International Trade

Why do we need international trade? Because of the different climate or rough materials. If you want to have bananas you can buy Austrian, but if there are Austrian ones, they are very expensive. So we have to import bananas from a country in which they can be produced cheaper. Even if we need rough materials, which we do not have in Austria, we have to buy them from elsewhere.

Different stages of education cause that not every country can produce their own microchips or computers. Also an important fact is, that the less developed countries are not in the position to educate their inhabitants because they need all the money to feed them.

In international trade payment is very important. In some cases you don't know you're your foreign business partners and have to trust them, because there might be different laws and if there are problems with payment or with the goods it could take a long time to better this situation. If you want be sure that you get your money or your goods, than there is the possibility to open a confirmed and irrevocable letter of credit. This is sure for both partners and so no one might lose his money, because of misunderstandings.

Two other common forms of payment in international trade are the so-called D/P and D/A. In the first case you only get the documents against payment and in the second case against acceptance. You have to accept a bill of exchange which as such is not very common any more. There are several other forms of payment, but these are not as secure and important as the mentioned ones.

Business travel can bring you to your foreign business partners to meet them personally. But it is very important to plan such a trip not in the last moment, because if you travel hundreds of kilometres and your partner has no time for you, this is not very efficient. Try to make an itinerary to plan exactly where you are at which time, so partners at home know where you are, if they need some help or have to contact you.