Economics
Global Trade
Global trade refers to the exchange of goods and services between countries across international borders. It allows nations to specialize in producing goods where they have a comparative advantage and to access a wider variety of products. Global trade is facilitated by international agreements, trade policies, and organizations such as the World Trade Organization.
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7 Key excerpts on "Global Trade"
No longer available |Learn more- (Author)
- 2014(Publication Date)
- Orange Apple(Publisher)
____________________ WORLD TECHNOLOGIES ____________________ Chapter- 3 International Trade Global Competitiveness Index (2008-2009): competitiveness is an important determinant for the well-being of states in an international trade environment. ____________________ WORLD TECHNOLOGIES ____________________ International trade uses a variety of currencies, the most important of which are held as foreign reserves by governments and central banks. Here the percentage of global cummulative reserves held for each currency between 1995 and 2005 are shown: the US dollar is the most sought-after currency, with the Euro in strong demand as well. International trade is exchange of capital, goods, and services across international borders or territories. In most countries, it represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history, its economic, social, and political importance has been on the rise in recent centuries. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance of globalization. Without international trade, nations would be limited to the goods and services produced within their own borders. International trade is in principle not different from domestic trade as the motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not. The main difference is that international trade is typically more costly than domestic trade. The reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or culture.
eBook - PDFValuing Services in Trade
A Toolkit for Competitiveness Diagnostics
- Sebastián Sáez, Daria Taglioni, Erik van der Marel, Claire H. Hollweg, Veronika Zavacka(Authors)
- 2014(Publication Date)
- World Bank(Publisher)
Increasing the competitiveness of the services sec-tor is important, particularly given internationally frag-mented models of production. Trade in the 20th century was mainly about selling goods to customers in another country. In the 21st century, trade is increasingly about flows of the goods, services, ideas, investment, training, know-how, and intellectual property needed to produce goods and services in multiple locations (Baldwin 2011, 2012; Jones 2000; Grossman and Rossi-Hansberg 2008; Feenstra 2010; Helpman 2011). Global value chains internationalize the nexus of flows, giving rise to the trade-investment-service-intellectual property nexus. Global value chains can be thought of as factories that cross international bor-ders. Traditional factories clustered most stages of production into a single building or industrial district. Coordinating complex production processes involves continuous, two-way flows between goods, people, ideas, investment, training, know-how, and other inputs. Factories traditionally minimized the cost of such flows by keeping all stages of production as close to one another as possible. The ICT revolution of the 1990s reduced the cost of coordinating complexity over long distances, allowing production stages that previously had to be within walk-ing distance to be dispersed internationally. Some stages Figure I.1. Services Trade as Share of GDP, by Region Source: United Nations Conference on Trade and Development (UNCTAD) and World Development Indicators. 5 6 7 8 9 10 Services trade as percent of GDP Services trade as percent of GDP 11 12 13 14 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 a. Services trade as share of GDP in developed and developing countries, 1980–2012 Developed countries Developing economies 0 2 Europe and Central Asia 4 6 8 10 12 14 16 18 20 b.
eBook - PDF- Peter Urmetzer(Author)
- 2017(Publication Date)
- University of Toronto Press(Publisher)
Chapter 4 Trade Introduction The impact of globalization is most commonly illustrated by way of trade statistics. This 'dizzying increase in cross-border exchanges/ as the Globe and Mail has put it, shows an impressive increase in interna-tional trade over the past few decades. For the most part, figures pre-sented usually go back to the 1950s or 1960s, but seldom farther. One reason for this lack of data may well be that most organizations that track this sort of activity did not come into existence until after the Sec-ond World War. The United Nations (UN) and associated organiza-tions such as the World Bank, the International Monetary Fund (IMF), and the United Nations Conference on Trade and Development (UNCTAD) were not formed until 1945. 1 And the Organization for Eco-nomic Cooperation and Development (OECD) did not come into exist-ence until 1960. Figures for individual countries do exist, of course, but bringing them together is time consuming and riddled with method-ological obstacles. There are statistical compendia in existence, such as Rostow's excellent The World Economy: History and Prospect (1978), that do investigate economic indicators extensively, but they are esoteric in the sense that they are not widely available, and insufficient in that they are often incomplete. But, as we saw in chapter 3, a lack of statistics does not mean that the countries of the world only started to trade extensively following the Second World War. This paucity of data makes one wonder whether we are turning a deaf ear to history. It is this longer history that we focus on in this chapter. But first a few meth-odological details. 66 Globalization Unplugged GDP and GNP in Canada To track trade statistics in current dollars as they are published by Sta-tistics Canada would be essentially meaningless. Inflation and a steadily growing population provide a constantly changing context in which this trade takes place.
eBook - PDF- Joseph S. Nye, John D. Donahue, Joseph S. Nye, John D. Donahue(Authors)
- 2000(Publication Date)
- Brookings Institution Press(Publisher)
Neverthe-less, economic theory and empirical research still have much to contribute. The Effect of Trade on the Level and Growth of Real Income Why do economists consider economic integration so important? What are the benefits of free trade for the economy? GLOBALIZATION OF THE ECONOMY 59 THE THEORETICAL CASE FOR TRADE. Classical economic theory tells us that there are national gains from trade, associated with the phrase comparative advantage. Over the past two decades, scholars have devel-oped a new trade theory. It suggests the existence of additional benefits from trade, which are termed dynamic. We consider each theory in turn. The classical theory goes back to Adam Smith and David Ricardo. Adam Smith argued that specialization—the division of labor—enhances productivity. David Ricardo extended this concept to trade between coun-tries. The notion is that trade allows each country to specialize in what it does best, thus maximizing the value of its output. If a government restricts trade, resources are wasted in the production of goods that could be imported more cheaply than they can be produced domestically. What if one country is better than anyone else at producing every good? The argument in favor of free trade still carries the day. All that is required is for a country to be relatively less skilled than another in the production of some good in order for it to benefit from trade. This is the doctrine of comparative advantage—the fundamental (if perhaps counterintuitive) principle that underlies the theory of international trade. It makes sense for Michael Jordan to pay someone else to mow his lawn, even if Jordan could do it better himself, because he has a comparative advantage at basketball over lawn mowing.
