DOCUMENTARY CREDIT: INVOLVEMENT and ROLE of DIFFERENT PARTIES and DOCUMENTS
INTRODUCTION
1.1 BACKGROUND
The spree of economic integration process has inflated the trade volumes dramatically during the last few decades. And here international trade consequently demonstrates the extent of globalization with increased spatial interdependencies amongst the participants of the global economy and their level of integration. The volume of exchanged goods and services between the nations is taking a growing share in generating wealth, mainly by offering economic growth opportunities in new regions and by reducing the costs of procurement for a wide array of trade bales. The initiatives under the rubric of multilateralism by the WTO, the bilateral as well the regional agreements popularly known as the PTAs, gargantuan efforts undertaken by the ICC to simplify the trade procedures and practices, tremendous emphasis on external sector liberalization proposed by the think tanks and business community compelling the policy makers across the globe to go for opening up-all these worked as the pertinent catalysts for huge surge in trade volumes. Now, the international trade continues to grow every year as nations expand their global trade and new nations are joining.
In these ever-increasing trade transactions, trade payment is particularly very important. In international transactions, securing payments might be affected by a number of factors such as the relative strength of the counterparties, credibility of the traders as well as the domestic regulatory requirements. Most important among them are the potential risks and costs which the exporters and the importers are willing to share between them. To succeed in today’s global marketplace, exporters must offer their customers attrac tive sales terms supported by the appropriate payment method to win over the foreign competitors. The risks and costs of today’s global payment system, associated in international trade transactions have been exerting pressure on the trade volumes. It calls for an
1.1 BACKGROUND
The spree of economic integration process has inflated the trade volumes dramatically during the last few decades. And here international trade consequently demonstrates the extent of globalization with increased spatial interdependencies amongst the participants of the global economy and their level of integration. The volume of exchanged goods and services between the nations is taking a growing share in generating wealth, mainly by offering economic growth opportunities in new regions and by reducing the costs of procurement for a wide array of trade bales. The initiatives under the rubric of multilateralism by the WTO, the bilateral as well the regional agreements popularly known as the PTAs, gargantuan efforts undertaken by the ICC to simplify the trade procedures and practices, tremendous emphasis on external sector liberalization proposed by the think tanks and business community compelling the policy makers across the globe to go for opening up-all these worked as the pertinent catalysts for huge surge in trade volumes. Now, the international trade continues to grow every year as nations expand their global trade and new nations are joining.
In these ever-increasing trade transactions, trade payment is particularly very important. In international transactions, securing payments might be affected by a number of factors such as the relative strength of the counterparties, credibility of the traders as well as the domestic regulatory requirements. Most important among them are the potential risks and costs which the exporters and the importers are willing to share between them. To succeed in today’s global marketplace, exporters must offer their customers attrac tive sales terms supported by the appropriate payment method to win over the foreign competitors. The risks and costs of today’s global payment system, associated in international trade transactions have been exerting pressure on the trade volumes. It calls for an