INERNATIONAL TRADEThe process of buying and selling

goods and services between countries

Countries can import or export: a) visible goods: the ones you can

see (e.g. clothes; cars)b) invisible goods: services

(banking, tourism, insurance)

Balance of trade andbalance of payments (p 33)Balance: difference between the

amount a country spends on IMPORTS and the amount it receives from EXPORTS

Balance of trade (ONLY visible goods)

Balance of payments => visible & invisible goods

BoP: SURPLUS = EXPORTS >IMPORTS

BoP: DEFICIT = EXPORTS <IMPORTS

Foreign trade controlsGovernments implement protection

policies through:Tariffs on imports =CUSTOMS DUTIES=

taxes on imported goods)Quotas = limit on the quantity of

foreign goods coming into a countrySubsidies: money given to domestic

producers to make them more competitive

Embargoes: ban on the export/import of certain goods

MULTINATIONAL TRADING BLOCKS

Groups of contiguous countries that agree to adopt common trading/protectionist policies for the rest of the world, but have preferential treatment towards one another

THE EU (1992 - 1957:ECC)NAFTA (North American Free Trade

Agreement – 1994)MERCOSUR (southern Cone free trade area -

Argentina, Brazil, Paraguay, Uruguay 1991)

Asean (Association of South East Asian Nations – 1967)

PROMOTING INTERNATIONAL TRADE

WTO World Trade Organisation

IMF International Monetary Fund

The World Bank

Listening p. 35 tr 7

Documents in international tradeWithin the EU (since 1993)= goods

exempt of VAT

VIES /vaiz/ = VAT Information Exchange System (companies can get confirmation of VAT numbers (partita IVA) and administrations

VIMA (VIES Intrastate and Mutual Assistance) = office where exporters send a VIES statement (monthly or every 3 months)

Documents in international tradeOutside the EU

SAD = Single Administrative Document used to declare imports and exports and to remove goods from customs procedures (sdoganare)

CERTIFICATE OF ORIGIN signed by the exporter’s Chamber of Commerce = necessary because the rate of customs duties on imports varies depending on the origin of the goods

(e.g p. 39)

TRANSPORT DOCUMENTS - 1The DELIVERY NOTE ……contains the details of the goods

(NO prices) …is signed on arrival by the

importer to state that he accepts the goods

…the carrier keeps a copy as proof of delivery

TRANSPORT DOCUMENTS - 1The COMMERCIAL INVOICE= a document that

the exporter sends to the importer with information about

importer/exporter detailsinvoice numberplace/date of issueorder numberdescription of the goodsunit amount/total amountTerms (INCOTERMS)PROFORMA INVOICE = statements of costs to

be paid before the goods are delivered

INCOTERMS = International Commercial Term pp.42-4313 standard terms established by the ICC (International Chamber of Commerce) they define the respective

responsibilites of exporter/importer as to:

-Transport costs-Risks/insurance-Customs duties and formalities-Loading/unloading

INCOTERMSE- TERMS (EXW= ex works) goods are placed on

the seller’s premises at the diposal of the buyer, and become his responsibility from then on

F-TERMS (FCA, FAS,FOB = free…) the buyer is responsible for the cost and risk of international carriage

C-TERMS (CFR, CIF, CPT, CIP = freight/carriage paid to…) the seller pays for international carriage, but does not bear the risks…

D-TERMS (DAF, DES,DEQ, DDU, DDP= delivered….) the seller bears all costs up to the delivery point…

TRANSPORTBY ROAD = - couriers on motorbikes- Road haulage firms carriers (small

areas)- TIR (Transport International Routier)

lorry

BY RAIL= freight service, esp. for bulk materials

(chemicals, petrol cement)

TRANSPORTSEA TRANSPORT- Freighter = large ship (or plane)

carrying goods- It can transport almost unlimited

weight

BY AIR= Goods of limited size/weight

PIPELINES = Liquids, gas, oil (to oil refineries or ports)

TRANSPORTForwarding agents = experts in the transportation

of goods/freight shipment; they arrange:insurancepackaging, storing, transportingDocumentationAccidents/damagesCustoms formalities

Logistics = the process of planning, implementing, and controlling the effective and efficient flow of goods and services from the point of origin to the point of consumption.

INSURANCEProtection of people and goods against accidents,

risks, lossKey terms:- The Insurer/underwriter =company providing the

insurance- The insured = company/person requiring the

insurance- Policy = document specifying the terms…- Premium = amount of money paid by the business- Claim = formal request of payment in case of

accident/loss

E.g of early insurance company :Lloyd’s London, coffee houses, 18th century

PACKING/packagingDRUM (barile)BARREL (botte)CASE (cassa in legno/chiusa)CRATE (cassseta /aperta) BAG/SACK saccoCARTON scatola in cartoneBALE balla

CONTAINERS (CONTAINERISATION) = steel boxes of standard size ; loaded as sealed units

TRANSPORT DOCUMENTS - 2INTERNATIONAL ROAD CONSIGNMENT

NOTE(CMR) = lettera di vettura THE AIR WAYBILL = lettera di vettura

aereaBoth contain: NAMES AND ADDRESSES OF

CONSIGNOR/SENDER, CONSIGNEE, CARRIER DESCRIPTION OF GOODS, DATE/PLACE OF DEPARTURECARRIAGE CHARGES

THE BILL OF LADING= polizza di carico (sea tr.)

TRANSPORT DOCUMENTS - 2

Do ex pp 58-59