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Trade Terms

Home - Other Trade Information - Trade Terms


A number of complicated trade terms have been explained in this section for the facilitation of the exporters as well as the importers. Along with this, a number of abbreviations have been provided with their expanded forms. Browse through this section alphabetically to get the meaning of a term.

A
Absolute advantage - A country has an absolute advantage if its output per unit of input of all goods and services produced is higher than that of another country.
Acceptance -

  1. It is a term used for a time draft (or bill of exchange) which has been accepted by the drawee and is unconditionally obligated to pay at maturity. The said draft should be presented first for acceptance - the drawee becomes the "acceptor" - then for the payment. The word "accepted" and the date and place must be written on the face of the draft.
  2. A term for the drawee's act in receiving a draft and entering into the obligation to pay the mentioned value at maturity.
  3. Any agreement to purchase goods under specified terms.

Ad-valorem duty - It is a duty fixed according to the value of the goods.

Ad valorem tax - (in Latin: to the value added) - a tax based on the value (or assessed value) of property.

Advance against documents - It is a loan made on security of the documents covering the shipment.

Advising bank - It is a bank in the exporter's country which handles letters of credit for a foreign bank by notifying the export firm of the credit opened in its favor. The advising bank completely informs the exporter of the conditions of the letter of credit without bearing responsibility for the payment.

Advisory capacity - It is a term, which indicates that a shipper's agent or representative is not empowered to make any of the definitive decisions or adjustments without the approval of the group or individual represented.

Agent - [check Foreign Sales Agent]

Aggregate demand - is the sum of all demand in an economy. This can be computed by adding the expenditure on consumer goods and services, investment, and not exports (total exports minus total imports).

Aggregate supply - is the total value of the goods and services produced in a country, plus the value of imported goods less the value of exports.

Air Waybill - It is the shipping document used for the transportation of airfreight that includes conditions, limitations of liability, shipping instructions, description of commodity, and the applicable transportation charges. It is usually similar to a non-negotiable bill of lading and is used for similar purposes.

Anti-dumping duties - It is an additional duties which are imposed on imported goods when these goods are sold to the importing country at a lower price than what it is charged in the home market.

Arbitrage - It is a term used for the process of buying foreign exchange, stocks, bonds or any other commodities in one market and selling them immediately in another market at a higher price.

ATA carnet - [check Carnet]
Autarky - An autarky is an economy that does no trade with the outside world, or an ecosystem not affected by influences from its outside, and relies entirely on its own resources.

Average propensity to consumer - is the proportion of income the average family spends on goods and services.

Average propensity to save - is the proportion of income the average family saves (does not spend on consumption).

Average total cost - is the sum of all the production costs divided by the number of units produced.

Assessment - A study to determine whether, and to what extent, labour practices comply with the provisions of a code of labour practice. The term can refer to the study of a workplace but can also apply to more general studies such as to an industry within a country.

Audit - A thorough formal examination of the labour practices of a particular workplace or company, based on corroborated evidence.

AFTA - (otherwise known as the Andean-FTA): The Andean Free Trade Agreement is being negotiated between the United States, Colombia, Ecuador, and Peru (with the possibility of including Bolivia at a later time).

B

Balance of trade - It is the difference between the total export and import of a country. If the export exceeds the import, it is known as favourable balance of trade and trade deficit is just the opposite.

Barter - It is a term for those types of trade in which the merchandise is exchanged directly for other merchandise without making use of money. It is useful for those countries where the currency is not readily convertible.

Barter system - System where there is exchange goods without involving money.

Base year - In the construction of an index, the year from which the weights assigned to the different components of the index is drawn. It is conventional to set the value of an index in its base year equal to 100.

Bear - An investor with a pessimistic market outlook; an investor who expects prices to fall and so sells now in order to buy later at a lower price.

Beneficiary - A term for a person in whose favour a letter of credit is issued or a draft is drawn.

Bid price - The highest price an investor is willing to pay for a stock.

Bilateral Trade Agreement - A trade agreement between a small group of countries - this term should indicate a trade agreement between just two countries, but it gets loosely used in trade agreements with five or more countries.

Bill of exchange - [check Draft]

Bill of Lading - A contract document agreement between the shipper and the customer that acts as a receipt for the goods delivered to the carrier for shipment; a definition or description of the goods; and evidence of title to the relative goods.

