Introduction to International Trade

refers to the exchange of goods and services between countries

or regions, typically involving the import (buying) and export (selling) of
products across international borders.
Introduction to International Trade

Importance of International Trade:

Facilitates access to a wider Enhances specialization and

variety of goods and services. efficiency in production.

Promotes economic growth and Fosters international cooperation

development. and peaceful relations.
Introduction to International Trade

Comparative Advantage Absolute Advantage

specialize in producing goods or can produce a particular good or

services service more efficiently
Introduction to International Trade

Balance of Trade:

A positive balance of trade is

Negative balance is a trade deficit
known as a trade surplus

occurs when a country exports occurs when a country imports

more than it imports more than it exports
Introduction to International Trade

Trade Policies:

Tariffs

Quotas

Trade agreements
Introduction to International Trade

Globalization:

Technology

Communication

Transportation
 Introduction to International Trade

International Trade Organizations:

Regulating international trade Resolving trade disputes

Promoting international trade Setting trade rules

 Introduction to International Trade

Exchange Rates:

determining the value of one

country's currency in terms of
another's

Fluctuations in exchange rates can

impact the competitiveness of a
nation's exports and imports.
 Introduction to International Trade

Benefits of International Trade:

Economic Growth Variety and Choice

Efficiency Job Creation

Resource Utilization
 Introduction to International Trade

Emerging Trends:

e-commerce sustainable trade practices

impact of geopolitical tensions on

digital trade
trade relations.
Theories of International Trade

1. Mercantilism:
Theories of International Trade

2. Absolute Advantage:
Theories of International Trade

3. Comparative Advantage:
Theories of International Trade

4. Heckscher-Ohlin Theory (Factor

Proportions Theory):
Theories of International Trade

5. New Trade Theory:

Theories of International Trade

6. Gravity Model:
Theories of International Trade

7. Porter's Diamond Model:

Theories of International Trade

8. Strategic Trade Theory: