Import and export procedures

‘PROMOTING GENDER EQUALITY IN TRADE’
EXPORT AND IMPORT PROCEDURES
TRAINING OF TRAINERS

Introduction
Make Your
Name Tag
and Place it
in Front of
Yourself

Introduce
yourself, your
designation and
assignment
What are your
expectations from
this workshop?
Introduction

Time Schedule For Each Day
Workshop Timings: 3 Full Days
15 Minutes – 1st Half
60 Minutes– Lunch
15 Minutes – 2nd Half
No Smoking / Cell phone etiquette
Restrooms / Emergency Exits

“What people really want is not knowledge but certainty.”
~ Bertrand Russell
The Quest For
Knowledge
{ }

Why? This Training of Trainers
Objectives to be acquired
and determined from and
by the participants

Basic Training Delivery
• Introduction
• Planning your training
• The training sequence
• Creating effective visual aids
• Effective presentation techniques

Why Give A Presentation on Training?
Three Main
Reasons
Inform Persuade Educate

Effective Presentation
Presentation
• “Something set forth to an audience for the
attention of the mind “
Effective
• “…producing a desired result”

#1 Fear
• Feared more than
death!
• THE FACTS: Shaky
hands, blushing cheeks,
memory loss, nausea,
and knocking knees
• NORMAL!

Causes of the Anxiety
• Fear of the unknown OR loss of control
• Fight or flight mode
• No backup plan
• No enthusiasm for subject
• Focus of attention

Effective Presentations
• Control anxiety – Don’t fight it
• Audience centered
• Accomplishes objective
• Fun for audience
• Fun for you
• Conducted within time frame

Planning Your Training
Determine
purpose
• What do you
want to
accomplish?
Know your
audience !!!
• Success
depends on
your ability to
reach your
audience
• Size
• Demographics
• Knowledge
level
• Motivation
• Why are they
attending?
• What do THEY
expect?
Plan space
• Number of
attendees and
seats
• Seating
arrangement
• Lighting, and
lighting
controls
• Audio/Visual
equipment
• Distracters
What day and
time
• Morning
• Afternoon
• Evening
• Work day
versus
weekend
• Any day!
Organization
• Determine
main points (1-
5)
• Evidence
• Transitions
• Prepare outline
• Prepare a
Storyboard
Rehearsal
• In the actual
room if
possible
• Work to a
script and time
your
presentation
• Practice Q & A
• Check
equipment –
load your slides
in advance
• Make
contingency
plans

Organizing Your Training
– Possible Organizational Patterns
Topical Chronological
Problem/Solution Cause/Effect

Presentation Outline
Keyword
Reminders
Conversational
Flow
Flexibility
More
responsive to
audience

#1: Build Rapport
• … relation marked by harmony or affinity
– Audience members need to trust you and feel that
you care about them
• Start before you begin
– Mingle; learn names
– Opportunity to reinforce or correct audience
assessment
– Good first impression
• People listen to people they like

#2: Opening Your Presentation
• Introduce yourself
– Why should they listen
• Get attention, build more rapport, introduce
topic
– Humor
– Short story
– Startling statistic
– Make audience think
– Invite participation
• Get audience response

#3…Completing the Opening
• Clearly defining topic
• If informative…
– Clear parameters for content within time
• If persuasive…
– What’s the problem
– Who cares
– What’s the solution
• Overview

#4: Presenting Main Points
• Make point-transition,…make point-
transition,…make point-transition, etc…
• Supporting evidence
• Examples
• Feedback & questions from audience
• Attention to, and focus on, audience…
are they listening?

#5: Concluding Your Presentation
Goal
• Inform audience that you’re about to close
• Summarize main points
– “Tell ’em What You Told ‘em.”
• Something to remember, or call-to-action
• Answer questions

CREATING EFFECTIVE VISUAL AIDS

Designing Good Slides
• Content
– If it doesn’t add value, don’t say/use it
• Unveiling
– Is drama useful or necessary?
• Color
– Know your room and lighting
• Dark room – use light font on dark background
• Bright room – use dark font on light background
• Subliminal messages
– Consider your audience and use carefully

Content
• Purpose
– Complement speaker
– Talk ≠ technical report
• Density
– 7-10 lines/page
– 4-8 words/line
– Test: Project a sample in the room, or in a room of
approximately the same size as will be used in the
real presentation

Visual Aids
To make, explain
or identify a
point
To emphasize,
clarify or
reinforce a point
To remind,
summarize or
review a point

We
Remember…
10% of
what we
read
20% of
what we
hear
30% of
what we
see
50% of
what we
see and
hear

Visual Aids
• Enhance understanding
• Add variety
• Support claims
• Lasting impact
Used poorly, however,
they can be a distraction
and lead to an
ineffective presentation
Some of them are:
• PowerPoint slides
• Overhead transparencies
• Graphs/charts
• Pictures
• Web links
• Films/video
• Flip charts
• Sketches
• Chalk or white board

Visual Aids Should…
• Outline, explain, support main points
• Serve audience’s needs, not speaker’s
• Be simple and clear
• Supplement and support…
• NOT DOMINATE!... the presentation

Be Visible
• Use Sans Serif fonts (fonts without feet)
– e.g. Arial, Tahoma, Trebuchet, Verdana, etc.
• Titles should be 32-44 pt. font size, BOLD
• Text should be as large as possible
– First level 24-32 pt font size
– Second level 20-28 pt font size
– Etc.
• Use color wisely
– Contrasting colors

Red/Blue Conflict
Red letters on blue background
creates “flicker effect”
Blue letters on red background
just as bad

Low Contrast
White on yellow Yellow on white
Black on blue Blue on black

“Fly-In” vs “Wipe”
• Could you read this?
• How about this one?
• Maybe the third time is the charm!
ALWAYS
• Less distracting
• Reduce eye movement
• Increase readability

• Upper left to
Upper right to
Lower left to
Lower right
Eye
Movement
The “Z” Rule

EFFECTIVE
PRESENTATION TECHNIQUES

What Makes an Effective Speaker?
• Control of information
• The voice used
• The right words
• Use of body language
• Prompts, scripts and notes
• The right location
• Useful and meaningful visual aids

Vocal Techniques
• Loudness
– Will you be using a microphone?
• Pitch
– Vary to make points
• Rate
– Watch your audience
• Pause for effect
– Allow time for message to “sink in”
• Deviate from the norm for emphasis

The Voice - CLAP
C
• C: Clear –
the use of
simple, easily
understood
words and
phrases
L
• L: Loud
(enough) – it is
important that
everyone can
hear you
A
• A: Assertive
– a bright and
confident air
born of
knowledge of
the subject and
good
preparation
P
• P: Pause – it
is essential to
allow the
listeners time to
digest what you
have said

Use the Rights Words - PREPare
What you say, and how you say it,
is the key to a successful presentation:
P – state
your
position or
point
R – explain
your ideas
E – use
examples
P – restate
your
position or
point

Use of Body Language
• Make eye contact
• Use your hands, but don’t go crazy
• If possible move around, but slowly!
• DON’T speak with your back to the audience
• Make eye contact,…but move focus around the
audience
• Use your hands,…but don’t go crazy
• If possible move around,…but slowly!
• Maintain good posture
• Make sure everyone can see you
• DON’T speak with your back to the audience

Scripts and Notes
• Learn and use a script for formal presentations
to large groups
• Small note cards, or PPT notes page, can be
used, but FIRST write a script
• Underline key words that will best remind you
what you want to say
• Use one card for each slide or topic
• If possible, have someone else advance slides
for you

Speaker Reads Slides
• A speaker may put his entire presentation on his
slides. He turns his back to the audience and
reads the slides aloud. Perhaps he feels this
approach guarantees all the information will get
to the audience.
• This may be the most annoying way to give a
presentation. Audience members feel insulted:
they already know how to read! They wonder
why the lecturer doesn’t simply hand out a copy
of the slides.
• The visual presentation dominates the
presenter. The presenter is not adding
any value to what is on the slides.
Psst! This slide is way too busy!

Common Problems
• Verbal fillers
– “Um”, “uh”, “like”, “you guys”
– Any unrelated word or phrase
• Swaying, rocking, and pacing
• Hands in pockets
• Lip smacking
• Fidgeting
• Failure to be audience-centered

Pauses
• Useful
– Awaiting thought
– Switching gaze
– Reading slide
– Reinforcing point
• Powerful
• Difficult

Control of Information
• Know your subject well
• Know what you are talking about
• Practice
• More practice
• More rehearsals
- in front of the mirror
- in front of colleagues or friends
- in front of family members
• Believe in yourself
• Know your opening by heart

Closing Summary
• Audience is always attentive at the begining
• Somewhat less attentive in the middle
• Generally more attentive at the end
• Tell them what you are going to say
• Then say it
• At the end, say it again
• Allow time for questions

Questions and Answers
Opportunities
• Welcoming gestures
• Focusing gaze
• Body language
• Getting point
• Reinforcing message
• Including audience
Pitfalls
• Hostile gestures
• Wandering gaze
• Body language
• Missing point
• Seeking approval
• Excluding audience

Guide audience
gently
Design slides carefully
Use pauses effectively
Answer questions
inclusively
Summary

End of the brief on
training and
presenting skills
required of a SAARC
trainer

WHAT IS GENDER EQUALITY IN
TRADE?

Gender Equality – What is it?
The creation of an environment where women:
• Can freely contribute
• Can have access to their desired education
• Are able to empower themselves
• Have equal opportunity alongside men
• Can be as good a breadwinner as their opposite
gender counterparts
• Have access to everything that the opposite
gender has

MDG 1
• "Eradicate extreme
poverty and
hunger"
• Includes a
gender‐specific
target, namely
"Achieve, full and
productive
employment and
decent work for all,
including women
and young people"
MDG 3
• "Promote gender
equality and
empower women”
• Does not make an
explicit reference
to trade but
includes a specific
reference to
women's economic
empowerment
MDG 8
• "Develop a global
partnership for
development”
• Promotes
cooperation on
development
assistance and debt
sustainability and
the further
development of
trade and financial
systems
Millennium Development Goals –
Gender Specific

Gender Perspectives in Trade Policy
• The effect of trade policy on economic and social activities tends to
be different between men and women as they have different
economic and social roles and different access to and control over
resources. This is due to
– socio‐cultural factors
– political factors
– economic factors
• Women tend to be more affected by the negative side effects of
trade liberalization and are facing bigger challenges than men when
it comes to taking advantage of the opportunities trade offers
• This situation is due to
– gender biases in education and training
– gender inequalities in the distribution of income and command over
resources
– unequal access to productive inputs such as credit, land, and
technology, which translate into significant gender differences in
occupational distribution

Pre‐existing Gender Imbalances At
The Macro, Meso And Micro Levels
Sector Level
•Where trade can augment or
reduce employment and
income opportunities for
women, depending on
whether the sectors where
women work, expand or
contract as a result of trade
liberalization and import
competition
Governmental Level
•Where fiscal revenues and
public expenditures ‐ modified
by trade liberalization in
accordance to the relative
importance of tariff revenues
in government financing have
an impact on public
investments in social
infrastructure and services
that particularly benefit
women, such as
•health
•education
•electricity
•water
•sanitation and other
infrastructure to meet
household needs
Household Level
•Where expenditures may
decrease or expand according
to the effects of trade on
consumer goods prices

Impact Of Gender Inequalities On
Trade And Economic Growth
• Greater accumulation of human capital of women and girls
• This is a crucial factor for the development of national
productive capacity
• Recent evidence on the links between girls' improved
education and economic growth has shown that enhanced
gender equality increases the level of investments in a
country
• Greater gender equality in employment and education,
increases the rates of return on investments and attracts
more investors
• In addition, the cases in which girls’ education had the
greatest impact on growth were in areas where:
(I) Employment opportunities were readily available for women
(Ii) Countries had a sizeable export‐focused manufacturing sector
(Iii)Their economies had already reached the middle‐income status

Gender Responsive Trade Policies
Better understanding the
specific challenges and
opportunities that
women and men face
from trade policy
Designing and
implementing trade and
other macro‐economic
policies to maximize
opportunities for all
Facilitating the successful
integration of women
into more technologically
advanced and dynamic
sectors of the economy
Avoiding the increase of
gender disparities and
mitigating the existing
Facilitating women's
empowerment and
well‐being

Trade liberalization
agreements
Unilateral
liberalization – for
example, unilateral
reduction of tariffs on
intermediate inputs in
productive sectors
with high female
employment
Multilateral
development
assistance
frameworks
Tax incentives ‐ for
example to encourage
exports from
women‐owned
enterprises
Policy measures in trade to
mainstream gender issues

Fiscal
policies
Education Labor Training Innovation Financing
Areas to address when framing
gender‐sensitive policies

Barriers to women seizing trade
related employment opportunities
Women are relatively disadvantaged, as they tend to face more
constraints than men in labour mobility
Women and girls' have limited access to education and skills,
including in cutting‐edge educational fields
de jure and de facto discrimination against women in the control over
economic and financial resources
Productive assets and access to financial services
Limited access to new technologies for production, training,
information and marketing
Occupational segregation leaves women in lower‐paying positions
and provides them with limited upward mobility
This is coupled with the erroneous perception that women's income
is supplementary rather than central to households’ wellbeing

Three ways to ensure a
gender specific trade polity
•Ensure that the labour
force, especially women,
acquire the skills sought by
expanding sectors
First
Way
•Eliminate the exploitation
of workers and protect
their labour rights through
fully enforcing national
legislation on labour
standards and promoting
decent working conditions
Second
Way
•If women are to play a
greater role in the global
economy, then household
responsibilities need to be
more equally shared
between women and men
Third
Way

Good Practices for
Gender Responsive Trade Policies
• Assessing gender‐related impacts of a trade
agreement before adoption
• Gender analysis in the configuration of trade
agreements
• Incorporating gender components for
assistance mechanisms

What Should Be Done Next?
Support developing countries'
capacity to assess the gender
dimensions of trade policies
through country case studies and
training of policy makers and trade
negotiators
Produce sound and reliable data to
evaluate the gendered impacts of
different trade measures and
instruments.
Gather evidence on possible trade
and other complementary policies
and measures necessary to enable
women to benefit from trade, or
to reduce the negative impacts
that trade may have on them
Provide inputs for the elaboration
of gender assessments of such
agreements, as part of a broader
human development impact
assessment
Support countries' national and/or
regional efforts to increase
coherence among different but
interlinked policies, such as trade,
development, employment,
migration and gender equality
Support advocacy platforms of
women informal traders for
promoting an enabling
environment for their business
and access to better services
Support the inclusion of gender
considerations into multilateral
development cooperation
frameworks
Develop specific training
programmes for women
entrepreneurs to enhance their
participation in world trade
Support countries in collecting and
analyzing sex‐disaggregated data,
including those related to informal
traders, and on designing
appropriate questionnaires and
evaluating the information
gathered

Women's empowerment and
participation
• Support broad‐based effective participation of women
and women’s groups in trade consultations and
negotiations as well as in trade policy‐making and
related implementation
• Facilitate the exchange of views and experiences
among women engaged in trade negotiations and
policy formulation and implementation
• Facilitate contacts, coaching and sharing of experiences
among women entrepreneurs
• Facilitate the linkages between women‐owned /
managed micro and small enterprises and larger
national or multinational firms.

Concessions for Women
• Women require specific assistance, especially in the areas of trade
development, policy and regulation
• This will fill the gaps in their knowledge of the rules governing
international trade transactions and standards for specific export-market
access
• Entrepreneurship promotion, fair trade and market-access initiatives
therefore also need to mainstream a gender perspective to ensure that
women are able to take up the opportunities they offer
• At times, women-focused initiatives such as women’s business
associations and organizations of women workers can support women in
situations where their involvement in mainstream organizations may be
problematic
• These organizations can also be good starting points for subsequent
gender mainstreaming within broader institutions
• However, even if such initiatives are orientated specifically to women, they
must ensure that they build in an understanding of women’s gender roles
rather than replicating mainstream organizations or programmes.

THE CONTENT TO BE DISSEMINATED
The following slides contain the whole content that needs to be
understood and delivered with ownership and confidence.
It requires a certain mastery of the subject.
There is no need to take notes.
We will be handing over the related handouts throughout.
Your attention is sought. THANK YOU!

Import and Export Rules
This section needs to be memorized. The objective is to disseminate “one
word” throughout and everywhere. Standardization and consistency is
the key!!

Focus areas
• Legal and financial aspects of
international trade
• Export Quotation Worksheet/s
• Pro Forma Invoice
• International sales contracts
• Negotiation skills
• Rules of sale - Incoterms
• Methods of payment
• Import/export financing
• Letter of credit payment process
• Settlement of disputes
• Preferential trading
• E-commerce
• Logistics and import/export
procedures
• Commercial and legal documents
• Customs related exports
• Cargo insurance carriers liability
• Transport and freight forwarding -
related documentation
• Duty-free access to imported
inputs
• Export packaging and air cargo
procedures
• BOI (Board of Investment)
procedures
• Gender based concessions (if any)
• Conclusion

LEGAL & FINANCIAL ASPECTS
OF INTERNATIONAL TRADE

Learning Objectives
• Discuss the complexity of the legal forces that confront
international business
• Recognize the importance of foreign law
• Explain contract devices and institutions that assist in
interpreting international contracts
• Recognize the need and methods to protect your intellectual
properties
• Discuss enforcement of antitrust laws
• Explain the risk of product liability legal actions, which can
result in imprisonment for employees or fines for them and
the company
• Discuss laws that affect international business operations

Basic Considerations
Business Structure
Business Contacts
Business Contacts
/Structure generally is
tremendously determined
by your role in the
importing and exporting of
goods

The 4 Major Players
Importer
•Person or entity that
brings in foreign
goods or services into
the country for its
own use, but more
often for resale
Exporter
•Person or entity that
sells their own goods
or services to foreign
buyers
Import / export
merchant
•Person or entity who
buys goods or
services from one
country for the
purposes of resale in
another country
Import / export
management company
•Essentially a person
or entity that serves
as the middleman in
deals between
importers and
exporters

EMCs, IMCs and IEMCs
• The person or entity may serve as an import management company (IMC)
by setting up deals between domestic businesses and foreign suppliers
• Alternatively, the person or entity may serve as an export management
company (EMC) by setting up deals between domestic suppliers and
foreign buyers
• Finally, this person or entity may serve as an import/export management
company (IEMC) by setting up deals in both directions
• The IEMC offers advantages particularly for the small business since there
is little need to spend huge amounts of capital to purchase goods first,
and then to tie up the capital waiting to sell these goods
• The IEMC functions exclusively as the middleman in deal negotiations and
profits only when a deal is closed
• In this respect, the IEMC must be knowledgeable about trade, good at
negotiators, and have an extensive contact list.

