Top misconceptions in language translation for business

Translation of your business messages into foreign languages looks easy these days with the Internet at your fingertips and bilingual friends on call. 

However, often these friends will translate your messages into the foreign language quite literally.  They will take your words and pose the exact referenceable words against them.  They will not rephrase them to make them more readable, nor check the grammar, sentence structure, vocabulary and expressions that might be local to a particular market.

When you write for a country or region of the world, you must localise the meanings and intents of metaphors and statements and make your words natural to the reader in order to be taken seriously as a real business constituent.

When you think about it, translating an important business message using the wrong tools could frankly be very dangerous.  For example, Julia Gillard’s Chinese version of Australia in the Asian Century contained broken sentences, grammar and syntax errors, inappropriate vocabulary and incomprehensible expressions, leading many to question how it was prepared.

The Australian newspaper reported that "It is reasonable to suspect that the person who translated this white paper relied heavily on Google Translate, not their Asian language skills."

Further to this, modern day machine translation systems (MT) have become much more advanced than the capabilities offered online, and can recognise common linguistic differences in a way that Internet systems cannot.

Today, we break down some myths and mysteries to explain what you really should know when considering translation for business purposes.

1. There is a lot more involved in high quality translation than you think

You may think that you just need a translator but in essence, to guarantee high quality materials, you will need a lot more. International campaigns, documents, collateral and websites will not only involve translation, but localisation, checking, revision, editing as well as desktop publishing and file handling.

Think about how long it took you to create that English brochure? Materials created for a foreign audience will require a little more care in their preparation. You will often need a second pair of eyes, an industry expert to verify terminology, and an editor for final publication. Also, you will often need project management to handle your file formats, connection to your content management system and your internal systems.

2. Bilingual friends or colleagues could do more harm than good

Translating business documents or marketing materials through bilingual colleagues or friends can be dangerous, as they might not be familiar with the subject area or could be from another region of the country you are translating for. Or, they might be native speakers, but do not have an excellent command of the language, or they might know enough about the subject matter, but their feedback might not be relevant or helpful.

Don’t get me wrong, there is a very useful place for these bilingual contacts, but they need to be given clear and precise instructions when translating business and marketing documents. Questions like "Is the message getting across?", "Does the translation use the right language for the target market?",  "Could messages be misinterpreted?" –  instead of just “ What’s your opinion?” – should be asked.

3. Machine Translation is more than Google Translate

You may think that Machine Translation (MT) systems are just a version of Google Translate, but in fact, the term refers to professionally programmed IT translation engines, trained for a specific technical subject, trained with millions of approved TMs (translation memories) and fed with a high volume of technical data to be able to produce a fast and pertinent output against a source text that has been written specifically for MT purposes.

The translated text is then still revised by human “post editors”. The use of the tool enables people to be more efficient on repetitive tasks that can be automated, and to use the skills of high quality translation professionals for more complicated translations.

MT is not to be confused with Translation Management Systems. These handle complicated file formats and can hold translation memories of entire segments of translated text in a database. They assist the translator to achieve consistency when similar terms and contexts come up again in future translation and can often save you, the client, money when many repetitions occur in high volume texts.

4. A back translation will not give you the full message

An ad agency was recently outraged when they used back translation to have a German translation translated back into English, and read that someone was "going to eat a broom"!  You see… pigs fly in the English language, but Germans will eat a broom if they don’t believe something will happen. It is because of these nuances that back translations should not be used to measure quality. Back translation should only be used in rare circumstances and done by a language professional who knows how to interpret the results. Independent checkers, focus group testing, community feedback and industry editors are a much more efficient way to ensure quality of the intended message.

5. High quality input gives high quality output

You may be committed to getting high quality translation, but if your own message is not clear from the start, it is difficult for the translator to guess what you mean and transmit it.  For best quality, a clear source text must be provided and translators should be equipped with as much information as possible such as background, style guides, related articles, links, glossary lists, anything you have to ensure the translator fully understands your subject and your message.

6. Don’t mix and match your translators

Translators become familiar with your style, terminology and subject area. So, if you have a good one, stick with them and train them to your needs. Even if you have glossaries and style guides, consistency is best achieved by continuing to work with those who are familiar with your content.

Using various different providers can result in mixed messaging and less efficiency in your translations. Very often, changes in translations are a matter of personal preference or ignorance on background knowledge, and you may find yourself spending a lot of time just redoing the versions, when it was often only matter of opinion.

As you can see there are many considerations in getting the quality right when translating for business. With translation, it can sometimes be a bit like picking up your car from the garage and wondering… what did the mechanic really do? But of course, there are varying degrees of services that can be applied for different types of outputs required. A high quality provider can show you the options and guide you through the process to ensure that your message hits the mark with your target audience.

Written by Tea C. Dietterich, Director of 2M Language Services. 
P: +61 7 3367 8722
W: 2m.com.au
E: multimedia@2m.com.au

Atradius - Key to Business Success in Mexico

Sydney, Australia 9 August 2013

In line with the ‘Trade Successfully With…’ series, Atradius has now released the recording of the ‘Key
to Business Success in Mexico’ webinar which is available to view for free.

A panel of experts on Mexico’s economy, business culture and law cover the opportunities and the
logistics of trading in Mexico in a lively debate designed to help businesses make their mark there.
The discussion is led by award winning financial journalist and broadcaster Adam Shaw.

