International Trade: Importance, Types, and Advantages, Lecture notes of Marketing Management

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Introduction to

International Trade

What is International

Trade?

“International trade is the exchange

of goods and services between

countries.”

Importance of

International Trade:

• (^) Primarily, a nation imports goods

and services for the following

reasons:

Price - If foreign companies can produce or offer

goods and services more cheaply, then it may be beneficial to go for foreign trade.

Quality - If the companies abroad can offer good

and services of superior quality. https://efinancemanagement.com/ international-financial-management/

Importance of

International Trade:

• (^) Primarily, a nation imports goods

and services for the following

reasons:

Availability - If it is impossible to produce that

product domestically, like a special variety of fruit or a mineral.

Demand - If a demand for a product or services is

more in a country than what it can domestically produce, then it goes for import.https://efinancemanagement.com/

Types of International

Trade

1.Export Trade 2.Import Trade 3.Entrepot Trade https://efinancemanagement.com/

Types of International

Trade

1.Export Trade 2.Import Trade 3.Entrepot Trade

- means selling

goods &

services out of

the country.

https://efinancemanagement.com/ international-financial-management/

Types of International

Trade

1.Export Trade 2.Import Trade 3.Entrepot Trade

- means

importing

goods from one

country &

exporting it to

another

country after

adding some

value to it.

https://efinancemanagement.com/

Advantages of

International

Trade

4. Transfer of Technology – international trade often leads to the transfer of technology from a developed nation to the developing nation. Govt. in the developing nation often lay terms for foreign companies that involve developing local manufacturing capacities. 5. More Job Creation - increase in international trade also creates job opportunities in both countries.

Advantages of

International Trade

https://efinancemanagement.com/ international-financial-management/

Disadvantages

of International

Trade

3. A Threat to National Security - if a country is over dependent on the imports for strategic industries, then exporters may force it to take a decision that may not be in the national interest. 4. Pressure of Natural Resources - a country only has limited natural resources. But, if it opens its doors to the foreign companies, it could drain those natural resources much quicker.

Disadvantages of

International Trade

https://efinancemanagement.com/

Facts and

Figures about

International

Trade

“Just 200 huge multinational companies control much of world trade.” “Where five countries – the USA, Germany, Japan, France and the UK – control almost half of world trade.” “The 30 richest countries control 82 percent of world trade.” “While, the 49 poorest countries control just 2 percent of world trade.” https://portalexport.wordpress.com/ 2014/02/11/interesting-facts-about-

“More countries are active in global trade. The exports from Asia has gone up dramatically.” “The growth of China is well known, with US trade data showing total trade between the two countries growing from $5 billion in 1980 to $ billion in 2018.” “South Korea is now one of the world’s top ten exporters, and India’s share of world services trade increased by seven time’s from 1995 to 2018.” https://www.wita.org/blogs/global-trade- today-5-facts/