Learn English vocabulary for international trade. International trade is a cornerstone of our global economy, as goods are constantly flowing by air and ship around the world. In this lesson, we’ll look at how it all works. Along the way, we’ll learn English vocabulary related to the process of international trade.

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2. International
TRADE
INCOTERMS
merchandise
inspection
proformainvoice
CERTIFICATE
letter of credit
FOBCFR
CIF
Customs
DUTY
BondedWarehouse
bill of lading
Broker

3. merchandise

4. Text
merchandise
Goods that
are bought
and sold in
trade are
called
merchandise.

5. Text
When merchandise
is being moved
or shipped, it
may be called
freight or cargo.
merchandise

6. Text
Trucks took the merchandise
in containers from the
factory to the port.
example:

7. Text
certificate of
manufacture

8. Text
certificate of manufacture
The manufacturer
will issue a certificate
of manufacture
certifying that the
goods are have been
made to the buyer’s
specifications.

9. Text
certificate of inspection
A certificate of
inspection shows
that the goods
meet therequired
standards prior
to shipment.

10. Text
“The goods appeared damaged,
so the buyer checked to see
that the certificate of
inspection was valid.”
example:

11. Text
pro forma invoice

12. Text
Before a supplier
sends merchandise
to a buyer, the
supplier provides a
pro forma invoice.
pro forma invoice

13. Text
pro forma invoice
This invoice lists
the exact quantity,
value, and
specifications of
the merchandise.

14. Text
“When the shipment arrived,
we checked the contents
against the pro forma
invoice we had received.”
example:

15. Text
letter of credit

16. Text
letter of credit
In large trades,
a buyer will
finance the
transaction
using a letter
of credit.

17. Text
letter of credit
This document
guarantees that
payment will be
made when the
seller meets the
conditions of sale.

18. Text
“ Whe n Wayland Inc.
received the letter of
credit, they contacted
the shipping company to
arrange transport.”
example:

19. Text
bill of lading

20. A bill of lading is
a contract
between an
exporter and a
transportation
company. Text
bill of lading

21. The bill of lading
lists the goods
being carried and
must remain with
the merchandise
at all times.
Text
bill of lading

22. Text
example:
“An airline may issue a bill
of lading to a seller either
before or after payment
for goods is made.”

23. Text
incoterms

24. C I P
DAT
E X W
FOB
INCOTERMS
c f r
CIFFAS
FCA
dap
DDP

25. Text
Free On Board
Free on Board
(FOB) means
the seller is
responsible for
the goods until
they are loaded.

26. Text
Free On Board
The seller must
pay all costs
related to getting
the goods to port
and onto the ship.

27. Text
CFR means that a
quoted price includes
the cost of goods
and transport
charges to the
destination port.
Cost & Freight

28. Text
CIF means that the
quoted price includes
the cost of goods,
insurance, and
transportation to
the destination port.
Cost Insurance Freight

29. Text
example:
“The seller agreed to pay
cost and freight, so the
buyer had to buy insurance
for the goods.”

30. Textbonded warehouse

31. Text
bonded warehouse
A bonded warehouse is
a place where goods
are stored after
shipping but
before the payment
of duties on those goods.

32. Text
“At any major port facility
there will be a number of
b o n d e d w a r e h o u s e s
available to store goods.”
example:

33. Text
customs / duty

34. Text
customs
Customs is the
authority or
organizationthat
controlsthe flow
of goods in and
out of a country.

35. Text
duty
Customs authorities
collect the duties
– or taxes -
applied to imports
and exports.

36. Text
“Within a port, customs
officials have the right to
board and search any ship.”
example:

37. Text
customs broker

38. Text
customs broker
A customs broker
helps importers
and exporters
move their goods
through Customs.

39. Text
customs broker
Customs brokers
prepare documents,
help with
communication,
and arrange
payment of duties.

40. Text
“Many customs brokers
specialize in certain types of
goods, such as textiles, food,
orcomputer equipment.”
example:

41. Text
Practice
Now, it’s
your turn
to practice!

42. Text
example
For example, if you hear…
The bank issued a letter
of <beep> to the furniture
exporter.

43. Text
example
You can say ...
The bank issued a letter
of credit to the furniture
exporter.

44. Text
get ready
to speak

45. Text
The goods sat in a
bonded <beep> for
three months before
the duty was paid.
question 1

46. Text
answer 1
The goods sat in a
bondedwarehouse for
three months before
the duty was paid.

47. Text
The agreed terms
were cost and<beep>,
so the buyer had to
buy insurance.
question 2

48. Text
The agreed terms
were cost and freight,
so the buyer had to
buy insurance.
answer 2

49. Text
question 3
When the shipment
arrived, we checked
the contents against
the bill of <beep>.

50. Text
answer 3
When the shipment
arrived, we checked
the contents against
the bill of lading.

51. Text
question 4
After so many delays in
customs, we switched
to a better customs
<beep>.

52. Text
After so many delays in
customs, we switched
to a better customs
broker.
answer 4

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