World Trade Day 2014 - Financial / Economic Panel Recap

14 May 2014 11:48 AM | Jessica Rettig
Moneymaking opportunities come and go very quickly in international business, but according to financial risk experts Joseph Quinlan from Bank of America and Anthony Lombard from BBVA Compass, the companies who take their time and demonstrate long-term perseverance are the ones that ultimately end up with the earnings.

“Be patient when it comes to the bottom line,” Quinlan said. “Good companies can weather storms, and there’s plenty of them.”

Quinlan and Lombard joined moderator Andrew Rieke from Euler Hermes at Denver’s 41st annual World Trade Day conference on May 7 to discuss the top challenges and opportunities for companies engaged with international trade today.

Among these challenges, Lombard pointed to the issue of currency constraints and other financial regulations, which often make it tough to get money out of specific countries. It’s vital, he cautioned, that companies define their exit strategy before going into a new place, especially since the constraints differ significantly from country to country. “As soon as you cross borders,” he said, “it can be a whole new set of circumstances.”

Quinlan also emphasized the importance of doing one’s homework before entering new markets. He warned that good partner companies abroad could be very, very hard to find. A company, he says, should make sure any potential partner is capitalized, has a successful local brand, and has the connections necessary to make the partnership sustainable.

“There’s no shortcuts,” he said in regards to researching new markets. “It’s almost like you need to be an intelligence officer.”

Recommending resources such as the World Bank’s Doing Business index and the World Economic Forum’s Global Competitiveness Report, Quinlan highlighted the importance of understanding local markets and local business culture.

One pitfall for many multinational companies, he said, is that they underestimate the strength of local competition. Local businesses often have better social networks and a better cultural understanding of how to close deals within a given community.

Despite these obstacles, however, both Quinlan and Lombard were enthusiastic about pursuing prospects abroad. For Quinlan, companies are missing as much as 80 percent of the playing field by not considering new markets overseas. He says that emerging economies, those whose consumers now have more money to spend than ever, are where U.S. companies could gain a huge advantage.

“I believe the U.S. is the best economy on earth, but we need other resources. We need other drivers of growth,” he said.
The panelist also offered warnings about other potentially challenging trends, such as the de-globalization of capital as banks find it increasingly difficult to deal with the variety of financial regulations outside their home countries.

Nevertheless, for U.S. companies, especially exporters, the most significant regulatory roadblocks might be at home, not in places like China or South Africa, Quinlan noted. “If there’s a political risk, it’s right here at home,” he said. “And you should be aware of that and push back against that.”