Trade Compliance Needs a Publicist

Just as Don Draper in 'Mad Men' transformed how advertising was perceived in the golden age of marketing, the field of trade compliance is undergoing a radical transformation. No longer the behind-the-scenes compliance police, today's trade professionals are at the forefront, steering strategic, trusted value chains that impact the entire lifecycle of the products we import and export for our companies.

The term "trade compliance" often conjures images of specialists buried in bureaucratic tasks, facilitating cross-border shipments at the tail end of a supply chain process. Yet, given the expectations of new regulations, today's trade professionals play a crucial role in aiding our companies to construct strategic, trusted value chains. Our influence extends across the entire lifecycle of a product – from sourcing raw materials and production to assembly, financing, insurance, and logistics. Gone are the days of being relegated to a back-office supporting role; now, our role positions us as frontline strategists in global operations. This marks a transformative era for a role that deserves recognition— it's time for a rebranding to better capture the dynamic, strategic impact of trade compliance activity. In this pivotal moment where trade and technology are converging, our role is more crucial than ever.

To be clear, I have a deep affection for the business and history of trade compliance. Having dedicated my entire professional career to this field, I understand its nuances and the critical role it plays–and can play. Trade and compliance are not just my profession but part of who I am. As a licensed US customs broker, I've dedicated my career to promoting new technologies that support and elevate our role.?

The Strategic Role of Today's Trade Compliance Professionals

The trade compliance function is no longer just about adhering to regulations and preventing non-compliance at the moment goods cross country borders. It’s about navigating complex new regulations like the UFLPA in the US (and forced labor policies worldwide) and EU’s carbon and deforestation legislation, and due diligence requirements so companies are equipped to make better decisions for their business - for humanity - for the world - as well as ensure compliance to preserve their privilege to engage in trade activity. But more than ensuring compliance; it strategically influences sourcing strategies, mitigates risks, and enhances efficiency. This shift highlights why I believe a new, broader term is needed. Far from being the last line of defense to ensure regulatory compliance, we are proactive strategists who help shape business outcomes.

The Role of AI

What have been considered trade compliance activities are now integral in shaping business strategies. With the advent of AI, companies have access to powerful tools that can analyze vast amounts of data to forecast trends, assess risks, and identify opportunities that were previously unattainable. It can process and interpret complex trade data to construct multi-tier product-level value chains that can be used to inform trade considerations from the outset, rather than as an afterthought. It means companies can embed trade considerations like duty and tax optimization or identifying risky n-tier suppliers during the strategic planning phases ensuring that compliance is not just about following rules but about making strategic decisions to enhance competitiveness and operational viability.

By leveraging AI, trade compliance enables companies to design sourcing strategies that consider the regulatory environment, tariff impact, and logistics challenges. For example, imagine a company using AI to verify the country of origin of a product before making a sourcing decision. With this approach, countries could optimize for value chains that qualify for trade preference programs, thereby reducing import duty and overall landed cost. This is how the trade function moves from being regarded only as a cost center to a strategic advantage.

For example, imagine a company using AI to verify the country of origin of a product before making a sourcing decision. With this approach, countries could optimize for value chains that qualify for trade preference programs, thereby reducing import duty and overall landed cost.

A Proposed Rebrand

Given the transformative impact of AI and the strategic nature of the role, the term "trade compliance" no longer captures the depth and breadth of our function. The shift from reactive compliance to proactive strategic planning underscores the need for a new term.? Perhaps "Trade Strategy," "Compliance-Driven Strategic Sourcing," or "Strategic Trade Management" or “Trade Influenced Procurement” would better capture our role, emphasizing strategy and comprehensive impact over mere compliance. Personally, “Trade Strategist” or “Trade Engineer” has a nice ring to it. These descriptions reflect the positive impact of thoughtful consideration of trade practices on the business, highlighting contributions to both top-line growth and bottom-line savings. The trade function no longer simply ensures that products cross borders legally; it scouts and secures advantageous trade agreements, identifies cost-saving opportunities through tariff engineering, and guides companies through the murky waters of international trade politics.

Conclusion

As geopolitics, climate disruptions, and consumer behavior reshapes trade, the function traditionally known as "trade compliance" will become more and more strategic. AI enables us to better inform trade behavior and play an important role across the value chain, and it’s time for our nomenclature to evolve as well.? Recognizing and renaming the role to reflect its strategic importance will not only align with the current capabilities and function but also elevate our place at the strategic heart of global trade operations. A rebrand is essential not just as a name change but as a recognition of the true value we bring to the table.

?? I'm eager to hear what you think. How do you see the trade compliance function evolving within the dynamic landscape of global trade? What terms would you suggest to more accurately reflect our strategic impact??