Secure international trade transactions and avoid hidden cost traps: MCB
MCB hosted an event on international trade, where it was noted that the latter is gaining a lot of attention in today’s connected world, making securing your transactions increasingly important – moreover arbitration and mediation can be the most appropriate way to resolve issues in a quick and flexible manner.(Image: Composite)
On 27 April 2015, Mauritian financial services major the MCB Group organized a forward-thinking event with the theme being “How to secure your transactions in International Trade and avoid hidden cost traps?”
Today, the world is becoming a global village and trade opportunities in the international market keep changing with increasing liberalisation and digitisation of trade policies. Here, Mauritius is viewed as a well positioned country to be the gateway to Africa with a business-friendly tax regime.
Koen Vanheusden, a member of the International Chamber of Commerce (ICC) addressed the floor regarding international trade, where he highlighted that to remain competitive, efficiency is necessary and risks in international trade need to be eliminated. He also stressed that “global trade requires standards and contracts that are universally acceptable”.
He went on to highlight though that a contract does not eliminate risks completely but rather shifts the risk to the other party. The transaction cost is more of a concern for a buyer than the price itself, therefore the challenge is to choose the optimal way to manage transaction costs, he added.
Another speaker was Baudouin Thore of the AU Group, who spoke about credit insurance and trends. He revealed that Europeans companies are estimated to have late payments of around EURO 90 million and the trend remained the same between the period 2010 – 2014. Regarding insolvency, on an annual basis, EURO 23.6 million is accounted for losses traced to unpaid debt, he stated.
However it is to be noted that Canada is one country whose position on insolvency has ameliorated in the concerned period. As for imports growth for the period 2015-16, a country like the United States is seen to enjoy a sound position. Besides, significant growth in imports will be recorded in countries like Colombia and Mexico while Greece’s growth shall be in the red.
The speaker concluded by noting that the slightest repayment problem can prove fatal for an entity.
The third speaker was B Pillay from the MCCI Arbitration and Mediation Centre (MARC) who started his speech by highlighting that a contract must help answer questions pertaining to issues such as “What happens if I am not paid or my merchandise is late?”
He then moved on to discuss the evolution in the world of commerce by the WTO which aims at harmonising rules across Member States.
MARC is a permanent court of arbitration in favor of the business community for quick, efficient and flexible solutions to disputes, which recommends three ways to resolve disputes – arbitration, mediation or a combination of both.
The advantage of choosing such modes to resolve disputes is that cost and time frame are predictable, there is confidentiality and the process is tailored to the parties involved.
The event ended with a panelist discussion involving Duncan Bradshaw, Koen Vanheusden, Afsar Ebrahim, Craig Saven and Patrice Robert, where the discussion hovered around the need to align WTO rules for international trade with the rules of different governments. Regarding Mauritius, it was noted that the island economy is viewed as the brains of Africa in terms of trade-centric logistics services.
- By Wazna Gunga