Analytical Essay on International Trade: International Shipping Case Study

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Analytical Essay on International Trade: International Shipping Case Study

Introduction

To begin with, the law is a term where there is rules and can also be considered as a set of policy that the individual should have to follow. Now, when it comes to international trade law, it is mainly focused on various aspects of both imports and exports shipping of goods. It is necessary to have enough knowledge of what and how is international law applied to goods importer and exporter. This report is about evaluating the scenario regarding the good shipping by the sea where international trade law will be applied with the right recommendations towards the shippers. Both parties must come up with the proper execution of how international trade law will be applied to whatever the goods and services are being shipped to other countries. Knowing that nowadays, lots of traders have no enough knowledge of how the trading internationally being processed since they did not teach either by their local government when it comes to trading (Cohen, 2019).

This is just one reason why there are issues appeared during the process such as the lack of documented details of cargo, lack of legal terms implied, and the lack of regulations in transporting the goods or service. The local government has its role to conduct proper training if necessary to those who are in the business of trading. This is to improve the activities within international trading to listen to the risks in trading of goods, leading the activities to be globalized and increased its recognition. Hence, enough knowledge is necessary and is mandatory especially when it comes to the terms and regulations under the international trade law of shipping different types of goods and services (Micklitz, 2000).

There are different aspects of international law that should be known by both importers and exporters. But before proceeding with the in-hand scenario, it is important to first specify the four levels of relationships about this law. The first relationship is called unilateral, the bilateral is the second, plurilateral is the third, and the last one is multilateral. For the contractual details, there should be enough understanding of how these relationships abide between the two parties to clarify everything and understand what should be agreed or not and compile the details clearly on the agreement based on the international trade law aspect (Palmeter, 1994). It is required to have a deep evaluation first and analyze the situation before the signing of the mutual agreement, to have a benefit about both parties if both of them classify the options about the financial institutions together with the shippers that would help them in the decision making process. All information given in this case study will be done following the relevant information supported by valid sources and peer reviews.

Law of International Trade

International trade law is field has good not only deeper and not only more technically complex but also much broader. It is not just about the World Trade Organization (WTO), it’s not just at the multilateral level, it’s also at the level of free trade agreements and the United States has entered into much exciting news including ones with Korea and Colombia and Panama, currently negotiating one with the Pacific allies the trans-pacific partnership and potentially a new one with the European Union. For the particular levels of international trade law mentioned above, it is necessary to have an evaluation of each section to have proper indication and get significant information on how those four relationships work by giving its short definitions. First is the unilateral relationship mainly signifies the measures towards the national law. The second relationship involves the interactions of the two countries when it comes to the shipping of goods. The third relationship is the interaction of more than two countries and having an interaction of various countries belongs to the fourth relationship.

Knowing that the term law abides a different set of rules and regulations where the shippers should take into consideration seriously. Both private and public companies and sectors followed international trade law. There is a relation arises between international trade law and economic liberalism. Comprising the financial system and the economic system involves in the process of trading from one country to another, the law works on both parties in a complex process where both parties should agree on the financial terms and how the currencies work. Since, in every country, there was a different currency that evolves such an example, for the US, the US dollar imposed on shipping costs where the traders on the other party also have its country currency used on the trading process. These all undergo in the law system of international trading. Below is the execution diagram of how the international trade law being applied during the process of shipping of both parties.

International Trade law Diagram

Bill of lading that will be given to the carrier to the seller

Carrier

Seller exporter

Carriage contract

Bill of lading

Buyer/importer

SALES CONTRACTThe buyer will confirm the bill of lading

Bill of lading sent from seller to the buyer

International trade law Contracts

Proceeding in this case, it is important first to know those various types of contracts that the shippers either exporter or importer have enough knowledge on how these contracts can be applied and what are their significant terms to be followed based on the international trade law. This should be done accordingly to avoid any violations and to have the proper agreement of both parties internationally and professionally.

Commercial Contracts

This contract is mainly focused on both the sale and purchase of both services and goods. The documentation of these contracts forms in a way that both sales and purchase terms are completed under the legal process for both parties and all information bound for both importers and exporter’s agreement which can be formal with the proper assistant of the government.

International trade contracts

This contract abides both rules and regulations that have to be implied for both importers and exporters of goods that certainly indicate the terms of shipping process such its insurance, delivery, and together with the cost (freight). There is an indication of exporter control about the local government, its insurance companies, etc. that covers under the transportation process or either goods or services.