Mexico is an accelerating economy. It is Latin America’s 2nd largest with a growing middle class that
has an increasing demand for luxury goods. With 150 million people and an economically stable
market, consumers now have more money to spend. Consumer spending is forecast to increase by
32% between 2013 and 2017.

As an emerging market, Mexico has signed 43 trade agreements with different countries making
Mexico a more appealing and competitive market to do business with. The reform of the
telecommunications market sector offers opportunities for foreign providers.

The webinar discusses the key factors for doing successful business in this market, including having a
local representative on site in Mexico.. There are 31 different states in Mexico all with different cultures,
rules and regulations which are just some of the key reasons a local representative is crucial to get
ahead in this market.

As always in the series there is also an accompanying special report ‘Trade successfully with Mexico –
10 Important Principals’. The report looks at ten principles that those seeking to expand their sales
strategy into Mexico should follow to avoid the many pitfalls of trading in untried territory.

To download the report, click here

If you have any questions or comments in regards to these publications or the webinar please contact
us at oceanianews@atradius.com.au

About Atradius
The Atradius Group, a company of Grupo Catalana Occidente S.A., protects businesses against trade
credit risks throughout the world with credit insurance, bonding, and collections services offered in 45
countries. With total revenue of EUR 1,554 million and a market share of approximately 31% of the
global trade credit insurance market, Atradius’ products contribute to the growth of companies throughout the world by protecting them from the payment risks associated with selling products and
services on credit.

Contact Details:
Level 14, 1 Market Street
Sydney  NSW 2000
Phone: +61 (0)2 9201 2389
Fax: +61 (0)2 9201 5224
Website: www.atradius.com

Atradius Country Report: Czech Republic July 2013

Summary of Report

Low demand from EU partners continues to hit exports

• Austerity measures hit domestic demand
• Export growth is forecast to slow down
• However, budget deficit targets will be met in 2013
• Construction and textile sectors remain in trouble

General Information

• Capital - Prague
• Government type - Parliamentary democracy
• Currency - Czech Koruna (CZK)
• Population - 10.6 million
• Status - Upper middle income country
•  (GDP/capita: US-$ 18,037 in 2011)

Main import sources (2012, % of total)

• Germany - 25.2%  
• China - 11.1%
• Poland - 7.1%
• Slovakia - 6.0%
• Russia - 5.6 % 

Main export markets (2012, % of total)

• Germany - 32.4%
• Slovakia - 9.0 % 
• Poland - 6.1 %
• France - 5.1%
• UK - 4.8 %

After a 1.2% year-on-year contraction in 2012, the Czech economy continued to shrink in early 2013:
by 2.2% year-on-year in Q1 (down 1.1% on the previous quarter), with GDP forecast to decrease 0.8%
in 2013 after its 1.2% decline in 2012.

The continued weak economic performance is partly the result of austerity measures. Tax increases
and public sector cuts have lessened the purchasing power and confidence of both households and
businesses, with a consequent impact on domestic demand. Private consumption is expected to
increase only slightly - by1.2% - this year after a 2.6% decrease in 2012, while lower government
spending will continue to have a negative effect on growth. Industrial production will level off this
year after a drop in 2012, investments will continue to decrease.

At the same time, low demand from EU trading partners will continue to hit exports. At more than
75%, the Czech Republic’ export-to-GDP ratio is one of the highest in the EU, making it especially vulnerable to trade losses.

To download the full report, please click here.

Atradius Country Report: Japan July 2013

Summary of Report

General Information

• Capital - Tokyo
• Government type: Parliamentary government with a constitutional monarchy
• Currency - Yen (JPY)
• Population - 127.6 million

Still obstacles to a comprehensive rebound

• Massive quantitative easing and fiscal stimulus will spur growth in 2013 and 2014
• However, the budget deficit is likely to exceed 10% of GDP in 2013
• Business insolvencies expected to decrease 2% this year

Main import sources (2012, % of total)

• China - 21.3%  
• USA - 8.6%
• Australia - 6.4%
• Saudi Arabia - 6.2% 
• United Arab Emirates - 5.0%
• South Korea - 4.6%

Main export markets (2012, % of total)

• China - 18.1%
• USA - 17.6% 
• South Korea - 7.7%
• Taiwan - 6.2%
• Thailand - 5.5%

To download the full report, please click here.

IP Australia: The Future of Intellectual Property in Australia

The Australian Intellectual Property system is ranked in the top five systems globally.

Intellectual property remains an issue of national significance as Australia gears up to take its place in the ‘Asian Century’. Data shows the Australian intellectual property system is robust – as a nation our intellectual property system routinely ranks in the top five systems globally.

But our level of investment in intangible assets, which includes intellectual property, is far behind that of our tangible assets – things like roads, mines and buildings. In addition, although our innovation inputs - for instance patent filings - are high, our outputs and record when it comes to commercialising innovative activity could be better.

So what can we do to better support innovation and intellectual property in Australia? This was the central question that framed discussion at IP Australia’s recent IP Forum in Sydney.

Keynote speaker Christine Emmanuel, executive manager, intellectual property and licensing, CSIRO Operations, believes as a nation we could be better at talking about the value of innovation.

“We don’t have a good way of communicating value, as well as no way of talking about innovation in the language of the government.”

According to Emmanuel, this inability to adequately communicate around innovation is a problem when it comes to attracting investors to innovative projects, which is a reason why innovative businesses find it challenging to attract venture capital.

