Foreign Trade Career Field

Foreign Trade Career Field Structure

International Trade CareersAbout one out of seven persons in private employment is engaged in activities linked to foreign trade. Foreign trade today affects almost every person in the world. It enables each country to make the best use of its most abundant resources. By selling its surplus, whether it’s a raw material such as coal, a semi-finished product like cotton stuffs, or finished products like computers, a country earns the money to import another nation’s surplus. Foreign trade involves the building of offices or plants in foreign countries, sending technical or other specialists abroad, and expanding the distribution of a product into the international market.

Large companies that have been abroad for many years have well-established programs and hiring practices. They may have programs that train within the company for work abroad, or they may be able to rely on the local nationals to run most of the organization. It is not easy to break into the international field in the large corporations, although some students are recruited occasionally for overseas service. Usually, a number of years must be spent in the domestic office learning the business and the company and often specializing in one aspect of it. Maturity and experience in decision-making ordinarily must be gained in the United States before a person is sent overseas.

With each type of trade arrangement, there are a number of jobs needed to organize, develop, and maintain the agreement. The jobs vary with the product or service offered and with the company’s goals for the product overseas. Many overseas jobs are temporary as companies send people skilled in setting up a manufacturing process or researching a new market for a few years. Professions in foreign trade include purchasers, buyers, economists, marketing research analysts, clerical support, delivery and logistics experts, and support personnel. Large companies may have these professionals on staff. Small to mid-sized companies hire these individuals through consulting firms.

Purchasers and buyers work in a number of capacities for large and small companies. Not all purchasers and buyers are involved with foreign trade. Those who are keep track of world markets to obtain the highest quality merchandise at the lowest possible purchase cost for their employers. To assist them in their search, they review listings in catalogs, industry periodicals, directories, and trade journals as well as visit manufacturers or sellers. Purchasers who specialize in commodities (raw materials such as steel, lumber, and cotton) track such things as market conditions, price trends, and futures markets.

On the opposite side of the transaction are marketing research analysts. They are concerned with the potential sale of a product or service. For example, they analyze statistical data on the buying practices of consumers in foreign markets before a company introduces its product into that market. They gather data on competitors and analyze prices, sales, and methods and costs of marketing and distribution. Is the cost of marketing and delivering a product all the way overseas worth the profit it will make? Marketing research analysts help companies make that determination.

A host of other professions make up foreign trade careers. Accountants are responsible for trade and tariff payments, investments, and currency exchange. Interpreters and translators are needed for contracts, hiring, training, sales, and almost every other aspect of the work. International affairs specialists give advice to a company on the business and political climate of a foreign country.

Four basic arrangements govern the trade of goods and services across national borders. The most basic arrangement is the single trade transaction. For example, someone in Florida has a shipment of orange juice to sell abroad. That seller either hires someone to find a buyer or personally finds someone who would like to purchase the shipment of orange juice. A buyer is found in France, a contract is signed after legal matters are settled, and the orange juice is shipped abroad. In the single trade transaction, there is only one contract and one shipment.

The second type of arrangement concerns installment sales. More than one transaction will take place between the seller and the buyer. A series of contracts for shipments may be signed, or one contract may be signed that outlines a series of sales over time. Either way, the key to an installment sales arrangement is an extended relationship between the seller and the buyer for continued supplies across the border with multiple deliveries and payments. Many products are bought with such regularity that a continued supply of an item can be counted on to sell. This pattern allows the importer to develop regular customers who rely on the continual receiving of goods from abroad. Wine, cheese, and many other food items are shipped on installment contracts.

A third type of international sales arrangement is the license arrangement. License arrangements are more complex because they involve the production of the item in the country where it is to be sold, while the rights to produce the item remain with the country that originally produced the items. Products made under patents are licensed to other companies for manufacturing, as long as the company manufacturing the product pays royalties on each item sold. For example, books may be produced in another country, or in another language, under a license agreement. If an American author has a book published in Germany, the German publisher has to get legal permission to publish, and the German company normally pays the author a set fee for each book sold.

The joint venture is the fourth type of arrangement for foreign trade. Two companies, one from each country, agree to produce something in a cooperative effort. They may choose to produce the item under one company’s name, under the two names combined, or they may choose to create a third company with an independent function from the two parent companies. Both parent companies get benefits from the sales of the items produced by the joint venture. Car manufacturers regularly have joint venture projects.

Subsidiary companies are branches set up in foreign countries. Many Fortune 500 companies have branches all over the world. Oil companies commonly have branches abroad, as do large banks, investment firms, and automobile manufacturers. Multinational corporations are companies that have operations in two or more countries. It is estimated that at least half of the 7,000 multinational corporations have branches in more than two countries and at least 300 companies operate in six or more countries. These companies may operate production branches in countries where it is cheaper to manufacture the product or where the raw materials may be close at hand. They also may produce the item in one or two locations and then use the other operations for sales and administration.