(Export Development Canada – Peter G. Hall)
Blinding. That’s the speed at which international trade has been transforming over the past two decades. It is re-casting models of cross-border commerce, and in the process has led to a lot of confusion about traditional definitions of international trade. In the midst of all this change, is it possible to get a handle on what an exporter really is these days? A tough task, but let’s give it a try.
We’ll start with old definitions, when things were a lot simpler. Trade used to be largely about shipping raw and finished goods. Raw goods would come from source to factory loading docks, be produced into a final good, and shipped to the end user in a foreign country. These simpler times gave rise to a stream of thinking we still struggle to shed: that exports are good, imports are bad, and that large trade surpluses are the goal. That’s the essence of mercantilism, and today’s trade probably has no greater enemy. Thankfully, trade’s transformation is increasingly helping it to gain the upper hand.
Technology is really the game-changer. Transportation has undergone a multi-generational overhaul that sees us able to whisk people about at far lower cost, at great frequency and at higher speed and efficiency. The same is true for goods, where multi-modal movements of goods to and from anywhere on the planet has been honed to a fine art, increasing the speed of movement, optimization to lower costs and reliable, just-in-time delivery. Advances in communication are growing exponentially, enabling us to buy, sell and produce on planet-wide platforms that are humming somewhere, 24-7, and make payments effortlessly. It’s complex and a bit daunting, but it opens up great possibilities. Read more here.
Date: March 30, 2012