Professional Documents
Culture Documents
OF
INTERNATIONAL TRADE PROCEDURE AND
DOCUMENTATION
ON
IMPORT EXPORT (INTERNATIONAL TRADE) PROCEDURE STILL AN
IMPEDIMENT TO THE GROWTH OF FOREIGN TRADE
SUBMITTED BY
SUBMITTED TO
MOHD ASHAD Mr.
HITESH JANGHI
ROLLNO- RT1901B43
REG. NO- 10901750
PROGRAME CODE-: 194
LOVELY PROFESSIONAL
UNIVERSITY’
JALANDHAR “PUNJAB”
TABLE OF CONTENT
export sector.
(5) References.
.
(1) Introduction of import export or international
trading
Import export businesses, also known as international trading, are one of the hottest commercial
trends of this decade. American companies trade in over 2.5 trillion dollars a year in
merchandise, of which small businesses control over 95 percent. As the owner of an import
export enterprise, you can work as a distributor by focusing on exporting and importing goods
and services that cannot be obtained on national soil (e.g., Russian caviar and French perfumes)
or those that are cheaper when imported from other countries (e.g., Chinese electronics). In
addition, you can also open an export management company (EMC), where you can help an
existing corporation market its products in a foreign country by arranging the shipping and
storing of the merchandise for them without doing the actual selling. EMCs can specialize in one
industry or work with different types of import export manufacturers. It is also possible to act as
a broker for a company, working on commission over the actual sales. This is a great choice for
products that are guaranteed to sell because of high demand or an established brand name.
International trade is exchange of capital, goods, and services across international borders or
territories.[1]. In most countries, it represents a significant share of gross domestic product
(GDP). While international trade has been present throughout much of history (see Silk Road,
Amber Road), its economic, social, and political importance has been on the rise in recent
centuries. Industrialization, advanced transportation, globalization, multinational corporations,
and outsourcing are all having a major impact on the international trade system. Increasing
international trade is crucial to the continuance of globalization. Without international trade,
nations would be limited to the goods and services produced within their own borders.
International trade is in principle not different from domestic trade as the motivation and the
behavior of parties involved in a trade do not change fundamentally regardless of whether trade
is across a border or not. The main difference is that international trade is typically more costly
than domestic trade. The reason is that a border typically imposes additional costs such as tariffs,
time costs due to border delays and costs associated with country differences such as language,
the legal system or culture. Another difference between domestic and international trade is that
factors of production such as capital and labour are typically more mobile within a country than
across countries. Thus international trade is mostly restricted to trade in goods and services, and
only to a lesser extent to trade in capital, labor or other factors of production. Then trade in
goods and services can serve as a substitute for trade in factors of production. Instead of
importing a factor of production, a country can import goods that make intensive use of the
factor of production and are thus embodying the respective factor. An example is the import of
labor-intensive goods by the United States from China. Instead of importing Chinese labor the
United States is importing goods from China that were produced with Chinese labor.
International trade is also a branch of economics, which, together with international finance,
forms the larger branch of international economics.
In addition, international trade also faces the risk of unfavorable exchange rate movements (and,
the potential benefit of favorable movements).
Even though, International Trade is doing very well these days, there lies a challenge at every
step. With increase in competition, international trade is subjected to many challenges.
Challenge of international trade may be psychological, infrastructural, and physical. The
challenge of international trade and other associated information and guidelines are usually made
known in the trade policies. The above mentioned three challenges affect the economy at the
enterprise and micro levels. In addition to the trade associated challenges in international trade, a
new challenge, which is lurking large, and had practically devastated the United States of
America, is the fight against terrorism. After the terrorist attacks on the World Trade Center,
there was global economic slowdown. International trade suffered massively. There were
tremendous fluctuations in the exchange rates. Starting from anthrax attacks to the terrorist
attacks on Sept 11th, the trade scenario worldwide has changed dramatically since then. It is
argued that International Trade adversely affects wages, particularly when trade takes place
between two countries in one of which wages are very low and in the other very high. Like the
trade between countries like America and China or Japan.
Some of the arguments advanced against international trade include the following:
* A country which depends on imports is in a vulnerable position during war.
* International Trade become a reason for economic instability and result into
conflicts with economic planning.
* International Trade inflicts harm on those home industries whose prduct are
displaced by the imports.
* It implied dependence on foreign markets as sources of supply and as outlets
for domestic production. Some people felt dependence to be dangerous.
They felt to reduce such dependence or entirely eradicated.
Hindrances Faced
International trade involves many countries. Every country is expected to abide by certain
norms, which govern the logistics in international trade. The economic condition, political make
up of a particular nation is never constant. In the event of an unforeseen event, taking place in
any country, the trading partners are also affected to a great extent.
National Defence
If a nation is depended on foreign sources of supply is in a woeful situation during war. Taking
the experience of England world war is a cited proof, in which the blockade of England by
German submarines had brought England to their knees by cutting off imports of food and
essential raw materials.
In 1930s when the Great Depression spread from one country to another by disrupting the
international flow of goods, services and capital. Today the argument against international trade
has been reinforced by government policies directed toward achieving full employment and
economic growth. Most nations are unable to achieve the objectives of full employment and
growth as members of an in international trading system.
Production
Attacks on international trade have been directed against imports. There is always a risk for the
protection of domestic industry against foreign competition. It also affects national security,
economic stability, employment, protectionism and others.
Non Tariff Barriers
There are certain restrictions such as Quantitative Restrictions, Voluntary Export Restraint
(VER), Licensing and Administered Protection. Quotas are aimed at reducing the quantity of
imports/exports in order to protect the interests of domestic producers or to conserve foreign
exchange. There are certain chances for misusing the liberalization.
Other Barriers
There are also other common barriers which are faced by all nations like Language Barrier,
Political Barrier, Infrastructure Barriers, Currency Barriers which becomes impediments to
International Trade. It also affects Growth of the country which affects their GDP and also
relationship between two countries.
In order to overcome the challenges faced by the international trade market, several
measures can be adopted. With regard to shipments, export and import of
commodities, if the shipment can be traced in real time, loss worth several million dollar can be
prevented.
(5) References
http://en.wikipedia.org/wiki/International_trade
http://www.scribd.com/doc/19357723/Impediments-to-International-Trade
http://www.piie.com/publications/chapters_preview/66/1iie2350.pdf
http://www.dsir.gov.in/reports/techint/annex5.pdf
http://www.dateyvs.com/custom03.htm
http://www.economywatch.com/international-trade/
http://www.economywatch.com/international-trade/trade-barriers.html
http://www.economywatch.com/international-trade/dumping-anti-dumping.html
Export import management justin paul, rajiv aserkar oxford higher education