INTERNATIONAL BUSINESS AND TRADE

QUIZ ON EXPORTING, IMPORTING AND COUNTERTRADE

1. A firm based in California wants to export a shipload of finished

lumber to the Philippines. The would-be importer cannot get sufficient
credit from domestic sources to pay for the shipment but insists that
the finished lumber can quickly be resold in the Philippines for a profit.
Outline the steps the exporter should take to export to the Philippines
effectively.

ANSWER:
In order for the exporter to export to the Philippines effectively, s/he should do the
following:
a. The exporter should register first with the Client Profile Registration System
(CPRS) of the Bureau of Customs (BOC).

b. Using the BOC Portal, the exporter shall create a ticket for the submission of
documents (print out of Export Declaration, Commercial Invoice, Packing
List, and other documents as may be required by the BOC) to the Export
Division of the Port Loading.

c. The ticket created shall then be assigned by the receiving clerk to a Customs
Operations Officer (COO) of the Export Division pf the Port Loading.

If the Export Cargoes that were cleared for loading by Customs shall then
proceed to the payment of duties and other charges through Authorized
Agents Banks (AAB).

d. The export division of the Port of Loading shall then issue “Authority to
Load”.

REFERENCE: https://customs.gov.ph/guidelines-on-exportation/
 2. How do you explain the use of countertrade? Under what scenarios
might its use increase further by 2020? Under what scenarios might its
use decline?

ANSWER:
Countertrade provides a mechanism for countries with limited access to
liquid funds to exchange goods and services with other nations. It is a part of an
overall import and export strategy that ensures a country with limited domestic
resources has access to needed items and raw materials. Furthermore, it provides
the exporting nation with an opportunity to offer goods and services in a larger
international market, promoting growth within its industries. Countertrade might
increase further by 2020 if the economy grows and develop as if many companies
in different nations, especially small businesses grows and be successful. On the
other hand, the use of countertrade might decline because some uncertain events
will occur that will be risky for traders to trade goods and services.

3. How might a company make strategic use of countertrade schemes as a

marketing weapon to generate export revenues? What are the risks
associated with pursuing such a strategy?

ANSWER:
Countertrade can be a strategic weapon for businesses because it provides
ease of access into competitive market, high efficiency and utilization of resources,
and higher sales. As a result, these benefits could translate into financial numbers
such as export revenues. However, this strategy comes along with risks. Since
companies generally prefer to countertrade to those companies who have solid
financial background, and so small and medium-sized companies who are lacking
of global network of operations will likely to inefficiently utilize their resources
and generate lesser profit.