International trade
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International trade is the exchange of
In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has existed throughout history (for example Uttarapatha, Silk Road, Amber Road, salt roads), its economic, social, and political importance has been on the rise in recent centuries.
Carrying out trade at an international level is a complex process when compared to
To ease and justify the process of trade between countries of different economic standing in the modern era, some international economic organizations were formed, such as the World Trade Organization. These organizations work towards the facilitation and growth of international trade. Statistical services of intergovernmental and supranational organizations and governmental statistical agencies publish official statistics on international trade.
Characteristics of global trade
A product that is transferred or sold from a party in one country to a party in another country is an export from the originating country, and an import to the country receiving that product. Imports and exports are accounted for in a country's current account in the balance of payments.[3]
Trading globally may give
Advanced
Differences from domestic trade
International trade is, in principle, not different from
However, in practical terms, carrying out trade at an international level is typically a more complex process than domestic trade. The main difference is that international trade is typically more costly than domestic trade. This is due to the fact that cross-border trade typically incurs additional costs such as explicit
Another difference between domestic and international trade is that factors of production such as capital and labor are often more mobile within a country than across countries. Thus, international trade is mostly restricted to trade in goods and services, and only to a lesser extent to trade in capital, labour, or other factors of production. Trade in goods and services can serve as a substitute for trade in factors of production. Instead of importing a factor of production, a country can import goods that make intensive use of that factor of production and thus embody it. An example of this is the import of labor-intensive goods by the United States from China. Instead of importing Chinese labor, the United States imports goods that were produced with Chinese labor. One report in 2010, suggested that international trade was increased when a country hosted a network of immigrants, but the trade effect was weakened when the immigrants became assimilated into their new country.[4]
History
The history of international trade chronicles notable events that have affected trading among various economies.
Theories and models
There are several models that seek to explain the factors behind international trade, the welfare consequences of trade and the pattern of trade.
Most traded export products
Largest countries or regions by total international trade
The following table is a list of the 25 largest trading states according to the World Trade Organization in 2021 and 2022.[5][6]
Rank | State | International trade of goods (billions of USD )in 2022 |
International trade of services (billions of USD )in 2021 |
Total international trade of goods and services (billions of USD )
|
---|---|---|---|---|
– | World | 50,526 | 11,533 | 62,059 |
– | European Union | 5,858 | 2,313 | 8,171 |
1 | China | 6,310 | 829 | 7,138 |
2 | United States | 5,441 | 1,345 | 6,786 |
3 | Germany | 3,227 | 751 | 3,978 |
4 | Netherlands | 1,864 | 482 | 2,346 |
5 | Japan | 1,644 | 369 | 2,013 |
6 | United Kingdom | 1,353 | 654 | 2,007 |
7 | France | 1,436 | 561 | 1,996 |
8 | South Korea | 1,415 | 248 | 1,663 |
9 | India | 1,177 | 435 | 1,612 |
10 | Italy | 1,346 | 212 | 1,559 |
11 | Belgium | 1,253 | 269 | 1,522 |
12 | Singapore | 991 | 453 | 1,444 |
13 | Hong Kong | 1,277 | 138 | 1,416 |
14 | Canada | 1,179 | 206 | 1,385 |
15 | Mexico | 1,205 | 65 | 1,270 |
16 | United Arab Emirates | 1,023 | 176 | 1,199 |
17 | Spain | 912 | 191 | 1,103 |
18 | Ireland | 360 | 679 | 1,039 |
19 | Switzerland | 758 | 275 | 1,033 |
20 | Taiwan | 914 | 91 | 1,005 |
21 | Russia | 772 | 130 | 903 |
22 | Poland | 742 | 130 | 872 |
23 | Australia | 721 | 82 | 804 |
24 | Vietnam | 731 | 23 | 753 |
25 | Brazil | 626 | 81 | 708 |
Top traded commodities by value (exports)
Rank | Commodity | Value in US$ (millions) | Date of information |
---|---|---|---|
1 | Mineral fuels, oils, distillation products, | $3,988,389 | 2022 |
2 | Electrical, electronic equipment | $3,493,553 | 2022 |
3 | Machinery, nuclear reactors, boilers, etc. | $2,573,572 | 2022 |
4 | Vehicles (excluding railway) | $1,621,658 | 2022 |
5 | Pharmaceutical products | $875,345 | 2022 |
6 | Pearls, precious stones, metals, coins, etc. | $866,839 | 2022 |
7 | Plastics and articles thereof | $815,554 | 2022 |
8 | Optical, photo, technical, medical, etc. apparatus | $669,128 | 2022 |
9 | Iron and steel | $564,547 | 2022 |
10 | Organic chemicals | $537,854 | 2022 |
Source: International Trade Centre[7]
Observances
In the US, the various
International trade versus local production
Local food
In the case of not the food production trade-offs in forms of
Qualitative differences and economic aspects
Qualitative differences between substitutive products of different production regions may exist due to different legal requirements and quality standards or different levels of controllability by local production- and
Local production has been reported to increase local employment in many cases. A 2018 study claimed that international trade can increase local employment.[23] A 2016 study found that local employment and total labor income in both manufacturing and nonmanufacturing were negatively affected by rising exposure to imports.[24]
Local production in high-income countries, rather than distant regions may require higher wages for workers. Higher wages incentivize automation[25] which could allow for automated workers' time to be reallocated by society and its economic mechanisms or be converted into leisure-like time.