The IEMC’s contacts
Customs Broker
• This contact is
particularly important
to establish for
importers since the
broker’s job is to have
special professional
knowledge about
customs regulations
and tariff schedules
and to file the
necessary paperwork,
and as such to ensure
that imported goods
pass through customs
with minimal tariffs,
delays and problems
Freight Forwarder
• This is an in-house
person at a
manufacturer,
independent shipper,
or contracted shipping
line company whose
job is to ensure that
the delivery of goods
arrives intact.
• The freight forwarder
must have special
knowledge of shipping
options and prices
Commercial Bank
• It is essential to
establish a banking
relationship with a
commercial bank that
has familiarity with
international trade,
deal structuring, and
deal financing.
• Make sure your bank
has a letter of credit
department
Manufacturer’s
Representative
• For importers, they
function essentially as
independent salesmen
who promote and sell
your imported good to
retailers.
• Manufacturer’s
representatives
function more so as
their name implies in
exporting.
• Often, these people
representing domestic
manufacturers seeking
to expand into the
international market
will approach exporters

Intellectual property includes
Patents
• Patents
(Protection)
• International
Convention for
the Protection
of Industrial
Property
• European
Patent
Organization
(EPO)
• The World
Intellectual
Property
Organization
(WIPO)
Trademarks
• Trademarks
• Protection
varies by
country, 10 to
20 years
• Madrid
Agreement of
1891
• General
American
Convention
for Trademark
and
Commercial
Protection
• Bilateral basis
in friendship,
commerce,
and
navigation
treaties
Trade names
• Trade Names
• Protected in
countries that
adhere to the
Convention for
the Protection
of Industrial
Property
Copyrights
• Copyrights
• Protection
provided under
the Berne
Convention of
1886 adhered
to by 77
countries
• Universal
Copyright
Convention of
1954 adopted
by 92 countries
Trade secrets
• A trade secret is
a formula,
practice, process,
design,
instrument,
pattern,
commercial
method, or
compilation of
information
which is not
generally known
or reasonably
ascertainable by
others, and by
which a business
can obtain an
economic
advantage over
competitors or
customers

Taxation
• Nonrevenue tax purposes
– To redistribute income, discourage consumption of
products such as tobacco and alcohol, and encourage
purchase of domestic rather than imported products
• Tax Treaties or Conventions
• Treaties between countries that bind the governments
to share information about taxpayers and cooperate
in tax law enforcement, often called tax conventions
• For e.g. U.S. has tax treaties with over 50 countries

National Tax Approach Differences
• Tax Levels
– Range from relatively high in some countries to
zero in tax havens
– Some countries have capital gains taxes, and
some do not
• Capital gain is realized when an asset is sold for an
amount greater than its cost

National Differences of Approach
Capital gains tax
Income tax
Common in
industrialized
countries
Value-added tax
Tax based on the
value of goods
and services
Used in Europe
Unitary tax

Antitrust Laws
• Antitrust laws
– Laws to prevent price fixing, market sharing, and business
monopolies
• Japan’s Fair Trade Commission
– Japanese companies are incorporating antitrust thinking into
strategy
• National Tax Jurisdiction
– A tax system for expatriate citizens of a country whereby the
country taxes them on the basis of nationality even though they
live and work abroad
• Territorial Tax Jurisdiction
– Expatriates are exempt from their country’s taxes

Tariffs, Quotas, and Other
Trade Obstacles
• Purposes of tariffs
• To raise revenue for
government
• To protect domestic
producers
• Quotas limit the
number or amount of
imports
• For protection
• Other trade obstacles
include
• Health requirements
• Packaging requirements
• Language requirements
• Weak patent or
trademark protection
• Quarantine periods
• Voluntary Restraint
Agreements

Accounting Law
• Sarbanes-Oxley Act (SOX)
– Brings major changes to the regulation of corporate
governance and financial practice
• New reporting requirements
• Officer and director responsibilities
• Auditor independence
– Applies to any company, domestic or foreign, that has
securities registered or is required to file reports under
the Securities Exchange Act of 1934

Sample Export Quotation Worksheet
Form
Filling
Activity

Sample
Pro Forma
Invoice
Form
Filling
Activity

Introduction
• Negotiating and negotiations are a constant
feature of everyday life
• We do it all the time with family, friends and a
range of people and organisations

Formal Bargaining
• Collective bargaining is a formal and highly
developed form of negotiating
• It is very similar to diplomacy
• Doing it successfully requires analytical skills,
forethought, preparation, presentational skills,
realism and detachment
• The purpose of negotiations is to secure an
outcome as close as possible to your objectives
• The aim of the people you are negotiating with is
to secure an outcome as close as possible to their
objectives

4 Pre-Steps for Successful Negotiation
•Determining and
evaluating the objectives
carefully and objectively
Forethought
•Determining the
credibility of the
objectives and the
strength of the supporting
evidence
Key tests •Means being well briefed
and knowledgeable about
what you are seeking to
achieve and how that can
be justified
Preparation
•How you can present your
case in an accessible and
persuasive way to the
audience
Presentation

Skills and Techniques
• Try to imagine yourself as the other side to the
negotiations and consider how they might view
or react to your proposals and arguments
• There is no one perfect style of negotiating.
• Different people do it equally successfully in
different styles and manners
• To be successful your individual style has to be
the one you are most comfortable with and
which matches your individual personality
• Successful negotiators range from colourful
charismatic performers to quiet, calm and
methodical people

The Collective Bargaining Response
• Collective bargaining negotiations are a ritual
process, a stately minuet, a symphony or a novel
• There are different stages the sequence of which
is essential to the whole process
• The opening presentation of the claim should set
the scene and seek to define the parameters for
the subsequent stages of the negotiations
• It is a strategic exercise setting out the case and
the supporting evidence
• It should not be too long or too detailed as that
can obscure and weaken the case
• Dealing with detail comes later

Initial Response
• The next stage is the audience response – again it
should be strategic and address the arguments
• It may make counter proposals, make an offer for
an agreement, and/or give a broad indication of
what they might offer
• You need to listen carefully and closely to that
response
• Take a written note of the key parts of the
response
• Evaluate and analyse the language, the precise
words used and their body language
• Assess the extent to which any of their counter
arguments do or do not weaken your case

Countering the Response
• Do not feel obliged to respond immediately other than in a preliminary way ,or to
seek clarification-but not necessarily too much at that stage
• Have a break/adjournment of the plenary joint negotiations to consider their
response in more detail and depth with your colleagues
• The employer/government first response is unlikely to be their final response
• Usually they will be prepared to offer more particularly if they believe an
agreement between the two sides is possible
• Consider how you can respond and show how your arguments and supporting
evidence have not been properly addressed or, hopefully, seriously weakened
• Look for weaknesses and inconsistencies in their response which you can
objectively demonstrate and exploit
• Look for any clues or indications of how or where they might move closer to your
objectives
• On return to plenary negotiating meeting answer their response – normally in a
logical, firm and not insulting way

• Try to show a willingness to consider more favourably an improved offer –
if possible with some indications of what might be acceptable in general
terms
• Do not make explicit threats unless you are confident they can be
delivered and that they would be effective
• Consider using more general expressions of potential adverse
consequences of the initial offer if not improved upon
• Present the response in the resumed plenary in a calculated and
persuasive way emphasising the strong parts of your case
• Try to avoid immediate subsequent exchanges becoming too
confrontational. Encourage them to have an adjournment to consider
your response carefully and in depth
• At such an adjournment review your position, identify possible employers
responses and how you might respond but avoid getting into an
interminable hypothetical maze of speculation
Countering the Response

Final Stage
• Third session onwards are likely to be key session(s)
• Final or near final response from audience very likely if negotiating
seriously and constructively
• Do not summarily reject it unless it really is a deliberately poor and
provocative offer
• Withdraw to consider it with your side. If it is a deliberately poor
and provocative offer respond quickly by asking them to go away
and reconsider their position and come back to a future meeting
with an improved offer
• If it is a sensible offer consider what modest further improvements
might be possible and decide which are the priority issues
• Consider without prejudice/informal/behind the chair meetings
between a small number of key representatives from both sides -
generally the smaller the better but start with a minimum of two
• Consider possible improvements through staging a settlement-
some now- more later - end loading a pay award – continued
negotiations on unresolved issues while reaching agreement on
those that can be agreed by both sides

Sealing the Deal
If there is an agreement
acceptable to both sides go
through it in detail jointly
before resuming any talk
session in order to be sure
that both sides have the
same understanding
If an informal agreement
has been reached, one side
should make the offer
formally and the other side
should accept it
Try to have a written
agreement at this stage to
prevent future arguments
about what has been
agreed
Conclude on good terms.
Remember collective
bargaining trade
negotiations are a long
term business –
circumstances will vary and
at different times in the
future will favour one side
or the other

