News from the East Asia Summit in Bangkok that Australia will be joining 14 other nations in a major free trade deal offers exciting prospects for Australian businesses. In stark contrast to fears of an escalating trade war, they can now start thinking of expanding into some of the world’s biggest markets with a minimum of red tape.
Some smaller businesses may still look at the prospect of overseas sales with a sceptical eye: there are barriers in terms of cash flow, logistics and languages, for example.
However, export sales are no longer exclusively a big business game. Thanks to innovative Trade Finance that helps with all aspects of an export deal – not just the cash flow problems – SMEs can now enjoy the growth benefits of overseas markets as much as any multinational.
Export Finance Makes Exporting Straightforward
Export finance, provided on non-bank funding platforms that allow a degree of tailoring to suit their needs, is a game-changer for businesses that are or want to export.
For example, an SME food manufacturers wanting to start selling in Japan directly to wholesalers would have to make contact with suitable Japanese companies, despite all the language and cultural divisions; it would have to agree a supply arrangement that was acceptable to both parties, including suitable inspection of goods and payment terms; and it would have to shoulder the burden of an extended cashflow gap caused by international shipping times.
With export finance, many of these issues are taken care of by a nimble provider like OptiPay, working closely with trusted and experienced agencies in key overseas markets.
The Australian producer can be introduced to suitable overseas partners, and receive a large proportion of its payment weeks or even months before it could realistically get its invoice paid. Terms, inspections, and even logistics could be arranged by professionals, and the Australian business would still enjoy a significant boost to its profits by getting its “exotic wares” to far away markets.
Trade Agreement Could be World’s Biggest
In Bangkok last week, 15 of the 16 participating Asia-Pacific nations agreed to sign up to the Regional Comprehensive Economic Partnership (RCEP). Australian businesses will be able to trade freely – in theory – with countries including New Zealand, Japan, South Korea and China, as well as the 10 nations of Asean.
Were it to include India’s massive economy – and hopes are very much alive that it eventually will – the RCEP would be the largest free-trade agreement in the world, encompassing 30% of global GDP and half of the world’s people.
Noting a slowing global economy, a joint statement from the leaders of the 15 nations said: “RCEP will significantly boost the region’s future growth prospects and contribute positively to the global economy, while serving as a supporting pillar to a strong multilateral trading system and promoting development in economies across the region.”
Given the largely negative expectations for both for international trade which have so often filled the headlines during the last few years, this is a fine opportunity for Australian business. With smart export finance, Australian businesses can enjoy that opportunity too.
