Question

QUESTION 4 Provide an example of an international trade of service. Explain the logistic difficulties. Explain the managerial challenges to the exporters and to the importers

Answer 1

Service basically refers to sale of intangible goods. International trade of services refers to cross-border supply/trade of services. For example, professional services rendered by a CPA in the USA to a person located outside the USA (say, Canada).

Logistic difficulties could arise due international shipping/freight, exposure to higher risk on account of longer supply chain etc.

Challenges faced by exporters and importers:

1. Logistics challenges such as International shipping terms

2. Inflation and rising costs

3. Cross border trade difficulties

4. Uncertainty and lack of knowledge of foreign markets.