Bimetallism - Bimetallism is a monetary standard in which the value of the monetary unit can be expressed either with a certain amount of gold or with a certain amount of silver: the ratio between the two metals is fixed by law.

Birth rate - The number of births in a year per 1,000 population.

Bond - A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal.

Bonded warehouse - Customs authorities authorize warehouse used for storage of goods on which payment of duties is deferred until it is removed.

Booking - It is an arrangement with a steamship company for accepting and carrying the freight.

Boom - A state of economic prosperity

Break even - This is a term used to describe a point at which revenues equal costs (fixed and variable).

Budget - A summary of intended expenditures along with proposals for how to meet them. A budget can provide guidelines for managing future investments and expenses.

Budget deficit - is the amount by which government spending exceeds government revenues during a specified period of time usually a year.

Bull - An investor with an optimistic market outlook; an investor who expects prices to rise and so buys now for resale later.

Buying agent - [check Purchasing Agent]

C

Call money - Price paid by an investor for a call option. There is no fixed rate for call money. It depends on the type of stock, its performance prior to the purchase of the call option, and the period of the contract. It is an interest bearing band deposits that can be withdrawn on 24 hours notice.

Capital - Capital is the contribution to productive activity made by investment is physical capital (machinery, factories, tools and equipments) and human capital (eg general education, health).

Capital account - Part of a nation's balance of payments that includes purchases and sales of assets, such as stocks, bonds, and land.

Capital budget - A plan of proposed capital outlays and the means of financing them for the current fiscal period.

Capital gain tax - Tax paid on the gain realized upon the sale of an asset. It is a tax on profits from the sale of capital assets, such as shares.

Cartel - An organization of producers seeking to limit or eliminate competition among its members, most often by agreeing to restrict output to keep prices higher than would occur under competitive conditions.

Carnet - It is a customs document, which permits the holder to carry or send merchandise into a certain foreign countries temporarily for display, demonstration, or any other related purpose without paying the duties or posting bonds.

Cash against documents (CAD) - A term in which the commission house or other intermediary transfers title documents to the buyer upon payment in cash.

Cash Crops - Crops such as coffee or cut flowers grown specifically for export.

Cash in advance (CIA) - It is a term in which the price is paid in full before the shipment is made.

Cash with order (CWO) - It is a term in which the buyer pays when the order is made and the transaction becomes binding on both the parties.

Census - Official gathering of information about the population in a particular area.

Central bank - Major financial institution responsible for issuing currency, managing foreign reserves, implementing monetary policy, and providing banking services to the government and commercial banks.

Centrally planned economy - An economic system in which the production, pricing, and distribution of goods and services are determined by the government rather than market forces.

Certificate of inspection - It is a document which certifies the merchandise (like perishable goods) that it was in good condition just before its shipment.

Certificate of manufacture - It is a statement, usually notarized, according to which a producer of goods certifies that the manufacture has been completed according to the contract and the goods are currently at the disposal of the buyer.

Certificate of origin - It is a certified document presented to the customs authorities showing the national origin of goods for import.

CFR - Cost and freight. It is a pricing term, which indicates that the cost of the goods and freight charges are included in the quoted price. In this case the buyer arranges for and pays insurance.

Charter Party - It is a contract between the owner of a vessel and a "charterer" who rents use of the vessel or a part of its freight space. It usually includes the freight rates and the ports that is involved in the transportation.

CIF - Cost, insurance, freight. It is the price, which includes the cost of material together with the transport and insurance costs.

Civil Society - This term refers to all of the organizations which are not public or for-profit institutions.

Clean bill of lading - It is a receipt for goods which is issued by a carrier indicating that the goods were received in "apparent good order and condition," without any damage or other irregularities. [also check Foul bill of lading]

Clean draft - It is a term used for a draft to which no commercial documents are attached.

Closed economy - An economy in which there are no foreign trade transactions or any other form of economic contacts with the rest of the world.

Collateral security - Additional security a borrower supplies to obtain a loan.

Commercial Policy - Encompassing instruments of trade protection employed by countries to foster industrial promotion, export diversification, employment creation, and other desired development-oriented strategies. They include tariffs, quotas, and subsidies.

