Nowadays importing and exporting is a very popular business in the new millennium. But it's not new. Think Marco Polo. Think the great caravans of the biblical age with their cargoes of silks and spices. Think even further back to prehistoric man trading shells and salt with distant tribes. Trade exists because one group or country has a supply of some commodity or merchandise that is in demand by another. And as the world becomes more and more technologically advanced, as we shift in subtle and not so subtle ways toward one-world modes of thought, international trade becomes more and more rewarding, both in terms of profit and personal satisfaction.
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All over the globe, import and export is rampant. There are countries that just cannot do without import and export. This is because no nation can survive totally on its own without interaction with other countries. There is always a need to relate and engage in exchange of goods, it can either be in terms of raw materials, semi-finished good or finished goods.
This important gap can be monetized in a form of movement of goods from where it is in abundance and above the demand to a nation where there is a high demand for agricultural products.
And as the world becomes more and more technologically advanced, as we shift in subtle and not ways toward one-world modes of thought, international trade becomes more and more rewarding, both in terms of profit and personal satisfaction.
This important gap can be monetized in a form of movement of goods from where it is in abundance and above the demand to a nation where there is a high demand for agricultural products.
And as the world becomes more and more technologically advanced, as we shift in subtle and not ways toward one-world modes of thought, international trade becomes more and more rewarding, both in terms of profit and personal satisfaction.
Agricultural Trade:
The expansion of agricultural trade has helped provide greater quantity, wider variety and better quality food to increasing numbers of people at lower prices. Agricultural trade is also a generator of income and welfare for the millions of people who are directly or indirectly involved in it. At the national level, for many countries it is a major source of the foreign exchange that is necessary to finance imports and development; while for many others domestic food security is closely related to the country's capacity to finance food imports.
As with any activity that involves buyers and sellers, however, agricultural trade - perhaps more than any other trade tends to be a source of conflicts of interest and international confrontation. One reason for this is that agricultural policies are frequently influenced by the interests of particular political constituencies within a country rather than by national, international or global interests. Related reasons are: the emergence and growth of widespread distortions in world agricultural markets; the food-security role of agricultural trade, which confers upon it a special political, socioeconomic and strategic dimension; and, more recently, differing perceptions of the role of agricultural trade in environmental matters of transnational or global i merest.
Amid the profound changes in the economic importance, structure, direction and composition of world agricultural trade during the past three decades, a number of paradoxical features have emerged. While losing importance in relation to total trade, agricultural trade has remained a key element in the economies of many countries. Nevertheless, it has tended to be those economies that depend less on agricultural trade which have made the largest gains in agricultural market share; while economies that are more firmly based on agriculture have not only lost market share, but in many cases have also seen their agricultural trade balances deteriorate in the face of persistently high or even increasing economic dependence on agricultural exports and food security dependence on imports.
Other general tendencies have been a protracted decline in the real international prices of agricultural products, which has negatively affected their purchasing power; greater geographic diversification of agricultural trade flows, along with intensified international exchanges; and the increasing importance of value-added compared with primary products in total agricultural trade.
The expansion of agricultural trade has helped provide greater quantity, wider variety and better quality food to increasing numbers of people at lower prices. Agricultural trade is also a generator of income and welfare for the millions of people who are directly or indirectly involved in it. At the national level, for many countries it is a major source of the foreign exchange that is necessary to finance imports and development; while for many others domestic food security is closely related to the country's capacity to finance food imports.
As with any activity that involves buyers and sellers, however, agricultural trade - perhaps more than any other trade tends to be a source of conflicts of interest and international confrontation. One reason for this is that agricultural policies are frequently influenced by the interests of particular political constituencies within a country rather than by national, international or global interests. Related reasons are: the emergence and growth of widespread distortions in world agricultural markets; the food-security role of agricultural trade, which confers upon it a special political, socioeconomic and strategic dimension; and, more recently, differing perceptions of the role of agricultural trade in environmental matters of transnational or global i merest.
Amid the profound changes in the economic importance, structure, direction and composition of world agricultural trade during the past three decades, a number of paradoxical features have emerged. While losing importance in relation to total trade, agricultural trade has remained a key element in the economies of many countries. Nevertheless, it has tended to be those economies that depend less on agricultural trade which have made the largest gains in agricultural market share; while economies that are more firmly based on agriculture have not only lost market share, but in many cases have also seen their agricultural trade balances deteriorate in the face of persistently high or even increasing economic dependence on agricultural exports and food security dependence on imports.
Other general tendencies have been a protracted decline in the real international prices of agricultural products, which has negatively affected their purchasing power; greater geographic diversification of agricultural trade flows, along with intensified international exchanges; and the increasing importance of value-added compared with primary products in total agricultural trade.
Import & Export Business Principle:
The following are the categories of applicable regulations that influence export, import, and trade compliance Policies, Standards, and Procedures:
Trade embargoes and economic sanctions prohibit or severely restrict business activities with certain countries and their nationals, as well as business activities with specifically-listed entities and persons.
