In a globalised world where goods often cross borders many times as both intermediate and final products, trade facilitation helps lower overall trade costs and increase economic welfare, in particular for developing and emerging economies. International trade allows countries to exchange good and services with the use of money as a medium of exchange. The benefits of international trade have been the major drivers of growth. Whether exporting or importing goods, trade facilitation benefits all countries by allowing better access for businesses to production inputs from abroad and supporting greater participation in global value chains (GVCs).
Trade has been an engine of growth. Since 1947, when the General Agreement on Tariffs and Trade (GATT) was created, the world trading system has benefited from eight rounds of multilateral trade liberalization, as well as from unilateral and regional liberalization. The eighth round led to the establishment of the World Trade Organization to help administer the growing body of multilateral trade agreements.
Key Elements
International trade, however, refers specifically to an exchange between members of different nations, and accounts and explanations of such trade begin only with the rise of the modern nation-state at the close of the European Middle Ages.International trade transactions are facilitated by international financial payments, in which the private banking system and the central banks of the trading nations play important roles. the process of establishing a trading strategy that includes all stages for an import, including product search, supplier verification, sample shipment, inspection coordination, purchase negotiation, insurance contracting and logistics supervision.
1. Quality and Delivery Time of the Product
Product quality must either be better than the entering market, or be able to compete with price instead while still being profitable. The timing with which each of the products is delivered can derail the entire logistics chain, so it’s something that must be mutually agreed upon and non-negotiable.
2. Supplier Relationship
Establishing a solid relationship with your supplier determines a successful trading operation. Although distance, cultural differences, and different markets play a decisive role in establishing those ongoing relationships, here is where technology can be relied on. Today, technology platforms are essential for the expansion and dissemination of new businesses.
3. Price and Payment Conditions
Product pricing, landed cost, financing options, short/medium/long term financing, government loan, angel financiers, and any other specifications about money should be clear, agreed upon, and signed on paper. In this way, both parties know exactly what was agreed upon and, in case there is a misunderstanding, a physical contract is available to clarify doubts.
4. Logistic Process
In international markets, legal, political, and economic practices may be different. Having a clearly defined shipping method & timeline, container requirements, measurement conversion system, transportation and government documentation, and customs requirements, among others, are things that can’t be missed.
“International trade fosters peace, goodwill, and mutual understanding among nations. Economic interdependence of countries often leads to close cultural relationship.”
