INERNATIONAL TRADE The process of buying and selling goods and services between countries Countries can import or export: a) visible goods: the ones you can see (e.g. clothes; cars) b) invisible goods: services (banking, tourism, insurance)

Balance of trade and balance of payments (p 33) Balance: difference between the amount a country spends on IMPORTS and the amount it receives from EXPORTS Balance of trade (ONLY visible goods) Balance of payments => visible & invisible goods BoP: SURPLUS = EXPORTS >IMPORTS BoP: DEFICIT = EXPORTS <IMPORTS

Foreign trade controls Governments implement protection policies through: Tariffs on imports =CUSTOMS DUTIES= taxes on imported goods) Quotas = limit on the quantity of foreign goods coming into a country Subsidies: money given to domestic producers to make them more competitive Embargoes: ban on the export/import of certain goods

MULTINATIONAL TRADING BLOCKS Groups of contiguous countries that agree to adopt common trading/protectionist policies for the rest of the world, but have preferential treatment towards one another THE EU ( :ECC) NAFTA (North American Free Trade Agreement – 1994) MERCOSUR (southern Cone free trade area - Argentina, Brazil, Paraguay, Uruguay 1991) Asean (Association of South East Asian Nations – 1967)

PROMOTING INTERNATIONAL TRADE WTO World Trade Organisation IMF International Monetary Fund The World Bank Listening p. 35 tr 7

Documents in international trade Within the EU (since 1993)= goods exempt of VAT VIES /vaiz/ = VAT Information Exchange System (companies can get confirmation of VAT numbers ( partita IVA ) and administrations VIMA (VIES Intrastate and Mutual Assistance) = office where exporters send a VIES statement (monthly or every 3 months)

Documents in international trade Outside the EU SAD = Single Administrative Document used to declare imports and exports and to remove goods from customs procedures (sdoganare) CERTIFICATE OF ORIGIN signed by the exporter’s Chamber of Commerce = necessary because the rate of customs duties on imports varies depending on the origin of the goods (e.g p. 39)

TRANSPORT DOCUMENTS - 1 The DELIVERY NOTE … …contains the details of the goods (NO prices) …is signed on arrival by the importer to state that he accepts the goods …the carrier keeps a copy as proof of delivery

TRANSPORT DOCUMENTS - 1 The COMMERCIAL INVOICE= a document that the exporter sends to the importer with information about importer/exporter details invoice number place/date of issue order number description of the goods unit amount/total amount Terms (INCOTERMS) PROFORMA INVOICE = statements of costs to be paid before the goods are delivered