Exchanging products and services across international borders is called International Trade.

It is like a bridge between nations spanning land, sea or air. Selling goods and services abroad is called ‘Export’ and it is often more complex than selling in the home market.

Exported goods are sold to buyers who are likely to be less well known to the seller than are buyers in the seller’s own country. In international trading, there is the problem that the legal system, the language and trade customers are all different and exporting tends to entail a greater risk of non-payment than domestic sales.

Additionally, the time taken for goods to pass from seller to buyer is generally longer for exports than for goods sold at home. This poses a problem because buyers prefer not to pay until they have inspected goods, while suppliers want payment on or before shipment.

Exporting also involves payment in a currency foreign either to the buyer or to the seller or to both; and hence entails exchange risk. Any movements in the relative values of currencies which take place between the date a contract is signed and final payment will mean that the seller obtains less (or more) in terms of his own currency than expected; or that the buyer has to pay more (or less) than planned, and exchange control regulations may exist in both the seller’s and the buyer’s country.


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