But importantly, as we resolve this and nurture our intellectual property system, we need to make sure we don’t give too much away.

“We need to have our scientists think about the value of innovation for our economy and our country. Scientists need to understand the value of their work from a commercial perspective. We seem to think scientists must have integrity and not bow to commercial pressures, but that’s nonsense. Both science and commerce should be going in the same direction. We need to teach our scientists to work on problems that will create value.”

Another keynote speaker, Scott Bouvier, a partner with law firm King Wood and Mallesons, suggests to generate better business outcomes from the innovation process, intellectual property advisers need to become better business advisers.

“Advisers need to broaden their role so that they understand the commercial context and to develop intellectual property within that context. Intellectual property advisers also need to be working with clients on commercialisation strategies,” Bouvier argues.

Nevertheless, another keynote presenter, Christine McDaniel, deputy chief economist, IP Australia, says we should not take for granted that our intellectual property system is well-functioning. The fact it’s possible to obtain high quality patents, which can be opposed and defended, within a transparent intellectual property system is a situation to which many countries aspire.

As to how or even whether our intellectual property system needs to be improved, McDaniel says “it’s a reasonable goal just to maintain the system.”

So what’s the place of government in encouraging investment in innovative activities? According to McDaniel, governments have a role in helping new, innovative firms enter the market, as well as in promoting innovation in existing firms.

Public sector involvement in innovation can take a number of forms – it can include support of ongoing research and development, acquisition of external knowledge through activities such as buying patents, as well as encouraging new business processes and new ways of organising people.

McDaniel says according to OECD figures, the Australian government is already a strong supporter of innovation. Data suggests sixty per cent of large firms receive support for innovation and twenty per cent of small firms receive government support to be innovative.

“But the question is whether we’re doing it the right way – how do we know whether we’re giving financial support to the right firms? It’s very hard to pick winners,” she states.

According to McDaniel, a new way of approaching this challenge is for governments to invest in performance-based innovation. So the idea is that if an innovative firm receives government funding, if it can demonstrate it is performing, it will qualify for further government support.

“But the challenge is how to measure performance – this is the big question,” says McDaniel.

She says there is also a role for governments in providing opportunities for innovative firms to be networked through trade shows, to assist in the collaborative process.

“Governments can help create the circumstances for firms to collaborate, but ultimately collaboration happens at the individual firm level.”

Emmanuel says as a nation we’re actually good at collaborating. “We do that well and to innovate you have to collaborate – no-one can innovate in a silo. Scientists are always sharing information at conferences and sharing information across universities, as well as travelling overseas to collaborate. So we’re seeing that activity – it’s just whether this translates into value.”

Bouvier says the intellectual property sector must work from more of a position in which intellectual property portfolios are created with the purpose of attracting investment.

“We need to understand investors’ drivers and look for collaboration based on intellectual property. By doing that we will be able to improve the services we provide to the sector and also improve innovative outcomes. Businesses need a mix of skills to be able to translate innovation into commercial results and advisers need the right skills to assist in this process.”

Fundamentally, says Bouvier, intellectual property needs to be properly structured so investors can securely invest. “Poor decisions about the way intellectual property is structured are very hard to undo and investment deals can die just on the terms of licenses.”

“We have undertaken the right steps to reform the industry. Our IP system is highly regarded. We have the right framework and what we need to do now is work more effectively within it,” he says.

For more information about IP Australia, please visit their website.

Atradius Payment Practices Barometer Eastern Europe

Atradius International survey of B2B payment behaviour - June 2013

Eastern Europe is heavily influenced by the weak economic conditions in the Eurozone. In particular, countries like Poland, Czech Republic, Slovakia and Hungary, which are nearer to the borders of the Eurozone, are affected by the continued financial constraints experienced by their neighbouring economies, which also puts pressure on their cash flow levels. The increase in long overdue receivables is also contributing to the increase in the value of receivables write offs reported by Eastern European respondents.

Core results:

•  29.4% and 21.6% of the total value of the invoices issued by Eastern European respondents to their domestic and foreign B2B customers respectively are overdue
•  B2B invoices in Eastern Europe are more likely to be paid late due to liquidity constraints of domestic (79.6% of respondents) than of foreign customers (53.2%)
• Uncollectable B2B receivables increased markedly over the past year, particularly in relation to export trade
• Around 45% of the respondents in Eastern Europe become concerned when average DSO is 46 days to over 90 days longer than the average credit period extended to B2B customers
• The majority of Eastern European respondents consider falling demand of products and services and maintaining adequate cash flow to be the biggest challenges to the profitability of their businesses this year

To view the full report, please click here.

For further information:
Atradius Credit Insurance N.V.
5/22 Pitt Street
Sydney NSW 2000
Phone: +61 (0)2 9201 2389 
Fax: +61 (0)2 9201 5224  
Website: www.atradius.com 

Messaging to Multicultural Australia

Author: Tea C. Dietterich 
Director of 2M Language Services
2m.com.au
Ph: +61 7 3367 8722
E: multimedia@2m.com.au




One in four Australians were born overseas, and there are more than 22 million people in our country who all contribute different ideas, religions, languages and customs. The diversity of these people makes Australia a unique place to live and creates multiple and versatile markets for our products and services.

I often talk about international marketing and how to reach your global markets. But we should not forget that LOTE (Languages other than English) speakers have strong purchasing and decision power in Australia, too, and any business would want to get the right messages across to them.

