April 5, 2018      wtcutah.com   Facebook Twitter   LinkedIn   Instagram

Helping Utah Companies Think, Act and Succeed Globally

CEO Derek Miller
@DerekMillerUtah

President's Message
Derek B. Miller, World Trade Center Utah

Last week it was announced that I will be taking the helm of the Salt Lake Chamber on April 30, when Chamber President and CEO Lane Beattie retires after 15 years heading up the organization. I know I will have huge shoes to fill in this new role, but that's a topic for another day.

For now, I'd like to focus on World Trade Center Utah and the fantastic team that serves at the center of this world-class organization. Recently, I have been reminded that nothing gets done without good people. I am deeply grateful to the past and current members of our team. Everyone in business understands that, at the end of the day, it takes people to get the job done.

Fortunately for me, the Salt Lake Chamber and WTC Utah are closely knit organizations and work together symbiotically. And so, I look forward to continuing the close working relationship between the Chamber and WTC Utah and further success in our mutual interests.

Thanks for all of your support. Utah is well-positioned to continue its export growth and these are exciting times!

Happy Exporting!

Market Highlight: Taiwan

This article was written and prepared by the U.S. Commercial Service in Taiwan. If you are interested in doing business in Taiwan, consider a Gold Key Matchmaking Service to help your business get connected with valuable and vetted business partners in country. Reach out to Commercial Service Utah for additional market or service information.

In 2016, according to the U.S. Census, exports to Taiwan increased 0.7% to US $26.04 billion. Imports from Taiwan decreased 3.8% to US $39.31 billion. Taiwan ran a trade surplus with the United States of US $13.26 billion dollars in 2016, a decrease of US $1.77 billion over the prior year.

Mainland China is Taiwan's largest trading partner, accounting for 23.07% of total trade and 19.07% of Taiwan's imports in 2016. The United States is Taiwan's second largest trading partner, accounting for 12.15% of total trade. Following the U.S. in terms of overall trade are Japan (11.77%), Hong Kong (7.77%) and South Korea (5.37%).

Taiwan was the world's sixth-largest holder of foreign exchange reserves and gold as of December 2016, with holdings of US $456.9 billion. In 2016, Taiwan's economy had a growth rate of 1.92% and a GDP growth rate of 5.7% compared to 2015. As of February 2017, Taiwan's unemployment is 3.85% and the labor participation rate is 58.75%.

The United States and Taiwan have a long-standing and vibrant trade relationship. Taiwan is our 10th largest goods trading partner and a top-10 destination for U.S. agricultural and food exports. U.S. goods and services trade with Taiwan totaled an estimated US $88 billion in 2015.

The Taiwan authorities have strategically identified five industrial areas – Internet of Things technology (Taiwan's "Asian Silicon Valley" project), smart machinery, biochemical & medical care technology, green energy technology, and national defense technology – for upgrading. In addition, the authorities have targeted two likely innovative industries – next generation agriculture and the recycling industry – for industrial development. In addition, to support Taiwan's sustainable development, Taiwan is going to allocate a total budget of approximately US $30 billion to implement an eight-year (2017-2025) "Forward-Looking Infrastructure Development Program," which includes five targeted areas – green energy, railway development, aquatic environment, digital infrastructure, and rural & urban development.

The Trade and Investment Framework Agreement (TIFA), signed in 1994, provides the primary mechanism for trade dialogue between the United States and Taiwan authorities to expand trade and investment links and deepen cooperation. During the 2016 TIFA meetings, the U.S. authorities welcomed the concrete steps taken by Taiwan after the conclusion of the 2015 TIFA Council meeting to follow through on important commitments related to intellectual property (IP) protection and enforcement. Taiwan authorities also highlighted progress in addressing technical barriers to trade and fostering transparency in matters related to trade and investment. At the meeting, the U.S. authorities pressed Taiwan for expeditious resolution of agricultural trade issues, including removal of longstanding and unwarranted barriers to U.S. beef and pork, which is necessary for any deepening of our trade relationship.

