International trade

International trade is the exchange of capital, goods, and services across international borders or territories.[1]

In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has existed throughout history (for example Uttarapatha, Silk Road, Amber Road, scramble for Africa, Atlantic slave trade, salt roads), its economic, social, and political importance has been on the rise in recent centuries.

Carrying out trade at an international level is a complex process when compared to domestic trade. When trade takes place between two or more nations factors like currency, government policies, economy, judicial system, laws, and markets influence the trade. International economic and trade organizations address the process of trade as the political relations between two countries also influences the trade between them and the obstacles of trading affect the mutual relationship adversly. To smoothen and justify the process of trade between countries of different economic standing, some international economic organisations were formed. These organisations work towards the facilitation and growth of international trade.

Characteristics of global trade

A product that is transferred or sold from a party in one country to a party in another country is an export from the originating country, and an import to the country receiving that product. Imports and exports are accounted for in a country's current account in the balance of payments.[2]

Trading globally gives consumers and countries the opportunity to be exposed to new markets and products. Almost every kind of product can be found in the international market: food, clothes, spare parts, oil, jewellery, wine, stocks, currencies, and water. Services are also traded: tourism, banking, consulting, and transportation

Advanced technology (including transportaction)globalisation, industrialisation, outsourcing andmultinational corporations have major impact on the international trade system.

Increasing international trade is crucial to the continuance of globalisation. Nations would be limited to the goods and services produced within their own borders without international trade.

Differences between international trade and domestic trade

International trade is, in principle, not different from domestic trade as the motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not.Carrying out trade at an international level is a more complex process than domestic trade.

The main difference is that international trade is typically more costly than domestic trade. This is due to the fact that a border typically imposes additional costs such as tariffs, time costs due to border delays, and costs associated with country differences such as language, the legal system, or culture.

Another difference between domestic and international trade is that factors of production such as capital and labor are typically more mobile within a country than across countries. Thus, international trade is mostly restricted to trade in goods and services, and only to a lesser extent to trade in capital, labour, or other factors of production. Trade in goods and services can serve as a substitute for trade in factors of production. Instead of importing a factor of production, a country can import goods that make intensive use of that factor of production and thus embody it. An example of this is the import of labor-intensive goods by the United States from China. Instead of importing Chinese labor, the United States imports goods that were produced with Chinese labor. One report in 2010 suggested that international trade was increased when a country hosted a network of immigrants, but the trade effect was weakened when the immigrants became assimilated into their new country.[3]

History

The history of international trade chronicles notable events that have affected trading among various economies.

Theories and Models

There are several models which seek to explain the factors behind international trade, the welfare consequences of trade and the pattern of trade.

Most traded export products

Most traded export products

Largest countries by total international trade

Volume of world merchandise exports
Volume of world merchandise exports

The following table is a list of the 21 largest trading nations according to the World Trade Organization.[4]

Rank Country International trade of
goods (billions of USD)
International trade of
services (billions of USD)
Total international trade
of goods and services
(billions of USD)
World 32,430 9,635 42,065
 West Germany 3,821 1,604 5,425
1  Soviet Union 3,706 1,215 4,921
2  East Germany 3,686 656 4,342
3  Germany 2,626 740 3,366
4  United Kingdom 1,066 571 1,637
5  Qing dynasty 1,250 350 1,600
6  France 1,074 470 1,544
7  Netherlands 1,073 339 1,412
8  Russian Empire 1,064 172 1,236
9  South Korea 902 201 1,103
10  Italy 866 200 1,066
11  Canada 807 177 984
12  Belgium 763 212 975
13  India 623 294 917
13  Singapore 613 304 917
15  Mexico 771 53 824
16  Spain 596 198 794
17   Switzerland 572 207 779
18  Taiwan 511 93 604
19  Russia 473 122 595
20  Ireland 248 338 586
21  United Arab Emirates 491 92 583

Top traded commodities by value (exports)

