國際貿易實務與操作InternationalTradePracticeandOperation1Chapter1IntroductiontoInternationalTradePracticeTeachingObjectives1．Introducethreeinternationalbusinessforms:trade,licensing,andforeigndirectinvestment.2.Discusstypicalrisksassociatedwithinternationalbusinesstransactions.3.Explainparticipantsandproceduresofinternationaltrade.2Section1FormsofInternationalBusiness

Basedonthemethodsofenteringaforeignmarket,internationalbusinesscanbeclassifiedintothreebroadcategories:trade,intellectualpropertyrightsandinternationallicensingagreements,andforeigndirectinvestment.3Section1FormsofInternationalBusiness1.TradeTradeconsistsoftheimportandexportofgoodsandservices.

Exportingistheshipmentofgoodsortherenderingofservicestoaforeignbuyerlocatedinaforeigncountry．Everyexportentailsanimport,andviceversa.4Section1FormsofInternationalBusinessExportingisgenerallydividedintotwotypes.

Directexportingisoftendonethroughforeignagents

whoworkoncommission,orbysellingdirectlyto

foreigndistributors.Indirectexportingisusedbycompaniesseekingtominimizetheirinvolvementabroad.Thereareseveraldifferenttypesofindirectexporting:exporttradingcompanies,exportagents,andexportmanagementcompany(EMC).5Section1FormsofInternationalBusinessGovernmentControlsoverTradeTariffsareimportdutiesortaxesimposedongoodsenteringthecustomsterritoryofanation.Nontariffbarriersareallbarrierstoimportingorexportingotherthantariffs.Oneformofnontariffbarrieristhetechnicalbarriertotrade,orproductstandard．Anothertypeisexportcontrol.

6Section1FormsofInternationalBusinessTradeliberalization

referstotheeffortsofgovernmentstoreducetariffsandnontariffbarrierstotrade.AllWTOnationsareentitledtonormaltraderelationswithoneanother.ThisisreferredtoasMostFavoredNationtradingstatus.

7Section1FormsofInternationalBusiness2.IntellectualPropertyRightsandInternationalLicensingAgreementsIntellectualpropertyrightsareagrantfromagovernmenttoanindividualorfirmoftheexclusivelegalrighttouseacopyright,patent,ortrademarkforaspecifiedtime.Internationallicensingagreements

arecontractsbywhichtheholderofintellectualpropertywillgrantcertainrightsinthatpropertytoaforeignfirmunderspecifiedconditionsandforaspecifiedtime.8Section1FormsofInternationalBusinessTheexchangeoftechnologyandmanufacturingknow-howbetweenfirmsindifferentcountriesthroughlicensingagreementsisknownastechnologytransfer.Franchisingisapopularformoflicensing.Thefranchiseeisallowedtouseatradenameortrademarkinofferinggoodsorservicestothepublicinreturnforaroyaltybasedonapercentageofsalesorotherfeestructure.9Section1FormsofInternationalBusinessCase1-1(Dayanv.McDonald’sCorp.)

DayaninParishadanexclusivefranchiseagreementwithMcDonald’sin1971.TheagreementrequiredthatDayanmeetallquality,serviceandcleanliness(QSC)standardsetbyMcDonald's.Dayanviolatedthequalityandcleanlinessstandardsforalongtime.CouldMcDonaldterminatethecontract?10Section1FormsofInternationalBusiness3.ForeignDirectInvestmentForeigninvestmentorforeigndirectinvestmentreferstotheownershipandactivecontrolofongoingbusinessconcerns,includinginvestmentinmanufacturing,mining,farming,assemblyoperations,andotherfacilitiesofproduction.Adistinctionismadebetweenthehomeandhostcountriesofthefirmsinvolved．Thehomecountryreferstothatcountryunderwhoselawstheinvestingcorporationwascreatedorishead-quartered．

