Chapter1 GeneralIntroductionto
InternationalTrade 1
1.1WhatIsInternationalTrade 3
1.2TheImportanceofInternationalTrade 3
1.2.1InternationalTradeRestrictions 4
1.2.2DifferencesBetweenInternationalTradeandDomesticTrade 4
1.3WorldTradeOrganization 5
1.3.1Overview 5
1.3.2FunctionsoftheWTO 6
1.3.3BasicPrinciples 6
1.3.4Missions 6
1.3.5FormalStructure 7
1.4MainProcedureofInternationalTrade 9
1.4.1BasicProcedureofExport 9
1.4.2 BasicProcedureofImport 12
1.5RelativeInternationalPracticeand
Laws 13
1.6OverviewofContract 15
1.6.1TheFunctionsofaWritten
Contract 15
1.6.2TheEssentialFeaturesofa
LegallyBindingContract 16
1.6.3TheGeneralContentsofaSales
Contract 16
1.7OverviewofThisBook 18
KeyTermsandWords 20
Exercises 20
Chapter2InternationalTradeTerms 22
2.1IntroductiontoTradeTerms 24
2.1.1Warsaw-OxfordRules1932 24
2.1.2RevisedAmericanForeignTrade
Definitions1941 26
2.1.3InternationalCommercial
Terms 28
2.2IntroductiontoIncoterms2010 29
2.3Incoterms2000vs.Incoterms2010 54
2.4IncotermsandContract 64
2.5ChoiceofTradeTerms 65
KeyTermsandWords 66
Exercises 67
Chapter3TermsofCommodity 70
3.1NameofCommodity 72
3.1.1CommodityNamingMethods 72
3.1.2HSCode 73
3.1.3NameClausesintheContract 73
3.2QualityofCommodity 74
3.2.1QualityStipulationMethods 75
3.2.2QualityLatitudeandQuality
Tolerance 81
3.2.3QualityClausesinthe
Contract 82
3.3QuantityofCommodity 82
3.3.1UnitofMeasurement 83
3.3.2Calculationofweight 85
3.3.3QuantityAllowanceClauses 87
3.3.4QuantityClausesinthe
Contract 88
3.4PackingofCommodity 89
3.4.1TransportPacking 90
3.4.2SalesPacking 96
3.4.3NeutralPackingand
DesignatedBrand 98
3.4.4PackingClausesin
theContract 98
[1]KeyTermsandWords 101
Exercises 102
Chapter4InternationalCargo
Transport 106
4.1 Containerization 108
4.1.1FeaturesofContainer
Transportation 109
4.1.2TypesofContainer 109
4.1.3FreightofContainer
Transportation 110
4.2ModesofTransportation 112
4.2.1MarineTransport 112
4.2.2AirTransportation 125
4.2.3 RailwayTransportation 126
4.2.4InternationalMulti-modal
Transport 126
4.2.5 LandBridgeTransport 127
4.2.6 PostalTransport 127
4.2.7 PipelinesTransport 127
4.3 ShipmentClausesinsalesContract 128
4.3.1TimeofShipmentandTimeof
Delivery 128
4.3.2PortofShipmentandPortof
Destination 129
4.3.3ShippingAdvice 130
4.3.4PartialShipmentand
Transshipment 130
4.3.5LayTime,Demurrageand
Dispatch 131
KeyTermsandWords 133
Exercises 133
Chapter5InternationalCargoTransport
Insurance 136
5.1PrinciplesofCargoInsurance 138
5.1.1PrincipleofInsurable
Interest 138
5.1.2PrincipleofUtmost
GoodFaith 138
5.1.3PrincipleofIndemnity 139
5.1.4PrincipleofProximate
Cause 140
5.2TheDefinitionofInsurance 140
5.3Partiestotheinsurance 141
5.3.1Insurer 141
5.3.2Insured 142
5.3.3Brokers 142
5.4MarineInsurance 142
5.4.1Risks 143
5.4.2 Losses 143
5.4.3Expenses 145
5.5ScopeofInsuranceCoverage 146
5.5.1BasicCoverage 147
5.5.2 AdditionalRisks 148
5.6CoverageofMarineCargo
