Chapter21

INternational

trade

process

ContentsEnquiryandOfferNegotiationandOrderingProductionPaymentShippingCustomsclearanceandcommodityinspectionSettlementArbitration(onlyincaseneeded)

Acorporatesecretarymayoftengetinvolvedininternationalbusiness.Itistotheiradvantagetohavesomebackgroundknowledgeaboutinternationaltrade.Inthischapterweintroducethebasicprocessofinternationaltransactions.Theflowofinternationaltradeincludesmanysteps,buttheonesdescribedbelowarethemainones.

1 EnquiryandOfferInthewholeprocessofinternationaltrade,thefirststepisalmostalwaysenquiry.Thisisnormallydonebythebuyer.Ifthebuyerdoesnotletthesellerknowthathehasaninterestinthelattersproducts,thelatterwouldnotknowaboutit.Oncethesellerknowsthepotentialbuyerhasaninterestinhisproducts,hewouldoftenvolunteertoprovideanoffertothebuyer.However,moreoften,itisthebuyerwhorequestsanofferfromtheseller.

Anofferisalsocalledaquotation.Normally,itcontainstheinformationabouttheproductsofficialname,whichisoftencalleddenomination.Italsocontainstheunitprice,tradeterm,whichisalsocalledIncoterm,deliverytime,paymentmethod,auxiliaries,etc.

2. NegotiationandOrderingAfterthebuyerhasreceivedanofferfromtheseller,thenextstep-negotiation-usuallywouldstart.Thisincludesacounter-offer,bargainingandacceptance.Thewordacceptanceheremeansbothsideshavereachedagreementabouteverythingrelatedtothesaleorpurchaseoftheproductsinquestion.

Thenextstepisordering,meaningthesigningofasalescontract,sometimescalledapurchaseorder.Undernormalcircumstances,apurchasecontractissignedinduplicatesbybothparties.

3. ProductionAfterthecontracthasbeensigned,thenextsteptotakeisproduction.Thisisinitiatedbythesellergivinganordertothefactoryforproducingthegoods.Sometimesthe