Manufacture Export Agent

The manufacture’s export agent (MEA) is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers. Unlike the EMC the MEA does not serve as the producer’s export department but has a short term relationship covers only one or two markets, and operates on a straight commission basis. Another principal difference is that MEAs do business in their own names rather than in the name of the client. Within a limited scope of operation the MEAs provide services similar to those of the EMC.

Home country Brokers: The term broker is a catchall for variety of middlemen performing low cost agent services. The term is typically applied to import export brokers who provide the intermediary function of bringing buyers and sellers together and who do not have a continuing relationship with their clients. Most brokers specialize in one or more commodities or which they maintain contact with major producers and purchasers throughout the world.

Buying offices: A variety of agent middlemen may be classified simply as buyers or buyers for export. Their common denominator is a primary function of seeking and purchasing merchandise on request from principals, as much they do not provide a selling service. In fact, their chief emphasis is on flexibility and the ability to find merchandise from any source. They do not often become involved in continuing relationships with domestic suppliers and do not provide a continuing source of representation.

Selling groups: Several types of arrangement have been developed in which various manufacturers or producers corporate in a joint attempt to sell their merchandise abroad. This may take the form of complementary exporting or of selling to a business combine such as a Web-Pomerene export association. Both are considered agency arrangements when the exporting is done on a fee or commission basis.

Web-Pormerene Export Associations: Web-Pomerene export associations (WPEAs) are another major form of group exporting. The Web-Pormerene Act of 1918 allowed American business firms to join forces in export activities without being subject to the Sherman Antitrust Act. WPEAs cannot participate in cartels or other international agreements that would reduce competition in the United States but they can offer four major benefits: 1) reduction of export costs, 2) demand expansion through promotion, 3) trade barrier reductions, 4) improvement of trade terms through bilateral bargaining. Additionally WPEAs set prices, standardize products, and arrange for disposal of surplus products. Although they account for less than 5 percent of US exports, WPEAs include some of America’s blue chip companies in agricultural products chemicals and raw materials forest products, pulp and paper textiles rubber products motion pictures and television.

Foreign Sales Corporation: A foreign sales corporations (FSC) is a sales corporation set up in a foreign country or US possession that can obtain a corporate tax exemption on a portion of the earnings generated by the state or lease of export property. Manufacturers and export groups can form FSCs. An FSC can function as principal buying and selling for its own account, or as a commissioned agent. It can be related to a manufacturing parent or can be independent merchant or broker. The WTO in 2003 ruled FSCs to be in violation of international trade rules thus starting a major trade dispute with the European Union that still simmers and occasionally sizzles.

Export merchants: Export merchants are essentially domestic merchants operating in foreign markets. As such they operate much like domestic wholesaler. Specifically they purchase goods from a large number of manufacturers, ship them to foreign countries, and take full responsibility for their marketing. Sometimes they utilize their own organizations but more commonly they sell through middlemen. They may carry competing lines, have full control prices, and maintain little loyalty to suppliers although they continue to handle products as long as they are profitable. Canadian wholesalers export low cost pharmaceuticals to American consumers is an increasingly important, albeit controversial example.