Some domestic network resources
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Unit 1
Internationቤተ መጻሕፍቲ ባይዱl Trade
Contents
1. 2. 3. 4. The definition of international trade Reasons for international trade. Benefits of international trade. Problems in international trade.
Course assessment
The course will be assessed using the following methods: (a) case studies/ presentations (b) assignments (c) exam (d) class attendance
● Theory of absolute advantage ● 1) Adam Smith, in his 1776 book, The Wealth of Nations, held that the real wealth of a country consisted of the goods and services available to its citizens. The national interest could be gained by trading with the products one nation produces at a relatively low cost for the products it produces at a relatively high cost. He developed the theory of absolute advantage, which holds that different countries can produce some goods more efficiently than others; thus global efficiency can be increased through free trade.
cultural problems Language Religion, Social Customs and Manners Money conversion Exchange Rate
● Two Basic Theory of International Trade Adam Smith (1723-1790) and His Absolute Advantage David Ricardo (1772-1823) and His Comparative Advantage
Main Contents of the Course
Chapter 1 Introduction to International Trade Chapter 2 Terms of delivery Chapter 3 Terms of Commodity Chapter 4 International Cargo Transport Chapter 5 Ocean Marine Cargo Insurance Chapter 6 Payment Terms Chapter 7 Inspection, Claims, Force Majeure and Arbitration Chapter 8 Business Negotiation and Establishment of Contract Chapter 9 Documentation
Reasons of Trade Barriers
To correct a balance-of-payments deficit For reasons of national security To protect their own industries against the competition of foreign goods. Jobs Political reasons
● Why do countries trade? Countries engage in international trade for the following reasons: 1. Resources Reasons, e.g. Natural resources Favorable climate conditions and terrain Skilled workers and Capital Resources Favorable geographic location and transportation costs Insufficient production
Course Description
International Trade Practice is a discipline specializing in the study of concrete process of international commodity exchange and a comprehensive applied science characterized by practical international business activities. It concerns basic principles and knowledge of international trade theories, trade terms, payment terms, transportation, insurance and their applications.
Benefits of international trade
1. Cheaper goods or services 2. Greater variety 3. Market expansion 4. Economy growth
Problems in international trade
1. Trade restrictions 2. Cultural problems 3. Monetary conversion Methods of restrictions Tariffs and Non-tariffs
Tariffs
A tariff is a duty or fee levied on goods being imported into a country. According to the time of collection : import duty and export duty Import surtax: Countervailing duty, Anti-dumping duty and Variable levy. According to the methods of collection: Specific Duties, Ad valorem Duties, Mixed Compound Duties and An alternative duty
2. Economic Reasons e.g. Absolute advantage Comparative advantage 3. Political Reasons In these cases, political objectives outweighed economic considerations. e.g. Former Soviet Union and Cuba.
● International trade vs. foreign trade ● International trade, also called “world trade”, generally refers to the exchange of goods and services among different countries. It is the aggregate of the import and export of all the nations. ● Foreign trade refers to the exchange of goods and services of one country (region) with another country (region). It comprises two parts - import and export.
Course Objective
The course aims at analyzing and studying the practices of international commodity exchange, summarizing the practice experience gained at home and abroad, and applying it into international trade business activities.
Non-tariffs (NTBS)
Quota Import license Voluntary export restraints Foreign exchange control State monopoly of import and export Government production policy Advanced deposit Technical standards Health and sanitary regulations Packaging and labeling regulations Minimum price