Export control regulations impose restrictions on the transfer of certain articles and technology to foreign destinations or persons.
Anti-boycott regulations prohibit U.S. companies and their foreign subsidiaries from participating in unsanctioned boycotts against countries friendly to the United States. Some other countries and jurisdictions also maintain laws that prohibit compliance with unsanctioned foreign boycotts or embargoes.
Customs regulations generally govern the many aspects involved in the importation of goods into countries. In virtually all countries this includes complex regulations concerning the classification, valuation, country of origin and marking of the imported goods. Customs regulations may also include the enforcement of partner government agencies’ regulations on imported goods, such as health care products, chemicals, or other regulated articles.
Government procurement and various advertising regulations define rules for making certain country of origin representations.
Tax regulations influence sales terms and the obligations of parties in transactions.
Cargo security laws provide minimal security standards for ensuring the physical security of cross-border shipments.
Free trade agreements are two-country or multi-country international agreements that provide for certain trade preferences and benefits to the participating countries when eligibility and certification requirements are satisfied.
Employees should be aware that applicable laws and regulations may vary from country to country.
3M’s policies take into consideration multiple laws and regulations from across many countries, as well as management strategies, organizational structure, and above all, 3M’s values. This often results in 3M’s policies setting a higher standard than a specific law requires. Employees are expected to adhere to 3M’s policies as the standard for behavior
The following are the categories of applicable regulations that influence export, import, and trade compliance Policies, Standards, and Procedures:
Trade embargoes and economic sanctions prohibit or severely restrict business activities with certain countries and their nationals, as well as business activities with specifically-listed entities and persons.
Export control regulations impose restrictions on the transfer of certain articles and technology to foreign destinations or persons.
Anti-boycott regulations prohibit U.S. companies and their foreign subsidiaries from participating in unsanctioned boycotts against countries friendly to the United States. Some other countries and jurisdictions also maintain laws that prohibit compliance with unsanctioned foreign boycotts or embargoes.
Customs regulations generally govern the many aspects involved in the importation of goods into countries. In virtually all countries this includes complex regulations concerning the classification, valuation, country of origin and marking of the imported goods. Customs regulations may also include the enforcement of partner government agencies’ regulations on imported goods, such as health care products, chemicals, or other regulated articles.
Government procurement and various advertising regulations define rules for making certain country of origin representations.
Tax regulations influence sales terms and the obligations of parties in transactions.
Cargo security laws provide minimal security standards for ensuring the physical security of cross-border shipments.
Free trade agreements are two-country or multi-country international agreements that provide for certain trade preferences and benefits to the participating countries when eligibility and certification requirements are satisfied.
Employees should be aware that applicable laws and regulations may vary from country to country.
3M’s policies take into consideration multiple laws and regulations from across many countries, as well as management strategies, organizational structure, and above all, 3M’s values. This often results in 3M’s policies setting a higher standard than a specific law requires. Employees are expected to adhere to 3M’s policies as the standard for behavior
Transaction:
After the exporter and customer agree on the terms of a sale, the customer arranges for its bank to open a letter of credit. (Delays may be encountered if, for example, the buyer has insufficient funds.)
The buyer's bank prepares an irrevocable letter of credit, including all instructions to the seller concerning the shipment.
The buyer's bank sends the irrevocable letter of credit to a local bank, requesting confirmation. The exporter may request that a particular bank be the confirming bank, or the foreign bank selects one of its local correspondent banks.
The local bank prepares a letter of confirmation to forward to the exporter along with the irrevocable letter of credit.
The exporter reviews carefully all conditions in the letter of credit. The exporter's freight forwarder should be contacted to make sure that the shipping date can be met. If the exporter cannot comply with one or more of the conditions, the customer should be alerted at once.
The exporter arranges with the freight forwarder to deliver the goods to the appropriate port or airport.
When the goods are loaded, the forwarder completes the necessary documents.
The exporter (or the forwarder) presents to the local bank documents indicating full compliance.
The bank reviews the documents. If they are in order, the documents are airmailed to the buyer's bank for review and transmitted to the buyer.
The buyer (or agent) gets the documents that may be needed to claim the goods.
A draft, which may accompany the letter of credit, is paid by the exporter's bank at the time specified or may be discounted at an earlier date.
After the exporter and customer agree on the terms of a sale, the customer arranges for its bank to open a letter of credit. (Delays may be encountered if, for example, the buyer has insufficient funds.)
The buyer's bank prepares an irrevocable letter of credit, including all instructions to the seller concerning the shipment.
The buyer's bank sends the irrevocable letter of credit to a local bank, requesting confirmation. The exporter may request that a particular bank be the confirming bank, or the foreign bank selects one of its local correspondent banks.
The local bank prepares a letter of confirmation to forward to the exporter along with the irrevocable letter of credit.
