Financing Foreign Trade
The development of a new product is a three-step process: first, a U.S. firm announces an invention; second, the Russians claim they made the same discovery 20 years ago; third, the Japanese start exporting it.
ANONYMOUS
LEARNING OBJECTIVES
- To describe the five principal means of payment in international trade
- To explain from the standpoint of an exporter the advantages and disadvantages associated with each means of arranging payment
- To identify the necessary documentation associated with each payment procedure
- To describe the primary functions associated with the use of the basic trade-financing instruments and documents
- To describe the different methods of private sector export financing
- To explain the benefits and costs of factoring
- To identify the different government-sponsored export-financing and credit insurance programs
- To describe the trends and consequences of public sector export financing
- To define countertrade and describe the specific forms it takes
- To explain the costs and benefits to both parties of countertrade transactions
Most multinational corporations are heavily involved in foreign trade in addition to their other international activities. The financing of trade-related working capital requires large amounts of money as well as financial services such as letters of credit and acceptances. It is vital, therefore, that the multinational ...
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