Export sales contracts

This contract signifies how the risks being classified within the transition and which party involved. The exporter in this contract should professionally follow the payment terms in which, there is authenticity and validation that the exporter can pay or eligibly have a strong modification of paying the amount imposed based on the terms and conditions regarding payment process of goods or services.

Incoterms

This is all about the rights and the obligations of both importers and exporters where all issues or risks about the transaction of business, shipping, insurances, etc. will be explained to both parties to have safe and efficient shipping.

Improving international trade activity

Development upgrading international trade permits nations and ally to grow by corrupting nature and the world’s assets, to reach the top and get most cash-flow. This implies for certain nations, the financial extension on account of international trade comes to the detriment of environmental quality. Hence, it is important to actively get some strong affirmation of improvement regarding the international trade law for both parties. Due to the motivation of countries to have a higher value of creating higher recognition of international trade, most of them used the free trading that can be accessed online using the internet (Delany, Signal, & Thomson, 2018).

This happened in different countries and some of them also appeared to be completely free where the shippers accommodate zero currency and failed to follow the process of trading law internationally. Also, it founds that other countries tried to reduce their trade barriers to having the increased trading process of goods or services promotion. This has jumped down dramatically since the government adopted this certain process just come up to the conclusion of being recognized globally. For instance, even the United States and Europe started to have a full free trade system, where the occurrence of WTO leadership is also started to impose in the government (Schoenbaun, 1992). Enhancing the multinational trade agreements those partnerships of various countries have arisen rapidly and contributes $160 billion profit for both importers and exporters.

Trade Scenario

My chosen scenario is all about the shipping of clothing to the Philippines from the United States. The shipping process is through the sea. This process of delivery will take a long period since we only use the sea shipping process. Shipping various types of clothes to the Philippines include competitive rates that are applied as an exporter. Trading to the Philippines will include the proper agreement of terms and conditions, implying on what is being included on the documents and what is being agreed upon the process of shipping such as the costs, the time duration, payment terms, etc. Hence, we need certain documentation about this scenario.

[image: Image result for shipping containers to sea from US to philippines]

Figure 1: Philippines Container Ship

[image: Image result for container ship of US]

Figure 2: US Container Ship

Figure 1 is the cargo ship of the Philippines where the goods will be shipped and the figure 2 s the cargo ship of the United States where the goods will be shipped to the Philippines.

Trade Commodities

[image: C:UsersUSERDesktopiez7yb2zgncl2effvxxvtnqcnoi4krlfxjxiurkz1iwbhwajrdpfnvxzywczsjwx-.jpg][image: C:UsersUSERDesktopclothing.jpg]

Documentations

In my chosen scenario, here is the possible documentation to be included in various contracts that are commonly applied in each trade:

Initiation to the tender letter –This will be informing the possible companies/firms to bid to conduct their bids. This is a letter type paper that inviting them to the biding process.

Terms of reference – This is including the authentic source of persons and backgrounds or certain possible bidders that should firmly give their information background for validation of their capabilities to attain the bidding or the trading process. This is important since we all know that in the trading process regarding goods and services, there is always scammers that occurred and it should be avoided, therefore background checking is necessary (Aliaj & Mekaj, 2019).

Form of tender – this will be given to the possible firms as a form of tender.

Draft Contract –This is a form where all terms have outlined and to make the transactions clear and also making sure that everything on documents is read and the firm understand everything on it. This will allow both parties to have soft and no-hassle negotiations.

Instructions to bidders – This is a form of guidelines to possible bidders where they have to understand how the process to be and what should be considered. This includes all steps that served as their guidelines.

Bid datasheet – this is all about the overall data that the bidders should read. In this sheet, all schedules and the evaluation of bidding will be included.

Specifications – this indicates the time frame of everything such as working on projects, the use of materials needed and all conditions regarding the project.

Schedule of rates and bills of quantities – this indicates the agreed rates or prices for each work done or for each good that the bidders should have and also it includes that bills to be agreed upon the outlined draft.

Carrier Selection Recommendations

These recommendations are before the selection of carriers that will handle the sea transportation process of goods that would ship from the United States to the Philippines.

Stowage -Hence, we are only shipped through the sea, it is necessary to consider the volume of the cargo to be delivered. The volume should be known so that it could not add the costs of shipping, knowing that the higher the volume of the cargo is also the higher the cost it may have.

