Panama Canal traffic cut by more than a third because of drought. A severe drought that began last year has forced authorities to slash ship crossings by 36% in the Panama Canal, one of the world's most important trade routes. (AP)

US economy grew at a shocking pace in the fourth quarter. The U.S. economy remained shockingly robust in the fourth quarter to close out a remarkably strong 2023 as consumers and businesses continued to spend. (CNN)

US, UK sanction senior Houthis as rebels say Red Sea attacks will continue. The Yemeni group says it will continue targeting Israel-linked commercial vessels until aid reaches Palestinians in Gaza. (Al Jazeera)

Could a court really order the destruction of ChatGPT? The New York Times thinks so, and it may be right. The answer to the first question is yes. Under copyright law, courts do have the power to issue destruction orders. (The Conversation)

China’s population shrinks again and could more than halve. China’s working-age population is projected to fall to just 210 million by 2100—a mere one-fifth of its peak in 2014. (The Conversation)

What the Red Sea crisis could mean for the electric vehicle industry and the planet. Automotive giants Tesla and Volvo have announced pauses to the production of their electric vehicles (EVs) in Europe. Electric vehicles are seeing record sales and demand worldwide, but a lack of parts means that factories cannot sustain their production. (The Conversation)

The Red Sea conflict is scrambling shipping. Europe is bearing the brunt. Europe is again on the front line of the latest geopolitical tensions, a development that threatens to widen the economic gap between it and the U.S. (WSJ)

CIA chief to meet Qatari PM and heads of Mossad, Egyptian intel for hostage talks. CIA director Bill Burns will meet with the head of Israel's Mossad, the Egyptian intelligence chief and the Qatari prime minister in Europe in the coming days to discuss efforts to reach a deal to secure the release of hostages held in Gaza. (Axios)

What recession? Inside the gangbuster GDP report. Forget the much-discussed prospect of a soft landing for the U.S. economy. In 2023, there was no landing at all. (Axios)

Financial markets are jonesing for interest rate cuts. Not so fast, says the European Central Bank. European Central Bank President Christine Lagarde pushed back Thursday against market expectations for quick interest rate cuts even as Europe’s economy sputters and financial markets froth in hopes of cheaper credit that would boost business activity and stock prices. (AP)

Italy's lower chamber of parliament approves deal with Albania to house migrants. Italy's lower chamber of parliament on Wednesday approved a novel government deal with Albania to house migrants during the processing of their asylum requests, a cornerstone of Premier Giorgia Meloni's efforts to share the migration burden with the rest of Europe. (NPR)

The West Bank economy has been hammered by war. More than three months into Israel's war in Gaza, the economy of the West Bank is reeling. (NPR)

Turkey's parliament votes to let Sweden join NATO. Turkish legislators on Tuesday endorsed Sweden's membership in NATO, lifting a major hurdle on the previously nonaligned country's entry into the military alliance. (NPR)

United Nations sees international tourism fully recovering in 2024. Global tourism is set to fully recover from the pandemic in 2024 as international tourist arrivals will likely be 2% more numerous than in 2019, the United Nations' World Tourism Organization said. (Reuters)

Building Customer Relationships in Italy

Jamilex Gotay, editorial associate

One of the most important duties of a credit professional in international credit is to form and maintain relationships with their customers. To do so, they must take the time to not only understand their customers, but be knowledgeable of the customs, culture and business style of their respective countries.

Why it Matters: Understanding the customs, culture and business style of customers' respective countries is crucial in building trust, mitigating risk and adapting business strategies to different markets.

For example, Italy takes pride in their “Bella figura” or “good image” lifestyle, meaning they like to dress well to make a good impression. A positive image, coupled with politeness and confidence, can significantly enhance your ability to establish relationships and secure business in Italy. The impression you create often determines whether your Italian counterparts accept your proposal.

Relationship Building

Business communities in Italy tend to be closely knit as they are very family oriented. They favor conducting business with familiar and trusted individuals. Initial meetings are more about establishing rapport than making business decisions, so your Italian counterparts may take a while to respond to your proposal.

Italians are candid and appreciate the same from others. They enjoy engaging discussions and are uneasy with quiet, so feel free to participate in conversations.

