Final answer:
Incoterms are pre-defined commercial terms used in international trade to assign responsibilities for the delivery of goods. They clarify tasks, costs, and risks, ensuring a common understanding between the seller and buyer. The World Trade Organization helps establish trade rules but does not mandate uniform consumer safety standards across nations.
Step-by-step explanation:
The term Incoterms stands for International Commercial Terms, which is a set of pre-defined commercial terms published by the International Chamber of Commerce (ICC). Incoterms are used in international trade to clearly define the responsibilities of sellers and buyers for the delivery of goods under sales contracts. They are essential for smooth international trade by providing standardized language that helps participants avoid misunderstandings by clarifying the tasks, costs, and risks involved in the delivery of goods from sellers to buyers.
Incoterms influence the costs and risks that are associated with global trade and are a crucial part of international transactions. They deal with aspects like the point of delivery, the transfer of risks from the seller to the buyer, and who is responsible for which freight and insurance costs, among others.
The World Trade Organization (WTO) also plays a significant role in establishing rules that govern international trade and providing a forum for trade negotiations. However, the WTO does not require that all nations impose the same consumer safety standards; member countries have the autonomy to set their own standards, leading to variation from one country to another.