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Chapter 1 An Overview of the International Trade 1

Section Ⅰ Reasons for the International Trade 2

1．Resources Reasons 2

2．Economic Reasons 2

3．Other Reasons 4

Section Ⅱ The International Trade Policy 5

1．Gains from Free Trade 5

2．Different Means of Protection 6

Section Ⅲ The History and Role of the Chinese International Trade 9

1．The Period between 1950—1976 9

2．The Period after 1976 10

Practical Drills 12

Case Study—Favorable Balance of Trade vs.Unfavorable Balance of Trade 12

Role Play—Establishing Business Relations 13

Extended Activities 14

Chapter 2 The International Trade Forms 17

Section Ⅰ Selling Agent,Distribution,Consignment and International Subcontracting 18

1．Selling Agent 18

2．Distribution 18

3．Consignment 18

4．International Subcontracting 19

Section Ⅱ Tender 19

1．Invitation for Bids 20

2．Submission of Bids 21

Section Ⅲ International Counter-trade 22

1．Barter Trade 23

2．Compensation Agreement 23

3．Buy Back 24

4．Counter-purchase 24

Section Ⅳ International Technology Transfer and International Technology Licensing 25

1．International Technology Transfer 25

2．International Technology Licensing 25

Practical Drills 27

Case Study—Confirming Offer 28

Role Play—Tender and Biding 28

Extended Activities 29

Chapter 3 General Introduction to International Trade Practices 32

Section Ⅰ The Definition of Export Transaction 33

1．Reasons for Exporting 33

2．Definition of Exporting 33

Section Ⅱ The Conduct of Export Transaction 34

1．Preparation for Exporting 34

2．Business Negotiation 35

3．Implementation of Contract 35

4．Settlement of Disputes 36

Section Ⅲ The Parties and Means in the Export Transaction 37

1．Basic Parties in the Export Transaction 37

2．Other Major Parties and Means in the Export Transaction 37

Practical Drills 39

Case Study—Compensation Trade 40

Role Play—Talking with a Potential Client 40

Extended Activities 41

Chapter 4 International Trade Terms 45

Section Ⅰ Brief Explanations of Trade Terms 46

1．International Trade Terms 46

2．International Rules and Practices on Trade Terms 47

Section Ⅱ Contents of Trade Terms 48

1．An Overview of the Structure of Incoterms 2000 48

2．A Brief Explanation of Terms in Incoterms 2000 49

3．Comparison between FCA/CPT/CIP and the Traditional FOB/CFR/CIF 53

Section Ⅲ Expression and Choice of Trade Terms 53

1．Expression of Trade Terms 54

2．Choice of Trade Terms 54

Practical Drills 56

Case Study 1—FOB(Incoterms 2000) 56

Case Study 2—Why to Send Shipping Advice? 56

Role Play—Price Negotiation 57

Extended Activities 57

Chapter 5 International Sales Contract 61

Section Ⅰ Definition and Contents of International Sales Contracts 62

1．Definition of International Sales Contracts 62

2．Contents of a Sales Contract 63

3．Major Terms of a Sales Contract 64

Section Ⅱ Formation of International Sales Contract 66

1．Inquiry 67

2．Offer 67

3．Counter-offer 68

4．Acceptance 69

5．Signing of the Contract 69

Section Ⅲ Implementation of the Contract 70

1．Cargo Readiness 71

2．Examination of L/C and Amendment to L/C 71

Practical Drills 74

Case Study 1—Offer 74

Case Study 2—Acceptance 75

Role Play—On Terms and Conditions of the Contract 75

Extended Activities 77

Chapter 6 Terms of Commodity 81

Section Ⅰ Name of Commodity 82

Section Ⅱ Quality of Commodity 83

1．Sales by Seller's Sample and Sales by Buyer's Sample 83

2．Sales by Description 84

Section Ⅲ Quantities of Commodity 85

