4.6 International Contracting

International Contracting• The policies and procedures that govern the acquisition and

sale of goods and services with foreign nationals and governments.

• Can sometimes result in lower costs and improved quality for buyers and increased sales and profitability for sellers.

Differences btw domestic and international markets

• Currency differences• Different meaning of common business terms• Different processes• Export/Import issues• Language• Legal processes• Location• Political climate• Social customs• Tax implications • Third-party involvement• Entry into a foreign county by expatriates

Agreements & Restrictions• Agreements exist among US and its trading partners• General Agreement on Tariffs and Trade (GATT)• GATT Government Procurement Code• North American Free Trade Agreement (NAFTA)

• Free trade agreement – a treaty between two or more countries that do not impose tariffs for commerce conducted across their borders

• Export Administration Regulation (EAR) – provides specific instructions on the use and types of export licenses required for certain commodities, software and technology

• International Commercial Terms (Incoterms) – provides internationally accepted definitions and rules of interpretation for most common commercial terms

• International Traffic in Arms Regulation (ITAR) - a set of US government regulations that control the export and import of defense-related articles and services on the United States Munitions List (USML).