2. Exporting, Importing, and Countertrade13
chapter
Exporting, Importing, and Countertrade
McGraw-Hill/Irwin
Global Business Today, 5e
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

3. Chapter 13: Exporting, Importing, and Countertrade
INTRODUCTION
Both large and small firms stand to benefit from exporting
The volume of export activity in the world economy is increasing as exporting has become easier
The decline in trade barriers under the WTO along with regional economic agreements such as the European Union and the North American Free Trade Agreement have increased export opportunities
Firms wishing to export must identify export opportunities, avoid a host of unanticipated problems that are often associated with doing business in a foreign market, become familiar with the mechanics of export and import financing , learn where to get financing and export credit insurance, and learn how to deal with foreign exchange risk

4. Chapter 13: Exporting, Importing, and Countertrade
THE PROMISE AND PITFALLS OF EXPORTING
The potential benefits from exporting can be great--the rest of the world is a much larger market than the domestic market
Larger firms may be proactive in seeking out new export opportunities, but many smaller firms are reactive and only pursue international opportunities when the customer calls or knocks on the door
Many novice exporters have run into significant problems when first trying to do business abroad

5. Chapter 13: Exporting, Importing, and Countertrade
IMPROVING EXPORT PERFORMANCE
Inexperienced exporters can gain information about foreign market opportunities from various sources and avoid some of the common pitfalls that frustrate novice exporters.
An International Comparison
Information Sources
Utilizing Export Management Companies
Export Strategy

6. Chapter 13: Exporting, Importing, and Countertrade
EXPORT AND IMPORT FINANCING
Mechanisms for financing exports and imports have evolved over the centuries in response to a problem that can be particularly acute in international trade: the lack of trust that exists when one must put faith in a stranger.

7. Chapter 13: Exporting, Importing, and Countertrade
Lack of Trust
Letter of Credit
Draft
Bill of Lading
A Typical International Trade Transaction

8. Chapter 13: Exporting, Importing, and Countertrade
EXPORT ASSISTANCE
Prospective U.S. exporters can draw on two forms of government-backed assistance to help their export programs.
Export-Import Bank
Export Credit Insurance

9. Chapter 13: Exporting, Importing, and Countertrade
Countertrade is an alternative means of structuring an international sale when conventional means of payment are difficult, costly, or nonexistent
Countertrade refers to a range of barterlike agreements that facilitate the trade of goods and services for other goods and services when they cannot be traded for money

10. Chapter 13: Exporting, Importing, and Countertrade
The Incidence of Countertrade
Types of Countertrade
The Pros and Cons of Countertrade