Compound interest - Interest paid on the original principal and on interest accrued from time it became due.

Cost benefit analysis - A technique that assesses projects through a comparison between their costs and benefits, including social costs and benefits for an entire region or country.

Cross elasticity of demand - The change in the quantity demanded of one product or service impacting the change in demand for another product or service.

Crowding out - The possible tendency for government spending on goods and services to put upward pressure on interest rates, thereby discouraging private investment spending.

Currency appreciation - An increase in the value of one currency relative to another currency.

Currency board - Form of central bank that issues domestic currency for foreign exchange at fixed rates.

Currency substitution - The use of foreign currency (e.g., U.S. dollars) as a medium of exchange in place of or along with the local currency (e.g., Rupees).

Customs duty - Duty levied on the imports of certain goods. Includes excise equivalents Unlike tariffs customs duties are used mainly as a means to raise revenue for the government rather than protecting domestic producers from foreign competition.

Codes of Conduct - Represent voluntary guidelines for treatment of workers and business behavior. In some cases the acceptance of inspections by independent agencies is a key factor of the guidelines.

Code initiatives - Organizations, such as ETI, whose role is to establish and/or encourage the implementation of codes of labour practice.

Code implementation - The policies, procedures and activities that a company needs to put in place in order to implement a code of practice.

Code of practice/conduct - A set of standards concerning labour practices adopted by a company and meant to apply internationally, and, in particular, to the labour practices of its suppliers and subcontractors.

Collective bargaining - The right to collective bargaining refers to the right for workers' organizations to negotiate with employers or employers' organizations on behalf of their members to determine working conditions and terms of employment.

Collection papers - It is a term for all documents, such as commercial invoices, bills of lading, etc. submitted to a buyer for the purpose of receiving payment for a shipment.

Commercial invoice - It is a complete transaction record between the exporter and importer with regard to the goods sold. It contains the name and address of the seller and the buyer, date of sale, description of the goods sold, the quantity, the unit price, the terms of sale and the total money amount due.

Commercial agent - [check Purchasing Agent]

Confirmed letter of credit - It is a term used for a letter of credit, which is issued by a foreign bank, and the validity of which has been confirmed by a domestic bank. This is an assured payment by the domestic bank even if the foreign buyer or the foreign bank defaults. [also check Letter of Credit]

Consignment - A term for the shipment of goods from an exporter (consignor) to an agent (consignee) under an agreement that the consignee undertakes to sell them for a commission. The consignor retains the title to the goods until they are sold.

Consular declaration - It is a formal statement, which is made to the consul of a foreign country with the description of the goods to be shipped.

Continuous improvement - It refers to a system of constant or ongoing incremental improvements to a process or product based on constant or ongoing examination and evaluation of the process or product.

Comparative Advantage - A component of free market theory that states that if each nation made just those things which it could produce cheaper relative to a foreign country and then trade with other nations to get that which they could produce relatively cheaper, wealth would expand and everyone would benefit.

Conditionality - Countries must adopt specified economic policies as a condition for receiving a loan from multilateral financial institutions such as the International Monetary Fund or the World Bank.

Convertible currency - A term for a currency, which can be legally exchanged for other currencies or gold at market rates.

Correspondent bank - It is a bank that handles the business of a foreign bank in its own country.

Cotton Corporation of India Ltd. (CCI CAFTA) - The Central American Free Trade Agreement (otherwise known as DR-CAFTA) is a pending agreement that has been negotiated between the United States, five Central American countries.

Countertrade - It is the sale of goods or services, which is paid by the transfer of goods or services either in whole or in part from a foreign country.

Countervailing duty - It is a duty against imports of goods that are subsidized by the exporting country's government. This is designed to countervail the effect of the subsidy.

Country of origin - It is a term used for the country where the merchandise was grown, mined or manufactured, in accordance with the regulations of the customs.

Credit risk insurance - It is the insurance which covers the risks of non-payment for delivered goods. [also check Marine Insurance]

Corporate Social Responsibility (CSR) - A concept of business ethics based on the idea that companies have stakeholders who are broadly defined as anyone or group affected by the activities of the company.

Customhouse broker - It is a term used for an individual or a firm that has been licensed to enter and clear goods through customs.

