Comercio International Y Sus Ramificaciones En Un

International Trade and Its Ramifications in a Globalized World

Miguel Angel Pinzon

International Trade Law INTL 643, Spring Semester 2012
Dr. Jeffrey Penley
April 27th, 2012

International Trade and its Ramifications in a Globalized World

The world we live in now is completely different from the world we used to live not so long ago, let’s say 20-30 years, and I am not talkingabout changes in technology and everyday things like the cars we drive, the electronic gadgets that have flooded our everyday activities, and things that do not have an impact in our behavior as human beings; I am talking about deeper and much more important things such as the set of values that form our personality. As society evolves in time, so does our belief systems, our politics, and our lawswhich in turn affect every single aspect of our lives and the way we do business.
The world has seen an exponential growth in the number of international business transactions throughout the last 20 years; this exponential growth in international trade has open opportunities for parties that never thought would be involved in international transactions. As time passes, governments from all overthe world are opening their frontiers for business to other countries because they have realized that the economic future of their respective countries lies within international trade. The number of Free Trade Agreements, Trade Promotion Agreements, and agreements that promote trade among countries in general has skyrocketed in the past decade; this only affirms what was said before in terms of theimportance of international trade. The global economy has given companies and countries access to markets all over the world, markets that they did not have access before. Goods and services are being sold in greater quantities and in more countries than ever before.
The current paper will be an opportunity for me to go deeper in topics as diverse as but not limited to: current trends ininternational trade, the role that banking institutions play in an international business transaction, the different risks that you run when involved in an international business transaction, the different payment methods that a customer has when they have entered an international business transaction (better known as Trade Finance), advantages of using banks instead of self-financing, and the mostimportant Incoterms used in international trade.

Current Trends in Global Trade
The exponentially growing number of international business transactions in the past decade has led us to identify certain trends. International trade has become more complex right now; we see a shift from documentary credit to open accounts, which adds complexity within the supply chain of the transaction. The growinguse of export and receivable finance creates a new dimension to Trade Finance. Trade financing is the provision of any form of financing that enables a trading activity to take place and which may be made directly to the supplier, to facilitate procurement of items for immediate sale and/or for storage for future activities, or it could be provided to the buyer, to enable him meet contractobligations. We also see general signs of improvements on credit availability which is a magnificent thing but at the same time it creates more complex scenarios in an international trade setting.
Another important trend in global trade is the market sophistication that all the parties involved in the transaction are going through; involved parties now expect advanced and customized trade solutions fortheir needs. As market sophistications grows, so does the inclination of these parties to use technology to complement their existing processes with further emphasis on technology linked to productivity, information management and risk management.
One of the most important trends that international trade has seen in the past decade has been the collaboration that the different parties involved...