Negotiation mistakes you may be making unconscious

Negotiation mistakes you may be making unconscious

Not everything in international trade is importing and exporting or getting through customs, a fundamental pillar is negotiation.

Negotiations prior to reaching a mutual agreement that can be finalized in an international sales contract implies concessions by both parties.

As well as an approximation of all the positions that the different companies have previously taken.

Knowing our weaknesses can make us stronger so let’s do a quick review of the most common mistakes of companies in the field of international negotiations.

Extremist negotiation

One of the most common mistakes of culture in international negotiations is to conceive of the negotiation itself in terms of “Win or Lose.”

Any process must provide added value that allows both parties to gain mutual gain.

Not being clear about this concept today is starting the house with the roof and the basis for some of the other errors on this list can be found here.

Fronts to convince

An extremist negotiation often generates two fronts that try to convince of their reasoning.

Which in a large percentage of cases causes feedback, hence the need for negotiations to become games to attract the client.

Try to find what the other negotiator wants and offer it in cooperation according to our possibilities.

Fuzzy objectives in the negotiation

To attract, we need to be very clear with our first and second level objectives and the limit of our concessions.

Only in this way will the two parties reach a common area of understanding. When both reach their maximum benefit, they will cordially decide if they are interested in the agreement.

Bad tactics

Tactics that build on past mistakes, but may work locally, rarely work in international trade between vastly different countries to build long-term relationships.

Examples are strategic submission concessions, bargaining as an intermediate solution, the random threat to dissolve the negotiation or the withdrawal tactic.

You have to know very well the tactics that are accepted by that country or company as valid before risking to use them.

Illegitimacy of the agreement

Breaking any sense of fairness, equality or legality in the agreement or proposing it as part of the agreement or import-export process can drastically end the negotiation in many areas.

In countries like Canada it is not allowed to even joke about the matter in many businesses.

Untidy shapes

It is essential in the negotiations to know the culture of the country with which you are going to negotiate as part of persuasion and seduction.

The protocol in formal or informal meetings is a fundamental part of the negotiation and for this the cultural context will give us information on the individualism or collectivism that is expected of us.

A big mistake would be to fall into cognitive dissonances between what is said and our non-verbal communication, generating insecurity and confusion.

Use of time in negotiation

Time must be managed correctly without urgency, but without delay when evaluating options.

Taking into account the Attention Curve, short meetings with breaks are preferable, but with enough time to consider alternatives to the first meeting.

Exportation what is it, types and importance

Exportation: what is it, types and importance

Exportation is the action of sending or selling goods and services from one country to another. In other words, it is an operation, whether commercial or not, where a product or merchandise is sent outside of a country.

It is about any service or product that a country or territory sends or dispatches to a third party for its use or purchase.

Exportation types

Depending on the time and shipment, the export can be temporary, definitive, direct, indirect or concentrated.


This type of exportation occurs when a product or merchandise is sent to an international market through customs agreements, in which it will remain for a stipulated time.

After the agreed time has elapsed, this product will return to the market where it has been nationalized.


This type of exportation occurs when the product is sent to an international market with the intention of being consumed or used abroad.

Thus, the departure from the country of origin will be final, with the exception that the exporter does not comply with the contract agreements and the product or merchandise is returned by the recipient.


Concentrated exportation occurs when several companies reach an agreement and collaborate with each other to send goods to a common destination.

Direct exportation

Direct exportation is the most used by companies with experience and human resources, since here it is the same company that is in charge of doing the export, thus eliminating any intermediary and assuming all the responsibilities of the process.


This type of exportation is recommended to beginner companies in their sector, who want to reduce risks during export.

Here, the production company hires a person specialized in international trade, who is in charge of both training clients and the entire process involved in exporting.

Importance of exportation

Exports are important as they help to form a source of income that encourages the growth of the country’s economy.

In turn, they allow to be a source of employment and help many people to have a better quality of life.

In addition, exporting avoids the risks of unstable internal markets and, in turn, reduces the effects of macroeconomic problems.

Canada pursue free trade agreement with ASEAN

Canada pursue free trade agreement with ASEAN

Canada continues to pursue a multilateral free trade agreement with Southeast Asian nations, and those involved with negotiations say bilateral deals in the region could lead to larger pacts.

The pursuit of a free trade deal with the Association of Southeast Asian Nations (ASEAN), began three years ago but has so far harvested no results.