Customs - The government authorities responsible for the administration of Customs law of a country and the collection of duties and taxes.

Customs union - It is the merger of two or more customs territories in a free trade zone with a Common External Tariff in order to establish an increased economic efficiency and closer political and cultural ties.

Customs warehousing - [check Bonded Warehouse]

D

Date draft - A draft that matures in a specified number of days after the date on which it is issued, irrespective of the date of acceptance. [also check Draft, Sight Draft, and Time Draft]

Debtor - It is a term to any individual who is liable for the payment of a customs debt.

Deferred payment credit - It is similar to the letter of credit which provides payment some time after presentation of shipping documents by exporter.

Demand draft - [check Sight Draft]

Devaluation - It is a term used when the value of the currency of a country is officially lowered in terms of one or more foreign currencies. Suppose the US dollar is devalued in relation to the Euro, then one dollar will buy fewer Euros than before.

Dispatch - It is an amount paid by vessel operator to the charterer when loading and unloading is completed in less time than stipulated in the charter party.

Distributor - It is a term for a foreign agent who sells for a supplier at wholesale and maintains an inventory of the supplier's products.

Dock receipt - A term used for a receipt being issued by a vessel agent that certifies that the goods have been received. [Also check Warehouse Receipt]

Documentary draft - A draft to which documents are attached.

Documents against acceptance (D/A) - It is an instructions given to a bank by the shipper indicating that the documents transferring title to goods should be delivered to the buyer (drawee) only upon the buyer's acceptance of the attached draft.

Draft (or bill of exchange) - It is a written order, either negotiable or non-negotiable, which directs one party to pay a certain sum of money to the drawer or to a third person.

Drawback - It is the import duties and taxes, either in whole or in part, refunded by a government when the imported goods are re-exported or are used in the manufacture of exported goods.

Drawee - An individual or a firm on whom a draft or a bill of exchange is drawn. [also check Drawer and Draft]

Drawer - An individual or a firm who issues an order, draft or bill of exchange and thus stands to receive payment of the stated amount.

Dumping - It is term used when the selling of merchandise is done in another country at lower price than the home market or sometimes even below the costs incurred in production and shipment.

Duty - It is the tax levied by a government on the imported merchandise.

Duty free - Goods that are exempted from customs duties.

Deflation - a reduction in the level of national income and output, usually accompanied by a fall in the general price level.

Developed country - is an economically advanced country whose economy is characterized by a large industrial and service sector and high levels of income per head.

Direct investment - Foreign capital inflow in the form of investment by foreign-based companies into domestic based companies.

Direct tax - A tax that you pay directly, as opposed to indirect taxes, such as tariffs and business taxes. The income tax is a direct tax, as are property taxes.

Double taxation - Quantitative measure of the change in size/volume of economic activity, usually calculated in terms of gross national product (GNP) or gross domestic product(GDP).

Duopoly - A market structure in which two producers of a commodity compete with each other.

Desk-based risk assessments - A preliminary assessment by a sourcing company of its suppliers. The desk-based risk assessment normally takes the form of a questionnaire sent to suppliers with the intention of highlighting the areas of greatest risk in terms of labour practices.

E

EMC - [check Export management company]

ETC - [check Export trading company]

Exchange rate - It is the price of one currency in terms of another i.e. the number of units of one currency can be exchanged for one unit of another currency.

Export - It is the physical movement of merchandise out of a country.

Export broker - It is a term for an individual or a firm that brings together a buyer and a seller for a fee but does not actually takes part in sales transactions.

Export commission house - It is a term used for an organization that, for a commission, acts as a purchasing agent for a foreign buyer.

Export declaration - It is a formal statement which declares the complete details about goods being exported. It is made to customs at a port of exit.

Export duties - It is the taxes or duties imposed on goods being exported from a country.

Export license - It is a government document which permits the exporters to export certain goods to certain countries.

Export management company - It is a private firm that serves as export department for several producers of goods or services. It also handles the exporting aspect of the business for a commission or fee.

Export trading company - It is a term given to a firm that is similar or identical to an export management company.

Exporter - A person on behalf of who export declaration is made and who is also the owner of the goods or has similar right of disposal over them.