Introduction
• Universally recognised set of definitions of
international trade terms
• Recognised by courts and other authorities
• Define the trade contract responsibilities and
liabilities between buyer and seller
• Updated regularly to keep pace with changes
and developments in international trade

13 Terms spread among 4 groups
E: Departure
• EXW- Ex Works
F: Main carriage
unpaid
• FCA- Free
Carrier
• FAS- Free
Alongside Ship
• FOB- Free On
Board
C: Main carriage
paid
• CFR- Cost and
Freight
• CIF- Cost,
Insurance and
Freight
• CPT- Carriage
Paid To
• CIP- Carriage
and Insurance
Paid To
D: Arrival
• DAF- Delivered
At Frontier
• DES- Delivered
Ex Ship
• DEQ- Delivered
Ex Quay
• DDU- Delivered
Duty Unpaid
• DDP- Delivered
Duty Paid
• Devised an published by the ICC
• WBO ICC introduced Incoterms in 1936
• Incoterms 2012
• 4 groups E, F, C and D and in all 13 main terms

Contractual Obligations
The Seller’s Obligations
A1 Provision of goods in conformity
with the contract
A2 Licenses, authorizations and
formalities
A3 Contract of carriage and
insurance
A4 Delivery
A5 Transfer of risks
A6 Division of costs
A7 Notice to the buyer
A8 Proof of delivery, transport
document or equivalent
electronic message
A9 Checking – packaging – marking
A10 Other obligations
The Buyer’s Obligations
B1 Payment of the price
B2 Licenses, authorizations and
formalities
B3 Contract of carriage
B4 Taking delivery
B5 Transfer of risks
B6 Division of the costs
B7 Notice to the seller
B8 Proof of delivery, transport
document of equivalent
electronic message
B9 Inspection of goods
B10 Other obligations

Scope of Incoterms
Incoterms:
• Limited to rights and obligations of the parties to
contract of sale with respect to the delivery of
the goods sold
• Do not deal with the consequences of breach of
contract
• Are primarily intended for use where goods are
sold for delivery across national boundaries,
hence international commercial terms
• Can be used in contracts for sale of goods directly

Structure of Incoterms
E
•EXW Ex Works
(.....…........named place)
F
•FCA Free Carrier
(....….........named place)
•FAS Free Alongside Ship
(........….named port of
shipment)
•FOB Free On Board
(............named port of
shipment)
C
•CFR Cost and Freight
(...........named port of
destination)
•CIF Cost, Insurance &
Freight
(.....named port of
destination)
•CPT Cost Paid To
destination)
•CIP Carriage and Insurance
paid to
(…… .named place of
destination)
D
•DAF Delivered at Frontier
(.....………………….....named
place)
•DES Delivered Ex Ship
destination)
•DEQ Delivered Ex Quay
(....…....named port of
destination)
•DDU Delivered Duty Unpaid
(…...named place of
destination)
•DDP Delivered Duty Paid
(.........named place of
destination)

The Terms
• The “E” Term is the term in which
seller’s obligation is at its minimum
• The “F” Term requires the seller to
deliver as instructed by the buyer
• The “C” Term requires the seller to
contract for carriage at his expense
• The “D” Term signifies arrival contracts

E Group
EXW Ex-Works
•Goods available only at seller’s premises
•Buyer loads the goods on truck or
container at the seller’s premises, and
takes into account the subsequent costs
and risks

F Group
FCA - Free Carrier
• Delivery at the
specified point of
departure: the
seller’s premises or
a named cargo
terminal / railroad
station
• Buyer pays main
carriage/freight,
cargo insurance
and other costs
and risks
FAS - Free Alongside
Ship
• Seller: places the
goods alongside
the ship at the
named port,
loaded at his
expense
• Buyer pays loading
fee, main
carriage/freight,
cargo insurance
and other costs
risks
FOB - Free On Board
• Delivery of goods
on board the vessel
at the port of origin
is at the seller’s
expense
• Buyer is
responsible for
loading fee, main
carriage/freight,
cargo insurance
and other costs
risks

C Group
CFR - Cost and
Freight
•Seller: pays the
costs and freight to
bring the goods to
the port of
destination
•Risk: transferred
once the goods
have crossed the
ship’s rail
CIF - Cost Insurance
and Freight
•Used exactly the
same way as CFR
except that
•Seller: must in
addition procure
and pay for
insurance for the
cargo insurance
and delivery of
goods to the port
of destination
•Buyer: responsible
for the import
customs clearance
& other costs and
risks
CPT - Carriage Paid
To
•Seller delivers the
goods at the named
place of destination
at his expense
•Buyer assumes the
cargo insurance,
import customs
clearance, payment
of customs duties
and taxes, and
other costs and
risks.
•Risk transferred at
the delivery of
goods
CIP - Carriage &
Insurance Paid To
•Seller delivers the
goods on the ship.
On board, the risk is
transferred to the
buyer.
•Buyer is
accountable for the
import customs
clearance, payment
of customs duties
and taxes, and
other costs and
risks until goods
reach their final
destination

D Group
DAF - Delivered At
Frontier
• Delivery of goods is
done at the
specified point at
the frontier at the
seller's expense.
• Buyer is
responsible for the
import customs
clearance, payment
of customs duties
and taxes. The
transfer of risk is
made at the
frontier
DES - Delivered Ex
Ship
• Seller assumes
expenses linked to
the delivery of
goods. At the
arrival of the ship,
the risk is
transferred to the
buyer
• Buyer is
accountable for the
unloading fee,
import customs
clearance, payment
of customs duties
and taxes, cargo
insurance, and
other costs
DEQ - Delivered Ex
Quay
• Delivery of goods is
done to the quay
of the port at the
seller's expense.
He is also
responsible for the
import customs
clearance and
payment of
customs duties and
taxes at the buyer's
end.
• Buyer assumes the
cargo insurance
and other costs
and risks
DDU - Delivered
Duty Unpaid
• Delivery of goods
and the cargo
insurance to the
final destination,
which is often the
project site or
buyer's premises, is
done at the seller's
expense.
• Buyer is
responsible for the
import customs
clearance and
payment of
customs duties and
taxes
DDP - Delivered Duty
Paid
• Seller is
responsible for the
cargo insurance,
import customs
clearance, and
payment of
customs duties and
taxes at the buyer's
end, and the
delivery of goods
to the final point at
destination, which
is often the project
site or the buyer's
premises.
• It is a “door to
door” delivery.
• Risk is transferred
when the goods
are delivered

Incoterms
– International Commercial Terms…
• ...cannot be applied by themselves to a variety
of situations, of medium of transports,
technologies
• ...must be supplemented by additional details
adapted to these particular cases
• ...define the geographical points where the
transfers of risks and expenses will take place

Payment Methods
Cash in
Advance
Open
Account
Documentary
Collections
Letters of
Credit

Risks vs. Methods of Payment
Open Account Documentary
Collection
Letter of Credit Cash in
Advance
Buyer Risk Lowest Lower Low High
Seller Risk Highest Higher High Low

Payment Methods Explained
Cash in Advance
•Time of Payment
•Before Shipment
•Goods Available to Buyer
•After Payment
•Risks to Seller
•None
•When Appropriate
•Seller has negotiating strength
to demand cash in advance
Open Account
•Time of Payment
•As agreed; i.e. 30 days
•Before Payment
•Risks to Seller
•Buyer defaults on payment
obligation
•Delays in availability of foreign
exchange and transferring of
funds from buyer’s country
•When Appropriate
•Seller has absolute trust that
buyer will accept shipment and
pay at agreed time
•Seller is confident that
importing country will not
impose regulations deferring
or blocking transfer of
payment
•Seller has sufficient liquidity or
access to outside financing to
extend deferred payment
terms
Documentary Collection
•Time of Payment
•On presentation of sight draft
by a bank to buyer
•After payment
•Risks to Seller
•Buyer’s non-acceptance of
shipment
•Payment delays due to
unavailability of foreign
exchange in buyer’s country
•Payment blocked due to
political actions in buyer’s
country
•When Appropriate
•Seller is confident that buyer
will accept shipment
•Seller is confident that
importing country will not
impose regulations deferring
or blocking transfer of
payment
Letter of Credit (LC)
•To be discussed at length in the
coming slides

Letter of Credit
• A letter of credit substitutes the credit of a bank
for the credit of an applicant
• It is a written instrument issued by banks stating
that payments will be made on behalf of
applicants to beneficiaries, provided that the
beneficiary fulfills all of the conditions described
in the letter of credit
• The typical bank customer for a letter of credit is
someone engaged in international trade and who
is a purchaser of international goods

Letter of Credit – Key Parties
Applicant - Buyer/Importer
Beneficiary - Seller/Exporter
Issuing Bank - Guarantees payment
Advising Bank - Authenticates LC
Confirming Bank - Guarantees
payment if Issuing Bank defaults

Commonly Used Documents for LCs
• Commercial Invoice
• Transport Document
– Ocean Bill of Lading
– Air Waybill
• Packing Lists/Weight Lists
• Insurance Policy or Certificate
• Draft or Bill of Exchange
• Other Documents
– Inspection Certificate
– Special Customs Invoices
– Certificate of Origin

