Chapter 14

time draft

a draft payable at a specified future date (30,60,90,120 days)

bill of lading (B/L)

A document issued to exporter by common carrier transporting merchandise. *serves as receipt, contract and document of title.

sight draft (demand draft)

A draft payable on sight

Export Legal Assistance Network (ELAN)

A nationwide group of international trade attorneys who provide free initial consultations to small businesses on export related matters.

Export-Import Bank (Ex-Im Bank)

Agency of the US government whose mission is to provide aid in financing and facilitate exports and imports.

Bankers v. Trade acceptance

Bankers- time draft drawn on and accepted by a bank. Trade- drawn on and accepted by a business firm.

barter

Exchange goods without involving money. Uncommon and risky

Export Management Company (EMC)

Export specialist that act as the export marketing department; either hand operations fully over to firm when done or continue responsibilities for it

letter of credit (L/C)

Issued by a bank, indicating that the bank will make payments under specific circumstances. Center of commercial transactions

MITI

Japan's Ministry of International Trade and Industry

Sogo Shosha

Japan's great trading houses- proactively seeks export opportunities for large and small companies

3M principles

Minnesota Business that built its export success on 1)"FIDO" first in defeats others 2)additional product lines "make a little sell a little" 3) hire locals

Foreign Credit Insurance Association (FCIA)

Program under Export-Import bank that provides insurance for international trade against commercial and political (gov) risks.

Sight and time draft

What are the two types of drafts?

Counterpurchase

a reciprocal buying agreement

Buyback

agreement to accept a percentage of a plant's output as payment for contract to build a plant

offset

agreement to purchase goods and services with a specified percentage of proceeds from an original sale in that country from any firm in the country

draft (bill of exchange)

document ordering an importer to pay an exporter a specified sum of money at a specified time. Maker-initiates draft (US exporter). Drawee- who the draft is being presented to (bank of Paris)

Countertrade

the trade of goods and services for other goods and services

switch trading

the use of a specialized third-party trading house in a countertrade arrangement