...HOW TO ACCESS TRADE FINANCE A GUIDE FOR EXPORTING SMEs EXPORT IMPACT FOR GOOD © International Trade Centre 2009 The International Trade Centre (ITC) is the joint agency of the World Trade Organization and the United Nations. Street address: ITC, 54-56, rue de Montbrillant, 1202 Geneva, Switzerland ITC, Palais des Nations, 1211 Geneva 10, Switzerland +41-22 730 0111 +41-22 733 4439 itcreg@intracen.org http://www.intracen.org Postal address: Telephone: Fax: E-mail: Internet: HOW TO ACCESS TRADE FINANCE A GUIDE FOR EXPORTING SMEs Geneva 2009 ii ABSTRACT FOR TRADE INFORMATION SERVICES 2009 F-04.03 HOW INTERNATIONAL TRADE CENTRE (ITC) How to Access Trade Finance: A guide for exporting SMEs Geneva: ITC, 2009. x, 135 p. Guide dealing with the processes involved in obtaining finance for exporting SMEs – explains the credit process of financial institutions from pre-application to loan repayment; examines the SME sector and barriers to finance, as well as the risks in lending to the SME sector as perceived by financial institutions; addresses SMEs’ internal assessment of financial needs, determining the right financing instruments, and finding the appropriate lenders and service providers; discusses how to approach and negotiate with banks; tackles cash flow and risk management issues; includes examples of real-life business plans and loan requests; includes bibliography (p. 134). Descriptors: Trade Financing, Export Financing, Export Credit, Risk Management...
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...C H A P T E R 19 International Trade Finance Financial statements are like fine perfume: to be sniffed but not swallowed. —Abraham Brilloff. LEARNING OBJECTIVES ◆ Learn how international trade alters both the supply chain and general value chain of the domestic firm, thereby beginning the globalization process in the trade phase. ◆ Consider what the key elements of an import or export transaction are in business. ◆ Discover how the three key documents in import/export, the letter of credit, the draft, and the bill of lading, combine to both finance the transaction and to manage its risks. ◆ Identify what the documentation sequence is for a typical international trade transaction. ◆ Learn how the various stages and their costs impact the ability of an exporter to enter a foreign market and potentially compete in both credit terms and pricing. ◆ See what organizations and resources are available for exporters to aid in managing trade risk and financing. ◆ Examine the various trade financing alternatives. The purpose of this chapter is to explain how international trade, exports and imports, is financed. The contents are of direct practical relevance to both domestic firms that just import and export and to multinational firms that trade with related and unrelated entities. The chapter begins by explaining the types of trade relationships that exist. Next, we explain the trade dilemma: exporters want to be paid before they export and importers do not want to pay until...
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...5AC008- Final Time-Constrained Assessment Question 1 Part (a) Advantages of SWIFT system: * Considering the circumstances outlined in the case study Super Sparkles could benefit from SWIFT because it reduces delays in payment processing. According to Chris Marshall (2003) SWIFT offers a fast, efficient and secure method of transmitting payments in most major currencies, with urgent payments available the next day. I believe this is important to Super Sparkles who trade globally and security is vital for them. * Mr Day has concerns due to cash flow problems resulting from financing his debtor book. According to Groves (2011) SWIFT allows Super Sparkles funds to arrive and be available to the beneficiary more quickly. Also this improves liquidity and this is an advantage for Super Sparkles as their working capital is financed within the company’s cash flow. However recently there has been pressure on the account and SWIFT could provide liquidity and free up funds to be used for working capital. * According to Groves (2011) SWIFT saves interest charges. Disadvantages of SWIFT * Considering Super Sparkle one major disadvantage that stands out seems to be the fact in this system, the payments need to be converted between currencies. According to the case study, Mr Day has concerns about how the movement in exchange rate will affect the company’s financial position. Also he is worried about the impact currency rate fluctuations will have on Super Sparkles own...