No longer available |Learn more- United Nations Department of Economic and Social Affairs(Author)
- 2017(Publication Date)
- United Nations Publications(Publisher)
Similar one-off events include increased trade and monetary integration within the European Union, especially the adoption of the euro. In addition, the revolution in information and commu-nication technology (ICT)and other technologies led to lower global transportation costs. A slight rebound is expected for Global Trade growth, at a pace of 2.7 per cent in 2017 and 3.3 per cent in 2018, along with some improvement in WGP growth (see chapter I), but the ratio of Global Trade growth to WGP growth is not expected to return to its historical highs in the foreseeable future. Trade in services Services remain a key avenue to realising international trade potential. Although the value of global exports in services decreased by about 6 per cent from $5.1 trillion in 2014 to $4.8 trillion in 2015, trade in services has been more resilient than trade in goods, as observed after the global financial crisis. This trend holds for both developed and developing econ-omies (figure II.5), highlighting the relevance of services for export diversification. As in goods trade, transition economies took the greatest decline, exceeding 15 per cent. Least developed countries (LDCs) constitute a notable exception, with trade in services growing 1.3 per cent in 2015. The world’s largest exporters of services in 2015, which are similar to the largest exporters of goods, continued to be major economies, including the United States of America, accounting for 14.9 per cent of global exports in services, followed by the United Kingdom of Great Britain and Northern Ireland at 7.3 per cent, then China at 6 per cent and Germany with 5.3 per cent. Meanwhile, developing and transition economies have increased their share in Global Trade in services, from 23 per cent in 2005 to 31 per cent in 2015. The share of LDCs in global services trade still lies below 1 per cent and has only expanded from 0.5 per cent in 2005 to 0.8 per cent in 2015.
eBook - PDFInternational Economics and Business
Nations and Firms in the Global Economy
- Sjoerd Beugelsdijk, Steven Brakman, Harry Garretsen, Charles van Marrewijk(Authors)
- 2013(Publication Date)
- Cambridge University Press(Publisher)
This argument was based on the rising importance of international trade and capital fl ows, relative to world income. In the rest of the book, we will provide other supporting information – for example, concerning the rising importance of FDI and multinational fi rms. Recalling our de fi nition of economic globalization: ‘ the increased interdependence of national economies and the trend towards greater integration of goods, labour and capital markets ’ , we can now argue that focusing attention only on the volume of these fl ows (to be further discussed in Chapter 2 ) gives a biased view of the degree of globalization. In this section, we give two examples to illustrate this point: the price wedge and fragmentation. The price wedge The most basic economic picture in (quantity, price) space consists of a downward-sloping demand curve (on the assumption that people buy less of a good if its price is higher) and an upward-sloping supply curve (on the assumption that fi rms produce more of a good if its price rises). As shown in Figure 1.11 , international trade fl ows The global economy 27 can also be depicted in this most basic framework, with two twists. Suppose there are two countries, Home and Foreign, and we investigate Home ’ s import market. The fi rst twist is that Home ’ s downward-sloping demand curve for imports actually consists of Home ’ s demand for the good not provided by Home ’ s domestic suppliers (it is therefore also called Home ’ s net demand curve). This applies, similarly, to Foreign ’ s export supply curve (or net supply curve). The second twist is that there may be a number of reasons for a deviation between Home ’ s and Foreign ’ s price, which is called a price wedge – for example, because Foreign fi rms have to overcome transport costs, tari ff s, trade impediments, cultural di ff erences, and all sorts of other extra costs before they can export the good to Home ’ s market.
eBook - PDFGovernment Intervention in Globalization
Regulation, Trade and Devaluation Wars
- C. Peláez(Author)
- 2008(Publication Date)
- Palgrave Macmillan(Publisher)
89 Introduction In a rare consensus, economists tend to agree, with important exceptions, that there are benefits from trade in the form of more efficient resource allocation. The first section below provides the important analysis of the gains from trade. The relaxation of the conditions of the first-best of efficiency leads to the analysis of distortions or market failures that motivate more analysis. The main principle is to correct domestic distortions with domestic policy instruments, allowing the economy to obtain the benefits from trade. It is difficult to relate empirically trade openness and economic growth. The US uses antidumping and safeguard sanctions that many con- sider to be disguised protectionism. One of the most debated issues in policy is whether employment and wages of less skilled workers in advanced countries decline because of trade in goods produced by cheap labor, which are exported by developing countries. In 2004, the issue of losses of services jobs to offshore locations received dispropor- tionate attention in the press and public debates. The summary provides some conclusions. The gains from trade The basic analysis of the desirability of international trade focuses on the gains from trade. It is one of the first analyses of welfare economics: the wellbeing of the state of free trade of goods and services with other nations versus the state of no trade. There is the important proposition that some trade is better than no trade. Even trade with restrictions such as quotas and tariffs is better than no trade. A quota is a quantitative 6 International Trade of Goods and Services 90 Government Intervention in Globalization limit on imports, which are purchases from other countries, or exports, which are sales to other countries.
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