Julieta, Rik, Auke & Jeroen, 2011).
There are two key compliances which a trader in both import/export trade in Brazil should consider to ensure that they are not violating any requirements. First, immigrates to Brazil either as an employee or a trader, must acquire temporary permit, if it for a short stay or a permanent permit if taking a long or indefinite time to work or trade in Brazil. This implies that one cannot operate in either importing or exporting from within Brazil if they do not have either of these permits. A trader or his employees from the United States should ensure that they have the required documents. Temporary visa are required to be renewed every two years in case an individual would like an additional time to work or trade in Brazil (Ernst & Young Terco, 2010). Acquiring the permit has the implication in that the person will be involved in economic activities, which will earn him/her some funds; out of these funds the individual is expected to pay taxes which must be complied with.
The other requirement when trading in Brazil is that trading licensing should be obtained. In Brazil import/exports either to or from any country including the United States should be licensed whatsoever. This is to avoid illegal trading which has a lot of adverse implications to the market involved. It is therefore clear that a trader must comply with these requirements while importing/exporting, from the United States. The acquisition of a license is an indication that the good/service traded in has been approved and is legally acceptable. This will avoid closing hands with the Brazilian government which will facilitate smooth trading across the two borders.
Security aspects are highly emphasized when it comes to international trade across various countries. This is after the realization that, criminal and terrorists takes advantage of the import/export trade to move their ill intentioned weapons into their targeted country. Nothing is put into risk particularly after the September 11th attack. This is the reason why goods and people moving across the United States border should be subjected into security checks. This takes place in all ports and in borders to neighbouring countries. Bearing in mind that Brazil does not have very strong security checks compared to those developed in the United States, security agencies do not put anything into chains. Importing into United States from Brazil is subjected into modern security checks which must be adhered to by all traders (Ernst & Young Terco, 2010). It is important to note that this undertaking takes place for the benefit of all and hence should not be taken for granted. Before the security check takes place a trader is expected to ensure that they verify that the goods they are pushing across are the once documented in all the required documents.
The other step is to undertake market research to understand market needs and potential volume of trade. This can be acquired through analyses of tastes and preferences that are there in the market. In case of importing to Brazil from United States, it is important to know whether there are other substitutes from other countries and how the Brazilians would react with the introduction of the product from the United States. This will significantly assist in identifying the volume of products to be involved during the introduction stage.
After the determination of the expected volume of trade, it is import to develop the trading capacity. Capacity development is a most essential step in import/export trade is it assists the trader to be ready to face the trading requirement. The human capital factor should be the first one to be developed in this case. Recruitment and training of the required number of staff to assist in trading, assists in building the required capacity. Secondly, acquiring the required resources, particularly the funding should take place sufficiently before the initiation of import/export takes place. This will assist in avoiding financial barriers which will ensure that optimal trading volume is realized as early as possible (Ernst & Young Terco, 2010). Financial constraint at the initiation stage implies that customers will not be satisfied from the word go; customer needs will be met while optimal initial profits will be realized.
After building the capacity, the final step should be the acquisition and confirmation of necessary documents. Trading permit and license on goods and services traded in should be acquired and verified with the appropriate office. This gives the free will to carry on the trade and utilize the developed capacity for the realization of trading objectives. Eventually, progressive trading will be available, while opportunities and growth in market size will be realized in time and accordingly.
It is worth noting that, planning as far as export/import trading is an essential undertaking. It is, therefore, the responsibility of the trader to ensure that there is a formal plan which should be strictly followed. This will assist in capturing all the aspects required for trading to avoid mistakes which will hinder effective trading. For example, planning will assist in setting up the required units to be trading on within a certain period to ensure that funds required for transport and tariffs are not utilized in merchandise. The goods will therefore reach the market as expected on time and at the right place. Many traders have been caught in a dilemma, when their goods are held at ports due to lack of funds to pay for tariffs, hampering their trade and sometimes leading into de-registration of trading license and trading permit. This happens mostly due to lack of proper planning.
In recap, it is clear that trading across Brazil and United States is not complex compared to other countries particularly those that are relatively far away. A trade should ensure that all what is required before trading is commenced is fulfilled to avoid undue conflict with concerned authorities. As a trade, I would request the government to offer soft custom and tariff requirements for first timers to reduce the cost of trade and encourage more trade as well as competition across the two countries. Secondly, the tax charged on both traders and their employees should be reduced for immigrants across the two countries for first timer traders for a given period of time. This will give them strong head starts in their trading activities. Other aspects such as trading permit; goods and services licenses, as well as, security checks and measures should continue and where possible, be strengthened.
Julieta, M., Rik G., Auke, T. & Jeroen, V. (2011). Socio Cultural Factors Summary
Available at: http://www.boomingbrazil.nl/uploads/media/SocioCultural.pdf
Ernst & Young Terco (2010). Doing business in Brazil
Available at: http://www.ey.com/Publication/vwLUAssets/Doing_business_in_Brazil_2011/$FILE/Doing%20Business%20in%20Brazil%202011.pdf
Foreign Affairs and Trade (2010). Doing business in Brazil, an introduction, 1-93.
Available at: http://www.dfat.gov.au/publications/brazil_business/brazil.pdf