DIVISION OF FOREIGN TRADE.

Hey Guyz, what’s happening? How are you all doing, hope great? It’s a beautiful day to live, learn and be merry. Today we are continuing our commerce 101 series.

International Trade can be divided into:

a. Export.

b. Import.

c. Enter-port.

IMPORT.

This is the act of buying goods and services from other countries. It is sometimes restricted to control the country’s Balance of Payment.

It can be divided into:

VISIBLE IMPORT- Consists of goods that can be seen and touched ( i.e. Tangible Goods), that are bought from other countries. For example, The Tangible Visible Imports of Nigeria are Automobiles, Machineries, Electronics etc.

INVISIBLE IMPORT- Consists of services that cannot be seen or touched, which are bought from other countries. For example, Banking.

BARRIERS OF INTERNATIONAL TRADE.

1. Language Problem- Two countries that speak and understand the same language can trade easily. For example, Nigeria trading with America. While it will be difficult
for two countries that understand different languages For example, Nigeria trading with Italy or France.

2. Problem of Distance- International Trade involves two or more countries that are far from each other and that poses as a problem many a times.

3. Currency Differences- Before a country buys a thing from another country, she must change her currency first of all to the currency of the other country and this can prove cumbersome some times.

4. Tariff- A country can impose import duties and this would make imported goods more expensive.

5. Religion & Culture- Religious Beliefs and culture differ from one country to another and this can pose as a problem.

EXPORT.

It is the act of selling a country’s goods and services to other countries that are interested. It is the act of selling ones goods aboard. It can be divided into:

VISIBLE EXPORT- Consists of goods which are sold in oversea markets and countries. For example, Cocoa, Cotton, Palm oil Cassava etc.

INVISIBLE EXPORT- Consists of services rendered to other countries. Like, Insurance, Banking, Transportation etc.

EXPORT PROCEDURES.

Export Procedures are those documents involved in international trade. These are documents used in international trade and they include:

1. Export License.

2. Export Invoice.

3. Consular Invoice.

4. Indent.

5. Certificate of Insurance.

6. Bill of Lading.

7. Fright Note.

8. Customs Specification.

EXPORT LICENSE.

This is a license authorizing an exporter to export and which an exporter must obtain before he can export his goods. This is in order to prevent duping of goods in a country.

EXPORT INVOICE.

This is an invoice prepared by the exporter. The export invoice describes the goods sold, the quantity, quality, price of the goods, name of the ship and the total amount to be paid etc. The exporter will send this document to the importer.

CONSULAR INVOICE.

This is different from the ordinary invoice because the exporter must swear to and sign in front of the council of the importer’s country. The council must also sign certifying that the prices stated in the invoice are correct. This is done in order to prevent importers from conspiring with the exporter, in understating the prices of goods so that they will attract less custom duty.

INDENT.

This is an order to buy goods sent by the importer to the exporter. Indent gives the details of the goods required by the intending importers, method of packaging, port of destination, means of payment etc.

CERTIFICATE OF INSURANCE.

This is a marine insurance, taken by the exporter to ensure the safety of the goods on the way.

BILL OF LADING.

This document empowers the importer to claim the goods on its presentations. It is an evidence between the exporter and the shipping company, stating the terms under which the goods are to be exported.

FRIGHT NOTE.

This is a document issued by shipping companies to the exporter/importer about transport charge.

CUSTOM SPECIFICATION.

This is a document lodged within custom authorities which shows the value of the goods exported and the country to which they have been consigned. This document enables the Ministry of Trade, to compile trade statistics with other countries of the world.

This concludes our session for today, Hope you found this very helpful and fun. Until we meet again, remain ever blessed and remember you are for SIGNS& WONDERS. God Bless You.