AN APPROACH TO TRADE POINT CONCEPT AND 12 ELEMENTARY COMPONENTS OF TP

AUTHOR: Mustafa Emre Civelek

CATEGORY: Trade Points

Internet caused our mind to do a quantum leap and will cause foreign trade volume to increase in the future. Because internet make the communication between importer and exporter more easier than before. As an importer you can find a product on internet and so as to contact with sellers you can send them e-mail and you have the chance of comparasion the prices of different sellers. Consequently by means of internet you solve the most difficult problem which is to contact with companies around the world. Sites having buyer and seller data base that are called as B2B sites get the firms contacted with each other. Erroneously B2B concept is confused with trade point concept. Trade Point sites on the internet serve their member as B2B site and supply them content about B2B. From my point of view real defination of Trade Point is follows:

Trade Point is a web site all the international trade transactions can be performed through it and all the services about trade can be obtained from this site without needing any other organization. In order to increase effectiveness Trade Point must combine all the components of international trade. But there are not real Trade Point in the world now. Trade Point concept originated from United Nations. Uited Nations set up UNTPDC and provide database service to the infant Trade Points around the world and these infant Trade Points are also supported by their own governments. But untill now this Trade Point incubator project generated only B2B sites which are under government control. These sites are non-profit organizations and development of these sites are very slowly due to bureaucratic obstacles.

Actually internet allows us to constitute a real Trade Point by means of contemporary technology. We can combine all the components of international trade together. But there are obstacles preventing us from setting up a real Trade Point. First of all there are legal problems about the transactions performed through internet. So as to remove this obstacle all the countries around the world shoul reach concensus on the validity of digital certificate and signature and accept the legality of electronic trade documents issued, endorsed, legalized and signed electronically (electronic documents designed to reduce paper flows through computer reproduction and facilitate the production of transport and related documents).

Secondly all the procedures of international trade needs reengineering. Training people for new procedures must be very expensive and removing paper work completely can cause reaction of the people working in the conventional works. But inspite of these obstacles internet is ushering in an even bigger wave of business transformation. We can call this transformation trend as e-engineering. Companies and governments begun to realize it is not enough to put up simple web sites for customers in order to take full advantage of the internet we must invent new way to do business through internet. Magic of the internet is effectiveness by removing paper work. Because employees spent their days faxing and phoning etc. Therefore in order not to lose competitiveness all the companies must be experience e-engineering in the future. E-engineering is also in also inevitable for international trade procedures.

Consequently I hereunder explain the 12 components on that Trade Point rests:

1-Content : A real Trade Point should provide its member content about international trade issues, articles written by experts about legal issues and economy etc., latest news about world trade and Links to other Trade-information sites.

2-Software Services : A real Trade Point should provide software consultancy service for development of business on the internet and provide e-commerce solutions to the members. Business tools can be downloaded from the download section and e-engineering consultancy department must be set up.

3-Consultancy Service : A Trade Point should provide their members concultancy service about e-commerce, business development, entering new markets, promotions and help them to find customer and affiliates around the world. And members should get consultancy about legal issues regarding their foreign trade transactions. Consequently consultancy is the most important component of Trade Point because it provides the firms latest Trade-information. Trade Point can get this information from the specialists by using e-lance method. Specialists which wants to sell their professional services can be a member of Trade Point e-lance department and provide Trade Point members latest Trade-information. In this situation Trade Point plays intermediary role and cut its commission from the specialists.

4-Communication Tools : Trade Point site should contain communication tools in order the firms to communicate with each other. Trade Point should perform authenticity and identification processes for the communication between the firms. As a certification agency Trade Point confirms the authenticity of the messages sent by the firms. Secure communication increase the effectiveness of the foreign trade transactions. In the future agreements will be signed on internet and companies will set up meeting in virtual area. Trade Point should guarantee the security of these meetings held in internet. The leading communication tools provided by Trade Point are secure e-mail and video conferencing.

5-Trade Directory : From the Trade Directory section of The Trade Point member companies reach database about companies, products and countries. Trade directory section devided into three parts that we can explain as follows:

a-Company Info: Company info section is a database about the companies around the world .Companies which wants to establish a connection with other firms can get simple explanation about other firms including contact info and web addresses.

b-Product Info : This section provide the members search tool for product .They can find out price and quality of the products and make comparison between different products.

c-Country Info : This section provides the members information about countries they intended to effect import or export. Information about legal environment ,tariffs etc. of the countries is very important. Trade procedures are different for each country in the world. Therefore information about trade procedures has vital importance.

6-Trade Finance : On the Trade Finance section of the Trade Point , members can be provided links to financial institutions financing foreign trade. Finance and Finance related information have paramount importance. Therefore Trade Point Trade Finance center must contain lists of electronic resources related to financial matters and financial information including real time financial news, information on banks and financial institutions, financial analysis software etc.

7-Customs :Customs, Insurance, Banking and Transport sections are office sections of Trade Point. Member companies can perform their operational activities through these sections. From Customs office of Trade Point members can perform their customs procedures virtually. By means of a secure connection with the customs departments they can send customs declarations through internet and gain considerable time.

8-Insurance : At the insurance section of Trade Point, members have secure internet connection to insurance companies that are members of the Trade Point and send application form for transportation insurance for their export-import transactions. Trade Point binds their members to the insurance brokers which they are also member of the Trade Point by using secure internet connection.

9-Banks : At this office section of the Trade Point member companies execute their banking operational transactions such as money transfer, issuing a Letter of Credit, Bill of Lading endorsment etc. without using paper documents. Banking section is depend upon web based systems that supports electronic document exchange. Conducting trade transactions by electronic documents will be a real revolution in the international trade and cause the world trade valume to increase and by reducing the cost allows us to trade effectively.

10-Transport : At this office section by establishing secure internet connection with the transport brokers, member companies are provided an effective way to contact with transport agencies.

11-Marketing : At this section member companies conduct online sell and buy in B2B auctions and market place and member companies are provided web tools to set up and establish websites, catalogs, electronic market places and marketing support tools study and simulate marketing strategies.

12-Venture Capital : At this section internet connection and links to Venture Capital entities are provided for the member companies. In conclusion TP stands for e-everything about international trade.