The exporter reviews carefully all conditions in the letter of credit. The exporter's freight forwarder should be contacted to make sure that the shipping date can be met. If the exporter cannot comply with one or more of the conditions, the customer should be alerted at once.
The exporter arranges with the freight forwarder to deliver the goods to the appropriate port or airport.
When the goods are loaded, the forwarder completes the necessary documents.
The exporter (or the forwarder) presents to the local bank documents indicating full compliance.
The bank reviews the documents. If they are in order, the documents are airmailed to the buyer's bank for review and transmitted to the buyer.
The buyer (or agent) gets the documents that may be needed to claim the goods.
A draft, which may accompany the letter of credit, is paid by the exporter's bank at the time specified or may be discounted at an earlier date.
Shipment:
The handling of transportation is similar for domestic orders and export orders. The export marks should be added to the standard information shown on a domestic bill of lading and should show the name of the exporting carrier and the latest allowed arrival date at the port of export. The exporter should also include instructions for the inland carrier to notify the international freight forwarder by telephone on arrival.
International shipments are increasingly being made on a through bill of lading under a multi-modal contract. The multi-modal transport operator (frequently one of the modal carriers) takes charge of and responsibility for the entire movement from factory to the final destination.
When determining the method of international shipping, the exporter may find it useful to consult with a freight forwarder. Since carriers are often used for large and bulky shipments, the exporter should reserve space on the carrier well before actual shipment date (this reservation is called the booking contract).
The exporter should consider the cost of shipment, delivery schedule, and accessibility to the shipped product by the foreign buyer when determining the method of international shipping. Although air carriers are more expensive, their cost may be offset by lower domestic shipping costs (because they may use a local airport instead of a coastal seaport) and quicker delivery times. These factors may give the exporter an edge over other competitors, whose service to their accounts may be less timely.
Before shipping, the firm should be sure to check with the foreign buyer about the destination of the goods. Buyers often wish the goods to be shipped to a free-trade zone or a free port where goods are exempt from import duties.
The handling of transportation is similar for domestic orders and export orders. The export marks should be added to the standard information shown on a domestic bill of lading and should show the name of the exporting carrier and the latest allowed arrival date at the port of export. The exporter should also include instructions for the inland carrier to notify the international freight forwarder by telephone on arrival.
International shipments are increasingly being made on a through bill of lading under a multi-modal contract. The multi-modal transport operator (frequently one of the modal carriers) takes charge of and responsibility for the entire movement from factory to the final destination.
When determining the method of international shipping, the exporter may find it useful to consult with a freight forwarder. Since carriers are often used for large and bulky shipments, the exporter should reserve space on the carrier well before actual shipment date (this reservation is called the booking contract).
The exporter should consider the cost of shipment, delivery schedule, and accessibility to the shipped product by the foreign buyer when determining the method of international shipping. Although air carriers are more expensive, their cost may be offset by lower domestic shipping costs (because they may use a local airport instead of a coastal seaport) and quicker delivery times. These factors may give the exporter an edge over other competitors, whose service to their accounts may be less timely.
Before shipping, the firm should be sure to check with the foreign buyer about the destination of the goods. Buyers often wish the goods to be shipped to a free-trade zone or a free port where goods are exempt from import duties.
Export and Import Insurance:
Export shipments are usually insured against loss, damage, and delay in transit by cargo insurance. For international shipments, the carrier's liability is frequently limited by international agreements and the coverage is substantially different from domestic coverage. Arrangements for cargo insurance may be made by either the buyer or the seller, depending on the terms of sale. Exporters are advised to consult with international insurance carriers or freight forwarders for more information.
Damaging weather conditions, rough handling by carriers, and other common hazards to cargo make marine insurance important protection for exporters. If the terms of sale make the firm responsible for insurance, it should either obtain its own policy or insure cargo under a freight forwarder's policy for a fee. If the terms of sale make the foreign buyer responsible, the exporter should not assume (or even take the buyer's word) that adequate insurance has been obtained. If the buyer neglects to obtain coverage or obtains too little, damage to the cargo may cause a major financial loss to the exporter.
Export shipments are usually insured against loss, damage, and delay in transit by cargo insurance. For international shipments, the carrier's liability is frequently limited by international agreements and the coverage is substantially different from domestic coverage. Arrangements for cargo insurance may be made by either the buyer or the seller, depending on the terms of sale. Exporters are advised to consult with international insurance carriers or freight forwarders for more information.
Damaging weather conditions, rough handling by carriers, and other common hazards to cargo make marine insurance important protection for exporters. If the terms of sale make the firm responsible for insurance, it should either obtain its own policy or insure cargo under a freight forwarder's policy for a fee. If the terms of sale make the foreign buyer responsible, the exporter should not assume (or even take the buyer's word) that adequate insurance has been obtained. If the buyer neglects to obtain coverage or obtains too little, damage to the cargo may cause a major financial loss to the exporter.