上海大学 ～ 学年 季学期研究生课程考试

课程名称(course name)： International Law

论文题目(paper title): Export of agricultural products between Colombia and USA

研究生姓名(student name): Fabian Orjuela Romero

学号(student number): 19760129

研究生班级(grade)： Master International Business

评阅日期(date): 11/06/2019

成 绩: 任课教师:

评阅日期: Leave the bottom 3 empty

 ABSTRACT

Through the study made the models of internationalization companies, in this case analyzing
the way that a company from Colombia have to be success exporting agricultural products to
USA, were identified the strategies implemented by the companies over the years in this
internationalization process.

Through this analysis, several conclusions were determined, like some success factors for an
enterprise internationalization, like, continuous innovation, the rules that this companies use
to fallow in order to don fail during the process of export, also an elevated degree of flexibility
for strategies implemented by the company in countries foreign, Because it does not always
the same strategies implemented in one country are useful in another, taking into account not
to change the essence of the company because they are the factors that will give the
competitive company advantages.

Key words:

 Internationalization
 Agricultural products
 Competitiveness
 Comparative advantage
 Free trade
 Trade agreements
 INTRODUCTION

The current trends in business models, the globalization of businesses and the
breaking of barriers to international trade are forcing the inhabitants of the
different countries of the world not to they are only thinking about creating a
company, but they are also testing their management capabilities, creativity
and competitiveness. In addition, these current conditions set new standards
of quality in the products and the creation and choice of target markets; that
is why with internationalization, companies are looking to ensure successful
entry and positioning to new markets by minimizing risks, establishing
different guidelines, being necessary to analyze a specific needs to export
agricultural products to USA and understand how although there are different
methods about how to enter an international market, not always what works
is this but that each company does it "in its own way".
 Export of Agroindustry Products
To the United States

As a subject of development of the work provided with the subject, I chose agro-industrial
products as raw materials to be marketed to the United States.

First of all, we would like to provide a brief information on the situation of the Colombia
market in context and the situation of exports to the United States.

The United States buys the world about $1.077 billion in non-traditional products, of
which Colombia is estimated to sell $2.4 billion dollars that are equivalent to 0.22% of
the products sold to this world power
Key factors in generating a product export to the United States include:

 pricing: A direct relationship is sought with the competition, target market and
marketing effort of the importer and exporter. What can be an optimal price is
regulated by controllable factors or not, by exporter. This pricing also includes
government regulations where price discrimination is reflected in like products
sold at significantly different prices which must have cost justification and
differentiation of the package. Similarly, the Anti-Dumping, Exchange Rate
Fluctuations and Life Cycle stages of the product are found in this, the
introduction, cooking, maturity and decline of the product.
 Customs agents: The customs agent is instrumental in the success of the entry of
the products to the United States. To achieve this it is essential to choose and
contact the alleged agents before making any export. This agent should be
required to prepare all necessary forms to file with customs, obtain inherent
permits in each government entity (FDA), USCS and USDA, and also be asked
to report the amount of taxes and charges and explain how to fill out proper
guides.

 Documentation: The previously appointed customs agent must report on all

documents to be submitted for export among the principals are, the packing list,
the commercial invoice in English that includes freight, insurance and certificates
such as certificate of origin, phytosanitary, if applicable.

A very important point in the documentation is transport. The United States relies
mainly on shipping, although air transport has become larger and larger. There
are more than 150 weekly flights from Colombia to the United States. The main
Atlantic ports are those of New York, Baltimore, Boston, Norfolk-Newport,
Philadenphia and Miami, while on the west coast the main ports are Los Angeles,
San Francisco, Seattle and Portland.
From Miami, an average of 1.5 ships are set up daily through 7 shipping
companies. To Houston, 14 shipping companies offer direct services, a note to
take into account is that if the goods to be exported fail to fill a container, you
must go to a consolidator in Colombia who serves your destination La Costa
Atlántica (Atlantic coast)
 recommendations: Sending samples is the starting point to start the business this
should be done in a timely manner and not randomly, when sending a sample
should include a company profile of the product, the first image in front of the
 customer is fundamental is I recommend sending the samples in catalog or CD-
ROM. Finally, the sample must be representative of the actual production and the
most similar to this. To legalize the sample process to the United States customs
requires informal entry when the value of the imported products does not exceed
$2,000 or $250 when the products are subject to quota or tariff. If the value of the
products exceeds the previous amount, the usual documents of a regular import
are required.
It is very important to comply with the provisions of The United States Special
Laws for Food, Medicines, Cosmetics, Alcoholic Beverages, and Radioactive
Materials. Likewise, faithfully follow the customer's instructions in the United
States regarding invoice, packaging and label requirements, etc.

Cultural aspects are very important for negotiations with the United States. Competition
in the United States is strong and complex, full compliance is expected in the required
steps (samples, quotes, etc.), meetings are propagated long in advance and must be served
on time. Evading answers is dishonest, by offering a high price and then changing it is
not an acceptable commercial practice, it should be clear in the proposals and at the time
of attending meetings it is advisable to attend this in full suit and without many
accessories.

