Along with the development of time, the needs of human life are increasing both type, quality and quantity and shape. Economic problems arise due to the infinite human needs, while the tools that satisfy human needs in the form of goods or services are very limited. To solve the problem of life, various efforts are made by humans, among them by producing such goods or services. In addition, human beings interact with each other to meet the needs and interests of each other. This relationship can be formed between individuals or between groups. Intergroup relations can be done between villages, inter-provincial or even more internationally. Now we will study the trade that takes place between countries or international trade.
The idea of international trade is no different from the idea of trade in general. Trade means the process of exchanging or buying and selling, while international means international in the world. International trade is defined as the exchange of goods or services that are mutually beneficial to one another. International trade is more complex than domestic trade, as international trade transcends customs and state boundaries. Meanwhile, each country has its own currency, its own economic system, its own customs rules, its trading system, its system of measurements or scales and different quality standards.
International trade is better known as export and import terms. Export means the activity of selling goods and services called the exporting country. The import is the activity of buying goods and services from abroad. The country that imports goods is called the importer country. The export market is currently increasingly open due to the formation of free trade organizations in various regions, including Asean Free Trade Area (AFTA), Asia Pacific Economic Cooperation (APEC), and World Trade Organization (WTO).
Why do people do international economic activities? What drives the occurrence of international trade is the presence of advantages and disadvantages of domestic goods and services production. That is, to meet the needs of the people of a country producing goods and services. Production for certain commodities may be excessive, but for other commodities it may be less or not at all. The excess production is sold or exported to other countries. Meanwhile, certain commodity shortages are imported or imported from other countries. So international trade arose to sell excess production and to import production shortage.
Payment tools used in international trade include:
1. full bodied money is a payment system using physical money directly either using Saudi riyal currency, dollars or other currencies agreed upon by the countries conducting the sale and purchase transaction. Examples of such payments are made in cash payments made by foreign tourists who were vacationing in Saudi Arabia, workers who work abroad, pilgrims.
2. Cable Order; Payment system using checks which are then forwarded using a telegram. Such payment systems are usually used by banks located in the country to conduct transactions of customers who are abroad using the source of funds available in the customer's account.
3. Bill of Exchange; Bill of exchange is usually used by the party in accordance with the agreement between the buyer and the seller that has been previously agreed. Through the use of the bill of exchange, the bank located in the country will issue a payment order to the bank abroad with the markings that have been written on the bill of exchange.
4. Letter of Credit; Letter of credit is a facility used to facilitate the sale and purchase of international goods. Due to the remote location so that makes the trust of buyers and sellers so low that with the help of the bank as an intermediary will provide a guarantee on the process of buying and selling with credit.
5. Check; Checks are used for international payment processing. The trick is that the importer will send a check to the exporter so that with the bank intermediary that has been designated by the exporter so that the exporter will be easier to liquidate the funds.
6. Gold; Gold is often used as a means of payment for international trade because of its value which tends to be stable and does not experience inflation as much as money.
7. Fintech; The digital era has an impact on all aspects of human life, one of them in terms of payment, namely the use of electronic money, including PayPal, e-money, Gopay and so on.
0 Comments