Many small and midsize businesses are hesitant to break into the global marketplace because of the perception that trading on a global scale is cost-prohibitive. But thanks to the recent proliferation of trade programs throughout the world, the savvy entrepreneur can greatly reduce the cost of doing business internationally, especially if that business has anything to do with importing or exporting goods.One of the first questions an entrepreneur should ask is: Is there a legal way to avoid paying duties on imports from and exports to a particular country? The answer could be yes, as long as the product and the country you plan to do business with are covered under the provisions of a trade program.
Trade programs fall into two categories: preference programs and free trade agreements (FTAs). Preference programs are unilaterally established by one country in favor of another country or group of countries, generally without demanding something in return. Usually created to bolster the economies of developing nations, examples of U.S. preference programs include the Generalized System of Preferences (GSP), which allows for the duty-free importation of thousands of designated products from 144 developing countries, and the Africa Growth and Opportunity Act (AGOA), designed to create new commercial opportunities for people in sub-Sahara Africa.Content Continues Below
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