Since, Canada has explored the possibility of entering into bilateral pacts with some of the ASEAN member states – including the launch of consultations for a deal with Indonesia.

Kendal Hembroff, director general of trade policy and negotiations for Foreign Affairs, said a broad agreement is better than a narrower one.

But it “sometimes makes sense to do what you’re able to do at a given point in time.”

Those comments came during a March meeting of the International Trade committee.

In 2017, exploratory talks for a possible Canada-ASEAN trade deal started.

Face-to-face meetings between Canada and ASEAN members continued over the next few years and in 2018, Ottawa did a public consultation on a potential pact.

Twenty of the 49 submissions in that consultation were from agricultural stakeholders.

According to the government, stakeholders overall expressed support for a free trade deal and highlighted:

 “existing barriers for Canadian firms, including high tariffs, sanitary and phytosanitary issues and non-tariff barriers” could be addressed.

Hembroff told committee members Canada continues to pursue a Canada-ASEAN free trade agreement.

“The pandemic has certainly reinforced the importance of an agreement with all of ASEAN, especially as an opportunity to be able to tap into regional supply chains.

That does not preclude us from pursuing the possibility of bilateral agreements with ASEAN member states.

And Canada recently conducted public consultations to seek the views of Canadians on a possible trade agreement with Indonesia,” she said.

Source: Grain News and Glacier Farm Media.

Top 5 most important navigation channels of the world

Top 5 most important navigation channels of the world

The recent breeding of the Panamanian Flag Ever Given at one end of the largest navigation channels in the world has caused a strong impact on international trade.

That is why we have decided to talk about the navigation channels and what are the most important in the world.

What are navigation channels?

A navigation channel is a waterway or water course of natural or artificial origin.

Artificial navigation channels are very common in many cities, built by the human being, wide and deep enough so that a ship can navigate on it.

Types of navigation channels

Natural navigation channels

Are those geographical accidents carried out by nature without the intervention of man and located in the last sections of a river, a delta or a narrow, although this is usually quite narrow.

Artificial navigation channels

They are also narrow passages, but pass through a watershed, the limit region between two hydrographic basins.

To have an artificial channel it is necessary to dig a long trench and ensure its continuous water supply; This usually is achieved by connecting it directly with the sea, taking water from rivers or springs or pumping the liquid from other sources.

The reasons for building channels are varied, but usually serve to connect bodies of water such as lakes, rivers, seas or oceans.

For example, the Suez Canal was created in the nineteenth century to physically separate Asia and Africa and thus facilitate the pass from Europe to South Asia, connecting the Mediterranean Sea with the Red Sea.

Most important navigation channels in the world

The Suez Canal

The Suez Canal is another of those important navigable channels worldwide. It is situated in Egypt and joins the Mediterranean Sea with the Red Sea.

This work of man converted the Sinai region into a new peninsula, turning it into the border between the continents of Africa and Asia.

It has a length of 163 kilometers, between Puerto Said and Suez.

It is the river way that makes it possible to go directly from the Mediterranean to the Red Sea without the need to border the entire African continent, so its strategic importance is incredible, both at the merchandise level and at the level of tourism.

The Panama Canal

Without a doubt, one of the most important channels is the Panama Canal.

We can say that it is an authentic wonders of engineering, in addition to being one of the most important channels around the world.

This channel is an interopean navigation path between the Caribbean Sea and the Pacific Ocean. It crosses the Panama isthmus at its narrowest point and has an extension of more than 80 km. A maritime passage through which more than 12,000 boats circulate a year, both transport and passenger.

The Corinth Canal

Perhaps not so famous, but another of the important in the world of cruises, is the Channel of Corinth, in Greece.

They say about this channel that is another of the great engineering of the world. The truth is that its beauty is evident, something that also happens with its size.

This channel unites the Gulf of Corinth with the Aegean Sea by the Corinth isthmus.

It was excavated on the rock at the end of the 19th century and has a height of more than 40 meters between these rocks, something that is impressive seen from a cruise.

While it is true that the width does not allow some of today’s biggest ships to circulate out there, it is still a very important and strategic attraction that will leave you completely amazed.

The Grand Canal of China

We are heading this time to China. That is where we find the Grand Canal of China, one of the largest projects of ancient China.

It is one of the oldest (it began to be built at 486 a. C. under the Wu family dynasty) and also one of the largest in the world, surpassing even the Suez or Panama to the one.

