COMMERCE 101

DIVISION OF FOREIGN TRADE

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International otherwise called Foreign Trade can be divided into the following:

# Import                                                      

# Export                                                          

# Entreport

1. IMPORT

It is the buying and selling of goods and services from other countries. it is sometimes restricted to control a country's Balance of Payment. It can be divided into two, namely:

a. Visible Import Trade- is the buying of goods from other countries which can be touched and seen (Tangible Goods). For Example- Automobiles (Cars), Electronics etc.

b. Invisible Import Trade- is the buying of services from other countries which cannot be seen or touched (Intangible Goods). For Example- Banking Services etc.

2. EXPORT

It is the act of selling goods and services o other countries, it can also be said to be the sales of a country's goods aboard. It can be divided into two namely:

a. Visible Export Trade- is  the selling and sales of the goods of a country in a different and to a different country which can be seen and felt. For Example- Cocoa, Palm Oil, Cassava etc.

b. Invisible Export Trade- is the selling and sales of the services offered by a Country to a different Country which cannot be seen or felt. For Example- Transportation ( Air Transport), Medical Service (Foreign Hospital) etc.

Barriers of International Trade:

* Language Problem- when two countries speak different languages it can be an issue in international trade.

* Problem of Distance-  The distance of the countries apart from each other can oppose a problem in international trade.

* Currency Difference- Before a Country can buy a product it must change to the seller's country currency and this can be hectic especially when huge amounts are involved.

* Religion & Culture- Difference in the cultures and religions of countries can cause problems in the smooth run of international Trade.

* Tariff- Import duty imposed by some Countries on imported goods can be a source of frustration to international trade because this makes the product more expensive in that country thereby reducing its patronage amongst the customers.

EXPORT PROCEDURES

Export Procedures are those documents involved/used in international Trade. They include the following:

1. Export License- This is a License Authority to export which an Exporter must obtain before he can export any goods in order to prevent duping of goods in a country.

2. 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.

3. 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 the importer from conspiring with the exporter to understate the price of the goods to attract less custom duty.

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

5. Certificate of Insurance- This is a marine insurance, taken by the exporter to ensure the safety of the goods in the transport.

6. Bill of Lading- This document empowers the importer to claim the goods on its presentation. It is an evidence between the exporter and the shipping company. Stating the terms under which the goods are to be exported.

7. Fright Note- This is an document issued by shipping company to the exporter or importer about transport charge.

8. Custom Specification- This is a document lodged with the custom authorities, which shares 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 brings us to the end of today's session. Hope this was very helpful to you, leave a comment of what you think of this tutorial and of your questions below. Have a Blessed Day and Remember You are Amazing. God Bless.