In the area of IP protection and enforcement, the TIFA talks took stock of progress on pharmaceutical IP protection and committed to strengthen engagement on Taiwan's intellectual property rights legislation, promoting the use of legitimate educational materials, and on enforcement cooperation. Both sides welcomed the strong exchanges already conducted between the two patent offices and look forward to deepening this cooperation for the benefit of U.S. and Taiwan rights holders and patent applicants. The two sides also pledged to deepen dialogue to streamline time-to-market of medical devices and to improve transparency and procedural fairness in trade and investment matters.

Taiwan's accession to the World Trade Organization (WTO) in 2002 and the WTO Government Procurement Agreement in 2009 led to a dismantling of non-tariff barriers and a general lowering of Taiwan's remaining tariffs. These actions further enhanced U.S. opportunities in this market, including exports of high-value-added components and other inputs for high-tech manufacturing (e.g., petrochemical products and electronic production and test equipment), food and other agricultural products, and "American lifestyle" goods and services sought by Taiwan's affluent population. These range from luxury consumer goods to healthcare products. Taiwan does not require foreign firms to transfer technology, locate in specified areas, or hire a minimum number of local employees as a prerequisite to investment.

On November 1, 2012, Taiwan became the 37th economy to enter the U.S. Visa Waiver Program (VWP). The U.S. VWP enables Taiwan leisure and business travelers to enter the United States for up to 90 days without a Visa once they have received authorization though the Electronic System for Travel Authorization (ESTA). The United States is the top long-haul destination for Taiwan's outbound travelers. In April 2016, the United States and Taiwan signed a joint statement regarding cooperation on an International Expedited Traveler Initiative, which will expand the U.S. Customs and Border Protection's Global Entry program.

Taiwan's status as a mature economy, alongside the fact that it has robust trade relations with the United States, means that companies seeking to enter the market must consider their product positioning vis-à-vis existing competition both domestically produced and imported. Taiwan has an aging population, so demand for products and services targeted at that demographic will grow for the foreseeable future.

With a population of 23 million, Taiwan is a thriving democracy, a vibrant market economy, and a highly attractive export market, especially for U.S. firms. In 2016, Taiwan was ranked as the United States' 10th-largest trading partner in goods, placing it ahead of markets such as Italy and Brazil. It was also the 14th-largest U.S. export market overall, and, in 2016, was the seventh largest source of foreign students pursuing higher education in the United States.

Taiwan is a sophisticated market in which consumers are plugged into global trends. U.S. products are well represented in the market, as are products from across the region, especially mainland China and other lower-cost producers. Taiwan is a good target market for high-quality, differentiated products and commodity items. Taiwan is also a price-sensitive market, and foreign goods must conform to certain local standards and labeling regulations required for importing products into this market. A local agent or distributor should be able to assist with obtaining the necessary certifications and permits required for importation.

By 2020, Utah May be the Crossroads of the World

By Derek Miller
World Trade Center Utah CEO

This article was first published by the Deseret News and is republished here with permission.

Start making your 2020 New Year's plans early. It is going to be a banner year for Utah – moving the state prison and corollary expansion of Silicon Slopes, opening the new Salt Lake City International Airport and (fingers crossed) breaking ground for the Utah Global Trade Port. One of these projects alone would be significant for any state, but three at the same time is truly a trifecta.

Expanding the international airport is the largest capital project in the state's history and magnifies Utah external connections on scale with driving the golden spike and building the interstate freeway system. The new airport also confirms Delta Air Lines' commitment to Utah as a hub far into the future. The significance cannot be overstated. There is a reason Utah business travelers get to Mexico, Canada and the European Union directly and quickly. And there is a reason these locations are Utah's top export destinations.

To put the expansion into context, the current airport is built to accommodate just over 10 million passengers, while the new airport will accommodate nearly 25 million. The airport director estimates this will be the only new airport hub built in the U.S. in the 21st century. Building a project of this size and scope without local taxpayer dollars is remarkable.

The vision to relocate the state prison was set by Gov. Gary Herbert in his State of the State address back in 2013. After years of due diligence, the new prison is now under construction. Besides being a significant development project on its own, the economic power of the prison relocation is opening 700 acres at the heart of Utah's Silicon Slopes. What the state does with its property will be a catalyst for the surrounding thousands of acres. Imagine, for example, how a Brigham Young University/Utah Valley University/University of Utah tech commercialization facility could amplify our growing IT industry.