Specialization, production efficiency and regional differences
Local production may require
Resource security
A systematic, and possibly first large-scale, cross-sectoral analysis of
Illicit trade
Illegal gold trade
A number of people in Africa, including children, were using informal or "artisanal" methods to produce gold. While millions were making a livelihood through the small-scale mining, governments of Ghana, Tanzania and Zambia complaint about the increase in illegal production and gold smuggling. Sometimes the procedure involved criminal operations and even human and environmental cost. Investigative reports based on Africa's export data revealed that gold in large quantities is smuggled out of the country through the United Arab Emirates, without any taxes being paid to the producing states. Analysis also reflected discrepancies in the amount exported from Africa and the total gold imported into the UAE.[30]
In July 2020, a report by Swissaid highlighted that the Dubai-based precious metal refining firms, including Kaloti Jewellery International Group and Trust One Financial Services (T1FS), received most of their gold from poor African states like
Another report in March 2022 revealed the contradiction between the lucrative gold trade of West African countries and the illicit dealings. Like
See also
- Aggressive legalism – Leveraging the rules in trade agreement
- Concertina model – International trade strategy
- Export control – Legislation regulating the export of harmful items
- Free trade – Absence of government restriction on international trade
- Free-trade area– Regional trade agreement
- Gravity model of trade – Bilateral trade flow model
- Import – Good brought into a jurisdiction
- Interdependence – Interdisciplinary study of systems
- International business – Trade of goods, services, technology, capital's and/or knowledge at a transnational scale
- International trade law – Rules for trade between countries
- Internationalization – In economics, process of increasing involvement of enterprises in international markets
- Market segmentation index – Measure of the degree of monopoly power
- Mercantilism – Economic policy emphasizing exports
- Monopolistic competition in international trade – Imperfect competition of differentiated products that are not perfect substitutes
- Northwest Passage – Sea route north of North America
- Panama Canal – Shipping route across Central America
- Suez Canal – Artificial sea-level waterway in Egypt
- Tariff – Goods and services import/export tax
- Trade Adjustment Assistance – US internal economic program
- Trade bloc – Intergovernmental open trading group
- Trade finance
- Transfer problem – Possibility that a debtor country might gain by making payments to its creditor countries
- United Nations Conference on Trade and Development (UNCTAD)
Lists
- List of countries by current account balance
- List of countries by imports
- List of countries by exports
- List of countries by merchandise exports
- List of countries by service exports
- List of international trade topics
References
- ^ "Trade – Define Trade at Dictionary.com". Dictionary.com. Archived from the original on 2010-07-27. Retrieved 2007-11-07.
- ^ "International Trade and Finance by ICC Academy". Archived from the original on 2022-03-12. Retrieved 2020-04-05.
- ^ "Balance Of Payments (BOP)". Investopedia. 2003-11-25. Archived from the original on 2017-05-12. Retrieved 2017-05-07.
- SSRN 1693334.
- ^ "WTO Stats". World Trade Organization. Archived from the original on 9 November 2022. Retrieved 15 April 2023.
- ^ "WTO Stats". World Trade Organization. Archived from the original on 15 April 2023. Retrieved 15 April 2023.
- ^ "List of exporters for the selected product in 2022". ITC. Retrieved 2022-08-22.
- Federal Government of the United States. Archived from the original on November 24, 2016. Retrieved March 13, 2017. Alt URL Archived 2017-10-20 at the Wayback Machine
- Federal Government of the United States. Archived from the original on March 13, 2017. Retrieved March 12, 2017. Alt URL Archived 2017-10-20 at the Wayback Machine
- National Archives.
- ^ Office of the Press Secretary (May 19, 2017). "President Donald J. Trump Proclaims May 21 through May 27, 2017, as World Trade Week". whitehouse.gov. Washington, D.C.: White House. Archived from the original on May 20, 2017. Retrieved May 20, 2017.
- ^ "President Donald J. Trump Proclaims May 21 through May 27, 2017, as World Trade Week". World News Network. United States: World News Inc. May 20, 2017. Archived from the original on October 20, 2017. Retrieved May 20, 2017.
- ^ "Import Export Data". Import Export data. Archived from the original on 2017-10-28. Retrieved 2017-10-06.
- ^ "World Trade Week New York". World Trade Week New York. Archived from the original on 2005-02-19. Retrieved 2017-10-06.
- from the original on 13 March 2023. Retrieved 4 December 2020.
