INTERNATIONAL

TRADE FINANCE
  Economic transactions that are made between
countries.
 International trade transactions are facilitated by
International international financial payments, in which the
private banking system and the central banks of
trade – the trading nations play important roles
Meaning  International trade is exchange of capital, goods
and services across international borders or
territories.
 "International Trade is a trade between nations.“-Anatol

"International Trade consists of transactions between

residents of different countries.“-Haltman
Definition
"International Trade is simply the extension of the trade
beyond the boundaries of a nation.“

"International Trade means in plain English trade between

nations."-Edgeworth
  To expand sales
Why  To acquire resource
companies  To minimize risk
goes
international
 Benefits of
international
Trade
 Apple
 Apple Inc., founded by Steve Jobs, Steve Wozniak, and Ronald
Wayne in the 1970s, is now considered one of the most influential
international companies. Headquartered in the United States, Apple
designs, develops, and sells electronics, software, streaming, and
online services worldwide.
 Apple opened its first international location in Tokyo, Japan,
in 2003 after saturating the American market. Under Jobs, Apple
touted ease-of-use, innovative design, and customer loyalty with the
marketing slogan, “Think Different,” and it continues to use
visionary strategic marketing and a tight ecosystem to overcome
competition and attract creative audiences around the globe.
 Apple not only sells products internationally but has supply chains
from 43 countries that ship supplies to China for final production
and assembly. By keeping a tight-knit and strong relationship with
suppliers, strategic inventory, and a focus on sustainability, Apple
stands as one of the world’s most successful companies.
 McDonald’s
 Two brothers, Maurice and Richard McDonald, converted their drive-
through barbecue restaurant in San Bernardino, California, into a burger
and milkshake restaurant—now known as McDonald’s—in 1948.
 The McDonald brothers focused on creating a better business system
geared toward self-service and efficient and repeatable processes that
relied on heating lamps instead of waiters. This model, known as “Speedee
,” led to lower costs, cheaper products, and faster growth. It became the
epitome of “fast food.”
 Soon after, Ray Croc took McDonald’s a step further by bringing in
franchisees and suppliers, leading to the creation of restaurants across the
United States. McDonald’s model continued to expand, and, in 1967, the
company opened locations in Canada and Puerto Rico.
 McDonald’s has been internationally successful, thanks in large part to the
consistency its business model allows. The fact that a Big Mac tastes the
same regardless of which country you order it in is a testament to the
company’s long history. Today, there are 58,000 restaurants in more than
120 countries.
 country gets specialization in a specific commodity
due to diversification of economic resources.
The basis of international trade is to be found in
the diversity of economic resources in different
countries.
Basis of specialization is facilitated by the exchange of
international surplus production through international trade.
trade International trade takes place when buyers find
the foreign markets cheaper to buy in and sellers
 find them more profitable to dispose of their
products than the domestic market. Thus, a more
effective use of world's resources is made possible
through international trade.
  Foreign Trade has imposed a profound impact on the
economic growth of a country. It has been witnessed that with
the starting up of the economy and liberalization of trade
restrictions, the developing countries, mainly India and China
have a significant growth over the years.
Foreign trade  Foreign trade infuse global competitiveness, and hence the
and economic domestic business units tend to become very efficient being
unveiling to international competition.
growth  The developed countries have higher trade protectionism
measures as against the developing countries. Exporting of
labour intensive products such as clothing, footwear, textiles.
etc.
  The balance of trade is the distinction
between the value of a nation’s imports and
exports for a given time frame.
 The BoT is the largest constituent of a
Balance of nation’s balance of payments.
trade  Economists utilize the BoT to compute the
nation’s economy growth.
 The BoT is also known as the trade balance
or the international trade balance.
  The balance of payment is a statement of
all the transactions that are made between
entities in one nation and the rest of the
world over a particular time frame,
 The BoP is a set of accounts that identifies
Balance of all the commercial transactions operated by
payment the nation in a specific period with the
remaining nations of the world. I
 documents a record of all the monetary
transactions performed globally by the
nation on goods, services, and income
during the year.
  A barrier to trade is anything that
makes it harder to trade goods and
services across borders. Barriers to
Trade trade can be financial like tariffs; or
technical such as laws, regulations,
Barriers standards, and testing and
certification procedures. Free trade
agreements exist to reduce or
eliminate trade barriers
Types of Trade
Barriers
  A tariff is a tax imposed on goods involved in International
Trade.Tariffs may be either ad valorem or specific.

TARIFF  Ad Valorem Tariffs: as percentages on values of goods

BARRIERS imported.
 Specific Tariffs: relates to some specific attributes of the
goods - weight, quantity, value .
 Compound Tariff: is calculated partly as a percentage on
value and partly as a rate per unit or weight
 Developed countries use non-tariff barriers as an economic strategy
to control the level of trade they conduct with other countries. When
Non-Tariff making decisions on the non-tariff barriers to implement in
international trade, countries base the barriers on the availability of
BARRIERS goods and services for import and export, as well as the existing
political alliances with other trade partners.
  quota is a government-imposed trade restriction that limits the
number or monetary value of goods that a country can import or
export during a particular period. Countries use quotas in
international trade to help regulate the volume of trade between
Quotas them and other countries.

 For example, in January 2018, President Trump imposed 30%

tariffs on imported solar panels from China.
  Another common barrier to trade is a government subsidy to
a particular domestic industry. Subsidies make those goods
cheaper to produce than in foreign markets. This results
Subsidies in a lower domestic price. Both tariffs and subsidies raise the
price of foreign goods relative to domestic goods, which
reduces imports.
  The WTO's global system lowers trade
barriers through negotiation and
WTO(World Trade operates under the principle of non-
Organization) discrimination. The result is reduced costs
of production (because imports used in
production are cheaper), reduced prices of
finished goods and services, more choice
and ultimately a lower cost of living.
 cut living costs and raise living standards
 settle disputes and reduce trade tensions
 stimulate economic growth and employment
cut the cost of doing business internationally
encourage good governance
What they do help countries develop
give the weak a stronger voice
support the environment and health
contribute to peace and stability
  EXIM policy is regulated by the Foreign Trade
Development and Regulation Act, 1992. The main
objective of this act is to provide the development
Indian EXIM and regulation of foreign trade by facilitating
POLICY imports into and augmenting exports from India.
Foreign Trade Act has replaced the earlier law
known as the imports and Exports (Control) Act
1947
EXIM Bank  https://www.youtube.com/watch?v=lMthMWVQHW4