InsuranceofICC 152
5.6.1 InstituteCargoClausesA 152
5.6.2 InstituteCargoClausesB 153
5.6.3 InstituteCargoClausesC 153
5.6.4MajorExclusion 155
5.7 ProceduresofMarineInsurance 155
5.7.1GatherInformation 155
5.7.2ChoosetheInsurance
Coverage 156
5.7.3GetQuotes 156
5.7.4PaytheInsurancePremium 156
5.7.5PurchasetheInsurance
Policy 157
5.7.6LodgeanInsuranceClaim 158
5.8 InsuranceClausesinContract 159
KeyTermsandWords 161
Exercises 162
Chapter6PriceofGoods 165
6.1PriceElements 167
6.1.1PricingPrinciples 167
6.1.2 PricingConsideration 168
6.1.3 PricingMethods 169
6.1.4PricingComposition 172
6.1.5CurrencyOption 174
6.2Calculationof?Price 175
6.3ExportCostAccounting 177
6.4CommissionandDiscount 178
6.4.1PriceIncludingCommission 179
6.4.2Pricewithdiscount 179
6.5PriceClauseinSalesContract 180
[1]KeyTermsandWords 181
Exercises 181
Chapter7CreditInstruments 183
7.1SummaryofInstruments 185
7.1.1DefinitionofInstruments 185
7.1.2EssentialFeaturesofNegotiable
Instruments 185
7.1.3FunctionsofNegotiable
Instruments 186
7.1.4TheLegalSystemof
Instruments 187
7.2BillofExchange(Draft,Bill) 189
7.2.1DefinitionofBillof
Exchange 189
7.2.2ContentsofaBillof
Exchange 190
7.2.3TheActsofBillsof
Exchange 193
7.2.4TheClassificationof
theDrawer 197
7.2.5TheOrderofMaking
Recourse 199
7.3PromissoryNote 199
7.3.1DefinitionofPromissory
note 199
7.3.2TheDefinitionfromtheNegotiable
InstrumentsLawofthePeopleu2019s
RepublicofChina 200
7.3.3TheKeyElementsinthe
PromissoryNote 200
7.3.4ClassificationofPromissory
Notes 201
7.3.5DifferencesBetweenaPromissory
NoteandaBillofExchange 201
7.4Check(Cheque) 202
7.4.1DefinitionofCheck 202
7.4.2ClassificationofCheck 203
7.4.3DifferencesBetweenaCheckand
aBillofExchange 203
KeyTermsandWords 204
Exercises 204
Chapter8InternationalPaymentand
Settlement 208
8.1Remittance 210
8.1.1 TheDefinitionof
Remittance 210
8.1.2 PartiestoanRemittance 210
8.1.3TheClassificationof
Remittance 211
8.1.4Reimbursementof
RemittanceCover 214
8.1.5CanceltheRemittanceor
RefundtheImbursement 215
8.1.6TheApplicationofRemittancein
Internationaltrade 216
8.2Collection 217
8.2.1DefinitionofCollection 219
8.2.2NatureofCollection 219
8.2.3ProcedureofDocumentary
Collection 219
8.2.4TheInvolvedPartiesin
Collection 220
8.2.5TypesofCollection 220
8.2.6TheProperty,Advantagesand
Disadvantages 223
8.2.7TheRulesofUniformRulesfor
Collections522(URC522) 223
8.2.8 PointsforAttentionfor
Collection 224
8.2.9RiskandProtectionforExporters
andImporters 224
8.2.10Financingunderthe
Collection 225
8.3TheLetterofCredit 227
8.3.1ThedefinitionofL/C 227
8.3.2PartiestoaLetterofCredit 228
8.3.3TheProcedureofCreditL/C 230
8.3.4CharacteristicsofaLetterof
Credit 238
8.3.5TheUseofaLetterofCredit 238
8.3.6ContentsofaLetterof
Credit 239
8.3.7TheVarietiesofDocumentary
Credit 240
8.3.8OtherSpecialCredits 244
8.3.9CombinedUseofDifferent
MethodsofPayment 248
KeyTermsandWords 250