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...International Trade and Finance Speech What happens when the dollar-value of goods and services imported into the U.S. exceeds the dollar-value of goods and services exported from the U.S. to other countries? When the dollar-value of goods and services imported into the U.S. exceed the dollar-value of goods and services exported to other countries from the U.S. it creates what is called a surplus. It is very important that we attempt to make every effort possible to keep it balance and limit the amount of imports as best as we can. Having a surplus of desired imports can create a lower price to the U.S. consumer and have a positive effect on the employment rate of the country who we imported from as it will keep their citizens working. A great example of something that the U.S. both imports and exports is seafood. In the many of the states along the coasts, specifically Washington, Oregon, and Maine there is a huge presence of domestic fishing boats that spend many months of the year out at sea collecting crabs and other seafood which the U.S. uses for both domestic sales and export. On the same token there are several different types of fish that the U.S. chooses to import from outside of the U.S. for sale in our domestic markets. It is very likely that if you are purchasing tilapia at the your local Whole Foods Market that is was imported from Chile or was farm raised outside of the United States. Albeit a fantastic option to have so many options when selecting what type of...
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...International Trade and Finance Speech Name ECO/372 Date Professor International Trade and Finance The current state of the U.S. economy is improving according to recent numbers that reflect a decrease in unemployment, coupled with an increase in both interest rates and GDP. All three factors are primary indicators in determining the wellbeing of an economy. The economy probably will never reach the numbers that we are accustom (pre 2008) in which real income is always on the rise, employment is below 5% and real GDP increases 4% each quarter. Unfortunately, we as Americans might have to get use to a new normal. The new normal is more of a reflection on our economic dependence on the global economy. The U.S economy is like any other major power whereas our growth will be somewhat dependent on the ability for other countries to afford our exports. While the U.S. is currently experiencing a growth in our economy, the same cannot be said for most of the world. In particular, the countries that we export a high number of goods and services are experiencing a slower recovery. Countries like Europe, who is our largest exporter, don’t have the revenue to match are current spending power. This will result in a budget deficit with a surplus in imports and a reduction in exports. When you have a higher budget with less revenue coming in then the amount going out, there will be a debt. This is bad for business because it will lead to higher unemployment. The automobile industry...
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...International Trade and Finance ECO/372 July 30, 2012 Alexander Heil International Trade and Finance When the US has a surplus of imports it affects the companies in the US that make the same product. A study sponsored by the solar power industry has concluded that the United States ran a trade surplus of $1.88 billion in solar technologies in 2010, as exports of raw material and factory equipment for the solar sector outpaced imports of finished solar panels. China has a rapid rise in solar panel manufactures, which now represent 58 percent of the world’s solar panel manufacturing. While American solar panel producers are struggling and filing for bankruptcy (Bradsher, K. (2011). The following examples will show a sequence of events to describe the impact of trade on the GDP; US demand for imports increase, this increases US demand for pesos, with increased US demand for pesos they increase the value of the peso. Americans purchasing more imports will cause the GDP and employment to decrease. The change in the exchange rate will correct the situation. When the US exports to Mexico it will reverse the affects and US demand will increase (Infoplease.com (2012). Tariffs are taxes of imported goods; this increases the cost of the good in the domestic market. Domestic producers benefit from tariffs because they receive higher prices for their goods and the government benefits by collecting tax revenues. Less of the good is produced, and consumers pay higher...
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...International Trade and Finance Speech By: Cleveland Ivery Class: ECO/372 Version 4 Date: 11/23/2013 Instructor: Spyridon Patton Good afternoon ladies and gentlemen of the house. I would like to thank you for the opportunity to speak to you today on such an important topic of our economy. I will attempt to simply address concepts and terms which focus on international trade and foreign exchange rates. Much of the discussion will focus around the surplus of imports brought into the U.S., and the impact it has on the U.S. businesses and consumers involved. I will also describe the effects of the international trade to GDP, domestic markets, and university students. It is important to understand how the government’s choices, in regards to tariffs and quotas, affect international relations and trade; so I will describe the interactive relationship in regards to tariffs and quotas, and how the government’s choices affect international relations and trade. We will also understand how foreign exchange rates are determined, and identify the reasons the U.S. does not restrict goods from China and minimize imports from other countries. The U.S. imports many goods from various countries around the globe; and the trading of these goods plays an important role in the...