Exchange control - A governmental policy designed to restrict the outflow of domestic currency and prevent a worsened balance of payments position by controlling the amount of foreign exchange that can be obtained or held by domestic citizens.

Export incentives - Public subsidies, tax rebates, and other kinds of financial and nonfinancial measures designed to promote a greater level of economic activity in export industries.

F

FAS - Free alongside ship. It is a term for pricing which indicates that the quoted price includes the cost of delivering the goods alongside a designated vessel.

FCA - It stands for "Free carrier" to named place. It is an incoterm in which the title and risk passes on to the buyer including the transportation and insurance cost if the seller delivers the goods cleared for export to the carrier. In this case the seller is obligated to load the goods on the buyer's collecting vehicle but it is the buyer's obligation to receive the seller's arriving vehicle unloaded.

FI - It stands for 'Free in.' A pricing term stating that the charter of a vessel is responsible for the cost of loading and unloading goods onto the vessel.

FO - It stands for 'Free Out.' It is a pricing term in which the charterer of a vessel is responsible for the cost of unloading goods from the vessel.

FOB - It is 'Free on board' at named port of export. It is an incoterm where the risk passes to buyer, included the transportation and insurance payment, once delivered on board the ship by the seller. It is only used for sea or inland waterway transportation.

Force majeure - It is the title of a standard clause in marine contracts which exempts the parties for non-fulfillment of their obligations as a result of conditions beyond their control, like earthquakes, floods, or war.

Foreign exchange - A term in which money from one country is exchanged for that of another.

Foreign freight forwarder - [Check Freight Forwarder]

Foreign sales agent - It is a term for an individual or for a firm that serves as a foreign representative of a domestic supplier and seeks sales abroad for the supplier.

Foreign trade zone - [Check Free-Trade Zone]

Foul bill of lading - It is a term for a receipt of goods, which is issued by a carrier indication that the goods were damaged when received. [also check Clean bill of lading]

Free port - A defined port free of customs duty.

Free-trade zone - A zone where tariffs and quotas are not applied and also the bureaucratic requirements are lowered to attract companies raise the incentives of doing business in the zone. It is also known as export processing zone.

Freight forwarder - It is a term for an independent business which handles export shipments for compensation. They are among the best sources of information and assistance on export regulations and documentation, shipping methods, and foreign import regulations.

Freedom of association - The right of all workers to join or form a trade union of their own choosing and carry out trade union activities without interference from their employer or from public authorities.

Fair Trade - These companies negotiate directly with the growers or producers of products to establish a fair price for the product.

FDI - Foreign Direct Investment is the purchase by the investors or corporations of one country of non-financial assets in another country.

Free trade - The theory of free trade contends that everyone in the world will be better off if each nation eliminates tariffs and other barriers to the flow of products across borders.

Free on Board - Indicates that all delivery, inspection and elevation, or loading costs involved in putting commodities on board a carrier have been paid.

FTA - A free trade area is a term used for a group of states that have reduced or eliminated trade barriers between themselves, but who maintain their own individual tariffs as to other states.

G

GATT - It stands for General Agreement on Tariffs and Trade. An international multilateral treaty intended to practice fair-trading and for helping in the reduction of trade barriers between signatory countries and also to promote trade through tariff concessions.

General export license - It is a general license that covers those goods for which validated export licenses are not required. To ship exports under a general export license, no formal application or written authorization is required.

Gross weight - It is a term used for the full weight of a shipment, including the goods and packaging. [also check Tare Weight]

Globalization - The term frequently used to identify a trend toward increased flow of goods, services, money, and ideas across national borders and the subsequent integration of the global economy.

Gross domestic product - (GDP) The total of goods and services produced by a nation over a given period, usually 1 year. Gross Domestic Product measures the total output from all the resources located in a country, wherever the owners of the resources live.

Gross national product (GNP) - Is the value of all final goods and services produced within a nation in a given year, plus income earned by its citizens abroad, minus income earned by foreigners from domestic production.

Government Procurement Policies - Rules utilized by governments for purchasing of goods and services.

I

Inland bill of lading - It is a bill of lading that is used in transporting goods overland to the exporter's international carrier.

Imports - It is the physical movement of goods into a country.

Import duties - Customs duties payable on importation.

Import license - It is an authorization by a competent authority for the importation of restricted goods.

