Import Export

International trade is the exchange of goods and services between different countries. Country can export and import commodities. A company which sells goods or services to other countries is known as an exporter. A company which buys products from other countries is called an importer.

Payment for imported product is usually by documentary credit, also called a letter of credit. This is a written promise by a bank to pay a certain amount to the seller, within a fixed period, when the bank receives instructions from the buyer. Documentary credits have a standard form. Another method of payment is a bill of exchange or draft. This is a payment demand, written or drawn up by an exporter, instructing an importer to pay a specific sum of money at a future date.

Trade in goods is sometimes called visible trade. Services such as banking, insurance and tourism are sometimes called invisible imports and exports.

Government can control international trade. The most common measures are tariffs and quotas.

A tariff is a tax on imported goods, and a quota is the maximum quantity of a product allowed into a country during a certain period of time.

International organization such as the WTO (World Trade Organization) and EFTA (European Free trade Association) regulate tariffs and reduce trade restrictions between member countries.

Companies can choose from various methods to establish their products in a foreign market:

• To start by working with local experts such as sole agents or multi-distributors

• To open local branch or sales office

• To use patents and licenses

• To set up a local subsidiary or a joint venture with a local partner