Explain the fundamental financing problem in international trade?

What will be an ideal response?

Answer: When goods are shipped internationally, it takes time to ship them, and someone must own the goods, which requires financing, during their transit between countries. The exporter would like to be paid immediately upon completion of the goods, but this requires that the importer does the financing. The importer is not interested in pre-paying for goods that may be damaged during shipment and is generally interested in paying as late as possible. The less net working capital that the importer utilizes, the more valuable is his business. These problems arise in domestic shipments of goods as well, but when the shipment and sale of goods occur within a single country, there is a common jurisdiction and system of courts that adjudicates contractual disputes between buyers and sellers. When goods are shipped across borders, though, additional legal complexities arise.