Trading in Lower-Risk Markets

International Trade invariably involves risk and complexity, regardless of the markets in which you may choose to transact business. The nature and scope of risks can, however, vary significantly, as can the mitigation options and the associated costs.

From a North American perspective, trade with European Union (EU) Member States is generally viewed as low-risk. From a trade financing perspective, the risk of non-payment due to national financial crisis may be considered minimal, yet the costs of market entry can be significant. In addition, the very sophistication which eliminates certain risks can introduce other issues, which contribute to complexity and/or higher costs of doing business.

Likewise, the need to ensure that payment can be collected outside of the EU is not a concern, as it might be in more volatile markets, yet the risks of non-payment for purely commercial reasons related to a trading partner are very real.

Trade in lower-risk markets can also introduce competitive pressure as more Importers and Exporters seek to establish "secure" trading relationships in safe markets. This can create pressure to offer attractive financing terms as part of an international trade contract.

Trading in lower-risk markets is likely to involve less focus on ensuring secure payment or broader risk mitigation,and more focus on financing and prompt payment.

TD Global Trade Finance can work with you to identify the most effective and appropriate solutions to financing business in lower-risk markets, even if the business involves established relationships, and you perceive that everything in the relationship or the transactions has been optimized.