International Trade Finance and Investment: A Comprehensive Report

This report provides a comprehensive analysis of international trade finance and investment, focusing on the UK market. It begins with an executive summary and introduction, then delves into the background of financial markets, exploring their role in allocating capital both domestically and internationally. The report examines capital allocation within the UK's domestic economy and then shifts to international markets, using France as a case study. Finally, it evaluates the UK economy, critically assessing the challenges posed by industrialization and trade policies. The report includes a conclusion, recommendations, and references, offering a complete overview of the subject matter. The report aims to help the reader understand the intricacies of international trade finance and investment and the challenges and opportunities that come with it.

International
trade finance and
investment

EXECUTIVE SUMMARY
International trade and finance and investments refers to the company which help in easy
transaction of trading globally across the world with in the national and the international market
so that easy exports and the imports can take place. By doing the export and the import the
company can increase its financial position and can earn the benefit in the long run.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
Background of financial market...................................................................................................1
Allocation of capital within domestic economy:.........................................................................2
Allocation of Capital within International markets:....................................................................4
TASK 2 ...........................................................................................................................................5
Evaluation of Economy................................................................................................................5
Critically evaluating the challenges that is faced by country because of industrialisation and
trade policies................................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
International trade finance refers to the trade that occurs on the border of the nation and
can easily do the export and import in the different countries. International trading helps in easy
transportation of the goods. International transaction have various risks like the payment risk,
country risk and corporate risk (Altomonte, 2016). Trade transactions requires the sellers and the
buyers of the goods. This report is based in the international trade finance and investment of the
UK with the international markets. In this report covers the topics regarding the financial
markets, its allocation within the domestic company and the allocation within the internation
market. Then the evaluation of the international market will be done and the industrialisation and
the trade policies challenges faced by the economy will be studies so that proper information can
be analysed regarding the international trade finance and investment.
TASK 1
Background of financial market
Financial markets refers to the place where the securities are been traded in an easy
manner which includes the stock and the bond markets. It helps in the smooth functioning of the
economy so that financial transaction can take place in an easy manner. It has the low transaction
cost which help in easy flow of the work within an international market. The financial market
acts as the intermediary between the investors and the savers so that flow money can be made in
an easy way. The savings in the financial markets help in the mobilization of the goods so that
the savings can be used for the productive use. It also helps in deciding and fixing the price of
the securities on the basis of the demand of the goods and the supply of the goods. The investors
in the financial market can sell the securities and convert these securities into the cash. Financial
markets helps in saving the time, money of the investors as they do not have to waste the time in
searching for the buyers in the market (Sharma and Mishra, 2015). Financial markets helps in
raising the money for the ventures and help in stabilizing the confidence of employees. There are
the different types of financial market like stock market, bond market, commodities market,
derivatives and the Forex trading. It helps in acquiring the large amount of capital and can be
done only by the bond and the stock market. In the bonds the money is loaned by the investors
and the fixed rate of interest is established and the company have to pay for it. Financial
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marketing helps in planning for investing the money in the capital which helps in trading in the
international market. Foreign markets do the speculation in the currencies also.
Financial market of UK: It helps in holding the equity of 25 percent in the economy
across the globe. UK also covers the 52 percent of the equity market in the Europe. Stock
exchange in UK was considered as the highest stock exchange which helps in providing the
employment to the 5000 individuals in the UK. The gross domestic production of the UL in the
year 2007 is 0.8 percent and this production remains the constant for many years. The place in
the market in the UK is very popular where the selling of the assets takes places and the easy
transactions of the securities is made and the transactions related to the export and the import of
the goods become easier (Dutta, Haider and Das, 2017). The organisation is working properly
and helps in providing the loans to the companies which are new so that they can earn the
revenue and can trade in the long term. Foreign exchange market refers to the market in which
the exchange of the securities and the curries takes place over the different countries so that there
is an easy export and the import can take place and the goods can transfer easily in different
countries and have proper control over them regarding the payments of the securities and the
bonds. There are number of customers who are managed by the brokers so that the proper
funding can be done of the financial securities and the bonds. In UK there are millions of broker
regarding the funding of the customers. It helps in increasing the economy of the nations so that
efficient working can be done and can easily raise the capital. In UK the financial market plays
an important role so that the funding and the investing become easier and can help in trading the
goods in an easy manner.
