ABC Exports: International Trade Analysis and Recommendations

This report, prepared for ABC Exports, a manufacturing company with existing exports to the Gulf Cooperation Council (GCC), analyzes its current international trade processes and proposes strategies for future growth. The report begins with an overview of regulatory and compliance environments, specifically focusing on the GCC and Saudi Arabia. It then identifies potential target markets, with Jordan as a primary example, detailing demographic, economic, and logistical considerations. The report also examines market segmentation strategies, focusing on product categories and consumer demographics. The report then examines the sales terms and incoterms. Finally, the report aims to provide recommendations for the company to improve its export sales. The report provides a comprehensive analysis of the company's current trade practices and recommends strategies for expanding into new markets and improving its supply chain.

Running head: INTERNATIONAL TRADE
International trade
Name of the student
Name of the university
Author note

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Table of contents
Answer 1)...................................................................................................................................2
Answer 2)...................................................................................................................................5
Answer 3).................................................................................................................................11
Answer4)..................................................................................................................................14
Reference list and bibliography...............................................................................................17

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Introduction
The report states that the organization ABC Exports operates in the manufacturing
sector which provide high quality products in the countries of the Gulf Cooperation Council.
The report reviews the present international trade process related to the exports, proposing
new export markets and also suggests ways through which the company can trade efficiently.
Answer 1)
The Cooperation Council for the Arab States of the Gulf is also known by the Gulf
Cooperation Council comprises of all the Arab States of the Persian Gulf except Iraq. The
member states are Oman, United Arab Emirates, Bahrain, Kuwait and Saudi Arabia. As ABC
Exports have been exporting high quality goods to the countries of the Gulf Cooperation
Council, it needs to analyse the various regulatory and compliance environment in which
business operating in international trade should be complying (Van den Berg. and Lewer
2015) The term environmental compliance suggests confirming to the laws related to the
environment along with the regulations and standards which the site permits to operate. The
term regulatory compliance suggests that the goal of the organization should be aspiring in
order to achieve their efforts for making sure that they are aware of the relevant laws,
regulation and the policies. It is done to ensure that all the necessary requirements are met
without unnecessary duplication of the effort.
Regulatory and the compliance environment of business
Most of the business usually requires the permit of the state for operating. Protecting
the environment is a normal part in case of any business operation. The regulatory
compliance is always a part of the business plan and should be complying with the laws. The
Environmental Protection Agency and the state environmental agencies should be enforcing
the environmental regulations which will be applied to business. Compliance is also known

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as one of the most complex aspects of the international trade. All the countries have unique
set of laws and regulations that applies for international transactions which are conducted in
various industries and sectors of the economy.
 Understanding the classification of tariff and the harmonized system: The
Harmonized System is the international denomination which can be used for
categorization of products. The Harmonized System allows the countries for
classifying the traded goods for the purpose of customs. It comprises of the names and
the numbers of the traded products (Hassine and Harrathi 2017). The main purpose of
this is to make sure that the parties involved in a trade deal use the accurate definition
of goods which needs to be exchanged. A precise classification is the legal
responsibility for both exporters and importers. Any kind of mistake will be having a
huge effect on the incorrect duty rates and complex the import and export controls.
 The traders should be knowing the details of the Trade agreement and the
Rules of Origin: The free trade agreement is a kind of special alliance which is
present between two or more countries which removes any kind of trade
protectionism present between two or more countries. The state authorities also play
an important role for negotiating the trade agreements. If the particular country has a
free trade agreement with the target market or the sourcing market, the trader should
check the regulations which are specific to the agreement prior to the commitments
and arranging deals. Another significant factor which is considered while conducting
the international trade is the rules of origin. According to the World Trade
Organization, the rules of origin are the criteria which serves to specify the national
source of the product (Abidin, Bakar and Haseeb 2015). The rules of origin also help
to identify the measures of the trade policies related to the exchange of goods and
services such as anti-dumping duties, import duties and the safeguard measures.

