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The Historical Perspecrive of
International trade and
Mercantilism

09/05/22
LEARNING OBJECTIVES
1. Understand the historyof
international trade.
2. Compare and contrast different
trade theories.
3. Determine which international
trade theory is most relevant today
and how it continues to evolve.
The Brief Hisrory of International
Trade and Policy
 The theory of international trade and
commercial policy is one of the oldest
branches of economic thought. From the
ancient Greeks to the present, government
officials, intellectuals, and economists have
pondered the determinants of trade between
countries, have asked whether trade bring
benefits or harms the nation, and, more
importantly, have tried to determine what
trade policy is best for any particular
country.
 The first reasonably systematic body of
thought devoted to international trade is
called “mercantilism” and emerged in
seventeenth and eighteenth century
Europe.
 The key objective of Trade be ;
▪︎ favorable” balance of trade
-is one in which the value of domestic
goods exported exceeds the value of
foreign goods imported.
 BALANCE OF TRADE SURPLUS
-the difference in value over a period of time
between a country's imports and exports of
goods and services, usually expressed in the
unit of currency of a particular country or
economic union
 BALANCE OF TRADE SURPLUS
Trade Balance = Total Value of Exports -
Total Value of Imports.