This channel begins in Beijing and ends at Hangzhou, so it has more than 1700 kilometers of travel.

The Kiel Canal

Finally, we find the Kiel Canal, in Germany. Recall that this city has the port of Kiel, one of the most important north of Europe.

It is a channel of more than 90 km in length. Its purpose is nothing other than communicating the Baltic Sea with the North Sea, a connection that is able to save enough fuel and hours on the commercial and tourist routes between both seas.

The channel has four locks in the last sections, where both seas are located.

These locks remain open most of the time to facilitate circulation, both commercial and tourist boats.

Importance of navigation channels

Currently, channels facilitate the transportation of millions of tons of goods and raw materials a year between production zones and destination areas.

Undoubtedly, the importance of these as strategic points for world trade will continue to increase over time.

Many governments seek to develop these infrastructure projects to increase the rapidity of supply chains and economic growth.

It might interest you: Risks of international trade: what are they and types

The Suez Canal blockage cause a big disarray in trade

The Suez Canal blockage cause a big disarray in trade

The Suez Canal expects 140 ships to pass on Mar 30 after the freeing of a container ship stranded for nearly a week allowed it to reopen.

But experts warned that disruptions to global shipping and at ports could take months to resolve.

The blockage threw global supply chains into disarray, threatening costly delays for firms already wrestling with COVID-19 restrictions.

And nearly doubled rates for oil product tankers.

Shipping convoys through the canal resumed on Monday evening.

After tugs pulled the 400-metre-long Ever Given container carrier free from the spot where it became wedged amid high winds on Mar 23.

“We want to reaffirm in a clear message to the world that everything is back to the way it was,” Egyptian President Abdel Fattah al-Sisi told reporters on Tuesday from a platform on the canal, as container ships passed behind him.

The Ever Given’s grounding across a southern section of the canal forced a halt to all traffic.

Leading to a build-up of 422 ships at either end of the canal and along its course.

Suez Canal Authority chairman Osama Rabie said 95 ships would pass by 1900 local time on Tuesday and a further 45 by midnight, reasserting that he hoped the build-up would be cleared in three to four days.

“We’ll work day and night and God willing we’ll get it done in the shortest time possible,” Rabie said.

Knock-on effects to global shipping and at ports could take much longer to disentangle.

Though the build-up around the Suez Canal might be cleared in four to five days, it could take several months to deal with backlogs at ports. Jan Hoffmann, an UNCTAD expert on logistics, told a briefing.

Shipping group Maersk has also said disruptions to international shipping could last for months.

Source: Channel News Asia

Suez Canal blocked since Tuesday by a stuck ship

Suez Canal blocked since Tuesday by a stuck ship

The Japanese owners of a giant container vessel blocking the Suez Canal said on Thursday they were facing “extreme difficulty” refloating it, prompting Egypt to suspend navigation through one of the world’s busiest shipping lanes. 

It could take weeks to free the ship, said a salvage company, forcing businesses to consider diverting their cargos to the much longer route.

The Suez Canal Authority (SCA) announced that it was “temporarily suspending navigation” through one of the world’s busiest shipping lanes. 

It said it was doing all it could to refloat the Panama-flagged MV Ever Given, a 400m-long vessel that veered off course. 

Satellite pictures released by Planet Labs Inc show the 59m-wide container ship wedged diagonally across the entire Suez Canal. 

It is now blocking transit in both directions through one of the world’s busiest shopping channels for goods, and other products linking Asia and Europe.

More than 200 large container ships, tankers carrying oil and gas, and bulk vessels hauling grain have backed up at either end of the Suez Canal.

This, according to tracking data, creating one of the worst shipping jams seen for years.

Japanese ship-leasing firm Shoei Kisen Kaisha said it owned the giant vessel and was facing “extreme difficulty” trying to refloat it.

“In co-operation with local authorities and Bernhard Schulte Ship management, a vessel management company, we are trying to refloat (the ship).

But we are facing extreme difficulty,” Shoei Kisen Kaisha said in a statement on its website.

“We sincerely apologize for causing a great deal of worry to ships in the Suez Canal and those planning to go through the canal.”

Tugboats have arrived Suez Canal to help refloat the ship

On Sunday, two additional tugboats sped to the Suez Canal to aid efforts to free a skyscraper-sized container ship wedged.

The tugboats will nudge the 400m-long Ever Given as dredgers continue to vacuum up sand from underneath the vessel and mud caked to its port side, said Bernhard Schulte Ship-management, which manages the Ever Given.

