NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Chapter Nine: International Trade Procedure §1 Launching a Profitable Transaction Preparation before the Negotiation Target Market Business Partner Qualified Negotiation Proper Plan

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Market information 1 Market conditions 2 Consumer's demand conditions 3 Products: structure 、 function 、 types 、 specification 、 quality 、 quantity 、 credit 、 packing 、 shipment, services ， similar products 。 4 Prices

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Gathering of information Macro policies of government Circumstances of politics Circumstances of law Economic Circumstances Technical Circumstances Commercial Practices

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Know about the information of your opponent Analysis of your opponent 1 Need analysis 2 Analysis of attitude and the market position 3 Credit investigation （ 1 ）资格审查（法人资格、谈判签约代表资格审查） （ 2 ）信用审查（履约能力和商业信誉） 4 Time limit of negotiation

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Information of the opponent 1 Actual conditions of the opponent 2 Running conditions of the opponent 3 Negotiating style of the opponent 贪权者 说服者 忠实的执行者 4 Ways of the opponent 强硬型；阴谋型；合作型；不合作型

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Media of gathering information 1 Printed media ： newspaper 、 magazine 、 inside publication and specialized book 2 E-wave media ： radio 、 TV 3 Statistic data ： 4 Specialized organization ： bank 、 insurance company 、 research institute 5 Meeting 6 Public places ： station 、 dock 、 restaurant 、 shop 、 street 、 amusement places 7 Telegram 、 card 、 ads

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Common methods of gathering information 1 Gather information in public issues 2 Obtain information from some units 3 Gather information by principal 4 Exchange 5 Gather information on spot （ 1 ） Interview （ 2 ） asking （ 3 ） observe （ 4 ） visit （ 5 ） purchase on spot

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Gain information from the employee of the opponent 1 False inviting applications 2 Fired employee 3 Counselor and assistant 4 Help his staff

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Tips for a successful negotiation Qualified Negotiator Negotiating Team Leader Negotiating Brief and Negotiating Plan

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Qualified Negotiator Shrewdness （ smart ） Patience Adaptability Endurance （ withstand hardship ） Gregariousness （ sociable ) Concentration The ability to articulate Sense of humor

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY §2 Business Negotiation and Establishment of Contract General Procedures for Trade Negotiation Enquiry Invitation for Offer Offer Definite Offer Indefinite Offer Counter Offer Acceptance Conclusion of Contract

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Layout of Business Letter: 1 Heading 2 Inside Address 3 Salutation 4 Caption 5 Opening Sentences 6 Body of Letter 7 Closing Sentences 8Complementary Close 9 Signature 10 Enclosure 11Postscripts

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Style of Business Letter: Block style （ Modern ） Indented style Modified block style

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Style of Envelope Envelope is the same to inside address; it can adopt indented or modified block style. The address of receiver in the middle left and the stamp is to the right top of the envelope.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Characteristics of business negotiation （ 1 ） The heart of each transaction; （ 2 ） The methods must agreed by the both parties; （ 3 ） Information is open; （ 4 ） Both sides understand the other ’ s viewpoint; （ 5 ） They achieve common and complementary objectives acceptable to them. （ 6 ） One side will always arrive at the negotiation table in position of great power. （ 7 ） Everything is negotiable. （ 8 ） It is the Zero-sum game.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Negotiation models Win/lose: Negotiations conducted in win/lose manner end with the final result of one side's victory and the other side's loss. Win/win: Negotiations conducted in win/win approach allow both or all sides to obtain a favored outcome, the heart of win/win thinking is the foundation of belief that one person's success is not achieved at the expense of another.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY

Contents of Trade Negotiation Contract clauses: Name of commodity quality quantity Packing shipment price payment insurance Commodity inspection claim arbitration force majeure General terms and conditions （ 事先达 成协议）