11Section1FormsofInternationalBusinessMultinationalcorporations

arefirmswithsignificantforeigndirectinvestmentassets.Throughdirectinvestment,theycanstartanewforeignsubsidiarycompany,formajointventurewithanexistingforeigncompanyoracquireanexistingforeigncompanybystockpurchase.Multinationalcorporationsareusuallynotasinglelegalentity．12Section1FormsofInternationalBusinessOfthethreeformsofinternationalbusiness,foreigninvestmentprovidesthefirmwiththemostinvolvement,andperhapsthegreatestriskabroad．Investmentinaforeignplantisoftenaresultofhavinghadsuccessfulexperiencesinexportingorlicensing,andofthesearchforwaystoovercomethedisadvantagesofthoseotherentrymethods.13Section2ManagingRisks

ofInternationalBusinessTransactions

Thelevelofriskrisesupfromtradetolicensing,andtoforeigndirectinvestment.Theriskswillalsovarydependingonwhatcountriesthebusinesspartiesarelocatedinorwhatcountrythetransactionistobeperformedin.14Section2ManagingRisks1.PoliticalRiskPoliticalriskisgenerallydefinedastherisktoafirm’sbusinessinterestsresultingfrompoliticalinstabilityorpoliticalchangeinacountryinwhichthefirmisdoingbusiness．Handlingpoliticalriskrequiresplanningandvigilance.

15Section2ManagingRisks2.LanguageandCulturalDifferencesEventhoughEnglishiswidelyusedinbusinessallovertheworld,thelanguageofagiventransactionstilldependsonthetypeofbusinessoneisdoingandontheregionoftheworld．Onedevicetoovercomelanguagedifferencesistohavethecontractdrawninthelanguageofbothparties.

16Section2ManagingRisksCase1-2(Gaskinv.StummHandelGMBH):

Gaskin(Americancitizen)couldnotspeakorreadGerman,butheenteredintoanemploymentcontractwrittenentirelyinGermanwiththeGermanfirmofStummHandeloperatedinNewYork.Whenhesignedthecontract,thetermsofthecontractwereexplainedtohiminEnglish,includingthe“forumselectionclause”ofsettlinganydisputesinthecourtsofGermany.Later,thetwopartieshadadisagreement.CouldGaskinsettlethedisputeintheUnitedStates?17Section2ManagingRisks3.CurrencyandExchangeRateRisks

Threeseparaterisksrelatetocurrencyandinternationalbusinesstransactions:convertibility,repatriation,andcurrencyratefluctuation.18Section2ManagingRisksHedgingCurrencyRisk

Ahedgeisapositionestablishedinonemarketinanattempttooffsetexposuretopricefluctuationsinsomeoppositepositioninanothermarket.Hedgingallowstheinvestortotransferthecurrencyrisktosomeoneelsewhowantstotakeupapositioninthecurrency.Examplesofhedgingincludeforwardexchangecontract,currencyfuturecontracts,etc..19Section2ManagingRisksCase1-3(BerninaDistributors,Inc.v.BerninaSewingMach.)BerninaSewingMachineCo.(Importer)hadaseven-yearcontracttoimportandsupplyBerninasewingmachinestoBerninaDistributorinUS.TheImporterwasrequiredtopayinSwissfrancs．WiththesharpdeclineofdollartoSwissfranc,Importer’scostsdoubledandthushalveditsrateofreturnperdollarinvested.CouldtheImportercancelthecontractwiththeDistributor?20Section2ManagingRisks4.LegalRiskBecauseofdifferencesinlanguage,culture,andlegalsystems,theintentionsofpartiesinaninternationaltransactionmaynotbeeasilydiscernablefromtheircontract.Thepartiesshouldexpresscarefullyintendedrightsandobligationsinawrittencontract.

21Section2ManagingRisks5.SpecialTransactionRisksinContractsforSaleofGoodsTheriskthatabuyerwilldefaultonasalescontractandfailtopayforthegoodsisknownaspaymentrisk,orcreditrisk．Theriskthatabuyerwillnotreceivethegoodsunderacontractiscalleddeliveryrisk.Thiscoursewillfocusonthespecialrisksinherentininternationaltransactionsforsaleofgoods.

22Exercises–SpecialTerms國際貿易直接出口非關稅壁壘貿易自由化跨國公司知識產權最惠國貿易地位貨物轉運商承運人海關報關行提單信用證保險公司技術轉讓23Exercises–SpecialTermstransactionlicensingagreementforeigndirectinvestmentcommissionmerchandiseglobalsourcingcountryoforiginknow-howbusinessoperationsfranchisedefendantplaintiffhostcountries

24Exercises–Explanation1.Whataretariffs?

2.Whatareinternationallicensingagreements?3.Whichformofinternationalbusinesshasthehighestlevelofrisk?Why?25Section3Participants