International Trade 2 - Extra notes/stuff to learn

Department of Trade

Set up by the government to provide exporters with information on things like possible markets for their products and import regulations abroad.

ECGD

Export Credit Guaranteed Department. Part of the Department of Trade and provides insurance for exporters in the case that their foreign buyers/importers are unable to pay.

Reasons why importers may be unable to pay:

1. Financial setback

2. Political activities

3. Government restrictions

4. Natural disasters

Ex works

Includes all other cost to be paid by the buyer excluding cost of the goods sold

F.A.S.

Free Alongside Ship. Price of the goods includes transportation to the dock (you pay for your goods shipment)

F.O.B.

Free on Board. Price of goods include loading onto board ship (you do not pay for your goods shipment)

C.F.

Cost & Freight. Price includes freight charges to the destination

C.I.F.

Cost, Insurance & Freight. The price of the goods includes freight and shipment

In Bond

Price includes all transport charges including delivery to the bonded warehouse

Bill of lading

represents ownership of the goods while in transit and is a way to contact the shipper. 4 copies are issued to the following people: shipper, exporter, importer, and customs

Manifest

A ship’s manifest is a summary of all the bill of lading and cargo it is carrying

Certificate of origin

A free trade area may need proof of the country of origin before goods are allowed to pass through duty free

Freight note

shipping charges sent to the exporter by the shipping company

Import License

This is used to enforce quotas and is issued by the government giving importers permission to bring certain quality of goods into the country.

Bill of exchange

A method of payment used when trading among other countries.

1. A contract signed by buyer and seller.

2. After bill of exchange is received by the seller the goods are shipped

As payment can be extended over a 3 month period, the seller can sell the note to the bank at a reduced price in the event that he needs money.

devaluation

a reduction in the official value of a country’s currency

revaluation

an increase in the official value of a country’s currency

depreciation

a change in the rate of a currency so it buys less foreign currency

appreciation

a change in the rate of a currency so it buys more foreign currency

Hard currency

currency that is readily accepted anywhere in the world e.g. US

Soft currency

currency that is not easily converted anywhere in the world