Import restrictions - It is a measure that limits the volume of imports by means of tariffs or non-tariff barriers such as import quotas, exchange controls, import licensing, etc.

International freight forwarder - [check Freight Forwarder]

Irrevocable Letter of Credit - A letter of credit obligating the issuing bank to pay the exporter the specified amount when all the terms and conditions are met by the drawee. [also check Revocable Letter of Credit]

Informal work/er - Informal work refers to work performed in an employment relationship that is not recognised or protected under legal or regulatory frameworks.

Inspection - A visit made to a workplace by an authorised outside organisation or individual for the purpose of checking whether a code of labour practice is being applied.

Intellectual Property Rights - The right to control and derive the benefits from writing (copyright), inventions (patents), processes (trade secrets) and identifiers (trademarks). See also Trade Related Intellectual Property Rights.

L

Letter of Credit (L/C) - It is a term used for a letter issued by a bank on behalf of a client to pay a beneficiary the stated amount of money under specified conditions.

Licensing - It is a business arrangement where the manufacturer of a product grants permission to some other group or individual to manufacture that product in return for specified royalties or other payment. It can also be in case of a firm with proprietary rights over certain technology, trademarks, etc. to make use of that proprietary material.

M

Manifest - [check Ship's Manifest]

Marine Insurance - An insurance, which compensates the owner of goods transported overseas in the event of loss that cannot be recovered from the carrier.

Marking (for marks) - It is the letters, numbers, and any other symbols placed on cargo packages to facilitate identification.

Marks of origin - It is the physical marking on a product indicating the country of origin where the article was produced.

Monitoring - Monitoring refers to the surveillance of labour practices against a standard by a person (or persons) with a continuous or frequent presence in the workplace and unobstructed access to management and staff.

O

On board bill of lading - It is a bill of lading which confirms that the merchandise have been placed on board of a certain vessel.

Open account - Credit extended to a foreign buyer without guarantee of payment.

Open insurance policy - It is a marine insurance policy applied to all shipments made by an exporter over a certain period of time and not to one shipment.

Order bill of lading - It is a negotiable bill of lading that is made out to the order of the shipper.

Offshoring - It can be defined as relocation of business processes (including production/manufacturing) to a lower cost location, usually overseas.

P

Packing list - It is a document listing the merchandise in a particular shipment stating the number and kinds of items being shipped along with other information needed for the transportation purposes.

Parcel post receipt - It is the acknowledgment of delivery by the postal authorities' of a shipment made by parcel post.

Perils of the sea - It is a marine insurance term that is used to designate heavy weather, stranding, lightning, collision, and sea water damage.

Political risk - The risk of loss in export financing due to currency inconvertibility, government action preventing entry of goods, expropriation or confiscation, and war.

Pro forma invoice - It is an invoice provided by a supplier prior to the shipment of merchandise, which informs the buyer of the kinds and quantities of goods to be sent, their value, and other important specifications like weight, size, etc.

Purchasing agent - It is a term used for an agent who purchases goods in own country on behalf of foreign importers like government agencies and large private concerns.

Protectionism - It is the economic policy of relying on tariffs for government revenue in order to reduce or eliminate other forms of taxation, such as income and sales taxes.

Privatization - The process of private, for-profit businesses taking over the provision of public services.

Q

Quota - It is the quantity of goods of a specific kind, which is permitted by a country to be imported without restriction or imposition of additional duties.

Quotation - It is an offer of selling goods at a price being stated and under specified conditions.

R

Re-exports - It is the shipment of products from one foreign destination to another.

Remitting bank - It is that bank which sends the draft to the overseas bank for collection.

Representative - [check Foreign Sales Agent]

Revocable letter of credit - It is a letter of credit that may be amended or canceled by the drawee after it has been issued by the drawee's bank. [also check Irrevocable Letter of Credit]

Race to the Bottom - The constant search for cheaper wages, lower taxes and weaker environmental and other regulations, produces a downward spiral in socio-economic conditions in the United States and in countries around the world.

S

Ship's manifest - It is a list of the individual shipments constituting the cargo of the ship.

Sight draft (S/D) - It is a bill of exchange that is payable on demand or upon presentation.

Specific duty - It is the duty or tax calculated as a rate per unit of measure of the merchandise, such as number, volume, weight, etc.

