International Trade

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This Presentation includes the various Advantages & Disadvantages of International Trade. Protectionism Vs Free Trade.

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International Trade

  1. 1. International Trade Group: 8
  2. 2. Domestic Trade  “Domestic trade means, performing business transactions within the borders of a nation”  It is also known as internal trade or home trade
  3. 3. Domestic Trade Vs. International Trade
  4. 4. Introduction of International Trade  International trade is the exchange of goods and services between countries  A product that is sold to the global market is an export, and a product that is bought from the global market is an import  International Trade is considered as the ”Engine of Growth”
  5. 5. Involves a lot things like: + Jobs + Consumption + Fashion + Natural Resources
  6. 6. Ctd…  As a result of international trade, the market contains greater competition and therefore more competitive prices, which brings a cheaper product home to the consumer
  7. 7. Benefits of International Trade  Diversify risk  Better margins  Earlier payments  Grow your Business
  8. 8. Ctd...  Inequalities and facilitate growth  Economic community  Long term growth  Less competition
  9. 9. Risk in International Trade  Transaction charges commission  Lack of market data / information  Foreign exchange rate  Political instability
  10. 10. Ctd...  Misunderstanding the local legal framework  Not communicating effectively with your business partners  Not spend enough time with your potential business partners  Unstable profits
  11. 11. Protectionism  It is Means by which trade between countries is restricted in some way  Main means are:  Tariffs: A tax on a good coming into a country, Increases the price of the good and makes it less competitive.  Quotas: Quantitative restriction on the number of goods coming into a country  Non-Tariff Barriers: like setting exacting standards on fuel emissions from cars, the documentation required to be able to sell drugs in different countries, the ingredients in products – some of which may be banned in the destination country
  12. 12. Free Trade  Free trade is a policy by which a government does not discriminate against imports or exports by applying tariffs, subsidies or quotas  Features: Trade of goods without taxes or other trade barriers , The absence of "trade-distorting" policies that give some firms, households, or factors of production an advantage over others, Free access to markets, to market information, Inability of firms to distort markets through government-imposed monopoly or oligopoly power
  13. 13. Protectionism vs. Free Trade • when government put in place policies that allow producers from overseas nations to freely sell their goods in our country (promote trade) Free Trade • when government put in place policies to stop overseas producers freely selling goods in our country (restrict trade) Protectionism
  14. 14. Conclusion  International Trade refers to exchange of goods & services beyond the nations  It opens up the opportunity for specialization and therefore more efficient use of resources, international trade has the potential to maximize a country's capacity to produce and acquire goods  Free Trade allows trading with no restrictions on trade
  15. 15. Ctd…  Opponents of global free trade have argued, however, that international trade still allows for inefficiencies that leave developing nations compromised  Protectionism exists in many different forms, but the most common are tariffs, subsidies & quotas  These strategies attempt to correct any inefficiency in the international market

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