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International trade (Transactions carried out across national border) -…
International trade
(Transactions carried out across national border)
Types
Primary
Import-export trade
: Establishment or expansion of operations in a foreign country
Import
: Be
taken out
of VN and
put in special areas
in VN
Export
: Be
put in
VN and
taken out of special areas
in VN
Temp import for re-export
:
Moved from
EPZs/foreign countries into VN and
exported into
other countries
Temp export for re-import
:
Moved to
EPZs/foreign countries and
imported to
VN
Transit
: 1.With VN as a broker (no direct involvement)
2.VN as a middle-man (w/out bonded warehouses/transit center) 3.Vn as a middle-man (w/ bonded warehouses/transit center)
FDI
: Sales & purchase of tangible goods and services to and from another country
Additional
Characteristics
Risk element
: Long distance/customs border
Restriction
: Tariff/non-tariff barriers
Foreign currency
: Convertible currency
Governmental control
: Permission/license
Need for middlemen
: Commercial agency/broker
Seperation of parties
: Belong to different countries
Reasons
Division of Labour (Specialisation)
Theory of Comparative Cost
Natural Resources
Differences in Economic Growth Rate
Benefits
Allows firms to improve competitively
Job creation
Allows for economies of scale
Bring in wide range of products & services
Domestic products to improve
Improve standard of living
Expand consumer choices
Differences vs Domestic trade
Commercial Law & Freedom of Contact
Currencies
Linguistic Diversity
Custom Duties & Import Quotas
Additional Distance
Local Conditions/Economic Policies
...
Risks
Legal
Transport
Quality of Goods
Cultural/language Differences
Exchange Rate Fluctuations
Non-payment
Unforeseen
Investment
International organizations
Non-governmental organizations (NGOs)
Local/Regional Chambers of Commerce
Assisting importers and exporters
Providing information on trade and trade-related procedures
Promoting foreign markets in finding customers/agents/distributors
Issuing Certificate of Origin (C/O)
ICC
The World Business organization
ICC commissions and Working Parties (Task Forces)
ICC Commercial Crime Service
World Chambers Federation
IRU
CMI
FIATA
IATA
Intergovernmental organizations (IGOs)
ITC (UNCTAD/WTO)
WCO
UNIDROIT
UNICITRAL