Ignore the P in PESTLE at your peril

This was originally posted in January 2014 under Expertexporter’s wordpress blog.

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In the last few days I have read three news reports where changes in government regulations are likely to have a significant impact on international trade. A timely reminder not to overlook the political environment when researching new markets or keeping up to date with existing ones!

In Argentina President Cristina Fernandez de Kirchner’s government has placed further restrictions on foreign currency transactions in an attempt to slow down the drop of almost 30% in foreign currency reserves. These new restrictions particularly target on-line purchases from overseas sites. International deliveries can no longer be made to private addresses. Instead consumers have to complete a customs declaration and collect their parcel from the local customs office. Limits have also been placed on the value and number of international purchases that can be made by individuals. Once a certain threshold is reached a tax of 50% kicks in. So overnight it has become highly inconvenient and more expensive for Argentinean consumers to purchase from overseas e-commerce sites.

Canadian authorities have just taken steps to ban the import of two iconic British food brands, namely Irn Bru and Marmite. Other British products are also affected but the British media seems to be particularly cross about the ban of these two items. Although it has been possible to import Irn Bru and Marmite into Canada in the past, the Food Inspection Agency (CFIA) is now taking a firmer stance on the sale of such goods. Unhappy expats will just need to turn to Scotland’s other national drink and spread jam on their toast for the foreseeable future.

In 2013 Russians ordered over 30million parcels from overseas but this number is likely to reduce significantly in 2014 as a result of the Russian government’s new requirements for additional customs documentation. Although business customers are not affected by this change, DHL and FedEx have already suspended delivery of parcels to Russia and it is likely that UPS, TNT and DPD will follow suit. Anyone wishing to ship product to Russia, may find themselves with a limited choice of options and higher freight costs.

These above examples have made the news. However, each week there must be a number of small changes being made to trade regulations in different markets around the world which don’t come to anyone’s attention. The first time they may come to light is when goods are held by customs – not a happy situation. Keeping up to date with changes in your overseas markets is very important and that’s why I always recommend to clients that they don’t just carry out a PESTLE analysis once but on a regular basis. That way they won’t fall foul of the P in PESTLE.

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