______________________________________ ________________________________ NO.___________
(CITY) (DATE)
AT _____________________________________________________ SIGHT OF THIS BILL OF EXCHANGE
PAY TO THE ORDER OF ________________________________________ ___________________
(AMOUNT IN FIGURES)
THE SUM OF___________________________________________________________________________
______________________________________________________________________________________
DRAWN UNDER ________________________________________________________________________
LC NO. ________________ DATED __________
TO ________________________________________ ______________________________________
DRAWER
_________________________________________
_________________________________________ ______________________________________
DRAWEE BY: AUTHORIZED SIGNATURE
Draft or Bill of Exchange

Letter of Credit
• Time of Payment
• When LC calls for a sight draft - at time documents are presented to
negotiating bank
• When LC calls for a time (usance) draft - at maturity of accepted time
draft
• Goods Available to Buyer
• When LC calls for a sight draft - after payment
• When LC calls for a time draft - after draft has been accepted by bank
• Risks to Seller
• Discrepancies in the documents
• Buyer’s Bank (opening bank) defaults on its payment obligation
• Payment blocked due to political events in buyer’s country
• When Appropriate
• Seller is unsure of creditworthiness of buyer

Standby Letter of Credit
• Commercial documents generally flow outside the
letter of credit (between buyer and seller)
• Funds generally flow outside of a letter of credit
(between buyer and seller)
• These credits are “Standing By” for an event of default
or non-performance before they can be drawn on
• Financial - Assures account party’s performance of a
financial obligation, i.e., to pay an invoice by a certain
date
• Performance - Assures account party’s performance of
a non-financial contract obligation, i.e., to deliver
products under a contract

Other Financing Options
• Countertrade
– i.e. barter, counter-purchase, compensation
• Factoring
– Outright sale of short term receivables
• Forfaiting
– Outright sale of medium term (large) obligation

Introduction
• Both large and small firms can benefit from
exporting
• The volume of export activity in the world
economy is increasing as exporting has
become easier thanks to
– the decline in trade barriers under the WTO
– regional economic agreements

Firms wishing to export must
• Identify export opportunities
• Avoid a host of unanticipated problems
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
• Learn how to deal with foreign
exchange risk

The Promise and Pitfalls of Exporting
• The 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 take
a reactive approach to exporting
• Many novice exporters have run into significant
problems when first trying to do business abroad,
souring them on following up on subsequent
opportunities

Common Pitfalls For Exporters
• Poor market analysis
• Poor understanding of competitive conditions
• A lack of customization for local markets, poor
distribution arrangements, bad promotional
campaigns
• A general underestimation of the differences
and expertise required for foreign market
penetration
• Difficulty dealing with the tremendous
paperwork and formalities involved

Improving Export Performance
• To improve their success, exporters should
– acquire more knowledge of foreign market
opportunities
– consider using an export management company
– adopt a successful export strategy

An International Comparison
• Many firms fail to consider export
opportunities simply because they lack
knowledge of the opportunities available
– both Germany and Japan have developed
extensive institutional structures on promoting
exports
• Japanese exporters can also take advantage of
the knowledge and contacts of sogo shosha -
the country’s great trading houses

Utilizing
Export Management Companies
• Export management companies - export
specialists that act as the export marketing
department or international department for
client firms
• EMCs
1.start exporting operations for a firm with the
understanding that the firm will take over
operations after they are well established
2.start services with the understanding that the
EMC will have continuing responsibility for selling
the firm’s products

Export Strategy
• Exporters
– can hire an EMCs to help identify opportunities and
navigate paperwork and regulations
– start by focusing initially on just one or a few markets
– enter a foreign market on a fairly small scale in order
to reduce the costs of any subsequent failures
– recognize the time and managerial commitment
involved in building export sales
– devote attention to building strong and enduring
relationships with local distributors and customers
– hire local personnel to help the firm establish itself in
a foreign market
– keep the option of local production

Lack of Trust
• Exporters and importers have to trust
someone who may be very difficult to track
down if they default on an obligation
• Each party has a different set of preferences
regarding the configuration of the transaction
– exporters prefer to be paid in advance, while
importers prefer to pay after shipment arrives
• Problems arising from the lack of trust can be
solved by using a third party who is trusted by
both - normally a reputable bank

A Typical International Transaction

Letter of Credit
• A letter of credit is issued by a bank at the
request of an importer and states the bank
will pay a specified sum of money to a
beneficiary, normally the exporter, on
presentation of particular, specified
documents
• This system is attractive because both parties
are likely to trust a reputable bank even if they
do not trust each other

Draft
• Most export transactions involve a draft, also
called a bill of exchange
• A draft is an order written by an exporter
instructing an importer, or an importer's
agent, to pay a specified amount of money at
a specified time
• A sight draft is payable on presentation to the
drawee while a time draft allows for a delay in
payment - normally 30, 60, 90, or 120 days

Bill of Lading
• The bill of lading is issued to the exporter by
the common carrier transporting the
merchandise
• It serves three purposes
– it is a receipt
– it is a contract
– it is a document of title

The Incidence of Countertrade
• In the 1960s the Soviet Union and the Communist
states of Eastern Europe, whose currencies were
generally nonconvertible, turned to countertrade
to purchase imports
• Many developing nations that lacked the foreign
exchange reserves required to purchase
necessary imports turned to countertrade during
the 1980s
– there was a notable increase in the volume of
countertrade after the Asian financial crisis of 1997

Types of Countertrade
•Barter - a direct exchange of goods
and/or services between two
parties without a cash transaction
•the most restrictive countertrade
arrangement used primarily for
one-time-only deals in
transactions with trading partners
who are not creditworthy or
trustworthy
Barter
•Counter-purchase - a reciprocal
buying agreement occurs when a
firm agrees to purchase a certain
amount of materials back from a
country to which a sale is made
Counter-
purchase
•Switch Trading - when a specialized
third-party trading house buys a
firm’s counter-purchase credits and
sells them to another firm
Switch Trading
•Offset - similar to counter-purchase
insofar as one party agrees to
purchase goods and services with a
specified percentage of the
proceeds from the original sale
•the difference is that this party can
fulfill the obligation with any firm in
the country to which the sale is
being made
Offset
•Compensation or Buybacks - occurs
when a firm builds a plant in a
country—or supplies technology,
equipment, training, or other
services to the country—and agrees
to take a certain percentage of the
plant’s output as a partial payment
for the contract
Compensation
Or Buyback

The Pros and Cons of Countertrade
• Countertrade is a way for firms to finance an export deal when
other means are not available
– firms that are unwilling to enter a countertrade agreement may lose
an export opportunity to a competitor that is willing to make a
countertrade agreement
• A countertrade arrangement may be required by the government of
a country to which a firm is exporting goods or services
• Countertrade is unattractive because
– most firms prefer to be paid in hard currency
– it may involve the exchange of unusable or poor-quality goods that the
firm cannot dispose of profitably
• Countertrade is most attractive to large, diverse multinational
enterprises that can use their worldwide network of contacts to
dispose of goods acquired in countertrading

The Dispute Settlement Body (DSB)
- An international jurisdiction, a legal value
- Rules and procedures defined by the Understanding
on Rules and Procedures Governing the Settlement
Disputes (1994)
- ”the central element in providing security and
predictability to the multilateral trading system” (art.
3.2 of the Understanding).
- Distinctive feature: possibility to impose economic
sanctions against a country.
- More restrictive and efficient than the GATT system.

The Rules and Procedures Governing the
Settlement of Disputes – WTO Model
First stage: the consultation
•Discussion between the
countries in dispute to settle
their differences by
themselves (60 days).
Second stage: the panel
•If consultations fail, the
complaining country can ask
for a panel to be appointed
(30 days).
•Delivery of the panel's rapport
(180-270 days).
•Adoption of the panel's final
report (panel's report can only
be rejected by consensus in
the DSB) (60 days).
Third stage: the
implementation of the
conclusions
•Possibility to appeal.
•Examination of the appeal by
the Appellate Body (60
days).
•Acceptance or rejection of
the appeals report (90 days).
•Implementation of the
recommendations (reasonable
period of time).
•If recommendations not
followed:
•The complaining country can
ask the BSD for permission
to impose limited trade
sanctions against the other
side

SAFTA - DISPUTE RESOLUTION WAYS

Some Abbreviations
Abbreviation Expanded
COE Committee of experts
SMC SAFTA Ministerial Council
SAFTA South Asian Free Trade Agreement

Dispute Resolution - SAFTA
• Article 10 of the SAFTA agreement provides the dispute resolution
framework available to Contracting States by establishing a
Committee of Experts ("COE") as its primary dispute settlement
body
• Article 10 further establishes the SAFTA Ministerial Council ("SMC"),
which is the highest administrative body concerned with
implementation of the agreement
• Similar to the SAPTA, Article 20 of the SAFTA agreement stipulates
the dispute settlement mechanism for disputes arising from the
"interpretation or application" of the agreement and its related
instruments
• In laying out the scope and framework for the adjudication of
disputes, the SAFTA agreement includes provisions relating to
consultations, timely COE review of a dispute, and the procedures
for seeking appellate review of a decision by the SMC