The Point of the Mountain Commission, led by Chris Conabee, former deputy director at the Governor's Office of Economic Development, and Rep. Lowry Snow, has undertaken the herculean task of constructing a regional development strategy for this area. The commission recognizes this is a once-in-a-lifetime project and, if we don't get things right, like transportation, business growth and environmental protection, there won't be a second chance.

Speaking of vision for the future, the third project in the Utah 2020 trifecta is the inland port. While recent news coverage has focused attention on the disagreement between Salt Lake City and the Utah Legislature on the political issue of governance, all sides agree on the substantive issue that an inland port would be great for our capital city and state.

Utah already benefits from its positioning as an intermodal hub, given our air, rail and freeway access. It's the reason Amazon and UPS are building distribution facilities in this area, joining companies like Walmart, Backcountry and Sephora. The extraordinary value of Utah becoming the center of global trade for the Western United States is the ability to attract companies in logistics, containerization, customs and manufacturing, with job creation estimates of 60,000. The inland port is a generational opportunity with a 10-year timeline and a hundred-year impact.

Utah has been the crossroads of the West since settlement. With the expansion of the state's international airport, the continued rise of Silicon Slopes and a global trade port, Utah will find itself in 2020 positioned to become a crossroads of the world.

Toolbox: Tip #5 Part 2 – Know the Rules of the Game

World Trade Center Utah's "10 Tips to Help you Think, Act and Succeed Globally" provide a deeper dive into topics that will help as you pursue international business opportunities.

Documentation can be a daunting task when you are looking to export your product. This article is designed to help you gain a better understanding of the most frequently used international documentation and direct you to the many resources available to guide you through the process.

Nine essential export documents can be found listed below. Of the nine listed, six will be highlighted in this article: quotation document, pro forma, commercial invoice, certificates of origin, insurance certificates and bills of lading.

DocumentIssued by
1. Quotation
2. Pro forma invoice
Both generally by the seller before the sale is confirmed
3. Commercial invoice
4. Packing list
5. Shipper's export declaration
All generally issued by seller and accompany shipment
6. Bill of lading or air waybillThe freight company
7. Certificate of originThe seller, but not always required
8. Insurance certificateBy various parties
9. DraftBy the seller, but not always required

When you need to give a detailed description of the product you will use a quotation document. A quotation document may be the first document that the buyer exchanges with the seller. It serves two purposes. First, it confirms the selling price of the goods to the buyer. Second, it clarifies any additional costs that the buyer might incur in completing the international transaction, which include export packaging, freight, insurance and special documentation charges.

You will need to state the price, time of shipment and the terms of the payment you will use in the quotation document. This document is typically very detailed because the foreign buyer may not be familiar with the product.

A pro forma contains much of the same information as a quotation document, including the set price of goods. An easy way to tell them apart is that a pro forma invoice should clearly be marked as such. The buyer uses the form as an example when applying for and arranging funds, an import license or opening a letter of credit. It is wise to include the pro forma invoice even if it is not requested, because it may be required by the importing country. The pro forma can act as an official document to be used to obtain relevant documents and licenses in foreign countries.

The commercial invoice is the paperwork that accompanies an order when a product is ready for shipment and may act as a certificate of origin. This invoice is a formal statement of payment to be sent directly to the buyer or submitted through a banking entity. The commercial invoice should include specific terms and conditions of the transaction. This document will become the basis for future decisions made by different parties, such as the foreign government's custom office, as the product makes its way to the importing country.

Certain countries may require the commercial invoice to be completed in the native language and some may require the invoice to be legalized by a consular of that country. Do your research to determine if the foreign destination has specific requirements for the commercial invoice. The Bureau of National Affairs (BNA) Export Reference Guide is a good resource to help navigate you through the invoice stipulations.

In some nations a certificate of origin (COO) might be required. Its purpose is to help custom officials determine duties and import taxes when a product reaches its destination in the foreign country. Duties vary depending on where the product was produced and finished. A COO is usually signed through an organization such as the Chamber of Commerce.

A generic COO is acceptable in some countries. However, others counties may require very specific and unique COOs. Make sure you are in compliance with guidelines and procedures unique to the country of destination before filling out a COO for your exports to ensure it is completed the correct way.

