International trade is a trade that takes place across country borders or territories. The trade takes place between the importer and the exporter. The subject of international trade can be products, services, rights (eg. copyrights) or licenses. International trade has been gaining in importance with the evolving globalization.
International trade in practice: companies trade either their own goods, services or rights, or they trade someone else’s (belonging to a third party) goods - they take on the role of a trading company. Every business wanting to launch into international trade must respect some international agreements as well as the legislation of the country where the trade takes place. Countries protect and support their markets through various legislative tools (customs duties, anti-dumping measures, etc.).
Before a trading company starts its business activities, some preparation usually has to be done, such as various situational analysis, market analysis, competitive analysis, analysis of the legislative governing the given market, search for (and search of) potential business partners and so on. For these purposes, starting trading companies hire some specialized companies or they start co-operation with some chambers of commerce or other governmental organizations supporting export.
As to the trading itself, the company must be ready to contract with the other party (purchase contract, cooperation agreement, etc.), cope with various legislative measures (eg. be able to provide some commercial and other required documents, certificates, etc.), finance the business, provide an insurance and make sure the trade is secure. Companies trading with products and goods must also deal with the logistics and transport of the goods from the manufacturer to the end-customer. There are many risks in the international trade which are usually higher than in the domestic market.
International trade requires a thorough knowledge of legislation, law, and local conditions and customs. Therefore, many international companies use services of some companies specialized in logistics, transport, law, payments or insurance.
- Preparatory activities - market analysis, competition analysis, import needs analysis, situational analysis, technological analysis, legislative analysis, price survey, search of suppliers, creating demand, evaluation of bids
- Import and export operations - conclude purchase contract, take over the goods, pay for the goods, secure international payments, mitigate risks, arrange transport and logistic, deliver the goods and the bills
- Insurance of risks in international trade
- Logistics in international trade
- Means of payment in international trade - international payments
- Contracts in international trade
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