In the initial 1992 Framework Agreement
establishing the AFTA, the dispute
settlement provision in Article 9 provided
for the amicable resolution of disputes
between the parties
It also mentioned the possibility of setting
up an ad hoc body to oversee the
settlement of disputes, but did not address
any other rules or procedures for dispute
resolution
A few years later, acknowledging the
inadequacy of this provision, the ASEAN
Ministers adopted a Protocol on Dispute
Settlement Mechanism ("DSM") to
implement the AFTA agreements
Most recently the ASEAN Protocol
superseded the DSM and further detailed
the dispute settlement mechanism
available to parties under the AFTA and
other agreements
Pursuant to the ASEAN Protocol, all
disputes arising under the existing and
future AFTA agreements are within the
purview of the mechanism.
The Senior Economic Officials Meeting
("SEOM") and the ASEAN Secretariat are
the primary bodies that oversee the
dispute settlement process
After exhausting alternative dispute
settlement methods, namely
consultations, good offices, conciliation,
and mediation, the parties may refer their
disputes to the SEOM to set up panels as
well as review, implement, and monitor
the decisions regarding the breach of a
party's obligations under the agreement
The ASEAN Protocol also provides more
extensive provisions on the role and
functioning of the panels, timelines for
deliberation and rendering
recommendations, a comprehensive
appellate review process administered by
the ASEAN Economic Ministers ("AEM"),
and procedures for compensation and
suspension of concessions
The Mechanism

Although the SAFTA agreement's dispute settlement mechanism is a significant improvement over the
SAPTA, it is still too ambiguous and imprecise to meet the dispute resolution needs of the member
states
There are several lacunae not addressed by the mechanism
One problem is the ambiguity in the scope and jurisdiction of the SAFTA agreement, which could be
a major threshold issue in determining when and what disputes member countries could refer for
resolution
Another obstacle is the lack of procedures for the operation of the COE, as well as the largely
undefined qualifications of its members
Still more issues are left open-ended include:
•The enforcement of decisions,
•Procedures for withdrawing and reinstating concessions
•The catch-all provision allowing contracting states to opt-out of the SAFTA agreement at any time, without due cause or
penalty
Analysis

Preferential Trading Area / Agreement
• A preferential trade area (also preferential trade agreement, PTA)
is a trading bloc that gives preferential access to certain products
from the participating countries
• This is done by reducing tariffs but not by abolishing them
completely
• A PTA can be established through a trade pact. It is the first stage
of economic integration
• The line between a PTA and a free trade area (FTA) may be blurred,
as almost any PTA has a main goal of becoming a FTA in accordance
with the General Agreement on Tariffs and Trade
• These tariff preferences have created numerous departures from
the normal trade relations principle, namely that World Trade
Organization (WTO) members should apply the same tariff to
imports from other WTO members

Brief History
 Early 1970s saw introduction of Electronic Fund Transfers (EFT)
 Limited to large organizations, financial institutions, few daring small
business
 Late 1970s and early 1980s – Electronic data interchange(EDI)for e-
commerce within companies
 Used by businesses to transmit data from one business to another
 to include other transaction processes besides financial; included
manufacturers, retailers, services, etc
 1990s- the World Wide Web on the Internet provides easy to use
technology for information publishing and dissemination
 Cheaper to do business (economics of scale)
 Enable diverse business activities (economics of scope)
 Between 1997 and 2000, more than 12000 Internet-related business were
started

What is e-commerce?
"The conducting of commercial
transactions (the exchange
of merchandise, services,
information, and/or money
between suppliers and
receivers for the commercial
transfer of goods between
economic actors) through
electronic mediation using
Internet technology."
-Ministry of International
Trade and Industry of
Japan
"Electronic commerce (e-commerce) is
business transactions conducted over the
public and private computer networks. It is
based on the electronic processing and
transmission of data, text, sound and
video. E-commerce includes transactions
within a global information economy such
as electronic trading of goods and services,
on-line delivery of digital content,
electronic fund transfers, electronic share
trading, electronic bills of lading,
commercial auctions, collaborative design
and engineering, on-line sourcing, public
procurement, direct consumer marketing
and after-sales services. It involves the
application of multimedia technologies in
the automation and re-design of
transactions and workflows, aimed at
increasing business competitiveness."
- Inter-Agency Task Force on Electronic
Commerce (IATFEC), Malaysia

Buyer and Seller Roles In Commerce

Communication on the Web
• Mass media
– One-to-many model
– Flows from one advertiser to many customers
– Seller is active, buyer is passive
• Personal contact
– One-to-one model
– Interchange within a framework of trust
– Seller and buyer are active
• Web
– Many-to-one/many-to-many model
– Buyers can communicate with many sellers
– Buyer actively searches, and controls the length, depth and
scope of the search

Types Of E-commerce
• 2 types of e-commerce:
– B2C
– B2B
– B2G (business to government)

B2C & B2B
B2C
 B2C means e-commerce transactions
between business and consumer
 Commerce between companies and
consumers
 Involve customer gathering information;
purchasing physical goods (tangible such
as books or consumer products) or
information goods (goods of electronic
material or digitized contents such as
software or e-books
 2nd largest and earliest form of e-
commerce
 Example of B2C business:
 Retailing business: Amazon.com,
pizzahut.com,
 Information goods: cuticuti.com
 With the use of online banking tools
(example: Maybank2u)
B2B
 B2B means e-commerce
transactions between business
and business
 E-commerce between companies
 Example: IBM, HP, Dell
 B2G means e-commerce
between companies and public
sector
 involves borderless transactions.
 Internet for public procurement,
 Example: myeg.com.my, e-tender
by JKR, licensing procedures and
other government related
operation

Advantage/Disadvantages to Business
Advantages
 Help increase profits and decrease costs
 Wide base for customers – internationally
geographically scattered; areas not
previously reached
 Identify new suppliers and business
partners
 Ability to create highly specialized
businesses
 Lower communication costs
 Buyers have wide range of choices of
vendors and products
 Availability 24/7
 Competitive market causes decrease in
prices, discounts or “freebies” thrown in
 Customers receive relevant and detailed
information in seconds, as opposed to days
or weeks
 Allows individuals to work from home, do
less travel
Disadvantages
• Some businesses processes may not work
using e-commerce
– Perishable goods
• Difficult to calculate return-on-investment
(ROI)
• Potential cultural and legal obstacles
– Legal environment still unclear and
have conflicting laws
• No “touch-and-feel” aspect
– Loss of ability to inspect products
from remote locations

E-commerce infrastructure
 Information superhighway infrastructure
 Internet, LAN, WAN, routers, etc
 Telecom, cable TV, wireless, etc
 Messaging and information distribution infrastructure
 HTML, XML, email, HTP, etc
 Common business infrastructure
 Security, authentication, electronic payment, directories catalogs,
etc
 Web architecture
 Client/server model
 N-tier architecture; e.g. web servers, application servers,
database servers, scalability

The process of e-commerce
 Attract customers
 Advertising, marketing
 Internet with customers
 Catalog, negotiation
 Handle and manage orders
 Order capture
 Payment
 Transaction
 Fulfillment (physical good, service good, digital good)
 React to customer inquiries
 Customers service
 Order tracking

Trust Issues
• How do I know who you say you are?
• How can I guarantee that you will supply me with
the products you offer within the timeframe you
gave?
• Established companies, especially those with
offline presence, have easy time creating trust on
the Web
• New companies face difficulties due to anonymity
that exists
– Visitors won’t just buy from anyone, especially if they
have never heard of the company before

Language Issues
• “Think globally, act locally”
• Providing local language conversions of a site
– Customers more likely to buy products or services
from a site in their own language
• About 60% of content on Web is in English; more than
50% of current Internet users do not read English

Culture Issues
• Common language and common customs provide
an easier time for consumers to determine how
companies will react in situations of
misrepresentation of quality, etc
• Laws and business practices vary between
countries
• Wine.com (not suitable for Muslim culture)
• Use of icons and terms to depict common actions
– Shopping carts used in US; shopping baskets used in
Europe; shopping trolleys used in Australia
– The OK symbol seen as an obscene gesture in some
countries

Infrastructure Issues
• Local connection costs in developing countries
high; some countries require payment for time
spent online
• This could lead to people spending less time online
• Introduction of flat-rate access required
• More than half of businesses on web turn
away international orders as do not have
capacity or processes in place to fill them

Obstacles, problems and issues faced by
companies in engaging e-commerce
• Lack of awareness and
understanding of the value of e-
commerce
 Many think that e-commerce
suited only for big companies
 Additional cost that will not
bring any major returns to
investment
• Lack of knowledge and skills
 Shortage of skilled workers
especially in small and medium
companies
 Limited capabilities in design,
distribution, marketing and post
sale support
• Financial cost
 Initial investment to adopt new
technology is proportionately
heavier for small than for large firm
 Firms will need to undertake
investment in an appropriate
computer system to implement e-
commerce.
 High cost of computer and internet
access
• Infrastructure
 Many developing countries have
poor telecommunication
infrastructure
• Security
 Ensuring security on payment and
privacy of online transaction
 Lack of trust to use internet to make
online payment

