ChapterImportandExportOperatingProcedures.ppt

Chapter Eleven Import and Export Operating Procedures General Procedures of Export and Import Transaction For most nations exports and imports are the most important international activities. Each country has to import the articles and commodities it does not produce itself, and it has to earn foreign exchanges to pay for them. It does this by exporting its own manufactured articles and surplus raw materials. Thus the import and export trades are two sides of the same coin, and both can have beneficial effects on the home market. General Procedures of Export and Import Transaction Imports create competition for home-produced goods; exporting gives a manufacturer a larger market for his products, so helping to reduce the unit cost. In each case the effect is to keep prices in the home and market down. But there may be factors that compel governments to place restrictions on foreign trade. Imports may be controlled or subjected to a custom duty to protect a home industry, or because the available foreign exchange had to be channeled into buying more essential goods. Exports, too, may be restricted, to conserve a particular raw material required by a developing home industry. These factors mean that importing and exporting are subject to a lot of formalities, such as customs entry and exchange control approval, from which the home retail and wholesale trades are free. They also mean that the procedures of foreign trade is much more complicated than that of domestic trade, the former involves specialized knowledge and highly trained personnel. Procedures of Export and Import Transaction An export or import business is so complicated that it may take quite a long time to conclude a transaction. Varied and complicated procedures have to be gone through in the course of export or import transaction. From the very beginning to the end of the transaction, the whole operation generally undergoes four stages: preparing for exporting or importing, business negotiat