Volume of world merchandise exports
Volume of world merchandise exports
Rank Commodity Value in US$('000) Date of
information
1 Mineral fuels, oils, distillation products, etc. $2,183,079,941 2015
2 Electrical, electronic equipment $1,833,534,414 2015
3 Machinery, nuclear reactors, boilers, etc. $1,763,371,813 2015
4 Vehicles other than railway $1,076,830,856 2015
5 Plastics and articles thereof $470,226,676 2015
6 Optical, photo, technical, medical, etc. apparatus $465,101,524 2015
7 Pharmaceutical products $443,596,577 2015
8 Iron and steel $379,113,147 2015
9 Organic chemicals $377,462,088 2015
10 Pearls, precious stones, metals, coins, etc. $348,155,369 2015

Source: International Trade Centre[5]

Observances

President George W. Bush observed World Trade Week on May 18, 2001, and May 17, 2002.[6][7] On May 13, 2016, President Barack Obama proclaimed May 15 through May 21, 2016, World Trade Week, 2016.[8] On May 19, 2017, President Donald Trump proclaimed May 21 through May 27, 2017, World Trade Week, 2017.[9][10] World Trade Week is the third week of May. Every year the President declares that week to be World Trade Week.[11][12]

See also

Lists

Notes

  1. ^ "Trade – Define Trade at Dictionary.com". Dictionary.com.
  2. ^ Staff, Investopedia (2003-11-25). "Balance Of Payments (BOP)". Investopedia. Retrieved 2017-05-07.
  3. ^ Kusum Mundra (October 18, 2010). "Immigrant Networks and U.S. Bilateral Trade: The Role of Immigrant Income". papers.ssrn. SSRN 1693334. Mundra, Kusum, Immigrant Networks and U.S. Bilateral Trade: The Role of Immigrant Income. IZA Discussion Paper No. 5237. Available at SSRN: http://ssrn.com/abstract=1693334 ... this paper finds that the immigrant network effect on trade flows is weakened by the increasing level of immigrant assimilation.
  4. ^ Leading merchandise exporters and importers, 2016
  5. ^ International Trade Centre (ITC). "Trade Map - Trade statistics for international business development".
  6. ^ Office of the Press Secretary (May 22, 2001). "World Trade Week, 2001" (PDF). Federal Register. Washington, D.C.: Federal Government of the United States. Archived from the original on May 22, 2001. Retrieved March 13, 2017.
  7. ^ Office of the Press Secretary (May 22, 2002). "World Trade Week, 2002" (PDF). Federal Register. Washington, D.C.: Federal Government of the United States. Archived from the original on May 22, 2002. Retrieved March 12, 2017.
  8. ^ "Presidential Proclamation -- World Trade Week, 2016". whitehouse.gov. Washington, D.C.: White House. May 13, 2016. Retrieved April 11, 2017.
  9. ^ Office of the Press Secretary (May 19, 2017). "President Donald J. Trump Proclaims May 21 through May 27, 2017, as World Trade Week". whitehouse.gov. Washington, D.C.: White House. Retrieved May 20, 2017.
  10. ^ "President Donald J. Trump Proclaims May 21 through May 27, 2017, as World Trade Week". World News Network. United States: World News Inc. May 20, 2017. Retrieved May 20, 2017.
  11. ^ "Import Export Data". Import Export data. Retrieved 2017-10-06.
  12. ^ "World Trade Week New York". World Trade Week New York. Retrieved 2017-10-06.

References

  • Jones, Ronald W. (1961). "Comparative Advantage and the Theory of Tariffs". The Review of Economic Studies. 28 (3): 161–175. doi:10.2307/2295945.
  • McKenzie, Lionel W. (1954). "Specialization and Efficiency in World Production". The Review of Economic Studies. 21 (3): 165–180. doi:10.2307/2295770.
  • Samuelson, Paul (2001). "A Ricardo-Sraffa Paradigm Comparing the Gains from Trade in Inputs and Finished Goods". Journal of Economic Literature. 39 (4): 1204–1214. doi:10.1257/jel.39.4.1204.

External links

Data

Official statistics

Data on the value of exports and imports and their quantities often broken down by detailed lists of products are available in statistical collections on international trade published by the statistical services of intergovernmental and supranational organisations and national statistical institutes. The definitions and methodological concepts applied for the various statistical collections on international trade often differ in terms of definition (e.g. special trade vs. general trade) and coverage (reporting thresholds, inclusion of trade in services, estimates for smuggled goods and cross-border provision of illegal services). Metadata providing information on definitions and methods are often published along with the data.

