International Trade

Presented by Group - 01
Tanha Binte Aman
ID : 12005001
 Cultural Environment

The ideas, customs, and social behavior of a particular people or society. It consists of
religious, family, educational, and social factors that influence the behavior of the people
of a country. It is a concept of international business that helps to understand the customs,
and collective believes of a set of people or society on the basis of their culture, religion,
nationality, language etc.
 The impact of ‘Cultural Diversity’ on international trade

Culturally diverse business environments are nothing new. However, as with any
challenge, cultural diversity can prove to be an opportunity for companies
willing to adapt their strategies and approach. With that in mind, here are three
ways in which cultural differences influence international business.

1. Differences in 2. Differences in Behaviors 3. Differences in Thinking

Communication Behaviors During Negotiations Patterns
 Political Issue

A political system is basically the system of politics and government in a country. It governs a
complete set of rules, regulations, institutions, and attitudes. It includes the political
climate and government policies that concerned with international trade such a trade
agreements, tariffs and sanctions. It impact the international trade by creating
opportunities for businesses or limiting their ability to operate in certain countries.
 The Growth of Business Dimension

Business growth is determined by several factors: individual characteristics, organizational

characteristics, relationships and environmental characteristics, strategy development and
planning, as well as organizational development.
Impact of environmental factors on International trade

 Certain factors, such as peoples’ view towards wealth, customs, cost

structure, labor mobility and cultural heritage, affect international
business.

 For example, customers living in one country may not be interested in the
same products and services as those residing in another country.
Measures that taken to solve the environmental problem
that affect international trade

There are following measures:

 Replace disposal items with reusable items.

 The use of paper should be avoided.
 Conserve water and electricity.
 Support environmental friendly practices.
 Recycle waste to conserve natural resources
Shaurav Banik
ID- 12005002
Free Trade
 Arguments for and against Free Trade

FOR AGAINST
•Advantages of specialization •Advantageous not for LDC’s
•All-round prosperity •Destruction of home industries/products
•Accessibility of domestically produced goods •Inefficiency becomes perpetual
and services
•Greater international co-operation •Danger of overdependence
•Free from interference •Penetration of harmful foreign goods
 Protectionism
Protectionism is a set of Govt. measures that limit imports in a country
with the intent of protecting commerce within that country against foreign
competition.
 Arguments for and against Protectionism
FOR AGAINST
•Infant industries (new industries should given •Keeping money at home argument
protection.)
•Diversification of industries argument •Home market argument
•Employment protection •National defense argument
•Employment creation •National self-sufficiency argument
•Balance of trade •Arguments against protection:
1. Obstacles or barriers to free multinational
trade.
2. Protection may lead to trade wars and
international conflicts among trading
nations.
•Avoid unfair foreign competition
 Free Trade vs. Protectionism
Free Trade
•Free trade increases the size of the economy as a
whole. Which allows goods and services to be
produced more efficiently.
•Free trade is good for consumers. It reduces cost
by eliminating tariffs.
•Some people worry that free trade deals can lead
to a lowering of standards of good and services.
•Some thinks it destructes home
industries/products as it penetrates harmful
foreign goods.
Protectionism
•Protectionism can also help build up new
industries which have high start up cost and
struggle to compete.
•Protectionism can be used to safeguard ‘strategic’
industries such as energy, water, steel, armaments
and food.
•Protectionism can result in destructive trade wars
that increase costs and uncertainty as each side
attempts to protect its own economy.
•Can avoid unfair foreign competition as it
protecting such industries by authority.
Fardin Ahad Noman
ID- 12005003
 Balance of Trade and Balance of Payment
Balance of Trade

The balance of trade is also known to as the trade balance, the international trade balance, the
commercial balance, or the net exports. Balance of trade (BOT) can be defined as the difference
between the value of a country’s imports and exports over a given period of time. Such period of
time may be a year. It may positive or negative. A positive trade balance indicates a trade
surplus while a negative trade balance indicates a trade deficit.

FORMULA:

Balance of Trade = Value of Exports – Value of Imports

Balance of Payment :

The balance of payments (BOP) is the method that used by the countries to
monitor all the international monetary transactions at a specific period of time.
It is the record of all financial transactions that made between a country and
the rest of the world over a specific period of time. It not only includes the
balance of trade, but also capital flows, such as investment and borrowing.
The balance of payments is divided into two main accounts:

• The current account, and

• The capital account.
 The components of Balance of Payment

1.Current Account: 2.Capital Account:

a. Trade in goods. a. Direct investment.

b. Trade in services. b. Portfolio investment.

c. Income. c. Other investments.

d. Current transfers. d. Reserve assets.

