Positive Changes and Remaining Shortcomings of Incoterms®2020

Abstract

With the deepening of reform and opening up, China has become the world's second largest economy. The huge volume of trade highlights the importance of understanding and familiarizing oneself with relevant trade rules. International Commercial Terms published by the International Chamber of Commerce is currently the most widely accepted and authoritative commercial practice in the world. When parties enter into international trade contracts, they often refer to relevant trade terms to regulate some of the rights and obligations of buyers and sellers. Therefore, it is necessary to study this general rule. The International Chamber of Commerce officially launched Incoterms®2020 in January, 2020, which requires both trading parties trade with each other according to it. By analyzing the positive changes and remaining shortcomings of Incoterms®2020 will have a significant impact on both sides of trade. And how to correctly select and apply Incoterms®2020 in the contract based on specific trade scenarios in negotiation and contract negotiation work will enable domestic trade enterprises and practitioners to prepare in advance for the use of the new general rules, thereby reducing the probability of improper use of trade terms and reducing transaction risks and additional costs caused by improper use of trade terms. As is mentioned above, the paper is organized for the purposes of providing reference and inspiration for parties engaged in international commercial activities both domestically and overseas.