International Trade: Key Concepts and Exercises

Exercises in International Trade

1. Define the Following Terms:

• Forwarding Agent: A person, agency, or enterprise engaged in the collection, shipment, and delivery of goods. For example, a company that arranges the transportation of products from a manufacturer to a retailer.
• Green Channel: The route followed when passing through customs at an airport or other port of entry for passengers who claim to have no dutiable goods to declare.
• Customs: The official organization responsible for collecting taxes (duties) on goods entering a country and preventing the entry of illegal goods.
• Freight: Goods transported in bulk by truck, train, ship, or aircraft.
• Invoice: A document listing goods supplied or services rendered, stating the sum of money owed for them.
• Intermodal Transport: The transportation of freight in an intermodal container or vehicle, using multiple modes of transportation (e.g., rail, ship, truck), without any handling of the freight itself when changing modes.
• Terminal: A set of facilities at ports and airports for handling passengers and goods.

2. Insurance Clauses:

Explain all the insurance clauses and their coverage. (This requires further information on specific insurance clauses, which are not provided in the original text. Common clauses include Institute Cargo Clauses A, B, and C, which offer varying levels of coverage.)

3. Minimum Insurance Coverage in International Trade:

What is the minimum insurance coverage required when paying for insurance in an international trade export?

4. Seller's Obligation for Insurance in C-Terms:

Does the seller have any obligation to pay for insurance in C-Terms? The seller pays for the main transport but does not assume the risk of loss or damage, or additional costs after customs clearance and loading of the goods. (Note: CIF and CIP are exceptions, where the seller *is* required to obtain insurance.)

5. Buyer's Request for More Coverage:

What if the buyer wants more coverage in their transaction?

6. Importance of International Insurance Coverage:

Why is it so important for insurance to have international coverage?

7. Buyer's Notice to Seller in D-Terms:

Does the buyer need to give notice to the seller in D-Terms? Why? No. The seller assumes all costs and risks to bring the goods to their destination.

8. Main Transport Payment in F-Terms:

Who pays for the main transport in F-terms? The seller makes the goods available to the carrier. The carrier, chosen by the buyer, is responsible for payment. Therefore, the seller does *not* pay for the main transport.

9. FOB Incoterm Example:

If a company in Spain wants to export goods from Barcelona port to Italy using FOB Incoterms, how would you write this down in a contract?

FOB Barcelona, ICC 2020 (Note: The year should be 2020, not 2010, as that is the most recent version of Incoterms.)

10. Delivery in CFR and CIF Terms:

When is delivery considered to be completed in CFR and CIF terms?