International trade and

Commerce
Global business for engineers
Rules of the game

 Introduce yourself and tell us your expectations

 Mobile-pone use in classroom
 Eating at the classroom
 Punctuality
 Class attendance
Value proposal

International
trade context
Logistic
process

International
commintment
and
institutions

Doing international business

 Assesment tool
Meet the enemy Final Battle
Test (25%) Final delivery (15%)
First delivery (5%) Presentation (15%)
Voluntary Adds English presentation
Week 6th (10%)

Consolidation
Test (30%)
Voluntary adds
Week 11th
 Content.
Introduction Context
• History of commerce and economical • Public policies and policy makers
models • Financial policy and national counts
• Comparative and competitive advantages • Risk in international business

Logistic
The commerce • International Institutions
• The market analysis
purchases • Bretton-Woods
• The international agreements • Incoterms • Silk road
• Free trade agreements • IPD • Multilateral
• Tariff and regulations to commerce • Transport and goods institutions
• Customs • Trade zones
• Free trade zones
 • Sesion 1: Introduction, history and economical

Scheduling models
• Sesion 2: The advantage theory
• Sesion 3: Public policy and commerce
• Sesion 4: Financial markets and commerce
• Sesion 5: Financial markets and commerce
• Sesión 6: Assesment
• Sesion 7: International Agreements
• Sesion 8 markets analysis
• Sesion 9: Incoterms
• Sesion 10: IFD and purchasing
• Sesion 11: IFD Trnasports and goods
• Sesion 12: Assesment
• Sesion 13: Customs and documentation
• Sesion 14: Bretton Woods institutions
• Sesion 15: Multilateral institutions for commerce
• Sesión 16: Free Trade Zones
 Introduction

Why the nations

fail?

What do you
consider the next
hegemon on the
world?

What is the best

economic and social
model of development?
A short history

Welcome to the money

America´s discovery
Spain and great britain domain the world
Independence process XIX century

World Wars
Cold war

Tearing down the wall

Advantage theory
Comparative and competitive
Advantages
Equilibrium without trade
Price
of Steel

Domestic
supply

Consumer
surplus
Equilibrium
Price
Producer
surplus

Domestic
demand
0 Equilibrium Quantity
quantity of Steel
 The advantage and prices
Price
of Steel
Domestic
supply

Price after trade World

price EXPORTER
Price before
trade

Exports Domestic
demand

0 Domestic Domestic Quantity

quantity supplied
quantity demanded of Steel
 The advantage and prices
Price
of Steel
Domestic
supply

Price before
IMPORTER
trade
World
Price after
Price
trade
Imports Domestic
demand
0 Domestic Domestic Quantity
quantity quantity of Steel
supplied demanded
Absolute and relative advantage

Venezuela Colombia
Venezuela Colombia

 OMG¡ What are 

we doing?
120 Hours
100 hours 90 hours
80 Hours
Coffee Petroleu
Coffee Petroleu m
m
 But…
Venezuela Colombia
Venezuela Colombia

 Seriusly?... What 
is the answer?
120 Hours
100 hours
110 Hours
90 hours
Coffee Petroleu
Coffee Petroleu
m
m
The model
 The advantage ecuation

 
𝑃𝑐𝑜𝑙 ∗ 𝑆 𝑐𝑜𝑙 ≤ 𝑃𝑣𝑒𝑛 ∗ 𝑆 𝑣𝑒𝑛

P=Productivity (the production factors in this case hours)

S=Cost of production factors (in this case salary per hour)
The Exchange rate

 
 And the
Tariff effecttariff

 
 Logistical effect

 
Common mistakes

• Dumping
• Subsidies
• Price manipulation
Competitive advantage
Competitive advantage

Strategic “Supporting” Policies:

Free trade and FDI
Infrastructure
Education
Antitrust and competition
Intellectual Property Protection
Tax Incentives on R&D
Technical Standards
Many others…
 Porter model
• Goverment
support
firm strategy • Flat, tax. Incentives
structure and • Big investor with
rivalry log term strategies
• Fond absortion

• Customer
• Favourable
sofistication
legislation
• High level of
• Access to markets
• Fast development
Demands technology
Factors conditions
• Infraestructure conditions transfer
• Large domestic
• Transparency
market
• R+D
• Low buyer power

• Many suppliers
• Developed
Related and material and
supporting machinery
• Higher education
industries and specilization
• Financial support
Public policies
Fiscal policies
Monetary policies
 National accounts
DEBT Credit

Production Gross Domestic Product (GDP)

Consume+investment+exports
+imports

Rent Internal savings+consume Domestic product

Capital Investment Internal + external savings

Foering Export + External savings Imports

The balance of payments Balance of
payments

Current Financial Capital Mistakes

account account Account account

Commercial
balance

Service
balance

Rent
balance

Transfer
balance