• Topics of conversation related to Italian art, architecture, music and opera are always appreciated. Other topics of interest are Italian cinema and calcio (football/soccer).
• Italians enjoy talking about food, wine and regional specialties. They are also curious about the gastronomy and cultures of other countries.
• Topics to be avoided are politics and religion—avoid bringing up the Vatican or the Pope—as well as taxes.
• Conflict is just another means of communication and interruptions are common.
• Be prepared to wait, and never communicate a sense of urgency, as this is taken as a sign of weakness, which can damage your credibility.

Avoid criticizing any aspect of Italian culture, even if the Italians around you are doing it themselves. Avoid asking about the profession, income or family of someone you've just met—these are considered personal questions.

Italian is the primary business language in Italy. Despite many Italians being multilingual, it's advisable to hire an interpreter if your team lacks Italian speakers.

Top Export Partners

Germany buys 13% of Italy’s exports, followed by France at 11%, the U.S. at 7%, Switzerland at 6%, the UK at 5% and Spain at 4%.

Major Export Products and Services

Italy’s major export commodities include textiles and apparel, engineering products, motor vehicles, manufacturing machinery, transportation equipment, chemicals, minerals, nonferrous metals, food, beverages and tobacco. The country’s export services include retail, transportation, tourism, real estate and other business activities.

Top Import Partners

Italy purchases 15% of its imports from Germany, 8% each from France and China, 6% each from Russia and the Netherlands and 4%, each from Spain and Belgium.

Major Import Products and Services

Italy imports engineering products, transportation equipment, chemicals, minerals, nonferrous metals, fuels, textile and apparel, food, beverages and tobacco. Its import services include tourism and transportation, banking and information and communication technologies.

Negotiation

In Italy's hierarchical business environment, you must determine where in that hierarchy your negotiating partner resides. The quicker you engage with decision-makers, the closer you are to finalizing the deal. Aim for parity in negotiation teams.

Northern Italians prioritize efficiency in business, aiming to close deals swiftly due to fluctuating economic conditions. Conversely, Southern Italians are more prudent, focusing on long-term prospects. Regardless, Italian businesspeople are adept negotiators, securing the best deals for themselves. Their negotiation style, however, may be influenced by economic uncertainty.

Small entities are usually managed by proactive individuals who make decisions without extensive consultation. In contrast, in larger, more complex corporations, you might not interact with top decision-makers until several initial rapport-building sessions have occurred.

Italians believe the power of an agreement is in the personal commitment, not the written contract. Building this commitment requires time, charm and tact. However, Italians are skilled negotiators and gracious hosts, forgiving a few missteps.

Once the contracts are signed, maintain the trust built with your Italian partners during negotiations. Given the region's fluctuating political and economic conditions, monitor the contract terms and adapt to significant changes.

Maintain clarity, simplicity and comprehensiveness in your presentation. Italians, though intuitive decision-makers, will scrutinize every detail of your deal.

Risk Mitigation

Italian business professionals excel in risk assessment and are willing to take calculated risks. In challenging times, they can identify opportunities for substantial financial gain.

• Put everything in writing to minimize disputes at the time of performance.
• Try to have the final agreement written in your native language, but if it must be written in Italian, you will need to obtain an authorized translation initiated by both parties.
• Early on, determine whether attorneys will be needed and if so, when they can be brought into the negotiations.

Business Etiquette

Italians leave an arm's length or sometimes less space between themselves and people they are conversing with. Expect a fair amount of touching on areas such as the hands, arms and shoulders. Maintain direct eye contact during conversation.

Italian men and women shake hands in business situations.

• The handshake should be firm and accompanied by direct eye contact and a friendly “Buon giorno” (good morning) or “Buona sera” (good afternoon or good evening).
• Women, and in certain regions men as well, will kiss each other lightly on the cheeks when greeting a friend or family member, and men may embrace lightly.
• When a man is shaking hands with a woman, the woman will often extend her hand first.

Italian professionals often stick with formal modes of address for a while before they are comfortable moving to first names.

• Avoid being the first to move to a first-name basis; your Italian counterpart may think you are rushing the friendship because of an ulterior motive.
• During introductions, Italians will use Signore (Mr.) or Signora (Mrs.) along with a person's surname.
• Use professional and academic titles in business communications and correspondence.

FCIB members can learn more about the culture and business etiquette of different countries in the World Trade Reference.

Week in Review Editorial Team:

Annacaroline Caruso, editor in chief

Jamilex Gotay, editorial associate

Kendall Payton, editorial associate