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2. 2 Individuals, companies, and countries participate in international trade by importing and exporting goods and services.

3. 3 To describe the processes of importing and exporting To explain the differences between goods and services To identify the steps of the importing and exporting processes

4. 4 International trade opens new markets for companies from many nations and provides access to products some people would otherwise never use.

5. 5 What Is International Trade? International trade can take place between one nation and another. international trade all business activities conducted between individuals, companies, and governments International trade can also take place within groups of countries.

6. 6 What Is International Trade? Business Activities in International Trade Buying Selling Shipping Receiving Paperwork Granting Credit Making Payments Servicing Products

7. 7 Importing and Exporting Business ImportsExports Needs are met by imports Extra products and supplies are exported

8. 8 The Nature of International Trade The WTO stands for the World Trade Organization. This is an organization in which many countries belong to for trade relations. The EU stands for the European Union. Many countries also belong to this group for special trade considerations.

9. 9 The Nature of International Trade Look up on the internet to find benefits of being a EU Member Also, look up some restrictions to being a member of the EU.

10. 10 Imports Imports can come from foreign companies or foreign governments and individuals. imports goods and services that people in one country buy from people in another country The United States imports oil and customer-relations call centers.

11. 11 Exports Exports can go to foreign companies or foreign governments and individuals. exports goods and services that people in one country sell to people in another country The United States exports agricultural products, technology, and financial services.

12. 12 Goods and Services When a good is imported or exported, a method of transportation must be chosen to move the item across national boundaries. good a tangible item that is made, manufactured, or grown

13. 13 Goods and Services A company must pay shipping costs in order to transport goods. Companies must agree to insure or pay for damaged or missing goods. There must be a procedure for returning goods.

14. 14 Goods and Services Producer Middleman Company Customer Channel of Distribution Merchant Middleman Agent Middleman or

15. 15 Services Selling a service usually involves convincing the customer of the benefits of the particular service. service an intangible benefit or task provided by a business to its customers A service may not require a middleman.

16. 16 Services Individual consumers purchase services such as hospitality and tourism. Companies purchase services such as consulting, insurance programs, and banking and financial services.

17. 17 Services

18. 18 Goods with Services Often, a good is sold with a service such as an extended warranty on a car. Services are sold with other services such as flight insurance with an airline ticket.

19. 19 Importing Process Identify need Search for suppliers Create and finalize a purchase agreement Receive goods Confirm the purchase 12345

20. 20 Identify Need An individual customer, a company, or a government can have a need. A need can be for a good or a service.

21. 21 Search for Suppliers The Internet makes the search for suppliers easy because there are so many choices.

22. 22 Create and Finalize Purchase Agreement A purchase agreement is a contract between the buyer and the seller. Items Involved Delivery method Price Exchange Rate Due Date Who pays for shipping Items in a Purchase Agreement Provisions for damage

23. 23 Create and Finalize Purchase Agreement International trade documentation refers to the papers and documents that companies must send to customers with their products to legally export or import goods.

24. 24 Receive Goods Goods are usually received at a shipping dock or a company’s front door. Goods need to be checked. As goods pass across national borders, companies may owe a tax or duty.

25. 25 Confirm the Purchase The importing company confirms the purchase and makes payment when it agrees that the terms of the contract have been met.

26. 26 Confirm the Purchase Relate What imported products do you buy and use? What countries export those products?

27. 27 Exporting Process Assess Demand Identify potential customers and make sales contacts Create and finalize a purchase agreement Deliver the goods or services Complete the transaction 12345

28. 28 Assess Demand The two steps in assessing demand are: Analyze the export potential for a good or service. Assess the company’s ability to follow through and provide the good or service.

29. 29 Identify Customers and Make Contacts Ways to identify customers and make contacts include: Trade Shows Visits by Salespeople Telephone Calls E-mails Teleconferences Internet Solicitations

30. 30 Create and Finalize Purchase Agreement*** Most shipping terms are FOB. FOB (free on board or freight on board) signifies that the ownership of merchandise in transit determines if freight charges are free FOB-loading dock means the seller will pay all shipping until goods reach the loading dock.

31. 31 Create and Finalize Purchase Agreement CIF is another term used in a purchase agreement. CIF (cost, insurance, and freight) the price quoted to the buyer, including cost, insurance, and freight

32. 32 Create and Finalize Purchase Agreement C&H is another term used in a purchase agreement. C&H (cost and freight) the price quoted to the buyer, signifying the buyer pays separately for insurance

33. 33 Deliver Goods and Services The seller must arrange to transport the goods to the buyers location. The seller must comply with all legal and accounting requirements.

34. 34 Deliver Goods and Services Many goods require a certificate of origin. A bill of landing (BL) identifies exactly what is being shipped.

35. 35 Complete the Transaction The transaction is completed when the buyer and seller agree all terms are met and payment is made. Many countries rely on the International Monetary Fund (IMF) to settle exchange rate problems.

36. 36 Complete the Transaction The World Bank Group can lend money to support an international trade relationship. The International Development Association (IDA) helps companies in less-developed nations.

37. 37 When in Armenia… Meeting and Greeting Men greet with a handshake and may embrace; women hug and kiss each other once on the left cheek. Maintain eye contact. Business Etiquette When arranging business, provide a letter of introduction. Punctuality is not typical. Business Dress Wear casual but stylish attire. Never wear tight clothing.