SUMMARIZED NOTES ON DOCUMENTS USED IN INTERNATIOAL TRADE

DOCUMENTS USED IN INTERNATIONAL TRADE

 

  BILL OF LADING:

This contains details of goods loaded into the ship, the terms and conditions under which they have been accepted by the shipper and the shipping charges “OR” Is the contract between the exporter or the shipper and the shipping company for the carriage of the goods from the port of loading to the port of destination. It has got main three uses which are:

·         Used as a document of the title to goods

·         It’s a contract of carriage

·         It’s a receipt for the goods by the shipper

The bill of lading has got the following contents:

·         Name and address of the exporter or shipper.

·         Name and address of the shipping company.

·         Name and address of importer or agent.

·         Quantity, weight and value of goods sent.

·         Place of loading and port destination.

·         Date of loading of goods on the ship.

·         Mark description and number of packages.

·         Ports at which the goods are to be discharged.

·         Freight paid or to be paid.

·         Signature of the issuing authority with date.

·         Any other relevant details.

CERTIFICATE OF ORIGIN:

This is an important international trading document attesting that goods in particular export shipment are wholly obtained produces, manufactured or possessed in a particular country. 

3    AN INDENT;

This is an order placed by importers to the exports. When the goods to be imported, its prices it stated by the importer, the indent will be called “closed indent” and when the price of imported goods is not stated then the indent is called “open indent”.

4      LETTER OF CREDIT:

This is the document which acts as an undertaking by importer’s bank stating that payment will be made to the exporter if the required documents are presented to the bank. Advantages of the letter of credit to the exporter are;

·         Exporter gets safety and security of payment for the goods exported.

·         The exporter gets discounting facility from the bank.

·         It enables the exporter to take more initiative in promoting exports and earns foreign exchange for his country.

5    CONSULAR INVOICE:

This is a document which is issued by the trade consulate of the importing country stationed in the exporter’s country. This document contains the details of goods and the value of goods.

6     BILL OF ENTRY:

This is the document which testifies the fact that goods of the stated value and description in specified quantity are entering the country from abroad. The bill of entry has the following contents:

·         Name and address of the importer

·         Import license number of importer

·         Name and address of exporter

·         Name of port where goods are to be cleared

·         Value of goods

·         Description of goods

·         Rate and amount of import duty payable

·         Other relevant details.

7    LETTER OF HYPOTHETICATION:

This is a letter sent by exporter to the exchange bank which authorizes the exchange bank to sell the goods in case the bill is dishonored by the importer.

8    BILL OF SIGHT;

This is the document or appeal prepared and submitted by the clearing agent to the customs authority requesting to permit for the inspection of the packages, it helps to know the real value of goods imported.

DIFFERENCES BETWEEN HOME TRADE AND FOREIGN TRADE

POINTS	HOME TRADE	FOREIGN TRADE
GEOGRAPHICAL BOUNDARIES VOLUME SPECIALIZATION DOCUMENTATION RULES AND REGULATIONS RESTRICTIONS TRADE POLICIES	Same nation Accounts for about 95% National level Less number of documents Of one country Free from restrictions Uniform	Different nation Accounts for about 5% International level More number of documents Of two or more countries Subjected to series of restrictions Different

       

EXPORT PROCEDURES;

·         Enquiry and quotations

·         Indent and license

·         Assembling, packing and marketing

·         Appointment of a forwarding agent or arrange for shipment goods

·         Formalities of forwarding goods

§  taking delivery goods

§  securing shipping through charter party or without charter party

§  customs formalities

§  dock receipt

§  mate’s receipt

§  bill of lading

§  marine insurance policy

§  advice

·         other relevant documents

§  certificate of origin

§  consular invoice

·         export invoice and payment

·         advice to the importer

IMPORT PROCEDURES

·         Obtaining import license

·         Obtain foreign exchange

·         Placing an indent

·         Receipt of letter of advice and shipping documents

·         Formalities to be performed by Cleaning agent:

§  Permission from the shipping company

§  Customs formalities;

o   Bill of entry

o   Bill of sight

o   Application of import

o   Payment of import duty (if any)

§  Dispatch of goods

§  Letter of advice

§  Receiving delivery of goods

SUMMARIZED COLONIAL ECONOMY NOTES FOR CSEE

 

COLONIAL ECEONOMY.