International shipments are vulnerable to a product being damaged or lost. Thus, possessing adequate insurance is a must to protect you and your company. You should obtain an insurance certificate, which will take care of any loss or damage to cargo during transit. In many cases, the buyer expects the seller/exporter to insure the shipment and add the costs of insurance to the invoice.

Important considerations when acquiring an insurance certificate are:

  • The seller, freight forwarder or an insurance company can issue an insurance certificate.
  • Insurance certificates differ depending on the company and what types of information is on the certificate.
  • Fill out the form completely; otherwise your freight may not be covered in event of loss or damage.

Bills of lading is a contract between the owner of goods and the carrier. It is issued by the carrier, such as the trucking, railroad and shipping companies, and has three main purposes. First, it serves as a receipt for the cargo. Second, it is a contract for the transportation of the exported product to the final destination. Finally, it serves as a document of title or ownership. There will be varying bills of lading required for different parts of the shipment, including, but not limited to, inland, ocean and air. The bills of lading include information about the freight such as quantity, weight and condition of the freight.

WTC Utah encourages you to attend documentation workshops and seminars offered by the Small Business Administration and other local, state or federal entities for more detailed information about export documents. Consider talking to a freight forwarder, experts in international trade documentation, as they and can be a valuable resource. It is also important to note that different documentation will be needed based on the requirements of both the U.S. government and the government of the importing country.

Chapter 15 of The Global Entrepreneur by James F. Foley was used as a reference for the information in this tip. If you have further questions please contact our Trade Services team or visit wtcutah.com for more information.

Going Global: Young Living Essential Oils

This month, Lehi-based Young Living Essential Oils announced that it exceeded $1.5 billion in annual sales for 2017. As a world leader in essential oils, Young Living continues to experience extraordinary growth, surpassing $1 billion in sales in each of the last three years, while revenues have grown 800 percent over the last five years.

Last May the company broke ground on its new, 263,000 square-foot global headquarters in Lehi. The world-class building was designed to complement Young Living's philosophy of living harmoniously with nature. To that end, the five-story building, which will provide workspace for nearly 1,000 employees, sits on more than 27 acres and features 3.6 acres of demonstration gardens.

Through its growth, Young Living continues to fulfill the vision of its Founder and Chairman of the Board D. Gary Young and its Chief Executive Officer Mary Young to provide pure essential oils to every home in the world. Along the way, the company has grown to include more than 3,000 global employees, 4 million members, 16 corporate and partner farms around the world, 13 offices in 22 global markets and products shipping to 133 countries.

Last year the company celebrated its official expansion into Indonesia with nearly 1,500 people attending the grand opening in Jakarta. To facilitate its expansion, Young Living opened a new office and store in the Argo Plaza Building in Kuningan, Jakarta. In 2016, the company opened sales in Finland, its second market in Scandinavia, after Sweden. Some of the other Young Living international markets include Canada, Mexico, Ecuador, United Kingdom, Germany, Austria, Czech Republic, Japan, Hong Kong, Malaysia, Singapore and Australia.

The company's partner farms include relationships with organizations like TFS Corporation, an Australian-based grower and distiller focused on Indian Sandalwood oil. Established in 2016, that partnership allowed Young Living to immediately double its sandalwood oil volume to meet current and future demand while also complimenting the company's existing supply of Royal Hawaiian Sandalwood from its partner farm in Hawaii.

That same year Young Living opened its Northern Lights Farm in Fort Nelson, British Columbia. Nestled in the Canadian Rockies, the farm produces Northern Lights Black Spruce Oil from its abundant supply of black spruce trees.

Among its operations, the company operates a 50,000 square-foot call center in American Fork that employs more than 500 people. Young Living also supports a philanthropic channel called the Young Living Foundation, which supports schools, orphanages and organizations throughout the world.

To learn more about Young Living Essential Oils visit youngliving.com or call 801-418-8900.


Upcoming Events
April 9-13 Mexico Trade Mission
 
April 10 Identifying Business Opportunities with the Asian Development Bank Seminar
 
April 19 Cache Valley Business Summit
 
April 27 Utah Economic Summit
 
May 17 Doing Business in South Korea and Taiwan Seminar
 
May 22 International Law Seminar at Zions Bank Founders Room 8-11 a.m.
 
June 17-20 OutDoor Trade Show
 
July 16-22 Farnborough International Airshow
 
September 2018 Taiwan Trade Mission
 

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