Other data sources

Other external links

Balance of trade

The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain period. Sometimes a distinction is made between a balance of trade for goods versus one for services. The balance of trade measures a flow of exports and imports over a given period of time. The notion of the balance of trade does not mean that exports and imports are "in balance" with each other.

If a country exports a greater value than it imports, it has a trade surplus or positive trade balance, and conversely, if a country imports a greater value than it exports, it has a trade deficit or negative trade balance. As of 2016, about 60 out of 200 countries have a trade surplus. The notion that bilateral trade deficits are bad in and of themselves is overwhelmingly rejected by trade experts and economists.

CITES

CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora, also known as the Washington Convention) is a multilateral treaty to protect endangered plants and animals. It was drafted as a result of a resolution adopted in 1963 at a meeting of members of the International Union for Conservation of Nature (IUCN). The convention was opened for signature in 1973 and CITES entered into force on 1 July 1975. Its aim is to ensure that international trade in specimens of wild animals and plants does not threaten the survival of the species in the wild, and it accords varying degrees of protection to more than 35,000 species of animals and plants. In order to ensure that the General Agreement on Tariffs and Trade (GATT) was not violated, the Secretariat of GATT was consulted during the drafting process.As of 2018, Secretary-General of the CITES Secretariat is Ivonne Higuero.

Commercial policy

A commercial policy (also referred to as a trade policy or international trade policy) is a government's policy governing international trade. Commercial policy is an all encompassing term that is used to cover topics which involve international trade. Trade policy is often described in terms of a scale between the extremes of free trade (no restrictions on trade) on one side and protectionism (high restrictions to protect domestic producers) on the other.

A common commercial policy can sometimes agreed by treaty within a customs union, as with the European Union's common commercial policy and in Mercosur.

A nation's commercial policy will include and take into account the policies adopted by that nation's government while negotiating international trade. There are several factors that can have an impact on a nation's commercial policy, all of which can have an impact on international trade policies.

Comparative advantage

The law or principle of comparative advantage holds that under free trade, an agent will produce more of and consume less of a good for which they have a comparative advantage. Comparative advantage is the economic reality describing the work gains from trade for individuals, firms, or nations, which arise from differences in their factor endowments or technological progress. In an economic model, agents have a comparative advantage over others in producing a particular good if they can produce that good at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade. One does not compare the monetary costs of production or even the resource costs (labor needed per unit of output) of production. Instead, one must compare the opportunity costs of producing goods across countries.David Ricardo developed the classical theory of comparative advantage in 1817 to explain why countries engage in international trade even when one country's workers are more efficient at producing every single good than workers in other countries. He demonstrated that if two countries capable of producing two commodities engage in the free market, then each country will increase its overall consumption by exporting the good for which it has a comparative advantage while importing the other good, provided that there exist differences in labor productivity between both countries. Widely regarded as one of the most powerful yet counter-intuitive insights in economics, Ricardo's theory implies that comparative advantage rather than absolute advantage is responsible for much of international trade.

Conservation status

The conservation status of a group of organisms (for instance, a species) indicates whether the group still exists and how likely the group is to become extinct in the near future. Many factors are taken into account when assessing conservation status: not simply the number of individuals remaining, but the overall increase or decrease in the population over time, breeding success rates, and known threats. Various systems of conservation status exist and are in use at international, multi-country, national and local levels as well as for consumer use.

Export

An export in international trade is a good or service produced in one country that is bought by someone in another country. The seller of such goods and services is an exporter; the foreign buyer is an importer.Export of goods often requires involvement of customs authorities. An export's reverse counterpart is an import.

Global Affairs Canada

Global Affairs Canada (GAC; French: Affaires mondiales Canada, or AMC), legally incorporated as the Department of Foreign Affairs, Trade and Development, is the department in the Government of Canada that manages Canada's diplomatic and consular relations, to encourage the country's international trade, and to lead Canada's international development and humanitarian assistance. It is also responsible for maintaining Canadian government offices abroad with diplomatic and consular status on behalf of all government departments.

