CHAPTER 1 - INTRODUCTION - GENERAL TRADE

What is Trade?

Trade is purchase and sale of goods and results in the movement of goods from the seller to the buyer for a consideration.

Trade could be domestic or international.

Domestic Trade is the purchase and sale of goods within the same country and results in the movement of goods within the country.

International Trade is the purchase and sale of goods between two countries and results in the movement of goods from one country to another country.

When goods move from one country to another, the following considerations are to be kept in mind.

1. Physical movement of goods, which involve someone to undertake transportation of the goods.
2. Insurance of goods against any damage that may occur during transit. This will require a contract of insurance with an insurer and documents evidencing (insurance policy / certificate) that insurance has been affected.
3. Regulations with the importing and exporting countries: licensing requirements, exchange control regulations, tariffs, quotas etc.
4. Legal requirements within the countries.

In international Trade all or many of the above considerations apply since there is scarcely any face-to - face contact between the buyer and the seller and the goods and money has to move long distances across natural and artificial barriers (cross country movement).