Spot exchange - It is the term used for the sale or purchase of foreign exchange for immediate delivery.

Standard industrial classification (SIC) - It is a standard numerical code system, which is used for the classification of products and services.

Standard international trade classification (SITC) - It is a term used for a standard numerical code system developed by the UN for the classification of commodities used in international trade.

Steamship conference - A term for a group of steamship operators that operate under mutually agreed-upon freight rates.

Straight bill of lading - A term for a non-negotiable bill of lading in which the merchandise is consigned directly to a named consignee.

Sanction - A punitive mechanism used. to encourage a country to adopt or revise its policies. Trade sanctions might include increases in tariffs.

Sourcing company - A company that purchases product from another company, for either direct or indirect onward sale to the consumer.

Sovereignty - The principle that the state exercises absolute power over its territory, system of government, and population.

Subsidies - Grants of money made by the government to either a seller or a buyer of a certain product or service, thereby altering the price or cost in a way which affects the output.

Sustainability - Meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Stakeholder - The term refers to any individual, community or organisation that affects or is affected by the operations of a company.

Sustainable Growth - Growth that does not negatively affect the poor, workers and the environment; economic growth that is just and fair and improves the likelihood of such growth in the future.

T

Tare weight - It is the weight of the container and/or packed materials without considering the weight of the goods inside the container.

Tenor (of a draft) - It is the period of credit given by a bill of exchange.

Through bill of lading - It is a term for a single bill of lading covering certain items moving from the point of origin to the final location although they move through two or more modes of transportation.

Time draft - It is a draft payable at a specified future date either certain number of days after acceptance or certain number of days after the date of the draft.

Tramp steamer - A vessel not operating under any regular schedule or route.

Transaction statement - It is a document, which traces an outline of the terms and conditions agreed upon between an importer and exporter.

Trust receipt - A written declaration by a customer to a bank stating that the ownership of the goods released by the bank is retained by it, and the client has received the goods in trust only. Such a receipt is given by the customer to induce the bank to issue a letter of indemnity to a carrier to release a shipment.

Tariff - A duty(or tax) applied to goods transported from one country to another, or on imported products.

Trade union organisation - There are two kinds of trade union organisations - those that have workers as members and those that have trade unions as members.

Trade Bloc - A trade bloc is a large free trade zone or near-free trade zone formed by one or more tax, tariff and trade agreements.

Trade Deficit - The value of a nation's imports exceeds the value of its exports.

Trade Liberalization - The reduction of tariffs, quotas, and other barriers to permit more foreign trade and investment.

V

VAT - A form of indirect sales tax paid on products and services at each stage of production or distribution, based on the value added at that stage and included in the cost to the ultimate customer.

Verification - Verification concerns the impartial examination and certification of claims made about the actual observance of code provisions by suppliers or of claims made about the activities that a company undertakes to give effect to its code.

W

Warehouse receipt - It is a receipt of a warehouse listing goods or commodities received for storage.

Wharfage - It is a charge assessed by a pier or dock owner for handling the incoming or the outgoing cargo.

Without Reserve - It is a term under which the agent or representative of a shipper is empowered to make any decision and adjustments abroad without the approval of the group or individual represented. [Also check Advisory Capacity]

WTO - The World Trade Organization, established in 1995 as the successor to the 1948 General Agreement on Trade and Tariffs, administers trade agreements, provides a forum for trade negotiations, and monitors national trade policies for the 147 member countries.

Trade Abbreviations

APC: African, Caribbean and Pacific

ACT: Australian Capital Territory

ADB: African Development Bank

Asian: Development Bank

AID: (US) Agency for International Development

ASEAN: Association of South East Asian Nations

ASSR: Autonomous Soviet Socialist Republic

APEDA: Agriculture & Processed Food Products Export Development Authority

ASSOCHAM: Associated Chambers of Commerce and Industry

AEPC: Apparel Export Promotion Council

AIMO: All India Manufacturers Organisation

CACM: Central American Common Market

CARICOM : Caribbean Community and Common Market

CIS: Commonwealth of Independent States

COMESA: Common Market for Eastern and Southern Africa

CPSU: Communist Part of the Soviet Union

C/F: Cost, Insurance & Freight

C & F: Cost and Freight CLE: Council for Leather Exports

CAPEXIL: Chemicals & Allied Products Export Promotion Council

CEPC: Carpet Export Promotion Council

TEXPROCIL: Cotton Textile Export Promotion Council

CSB: Central Silk Board

CCIC: Central Cottage Industries Corporation

CEPC: Cashew Export Promotion Council

CII: Confederation of Indian Industry

D/A: Documents against acceptance

D/P: Documents against payment

DDP: Delivered Duty Paid (Name, place of destination)