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Understanding the various legal and the administrative requirements of the
agreements of the free trade is significant for the company involved in the
international trade.
 All the regional standards for the product usage need to be followed: The
imports and exporters should be complying with multiple regulations and standards
which are related to the exchange of the products.
Regulatory bodies of the international trade
The international trade law comprises of those rules and customs which is used for
handling the trade between the countries. Trade was usually regulated through the bilateral
barriers which was present between two nations. Although in the present situation, the
multinational treaties like the World Trade Organization and the General Agreements on
Tariffs and Trade are the principle regime for regulating the global trade (Jouini 2015). The
basic principles which the role of World Trade Organization follows are non-discrimination,
reciprocity, binding and enforceable commitments, transparency and the safety valves. The
North American Free Trade Agreement present between the United States, Mexico and
Canada, Association of South East Nations in southern Asia and the European Union
present between 27 independent states also comprises of the regulating bodies of the
international trade.
Regulations of trade
The rules which usually governs the international trade are quite complex in nature and
counterintuitive too. Complying with the regulations which generally governs the
international trade is a necessary component of the internal legal auditing programs for those

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kinds of business that are engaged in the import and the export trade. The basic inquires in
the customs includes the following:
 What methods are present to determine the proper classification of the
products which are imported?
 Will the system of recording imports comply with the requirements of the law
of customs?
 Is the imported merchandise of the company subject to requirements of visa or
the orders of the antidumping duty?
The unification of the regulations and procedures in the GCC member states is one of
the most significant objectives which needs to be achieved by the customs demonstration of
the GCC Member States. The customs law of the gulf countries had been adopted in the year
of 2000. The law is known as “The Common Customs Law for the Arab States of the Gulf”.
The unification of the laws and procedures related to the Customs in the Customs
Administration of the states of Gulf Cooperation Council is one of the main objectives that
these countries seek to achieve (Correa and Yusuf 2016). The adoption of the common
customs law will enhance the cooperation, present among the member states of the customs
filed. For exporting all the products to the Kingdom of Saudi Arabia, all the products requires
a certificate of conformity and must comply with the rules of the Saudi Arabian Standards
Organization. The SASO works for maintaining the safety of the consumers by adopting the
actual standards of the products and services. The Saudi Food and Drug Authority (SFDA) is
an independent body whose main objective is to ensure the safety of the food and drug for
human beings. One of the main objectives of SFDA which will observe the safety and
security of food and drug or both animals as well as humans. Another regulatory body which
governs the international trade is the Saudi customs. Saudi Arabia is also known to apply the

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Harmonised Customs System which includes certificate of origin, customs invoice and
commercial invoice.
Answer 2)
Target markets: a target market is that part of the market where the organization will
want to sell its commodities. It mainly comprises of the targeted set of consumers for whom
will be directing its marketing efforts. For developing a marketing plan, it is very important
to identify the market. The difference between the targeted market and the main market lies
in the difference of geography and demographics. Selection of a target market is an overall
process of segmentation, targeting and positioning. In order to develop a (Hassine and
Harrathi 2017) positioning strategy, the business should identify the target for the positioning
strategy . It will help the business to use the marketing resources quite efficiently. The first
step therefore includes market segmentation where the business identifies the potential
market of the total available market. This includes number of potential and existing
customers. One of the key considerations in selecting the market is whether the customer
needs are sufficiently different in order to warrant the segmentation. When the needs of the
customers are quite different across the segments, at that time a differentiated approach is
warranted.
The target market of the ABC Exports is Jordan which is part of GAFTA.
Demography: Jordan has a population of about 9,531,712 inhabitants where the
annual growth rate stood to 2.05%. The population includes a lot of refugees, legal as well as
a lot of illegal migrants.
Ease of doing business: According to the World Bank annual ratings Jordan is known
to rank 104 among the 190 economies in the ease of doing business.

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Income: The average monthly income of Jordan is known to be around $637and it
also ranks 65th in terms of the average monthly salary.
Competition: the economy of Jordan is basically a market oriented economy. The
pharmaceutical industry is one of the most competitive industry of Jordan globally.
Barriers to trade: in the past few years, Jordan has made many reforms in case of trade
liberalization. The barriers inludes both tariff and non tariff which the American companies
face while exporting to Jordan.
Local laws: The local laws of the Jordan reflects that it is a predominantly Islamic
country. The main legislation of governing trade in Jordan is the National production
Protection Law No.21 of 2004. The website of the Ministry of Industry and Trade publishes
all the laws and regulations.
Logistics and distribution system: most of the goods arrives through the Port of Aqaba
or Queen Alia international Airport. The retail network have started transforming from
traditional shops to American style malls.
Market potential: Jordan have invested a huge amount of money in alternative and the
renewable energy. It is a fairly developed and also a small economy in the Middle East.
Terms of Sales in the context of International Terms of Sales and Incoterms: INCOTERMS
are generally designed for creating a bridge between the members of the industry. the terms
of sales is the agreement present between he buyers and sellers of the products and services.
Target and market segmentation
Preschoolers and elementary school children: the preschoolers of age between two to
sis years old would be playing with the product ABC Duo. The children in the age group of

