Surely you have met such an abbreviation as the WTO. What does it mean? Foreign trade operations, foreign trade association. In the article we will thoroughly analyze the operations. Let's see what foreign trade turnover is. Consider their essence, varieties, stages of implementation and much more important on the topic.
What is this?
Foreign trade operations is a set of certain actions of counterparties (these are foreign partners in the ongoing WTO) of different countries. It is aimed at preparing, committing, as well as ensuring trade exchange. The WTO here will characterize foreign economic activity, which is the exchange of goods in material form and services that are associated with the implementation of this trade.
Foreign trade operations will be carried out only on the basis of ongoing transactions. WTO deal - the name of a commercial contract concluded with a foreign counterparty. This is the main tool, the main way to carry out foreign trade operations.
And the main element of the WTO is a contract. As a standard, its subject can be a sale, rent, exchange,execution of contract work, etc.
WTO Peculiarities
Conducting foreign trade operations is the main content of foreign economic activity (foreign economic activity). The peculiarity of such operations is the use of certain technologies, involving the use of specific methods, techniques, methods of cooperation, organizational measures and technological means that are unique to this area.
If we turn to official legal and regulatory acts, we will see several names of the WTO at once - export-import, foreign economic, foreign trade operations. All these concepts are related. The word "operation" in foreign economic activity means a process that is professionally implemented, stretching over a certain period of time.
Foreign trade turnover - these are certain actions carried out in strict sequence, interconnected. However, some of the processes can be carried out in parallel. Actions are carried out with the direct participation and guidance of specific employees of the export side (for example, Russian entrepreneurs) necessarily in cooperation with a counterparty - a foreign partner (for example, a French buyer). Foreign trade operations always take place according to a predetermined plan. Their goal is a certain commercial result.
When organizing a foreign trade operation, it is very important to work out all the terms of the contract in detail. They should not cause doubts in the counterparty. Only in this case will followentering into a transaction agreement. And the subsequent execution of the contract by the exporter. A treaty, a deal agreement, a contract is thus the key point of the WTO.
Key Features
Foreign trade operations are distinguished from related ones by three characteristic features:
- They are considered a means of implementing all operational, commercial, economic activities of foreign economic activity.
- The implementation of a foreign trade operation is always a process that takes place in three stages. Namely: preparation, conclusion and execution of the transaction. At the same time, depending on the object of the transaction, the period of completion may drag on from several hours/days to several years.
- Foreign trade operations - a very broad term. It includes not only the conclusion of sales contracts, but also the operations that ensure the transaction. Complex operations are even several transactions. In any case, the holding of the WTO is always accompanied by a whole range of supportive actions.
Main types of WTO
There are four main types of foreign trade operations:
- Export. This implies the sale of goods to a foreign buyer, taking into account its export from the country of the seller. Simply put, the export of services and goods abroad.
- Imported. Reverse process. This is the acquisition of goods from a foreign seller with the subsequent delivery of the acquisition to the country of the buyer. Again, a simple definition: the importation of services and goods from abroad.
- Reimported. Import from abroad back into the territory of the state earliergoods imported from there. There may be items that are not sold at auctions, returned from warehouses, unclaimed or rejected by the end buyer.
- Transit operations. It is important to distinguish two types here. Direct transit is the transportation of products from one state to another through the airspace or territory of another, third country. Such transactions will not be included in either imports or exports. Accounting here is carried out according to the number of vehicles involved, the volume of transported goods, the point of departure and destination. There is also indirect transit. This is the storage of products in the customs warehouses of the state in order to transport them to another country in an unprocessed form.
Two WTO groups
In various provisions on the basis of regulation of foreign trade activity, the following simple classification of the WTO is most often found:
- Main.
- Providing.
It makes sense to analyze each of the groups in more detail.
Main group
This category actually includes all forms of international trade. The content of such operations is the sale and subsequent delivery of products, as well as the provision of all kinds of services, the performance of work (including contract work), the exchange of any goods on paid terms.
In more detail, we can highlight the following:
- The main forms of international trade are import, expert, compensatory (barter) operations.
- Trade-mediation.
- Export and import of copyrights, licenses, other items related to intellectual property.
- Work in progress.
- Provision of services.
- Leasing, rental operations.
- Tolling operations.
Now move on to the next category.
Providing operations
International rail transport, for example, excels here. Supporting operations - activities that guarantee the normal passage of foreign trade exchange. Sometimes such operations are called auxiliary. They are closely related to the main ones, they do not make sense without them. Although they are formally carried out independently, other objects of foreign economic activity can be connected to them.
Among the supporting operations, the following are distinguished:
- Production, packaging, storage of goods preparing for import or export, quality control, acceptance.
- Drafting the necessary documentation for the transaction.
- Transport, forwarding support. The organization of international rail transport falls into this category.
- Calculations.
- Insurance.
- Lending.
- Advertising and promotion of goods for export/import.
- Patenting of industrial designs and individual inventions.
- Registration of service symbols, trademarks.
- Consulting, provision of information services related to foreign trade activities.
- Conducting arbitration and claim cases on this issue.
Thus, for one main operation, sometimes there can be up to 10 most diverse collaterals.
On the subject of the transaction
Export-import operations, among other things, may also differ in the subject of foreign economic cooperation. Here the following classification is introduced:
- By buying and selling products in material form. These are food and raw materials, machinery, finished products, etc.
- On buying and selling services. This includes engineering, international leasing, tourism, various transportation, insurance services, etc.
- By buying and selling the results of various creative activities. These are patents, know-how technologies, trademarks, all kinds of licenses, etc.
- Export-import operations carried out within the framework of certain industrial, economic cooperation.
WTO degrees
And further on foreign trade turnover. Any transaction here necessarily goes through three stages:
- Preparation for the conclusion of this contract (deal).
- Actually, signing the contract (and closing the deal).
- Performing a contract (or execution of a deal).
Now let's dwell on each step in more detail.
First stage of the deal
How is international trade cooperation developing here? Preparing formaking a deal in foreign trade realities looks like this:
- Comprehensive market research consisting of a seller and a buyer.
- Carry out an advertising campaign to reach as many desired foreign buyers as possible.
- Establishing contact with a certain foreign counterparty who is interested in the proposed products.
After a contact is found, the case moves on to the next step in its development.
Second stage of the deal
What happens at the stage of concluding a foreign trade contract? This is usually a set of the following:
- Conducting preliminary negotiations with counterparties (business phone calls, personal correspondence, etc.).
- Choosing the method of concluding a contract, agreement.
- Acceptance of a firm offer by the buyer.
- Confirmation by the seller of the order made by the buyer.
- Selecting the form of concluding a sale and purchase agreement - oral, written, combined.
- Choose the type of contract - one-time (for a single transaction) or involving periodic deliveries of the selected product.
- Form of payment for the purchase - cash, commodity, non-cash, combined.
- Final revision of the content of the contract, making all necessary additions.
- Signing a contract, deal agreement.
Third stage of the deal
The last stage of international trade cooperation is the execution of the concludedcontracts. Includes the following:
- Ensuring the production of products that are intended for export.
- Preparation of products for shipment and further shipment to the buyer.
- Conducting the necessary settlement and payment transactions.
- If necessary - cargo insurance.
- Conclusion of an agreement for escort, dispatch forwarding.
- Organize the international transportation of the buyer's order.
- Customs clearance of cargo.
Foreign trade operations are the essence of foreign economic activity. Do not think that this is only the conclusion of contracts for the import / export of products, services, patents or works. The WTO is a very complex system of actions that has its own algorithms.
