Globalisation Of Trade: International Trade: Challenges Of International Trade To Exporters And Importers (Copy)
Cheat Sheet: 1.2 Challenges of International Trade to Exporters and Importers
| Challenge | Explanation | Example |
|---|---|---|
| Distance | Long distances increase delivery time & costs | Exporting furniture from Pakistan to USA takes weeks |
| Language | Miscommunication in contracts/negotiations | Chinese exporter struggles with English contract terms |
| Methods of Payment | Risky if unclear or insecure | Disputes over advance payment vs. letter of credit |
| Documentation | Complex paperwork required for customs clearance | Exporter must prepare bill of lading, certificate of origin |
| Transport | Costs and delays due to weak infrastructure | Shipping delays at congested ports |
| Customs Duties | Import tariffs raise costs | EU imposing duties on textile imports |
| Non-Payment | Importer may refuse or delay payment | Exporter not paid after goods delivered |
| Currencies | Exchange rate fluctuations affect profit | USD/PKR fluctuation reduces exporter’s earnings |
| Foreign Exchange Rates | Volatile rates can make exports uncompetitive | Rising rupee makes exports more expensive |
| Competition | Intense global competition lowers profit margins | Local shoes compete with cheaper Chinese imports |
| Different Legal Systems | Varying laws complicate trade contracts | EU product safety laws stricter than Asian exporters expect |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Commerce Full Scale Course
Grouping of Challenges
| Category | Challenges |
|---|---|
| Logistical | Distance, transport, documentation |
| Financial | Payment methods, non-payment, currencies, exchange rates |
| Legal/Administrative | Customs duties, different legal systems |
| Market-related | Competition, language barriers |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Commerce Full Scale Course
Summary
| Key Idea | Takeaway |
|---|---|
| International trade is profitable but complex. Exporters and importers face logistical, financial, legal, and competitive challenges that can delay goods, increase costs, or reduce profits. |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Commerce Full Scale Course