Allocation of capital within domestic economy:
Domestic economy: It refers to the trade that occurs in the economy country itself. In term
of GDP economy of the UK is the fifth largest in which the transaction can be made on easy
manner and can trade easily with the countries itself. UK stands in the ninth position in the
purchasing power parity of the economy in which the easy purchase can be made from the
different nations. UK is the fifth largest exporter in the world and can trade the goods easily to
other countries which help in earning the revenue. London is the second financial market in the
world where the transaction are made in an easy manner. The currency used by the UK is pound
sterling which is the fourth largest currency in the world by which the transaction can be made
and can gain the profit with the countries whose price is low. In the year 2020 because of the
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COVID the ban was imposed on some of the industries and the travel in the UK which leads to
decline in the economy of the UK. The economic growth of the company becomes weak and the
travel company is suffering from the loss as it is almost one year there is less travel of the person
in the UK which leads to down fall in the economy (Ferrier, Reyes and Zhu, 2016). In the year
2020 BOE has purchased billions of the government bonds so that economy remains stable
during the period of the recession. Tax in the UK was paid by the two levels of the government
that are the state and the local government which help in granting the loan to the people in the
UK and imposed the tax on them. Central government helps in financing the loans to the local
government and the different taxes are charge on them so that the economy may work in an easy
manner and there is proper inflow and outflow of the money in the country. In UK the European
Union is the single trading partners which export the products of 43.5% which is the large
amount of inflow and the outflow of cash. Economy of the UK of most affected in the year 2020
because of the COVID.
Capital allocation within domestic economy of United Kingdom: Capital allocation of
the goods helps in allocation of goods in proper manner so that efficiency it helps in the proper
distribution of the resources in the economy for the better economy. Allocation of the capital
takes place in the UK in various forms:
 Infrastructure enhancement: It has been stated that the development in the
infrastructure helps in providing the growth in the economy and help in providing quality
of life to the individual so that they can increase their efficiency and helps in
enhancement of the economy. In UK the government focuses on the infrastructure
development so that there is more growth and the proper flow of the economy and helps
in increase the transaction and the opportunities to trade in the different economy as
people of different nations get attracted easily.
 Small business: It has been stated the organizations which have the small business there
would be more allocation of the capital invested so that there is easy flow of capital in the
market and should have proper growth. In UK the government is focusing on the small
business so that the individual can earn their livelihood and can increase their standard of
living in the economy (Steven, 2016).
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 Large players: It indicates the large player in the market and helps in increasing the
efficiency as there are number of employees and should adopt different technologies and
work on a large scale which helps in enhancing the UK government economy for the
proper flow of the goods and work can be done easily in an economy.
Allocation of Capital within International markets:
International market can be referred as the market in which is outside the boundaries of the
nation and the company is having the citizenship of that country. It helps in maximizing the
profit of the organisation and helps in improving the efficiency for the proper flow of the work.
United capital is allocating its income in the France which helps in proper flow of goods and
helps in enhancing its efficiency (Lester, Mercurio and Davies, 2018). Capital allocation in
France is described below:
 Debt repayment refers to the debt borrowed by the nation and it is time to pay all of the
debts of the company that is borrowed by the other country. In the France they are
concerned with the repayment of all credit and the debt of the economy so that there is
easy flow of money in the market.
 Dividends refers to the amount paid to the shareholders as the rewards and helps in
taking the decisions regarding the investments so that there is proper growth in the
economy and an easy flow of decisions can be taken. As there is an easy allocations of
the resources in the France which help in increasing the efficiency of the United kingdom
so that there is easy flow of the good and because of the increasing efficiency and the
profits in the company shareholders are paid dividend which leads to the enhancement in
the value of the economy and the individuals.
 Mergers and acquisition refers to the mergers with the different nations and of the
United Kingdom so that the profit can be maximized and efficiency is increased which
helps in easy transactions between the countries. United Kingdom has done its mergers
from the France which help in generating the revenue and the growth of the economy
sometimes it also involves the risk and the risk is also arise that in future the nation will
get the proper return or not.
 Share buyback means the purchasing of the own shared in the different markets situated
outside the borders. The outstanding shares will decrease and help in trading easily with
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the France economy and help in increasing the per value share of the economy for the
efficient flow of the trading in the economy.
 Capital increment in the France leads to increase in the profit and the efficiency of the
company so that there is easy flow of the goods in the market and can easily be invested.
In the context of the UK the efficiency increases as the GDP of the company increase and
the productivity helps in the easy flow of goods and have the high impact on the social
and the economic factors of the country.
TASK 2
Evaluation of Economy
While studying the economy of the France it has been analysed that it is in the fifth
position in the economy in context to GDP. France is the biggest leader in the auto mobile
industry as well as in other goods also. The GDP of the France is only contracted in the year
2009. For the policy makers the biggest concern is the unemployment rates which affect the
economy and the biggest concern of the nation because of their future growth. There was the
huge declined in the FDI contracting to about 77% which affect the economy (McNeill, 2017).
The largest investments in the France are of United Kingdom, United States, Germany and Italy.
It is the second largest trading partner in the exports in Europe. The France consume the large
amount of the importer consumer goods which are less costly then the products which are made
in France this is the biggest growth of the France. France is the importer of the oils and can
easily changes the prices which have to bear by other nations and help in the development of the
France. The nation has the regional and the bilateral trade agreements with the other countries
and an open economy. Financial sector is relatively the closed economy and have only few bank
s which are operating it. GDP ratio of France is close to the 30% of the France economy and has
the highest dollar of the goods are exported. Top imported products of the France are machine,
vehicles, crude oils and the aircraft. Economy of the France will grow up to 6.7% in 2021 and
2.9% in the year 2022.
