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Problems of Foreign Trade

Forging trade raises certain peculiar problems which distinguish it form home trade and makes it necessary for every Sate to control foreign trade and lay down procedures.. Some of the important problems peculiar to foreign trade are:

1.    Every country has its own currency, which is not in circulation in other courtiers. Payments as between nations, therefore, create complication.
2.    Every country being a separate and independent political entity has its own laws, customs and regulations which have a direct bearing on import and export goods.
3.    The goods are exposed to much greater risks than in the case of home trade because they have tot be transported over long distances separating nations on the globe.
4.    It follows form the above that there is a wide gap between the time when the goods are dispatched and the time when the goods ate dispatched and the time when the goods are received and paid for.
5.    Since there is no direct and close contact between the seller and the purchaser, the seller has to take special steps to verity the credit worthiness of the purchaser.
6.    A large number of documents-some required under law and some under customs of trade-have to be drawn of filled up and dispatched to the other party. 

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