Value –It is also important to consider that the cargo should have balance quantities since it is in a low-cost value from the United States and it should not affect its costs on shipping due to its weight value.

Quantity –Since it is through sea transportation, so consider that there will be lots of clothes to be shipped to the Philippines, so we are making sure that we can deliver lots of clothes in just one shipping or one transaction.

Costs – Choosing a carrier should apply critical thinking and one of the most required factors in decision making is the cost. We have to make sure that the cost of the carrier is efficient as we have to make sure that everything is under control and well-balanced.

Reliability and safety concerns – this is the important concern that we have to firmly considered in choosing the carrier. Asking if this is safe to transport? Is this capable of any risks that might happen in the sea, hence, these questions should be cleared in a way that the chosen carrier is trusted enough to carry our clothes goods?

With the above-listed points in considering choosing the best carrier in transporting the goods, as an exporter, I will make sure that everything complies under the international trade law where the documents were mentioned properly based on the terms and regulations on proper shipping process to the other country (Philippines). Hence, the above points are highly recommended to be followed and should apply during the process of transportation of goods by sea.

The importer’s checklist

Shipping the clothes goods to the Philippines will include checklists that would lead the importers to classify which documents are included or missed out. Hence, below are the checklists to be considered:

Before shipping process

A commercial invoice for both the buyer and the seller. This should not be missed since it is a validation of rates and prices applies to the goods being delivered.
The return or warranty process if any.
The collaboration of both parties regarding the agreed agreement during the process of trading.
The custom invoice where stated all information on clothes goods basically its prices, freight costs, weights, payment method, insurance included, the volume of each cargo, etc.
Packing slip of the goods. This should be included to have basic proof of orders from the designated buyers from the Philippines.
Marking the clothes goods as the country origin.
Making sure to apply the licensed customs broker.
Make sure that transportation (carrier) obtained insurance.

After shipping process

Confirming that the shipment is done based on the time duration.
Confirm that all documents are received by the buyers
Make sure that you know the arrival time of the carrier
Make sure to know the information of the carrier such as the phone number, trailer number, and everything that could connect to them.
Make sure to know the inland shipping of the carrier before the designated location in the Philippines.

Conclusion

Transporting and exporting goods and services is not easy, it needs proper decision making and most of all, and it should comply with the provision and the terms and regulations under the international trade law. With the cooperation of local governments of both parties, all activities were managed according to the international trade process while making sure that it could also motivate the other nation or country to participate in the trading process worldwide. The documentations and the different types of contracts under the international trade law were imposed based on the scenario or situation of the shipping system of both parties. In this business report of international trading law, the learned knowledge is mainly how both importers and exporters apply the set of rules and regulations when importing or exporting the goods. Both parties performed deep analysis on dealing with various documents and contracts under the provisions of international trading law complying with all aspects of information that been documented from choosing the carrier, transportation method, paper guidelines in before and after shipping and all required checklists in performing the process of delivery.

References

Aliaj, K., and Mekaj. G. (2019). Legal Aspects of International Trade. Research Gate. Retrieved from https://www.researchgate.net/publication/330066648_Legal_Aspects_of_International_TradeDOI: 10.21113/iir.v8i2.444.
Cohen, H. (2019). What Is International Trade Law For? American Journal of International Law, volume 113, pp. 326-346. Retrieved from https://www.cambridge.org/core/journals/american-journal-of-international-law/article/what-is-international-trade-law-for/F8C98A6B262B92A3C97632E402D01EDC. DOI: https://doi.org/10.1017/ajil.2019.4
Delany, L., Signal, L., and Thomson, G. (2018). International trade and investment law: a new framework for public health and the common good. BMC Public Health, volume 18, Article number: 602. Retrieved from https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-018-5486-6
Micklitz, H. (2000). International Regulation on Health, Safety, and the Environment – Trends and Challenges. Journal of Consumer Policy, volume 23, pages3–24. Retrieved from https://link.springer.com/article/10.1023/A:1006302721189.
Palmeter, D. (1994). International Trade Law in the Twenty-First Century. Fordham International Law Journal, Volume 18, Issue 5, Article 9. Retrieved from https://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=2560&context=ilj.
Schoenbaun, T. (1992). Free International Trade and Protection of the Environment: Irreconcilable Conflict? The American Journal of International Law, Vol. 86, No. 4 pp. 700-727. Retrieved from https://www.jstor.org/stable/2203788. DOI: 10.2307/2203788.