Page 89 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation

Notes 5. Effective .............................. is an essential part of business.

6. The ............................ Carnet is a standardized international customs document used to
obtain duty-free temporary admission of certain goods into the countries that are
signatories to the ATA Convention.
7. An ......................... planning to carry product samples must know about the rules governing
import of samples and duties to be paid, if any, in the foreign country
8. The objective of ......................... scheme of the Office of the Development Commissioner is
to promote export of handicrafts including hand knotted carpets and floor covering from
Indian.
9. The Office of the Development Commissioner (Handicrafts) functions under Ministry of
Textiles for promotion and exports of ..................................

10. Systematic collection on information is crucial to successful strategy development in
..................... markets.

Task Interview two or three small exporters in your area and try to find out their ways
of sourcing export business. Try and create a better plan for their marketing efforts.
4.5 Market Entry Strategies

International trade is the exchange of goods and services between countries. This type of trade
gives rise to a world economy, in which prices, or supply and demand, affect and are affected by
global events. Political change in Asia, for example, could result in an increase in the cost of labor,
thereby increasing the manufacturing costs for an American sneaker company based in Malaysia,
which would then result in an increase in the price that you have to pay to buy the tennis shoes at
your local mall. A decrease in the cost of labor, on the other hand, would result in you having to
pay less for your new shoes. The various forms of international trade are as follows:

4.5.1 Importing and Exporting

Importing and exporting are often the simplest ways a business may go global.
Importing is the purchasing abroad, either directly from target suppliers or indirectly through
sales agents and distributors.
Exporting is the selling abroad, either directly to target customers or indirectly by retaining
foreign sales agents and distributors.
Products that are made or grown abroad but sold domestically are called imports and products
made or grown domestically and shipped for sale abroad are exports. People who engage in this
type of international trade are called importers or exporters.
A good question is why a country imports or exports certain products. It may be simply that
they do not have that resource internally or that it has an excess of that product. It could also be
more complex than this simple answer. A country may have an absolute or competitive advantage.
Absolute advantage: when a country can produce something more cheaply than any other country.
For example, Saudi Arabia, due to its natural resources, has an absolute advantage in oil.
Comparative advantage: when a country can make certain items more cheaply or better than
other items relative to other countries. For example, Japan, due to its manufacturing efficiencies,
has a comparative advantage in automobiles.

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