Ambassador Donnelly’s “12 Rules”
June 9th, 2009 Posted in General, Markets, Trade
Ambassador Shaun Donnelly, who currently serves as Sr. Director of International Business Policy at the National Association of Manufacturers (NAM), told TradeFlow21 – Middle East Trade Summit participants (April 24) that he acknowledges there are challenges for businesses amidst the current economic backdrop, but he said he believes there are “even more opportunities.” Heed the Ambassador’s word since NAM’s membership exceeds 13,000. Furthermore, he stated, “It’s hard to have a strategy if you don’t have an export strategy,” citing the fact that approximately 95% of the world’s consumers reside outside the U.S. TradeFlow21 is cognizant of this, and thus is presently focused exclusively on the Middle East given the region’s many attractive growth characteristics, in addition to the prospect of realizing security through commercial prosperity. So without further ado, let’s review the “12 Rules for Exporting to the Middle East.”
1. Do your homework: learn something about your target country; no, you don’t have to learn Arabic, but do learn some greetings; and understand that the Middle East is not only what you see on CNN or the evening news (usually scenes of violence or of money in Dubai). Note that relationship building is especially important.
2. Be culturally sensitive: both the business week and business hours are different in the region, with SUN – THUR and later hours the norm; Friday is mosque day (communal prayer). Remember, the region has a long, rich history and people want to be treated as equals with the West. Also, be ready to drink a lot of tea. Don’t expect much, if any, alcohol.
3. Learn even a little about political issues: Arab/Israel (eventually your local business partners may inquire of your opinion); government sanctions (U.S. businesses face certain restrictions such as in Iran); and illicit payments (referring to bribery, which U.S. companies are prohibited by law from engaging in — and it’s not necessary to do business, says the Ambassador).
4. Patience needed: don’t present the image of being in a hurry, a rather common stereotype of Americans. Can’t expect to fill your order book right after leaving the airport; doing business begins with relationships.
5. Use the U.S. govt.: the Dept. of Commerce, embassies and consulates all have information and resources available to U.S. companies looking to do business overseas.
6. Think about security: while the Middle East is not the 24/7 violence portrayed on the news, recognize that like anywhere it is important to be aware of your surroundings; you can’t do business if you’re uncomfortable. Review State Dept. travel warnings; contact the consulate if you are planning an extended stay.
7. Find a local partner: “most important” step when targeting a market; may be an agent, representative, or a distributor; a local partner can also facilitate with any cultural sensitivities that may arise.
8. Consider intellectual property issues: as with any market you enter, ensure that you’re intellectual property rights are protected. Don’t assume protection if you’ve only registered in the U.S.
9. Beware of the “V” word: don’t make promises regarding immigration visas to the U.S.; issue may eventually arise with local business partners; U.S. concerned with security and immigration, but serious commercial implications if business lost to more “open” European markets, for instance.
10. Understand M.E. buyers’ criteria: quality is king, and there’s a willingness to pay, but it’s not everything (can’t charge too much premium); also looking for service and personal relationships. Preference to do business or at least interact with more senior ranking company representatives.
11. Be prepared to compete: true of any market, but there are some distinct advantages/disadvantages for U.S. exporters. The former include existence of free trade agreements in select regional economies. The latter is largely in light of European competitors (proximity and longevity).
12. Be realistic, be bold, and be patient (see #4), as you strive for success.
Along with his “12 Rules,” Ambassador Donnelly also mentioned the importance of foreign currency exchange rates. He advised that business counterparts in the Middle East are sophisticated with forex, and the fluctuations in the dollar can impact business since for example, euro-denominated goods or services may be priced more or less favorably. On that note, TradeFlow21 is continuously tracking economic and capital market developments, and we look forward to helping your company engage in business in the Middle East.
