Exporting, Importing and Countertrade

These flashcards cover key concepts related to exporting, importing, countertrade, and the associated risks and strategies.

What are some promises associated with exporting?

Exporting presents large revenue and profit opportunities, economies of scale, and access to foreign markets.

Identify one major risk associated with exporting.

Voluminous paperwork and complex formalities can lead to potential delays and errors.

What can firms do to improve their export performance?

Firms can collect information on foreign markets, hire export management consultants, and foster relationships with local distributors.

What is the role of the U.S. Department of Commerce in supporting exporters?

It provides assistance through U.S. Export Assistance Centers and International Trade Administration resources.

What is countertrade?

Countertrade is the trade of goods and services for other goods and services, often used when conventional payment methods are difficult.

What has contributed to the popularity of countertrade?

Countertrade is especially popular among developing nations that lack foreign exchange reserves for necessary imports.

What is a letter of credit?

A letter of credit is a bank's promise to pay a specified sum to a beneficiary upon presentation of specified documents.

Describe a draft (bill of exchange) in international commerce.

A draft is used to effect payment, indicating a specified amount to be paid at a specified time, and is essential for settling trade transactions.

What are some challenges faced by inexperienced exporters?

Exporters may face challenges such as daunting time and costs, documentary compliance, and border compliance.

What is the purpose of bill of lading in international trade?

It serves as a receipt, a contract, and a document of title, and can also act as collateral for financing.

What are some pros of countertrade?

Countertrade can facilitate financing deals when cash is unavailable, may be required by importing governments, and can strategically enhance market penetration.

What is one financing risk that exporters face?

Exporters may not trust foreign importers and may have difficulties tracking them if obligations are unmet.