MODULE 7: IMPORTING, EXPORTING, & TRADE RELATIONS

• It refers to the act of bringing goods or services into one country from another country or in your own country.

  Importing
• It means a country sells and ships goods or products to another country.

  Exporting
• It because it allows countries and businesses to access products and resources that they may not have domestically. It expands choices, lowers costs, and promotes economic growth through trade with other countries.

  Importing is Important
• IMPORTING PROCEDURES

  1. Identify Needs
  2. Search for Supplier
  3. Create and Finalize a Purchase Agreement
  4. Receive Goods
  5. Confirm the Purchase
  6. Confirm Purchase Agreement
  7. Payment to Supplier
  8. Record Keeping and Compliance
• Determine the specific products or goods you want to import based on market demand and your business's requirements.

  Identify Needs
• Research and identify potential suppliers, manufacturers, or distributors in the exporting country.

  Search for Supplier
• Initiate negotiations with your chosen supplier. Discuss terms and conditions.

  Create and Finalize a Purchase Agreement
• Coordinate with your supplier to arrange the shipping and transportation of the goods to your country. Determine the mode of transportation (e.g., sea, air, land) and logistics provider.

  Receive Goods
• After the goods arrive at the port of entry in your country, they will go through customs procedures, including inspection and clearance. Pay any import duties, taxes, and fees as assessed by your country's customs authorities.

  Confirm the Purchase
• Ensure that the received goods match the details specified in the purchase agreement, including quality, quantity, and packaging.

  Confirm Purchase Agreement
• Fulfill your payment obligations to the supplier as specified in the purchase agreement.

  Payment to Supplier
• Maintain detailed records of the entire import transaction, including the purchase agreement, invoices, shipping documents, and customs clearance documents.

  Record Keeping and Compliance
• A government employee authorized to collect the duties levied on imports.

  Customs Official
• This term also refers to the procedures involved in the collection of duties.

  Customs
• It is a government agency in the United States responsible for collecting import duties and taxes, enforcing trade regulations, ensuring border security, and facilitating legitimate international trade.

  Customs and Border Protection (CBP)
• In the Philippines, this agency responsible for customs and borderprotection.

  Bureau of Customs (BOC)
• It is a regulatory agency that is responsible for overseeing and regulating various products related to public health including medical devices, cosmetics, dietary supplements, and more.

  Food and Drug Administration (FDA)
• EXPORTING PROCEDURES

  1. Find Potential Customers
  2. Meet the Needs of Customers
  3. Agree on Sales Terms
  4. Deliver Products or Services
  5. Complete the Transaction
• Conduct market research to identify potential international markets and customers interested in your products or services.

  Find Potential Customers
• Adapt your products or services to meet the specific needs and preferences of the target market. This may include product customization or localization.

  Meet the Needs of Customers
• Negotiate sales terms and conditions with the potential customers, including pricing, payment terms, delivery terms, and quality standards.

  Agree on Sales Terms
• Arrange for the production, packaging, and transportation of your products or delivery of your services.

  Deliver Products or Services
• Deliver the products or services to the international customers as agreed upon in the sales terms. Handle customs and import procedures, including preparing and submitting required documentation for customs clearance in the destination country.

  Complete the Transaction
• It means the selling price of the product includes the cost of loading the exported goods onto transport vessels at the specified place.

  Free on board (FOB)
• It means the buyer assumes all risk once the seller ships the product.

  FOB Origin
• It means the seller retains the risk of loss until the goods reach the buyer.

  FOB Destination
• It is used in contracts for the sale of goods. It defines the responsibilities and costs associated with the transportation of goods from the seller to the buyer.

  Cost, insurance, and freight (CIF)
• The seller is responsible for the cost of the goods and all expenses related to getting the goods to the port of destination.

  Cost (C)
• The seller also arranges and pays for marine insurance to cover the goods during their journey to the port of destination.

  Insurance (I)
• The seller is responsible for the cost of freight, which covers the transportation of the goods to the port of destination.

  Freight (F)
• It is a company that arranges to ship goods to customers in other countries. Like a travel agent for cargo, these companies take care of the reservations needed to get an exporter’s merchandise to the required destination.

  Freight Forwarder
• Export Documents


  • Bill of lading
  • Certificate of origin
• It is a document stating the agreement between the exporter and the transportation company. This document serves as a receipt for the exported items.

  Bill of lading
• It is a document that states the name of the country in which the shipped goods were produced.

  Certificate of origin
• Obstacles to Exporting

  • No company representatives in foreign countries.
  • Products not appropriate for foreign consumers.
  • Insufficient production facilities to manufacture enough goods for exporting.
  • High costs of doing business in other countries.
  • Difficulty understanding foreign business procedures.
  • Difficulty obtaining payment from foreign customers.
• This is like a financial scorecard for a country's trading activities. It's the difference between the value of stuff a country sells to other countries (exports) and the value of stuff it buys from other countries (imports).

  Balance of Trade
• Buying more than selling

  Trade Deficit
• Selling more than buying

  Trade Surplus
• This measures the total flow of money coming into a country minus the total flow going out.

  Balance of Payments
• This means a country is earning more money from its international transactions than it is spending.

  Positive Balance of Payments