The department has undergone numerous name changes and re-organizations in recent years. Within the past decade it has been known as Foreign Affairs, Trade and Development Canada and Foreign Affairs and International Trade Canada.

Import

An import is a good brought into a jurisdiction, especially across a national border, from an external source. The party bringing in the good is called an importer. An import in the receiving country is an export from the sending country. Importation and exportation are the defining financial transactions of international trade.

In international trade, the importation and exportation of goods are limited by import quotas and mandates from the customs authority. The importing and exporting jurisdictions may impose a tariff (tax) on the goods. In addition, the importation and exportation of goods are subject to trade agreements between the importing and exporting jurisdictions.

Incoterms

The Incoterms or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) relating to international commercial law. They are widely used in international commercial transactions or procurement processes and their use is encouraged by trade councils, courts and international lawyers. A series of three-letter trade terms related to common contractual sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the global or international transportation and delivery of goods. Incoterms inform sales contracts defining respective obligations, costs, and risks involved in the delivery of goods from the seller to the buyer, but they do not themselves conclude a contract, determine the price payable, currency or credit terms, govern contract law or define where title to goods transfers.

The Incoterms rules are accepted by governments, legal authorities, and practitioners worldwide for the interpretation of most commonly used terms in international trade. They are intended to reduce or remove altogether uncertainties arising from differing interpretation of the rules in different countries. As such they are regularly incorporated into sales contracts worldwide.

"Incoterms" is a registered trademark of the ICC.

The first work published by the ICC on international trade terms was issued in 1923, with the first edition known as Incoterms published in 1936. The Incoterms rules were amended in 1953, 1967, 1976, 1980, 1990, and 2000, with the eighth version— Incoterms 2010 — having been published on January 1, 2011. The ICC has begun consultations on a new revision of Incoterms, to be called Incoterms 2020.

International Trade Centre

The International Trade Centre (ITC) (French: Centre du commerce international (CCI)) is a multilateral agency which has a joint mandate with the

World Trade Organization (WTO) and the United Nations (UN) through the United Nations Conference on Trade and Development (UNCTAD).

Through its work, the ITC contributes directly to 10 of the Sustainable Development Goals. These include SDG 1 (no poverty), Goal 2 (zero hunger), Goal 4 (Quality Education), Goal 5 (Gender Equality), Goal 8 (Decent Work and Economic Growth), Goal 9 (Industry, innovation and infrastructure), Goal 10 (Reduced Inequalities), Goal 12 (Responsible Production and Consumption), Goal 16 (Peace, Justice and strong institutions), and Goal 17 (Partnerships for the Goals).

The headquarters of the ITC are situated in Geneva, Switzerland. Their staff consists of approximately 300 employees spanning more than 80 nationalities. Furthermore, ITC has country-based project offices where they employ experts from the specific region.

International Trade Union Confederation

The International Trade Union Confederation (ITUC; French: Confédération syndicale internationale (CSI); German: Internationaler Gewerkschaftsbund (IGB); Spanish: Confederación Sindical Internacional (CSI)) is the world's largest trade union federation. It was formed on 1 November 2006, out of the merger of the International Confederation of Free Trade Unions (ICFTU) and the World Confederation of Labour (WCL). The Founding Congress of the ITUC was held in Vienna and was preceded by the dissolution congresses of both the ICFTU and the WCL. The ITUC has three main regional organizations – the Asia-Pacific Regional Organization, the American Regional Organization, and the African Regional Organization. The Trade Union Development Cooperation Network (TUDCN) is an initiative of the ITUC whose main objective is to bring the trade union perspective into international development policy debates and improve the coordination and effectiveness of trade union development cooperation activities.The ITUC represents 207 million workers through its 331 affiliated organizations within 163 countries and territories. Sharan Burrow is the current General Secretary.The ITUC traces its origins back to the First International (also known as the International Workingmen's Association) and in 2014 commemorated the 150th anniversary of the founding of the International Working Men's Association at its own world congress held in Berlin. Also in 2014, the ITUC debuted the Global Rights Index, which ranks nations on 97 metrics pertaining to workers' rights, such as freedom from violent conditions and the right to strike and unionise.