Source: Channel News Asia

Risks of international trade what are they and types

Risks of international trade: what are they and types

The risks of international trade range from small risks that present little difficulty to larger errors that could complete the sale.

When conducting international negotiations, companies face different factors that represent a risk.

The list of risks that an international negotiation can face are varied and appear depending on what barrier, error, difficulty or variant the international sale transaction faces. 

What are the risks of international trade?

When we speak of risk in foreign trade or risk in international trade, we refer to the different dangers, fatalities, misfortunes or accidents that exist or that may exist when carrying out an international sale and purchase operation.

When a company is preparing to carry out an international sale operation, it must study and analyze its situation, the situation of the country where it is, that of its potential client and that of its client.

As the situation of the means of transport of the merchandise to be sent must also be analyzed and studied.

Types of international trade risks

The risks in international trade are divided depending on which aspect of the sale affects. The different types of foreign trade risks are:

Risk country

This type of risk in international trade occurs when there is the possibility of an eventuality occurring or materializing that directly affects a country and therefore also the companies that are in it. In turn, this type of risk in international trade is divided according to the different factors that are in danger. Country risk is divided into:

  • Administrative factors: when the country’s public administration contributes to risk.
  • Regulatory: when the operating conditions are not correctly applied to a company.
  • Political factors: when the company is directly affected by policies taken by the government. Also when the company is affected by decisions of the powers of a state.
  • Economic: the economic dangers of the country that may present a risk to the company.
  • Social and cultural factors: the different unexpected changes in the society and culture of a country.

Currency risk

Currency risk is very common in international negotiations. It occurs when there is a change or variation in a commodity’s price when it is transferred to another currency.

That is when the exporter’s country’s currency is different from that of the importer and there is a price change between one country and another.

Business risk

When we speak of business risk, we refer to a risk in international trade where the danger that exists is that the company does not have sufficient funds to carry out all its operations.

In other words, the income or funds of the company are not enough to make the payments necessary to carry out the operations.

Commercial risk

Commercial risk is the danger that the importer or debtor does not pay for the exported goods.

This type of risk is very common in international negotiations. Even more so with the growth of technology and the lack of confidence that is generated when making a sale.

Credit risk

Credit risk occurs when there is a possibility of economic loss arising from a breach of the obligations expressed in a contract.

Unlike commercial risk. In this risk, the danger exists is that the company, bank or financial institution does not comply with the contract and generates dissatisfaction in the client or importer.

Financial risk

A financial risk is the danger that exists that a financial operation is carried out that generates negative consequences within a company. If within a company there is the possibility that there is a risk that threatens the productivity of the company, there is a financial risk.

Political risks

Political risk is called different causes where the company cannot intervene, we find different types of risks:

  • Government legal.
  • Extralegal.
  • Policy changes.
  • Economic conditions.
  • Social instability.
  • Armed conflicts, among others.
The trade balance what it is and how it is calculated

The trade balance: what it is and how it is calculated

The trade balance is the record of imports and exports of a country in a given period. It is also called the balance of goods.

Through the trade balance, income from the sale of national goods abroad and expenses from the purchase of foreign goods are recorded and compared. In other words, the trade balance allows recording the value of a country’s exports and imports.

The trade balance serves to understand market supply and demand, as well as to identify possible signs of economic expansion or contraction.

Its importance lies in the fact that it helps to understand the economic potential of a country in relation to others, useful information to determine with which countries to establish trade relations or in which areas to invest.

The balance of the trade balance can be positive or negative, in which case we speak of a trade surplus or a trade deficit respectively. When the balance tends to zero, it is said that there is balanced trade.

How to calculate the balance of the trade balance?

It is calculated with a simple subtraction operation between the total income from exports and expenses from imports.

The formula is as follows:

Exports – Imports = balance of trade balance

For example: in 2019, the country registered revenues of 911,894.2 million dollars from exports. It also recorded expenses for imports of 917,456.1 million dollars. So if we apply the formula we get the following result:

911.894,2 M.$ – 917.456,1 M.$ = -5.561,9 M.$

Therefore, the country’s trade balance in 2019 was -5,561.8 M. €. It is, therefore, a negative balance of the trade balance or deficit.

Variables that affect the balance

Although it allows us to get a fairly approximate idea of the economic direction of a country, by itself it is not a sufficient indicator to interpret the behavior of the general economy.

