Economics - International Trade

International trade, capitalism, etc

international trade

international trade

International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services.

trade off

A trade-off is a situational decision that involves diminishing or losing one quality, quantity, or property of a set or design in return for gains in other aspects.

opportunity costs

the potential forgone profit from a missed opportunity—the result of choosing one alternative and forgoing another.

specialisation

the process wherein a company or individual decides to focus their labor on a specific type of production/job.

absolute advantage

the ability of a party to produce a good or service more efficiently than its competitors.

comparative advantage

to produce a particular good or service at a lower opportunity cost than its trading partners.

capitalism

an economic and political system in which a country's trade and industry are controlled by private owners for profit.

trade barrier

any regulation or policy that restricts international trade, especially tariffs, quotas, licences etc.

tariff

a tax on goods and services imported into a country.

quota

the time-bound restrictions governments impose on trade. This is generally done to protect and encourage domestic business and balance trade.

embargo

a trade restriction, typically adopted by a government, a group of countries or an international organization as an economic sanction.

OECD

Organisation for Economic Co-operation and Development

EU

European Union

APEC

Asia-Pacific Economic Cooperation

WTO

World Trade Organization

ASEAN

Association of South East Asian Nations

IMF

International Monetary Fund

“duty-free”

the act of being able to purchase an item in particular circumstances without paying import, sales, value-added, or other taxes.

laissez-faire

a type of economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies or transfer payments).

tariff purposes

• to serve as a source of revenue

• to protect domestic industries

• to remedy trade distortions (punitive function)

trade deficit

occurs when a country imports more than it exports. In other words, when a country buys more than it sells, it has a trade deficit.

hidden trade barriers

Government regulations that do not directly restrict trade, but indirectly impede free trade by imposing excessive or obscure requirements on goods sold within a country, especially imported goods.

characteristics of international trade

Characteristics of foreign trade | Import and export services Essential characteristics of foreign trade Exchange of different goods and services. Necessary regulations and measures. Currency flow reflected in the exchange rate. Encourage the production of a country.

differences from domestic trade

Domestic business involves those economic transactions that take place within the geographical boundaries of a country. International business involves those economic transactions that take place outside the geographical boundaries of a country

most traded export products

1. Cars

2. refined petroleum

3. integrated circuits

4. vehicle parts

5. computers

illicit trade

the production or distribution of a good or service that is considered illegal by a legislature. It includes trade that is strictly illegal in different jurisdictions, as well as trade that is illegal in some jurisdictions but legal in others.

mercantilism

was a form of economic nationalism that sought to increase the prosperity and power of a nation through restrictive trade practices. Its goal was to increase the supply of a state's gold and silver with exports rather than to deplete it through imports. It also sought to support domestic employment.

suez canal

a man-made waterway connecting the Mediterranean Sea to the Indian Ocean via the Red Sea. It enables a more direct route for shipping between Europe and Asia, effectively allowing for passage from the North Atlantic to the Indian Ocean without having to circumnavigate the African continent.

panama canal

President Theodore Roosevelt oversaw the realization of a long-term United States goal—a trans-isthmian canal. Throughout the 1800s, American and British leaders and businessmen wanted to ship goods quickly and cheaply between the Atlantic and Pacific coasts.