[1]Exercises 252
Chapter9Inspection,Claims,Force
MajeureandArbitration 260
9.1Inspection 262
9.1.1TheImplicationofCommodity
Inspection 263
9.1.2TheImportanceofCommodity
Inspection 263
9.1.3ImportandExportCommodity
Inspection 264
9.1.4TimeandPlaceof
Inspection 264
9.1.5InspectionStandard 266
9.1.6InspectionCertificate 267
9.1.7InspectionClause 268
9.1.8Inspectionprocedures 268
9.2Claim 269
9.2.1BreachofContract 271
9.2.2LiabilitiesofBreachof
Contract 271
9.2.3ValidTermforClaim 272
9.3ForceMajeure 273
9.3.1DefinitionofForceMajeure 273
9.3.2FeaturesofForceMajeure 273
9.3.3ConsequencesofForce
Majeure 274
9.3.4ForceMajeureClause 274
9.4Arbitration 276
9.4.1TheDefinitionofArbitration 276
9.4.2CharacteristicsofArbitration 277
9.4.3ArbitrationClauses 277
KeyTermsandWords 280
Exercise 280
Chapter10BusinessNegotiationand
Establishmentof
Contract 283
10.1TheGeneralProcessofBusiness
Negotiation 285
10.2Enquiry 287
10.2.1TypesofEnquiry 287
10.2.2GuidelinesforWritingEnquiries
andReplies 288
10.3Offer 289
10.3.1TheMeaningofanOffer 289
10.3.2TypesofanOffer 289
10.3.3FourNecessaryConditionsof
aFirmOffer 291
10.3.4TimeofValidityorDurationof
anOffer 292
10.3.5WithdrawalorRevocationof
anOffer 294
10.3.6TerminationofanOffer 294
10.4Counter-offer 295
10.5Acceptance 296
10.5.1TheMeaningof
Acceptance 296
10.5.2EffectiveTimeof
Acceptance 297
10.5.3LateAcceptance 297
10.5.4WithdrawalofAcceptance 298
10.6ConclusionofContract 299
10.6.1NecessaryConditionsof
anEffectiveContract 299
10.6.2FormsofaWritten
Contract 299
10.6.3StructureofaWritten
Contract 299
KeyTermsandWords 306
Exercises 307
Chapter11ExportingandImporting
Procedures 311
11.1ExportingProcedures 314
11.1.1PreparationStageofExport
Contract 315
11.1.2NegotiationStageofExport
Contract 317
11.1.3PerformanceStageofExport
Contract 320
11.2ImportingProcedures 343
11.2.1PreparationStageofImport
Contract 344
11.2.2NegotiationStageofImport
Contract 346
11.2.3PerformanceStageofImport
Contract 347
KeyTermsandWords 355
Exercises 356
Chapter12ModesofInternational
Trade 358
12.1AgencyandDistribution 359
12.1.1Agency 359
12.1.2Distribution 360
12.2Consignment 361
12.2.1Definition 361
12.2.2Features 361
12.2.3TheAdvantagesandDisadvantages
ofconsignment 362
12.3TendersandAuction 363
12.3.1Tenders 363
12.3.2Auction 365
12.4CounterTrade 366
12.4.1MainReasonsWhyCounterTrade
isEmployed 366
12.4.2SpecificFormsofCounter
Trade 367
12.5FuturesTrading 369
12.5.1IntroductiontoFutures
Trading 369
12.5.2MainTypesofFutures
Traders 371
12.5.3DangerofFuturesTrading 372
12.6E-commerce 372
12.6.1DefinitionofE-commerce 373
12.6.2TypesofE-commerce 374
12.6.3BenefitsofE-commerce 376
12.6.4LimitationsofE-commerce 377
12.6.5TipsforRunningasuccessful
E-commerceBusiness 378
12.6.6TheFutureofE-commerce 379
KeyTermsandWords 380
Exercises 381
References 382
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