1．Units of Measurement 85

2．Calculation of Weight 85

Section Ⅳ Packing of Commodity 86

1．Outer Packing 86

2．Inner Packing 88

Section Ⅴ Marking of Commodity 89

1．Shipping Marks 89

2．Indicative and Warning Marks 90

3．Additional Marks 91

Practical Drills 92

Case Study—Dealing with Cartons Damaged 92

Role Play—Packing 93

Extended Activities 94

Chapter 7 Export and Import Documentations 96

Section Ⅰ Role and Requirements of Documentation 97

1．Role of Documentation 97

2．Requirements for Documentation 97

Section Ⅱ Official Documents 98

1．Export License 98

2．Import License and Foreign Authorization 99

3．Certificate of Origin 99

4．Certificate of Inspection 99

5．Consular Invoice 100

6．Customs Invoice 100

Section Ⅲ Commercial Documents 100

1．Pro Forma Invoice 100

2．Commercial Invoice 101

3．Quality Certificate 101

4．Weight Certificate 102

Section Ⅳ Financial Documents 102

1．Application Form for International Money Transfer 102

2．Drafts 103

3．Application for Documentary Letter of Credit 104

4．Letter of Credit 104

Section Ⅴ Transportation Documents 104

1．Bill of Lading 105

2．Shipping Note 105

3．Packing List 105

4．Rail Consignment Note 106

5．Road Consignment Note 106

6．Air Waybill 107

7．Combined Transport Document 107

8．Arrival Notification 107

Section Ⅵ Insurance Documents 107

1．Insurance Policy 108

2．Insurance Certificate 108

3．Open Policy 108

Section Ⅶ Specimens 109

1．Import and Export Licenses 109

2．Certificate of Origin 110

3．Certificate of Inspection 111

4．Pro Forma Invoice 112

5．Commercial Invoice 113

6．Draft(Bill of Exchange) 114

7．Bill of Lading 115

8．Packing List 116

9．Insurance Policy/Certificate 117

10．Customs Declaration Form 118

Practical Drills 121

Case Study—The Advising Bank's Refusal 121

Role Play—Talking about Credit Card 122

Extended Activities 123

Chapter 8 International Cargo Transportation 126

Section Ⅰ Ocean Freight 127

1．Conference Shipping 127

2．Non-conference Line Vessels 128

3．Tramp Ships 128

4．Chartered Ships 129

Section Ⅱ Air Transport 130

1．Scheduled Airlines 130

2．Chartered Carriers 130

3．Consolidated Consignments 131

Section Ⅲ Other Means of International Cargo Transportation 131

1．Road Transport 131

2．Rail Transport 131

3．Inland Waterway Transport 132

4．Containerization 132

5．Palletization 132

6．Pipelines 133

7．International Multimodal Transport 133

Practical Drills 135

Case Study—What Would the Exporter Do? 135

Role Play—Late Delivery 135

Extended Activities 136

Chapter 9 International Cargo Transportation Insurance 138

Section Ⅰ Fundamental Concepts in the International Cargo Insurance 139

1．Parties Involved 139

2．Insured Amount 140

3．Premium 140

4．Insurance Policy 140

Section Ⅱ Marine Transportation Insurance 141

1．Risks Covered by Marine Insurance 141

2．Losses Covered by Marine Insurance 141

3．Expenses Incurred for the Rescue of Insured Cargo 142

4．Major Categories of General Insurance Coverage 142

5．Procedures of Marine Insurance 143

Section Ⅲ Insurance of Land,Air and Postal Transportation 145

1．Insurance Coverage for Land Transportation 145

2．Insurance Coverage for Air Transportation 145

3．Parcel Post Insurance 146

Practical Drills 147

Case Study—Refusal of Compensation 147

Role Play—An Exporter Discusses Insurance of an Order with a Buyer 148

Extended Activities 149

Chapter 10 International Trade Payment 152

Section Ⅰ Payment Instruments of International Trade 153

1．Bill of Exchange 153

2．Promissory Notes 154