This is because, on the one hand, it only reflects one aspect of the economy and, on the other hand, this aspect is affected by various variables.

Among some of the variables that affect it we can mention:

  • The consumption preferences of the population with respect to national and foreign products.
  • The sale price to the consumer of imported products.
  • The average income of consumers from imports or exports.
  • Government policies regarding foreign trade.

Balance of payments

The balance of payments consists of the total record of commercial operations, services, and movement of capital between a country and the countries with which it has commercial relations.

The trade balance is one of the components of the balance of payments, and it is the most important since it is an indicator of the country’s commercial functioning.

Other components of the balance of payments are the income balance, the transfer balance, and the services balance.

World trade forecast by the WTO part 2

World trade forecast by the WTO: part 2

As already indicated in the forecast update published on June 22, there is a clear possibility that the reactivation of world trade will not be enough for it to regain its pre-pandemic trend.

This would lead to merchandise world trade growth of around 5% next year, instead of the 20% expected in the case of a rapid return to the previous trajectory. The current trade forecast of 7.2% for 2021 seems to be closer to the hypothesis of a “weak recovery” than to that of a “rapid return to trend”.

Crisis difference

Although the decline in world trade during the pandemic is similar in magnitude to that recorded in the 2008-2009 global financial crisis, the economic context is very different. The contraction in GDP has been much greater in the current recession, while the decline in trade has been more moderate. Consequently, the volume of world merchandise trade is projected to shrink only about twice as much as world GDP at market exchange rates, rather than six times as it did during the 2009 crash.

These divergent world trade outcomes during the pandemic are largely due to the nature of the pandemic and the policies applied to combat it. Containment measures and travel restrictions have imposed significant supply constraints on national economies, leading to significant reductions in production and employment in sectors that tend to resist business cycle fluctuations, particularly those of services not traded internationally. At the same time, the application of sound monetary and fiscal policies has stimulated revenues, which has made possible a rebound in consumption and imports once containment measures have been relaxed.

Whether the recovery can be sustained in the medium term or not will depend on the strength of investment and employment. This could be undermined if confidence breaks down due to the emergence of new outbreaks of COVID-19, which could force governments to impose new containment measures. Therefore, the risk that the results will be less favorable than expected is very considerable. There is some chance that projections will improve slightly if a vaccine or other effective medical treatments are found, but their impact would be less immediate.

What could influence the recovery of world trade?

A large increase in public debt could also influence longer-term growth in world trade and GDP. While rich countries are not likely to face a sovereign debt crisis as a result of fiscal expansion, rising debt burdens can be extremely burdensome for poorer countries. Deficit spending could also influence trade balances, reducing national savings, and increasing trade deficits in some countries.

Read part 1 here: World trade forecast by the WTO: part 1

Source: WTO

World trade forecast by the WTO part 1

World trade forecast by the WTO: part 1

The WTO (World Trade Organization) forecasts a decrease in the volume of world trade of 9.2% by 2020, followed by an increase of 7.2% in 2021. These estimates are subject to an unusually high degree of uncertainty, as they depend on developments of the pandemic and the responses of governments.

According to current data, the expected decline for the current year is less marked than that announced by the more optimistic of the two hypotheses set out in the WTO’s April trade forecasts, which was 12.9%. Strong trade results in June and July instill some optimism about global trade growth in 2020.

What changed the world trade forecast made in April?

The growth in world trade in COVID-19-related products was especially strong in those months, illustrating that trade can help governments obtain needed supplies. In contrast, the forecast for next year is more pessimistic than the previous estimate of growth of 21.3% and places merchandise trade in 2021 well below the trend it showed before the pandemic.

World trade results so far this year have exceeded expectations due to the sudden increase recorded in June and July when containment measures were relaxed and economic activity accelerated. The pace of expansion could slow down sharply once pent-up demand is exhausted and companies’ inventories have been replenished. Results may be more negative if there is a COVID 19 outbreak in the fourth quarter.

Unlike world trade, GDP fell more than expected in the first half of 2020, which caused the forecasts for the year to be lowered. According to consensus estimates, the decline in GDP weighted according to the world market in 2020 is now -4.8%, compared to the -2.5% expected in the most optimistic hypothesis set out in the April WTO forecasts. GDP growth is projected to rebound to 4.9% in 2021, but that largely depends on policy measures and the severity of the disease.

Source: WTO