INTERNATIONAL

TRADE
GROUP 8
1. What is trade?
Trade is the fulfillment of
desires by two individuals or
groups via the swapping of
their respective material
goods and services.
2. What is International trade ?

International trade is the exchange of

goods and services between countries
around the world.
3.What are international trade activities?

Switch internatioal
trade processing

On the -
spot
export and Re-export
import Import,
export of
visible
goods
* Switch trade
- Goods are transported from one country to another via a
third country.
+ Buying and selling activities.
+ Other services: transportation, warehouse, bonded,
* International processing
International processing is a method of business
transactions in which one party imports raw materials and
semi-finished products of another party for processing
into finished products and delivery, for the other side,
processing orders and receiving remuneration.
 * Import
-When goods are being bought by
country A from country B, we refer
to that as goods are being imported
to country A from country B.
 * Export
When country A supplies goods to
country B involving transaction of
money in exchange, it is said that goods
are being exported by country A to
country B.
4. Why do nations trade?
4. Why do nations trade?
• No country is capable of producing all the goods and services its people
demand.
• Due to price difference
• Diversified consumption tastes.
• Differences in resource endowment : arable land, forests, mines, mineral
products, labor, capital, technological capabilities and management and
business skills.
 5. what is free trade?
Free trade is a trade policy that does not
restrict imports or exports. It can also be
understood as the free market idea applied
to international trade. In government, free
trade is predominantly advocated by
political parties that hold economic liberal
positions, while economic nationalist and
left-wing political parties generally support
protectionism.
6. The difference between free trade
and international trade
 International trade
Scope of operation Trade occurs between two
countries on a global scale.
Participants Both buyers and sellers are
citizens of different
countries
Monetary factor Trade with each other in
many different currencies
Financial and Face financial risks,
exchange risk exchange rate changes and
global market fluctuations
Compete Facing competition from
global businesses and
needing to build a global
competitive advantage
Free trade
Trade that takes place within the
geographical limits of a country.
Both buyer and seller are from the
same country
Use national currency for
transactions.
Experience lower financial and
foreign exchange risks due to
trading in a familiar currency and
business environment.
Competition is often limited within
the country
7. The advantages of
international trade?
7. The advantages of international trade?
o -International trade is the foundation of each
country's economy, contributing to a country's trade
balance and economic growth.
o -International trade increases foreign investment.
o -International trade promotes technology transfer
between countries, helping to improve production
capacity and scientific and technical level.
8. The disadvangates of international trade

- Stock of natural resource finished and it creates the

shortage of resources for next generation. Adverse
effect on domestic industrie
- If the situation of inflation arises in one country, it
spreads like an epidemic and infectious disease all over
the world.
- Large portion of income spend on import of goods
which reduces the saving and investment. Economic
Crisis
9. What organizations are
there?
• World Trade Organization(WTO)
- The WTO was officially established on January 1,
1995. Most WTO decisions are based on negotiation and
consensus. Each member of the WTO has one vote of
equal value.
Trade negotiations:
-The WTO agreements cover goods, services and
intellectual property. They spell out the principles of
liberalization, and the permitted exceptions. They include
individual countries’ commitments to lower customs
tariffs and other trade barriers, and to open and keep open
services markets.
 • The ASEAN Free Trade Area (AFTA)
- The ASEAN Free Trade Area (AFTA) is an FTA between
ASEAN countries. AFTA was signed on January 28, 1992 in
Singapore.
- The Agreement creates investment capital attraction, expanding
the large market penetration of ASEAN countries with about 500
million people. Putting pressure on businesses to improve
quality and reasonable prices. Help the process of structural
transformation change, develop service industries, and shrink
traditional agricultural industries.
 THANHK YOU
FOR LISTENING
!
Do you have any questions ?