International Trade Rules and challenges for international business

International trade rules are crucial for facilitating fair and efficient commerce between nations. They help remove barriers, ensure fair competition, promote investment, and encourage sustainable development. Trade agreements like those in the EU, EAC, ECOWAS, and NAFTA have reduced tariffs and quotas, enabling businesses to expand into new markets. Regulations ensure product safety, level the playing field for workers, and incentivize innovation. While some fear trade can lead to job losses or cultural homogenization, most economists agree that overall, nations and consumers benefit from buying and selling abroad. Imports provide greater choice and value, while exports allow countries to specialize in their comparative advantages, raising living standards. By following international trade rules, businesses can navigate the global marketplace more effectively, driving economic growth and mutual prosperity.

1. International
Trade Rules and
competitiveness
Prepared By: RupeshKhanal (RK)

2. •Brief Introduction of Trades
and Types of Trades
•Domestic Trade Vs
Foreign/international
/cross border Trade
•Definition and scope of
international trade
•Bilateral Trade vs
Multilateral Trade

3. •Importance of international
business
•Cost Difference Advantage- eg: Subsidy given
by USA for cotton textile
•Specialization and division of labour: eg:
skilled engineer is hired from overseas for
construction, wine for Italy, automobile-Japan
•Natural resources exchanges among the
countries- eg: importing of petroleum product
in Nepal
•Increase in employment and Income
•Economic Development: Increase in GDP of
Nation
•Good relationship with foreign countries: Eg:
India and china
•To make competitiveness in market: Demand
and supply

4. Fundamentals of
International
Trade
Key concepts: exports, imports.
Trade balance, and trade surplus/deficit
Importance of globalization and liberalization
in expanding international trade
Role of international organizations like WTO,
IMF, SAFTA and regional trade agreements

5. Requirements
for International
Trade
Legal and regulatory framework: Trade policies,
import-export regulations, and compliance with
international standards
Documentation: Certificates of origin,
commercial invoices, bills of lading, and customs
declarations, packing list
Financial requirements: Access to trade finance,
letters of credit, and foreign exchange
regulations, BBNI
Infrastructure: Ports, logistics, ICT facilities, and
banking services necessary for facilitating
international trade

6. Challenges of
International
Trade in Nepal
Geographical challenges: Landlocked status and
rugged terrain impacting logistics
Limited infrastructure: Inadequate transportation,
warehousing, and technological infrastructure
Regulatory hurdles: Bureaucracy, regulatory
compliance, and frequent changes in trade policies
Political instability and economic volatility: Effects on
investor confidence and trade flows for FDI
Competitiveness: Challenges in maintaining
competitive pricing and meeting international quality
standards

7. Opportunities
in International
Trade
Expanding export base: Potential markets for
traditional products like textiles, tea, coffee,
handicrafts, and tourism
Strategic partnerships: Leveraging trade agreements
with countries like India, China, and potential
opportunities in emerging markets
Niche markets: Organic products, herbal medicines,
and eco-tourism with growing global demand
Technological advancements: Using ICT for better
market access and to streamline trade processes
Encouraging FDI: Attracting foreign direct investment
to boost industrial capacity and export potential

8. Marketing
Strategies
•Product Standarization: same standard of
products in foreign and domestic market
•Product Adaptation: eg: MD in India don’t
sell beef burger
•Product Innovation: eg: New Product line
Product Strategy based on
•Penetration Pricing(श ेबप्र यल्ुम) : Eg: Low
pricing
•Market Skimming Pricing -Eg: Luxury
products
•Competition based Pricing
Pricing Strategy based on

9. Marketing
Strategies
Promotion Strategy based on
•Advertising: via broadcast-audio, video
/Magazines/ flyers/
•Sales promotions: eg: buy one get one
free
•Public relationship: engaging with
management, clubs, groups
•Personal Selling: Personally, meeting
and branding the products
•Direct Marketing such as Branding,
DM, Fair and Exhibitions in
international trade expo, Networking

10. Marketing
Strategies
•Physical Distribution: Order placed,
warehouses, Inventory Management
•Channel of Distribution:
•First Level: Producer to consumers
•Second Level: Producer to Retailer
to Consumers
•Third Level: Producer to
wholesaler to Retailer to
Consumers
Place Strategy based on:

11. CompetitivenessAdvantage Theory: For export
•Applicationof this theory:
•France (wine Production),
•Switzerland (Watch),
•Japan (Automobile),
•Egypt/Rome (History),
•UAE (Petroleum),
•Nepal (Mo:Mo)
•Taking one example (Explain)
Apply the factors affecting
Competitive Advantage
1.Factor Condition
•These are the factors of
production such as land,
labour and capital
2.Demand Condition
•Demand and supply ratio in
the local and Niche Market

12. To be conti....
3.Related and supporting Industries
•All supporting raw materials and goods for
creating Final GoodsFor eg: In case French
Wine:bottle, lid, grapes, levelling, p packaging,
distribution etc
4.Firm’s Strategy and Rivalry: Clear strategy /
well defining planning
•International Strategy is highly benefited.

13. Strategy for Competitive Markets:

14. Strategy for
Competitive
Markets
There are Two Types of
Competitive Pressure
Pressure for Cost
Reduction
Pressure for Local
Responsiveness
Example: Pork+Rice+Pickle combo in 5
Dollars from Nepa hotel
Nepa hotel wants to open the Branch hotel
in Japan/Kuwait/Vietnam/ Pakistan
Analize the right Strategy based on
Competitive pressure

15. Procedures for
International
Trade
Initially: Market research and
business planning
Market research and product selection:
Identifying target markets and
understanding consumer behaviour and
preferences, demand, competition and
market trend
Secondly: completion of
Business Setup and
registration
OCR Registration/ Gharelu Registration
EXIM Code
Respective department registration
Maintain quality control and
Standards of products
NS Certified/ISO/HACCP/ CE etc as per
country’s requirement
Obtain PO or approved PO to export and import
Export procedure: Steps including product
identification, obtaining necessary licenses, production,
packaging, and labelling as per international standards

16. Procedures for
International
Trade
Shipping and logistics: Choosing
appropriate shipping methods,
insurance, and handling logistics
through Freight Agent
Customs clearance: Navigating
customs procedures and obtaining
clearance through the custom
agent
Payment methods: Negotiating
terms of payment and ensuring
secure transactions

17. Case Study:
Successful
International
Trade Example
Presentation of a successful
Nepalese company engaging in
international trade
Overview of their journey: Initial
challenges, strategies employed,
and eventual success
Key takeaways: best practices,
lessons learned, and replicable
strategies for other businesses

18. Conclusion and
Future Outlook
Summary of key points discussed:
Fundamentals, requirements, challenges,
opportunities, marketing, and procedures
Emphasis on the potential of international trade
to contribute to Nepal’s economic growth and
development
Future outlook: Expanding trade networks,
continuous improvement in infrastructure, and
adoption of modern trade practices
Encouragement to explore and engage in
international trade for a prosperous future
Prepared byRupeshKhanal (RK)

19. ThankYou...
Prepared By: Rupesh Khanal