Chapter2 - CHAPTER 2 DEALING NEGOTIATING AN DEALING IMPORT...

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1 CHAPTER 2 DEALING – NEGOTIATING AN DEALING – NEGOTIATING AN IMPORT – EXPORT CONTRACT IMPORT – EXPORT CONTRACT Content : Foundation Negotiating an import –export contract Forms of negotiating a foreign trade contract.
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2 I - FOUNDATION I - FOUNDATION 1 – Researching and approaching market 1 – Researching and approaching market 1.1 – Product research Usage, quality, price, design, packaging. Local habits, consumer tastes Product life cycle. Current situation of production : material, season, manufacturing ability, technical level, operation skills.
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3 1.2 – Market research Commercial guideline, method, policy. Stable frames of economy, politics and trade. Currency system, credit system. Transport system. Tax regulation, policy of import – export tax . Market capacity.
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4 1.3 – Choosing Right Partner: 1.3 – Choosing Right Partner: Legal status. Finance power, technology, trade field. Business prestige.
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5 2 – Calculating foreign currency rate: 2 – Calculating foreign currency rate: 2.1 – Export exchange rate 2.1 – Export exchange rate (Kx): the amount of home nation’s currency spent for a unit of foreign currency in term of FOB price. Total export cost K(x) = Total export turnover
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6 Notes: Total export cost in home currency including: purchasing, packaging, inland transport, customs fee, inspection, delivery, banking interest rate, tax, other charges,… Total export turnover in foreign currency counted on FOB price. If Kx < current exchange rate, should export. If Kx > current exchange rate, should not export.
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7 2.2 – Import exchange rate 2.2 – Import exchange rate (Kn) (Kn): the amount of home nation’s currency collected when spending 1 unit of foreign currency to import cargo. Total import turnover Kn = ──────────────────── Total import cost
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8 Notes: Total import turnover in home currency (Quantity x Selling Price) Total import cost in foreign currency including: purchasing value under CIF price, inland circulation fees ( transport, warehouse, loading/ unloading,. ..), customs fee, inspection, delivery, banking interest rate, import tax and others, and other charges. If Kn > current exchange rate, should import. If Kn < current exchange rate, should not import.
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II – NEGOTIATING AN IMPORT – II – NEGOTIATING AN IMPORT – EXPORT CONTRACT EXPORT CONTRACT 1 – Concept: 1 – Concept: The process in which at least two parties negotiate the terms and conditions of purchasing or selling goods in order to meet the goal of signing the sales contract. (By Dr. Doan Thi Hong Van – Ky thuat Ngoai
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This note was uploaded on 12/17/2011 for the course B.A 13 taught by Professor Cr during the Spring '11 term at Haverford.

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Chapter2 - CHAPTER 2 DEALING NEGOTIATING AN DEALING IMPORT...

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