Chapter 1 International Trade 1
1.1 Concept of International Trade 1
1.2 Reasons for International Trade 2
1.3 Benefits of International Trade 3
1.4 International Trade Restrictions 4
1.4.1 Reasons for Restricting Free Trade 4
1.4.2 Methods of Restricting Free Trade 5
1.5 Invisible Trade 8
Chapter 2 International Trade Theory 18
2.1 Mercantilism 18
2.2 Absolute Advantage 19
2.4 Heckscher-Ohlin Theory 20
2.3 Comparative Advantage 20
2.5 The Product Life-cycle Theory 21
2.6 The New Trade Theory 23
2.7 National Competitive Advantage:Porter's Diamond 25
2.8 Implications for Business 26
2.8.1 Location Implications 26
2.8.2 First-mover Implications 27
2.8.3 Policy Implications 28
Chapter 3 International Payment 37
3.1 Payment Instruments of International Trade 37
3.1.1 Draft or Bill of Exchange 37
3.2.1 Cash in Advance 40
3.2 Five Basic Methods of Payment 40
3.1.3 Check 40
3.1.2 Promissory Note 40
3.2.2 Open Account 41
3.2.3 Consignment 43
3.2.4 Documentary Collection 43
3.2.5 Documentary Letter of Credit 48
Chapter 4 The Letter of Credit（Ⅰ） 56
4.1 The Major Contents of the L/C 56
4.2 Parties to the Transaction 57
4.3 Details on Procedures 58
4.3.1 The Buyer(Importer/Applicant) 58
4.3.3 The Advising(Seller's)Bank 59
4.3.2 The Issuing(Buyer's)Bank 59
4.3.4 The Seller/Exporter/Beneficiary 60
4.3.5 The Advising Bank and the Issuing Bank 60
4.4 Conformity with the Documentary Credit 60
4.5 How to Handle Documentary Discrepancies 61
4.6 Regarding the Role of Banks 62
4.7 Limitations with Documentary Credits 63
Chapter 5 The Letter of Credit（Ⅱ） 71
5.1 Clean Credit and Documentary Credit 71
5.2 Revocable Credit and Irrevocable Credit 71
5.3 Confirmed Credit and Unconfi rmed Credit 72
5 6 Transferable Credit and Non-transferable Credit 73
5.4 Sight Credit and Usance Credit 73
5.5 Non-draft Credit 73
5.7 Deferred Payment Credit 74
5.8 Revolving Credit 75
5.9 Standby Credit 75
5.10 Red Clause Credit 76
5.11 Back to Back Credit 77
Chapter 6 Terms of Delivery 86
6.1 Vital Aspects of Transaction 86
6.2 The Purpose of Terms of Delivery and Incoterms 87
6.3 A View of the Structure of Incoterms 2000 87
6.3.1 Ex Works [Named Place](EXW) 89
6.3.4 Free on Board [Named Port of Shipment](FOB) 90
6.3.2 Free Carrier [Named Place](FCA) 90
6.3.3 Free Alongside Ship [Named Port of Shipment](FAS) 90
6.3.5 Cost and Freight [Named Port of Destination](CFR) 91
6.3.6 Cost,Insurance,Freight [Named Port of Destination](CIF) 91
6.3.7 Carriage Paid To [Named Port of Destination](CPT) 92
6.3.8 Carriage and Insurance Paid To [Named Port of Destination](CIP) 93
6.3.9 Delivered at Frontier [Named Place](DAF) 93
6.3.10 Delivered Ex Ship [Named Port of Destination](DES) 93
6.3.11 Delivered Ex Quay Duty Paid [Named Port of Destination](DEQ) 93
6.3.12 Delivered Duty Unpaid [Named Place of Destination](DDU) 94
6.3.13 Delivered Duty Paid [Named Place of Destination](DDP) 94
7.1.1 Invitation to Offer 103
Chapter 7 Business Contract 103
7.1 Business Negotiation 103
7.1.2 Offer 104
7.1.3 Acceptance 105
7.1.4 Counter-offer 106
7.1.5 Conclusion of a Contract 107
7.2 The Performance of the Contract 107
7.2.1 Delivery of the Goods 107
7.2.2 Passing of the Property 107
7.2.3 Passing of the Risk 108
7.3 The Functions of the Contract in Written Form 108
7.4 Forms of the Written Contract 108
8.1 Commercial Documents 116
Chapter 8 Import and Export Documentation 116
8.1.1 Pro Forma Invoice 117
8.1.2 Commercial Invoice 117
8.1.3 Quality Certificate 118
8.1.4 Weight Certificate 118
8.2 Finance Documents 118
