Export-Import Theory, Practices, and Procedures. 3rd Edition

Transcription

1 Export-Import Theory, Practices, and Procedures 3rd Edition BELAY SEYOUM Routledge R Taylor & Francis Croup NEW YORK AND LONDON

2 Contents Introduction A Brief History of International Trade 1 Ancient Period 1 Colonial Period ( ) to the Present 3 SECTION I Overview of International Trade 5 Chapter 1 Growth and Direction of International Trade 7 Importance of International Trade to the Global Economy 8 Determinants of Trade 9 Volume and Direction of Trade 10 Important Developments in Trade 11 Chapter Summary 13 Review Questions 14 Gase 1,1 The Limitations of Export-Led Growth 15 Gase 1.2 The Impact of the Financial Crisis on Exports 17 Chapter 2 International and Regional Agreements Affecting Trade 19 The GATT and the WTO 19 Regional Integration Agreements (RIAs) 22 The North American Free Trade Agreement (NAFTA) 23 The European Union 29 Chapter Summary 32 Review Questions 33 Gase 2.1 The Euro Crisis and Implications 35

3 vi Contents SECTION II Export Marketing and Strategy 37 Chapter 3 Setting Up the Business 39 Ownership Structure 40 Business or Trade Name 44 Bank Accounts, Permits, and Licenses 46 Location and Use of Professional Services 46 Organization for Export: Industry Approach 47 General Principles of Taxation 48 Taxation of Export-Import Transactions 50 Chapter Summary 58 Review Questions 59 Gase 3.1 Globalization and the Shrinking Tax Base 61 Chapter 4 Flanning and Preparations for Export 63 Assessing and Selecting the Product 63 International Market Research 66 International Market Assessment 67 Developing an International Business Plan 70 Export Counseling and Assislance 70 Overseas Travel and Promotion 74 Chapter Summary 80 Review Questions 81 Gase 4.1 Developing Export Markets 82 Gase 4.2 Strategies for Entering New Markets 83 Chapter 5 Export Channels of Distribution 85 Indirect Channels 89 Direct Channels 94 Locating, Contacting, and Evaluating Agents and Distributors 97 Contracts with Foreign Agents and Distributors (Representatives) 98 Major Clauses in Representation Agreements 100 Maintaining and Motivating Overseas Representatives 103 Chapter Summary 103 Review Questions 104 Gase 5.1 Export Channel Decisions of Two U.S. Companies 106 Gase 5.2 The Internet and Exporting: A Focus on Developing Countries 107 Chapter 6 International Logistics, Risk, and Insurance 109 International Logistics 109 External Influences on Logistics Functions 111 Typical Logistics Problems and Solutions 112 The International Logistics Process 113 Logistics Functions 115 Risks in Foreign Trade 117 Marine and Aviation Insurance 120 Claims and Procedures 127

4 Contents vii Chapter Summary 130 Review Questions 132 Gase 6.1 Marine Insurance 133 Gase 6.2 Marine Insurance: Inchmaree Clause 134 SECTION III Executing the Transactions 135 Chapter 7 Pricing in International Trade 137 Determinants of Export Prices 138 Pricing in Export Markets 139 Pricing Objectives 141 Calculating the Export Price 141 Trade Terms 144 Chapter Summary 158 Review Questions 160 Gase 7.1 Incoterms (CIF) 161 Case 7.2 Incoterms (C&F) 161 Chapter 8 Export Sales Contracts 163 Harmonization of Contract Law 163 CISG: Essential Elements 165 Pertinent Clauses in Export Contracts 167 Chapter Summary 175 Review Questions 175 Case 8.1 CISG 177 Case 8.2 China National Products versus Apex Digital, Inc 177 Chapter 9 Trade Documenta and Transportation 179 Documentation in Export-Import Trade 179 Transportation 182 Air Transportation 183 Ocean Freight 190 Land Transportation 199 Chapter Summary 206 Review Questions 208 Case 9.1 What Constitutes a Package Under COGSA? 209 Case 9.2 The Container Revolution 210 SECTION IV Payment Terms and Procedures 213 Chapter 10 Exchange Rates and International Trade 215 Foreign Exchange Transactions 215 Protection Against Exchange Rate Risks 218 Chapter Summary 223