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...International Trade and Finance In some ways the United States and Japanese are the biggest competitors in the international trade because both countries are producing many of the same goods. For example, Toshiba’s biggest competitor in the personal computer niche is Dell. Countries use international trade in order to get higher GDP results. A country will best utilize their expertise in a certain good in order to trade for other goods that they may not be able to produce as well. In this essay, the advantages of international trade will be closely examined, including the risks of exchange rates and barriers in trade. Comparative Advantage In the international trade the role of comparative advantage is enormous and it can be referred as the capability of a country or company to manufacture a particular good or service at a lower opportunity cost than the other competitive country or company. Exchange Rate Risk The exchange rate is best described as what one country currency will be worth when converted to another countries currency. The threats of exchange rates mostly effect organizations that are actively engaged in international export and import. Price of commodity influences the strength of currency in a given market. Refer to the chart below to better understand. When a country’s commodity experiences a lower than expected market demand, the demand for that countries currency will also go down. Internal forces may be a cause for the country’s decrease...
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...International Trade and Finance The United States imports many goods and services, as well as exports goods and services in the global economy. International trade affects the United States’ Gross Domestic Product (GDP) and domestic markets. The government can affect international trade by imposing tariffs and quotas on imports. Foreign exchange rates affect how much is brought and sold abroad. International trade is beneficial to the United States, but can sometimes be seen as unfair competition to the American workforce and businesses. Trade Surpluses and Deficits A country has a trade surplus when exports exceed imports. This situation will initially create wealth for the country, but in the long-run the country’s currency appreciates causing the cost of its goods to other countries (exports) to become more expensive; which evens out the trade imbalance. After World War II the United States was in this situation, becoming an international lender to foreign countries (Colander, p. 449). This created wealth for the U.S. because of the flow of interest payments, instead of having to pay income on its own debt. A trade deficit is when a country imports more than it exports. The United States is currently experiencing this type of trade imbalance. The U.S. is consuming more than it is producing, and they are financing this consumption by selling off assets such as stocks, bonds, real estate, and corporations (Colander, p. 448, 449). Effects of Excess Imports When the...
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...International Trade and Finance ECO372 Good evening ladies and gentlemen: Today I will be speaking to you about international trade and foreign exchange rates. Throughout history, there have been many market structures and systems, as well as trade amongst international countries and colonies. As all of you already know, imports can be brought in from pretty much any country. During the process, the government will usually set a price ceiling and price floor for producers to protect them as a whole. For example, if there are farmers importing tomatoes from multiple countries into the United States, there will be a surplus. There is a surplus when the supply of the imported goods is greater than the demand. As a result, a countries export and import levels should be controlled by government policies. If there were no trade regulations applied to imports, the surplus may turn into a deficit, negatively affecting farmers who will lose money because of the decrease on the Gross Domestic Product. The Gross Domestic Product or GDP is the total amount of goods and prices a country produces in a one year span. International trade influences the GDP by expanding our markets with the imports of goods and services that are not readily available to us here. Some of these goods and services include coffee, bananas, oil, and automobiles from Germany and Japan. The imports of these goods increase our economy GDP, but also allow us to export our own products and...
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...E C O N O M I C I S S U E S 1 Growth in East Asia What We Can and What We Cannot Infer Michael Sarel I N T E R N A T I O N A L M O N E T A R Y F U N D E C O N O M I C I S S U E S 1 Growth in East Asia What We Can and What We Cannot Infer Michael Sarel I N T E R N AT I O N A L M O N E TA RY F U N D WASHINGTON, D.C. ©1996 International Monetary Fund ISBN: 1-55775-607-4 Published September 1996 Reprinted November 1996 To order IMF publications, please contact: International Monetary Fund, Publication Services 700 19th Street, N.W., Washington, D.C. 20431, U.S.A. Tel.: (202) 623-7430 Telefax: (202) 623-7201 Internet: publications@imf.org Preface The Economic Issues series was inaugurated in September 1996. Its aim is to make accessible to a broad readership of nonspecialists some of the economic research being produced in the International Monetary Fund on topical issues. The raw material of the series is drawn mainly from IMF Working Papers, technical papers produced by Fund staff members and visiting scholars, as well as from policy-related research papers. This material is refined for the general readership by editing and partial redrafting. The following paper draws on material originally contained in IMF Working Paper 95/98, “Growth in East Asia: What We Can and What We Cannot Infer From It,” by Michael Sarel, an Economist in the Fund’s Southeast Asia and Pacific Department. It has been prepared by David D. Driscoll of...
