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