Impact of e-commerce
 E-commerce will eliminate mediation process as
producers can sell direct to consumers
 Firms will have fast knowledge of what customers want
 Firms can use this knowledge to guide the development
of their product lines and to identify new growth areas at
their earlier stages
 E-commerce will also help small- and medium-sized
enterprises (smes) to gain greater market reach for their
products and services
 In fact, e-commerce can be an efficient and economical
way for many smes to enter an export market
 E-commerce offers consumers a wide range of new
opportunities to do direct shopping and banking using
the convenience of a home computer or other
communication devices
 Consumers will also benefit in terms of lower final prices
due to lower transaction costs as described above
 E-commerce consumers will have a wider and direct
access to producers of goods and services without
intermediaries
 With a wider choice of products and services offered to
them, they can cast their preferences by describing what
they want
 In this environment, e-commerce will hasten the shift of
market power of consumers, from a "product taker" to a
"product maker"
 As a result, this process will lead to greater competition
among firms to protect their market share
 E-commerce will result in higher investment by the
government, firms and consumers
 Coupled with higher investment in IT, e-commerce will
result in higher efficiency and productivity of the
economy
 E-commerce will contribute to higher total factor
productivity of the economy which is needed to sustain
economic growth in the long term
 E-commerce will create new activities and a variety of
new industries which utilize it
 This will lead to the creation of new job opportunities

LOGISTICS AND IMPORT/EXPORT
ACTIVITIES

Logistics & Physical
Distribution Activities
1. Logistics management refers to all activities involved
in physically moving raw material, in-process
inventory, and finished goods inventory from the
point of origin to the point of use or consumption
2. A physical distribution system involves:
(1) transportation mode
(2) inventory quantities, and
(3) packing
3. A decision involving one activity affects the cost and
efficiency of one or all others
4. Total cost of the system is defined as the sum of the
costs of all these activities
5. It is important to reduce the total cost instead of
reducing the cost of each component of the logistics
system

COMMERCIAL AND LEGAL
DOCUMENTS

Documentation Requirements
• Most international transactions require
numerous documents
• It is important that each of these documents be
filled correctly and within a specific time frame
• Each document has different requirements
• It is common to issue more than one original
document – one for each of several parties
• Most countries still require documents to be
printed on paper and not submitted electronically

Invoices
• Commercial invoices for transactions conducted in an
international environment are much more complete
and detailed than in a domestic environment. They
must include:
1. A detailed description of the goods, with HS number
2. The Incoterm of the transaction
3. Details on the costs of domestic transportation, loading,
insurance, etc. so as to help determine the dutiable value
of the goods
4. Details on the weight and dimensions of the goods
5. Details on the itinerary of the shipment
6. The terms of payment

Invoices
Pro forma invoice
• A quote (preview
of the commercial
invoice) provided
by the exporter to
the importer for
the purpose of
obtaining a letter
of credit.
Consular invoice
• A commercial
invoice that is
printed on
stationery
provided by the
consulate of the
country in which
the good will be
imported.
Specialized
commercial invoices
• Some countries
require that
invoices be
printed on special
forms.

Export Documents
Export License
Destination Control
Statement
Shipper’s Export
Declaration
Certificate of End-Use
Country’s
Regulations

Export License
• What types of
products need an
export license?
Depending on the
country of export, it
could be:
• National treasures,
antiques, or works of art
• Products put under
control for political or
military purposes
• Scarce natural resources
What it is
• An export license is an
express authorization
by a given country’s
government to export a
specific product before
it is shipped.

Shipper's Export Declaration
• The Shipper’s Export Declaration (SED) is a
data-collection document. It is used to
tabulate what products are exported from the
seller, and to which countries they are
exported
• Most other countries have a similar data-
gathering export requirement

• An End-Use Certificate is a document required
by some exporting countries in the case of
sensitive exports, such as ammunition, to
ensure that the product is used for acceptable
(to the exporting country’s government)
purposes
End-Use Certificate

Export Taxes & Quotas
• Some countries require
exporters to pay an
export tax on certain
commodities.
• Export quotas are a limit,
set by the exporting
country’s government, on
the quantity of a specific
commodity that can be
exported in a given year.
Fact
• Few governments
attempt to hinder
exports, but some
do.

Import Documents
Import License
Phyto-Sanitary Certificate
Certificate of Free Sale
Certificate of Inspection
Import Forms
Certificate of Insurance
Certificate of Origin
Consular Invoice
Certificate of Manufacture
Certificate of Insurance
Certificate of Certification
Other Certificates

• A Certificate of Origin is a
document provided by
the exporter’s chamber of
commerce that attests
that the goods originated
from the country in which
the exporter is located.
Certificate
of Origin

• A Certificate of Inspection
is a document provided by
an independent inspection
company that attests that
the goods conform to the
description contained in
the invoice provided by the
exporter.
Certificate of
Inspection

• A Phyto-Sanitary
Certificate attests that
the goods conform to
the agricultural
standards of the
importing country.
Phyto-Sanitary
Certificate

• A Certificate of Insurance
is a document provided
by the exporter’s
insurance company that
attests that the goods are
insured during their
international voyage.
Certificate
of Insurance

Other Import Documents
Certificate of
Certification
•A document
provided by an
independent
inspection
company, or by
the Agricultural
Department of
the exporting
country’s
government,
that attests that
the goods
conform to the
agricultural
standards of the
importing
country.
Certificate of
Free Sale
•A document
that attests that
the product
exported
conforms to all
of the
regulations in
place in the
exporting
country and
that it can be
sold freely in
the exporting
country.
•Some importers
use this
certificate as a
guarantee of
quality.
Consular invoice
•A commercial
invoice that is
printed on
stationery
provided by the
consulate of the
country in
which the good
will be imported
Import license
•The express
authorization,
granted by the
government of
the importing
country, to
import a
particular
product in a
given country.
Import forms
•All countries
have specific
administrative
forms that have
to be submitted
by the importer
in order to clear
Customs.

Transport
Documents
Ocean Bill
of Lading
Air Waybill
Intermodal
Bill of
Lading
Uniform
Bill of
Lading
Charter
Parties
Aircraft
Leases
Packing List
Manifest

Bill of Lading -
It is a contract between the and the
shipper.
•The carrier agrees to transport the
goods from A to B for a given price.
•It can be called an “ocean bill of lading”
for transportation by ocean, an “air
waybill” when the goods travel by air,
an “intermodal bill of lading” when the
goods travel on more than one mode of
transportation under a single contract,
and a “uniform bill of lading” when the
goods travel by road or rail.
•The shipper (the firm that enters the
contact with the carrier) is either the
exporter or the importer, depending on
the Incoterm used.
It is a receipt for the goods.
•Signed by the carrier, it signifies that the
goods were received in good condition.
•If the goods are received in good
condition, the carrier just signs the bill
of lading, without any other annotation.
Such a bill of lading is called a clean bill
of lading.
•If the goods are received in a condition
that concerns the carrier (dirty, wet,
poorly packaged, rusty, leaking, etc.),
the shipper makes an annotation of the
issue, then signs. Such a bill of lading is
called a soiled bill of lading.
•Letters of credit always call for a clean
bill of lading.
It is a certificate of title.
•Whichever party has the original bill of
lading is the owner of the goods.
•On a bill of lading, there is a box called
“consignee,” in which the shipper
identifies the firm that will take delivery
of the goods from the carrier. There are
two alternative ways to fill this box:
•If the box is left blank or the words “to
order” are used, then the bill of lading
is said to be negotiable, and the owner
of the goods in the destination port is
the entity with the original bill of
lading. The goods can be sold while
they are being transported.
•If the name of the consignee is
entered, then only that firm can pick up
the goods from the carrier. Such a bill
of lading is called a straight bill of
lading.
•Traditionally, only ocean bills of lading
are ever negotiable.

• An ocean bill of lading is
a contract of carriage
between an ocean
shipping line and the
shipper.
• It can be straight or
negotiable.
Ocean Bill
of Lading

• An air waybill is a
contract of carriage
between an airline
and a shipper.
• It is always straight.
Air Waybill

Miscellaneous Transport Documents
Uniform bill of
lading
•A bill of lading
used in the
transportation
of goods on
trucks and
trains, either
domestically
or
internationally
Intermodal bill
of lading
•A bill of lading
used in the
intermodal
transportation,
domestic or
international,
of goods
Packing list
•A document
that lists out
what a
shipment
contains, in
great detail. A
packing list
always
accompanies
every
shipment
Manifest
•A document,
internal to the
shipping
company (the
carrier), which
lists all cargo
onboard the
transportation
vehicle. There
is a manifest
for every
voyage
undertaken by
the carrier
Shipper’s Letter
of Instruction
•A document in
which the
shipper spells
out how it
wants the
carrier to
handle the
goods while
they are in
transit.