5 viii Contents Review Questions 224 Case 10.1 Will the U.S. Dollar Maintain Its Key Currency Status? 225 Case 10.2 Currency Wars 226 Chapter 11 Methods of Payment 228 Consignment Sales 229 Open Account 220 Documentary Collection (Documentary Draft) 231 Documentary Letter of Credit 236 Cash in Advance 244 New Payment and Financing Alternatives 244 Fraud in Documentary Credits 246 Other Letters of Credit 248 Chapter Summary 253 Letters of Credit 255 Review Questions 255 Case 11.1 Dishonoring Letters of Credit 257 Case 11.2 The Independent Principle in Letters of Credit 257 Case 11.3 Deferred Payment in Letters of Credit (L/C) 258 Chapter 12 Countertrade 259 Origins of Countertrade 259 Benefits of Countertrade 260 Theories on Countertrade 261 Forms of Countertrade 263 Countertrade and the WTO 269 Countertrade and the International Monetary Fund 270 Governments' AttitudesToward Countertrade 270 Chapter Summary 273 Review Questions 274 Case 12.1 The Bofors-India Countertrade Deal 276 Case 12.2 Offsets in U.S. Defense Trade 276 SECTION V Financing Techniques and Vehicles 279 Chapter 13 Capital Requirements and Private Sources of Financing 281 Capital Sources for Export-Import Businesses 282 Private Sources of Export Financing 288 Chapter Summary 295 Review Questions 296 Case 13.1 Tadoo's Sales to Belgium 297 Chapter 14 Government Export Financing Programs 299 Export Credit Agencies (ECAs) in Various Countries 300 Export-Import Bank of the United States (Eximbank) 302 Small Business Administration 311 Overseas Private Investment Corporation (OPIC) 312

6 Contents ix Private Export Funding Corporation 314 U.S. Department of Agriculture 314 Chapter Summary 315 Review Questions 316 Gase 14.1 Trade Finance for Small and Medium-Size Enterprises in Transition Economies 317 Gase 14,2 Eximbank Financing: Selected Gases 318 SECTION VI Export Regulationsand Tax Incentives 321 Chapter 15 Regulations and Policies Affecting Exports 323 Export Licensing and Administration 323 Antiboycott Regulations 335 Foreign Corrupt Practices 338 Antitrust Laws and Trade Regulation 344 Incentives to Promote Exports 348 Chapter Summary 352 Review Questions 354 Gase 15,1 Export Trade Certificate of Review 356 Gase 15,2 Selected Gases in Enforcement of FCPA 360 SECTION VII Import Procedures and Techniques 363 Chapter 16 Import Regulations, Trade Intermediaries, and Services 365 Import Restrictions in the United States 365 U.S. Free-Trade Agreements (FTAs) 369 U.S. Trade Preferences 371 Trade Intermediaries and Services 374 Chapter Summary 377 Review Questions 378 Gase 16.1 Tax Deduction for Processing in Maquilas: Mere Assembly or Fabrication 380 Gase 16.2 Import Penetration Rates in U.S. High-Value Industries: Focus on China 381 Chapter 17 Selecting Import Products and Suppliers 383 Selecting Products for Importation 383 Determining Import Volume 388 Selecting the Supplier 389 Pricing the Imported Product 393 Import Marketing Channels 393 Financing Imports 394 International Sourcing 395 Chapter Summary 397 Review Questions 398 Case 17.1 The ATA Carnet: Unlocking Customs for Temporary Entry of Goods 399 Case 17.2 Maytag's Triad Strategy 400

7 x Contents Chapter 18 The Entry Process for Imports 401 The Entry Process 402 The Harmonized Code (HS Code) 406 Customs Valuation 409 Rules of Origin and Other Marking Requirements 412 Chapter Summary 413 Review Questions 414 Case 18.1 Deemed Liquidation by Customs 418 Case 18.2 Product Classification. 419 Chapter 19 Import Relief to Domestic Industry 420 Import Relief underthewto 428 Unfairly Traded Imports 421 Fairly Traded Imports 422 U.S. Import Relief to Domestic Industries 422 Antidumping and Countervailing Duties 422 Antidumping and Countervailing Duty Proceedings 425 Other Trade Remedies 429 Chapter Summary 432 Review Questions 432 Case 19.1 Similar Products and Dumping 433 Case 19.2 Dominican Republic: Safeguard Measures on Imports of Polypropylene Bags and Tubulär Fabric 434 Chapter 20 Intellectual Property Rights 436 What Are Intellectual Property Rights? 436 Intellectual Property Rights and International Trade 438 Protection of Intellectual Property Rights 439 International and Regional Protection 443 Global E-Commerce: Solling in a Networked Economy 445 Trading Online 447 International Regulation of Electronic Commerce 448 Chapter Summary 450 Review Questions 451 Case 20.1 Patents and Access to Lifesaving Drugs 452 Case 20.2 Intellectual Property Rights and International Trade 453 APPENDICES 455 Appendix A Trading Opportunities in Selected Countries 457 Appendix B Importing into the United States 505 Appendix C Trade Profiles of Selected Countries 513 Appendix D Average Tariff Rates of Selected Countries 516

8 Contents xi Appendix E Döing Business with China 518 Appendix F U.S. Trade Profile 526 Appendix G Export Credit Agencies in Selected Countries 541 Appendix H A Brief Comparison of Cargo Conventions 556 Appendix 1 Countries That Are Members of Cargo Conventions 562 Appendix J Rotterdam Rules 563 Appendix K Freight Calculations 578 Appendix L Sample Export Business Plan: Donga Michael Export Company 580 Appendix M Sample Import Business Plan: Otoro Import Company 585 Appendix N Export Sales Contract (Basic Clauses) 590 Appendix 0 Sample Distributorship Agreement 599 Appendix P Sample Sales Representative Agreement 605 Appendix Q North American Free Trade Agreement 611 Appendix R Trade Documents 626 Index 633