8.2.1 Application Form for International Money Transfer 118
8.2.2 Draft 118
8.2.3 Application for Documentary Letter of Credit 119
8.2.4 Letter of Credit 119
8.3.2 Packing List 120
8.3 Transportation Documents 120
8.3.1 Shipping Note 120
8.3.3 Bill of Lading 121
8.3.4 Consignment Note(for Rail and Road) 124
8.3.5 Air Waybill 124
8.3.6 Parcel Post Receipt 125
8.3.7 Combined Transport Documents 125
8.4 Other Documents 125
8.4.1 Import License and Foreign Exchange Authorization 126
8.4.2 Certificate of Origin 126
8.4.3 Inspection Certificate 126
8.4.5 Customs Invoice 127
8.4.4 Consular Invoice 127
Chapter 9 Description of Commodities and Their Packing 134
9.1 Description of Commodities 134
9.1.1 Name of Commodity 134
9.1.2 Quantity of Commodity 134
9.1.3 Quality of Commodity 137
9.2 Packing of Commodity 141
9.2.1 Types of Packing 142
9.2.2 Particulars of Attentions 143
Chapter 10 International Cargo Transportation 151
10.1 Modes of Transport 151
10.1.1 Sea Transport(Ocean Transport) 152
10.1.3 Air Transport 153
10.1.2 Rail Transport 153
10.1.4 Road Transport 154
10.1.5 Inland Waterway Transport 154
10.1.6 Container Transport 154
10.1.7 Intemational Multimodal Transport 156
10.1.8 Parcel Post Transport 156
10.1.9 Pipeline Transport 156
10.2 Shipping and Forwarding Agents 156
10.3 Clause of Shipment 157
10.3.1 Time of Shipment 157
10.3.2 Port of Shipment and Port of Destination 157
10.3.4 Partial Shipment and Transshipment 158
10.3.3 Shipping Advice 158
10.3.5 Lay time,Demurrage and Dispatch 159
Chapter 11 Insurance（Ⅰ） 167
11.1 Risk Transfer 167
11.2 The Common Pool 168
11.3 Transportation Insurance 168
Chapter 12 Insurance（Ⅱ） 180
12.1 Marine Cargo Insurance 180
12.1.1 Types of Risks,Losses and Expenses Covered 180
12.1.2 Ocean Marine Cargo Clauses of CIC 183
12.1.3 Institute of London Underwriters and Institute Transit Clause 184
12.1.4 Major Types of Policy 184
12.1.5 Premium 185
12.3 Insurance Procedures 186
12.3.1 Insurance Clause in Sales or Purchase Contract 186
12.2 Insurance of Land,Air and Postal Transportation 186
12.3.2 Insurance in Practice 187
Chapter 13 Inspection,Claim,Force Majeure and Arbitration 195
13.1 Inspection 195
13.1.1 Importance of Commodity Inspection 195
13.1.2 Time and Place for Inspection 195
13.1.3 Inspection Authority 197
13.1.4 Inspection Standard 197
13.1.5 Inspection Certificate 198
13.2.1 Liabilities of Breach of Contract 199
13.1.6 An Example of Inspection Clause in Contract 199
13.2 Claim 199
13.2.2 Claim Clause in Contract 200
13.2.3 Claim 201
13.3 Force Majeure 203
13.3.1 Definition of Force Majeure 203
13.3.2 Consequences of Force Majeure 203
13.3.3 Cautions When Drafting the Clause 203
13.3.4 Cautions When Quoting the Clause 204
13.4 Arbitration 204
13.4.1 Definition of Arbitration 204
13.4.4 Arbitration Bodies 205
13.4.2 Characteristics of Arbitration 205
13.4.3 Location of Arbitration 205
13.4.5 Arbitration Award 206
13.4.6 Arbitration Fees 206
Chapter 14 Import and Export Procedures 215
14.1 Import Procedures 215
14.1.1 Import License 215
14.1.2 Sales Contract 215
14.1.3 Letter of Credit 216
14.1.4 Arrange Shipment and Insurance 216
14.1.5 Document Examination and Payment 216
14.1.6 Customs Clearance 216
14.2.1 Export License 217
14.2.2 Sales Contract 217
14.1.7 Taking Delivery and Reinspection 217
14.2 Export Procedure 217
14.1.8 Settlement of Disputes 217
14.2.3 Cargo Readiness 218
14.2.4 L/C 218
14.2.5 Export Declaration and Customs Clearance 218
14.2.6 Shipment 218
14.2.7 Insurance 219
14.2.8 Documentation and Payment 219
References 227