UNIT 17: INTERNATIONAL TRADE

International trade

Purchase, sale, or exchange of goods and services across national borders.

Free trade

a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade.

Protectionism

the economic policy of restraining trade between nations, through methods such as tariffs on imported goods, restrictive quotas, and a variety of other restrictive government regulations designed to discourage imports, and prevent foreign take-over of local markets and companies.

Trade barriers

Government laws, regulations, policies or practices that either protect domestic products from foreign competition or artificially stimulate exports of particular domestic products.

Tariff

A duty (or tax) levied upon goods transported from one Customs area to another, for either protective or revenue purposes.

Quota

Restriction on the amount (measured in units or weight) of a good that can enter or leave a country during a certain period of time.

Absolute advantage

Ability of a nation to produce a good more efficiently than any other nation.

Comparative advantage

Inability of a nation to produce a good more efficiently than it does than other nations, but an ability to produce that good more efficiently than it does any other good.

An infant industry

a new industry, which in its early stages experiences relative difficulty or is absolutely incapable of competing with established competitors abroad.

A strategic industry

an industry which is essential for the promotion or stabilization of the growth of the locality in which that industry is situated.