DDU: Delivered Duty Unpaid

DAF: Delivered at Frontier (named place)

DGCI&S: Directorate-General of Commercial Intelligence & Statistics

EBRD: European Bank for Reconstruction and Development

EC: European Community

ECE: (United Nations) Economic Commission for Europe

ECLAC: (United Nations)Economic Commission for Latin

ECOSOC: (United Nations) Economic and Social Council

ECOWAS: Economic Community of West African States

ECU: European Currency Unit

EFTA: European Free Trade Association

ESCAP: Economic and Social Commission for Asia and the Pacific (United Nations)

ESCWA: Economic and Social Commission for Western Asia (United Nations)

EIC: Export Inspection Council

ECGC: Export Credit Guarantee Corporation of India Ltd.

EEPC: Engineering Export Promotion Council

ECSEPC: Electronics & Computer Software Export Promotion Council

FOB: Free on Board

FCA: Free Carrier (named place)

FAS: Free alongside Ship (name port of shipment)

FAO: Food and Agriculture Organization

FASII: Federation of Associations of Small Industries in India

FICCI: Federation of Indian Chamber of Commerce & Industry

FIEO: Federation of Indian Export Organisations

GATT: General Agreement on Tariffs and Trade

GDP : Gross Domestic Product

GMT: Greenwich Mean Time

GNP: Gross National Product

G&JEPC: Gem & Jewellery Export Promotion Council

HEPC: Handloom Export Promotion Council

IEC: Import, Export Code Number

IBRD: International Bank for Reconstruction and Development (World Bank)

ICC: International Chamber of Commerce

IDB: Inter-American Development Bank

IMF: International Monetary Fund

IIP: Indian Institute of Packaging

IIC: Indian Investment Centre

IIFT: Indian Institute of Foreign Trade

JCI: Jute Corporation of India Limited

JMCD: Jute Manufacturers Development Council

MPEDA: Marine Products Export Development Authority

MDA: Market development assistance

MAI: Market assistance initiative

MTC: Mica Trading Corporation

NAFTA: North American Free Trade Agreement

NATO: North Atlantic Treaty Organization

NTC: National Textile Corporation of India Ltd.

OECD: Organisation for Economic Cooperation and Development

OPEC: Organization of the Petroleum Exporting Countries

OCCI: Overseas Construction Council of India

PEC: Project and Equipment Corporation of India Limited

PLEXCOUNCIL: Plastic & Linoleum Export Promotion Council

RCMC: Registration-cum-Membership Certificate form for Registered Exporters

RSFSR: Russian Soviet Federative Socialist Republic

SIL: Special Imprest Licence

SAARC: South Asian Association for Regional Cooperation

SMEs: Small and Medium-Sized Enterprises

SGEPC: Sport Goods Export Promotion Council

SOPA: Soyabeen Processor Association of India

SEPC: Shellac Export Promotion Council

STC: The State Trading Corporation of India Limited

ISEPC: The Indian Silk Export Promotion Council

SREPC: The Synthetic and Rayon Textiles Export Promotion Council

HHEPC: The Handicrafts & Handloom Export Corporation of India Ltd.

MMTC: The Minerals & Metals Trade Corporation of India Ltd.

UNCTAD: United Nations Conference on Trade and Development

UNDP: United Nations Development Programme

UNEP: United Nations Environment Programme

UNESCO: United Nations Educational, Scientific and Cultural Organization

UNICEF: United Nations Children's Fund

USAID: United States Agency for International Development

USSR: Union of Soviet Socialist Republics

VAT: Value-added Tax

WEU: Western European Union

WHO: World Health Organization

WWEPC: Wool & Woollen Export Promotion Council

General Exim Terms (Export Import)