FOREIGN TRADE

CONTENT

1. The Procedure for International Trade
2. Balance of Trade and Balance of Payment

The Procedure for International Trade

A businessman who wishes to engage in international trade should follow certain procedures. The step-by- step procedures are:

(i) Contact should be established between importer and exporter different means e.g. letter of inquiry, telephone, internet advertising etc.

(ii) A quotation, outlining the description, price and features of the products are furnished by the exporter in response to the letter of inquiry.

(iii) If the intending importer is satisfied with quotation, he will place an order with the manufacturer. The indent will show details of the goods, price and date of delivery.

(iv) The next step is to make arrangement for payment through any agreed means of payment e.g. western money transfer, documentary credit, telegraphic mail transfer etc.

(v) Then, an arrangement of the goods to be shipped through a shipping company will be made. The shipping agent will get all the necessary documents e.g. shipping note, calling forward note etc.

(vi) The exporter prepares and sends copies of bill of lading to the importer in advance.