Critically evaluating the challenges that is faced by country because of industrialisation and trade
policies
Industrialization
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It refers to the period in which the social and the economic change of the humans are
transferred to the industrial society which includes the proper use of machines and the proper use
of the technologies in the organisation and includes in the economic growth, use of technology
and the efficient use of the resources in the organisation. It transfer the agriculture industry into
the manufacturing industry. It helps in increasing the income of the people so that they can raise
there standard of living. The first industrialization was occurred in the 18th and the 19th century in
the Europe and the North America and later it was expanded to the other areas. Industrial policy
of the France was increased in the year 2017-2018 which includes reduction of tax in capital and
help in making the industrial job position and the investment in the innovations so that the
economy will grow up (Moon, 2018).
Challenge 1
Environmental Disadvantage: The foremost challenge faced by the France is the
environmental impact which has its affect on the environment as the economy is using the
resource of the environment so there is proper use. As the pollution in the environment affects
the industry and the France economy has to pay the high taxes as they are using the resources
from the environment and have its impact on the industry in the large and economy will affect as
they create the pollution in the environment which may cause to serious diseases and will affect
the individual in the organisation as well as the industrialization.
Challenge 2
Social Disadvantage: Social disadvantage of the industrialization is the migration of the
workers in the cities and the workers have the limited job satisfaction which effects the morale of
the employees. Sometimes the individual working in the factories may cause the health issues to
them as they work in the areas where the life of the individual is riskyand can take the use of
machines also for the proper development and makes rthe work easier in the organisation. It
affects the organisation as the lower qualities of food are also served by the organisation.
Trade policies
It refers to the agreement and have the proper control of the exports and the imports by
the nation and the individual have to follow the strict rules and the regulation created by the
organisation in trading of goods. There are the different constitutes of the trade policy that are
tariffs, trade barriers and safety (Titi, 2015). Trade policies adopt the different dimension on the
basis of the national foreign policy the economy of the country is protected, bilateral trade
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policies in which the transactions between the two countries will occur and will get benefits and
the international trade policies in which the transaction occurs overseas.
Challenge 1
Licensing: Trade policy face the challenge of licensing as all the companies in the france
do not have the license to trade in the different country only the product which donot have affect
on thye environment will be traded only and no wastage of resources. The license of selling the
goods to the another nation should benefit the other country.
Challenge 2
Taxation: Taxation is the biggest challange faced by the company as for trading into the
different countries companies have to pay the high tax to the goverment which affect the
individual income (Roy, Shah and Sharma 2020). In France the company has to pay the high tax
who are exporting goods to the other nations like the export import tax, excise duty, custom tax
these are paid to the goverment and with the proper licensing and should have the proper
documentation than only the company can trade to the other country. Taxation policy is different
in the different countries and the company have to follow the rules strictly otherwise the high
penalty is charged by the goverment on companies.
CONCLUSION
It has been concludeed from the above report that the international trade finance and
investment refers to the trading of goods in the different countries so that easy transactions can
take place and it help the economy to grow and to earn the revenue. It helps in conducting the
trade across globally. The market involves the forex, bonds, derivatives. In this report allocation
of the resources is done in the domestic economy so that the funds can be distributed properly
and the allocation within the borders are done so that there is easy transaction between the two
countries because of this various approaches are applied in the organistion like the debt
payments, merger and acquisition. The study of industrialisation and the trade policies are done
and challages they are facing is studied so that the work can be done easily in the market and
affect the international transaction of the buisness.
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REFERENCES
Books and Journals
Altomonte, C., 2016. Measuring competitiveness in Europe: resource allocation, granularity
and trade. Bruegel.
Dutta, C. B., Haider, M. Z. and Das, D. K., 2017. Dynamics of economic growth, investment and
trade openness: Evidence from Bangladesh. South Asian Journal of Macroeconomics
and Public Finance. 6(1). pp.82-104.
Ferrier, G. D., Reyes, J. and Zhu, Z., 2016. Technology diffusion on the international trade
network. Journal of Public Economic Theory. 18(2). pp.291-312.
Lester, S., Mercurio, B. and Davies, A., 2018. World trade law: text, materials and commentary.
Bloomsbury Publishing.
McNeill, D. and et. al., 2017. Trade and investment agreements: implications for health
protection. Journal of World Trade. 51(1). pp.159-182.
Moon, B. E., 2018. Dilemmas of international trade. Routledge.
Roy, A., Shah, M. and Sharma, R., 2020. Need for Foreign Investment. Journal of Accounting,
Finance & Marketing Technology. 1(1). pp.18-21.
Sharma, C. and Mishra, R. K., 2015. International trade and performance of firms: Unraveling
export, import and productivity puzzle. The Quarterly Review of Economics and
Finance. 57. pp.61-74.
Steven, R., 2016. Japan and the new world order: global investments, trade and finance.
Springer.
Titi, C., 2015. International investment law and the European Union: towards a new generation
of international investment agreements. European Journal of International Law. 26(3).
pp.639-661.
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