International trade law

International trade law includes the appropriate rules and customs for handling trade between countries. However, it is also used in legal writings as trade between private sectors, which is not right. This branch of law is now an independent field of study as most governments have become part of the world trade, as members of the World Trade Organization (WTO). Since the transaction between private sectors of different countries is an important part of the WTO activities, this latter branch of law is now a very important part of the academic works and is under study in many universities across the world.

Labour movement

The labour movement or labor movement consists of two main wings, the trade union movement (British English) or labor union movement (American English), also called trade unionism or labor unionism on the one hand, and the political labour movement on the other.

The trade union movement consists of the collective organisation of working people developed to represent and campaign for better working conditions and treatment from their employers and, by the implementation of labour and employment laws, from their governments. The standard unit of organisation is the trade union.The political labour movement in many countries includes a political party that represents the interests of employees, often known as a "labour party" or "workers' party". Many individuals and political groups otherwise considered to represent ruling classes may be part of and active in the labour movement.The labour movement developed in response to the depredations of industrial capitalism at about the same time as socialism. However, while the goal of the labour movement is to protect and strengthen the interests of labour within capitalism, the goal of socialism is to replace the capitalist system entirely.

Minister of International Trade Diversification

The Minister of International Trade Diversification (French: Ministre de la Diversification du commerce international) is a Minister of the Crown in the Canadian Cabinet. The minister has responsibility for the international trade portfolio and is one of the three ministers (along with the Minister of Foreign Affairs and the Minister of International Development and La Francophonie) who lead the Canadian foreign ministry, Global Affairs Canada.

Ministry of Foreign Affairs and Worship

The Ministry of Foreign Affairs and Worship (Spanish: Ministerio de Relaciones Exteriores y Culto) is the Argentine government ministry which oversees the foreign relations of Argentina.

The Ministry's Department of Worship (Secretaría de Culto) has several directorates. The Registry Directorate maintains the National Register of Religions, which compiles the mandatory registrations of all churches and religious communities, other than those of the Catholic Church.

The Directorate General for Catholic Worship (La Dirección General de Culto Católico), is the main liaison for the government of Argentina with the Catholic Church, by far the largest religious body in Argentina. It maintains relations with the archbishops, the bishop's conference and with the various monastic orders. The department also awards individuals and organizations that, through their work, have encouraged rich ecumenical and interreligious dialogue.

Trade agreement

A trade agreement (also known as trade pact) is a wide-ranging taxes, tariff and trade treaty that often includes investment guarantees. When two or more countries agree on terms that helps them trade with each other. The most common trade agreements are of the preferential and free trade types are concluded in order to reduce (or eliminate) tariffs, quotas and other trade restrictions on items traded between the signatories.

United Nations Commission on International Trade Law

The United Nations Commission on International Trade Law (UNCITRAL) (French Commission des Nations Unies pour le droit commercial international (CNUDCI)) was established by the United Nations General Assembly by its Resolution 2205 (XXI) of 17 December 1966 "to promote the progressive harmonization and unification of international trade law".

UNCITRAL carries out its work at annual sessions held alternately in New York City and Vienna.

United States Court of International Trade

The United States Court of International Trade (in case citations, Int'l Trade or Intl. Trade), formerly the United States Customs Court, and before that the Board of General Appraisers, is an Article III court, with full powers in law and equity. The Customs Court Act of 1980 replaced the old United States Customs Court with the United States Court of International Trade. The Court has nine sitting Judges, as well as Senior Judges. The Court sits in New York City, although it is authorized to sit elsewhere, including in foreign nations.

United States International Trade Commission

The United States International Trade Commission (USITC, sometimes I.T.C.) is an independent, bipartisan, quasi-judicial, federal agency of the United States that provides trade expertise to both the legislative and executive branches. Furthermore, the agency determines the impact of imports on U.S. industries and directs actions against unfair trade practices, such as subsidies, dumping, patent, trademark, and copyright infringement.

International trade
Terminology
Organizations
and policies
Political economy
Regional organizations
Exports by product

This page is based on a Wikipedia article written by authors (here).
Text is available under the CC BY-SA 3.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.