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. Tariffs raise the prices of imported goods, thus making them more generally less competitive within the market of the importing country, unless that country does not produce the items so tariffed

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

the ability 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 good

an infant industry

a new industry, which in its early stages experiences relative difficulty or is absolutely incapable in 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