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Global Trade Operations - Essay Example

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Global Trade Operations Over the recent past, the international trade has increased significantly. This has been triggered by the process of globalisation that is taking place at a high speed. The international trade plays a significant role in determining the performance of an organisation…
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Download file to see previous pages International trade has also played a pivotal role in offering economic growth in the countries involved. International trade has also helped countries to reduce their manufacturing costs. For instance, a country can concentrate on what it produces efficiently and effectively. The countries specialize on the field where their absolute advantage lies. This case involves international trade between two countries that are located in different parts of the world. Both countries are different but they are linked together by trade. Background; Trade between CHINA and UK China and UK have enjoyed productive trade relations for a long time. Statistics reveal that trade between the two countries is increasing significantly. In 2009, UK – China bilateral trade in goods was more than $ 201.16 billion. The value is expected to increase significantly in the future. More than 56 Chinese companies have also been listed in the London Stock Exchange. In 2009, UK, imports from China was $ 15.97 billion. Desired Incoterms In 2000, International Chamber of Commercial Terms issued International Commercial Terms (Incoterms) that are now adopted in international trade throughout the world. The Incoterms that are basically used by these traders is the Free on Board (FOB). In this case, the seller is required to deliver the goods to a carrier identified by the buyer. For FOB, the seller delivers the goods after which they are cleared for export (Grath 2008). Importing from China While importing from China, an importer is supposed to create a relationship with the supplier. After establishing a relationship, an individual or organization is required to confirm the terms of trade between the two countries. After confirmation of the trade terms, the parties then agree on the terms of payments. This is followed by approval of samples. Finally, an order is placed in writing after which the freight forwarder is appointed (Grath 2008). In 2008, China exports to UK were $36.07 million. These statistics reveal that there is a strong trade relationship between China and United Kingdom. Exporting to China Exporting from China is almost similar to the importing process. The first step is for the exporter to develop a relationship with the buyer. Then, the two confirm the terms of trade which applies for the two countries. The two parties are then required to agree on the conditions of payment. This involves the deposit balances well as receipts of goods. It is also, important to have samples approved before receiving an order with the new buyer. This should be in writing. The order should indicate the exact order and the terms of trade. Regulations guiding trade in EU and non- EU countries Although the international trade has opened new markets for many companies, it has some complications. For example, trading between EU and non EU member is crucial bearing in mind that the two regions may have different regulations. In this case, the trading companies are required to adhere to the jurisdiction within the region where the trade is taking place. Some restrictions are unhealthy since they undermine the ability of companies to export freely. The regulations within the EU regions favour the trade between the member states. It promotes free movement of goods and services between the members. The member states are required to withdraw all restrictions to the member states. Therefore, all businesses in the member states can easily ...Download file to see next pagesRead More
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