Nelson Mandela said: “If you speak to a man in a language he understands – it goes to his head. If you speak to him in his own language – it goes to his heart.” 

The same applies for our multicultural Australian audience. Although the majority do speak English, it is ideal to talk directly to your customers in their own language.

Whether you are a private or public institution – the aim is to get the right message across to your key audience.

Here are some basic facts on Australia's diversity:

• Since 1945, more than seven million migrants have made Australia their home.
• Around 45 percent of Australians were born overseas or have at least one parent who was born overseas.
• People from more than 200 countries make up the Australian community.
• The top ten countries of birth in Australia are: Australia, the U.K., New Zealand, China, India, Italy, Vietnam, Philippines, South Africa and Malaysia.
• Australians practice more than 100 religions including Christianity, Buddhism, Hinduism, Islam and Judaism.
• More than 300 languages are spoken in Australian homes; the most common apart from English are Mandarin, Italian, Arabic, Cantonese, Greek, Vietnamese, Tagalog/Filipino, Spanish and Hindi.

The changing mix of origins of Australians is always a topic of interest in every Census. We often quote the above statistic that a quarter of the population was born overseas. That figure hasn’t changed much over the years; however what has changed is how that quarter is made up. See details in the below migration chart which shows that the largest increase has come from India and China.

 

Translating for multicultural Australia
When you are translating for multicultural Australia, you are reaching out to Culturally and Linguistically Diverse (CALD) Communities. But before you begin, it is imperative to identify your readership.

Are you a City Council with information for retirees? A Health Department with a brochure for mentally ill? An Internet Service Provider with a website for all age groups? A manufacturer with a product suitable for the Asian Australians? The answers to these questions will help you to frame your messaging and your tone.

How long have they been here?
One example segment could be Italians who have lived in Australia for 50 years. Their terminology and key word usage is very different to Italians in their native country. Their home is Australia, and they are Australian – so, your messaging cannot be compared to what it would be if you were addressing their compatriots in their birth country. A competent translator in the origin country might do an outstanding job translating the text, but will still not give the right message to the Australian multicultural reader, because it is not using their language. Locally known keywords, names or government programs will often stay in English, because that is how they are known - whereas for overseas markets, the translation approach would differ.

What is their age group?
Closely related to above point, the age group will determine the type of language to be used. Tone of language has to be adjusted. This applies to translation in general and is particularly important, as the language of older migrants may not have evolved naturally due to their distance from their birth country.

What is there education level? 
The tone of the translation should be dependent on your target audience, whether it is plain and simple, sophisticated or somewhere in between. The demography and geography of your target audience should also be noted. Convoluted sentences that are often found in lengthy government documents may be a challenge. Essential messages should be portrayed in the right terms for the audience, so that they completely understand.

Consider their health
CALD communities are an important target audience for health departments in government levels as well as for health device manufacturers. The language to be used will differ considerably here as well, depending on the target group. For example, is your health brochure for the mentally ill, or directed at people prone to sports injuries, or at the wide variety of CALD public groups?

What should be left in English?
Often, the question of where and when to use English in key phrases, is a matter of personal preference. For this reason, it is important to establish a style guide from the beginning to determine which terms are left in English and which are to be translated or explained. This can differ from language to language. In German for example, English terms are frequently used and accepted without an explanation. This is contrary to Arabic, where often everything will be translated, numbering included.

However, it is important to note that it is logical to leave the English words in for many instances. This is so the LOTE speaker knows which words to use when they come across that situation in their Australian daily life. It applies in everything from health programs to transport options and everything in between.

Language specific differences
There can also be many subtle differences within a language group. Just to name one example: Serbian can be written in Latin (Roman) or Cyrillic script. Which one should you use?

This proves that you need to check your target audience closely and don’t assume anything.

As you can see, there are many differentiators when translating for CALD communities, and this also includes the design aspect (i.e. which images and symbols to use). It is important to remember that Australia contains a very large multicultural audience that needs to be communicated with in the right way.

In return, we can harness this vital part of our community to share information and knowledge, and to market our products and services.

New OECD Analysis on Trade Facilitation as it Applies to Australia and the World

The Organisation for Economic Co-operation and Development (OECD) recently published the results of research, undertaken to measure the relative economic and trade impacts of trade facilitation measures currently under negotiation in the World Trade Organization (WTO) on trade flows and trade costs across all WTO member countries. 

A series of Trade Facilitation Indicators (TFIs) that identify areas for action and enable the potential impact of reforms to be assessed have been identified by the OCED  to help governments improve their border procedures, reduce trade costs, boost trade flows and reap greater benefits from international trade (see list of indicators in Appendix 1).

“Trade facilitation is about easing access to the global marketplace,” OECD Secretary-General Angel Gurría said. “Complicated border processes and excess red tape raise costs, which ultimately fall on businesses, consumers and our economies. The trade facilitation negotiations offer countries a golden opportunity to reduce or eliminate these bottlenecks, cut the cost of trading, boost the flow of goods and reap greater benefits from international trade,” Mr Gurría said.

A key message from the OECD research is that a multilateral agreement to cut red tape in international trade would have a significant impact on reducing trading costs and add a much needed boost to the global economy (for details on the the progress of a multilateral agreement, see Appendix 2). 

The OECD estimate that comprehensive implementation of all measures currently being negotiated in the World Trade Organization’s Doha Development Round would reduce total trade costs by 10% in advanced economies and by 13-15.5% in developing countries.  Reducing global trade costs by 1% would increase worldwide income by more than USD $40 billion, most of which, according to the OECA, would accrue in developing countries.

