UNIT 17: INTERNATIONAL TRADE

Keyterms

international trade

purchase, sale, or exchange of goods/ser across national borders

free trade

a trade policy that does not restrict imports or exports

protectionism

the economic policy of restraining trade betw nations through methods (tariffs, quotas, regulations to discourage imports and prevent foreign take-over of local markets and companies)

trade barriers

government laws, regulations, policies, either practices that protect domestic prod from foreign competition or artificially stimulate exports of particular domestic prods

tariff

a duty (or tax) leived upon on goods transported from one Customs area to another, for either protective or revenure purposes--> raise the price of imported goods --> less competitive within the market of the importing country, unless they does not produce the items so tariffed

quota

restriction on the amount of goods 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 other nations, but an ability to produce that good more efficiently than it does any other goods

an infant industry

a new industry, early stage - experience relative difficulty or 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

dumping

selling goods abroad at (or below) cost price

embargo

a type of trade protectionist measure banning the trade of a certain good, or banning trade with a particular country

globalization

the process by which the world's economies become increasingly interdependent and interconnected

a multinational corporation (MNC)

an org that operates in two or more countries

protection

the use of trade barriers to safeguard a country from excessive international trade and foreign competition

subsidies

financial support from the government to lower the production costs of domestic firms, thereby improving their competitiveness

visible trade (GB) or merchandise trade (US)

trade in goods

invisible imports and exports

trade in services (banking, insurance, tourism,...)

barter or counter-trade

direct exchanges of goods without the use of money

balance of trade

the difference between what a country receives and pay for its exports and imports of goods

autarky

the (impossible) situation in which a country is completely self - sufficient and has no foreign trade

EXW

Ex Works

FAS

free along ship

FOB

free on board

CFR

cost and freight

CIF

cost, insurance, freight

DDP

deliver duty paid