|
|
|
| Home » International Trade |
|
International Trade |
|
|
International trade can be described in other words as the export of goods across geographical boundaries to foreign countries. International trade is largely responsible for the growth of economy of a country and hold a good share of the gross domestic product of the country. The history of international trade dates back long in the ancient ages when the Amber road and the famous silk route have contributed greatly in shaping the world economy. However international trade has greatly developed in the past few years in the recent times.
|
|
International trade plays a major role in the international economy thus shaping world economy as well as political relation between countries. International trade has developed in the recent times with the advancement of globalization as well as transportation facilities. The major impact of international trade is globalization. Other impacts of international trade include outsourcing and the emerge of various multinational corporates.
However there are various risks associated with international trade. Risks can be in political as well as economic. War risk is one of the major political risks of international trade. Other political risks may include risk of transfer risk, risk of cancellation of export licenses, imposition of ban on any exporting goods. Exchange rate, non acceptance are the common economic risks associated with international trade.
International trade is regulated by various treaties and policies between countries. The World Trade Organization as well as the General Agreement on Tariffs and Trade or more popularly known as GATT have played major role over regulation of International Trade over the past centuries specially after the World War II period. The economically sound countries encourage and support free international trade. However various protective measures are imposed in most cases for international trades. For an example the agricultural tariffs imposed by Europe and United States can be cited. These countries impart more protections on international trade over agricultural products over the manufacturing products. However this scenario has recently developed. Previously protective tariffs were applied on manufacturing goods than agricultural goods. Presently with the economic growth in the third world countries like China and India, free trade is also supported strongly by these countries.
The international trade is governed and regulated by several international trade theory models that indicate the trade pattern as well as analyze various international trade theory models as well as their effects on the world economy. Some of the most common international trade theory models include the Heckscher-Ohlin model, Ricardian Model as well as the Gravity model. The New Trade Theory is another common international trade theory model.
International trade is vastly regulated by the World Trade Organization. This organization controls international trade globally. There are various subsidiary organizations who take active part in regulation of international trade on behalf of the World Trade Organization. These organizations include the NAFTA regulating international trade between Mexico, United States and Canada.
|
|
|
|
|