With this data we can already have idea of how to market with the United States, thus
focusing on the product chosen previously (Agroindustry Products).

The opportunities in Agroindustry in the United States are very great for Colombian
products due, among others, to the growth of the Hispanic population.
The population in the United States is: White 82.6%, Black people 12.7%, Asian 3.8%
and others 0.9%. Of these Spanish speakers: approximately 32 million, representing
10.3% of the total population

Most agricultural products in the United States are sold in traditional establishments:
supermarkets, markets, charcute styals, natural food stores, Express service stores, fresh
produce markets, bakeries, shops gourmet restaurants and fast food franchises.
According to the Food Institute, there are more than 126,000 retail outlets in the country.

Colombia's opportunities to export Agroindustrial products is high as there are identified

market niches for value-added processed agricultural products, including: Ethnic
Products, Gourmet Products, Products Organic and Naturist Products.
There are marketing niches for perishable (admissible) products such as tomato, paprika
and asparagus.

According to the Food Institute, American residents spend an average of $2,510 billion
on food annually According to the Bureau of Labor Statistics.
70% of gourmet invoicing focuses on products such as fresh food, semi-prepared meals
and prepared dishes.
The supermarket as a point of sale:
There are fewer supermarkets than people think, 43% of all food outlets fast service
stores, about 35% are made up of other types of food stores and only 22% are
supermarkets. Supermarkets bill 74.9% of food sales. Supermarkets work under the
criterion of profitability per square meter, being the limited physical space, introducing a
product to a supermarket involves removing another product and competing with
profitability. According to the Food Institute in a year more than 22,000 new products
enter supermarkets in the United States. Only 1% stay and their average subpoena is 78%.
In most supermarkets there is the "slotting fee" to condition the products and their cost
varies between $1,000 to $5,000 per product and per supermarket. Supermarkets often
require in the introduction of a new product a promotional effort to support it such as
offers, coupons, displays, advertising, etc.
It is advisable to have a distributor to introduce a product to supermarkets, as it is
extremely difficult for the central purchasing office to import it directly.

Traditional Distribution Channels:

The commercial office has identified the distribution channel for the following products:
Processed foods, confectionery and biscuits, fresh flowers and perishable foods.
It is advisable to be located in the right channel based on price, production capacity,
delivery time, quality and customer service.

For the entry of Colombian products into the U.S. market, the three main distribution
channels are:

Wholesale Channels: These are characterized by focusing on the distribution of goods

in bulk, capital goods and consumer goods. They usually specialize by product type or
regions. Most of these types of

distributors are marketers who buy the products and then package them and mark them
with own brand labels and resell them to retailers and commercial consumers.

In the event that the exporter wishes to maintain his brand and product he must then make
use of commissioners or "brokers" who work with wholesalers or distribution centers for
retailers, set up a subsidiary or enter directly into retail distribution channels.

Retail channels: Currently in the United States the retail channel is led by department
stores called "discount stores". These warehouses, characterized by granting considerable
discounts every day of the year, have started to occupy an important place in this channel
since in addition the shopping habits of Americans have evolved in order to combine
better prices, design and quality.

Another very important retail channel is direct marketing, info-commercials and phone
or online purchase. Generally, the people who use this type of channel are those with high
purchasing power and professionals accustomed to using credit cards as a form of
payment. Major U.S. retail markets lead him in Los Angeles, New York and Chicago.

Importers and distributors: They generally act on their own, accepting full
responsibility for operations, including technical specifications, prices, stocks and
distribution. Such agents usually reside in the United States and are characterized by
selling directly or selling to distributors.
Generally, the profit mode with which these agents work is a fixed amount plus
commissions, which can, over time and volume of sales, migrate to a commission contract
exclusively.

In the food segment, the channels that are detected are two: the retailer (retail) and the
HORECA (Hotel, restaurant, catering and coffee).

The retail channel is in turn divided into: Large distribution (supermarket chains and large
areas);

Ethnic supermarkets: Latinos are those of interest to the Colombian product, but there are
them for the different ethnicgroups present in the United States;

Convenience stores: similar to our country's neighborhood stores, where you sell some of
everything you need for basic meals;

Shops of gourmet or organic products: following new consumer trends that are more
oriented towards the natural and towards the consumption of functional foods and that
help health care.

In the big cities of the United States there is a transformation of this channel due to the
emergence of new supermarkets that compete with the already positioned large areas
(Wal-mart, Costco, BJ's, etc.) with a more varied offer, serving the new consumer trends
and although they have higher prices, they seek to serve the consumer who is most
interested in their health and well-being and who is willing to pay more for better quality
products.

Brokers: It is a sales company and the mission is to provide assistance in the

development of your export product, on topics such as labeling, customs, local storage
and marketing strategy, depending on the region in which you will distribute your
product.

The average fees for such companies are 5% of orders shipped in the territory during the
month. If sales are not the territory, a fixed monthly fee is usually charged, the value of
which will depend on the product type, volume, and value.

Distributors: Take care of the product at the national or local level. They distribute it
among retailers and other distributors.

If specific segments are required to be geographically, local distributors are the best
choice.

