International Trade: Concept, Risks, and Process with Legal and Regulatory Frameworks, Slides of Foreign Trade

Download International Trade: Concept, Risks, and Process with Legal and Regulatory Frameworks and more Slides Foreign Trade in PDF only on Docsity! Prof. SK Lee 1 ❖ Concept of International Trade What is International Trade ? International Trade Trade Domestic Trade 2 Basic Contract Accessory Contract Transportation Contract Insurance Contract Payment Contract United Nations Convention on Contract for the International Sales of Goods (CISG) - mainly used as reference rule when signing contract between seller & buyer ‘INCOTERMS’ (International Rules for the Interpretation of Trade Terms, 2010) - a series of pre-defined commercial terms relating to international commercial law Hague-Visby Rules (1968) Hague Rules (1924) Warsaw Convention (1929) Uniform Rules for a Combined Transport Document (1973) Marine Insurance Acts (1968) Institute Cargo Clause(ICC) UCP (Uniform Customs and Practices for the Documentary Credits, 2007 -UCP 600) Uniform Rules for Collection (1995) Sea Air ❖ International Trade related Law & Regulations International Trade Law & Regulations 5 Item Selection & Overseas Market Research Import / Export Marketing 1 2 Discovery of Trading Partners & Credit Investigation Negotiation and Acceptance of Trade Terms & Conditions 3 4 Issuing & Accepting of L/C Selection of Transportation Company & Sign an Insurance Contract 6 7 Import / Export Customs Clearance and Payment & Acceptance Claim & Arbitration 8 9 Sign a Trade Contract5 ❖ The Process of International Trade 6 Item Selection & Overseas Market Research1 Evaluate the competitiveness and differentiation factors of the goods to be exported 1) Select Target Items Primary Consideration Secondary Consideration : : 2) Select the Market Select the market that best matches the target item ▪ Market Demand Phase : : : : ▪ Economic Development Phase : : ▪ Market Opening Phase ▪ Competitive Elements ▪ Government Interference ▪ Other Elements ❖ The Process of International Trade 7 ~ Business Culture ~ East Asia Central Asia 10 Item Selection & Overseas Market Research1 ① Set scope of research 3) Target Market Research Macro scope Micro Scope Country Overview: : Most recent Trends & Issues Economic Index Culture Overview Propensity to Consume by Item Sales Index Competitors ② Set survey items by Region by Gender by Age by Occupation Sales Consume Propensity to Trend of ※ Considerations • Availability • Period • Cost • Subject ❖ The Process of International Trade 11 Item Selection & Overseas Market Research1 ③ Set survey method 3) Target Market Research Search Documents Inquiry : : Visit : ※ Points to note when visiting • Pre-visit request : • Send check list : • Need to prepare : ❖ The Process of International Trade 12 ▪ Trade Portal Registration ▪ Webpage, Blog Production ▪ On-line Ads ▪ Participate in the Exhibition ▪ Visits and Meetings ➢ Professional Trade Portal ➢ Self-produced or Outsourced ➢ Ad Agency ➢ Travel Agency or State Organization ➢ Direct contact or Introduction ➢ Chamber of Commerce Import / Export Marketing2 ❖ The Process of International Trade 15 ▪ Search Engines ▪ E-mail, Fax ▪ Exhibition ▪ Financial statement ▪ Credit survey ▪ Visiting ➢ Trade Association ➢ Chamber of Commerce ➢ Exhibition Center ➢ Import / Export Bank ➢ Credit Fund ➢ Credit Information Agency Discovery of Trading Partners & Credit Investigation3 ❖ The Process of International Trade 16 ▪ Payment Currency & Exchange Rate ▪ Payment Terms, Price, Quantity etc. ▪ Incoterms ▪ Transportation Mode, Logistics Cost ▪ Duty & Tax, Market Price ➢ L/C, D/A, D/P, T/T etc. ➢ Exchange Risk Management ➢ Selection of LSP ➢ Bank, Customs Broker ➢ Cost Analysis ➢ Market Survey Negotiation and Acceptance of Trade Terms & Conditions4 ❖ The Process of International Trade 17 ❖ The Process of International Trade Distributor or Agent - an intermediary who purchase and takes title to the goods. - an middleman primarily involved in wholesaling who handles consumer or business goods that may be manufactured or not manufactured, imported or exported, and then sold. - typically purchase goods on their own account and resell them at a higher price, accepting the risks and the rights that come with ownership of the goods. ▪ Distributor Supplier Import/Export Distributor Buyer resell Goods Payment sell Goods Payment $10/EA $12EA A Distributor is Is independently owned. Takes title to the goods being distributed. (Ownership passes from the seller to the buyer upon purchase.) Is often classified by product line (such as medical, hardware, or electronics products). ❖ The Process of International Trade Distributor or Agent ▪ Distributor Full-service Distributor • Buying: DB acts as a purchasing intermediary for its customers. • Creating assortments: DB purchases goods from a variety of suppliers and maintains an inventory that meets the needs of its customers. • Breaking bulk: DB purchases in large quantities and resells to its customers in smaller quantities. • Selling: DB provides a sales force to its suppliers. • Storing: DB serves in a warehousing capacity for its customers, delivering the goods to its customers at the customers’ request. • Transporting: DB arranges for delivery of goods to its customers. • Financing: DB provides credit terms to its customers. Drop-shipping Distributor - A distributor who sells merchandise for delivery directly from the supplier to the customer, and does not physically handle the product. - Drop-shipping distributor does take title to the goods before delivery to its customer, ❖ The Process of International Trade Distributor or Agent ▪ Agent Supplier Seller Import/Export Agent Buyer Goods Payment for goods $12/EA - An agent is similar to a distributor in that he is a middleman. - However, an agent does not take title to the goods and provides fewer services than a distributor does. - The agent’s role is to get orders and (usually) earn a commission for his services. - Export agents work in the country in which the product is produced; import agents are based in the country where the product will be sold A Distributor is Is independently owned. Does not take title to the goods being purchased and sold. Is actively involved in the negotiations for either the sale or purchase of the goods Traditional I/E Agent Broker?