Exporting & Countertrade

Albania offered such items as spring water, tomato juice, and chrome ore in exchange for a $60 million fertilizer and methanol complex. Which type of countertrade is this?

Barter

A U.S. firm sells some products to China. China pays the U.S. firms in dollars, but in exchange, the U.S. firm agrees to spend some of it proceeds from the sale on textiles produced by China. Which type of countertrade is this?

Counterpurchase

_______ is an alternative means of structuring an international sale when conventional means of payments are difficult, costly, or nonexistent.

Countertrade

The mission of the _____ is to provide financing aid that will facilitate exports, imports, and the exchange of commodities between the United States and other countries.

Ex-Im Bank

In the U.S., export credit insurance is provided by the _____, an association of private commercial institutions.

FCIA

When a firm builds a plant in a country and agrees to take a certain percentage of the plants output as partial payment for the contract, it is called:

a buyback

What is the main attraction of countertrade?

a firm can finance an export deal when other means are not available.

International trade often occurs between parties who may never have met, live in different countries, speak different languages, and abide by different legal systems. These factors could result in:

a lack of trust between the parties

Which of the following steps can increase a firm's probability of exporting successfully?

enter a foreign market on a small scale

A company of export specialists that act as an export marketing department for client firms is called a(n):

export management company

The letter of credit is issued by a bank at the request of a (n) :

importer

A bill of lading serves all of the following purposes EXCEPT:

letter of credit

Which of the following stands at the center of international commercial transactions?

letter of credit

The two categories of drafts are:

sight drafts and time drafts.

A U.S. firm concludes a counterpurchase agreement with Poland for which it receives some number of counterpurchase credits for purchasing Polish goods. The U.S. firm does not want any Polish goods, however, so it sells the credit to a third-party trading house at a discount. The profit house finds a firm that can use the credits and sell them at a profit. This is an example of

switch trading