The commissions for distributors are in the range of 15% to 35%, depending on the type
of approach to the customer: home delivery or direct in-store sale (DSS).
Retailers: This is where customers find the products. (Point of Sale). The commission
range of these sites ranges from 25% to 45%, depending on the brand and product. If the
category warrants it, in the big chains the commission may be higher.

Agroindustry products that can be sold to the United States that provide for the
admissibility of perishable products are:

Artichoke No restriction: good market

Banana No restriction
Bananito No restriction
Onion Junca No restriction
Curaba Cannot import to the United States (fly)
Asparagus No restriction: good market
Raspberry No restriction on the Bogota Savanna
Strawberry No restriction on the Bogota Savanna
Granadilla Cannot import to the United States (fly)
Guava Cannot Import to the United States (fly)
Tahiti lemon No restriction
Mandarin No restriction but requires cold treatment
Mango has to be tested for pests (fly)
Maracuyá Cannot import to the United States (fly)
Melon Cannot import to the United States (fly)
Mora No restriction on the Bogota Savanna
Pineapple No restriction
Papaya Cannot Import to The United States (fly)
Papa Criolla Cannot import to the United States (Plague)
Cucumber has to be tested for pests (fly)
Pimenton has to be tested if it has pests (Fly)
Pitahaya has to be tested for pests (fly)
Tomato has to be tested for pests (fly)
Tree Tomato has to be tested for pests (fly)
Uchuva has to be tested for pests (fly)
Grape has to be tested for pests (fly)
Meat, chicken and its derivatives are not admissible.

The body that regulates these foods is the Food and Drug Administration (FDA), is part
of the Halth an Human Services (DHHS) department and the Public Health Services
(PHS). Its mission is to enforce the Federal Food, Drug and Cosmetic Act and other laws
that have been created to protect the health, safety and economic interests of consumers.
These laws apply to both domestic and imported products.

Documents required by FDA service:

It is important to note that the importer must submit the products to the FDA at each of
the ports before being imported into the United States for the first time. If it is necessary
to use supplies requiring FDA certificates to submit them before each import (example:
Colorants)
The product label must contain the following rules: Product Name, Net Content,
Ingredient Statement, and Nutritional Information.
This is an example of the types of labels to use for the prior sale of the product.
 For food buyers, the following recommendations are available: Have a Marketing
Plan when products are offered and involving the customer. Choose an industry-
specialized Customs Agent. In the United States, apologies are not accepted.
Meeting deadlines and not blaming time can be the existence of a good business
relationship. It is important to know that the customer is always right and to be
clear that in the United States we work 24/7. Therefore, the concept of collective
holidays does not exist. Exporting is not selling more expensive and much less
remnants. He develops packaging suitable for the market. To be innovative and
different and to offer the best quality is what the market demands and not the one
that considers the best. Following these rules and advice will be successfully
achieved intercede in the U.S. market and set a new paradigm in international
agricultural trade.

CONCLUSIONS:
 U.S. Buys Everything: Adapt Your Product to the Market

 One of the most important things in the export strategy, it’s to follow all the rules
and laws, that are imposed for both governments.

 Subscribe to the largest number of magazines in your industry. This will keep you
up to date with market trends.

 Find out about American regulations before setting up a business in this country
(taxes, visas, labor laws, insurance)

 If you're hiring a representative for your company in the United States, look for
an industry specialist locally as know the channels and who's who in the industry
takes time and is expensive.

 The success of marketing your products in the United States depends on placing
well in the right distribution channel.

 Export is a long-term business: don't be a part of the "B2C" (Back to Colombia)

 Don't consider catalogs an expense: they're an investment and your first image to
the customer.

 After-sales service is the key to a second order

 Maintain an excellent relationship with suppliers through win-win businesses,

assuring the company stability in these relationships in the future and thus
minimizing possible problems that may arise in various scenarios in which the
company had to constantly switch providers.
 REFERENCE
- http://nationalatlas.gov/printable/timezones.html#one
- https://www.cia.gov/library/publications/the-world-factbook/geos/us.html
- http://www.portafolio.co/negocios/beneficios-del-tlc-colombia-y-estados-unidos
- www.cia.gov
- https://www.fda.gov/about-fda/fda-basics/what-does-fda-regulate
- https://www.foodpackaginglabels.net/food-labeling-requirements/
- https://www.portafolio.co/economia/finanzas/colombia-podra-exportar-papaya-
estados-unidos-232070
- COLOMBIA – UNITED STATES. Colombian American Chamber of
Commerce. Practical Guide to Importation and exportation
- Colombia. BANK OF THE REPUBLIC. The impact of the free trade agreement
with the United States (FTA) on the balance of payments until 2010
- Colombia. Dane. Imports and Trade Balance January 2012. Press release.
Bogota, March 15, 2012
- Colombia. Dian. Import and export load statistics in Colombia, January –
December 2011/2010.
- Colombia. MINISTERY OF INDUSTRY, TRADE AND TOURISM. Foreign
Trade of Colombia with the United States. November 2012
- Colombia. MINISTERY OF INDUSTRY, TRADE AND TOURISM, DIAN –
DANE. Colombia's foreign trade with the United States. 2012