Chapter 14 : Modes of trading internationally

Exports & imports : Important facet of global economy

Emerging markets

Iris food/drinks exports to China +47%

South Africa exports to China : +43%

US companies trade now with 233 countries

World trade as percent of world GDP in $ : 55% in 2010

Definition : Exporting is the sale of goods or services produced by a firm based in one country to customers that reside in another country.

To be qualified as an export product, the product must leave the country OR earn foreign currency

Who are exporters ?

Non exporters : Some companies grows in their own market without exporting because what they product don't interest foreign markets

Occasional Exporters : They use foreign markets just as an option occasionaly.

Regular exporters : It is a company that aggresively uses global markets. They are regular exporters and they know the codes of international exchanges

In USA the 500 biggest companies account for nearly 60% of total exports value.

Why export ?

Profitability : The main goal is to become more profitable. Indeed, abroad companies can often sell theirs products for higher price.

Productivity : More productivity and more economies of scale

Diversification : Exporting enables companies to become more diversify and innovator

Exports/Imports of USA

TOP 3 exports partners

TOP 3 imports partners

  1. Mexico
  1. China
  1. Canada
  1. Canada
  1. Mexico
  1. China

Who are the importers ?

Definition : Importing is the purchase of good or service by a buyer in one country.

Input optimizers

Opportunistic : Import znd profitably sell to local citizens

Abitrageurs : Try to get the higest quality ressource from abroad at the lowest price possible

Why import ?

Specialization of labor

Local unavailability

Global rivalry

Diversification