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...Section 1: Question A Definition of Cross-border Merger and Acquisition A merger is characterized as the union of two associations into a single organization. An acquisition is the purchase of one association from another when the acquirer keeps up the control. There are local M&As and cross-border M&As. Local M&As are directed inside the same country, while cross-border M&As involve two companies from two different countries. A cross-border M&A is characterized as activity in which an enterprise from one country purchases the entire resource or controlling rate of an enterprise in another country. Mergers and acquisitions (M&As) are a basic part of the corporate rebuilding handle, and have created an unlimited scholarly writing in the course of recent decades. (Mulherin & Audra L. Boone, 2000) Cross-border mergers and acquisitions (M&As) have expanded significantly in the course of the last two decades. Given this fast increment, completely understanding the determinants and ramifications of mergers and acquisitions has been high on the plan for both strategy producers and scholastics. (Hijzen & Holger , 2006) Figure [ 1 ]: Three Stages of Cross-Border M&A The process of acquiring an enterprise has three common elements: 1. Identification and valuation of the target 2. Completion of the ownership change transaction 3. The management of post-acquisition transition The management of post-acquisition transition ...
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...International Trade and finance speech International Trade and finance speech It is a general inaccuracy with the meaning of importing goods to America is the expenditure of American jobs. In reality, imports provide many job creations on a huge scale; the increased economic action associated by means of every step of the import advancement millions of jobs in the U.S are helped increase. The Heritage Foundation states that with the intention of this over half of American jobs are maintained by imports like clothing as well toys and other goods from China. These jobs are held in fields like transportation, retail, wholesale, construction, and finance. Appreciative the encouraging is role of imports with revere to jobs, in addition to their supplementary benefits, is critical to adopting the approved trade course of action and as a result to strengthen the economy. According to the Census Bureau, the United States imported just about $382 billion of merchandise from China in 2010, approximately 20% of the entire American imports that year. A number of people quarrels that massive quantities like this imply that the U.S.is losing a lot of employment to China. Variations of this disagreement are found and all are seriously blemished. First they depend on false information; next they get the wrong idea of the fundamental impact of selection and opposition, and finally confuse the impacts of modern trade with a solitary nation (more often than not China) by means of the multi-generation...
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...INTERNATIONAL TRADE & FINANCE SPEECH 1 International Trade & Finance Speech Jose L. Sandoval Jr. ECO/372 September 30, 2013 Howard Blitz INTERNATIONAL TRADE & FINANCE SPEECH 2 International Trade & Finance Speech Good evening Ladies and gentlemen of the press; this evening I will define what economics is and when there is a surplus of imports brought into the U.S, The effects of international trade to Gross Domestic Product (GDP), domestic markets and university students, Government choices in regards to tariffs and quotas affect international relations and trade, What are foreign exchange rates, How are they determined, Why doesn’t the U.S. simply restrict all goods coming in from China, and final Why can’t the U.S. just minimize the amount of imports coming in from all other countries. The economics is the study of how people choose to use resources. Resources are considered as time and talent people have available, the land, buildings, equipment, and other tools on hand, and the knowledge of how to gather them to create useful products and services. The choices that are more important are how much time to devote to work, to school, and time to relax or spend with family. Also what are important are how many money to spend and how much to save, how to put together resources to produce goods and services, and how to vote and shape the level of taxes and the role of government. When a surplus of imports brought into the United State the surplus and deficit in the...
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...International Trade and Finance Keith De Luca ECO/372 March 25, 2013 Dr. Godwin Quashigah International Trade and Finance Good afternoon ladies and gentlemen, my name is Keith De Luca, Speaker of the House, United States Senate. The U.S. economy has been hit hard since the attacks on the World Trade Center’s 12 years ago. It’s been one of the worse financial states of our economy since the Great Depression, but as of 2009 we have been on the up side and looking at a growing economy. When there is a surplus of imports brought into the United States, there comes advantages and disadvantages to our economy. “The increased economic activity associated with every stage of the import process helps support millions of jobs in the U.S” (Scissors, Espinoza, & Miller, 2012). This happens by supplying jobs in all aspects of the business market from transportation, construction, retail and it keeps our ports running strong. Providing jobs throughout the United States is a great advantage of having imports coming to our country. On the negative side, the higher number of imports that we have shows a down side in our own manufacturing sector. The cost of materials and manufacturing overseas impacts what we can produce here. “Auto sales since the depths of the recession have increased more than twice as fast as employment in auto parts in part because of the rapid growth in auto parts imported from China—the fastest-growing source of U.S. auto-parts imports” (Scott, 2012)...
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