 Causes of disequilibrium in the balance of payment

Disequilibrium in the balance of payment occurs when a country’s total outflows are more
than its total inflows or when the inflows are more than the outflows. There are following
causes of disequilibrium in the balance of payment, including:

Trade imbalances.
Capital account imbalances.
Changes in exchange rates.
Changes in domestic policies.
Changes in global economic conditions.
Capital flight.
Political instability.
 Natural disasters.
Taslim Mahmud
ID- 12005004
 What is foreign Exchange rate?
An exchange rate is a relative price of one currency expressed in terms of another currency (or
group of currencies

The causes of fluctuations in the rate of exchange?

1. Trade Movements 5. Banking Operations
2. Capital Movements 6. Monetary Policy
3. Stock Exchange Operations 7. Political Conditions
4. Speculative Transactions
 What is foreign exchange market?
Foreign exchange market (forex, or FX, market), institution for the exchange of one country's
currency with that of another country.

How can international trade be improved?

1. Strong Offerings 4. International Law Compliance

2. Market Opportunity 5. Strategic Partnerships
3. Supply Chain Logistics 6. Local Resources
 Some organizations that help international trade

EPB
Export Promotion Bureau (EPB), Bangladesh under the Ministry of Commerce is a government agency
of the country, entrusted with the responsibilities of promoting export of the country.

IMF
The International Monetary Fund (IMF) works to achieve sustainable growth and prosperity for all of its
190 member countries. It does so by supporting economic policies that promote financial stability and
monetary cooperation.
 Some organizations that help international trade

BSTI
The Bangladesh Standards and Testing Institution (BSTI) was established by the Government through an Ordinance
passed in July 1985. BSTI is headed by a Director General (Additional Secretary to the Government). The primary
activities of the Bangladesh Standards and Testing Institution (BSTI) are: standardization of services and products
(S);

TCB
The Trading Corporation of Bangladesh (TCB) was established on January 1, 1972, by the Father of the Nation
Bangabandhu Sheikh Mujibur Rahman to ensure adequate supply of essential commodities and industrial raw
materials in the volatile economic condition during the post-independence period.
Fahima Akter
ID- 12005005
 Export and import policy that followed by Bangladesh

Export Policy:

The current export policy of Bangladesh is the “Export Policy 2018-2021.” The policy aims to
increase the export volume and diversify the export basket of the country. Under this policy, the
government provides various incentives and facilities to exporters, such as cash incentives, duty
drawbacks, export development funds, etc. The policy also focuses on promoting non-
traditional export items, such as software, IT-enabled services, pharmaceuticals, jute and jute
goods, leather and leather goods, and agro-based products. The government has also set up
Export Processing Zones (EPZs) to encourage export-oriented industries and provide them with
infrastructure and other necessary facilities.
Import Policy:

The current import policy of Bangladesh is the “Import Policy Order 2015-2018.” The policy aims to regulate
and facilitate the import of goods into the country.
The policy divides goods into three categories: prohibited items, restricted items, and freely importable items.
Prohibited items cannot be imported into the country under any circumstances, while restricted items require
special permission from the concerned authority.
The policy also imposes various duties, taxes, and fees on imported goods, depending on their nature and
origin.
Overall, Bangladesh has been striving to promote its exports and reduce its reliance on imports, and the
government has been implementing various policies and measures to achieve this objective.
 Problems of international trade in Bangladesh and ways to
overcome

Problems:
Ways to overcome:
Political unrest
Cultural weakness
Difficulty in transportation and
communication
Limited skilled manpower
Technological short coming
Poor quality infrastructure
1. Limited resources
Favorable government policy
Favorable investment policy
Managerial efficiency
Favorable monetary policy
Customers preferences
Use of modern technology
1. Diversification of exports
 The main objective and The rolls that EPZ performs to
develop the economy of Bangladesh

The main objective of establishing Export Processing Zones (EPZs) in Bangladesh is to attract foreign
investment, promote exports, create employment opportunities, and develop the economy. EPZs are
designated areas where foreign and local investors can set up industries with special incentives and benefits.

1. Increase in Export Earnings.

2. Employment Generation.
3. Foreign Investment.
4. Infrastructure Development.
5. Promotion of Small and Medium Enterprises (SMEs).
Thanks
to
All!