TFI analysis was conducted on all WTO member countries to measure their relative trade facilitation performance and reveal areas where more can be done to improve trade flows and costs.

How did Australia rank?

Australia performed significantly better than the OECD average in the areas of appeal procedures, border agency cooperation (internal and external) and governance and impartiality. We performed slightly above the average in most other indicators but performed below average for harmonisation and simplification of documents.

The OECD’s quantitative analysis reveals that, for developed countries, the areas with the greatest impact on increasing bilateral trade flows and reducing trade costs are the following:

• information availability
• advance rulings 
• fees and charges 
• automation and streamlining of procedures 

Taking into account the OECD research, Australia would benefit from continued improvements in the following areas:

Information availability: 

• Introduce a full time hotline (24/7) for addressing reasonable enquiries to Customs.
• Publish decisions and examples of Customs classification on the Customs website.
• Publish examples of judicial decisions on the Customs website.

Advance rulings: 

• Increase the length of time for which the advance ruling is valid, as it remains lower than the OECD average.

Fees and charges: 

• Decrease the number and diversity of total fees and charges collected. Interestingly, in the recent budget announcement the Government announced they will be restructuring the Import Processing Charge (IPC) in order to recover the costs of all import related cargo and trade functions undertaken by Customs, which is obviously in contrast to the above OECD recommendation. For details on the IPC changes, please see Appendix 3.  

Formalities – Procedures:

• Improve the treatment of perishable goods with respect to the separation of release from final determination and payment of Customs duties.
• Further develop the Post-Clearance Audit program.
• Further develop the Authorised Operators program as the number of authorised operators in the total number of traders remains low compared to the OECD average.  However, what the OECD did not mention, or was perhaps unaware, was that Australia does not actually have any Authorised Operators program.
• Continue overall simplification of procedures in terms of both time and costs.

What is the ECA doing?

The ECA has long advocated for a reduction in trade facilitations costs.  In fact, the ECA is currently working on a research project which analyses the fees and charges businesses across a wide range of industries incur in order to be able to export their product overseas. The results of this research will be used to reveal to government how significant these costs in fact are and how they impede exporters and their ability to compete internationally. If you are interested in being involved in this research please contact Lisa McAuley: lisamcauley@export.org.au.   

The ECA has a five point agenda in its Trade Policy paper to be tabled in June. The paper will call on government to:

1. Address International Trade as an essential aspect of domestic economic policy
2. Incorporate International Trade in economic and physical infrastructure and investment
3. Rigorously review all aspects of regulation (both red and green tape) and increase the focus on competition policy
4. Re-evaluate policy settings in foreign trade negotiations to place greater emphasis on trade.
5. Ensure International Trade becomes a “whole of Government” issue

In addition, the ECA is involved in the Future Logistics Living Lab which provides industry and research the opportunity to work together to create innovative solutions to logistics challenges. Ultimately, the projects developed through the Lab improve trade facilitation through the increased availability of information and the automation and streamlining of procedures.

Appendices

Appendix 1
OECD Trade Facilitation Indicators:

1. Information Availability: Publication of trade information, including on internet; enquiry points.
2. Involvement of the Trade Community: Consultations with traders.
3.  Advance Rulings: Prior statements by the administration to requesting traders concerning the classification, origin, valuation method, etc., applied to specific goods at the time of importation; the rules and process applied to such statements.
4.  Appeal Procedures: The possibility and modalities to appeal administrative decisions by border agencies.
5.  Fees and Charges: Disciplines on the fees and charges imposed on imports and exports.
6. Formalities-Documents: Simplification of trade documents; harmonisation in accordance with international standards; acceptance of copies.
7. Formalities-Automation: Electronic exchange of data; automated border procedures; use of risk management.
8. Formalities-Procedures: Streamlining of border controls; single submission points for all required documentation (single windows); post-clearance audits; authorised economic operators.
9. Internal Co-operation: Co-operation between various border agencies of the country; control delegation to Customs authorities.
10. External Co-operation: Co-operation with neighbouring and third countries.
11. Governance and Impartiality:Customs structures and functions; accountability; ethics policy.

Appendix 2:

Trade facilitation refers to the simplification and harmonisation of international trade procedures to assist the movement of goods. Customs, licensing and transit formalities are areas which can involve complicated administrative processes and additional costs to business.

Negotiations on a multilateral trade facilitation agreement were launched as part of the WTO Doha Round in 2004. Nearly 9 years on there is now a draft negotiating text which is said to be a fairly accurate indication of what the final document might look like. With the Doha Round of negotiations at an impasse, it is hoped that headway on the agreement might be made at a high level meeting to be held in Bali this December.

Organisations that are involved in studying the implications of trade facilitation costs and are actively pursuing the ratification of a multilateral agreement include the WTO, the OECD, the World Bank, the EU, the World Economic Forum and other regional trade forums such as APEC, among others.

Most of the gains attributed to a multilateral trade facilitation agreement would accrue to developing nations and would lead to significant gains to world trade.

Appendix 3: Change to Import Processing Charge for full cost recovery

In the recent budget announcement the Government announced they will be restructuring the Import Processing Charge (IPC) in order to recover the costs of all import related cargo and trade functions undertaken by the Australian Customs and Border Protection Service.

The new charges will take effect on 1 January 2014 and will take effect as follows:

• For consignments valued over $10,000 the IPC for electronic sea import declarations will be increased by $102.60 to $152.60 per consignment.
• The IPC for electronic air import declarations will be increased by $81.90 to $122.10 per consignment, for consignments valued at over $10,000.
• For consignments valued over $1,000 and up to $10,000, the IPC will remain at current levels, being $50 for electronic sea import declarations and $40.20 for electronic air import declarations.
• The IPC will continue not to be applied to consignments valued at $1,000 or less.

The increase to the IPC will result in additional revenue of $674.3 million over four years and will be implemented in accordance with the Australian Government's cost recovery policy.

Author

Stacey Mills

Export Council of Australia

Ph: 02 8243 7460

Fax: 02 9251 6492

Email: StaceyMills@export.org.au

Website: http://www.export.org.au/

Education & Training: http://www.aiex.com.au

Twitter: http://twitter.com/Aussieexport

For media queries or further information on the Export Council of Australia, please contact:

Lisa McAuley

National Manager

Export Council of Australia

Ph: 02 8243 7400

Fax: 02 9251 6492

Email: lisamcauley@export.org.au

Website: www.export.org.au

Education & Training: http://www.aiex.com.au

Twitter: http://twitter.com/Aussieexport

Response to Australia’s position in becoming the food bowl of Asia

The Export Council of Australia (ECA) acknowledges the opportunity increasing global food demand presents to Australia and supports the Australian Government’s initiative to develop a National Food Plan, which will promote a more highly integrated approach to government food policy along the supply chain.

The ‘food system’ is shaped by many factors including population growth, economic conditions and changing food preferences. The value of world demand for food is expected to increase 77 per cent by 2050 with most of this growth occurring in Asia where demand will double. By 2030, Asia’s middle class will reach 3.2 billion people who will be demanding higher quality, protein-rich foods such as meat.

Given Australia’s advanced agriculture sector, which is characterised by cutting edge farming techniques and technologies and sophisticated biotechnology innovations, as well as our vast amounts of arable land and our proximity to Asia, Australia has the potential to be well positioned to meet Asia’s growing food demand.
That being said, the ECA believes there are still improvements that need to be made in terms of reducing red and green tape, as well as reducing the bureaucracy which inhibits companies’ ability to do business efficiently.

Moreover, the ECA encourages the Government to address the shortfalls we will inevitably face in terms of food producers access to technology, skilled labour and the construction and maintenance of important infrastructure.

While the completion of Free Trade Agreements (FTAs) with key trading partners is an important component in increasing Australia’s competitiveness, the ECA believes that significant investment also needs to be made in the following areas:

• Reducing the red and green tape that hinders Australia’s ability to facilitate trade efficiently
• Investment into improving infrastructure across Australia to facilitate trade flows
• Government support to improve areas of productivity and efficiency in Australia’s production capabilities
• Educating Australia’s food export community on how to effectively do business with Asia 
• Building awareness of cultural differences between Australia and each individual Asian market 
• Assisting companies in developing key relationships with buyers and government officials in market

In response to much of the talk about Australia’s position in becoming the food bowl of Asia, the ECA will be launching a national Agribusiness Committee to work with agribusiness exporters in putting a “Voice” to Government on realistically, how Australian can work towards the next “Food Boom.” The first committee meeting will be held in Brisbane in June 2013.

Mexico Market Update

By Stacey Mills, Export Council of Australia

Snapshot

Population: 114.8 million
Nominal GDP: US $1.16 trillion
Nominal GDP p/c:  US $10,146
GDP Growth:   3.9% (2011); 3.8% (2012)
Inflation:   4% (2012)
Unemployment: 4.85% (Feb 2013)
Exchange rate:   AU $1 = 12.93 Pesos (March 2013)
Major industries: construction, metallic products, food and beverages.


Bilateral Trade Relationship

Australia and Mexico share a strong relationship following years of cooperation and collaboration on various foreign affairs and trade matters. In particular, the two countries have worked together multilaterally on forums including APEC, the G20 and the WTO. In 2004, Australia and Mexico signed a Double Taxation Agreement, which aids trade facilitation by clarifying the taxation rights of the two countries and introducing measures to avoid double taxation and prevent fiscal evasion.

Becoming a member of the Organisation for Economic Co-operation and Development (OECD) in 1994, Mexico is one of only two Latin American countries, the other being Chile, to be admitted.

Australia and Mexico’s two-way trade relationship is valued at AUD $2.9 billion. In 2011/12 Mexico was Australia's largest merchandise trading partner in Latin America, with exports to Mexico valued at $1.03 billion and consisting mostly of coal, aluminium and medicaments. In terms of the export of services, education related travel is Australia’s key export to Mexico, valued at $42 million.

Mexico’s imports into Australia are valued at $1.8 billion and consist predominantly of lead ores and concentrates, telecommunications equipment and parts, fertilisers, and passenger motor vehicles. While the countries major service import into Australia is personal travel, valued at $33 million.

Australian foreign direct investment (FDI) into Mexico sits at $3.13 billion, while Mexico’s FDI into Australia is valued at $42 million.

Trade Agreements
Australia does not have a Free Trade Agreement (FTA) with Mexico however, in 2006, Mexico and Australia formed a Joint Experts Group (JEG) which published a report recommending that that Ministers revitalise the Joint Trade and Investment Commission (JTIC). Ministerial meetings of the JTIC were subsequently held in April 2010 and in February 2012. In October 2012 Mexico officially joined the Trans Pacific Partnership (TPP) negotiations which Australia is involved in.