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Enquiry … invitation to offer （ a step to initiate a potential transaction ） We are interested in 2000 metric tons each of red beans and green Beans,1999 crop, in bulk and packed in gunny bags. When offering, please state in detail description and origin. * INTERESTED 2000MTEACH REDBEANS GREENBEANS 1999CROP INBULKAND GUNNYBAGS STATING INDETAIL DESCRIPTN ORIGIN

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Invitation to Offer Is either an enquiry made to get information about the terms and conditions of a commodity trading, or a conditional suggestion about the transaction. Inquiry is a usual form of Invitation to Offer involving quality, quantity, price, packing, shipment, asking for samples and catalogue. Inquiry can be made by the buyer or the seller, and can be made orally or in writing.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Offer The difference between OFFER and QUOTATION An offer is a proposal to enter into a contract V CAN OFA 1000DZ T-SHIRTS USD45.00 PER DZ FOB DALIAN CARTON PACKING SHIPMT BEFORE THE END OF 2003 IRREVOCABLE SIGHT L/C SUBJECT REPLY HERE 30TH.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Valid terms of an offer To one or more specific persons Sufficiently definite Indicate the intention of the offeror to be bound in case of acceptance

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Offer Is a sufficiently definite proposal for concluding a contract addressed to one or more specific persons indicating the intention of the offeror to be bound in the case of acceptance by the offeree.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Withdrawal and revocation of an offer Withdrawal An offer becomes effective only after it reaches the offeree. So it can be withdrawn prior to their reaching the offeree.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Revocation An offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Exception: If indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; If it is reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Counter-offer Is a proposal made by the offeree who does not fully agrees the offer and makes modification or alteration to the offer. Counter-offer is the rejection of the offer and constitutes a new offer.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Counter-offer A counter-offer is a reply to an offer. A counter-offer is a new offer made by the offeree. The original offeror is the offeree of the new offer. Referring to your letter of July 16, we regret that your price is too high to be accepted. Business is not possible unless you make a 2% reduction in the quotation. · YLJULY16 PRICEHIGH PLSREDUCE BYTWOPCT

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Acceptance An acceptance is an unconditional assent to an offer. Thank you for your cable of august 15, and we confirm having sold you 10 metric tons of Writing paper for October shipment. Please do your utmost to open the L/C as soon as possible. YC15AUG WRTGPAPER 10MT OCTSHIPMT CONFIRMED PLSRUSHLC

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Valid terms of acceptance made by the offeree contents must conform to that of an offer within the period of time for acceptance （ in the validity period ） An acceptance must be indicated by statement or performing on act.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Conditional Acceptance If the acceptance made by the offeree with some conditions, the offer or can accept or refuse to the conditional acceptance.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Late Acceptance An acceptance of an offer becomes effectives at the moment the indication of assent reaches the offeree. An acceptance is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Withdrawal An acceptance may be withdrawn if the withdrawal reaches the offeror before or at the same time as the the acceptance would have become effective.

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY §3 Import and Export Operating Procedures Export Procedures Import Procedures

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Export Procedures Export License Trade Negotiation Cargo Readiness L/C Customs Clearance Shipping Insurance Document and Payment

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Import Procedures Import License Trade Negotiation L/C Booking Shipping Space or Ship Insurance Document Examination and Payment Customs Clearance Taking Delivery and Inspection Claim Settlement of Disputes

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NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Government control documents Import License Foreign Exchange Export License Certificate of Origin Inspection Certificate Consular Invoice Customs Invoice

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Commercial documents Proforma Invoice Commercial Invoice Quality Certificate Weight Certificate

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Finance documents Application Form for International Money Transfer Drafts Banker ’ s Draft Commercial Draft Sight Draft Time Draft Application for Documentary Letter of Credit Letter of Credit

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Transportation documents Shipping Note Packing List Bill of Lading Consignment Note (rail, road) Air Waybill Parcel Post Receipt Combined Transport Documents Arrival Notification

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Insurance documents Insurance Policy Insurance Certificate