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Transcript of International Trade
Francisco International Trade Fatou BADJI
Melissa LAZO CASTRO Lima International trade Bartering I. Introduction Supermarket adventure From
South America How did it all
started? According to the history.... The discovery of
Christopher Colombus Bartering More information!! New
technologies Industrialization To conclude.... This is how all these factors were
crucial for the development
of international trade as we know it nowadays. END (of the introduction) Marco Polo's Routes Money!! Definition What is International trade? Basically the exchange of goods and services between countries. Allows us to expand our markets. Increases the competition (between markets and prices). Affects and is affected by global events. International trade focuses on different aspects of the society structure. INTERNATIONAL
TRADE V. Some restrictions? Free trade III. Statistics Important concepts Export Import Trade balance * Trade deficit * Trade surplus Mostly common
commodities traded Crude oil Coffee Gold Sugar International trade in goods How countries act in this international market? The Ricardian model: Comparative advantage - For Ricardo, labor was the only factor of production.
- A person has comparative advantage at producing something if he can produce it at a lower cost than anyone else.
- According to comparative advantage, each country should specialize in production of its comparative advantage good, and export that good to the other country in exchange for that country’s comparative advantage good. IV. Basic knowledge Heckscher-Ohlin Model - For Heckschker- Ohlin there are two factors of production: labor and capital.
- A country will export goods that use its abundant factors intensively, and import goods that use its scarce factors intensively.
- A capital-abundant country will export the capital-intensive good, while the labor-abundant country will export the labor-intensive good. - Ability for countries to import and export products with each other without restrictions and paying additional costs. - Supply and demand factors will ensure that production happens efficiently.
- Market forces will protect or promote trade and growth.
- Advantages (according to several authors): more efficiency, consumers benefit, improves exports. Protectionism 1. Regulation of international trade: Trade barriers.
2. Principle: Imposition of some sort of cost on trade that raises the price of the traded products.
3. Protectionism exists in many different forms, but the most common are tariffs, subsidies and quotas.
4. These strategies attempt to correct any inefficiency in the international market. VI. International Organizations • WTO (World Trade Organization)
• European Union (EU) (Europe)
• North American Free Trade Agreement (NAFTA) (North America)
• The South Asian Association for Regional Cooperation (SAARC) (Asia)
• The Organization of African Trade Union Unity (OATUU) is an independent regional union federation for trade union centers in Africa. Founded in 1973. VII. Incoterms * The Incoterms 2010 are organized into two categories:
Incoterms for any Mode or Modes of Transport:
• EXW - Ex Works
• FCA - Free Carrier
• CPT - Carriage Paid To
• CIP - Carriage and Insurance Paid
• DAT - Delivered At Terminal (new)
• DAP - Delivered At Place (new)
• DDP - Delivered Duty Paid
Incoterms for Sea and Inland Waterway Transport Only:
• FAS - Free Alongside Ship
• FOB - Free On Board
• CFR - Cost and Freight
• CIF - Cost, Insurance and Freight
- International Trade has the potential to maximize a country's capacity to produce and acquire goods.
- According to opponents, international trade still allows for inefficiencies that leave developing-nations compromised.
- However, International trade if used correctly can raise employment levels and lead to a growth in the gross domestic product of a country and therefore on a better way of life for its citizens. Conclusion VII. New vision: Fair trade - Organized social movement that aims to help producers in developing countries to make better trading conditions and promote sustainability.
- Advocates the payment of a higher price to exporters as well as higher social and environmental standards.
- It focuses in particular on exports from developing countries to developed countries of products like handicrafts, coffee, cocoa, sugar, tea, bananas. • The most direct beneficiaries of Fair Trade products are the employees who work for the supplying organizations.
• Consumers also benefit from Fair Trade products.
• Every living thing on Earth benefits from Fair Trade. Benefits of Fair Trade Thank you! INVESTOPEDIA (Article: ‘What is International trade?’)
http://www.investopedia.com/articles/03/112503.asp#ixzz2GRi1eqYo EUROSTAT (European Commission: International trade in goods)
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/International_trade_in_goods Article: ‘The 10 most traded commodities in the world’.
http://www.stockmarketdigital.com/top_ten/top-10-business/top-10-most-traded-commodities-in-the-world Video: Free Trade: The Great Prosperity
http://www.youtube.com/watch?v=bfE2HO8p3F Video: Episode 35: Why do countries restrict trade? http://www.youtube.com/watch?v=Y2X3KPAt0
Video: Animation: Trade Justice - why world trade rules need to change
http://www.youtube.com/watch?v=ldZwGDXTk Bibliography - The global economy is in a state of continual change, and, as it develops, so too must all of its participants. II. Basic knowledge Ricardian model: comparative advantage (To exchange goods for other things rather than for money)