By defn:

Is the totality of all activities introduced in Africa by the colonialist which was introduced in 1880’s.The introduction of colonial economy did not come naturally but because of its objectives including the following:

·         They wanted to get raw-materials at a minimum cost .This is because their industries needed much raw-materials to consume.

·         The need of markets in Africa. In 1880’s capitalists faced a stiff opposition from local markets, so in order for them to survive their main solution was for them t o invest in African parts.

·         Industrial development in Europe. As in Europe by the time most of the industries were developed, so they become in need of raw-materials as well as areas for conducting such activity, where a better place which come to mind was African Continent.

·         Areas for investment. Since in Europe there was population pressure there were no enough land for the investment so the better to conduct that was planned to be Africa.

METHODS USED TO INTRODUCE COLONIAL ECONOMY.

There were various methods used to introduce colonial economy including the following:

1.       DESTRUCTION

Before the coming of Europeans there were different economic, social and cultural activities conducted by African themselves including:

                                I.            Destruction of local industries such as cloth making industries in Uganda, Iron smelting in Ufipa and salt industries in Bunyoro.

                              II.            Prohibition of Africans  in trading included Trans-Saharan trade as well as Triangular Slave Trade.

After the coming of capitalists their main aim was to destruct those economic activities conducted by Africans so as to pave their way easily to the introduction of colonial economy since the Africans did not have any economic potentials and ultimately they will be dependent to them in Economic terms.

 

2.       CREATION.

After the success of destructing African economic activities they needed to introduce various terms and activities which would help them in conducting their activities smoothly in Africa without any interference. Such activities introduced by them were:

a)      Introduction of money economy.

Africans before the coming of capitalists they exchanged goods and services with another goods where this system was widely known as Barter System.

After the coming of capitalist they introduced new system of exchange instead of Barter system, the system was known as Money economy which was mostly for their own economic benefits.

b)      Introduction of new cash crops in Africa.

In order to meet their needs, capitalists introduced crops which were mostly needed by them during the industrial revolution. Among of the cash crops introduced were: Coffee, Sisal and Rubber .

c)       Creation of new transport and communications system.

To make the transportation of raw-materials easier they had to link all the ways smoothly by constructing the facilities. Such facilities were like: Railways and Harbors.

d)      Also they introduced western culture that is Colonial education system as well as colonial health services.

 

3.       PRESERVATION.

Some practices of pre-colonial societies were preserved .Among of the Preserved practices were s follows:

·         Usage of traditional tools such as hoes and Pangas.

·         They also preserved the system of land ownership. The pre-colonial system of owning a land was preserved by the capitalists which involved the production of cash crops and food stops in their respective land .Crops produced were like coffee, cotton and cocoa.

FEATURES OF COLONIAL ECONOMY.

Colonial economy has got various features including the following:

         i.            Mono-culture in nature. Colonial economy involved only the production of one single crop like production of sisal in Tanganyika, Rubber in Liberia and cloves in Zanzibar.

       ii.            Dependent economy. African societies depended only help from capitalists since they were not both economically and technologically developed.

      iii.            It based in production of Raw-materials. Since Europe by the time industrial revolution was developed much, they were in need of Raw-materials to run their industries, such materials needed were like Cocoa, Cotton and cloves.

     iv.            It was import and export oriented economy. Its economy is said to base on importation of goods this is because after the goods were being manufactured in Europe they were transported in Europe for trading purpose since in their home land many manufactured goods were sheltered and hence there were no markets for their goods so they decided to send them to Africa for maximum profit maximization.

       v.            Weakness of manufacturing centers in Africa. Local industries in Africa used undeveloped tools and hence their products were also of low quality.

     vi.            It was monetary economy. Since capitalists introduced money system as the means of exchange. So all of economic matters based on the use of money.

    vii.            Based on cohesive measures. They used harmful measures in fulfilling their economic needs like they forced people to work on their jobs and imposition of forceful and unneeded tax.

 

SECTORS OF COLONIAL ECONOMY.