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five to twelve years old would be more likely to play with licensed toys, themed sets and the
play sets.
Income: the target market is generally the members with rising incomes as the price of the
products are on the higher side. The dual income households with more income will be
having more money to spend on the playtime.
Geographic: the ABC exports mail targets the customers of the western Europe and South
America. The western part of the Europe is the largest market for ABC (Waheed and Abbas
2015). The main customers of ABC are mainly the people of Belgium and Netherlands.
Germany, Spain and Switzerland also are the target customers of ABC.
Products: at present the ABC Exports comprises of different products such as ABC duo. ABC
architecture, ABC Disney princess, Star Wars. ABC ideas and the ABC classic.
Age: preschool children between 2-5 years and for the children between five o twelve years
old.
Gender: both male and female. Although the boys are more attracted towards the products
Income: the products are made specially for the children from the parents of rising income.
Family life cycle: the product also attracts the married couples who are with children.
Psychographic
The children of this age actively participate in the playful learning where they are
encouraged in the STEM related products. The children have seemed to actively participate in
the learning activities. There have ABC tournament for the youngsters aged between nine to
sixteen years old. The products have also been introduced in the school.

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Children are known to be the fans of movie tie ins. The products of the ABC Exports
have sets of the recent movie that presently came out and children are big fans of them. The
children also want to watch their favorite characters on the smartphones of their parents and
therefore demand more licensed products. The products also help to connect parents to
children, they have multigenerational appeal of the licensed products and the nostalgic
parents also introduced their children to the ABC playsets. The millennials also have great
loyalty to the brands ABC is licensed with. The products of ABC are also selling luxury
products on which the parents are willing to spend their money on. They also find attached
memories and therefore indulge themselves on with their spending powers. The emotional
connection is also related to the high dollar spending.
Documentary requirements: a product requirements document is the documents which
comprises of all the requirements of the certain product and it also allows people to
understand what a product should be doing. The product document is used for any type of
product and services. The requirements of the products are then analyzed by the supplier
from a more technical point of view. The components of the products of the ABC Exports
includes
 The certification number of ABC
 The item number of the product
 The product numbers
 The UPC code of the product
 The document ID
 Product description
Sometimes in some cases the products of the ABC Exports might as well comprise of
 The information of the product

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 Purpose and scope of use
 The product dentification number
 Stakeholder identification
 Product overview and the use cases
 Usability requires
 Support requirements
 Performance metrics
Terms of sales
The terms of sales refer to the agreements which is present between the consumers
and the sellers of products and services. The terms of sales often include the conditions which
the parties agree on price, payment terms, delivery and warranty. The sales contract is the
formal agreement which takes place between the buyers and the sellers for exchange of goods
and services or property for the payment. The sales contract usually comprises of certain
conditions which includes price and delivery. The sales contract therefor should comprise of
the following items:
 Date of agreement: one of the main topic of the sales contract is identifying
the parties. The signature portion of the form should comprise the name and title. The
first part of the sales contract should clearly state the date that the agreement is made
and executed.
 Description of the goods: the sales contract should also be addressing of hat is
being sold and bought. The sales contract should also provide a detailed description of
the goods and the services at issue, the quantity of the goods, duration of the service

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and should also comprise of any industry standards that the goods and services should
be meeting.
 delivery: the sales contract should be addressing the various aspects of the
delivery of the goods and services which comprise the time for delivery, place of
delivery, method of delivery of the goods and services. The sales contract should also
comprise of the cost of delivery and liability foe the damage caused or for the failed
delivery.
 Price: price if known to be most negotiated term for the sales contract and
should be therefore put in writing immediately after the agreement is reached. With
addition to price, the sales contract should be stating the time for payment, the method
of the payment and any kind of payment schedule agreed upon.
 The other provisions which needs to be included are
Warranties- it assures that the product will meet the certain level of quality and
reliability
Breach of the contract: the provisions which address what happens when one party
beaches the contract, the time for curing the breach and terminate the contract where
any remedies the party can recover.
Confidentiality: these are the provisions which states that other remaining provisions
should be remaining valid and enforceable when any provisions re found to be invalid
or unenforceable in nature.