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WEEK 6
TOPIC: INTERNATIONAL TRADE
CONTENT:
- Procedure for international trade
- Balance of trade and balance of payment
SUB-TOPIC 1: PROCEDURE FOR INTERNATIONAL TRADE
A businessman who wishes to engage in international trade should follow certain procedures. The – step – by step procedures are:
- Contact should be established between importer and exporter different means e.g. letter of inquiry, telephone, internet advertising etc.
- A quotation, outlining the description, price and features of the products are furnished by the exporter in response to the letter of inquiry.
- If the intending importer is satisfied with quotation, he will place an order with the manufacturer. The indent will show details of the goods, price and date of delivery.
- The next step is to make arrangement for payment through any agreed means of payment e.g., western money transfer, documentary credit, telegraphic mail transfer etc.
- Then, an arrangement of the goods to be shipped through a shipping company will be made. The shipping agent will get all the necessary documents e.g. shipping note, calling forward note etc.
SUB-TOPIC 2: BALANCE OF TRADE AND BALANCE OF PAYMENT
BALANCE OF TRADE: is the difference between the value of a country’s visible exports and visible imports over a given period of time. It is favorable when a country’s visible exports are
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