In colonial economy different sectors were introduced in helping their activities to go on .Among of the sectors of colonial economy are as follows:

·         AGRICULTURAL ECONOMY

·         MINING ECONOMY

·         TRANSPORTATION ECONOMY

ü  AGRICULTURAL  ECONOMY: This involves crop production and animal keeping. But during the colonial the following forms of agriculture were mostly conducted:

A.      SETTLER ECONOMY

Was a large scale conducted by Europeans who settled in their respective areas. It was mainly conducted by whites who came from Italy, Britain and South Africa led by sir Elliet. It was mostly done in Kenya high lands like Kikuyu highlands. They mostly produced cash crops like Coffee, Tea and Tobacco.

 

FEATURE OF SETTLER ECONOMY.

·         Land alienation. The settlers in-order to obtain land they decided to shift Africans from their respective lands to other areas, as different land ordinances were introduced such as:

¨       Land ordinance of 1900 in Zambia. The ordinance demanded that Whites distributed land were to settle on it and to start agricultural activities otherwise they would pay revenue for not using it.

¨       Crown land ordinance of 1902.It permitted the governors to dispose land to the whites freely.

·         Forced labor: The settlers used to force Africans to work in settler farms so as to avoid over expenditure. They did that so as to get maximum profit. Even in Kenya it was ordered local chiefs to supply laborers at low cost.

·         Taxation. Different kind of taxes were introduced so as to drive different farming activities smoothly, some kind of taxes introduced were: Hut tax in Malawi  and Zimbabwe in 1880’s as well as poll tax in Kenya.

·         Migrant laborers: They also used laborers from different parts so as to promote hard work as well as disunity sine they are not from the same society or tribe and they will only concentrate in production and not otherwise.

·         Infrastructural development :So as to link agricultural parts settlers constructed road facilities as well as railways like railway from Mombasa to Nanyuki and Nairobi.

·         Characterized by crop farming together with cash crops.  Such as tea, coffee and cotton.

ROLE PLAYED BY THE GVT OF KENYA TO THE SUCCESS OF SETTLER ECONOMY.

ü  They ensured land availability to settlers in any means like posing and enacting some laws like Law of land Ordinance in Kenya.

ü  They ensured loan availability to settlers. Every commercial institutions either  owned by GVT or not should supply loan to settlers.

ü  Exemption of Settlers from paying taxes. Settlers were not paying any tax like hut tax and land tax but they used the land and lived freely in their respective areas.

ü  They ensured laborers availability. As they ordered different tribal chiefs to supply laborers at low cost.

ü   Construction of reliable means of transport linking the settler’s areas. Like from Mombasa to Kisumu.

ü  The Settlers were provided with social facilities like schools, hospitals and water supply.

 

EFFECTS OF SETTLER AGRICULTURE.

         i.            Racial segregation BTN whites and Africans.

       ii.            Africans occupied the lowest positions in settlers farms such as clerks,

      iii.            Political and social grievances BTN Asians, Africans and whites.

     iv.            Imposition of taxes to Africans.

 

 

 

 

 TO BE CONTINUED.................

SUMMARIZED NOTES OF INTERNATIONAL TRADE FOR CSEE

COMMERCE

SUMMARIZED TOPIC FORM THREE: INTERNATIONAL TRADE

INTERNATIONAL TRADE

This refers to the selling of goods and services among countries. International trade may be import, export and entreport trade.

 

REASONS FOR INTERNATIONAL TRADE.

·         Difference in natural resources.

·         Difference in human skills.

·         Unequal distribution of capital and technology.

·         Gain from trade.

 

ADVANTAGES OF INTERNATIONAL TRADE.

1.       Possession of goods a country cannot produce.

2.       Technological transfer.

3.       Amplification of competition.

4.       Reduce scarcity of goods.

5.       Widens economic scale.

6.       Important in tackling calamities.

7.       Improves national understanding.

 

DISADVANTAGES OF INTERNATIONAL TRADE.

1.       Decline in domestic industries.

2.       Importation of harmful products.

3.       Dependency.

4.       Problems of unequal exchange.

5.       Defects of over specialization.

6.       Fall of domestic currencies.

 

 

PROBLEMS FACED BY DEVELOPING COUNTRIES IN INTERNATIONAL TRADE.

1.       Declining terms of trade.

2.       Dependency.

3.       Protectionism policies of foreign goods.

4.       Severe external debt due to deficit in balance of payment.

 

TO BE CONTINUED……………………..

 

NEXT IS BALANCE OF PAYMENT