- ^ "Climate Change 2022: Mitigation of Climate Change". www.ipcc.ch. Archived from the original on 2022-08-02. Retrieved 2022-04-05.
- ^ "CO2 EMISSIONS EMBODIED IN INTERNATIONAL TRADE AND DOMESTIC FINAL DEMAND" (PDF). Archived (PDF) from the original on 2022-02-25. Retrieved 2022-04-05.
- ^ Dunphy, Siobhán (28 April 2020). "Majority of the world's population depends on imported food". European Scientist. Archived from the original on 4 May 2020. Retrieved 17 May 2020.
- ^ "Relying on 'local food' is a distant dream for most of the world". phys.org. Archived from the original on 29 April 2020. Retrieved 17 May 2020.
- .
- from the original on 8 November 2021. Retrieved 4 December 2020.
- PMID 20696093.
- S2CID 158243880. Archived from the original on 22 December 2020. Retrieved 4 December 2020.)
{{cite journal}}
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(help - from the original on 21 January 2022. Retrieved 4 December 2020.
- ^ "How Artificial Intelligence Could Widen the Gap Between Rich and Poor Nations". IMF Blog. Archived from the original on 3 December 2020. Retrieved 4 December 2020.
Higher wages Advanced economies have higher wages because total factor productivity is higher. These higher wages induce firms in advanced economies to use robots more intensively, to begin with, especially when robots easily substitute for workers. Then, when robot productivity rises, the advanced economy will benefit more in the long run. This divergence grows larger, the more robots substitute for workers.
- ^ "Global trade linked to resource insecurity". Cosmos Magazine. 26 October 2020. Archived from the original on 3 December 2020. Retrieved 3 December 2020.
- ^ Dunphy, Siobhán (20 November 2020). "Is globalisation compatible with sustainable and resilient supply chains?". European Scientist. Archived from the original on 2 December 2020. Retrieved 3 December 2020.
- ^ "Globalized economy making water, energy and land insecurity worse: study". phys.org. Archived from the original on 4 December 2020. Retrieved 3 December 2020.
- S2CID 228952251. Retrieved 3 December 2020.
- ^ "Gold worth billions smuggled out of Africa". Reuters. Archived from the original on 2 January 2020. Retrieved 24 April 2019.
- ^ "Dubai's dubious gold is prized in Switzerland". Le Temps. 16 July 2020. Archived from the original on 17 July 2020. Retrieved 16 July 2020.
- ^ "GOLDEN DETOUR: The hidden face of the gold trade between the United Arab Emirates and Switzerland" (PDF). Swissaid. Archived (PDF) from the original on 18 July 2020. Retrieved 16 July 2020.
- ^ "Mali: West Africa's hub for illegal gold trade with Dubai". Enact Africa. 11 March 2022. Archived from the original on 2 January 2020. Retrieved 11 March 2022.
- ^ "Mali to Dubai: artery for West Africa's booming illegal gold trade". ISS Africa. 3 August 2022. Archived from the original on 2 January 2020. Retrieved 3 August 2022.
Further reading
- Nelson, Scott Reynolds. Oceans of Grain: How American Wheat Remade the World (2022) excerpt
- Linsi, Lukas; Burgoon, Brian; Mügge, Daniel K (2023). "The Problem with Trade Measurement in International Relations". International Studies Quarterly. 67 (2).
Sources
- Jones, Ronald W. (1961). "Comparative Advantage and the Theory of Tariffs". The Review of Economic Studies. 28 (3): 161–175. JSTOR 2295945.
- McKenzie, Lionel W. (1954). "Specialization and Efficiency in World Production". The Review of Economic Studies. 21 (3): 165–180. JSTOR 2295770.
- Samuelson, Paul (2001). "A Ricardo-Sraffa Paradigm Comparing the Gains from Trade in Inputs and Finished Goods". Journal of Economic Literature. 39 (4): 1204–1214. .
External links
Data
Statistics from intergovernmental sources
Data on the value of exports and imports and their quantities often broken down by detailed lists of products are available in statistical collections on international trade published by the statistical services of intergovernmental and supranational organisations and national statistical institutes. The definitions and methodological concepts applied for the various statistical collections on international trade often differ in terms of definition (e.g. special trade vs. general trade) and coverage (reporting thresholds, inclusion of trade in services, estimates for smuggled goods and cross-border provision of illegal services). Metadata providing information on definitions and methods are often published along with the data.
- United Nations Commodity Trade Database
- Trade Map, trade statistics for international business development
- WTO Statistics Portal
- Statistical Portal: OECD
- European Union International Trade in Goods Data
- Food and Agricultural Trade Data by FAO
Other external links
- The MIT Observatory of Economic Complexity
- The McGill Faculty of Law runs a Regional Trade Agreements Database that contains the text of almost all preferential and regional trade agreements in the world. ptas.mcgill.ca
- Historical documents on international trade available on FRASER (St Louis Fed)