3．Cheques 154

Section Ⅱ Methods of Payment 155

1．Remittance 155

2．Collection 157

3．Letter of Credit 159

4．Banker's Letter of Guarantee 161

Section Ⅲ Terms of Payment in the Sales Contract 161

1．Payment by Remittance 161

2．Payment by Collection 162

3．Payment by the Letter of Credit 162

Practical Drills 163

Case Study 1—A FOB Contract 164

Case Study 2—Letter of Credit 164

Role Play—Decision on Mode of Payment 166

Extended Activities 166

Chapter 11 Inspection,Force Majeure,Claim and Arbitration 170

Section Ⅰ Commodity Inspection 171

1．Necessity of Commodity Inspection 171

2．Time and Place of Inspection 171

3．Inspection Agency and Certificate 173

Section Ⅱ Force Majeure 173

1．Concept of Force Majeure 173

2．Consequences of Force Majeure 174

Section Ⅲ Claim 174

1．The Definition of Claim 174

2．Settlement of Claim 175

Section Ⅳ Arbitration 175

1．Procedures of Arbitration 175

2．Cost of Arbitration 176

Practical Drills 178

Case Study—Arbitration of Dispute 178

Role Play—Damage 179

Extended Activities 179

Chapter 12 Marketing Organizations Abroad 182

Section Ⅰ Agency Arrangements 183

1．Self-employed Agents Abroad 183

2．The Nature of the Contract of Agency 183

3．The Agent's Authority 184

4．Rights and Obligations of the Agent and the Principal 185

5．Special Types of the Agents 186

Section Ⅱ Branch Offices and Subsidiaries Abroad 188

1．General Understanding of Branch Offices and Subsidiaries Abroad 188

2．Dealings between Branch Offices Abroad 189

3．Subsidiary Companies Abroad 189

Section Ⅲ Sole Distribution Agreements,Licensing Agreements and Franchising 190

1．Sole Distribution Agreements 191

2．Licensing Agreements 193

3．Franchising 193

Practical Drills 195

Case Study—Sole Agency Agreement 195

Role Play—Joint Venture 197

Extended Activities 197

Chapter 13 E-commerce 200

Section Ⅰ E-commerce and Its Historical Development 201

1．E-commerce 201

2．Historical Development of E-commerce 201

Section Ⅱ Major Categories of E-commerce 202

1．Business-to-business(B2B)E-commerce 202

2．Business-to-consumer E-commerce 202

3．Consumer-to-consumer E-commerce 202

4．Consumer-to-business E-commerce 203

5．Government-to-citizen E-commerce 203

6．Government-to-business E-commerce 203

Section Ⅲ Business Process and Models of E-commerce 203

1．Business Process of E-commerce 203

2．Business Models of E-commerce 204

Section Ⅳ Advantages of E-commerce 205

1．Low Operating Cost 205

2．Large Purchase Per Transaction 206

3．Integration of Business Procedures 206

4．Flexibility and Availability of Information 206

5．Improved Interactions 206

Section Ⅴ Limitations of E-commerce 207

1．Technical Limitations 207

2．Non-technical Limitations 207

Practical Drills 210

Case Study—Dell Computer:E-commerce in Action 210

Role Play—Talking about Order On-line 211

Extended Activities 211

Chapter 14 Fundamentals of GATT and WTO 214

Section Ⅰ A Brief Introduction to GATT 214

Section Ⅱ A Brief Introduction to WTO 216

1．Objectives,Functions and Basic Principles of WTO 216

2．WTO Structure 218

3．An Outline of the WTO Agreements 221

Practical Drills 223

Case Study—China and WTO 223

Role Play—At the Trade Show 224

Extended Activities 225

Keys 228

Appendix 244

Appendix 1-1 Sales Contract 244

Appendix 1-2 Purchase Contract 245

Appendix 2-1 Shifeng Double-Star Tire CO.,LTD 248

Appendix 2-2 Commercial Invoice 249

Appendix 3 Proforma Invoice 250

Appendix 4 Bill of Lading 251

Appendix 5 Letter of Credit 252

Bibliography 253