Dangerous Goods
• Shipments of dangerous goods are regulated by
the:
– International maritime organization’s international
maritime dangerous goods code,
– The international civil aviation transport association’s
dangerous goods regulations,
– The international civil aviation organization’s technical
instructions for the safe transport of dangerous goods
by air
– Or by local shipment codes
• All require different documents

Electronic Data Interchange
• Electronic Data Interchange (EDI) is the electronic exchange
of documents, from computer to computer
• The sender and the recipient have to agree to a technical EDI
understanding – the specific technology used for the
exchange
• The United Nation’s Working Party on the Facilitation of
International Trade Procedures of the Committee on Trade of
the Economic Commission for Europe is the most likely to
prevail as the international standard, although there is
currently no official international standard
• There also needs to be a legal agreement between the parties
defining the responsibilities, timing, liabilities for errors, the
“evidentiary value” of messages, and other legal issues

Documents as a Marketing Tool
• The pro forma invoice must be a perfect preview of the actual
invoice
• The commercial invoice must be clear, detailed, and precise. It must
include all the information that is necessary for the importer to
clear Customs and minimize the duty that it has to pay
• All the certificates requested have to be provided, in the manner
requested
• The correct number of originals and copies of all documents must
be prepared or collected
• The packing list must be prepared carefully and precisely. An
incomplete or imprecise packing list increases the probability of a
Customs inspection
• The export paperwork must be prepared and filed correctly and in a
timely manner

Customs-Privileged Facilities
• To facilitate export trade, countries designate
areas called customs-privileged facilities,
where goods can be imported for storage
and/or processing with tariffs and quota
limits postponed until the products leave the
designated areas. They include:
– Foreign trade zones (also known as free trade zones)
– Free ports, and
– In-bond arrangements

Export Restrictions
• Export regulations may be designed to conserve
scarce goods for home consumption or to control
the flow of strategic goods to actual or potential
enemies
• To comply with various regulations, the exporter
may have to acquire export licenses or permits
from the home country
• To alleviate problems of exporting, the
Department of Commerce has published a
revised set of export regulations known as the
Export Administration Regulations (EAR)

Import Restrictions
Tariffs
•Custom duties
are based on
value or
quantity or a
combination
of both and
are classified
as follows:
•ad valorem
duties
•specific
duties
•a compound
duty
Exchange
Permits
•To conserve
scarce foreign
exchange
many
countries
impose
restrictions on
the amount of
their currency
they will
exchange for
the currency
of another
country
Quotas
•Countries may
also impose
limitations on
the quantity of
certain goods
imported
during a
specific period
Import
Licenses
•As a means of
regulating the
flow of
exchange and
the quantity of
a particular
imported
commodity,
countries
often require
import
licenses
Standards
•Health
standards,
safety
standards, and
product
quality
standards are
necessary to
protect the
consuming
public from
imported
Boycotts
•A boycott is an
absolute
restriction
against trade
with a country,
or trade of
specific goods
Voluntary
Restrictions
•Countries may
themselves
impose
restrictions
on firms
exporting to
specific
countries

CARGO INSURANCE CARRIERS
LIABILITY

Duty Free Access – Possible Incentives
• 100% write off on R&D costs
• Duty free importation of machinery and equipment, raw
materials (15% - Intermediate goods, 25% - Finished goods)
• After care services: RDB facilitates investment projects
even after registration
• Investment allowance- Accelerated depreciation
• Duty free importation of EAC products due to the common
external tariff
• Additional fiscal incentives in strategic sectors (e.g. energy,
IT)
• Duty free importation of one personal vehicle
• No restriction on repatriation of capital and profits
• Work permits: 3 automatic and free work permits for 3
expatriates

EXPORT PACKAGING AND AIR
CARGO

Packaging - Why
• Proper packaging is essential to contain and protect products while
offering a means of conveniently handling them
• Each package design has the goal of protecting the product from
the assembly line to the user
• There are many hazards even in domestic distribution, and
international transport and distribution can increase the times
products are handled and the probability of damage
• Poor packaging leads to damage, decay, low prices (for damaged or
incomplete shipments), or in extreme cases, rejection of the
shipment by the buyer.
• The method of packing or shipping will depend on your product and
the infrastructure in the country of destination
• Before agreeing to a letter of credit, ensure that the necessary
infrastructure is in place in your destination
• Pack your goods to avoid unnecessary loss during shipment
• Research the refrigeration, loading, and storage facilities of the
destination to ensure that they are adequate for your product.

Air Cargo Insurance
• Cargo insurance protects the cargo owner's financial
interests while the cargo is in transit
• Air and ocean carriers provide very limited coverage
while a shipment is in their possession
• Cargo insurance requires a bill of lading, which states
the liability assumed by the carrier
• When an exporter files a claim against a carrier, it has
to prove that the carrier is directly responsible for the
loss
• Outlets for obtaining cargo insurance are a freight
forwarder or a company specializing in ocean and air
cargo insurance

What is a BOI?
• Body charged with attracting investment into
the country
• Provides information on investment
opportunities, government policies and
facilities available
• Makes sure that ease of doing business is
provided to new entrants

BOI – Sample Mission
• Policy advocacy
Achieve Steady improvements in the investment environment by:
– Proposing measures to create a steadily improving investment friendly environment
– Removing and simplifying outdated unnecessary procedures, approvals and legislation
– Facilitating greater private sector role in industrial zone development
• Investment promotion
Provide exemplary leadership as the apex investment promotion body by:
– Implementing proactive cost effective responsive and targeted promotion strategies
– Delivering effective investor facilitation services on behalf of the individual investor
– Creation of a centralized databank
• Coordination
Strengthen linkages between public / private sectors by:
– Developing effective working relationships with other federal organizations, provincial
governments, district governments and the country’s missions in target areas.
– Promote unit and consistency in implementing shared policy objectives
– Stimulate public - private partnership to attract investment

Most Common NTMs used by Countries
• Sanitary and
Phytosanitory Measures
• Technical Regulations
• Import Licensing
• Export Price Restraints
• Variable Charges
• Safeguards
• Anti-dumping and
Countervailing Actions
• Charges on Imported
Goods
• Customs Procedures
• Minimum Import Price
• Market Labeling Practice
• Port Restrictions
• Quantitative/Marketing
Restrictions
• Rules of Origin
• Preferential Access
• Packaging Requirements

Why Countries have NTMs
• Most of the non-tariff measures are the result of
the rules and regulations, which countries apply
at the border to imported products and to the
sale of such products in the domestic markets
• Non-tariff measures are considered necessary for
the attainment of national policy objectives
• However, the way they are applied may in
practice result in the creation of barriers to trade

NTMs Affecting Trade in SAARC Countries
• Technical Barriers to Trade (TBT)
• Agreement on Sanitary and Phytosanitory Measures (SPS)
• Safeguards Anti-dumping and Countervailing Actions
• Customs Procedures
• Port Restrictions
• Rules of Origin (ROO)
• Preferential Access
• Packaging/labeling Requirements

Technical Barriers to Trade (TBTs)
• These are severe obstacles to exports to developed
countries whose technical regulations, standards and
conformity assessment procedures may effectively serve as
border-protection instruments
• SAARC countries have to spur new competitive advantages
and investment in technological capability if they are to
overcome this problem effectively
• This scenario is less likely to materialize in developing
countries, given the significant technological and financial
constraints they face

NTMs and SAFTA
Objectives and Principles
Article 3(2)(d)
• SAFTA shall involve the free
movement of goods,
between countries through,
inter alia, the elimination of
tariffs, para tariffs and non-
tariff restrictions on the
movement of goods, and any
other equivalent measures
Components
Article 6
• SAFTA may, inter-alia,
consist of arrangements
relating to:
– Tariffs;
– Para-tariffs;
– Non-tariff measures
– Direct trade measures

Trade Liberalization Programme
Article 7.4
• The Contracting States shall notify
the SAARC Secretariat all non-tariff
and para-tariff measures to their
trade on an annual basis
• The notified measures shall be
reviewed by the Committee of
Experts, established under Article 10,
in its regular meetings to examine
their compatibility with relevant WTO
provisions
• The Committee of Experts shall
recommend the elimination or
implementation of the measure in
the least trade restrictive manner in
order to facilitate intra-SAARC trade
Article 7.5
• Contracting Parties shall eliminate all
quantitative restrictions, except
otherwise permitted under GATT
1994, in respect of products included
in the Trade Liberalization
Programme.

Constraints and Irritants
• Infrastructure
 Intra Regional Connectivity-
land locked countries,
comprehensive motor
vehicular agreement for
seamless movement across
border
 Poor quality of
Communication Network
 Airlines Connectivity,
Frequency and Cost
 Intra Regional Rail and
Energy Grid
• Others
 Customs Procedure -
Detailed Goods
Examination/ No
Computerized Processing
 Lack of Reliable Banking
Network- no action on
LC’s dishonored
 Cumbersome procedure
for travel and business
visas
 Barriers to Intra SAARC
investments

Possible Suggestions for Improvement
•Allow transit facilities to third countries
•Harmonize tariff and Customs documents
•Allow pre-filing of documents
•Introduce electronic data interchange
•Upgrade warehousing facilities
•Align Customs working hours
•Establish joint Customs stations

NTMs in SAFTA Trade
• Hard data on NTBs for this trade
segment are scarce
• Intra-SAARC agriculture trade is
large and growing. NTBs mostly
are pervasive here all over the
world. These are also very
difficult to identify and remove
• Trade/industry has an important
role to play in identifying non-
transparent measures, all of
which may not necessarily turn to
out to be barriers
• Importance of NTBs will be more
pronounced once the tariff
liberalization takes place.
• Cost of compliance associated
with NTBs will also become more
pronounced.
• If we do not tackle this aspect of
NTBs, there is a potential danger
that unofficial trade remain
unofficial and benefits of SAFTA
are not reaped.
• Tariff reduction will not be
enough of an incentive

The Way Forward
Free Trade! Free Trade! Free Trade!

Please, do not forget to sign and complete the
evaluation form & hand it over to the trainer(s)
before you leave
 THANK YOU 

Import and export procedures

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