Mexico is one of the WTO members with the highest number of FTAs. It currently has a network of 12 FTAs that cover 44 different countries. One of Mexico’s most significant FTAs is the North American FTA (NAFTA), which includes the USA, Canada and Mexico.

Economic Overview
Mexico came close to economic collapse during the Mexican Peso crisis in 1994/95. Since then however, the country recovered and has gained a reputation for credible macroeconomic policy management, which has led to prolonged economic growth and stable inflation. This can be largely attributed to the high level of integration with its northern neighbours, the USA and Canada, through the introduction of the NAFTA which was signed in 1994.  Over the past few decades Mexico has moved from being highly protected, to engaging in widespread trade liberalisation and welcoming FDI.

Mexico was hard hit by the GFC in 2009 with the decline in industrial production directly impacting on the manufacturing sector. The economy is continuing to recover thanks to renewed, albeit slow, growth in the USA and the rest of the world, and strong domestic demand.

In terms of future economic growth, Mexico faces some longer-term structural challenges including:

• Political structure adverse to reform, particularly referring to reforms needed in the labour and product markets
• Persistent violent organised crime – a widely reported problem
• Business cycles risk, which is strongly linked to the business cycles in the USA
• Corruption–Mexico ranks 105 out of 176 countries in Transparency International’s Corruption Perception Index
• Rule of law, particularly contract enforcement 
• Currency risk

Doing business in Mexico
Mexico has been known to be a difficult place to do business in the past because of the politicised nature of the business environment, the prevalence of large conglomerates and the lack of a robust legal framework. However, the story is not all doom and gloom; both the public and private sector have adopted a more global outlook driven by competition and export opportunities stemming from its wide FTA network. Moreover, the investment environment has been improved by the introduction of more simplified procedures, higher ceilings on foreign equity and great impetus put on the protection of intellectual property.

When it comes to conducting business in Mexico, it is important to be aware of the differences in culture and business practices.  Mexicans are very amiable but are inclined to be more formal than Australians when it comes to doing business.  It is worthwhile to also take note of the following:

• It is likely that accomplishing tasks and completing businesses deals in Mexico will take more time than you initially envisage. 
• Mexican business and social structures are highly hierarchical. All decisions are made by the CEO, or the very top executives of the company, therefore the decision making process can be delayed if they are otherwise engaged. Even in urgent situations, the CEO often still has to make the final decision.
• Mexican business partners appreciate being able to communicate in their native tongue, Spanish, even if they do speak English. For this reason, if you don’t speak Spanish, or only have limited proficiency, it is advisable to use a translator.
• Networking and personal relations are crucial. It is most likely that personal relationships determine business deals, rather than the quality of products or services. 
• Even if it seems obvious, respect for a person is central to business relations. Unintended insignificant actions can damage business relations.  
• Business commonly takes place over meals, often lunch but also breakfast. If you invite someone for a meeting over a meal it is expected that you will be footing the bill.
• Cancelled meetings are common. Err on the side of caution and re-confirm your meeting several times, including on the day of the meeting.
• It is always suggested to arrive on time for meetings, but note that they seldom begin on time. All procedures take longer than expected. It is not polite to look at your watch or appear impatient.   
• In an introductory meeting, it is common and expected to shake hands with the same and opposite genders. People from the opposite gender that know each other already, generally exchange cheek kisses.    
• Industry in Mexico can often be more political than in Australia and the State Government are very influential in regional industries, especially agribusiness. Therefore, an introduction to key officials is beneficial and this is an area where Austrade will be able to assist you.

Opportunities for Australian Exporters
Currently Mexico is actively pursuing a strategy to reduce its reliance on the USA as a trading partner. Moreover, given Mexico’s advancing economy and the rise of its middle class, demand for certain agricultural products, fast moving consumer goods, processed foods etc., is set to increase thus presenting significant opportunities for Australian exporters.

There are two factors, however, that will constrain Australian exports to Mexico, and hence our ability to take full advantage of the current and future opportunities presented by the market. The first is the high transport costs to export goods to Mexico. The second, and perhaps more significant, is  attributed to the tariff advantage which the United States, Canada and countries in the EU and Latin America have against Australian products given they have FTAs with Mexico. Both of these factors affect the competitiveness of Australian products and services but do not discount the fact that Australian businesses can and have successfully done business in Mexico.

Business Opportunities:

 

AEROSPACE

• Engine, electronic and landing system components, plastic injection, heat exchangers, precision machining, airfoil repairs, audio and in video systems, fuselage insulation and interior parts.
• Engineering design and aeronautical components for military and civil applications.
• Machining parts, vacuum heat treatment and chemical processing.
• There is low availability of aerospace grade materials for structural welding.
• Sheet metal fabricators of super alloys, major sub-assembly companies, structure manufacturers, tooling companies and casting companies.
• Special chemical processes and non-destructive testing.
• Environmental solutions for reducing emissions including noise emissions.
• Maintenance, repair and overhaul services.
• Development of commercial and military projects related to high dual technology.

AUTOMOTIVE

• Demand for raw materials used in the manufacture of spare parts and components.
• Components (engineered parts for diagnostic and assembly equipment): Braking systems, electrical components, transmission and engine components, molded plastic section, stamped steel parts steering assemblies, interior trims and light weight alternative metals.
• Opportunities for tier one & two suppliers: OEM parts and components, hybrid vehicle components, materials, stampings, electronic components, equipment and specialised tooling.
• High tech components and the mainstream application of motor sport technology and high-end manufacturing and design automotive engineering.
• Supplies to the automotive after-market with an increasing emphasis on high technology.

CONSUMER GOODS

• Growing demand for designer furniture and interior design goods
• High-fashion merchandise

CREATIVE INDUSTRIES

• Design Consultancy on products and packaging.
• Consultancy on branding and marketing.
• Mexican companies are demanding interactive and marketing content.
• There is a growing cinematographic industry which is demanding consultancy on development and production financing.
• Publications and books written in English.

EDUCATION AND TRAINING

• Export of educational equipment and services.
• Vocational training models. 
• Programme to strengthen higher education institutions.
• Private sector training possibilities -mainly for on-line courses (principally language training, but also other niche sectors and distance learning at an academic level for MBAs)
• English language training (mainly business English) continues to offer serious opportunities.

FINANCIAL SERVICES

• PPP’s consultants/operators. 
• Consortium managers. 
• Contract management specialists. 
• Arbitration. 

ENVIRONMENT

• Waste management and recycling 
• Water on control 
• Air pollution control 
• Contaminated land remediation 
• Environmental monitoring equipment and consultancy
• Energy efficiency 
• Greenhouse gas capture and storage 
• Carbon trading

FOOD AND DRINK

• Niche products such as delicatessen, gourmet, and organic foods. Including natural and dietary products.
• Food and drink products reflecting health concerns, weight loss and a healthy way of living.
• Food and drink products that address the needs of an ageing population including calcium rich and energy specific products.
• Ready to drink beverages and beer. 
• Specialised food and packaging machinery given the need for many companies to renovate existing machinery to satisfy health and safety standards.
• Dairy products and services including refrigeration, packaging and advertising.
• With a young population (the average age in Mexico is 26) and a spread of convenience stores around the country are the two main driving forces creating the growth in the confectionery Mexican market. 32 per cent of Mexican confectionery consumption is imported.

HEALTHCARE

• PPPs (Private and Public Partnerships). 
• Biomedical products. 
• Investment and supply of pharmaceuticals.
• Medical equipment.
• Healthcare promotion. 
• Training in PPP hospital management. 
• Training in geriatrics. 
• Consultancy and training for nurses. 
• Consultancy in institutional reform. 
• Quality assessment and management.
• Accountability. 
• Telemedicine. 
• Medical informatics. 
• GP training in prescribing team building, management.
• Primary healthcare and paramedics. 
• Patient safety. 

INFRASTRUCTURE

• Consulting engineers. 
• Facilities managers 
• PPP specialists.
• Equipment and machinery suppliers. 
• Roads, ports, airports and railways security consultants.
• Sustainable technologies

MINING AND STEEL

Mining

• Mexico has major opportunities in mineral exploration
• Mexico has eleven giant deposits of silver, three of copper, two of molybdenum, five of zinc, one of lead, one of manganese and one of fluorite. These deposits represent opportunities for exploration, machinery, tools, consultancy and new technology.
• Companies with expertise in feasibility studies have also big opportunities in the mining sector in Mexico.

Steel

• The iron and steel industry in Mexico is experiencing intellectual challenges.
• Companies are open to R&D that can provide the know-how and knowledge in different fields such as new technologies, composites material, new applications, demand and price forecasting, among others.
• In the next five years, the ironworks sector in Mexico will invest about US$10,000 million to grow and diversify their products, replacing imports.
• Home supplies such as stoves and refrigerators continue to grow in demand; therefore materials such as steel and copper are being required much more.

OIL AND GAS

• Off shore and onshore platform design and construction
• Decommissioning of productions facilities 
• Design construction, installation and commissioning of pipelines
• Receiving terminals and production facilities
• Exploration and appraisal drilling
• Production operations
• Environmental control
• Regional geographical studies 
• Reservoir appraisal and exploration techniques
• Training and education
• Deep water technologies
• Develop heavy and extra heavy oil recovery technology.

POWER AND RENEWABLE ENERGY

• Combined cycle plants maintenance and reconfiguration.
• Plants modernisation and maintenance.
• Hydroplants reconfiguration. 
• Metering.
• Interconnection projects. 
• Transmission and distribution infrastructure.
• Cogeneration projects 
• Renewable energies (small and large hydro, solar, wind, geothermal, biofuels, wave and tidal)
• Financing and carbon markets. 

Source: UKTI

Tariffs and Taxes

Tariff is based on the Harmonised System. You can obtain tariff rates (approximate rates) for most products from the APEC Tariff Database.

Most duties are ad valorem, assessed on the FOB or CIF value or at specific rates, whichever is the greater.

The General Import Tax Law of Mexico sets out specific, general and mixed tariff rates. The general rates (ad valorem) are mainly 3 per cent, 8 per cent, 13 per cent, 18 per cent, 23 per cent and 35 per cent, while the specific rates are established according to unit of merchandise. Mixed rates are part ad valorem and part specific rates and are applied to some products from sensitive sectors, such as sugar.

Australian Federal Trade Representation

Austrade Mexico City

Australian Embassy  

Ruben Dario #55, Esquina Campos Eliseos 

Col Polanco DF 11580 Mexico

Tel:+52 55 1101 2267 or +52 55 1101 2200  Fax:+52 55 5728 6459