IntroductionTheories of International TradeCommon Terms in International TradeReasons For International TradeAdvantages of International TradeDisadvantages of International TradeInternational Trade ProtectionismReasons for Trade ProtectionismWorld Trade OrganizationObjectives of WTOConclusionsDiscussions

1. Topic: International Trade
Rome Business School,
Cameroon
Course: Economics
Tutor: Mr. TA Alems
Presented By:
Nkesi Kevin
Desmond Kitcha

2. Introduction
Theories of International Trade
Common Terms in International Trade
Reasons For International Trade
Advantages of International Trade
Disadvantages of International Trade
International Trade Protectionism
Reasons for Trade Protectionism
World Trade Organization
Objectives of WTO
Conclusions
Discussions
OVERVIEW

3. INTRODUCTION:
International Trade is the exchange of goods, and services
across international borders or territories. It is trade between
two or more countries.
Trading globally gives consumers and countries the
opportunity to be exposed to goods and services not available
in their own countries.
Supply or sale of goods to another country is called export
trade.
while purchase of goods from another country is referred to
as import trade

4. INTERNATIONAL TRADE THEORIES
 Classical Country Based theories
– Mercantilism (Export more, Import less)
– Absolute Advantage (countries’ ability to produce
a good more efficiently by specialization)
– Comparative Advantage ( Relative productivity
differences)
– Factor Proportion Theory
– Leontief Paradox

5.  Modern or Firm based Trade Theories
• Country Similarity theory. (First produce for domestic Consumption
and then explore internationally for countries with similar taste)
• Product life cycle theory (Initial new product innovation occurs in
its home country and then emerge to its next stages as it moves to
new nations)
• Global Strategic Rivalry Theory (Multinational Companies and their
efforts to gain competitive advantage against global firms in the
industry)
• Porter’s National Competitive Advantage Theory (Local Market
resources and capabilities, Local Market demand conditions, Local
suppliers and complementary industries, Local Firm characteristics.

6. COMMON TERMS IN INTERNATIONAL TRADE
Bilateral Trade- This is foreign trade between two countries.
Multi lateral Trade –This is foreign trade between more than
two countries.
Import Trade –Is when goods and services are brought from
another country.
Export Trade –Is where goods and services are sold to
another country.
Visible Trade –This consists of imports and exports of tangible
goods e.g. vehicles’, coffee, plastics, fruits etc
Invisible Trade –This refers to the purchase and sale of
services or it is the exchange of services between countries
e.g. telecommunications, Insurance, banking etc.

7. REASONS FOR INTERNATIONAL TRADE?
• The uneven distribution of factors
• Availability of multiple choices
• Generate employment opportunities
• Facilitate economic development
• Assistance during natural calamities
• Promotes World Peace
ADVANTAGES OF INTERNATIONAL TRADE
• It enables the country to get what it doesn’t have.
• It enables a country to dispose off its surplus goods
• It earns the country foreign exchange
• It encourages competition
• The taxes that are levied on imports are a source of revenue
• It makes countries interdependent
• International trade promotes cultural transmission

8. DISADVANTAGES OF INTERNATIONAL TRADE
• High taxation leads to loss of money.
• Dependence on foreign goods
• Risk of complete depletion of a country’s natural resources
• Imports of harmful goods
• Trade rivalry leads to war and friction
RESTRICTIONS IN INTERNATIONAL TRADE
Economic policies that restrict trade between countries in order
to promote "fair competition" between imported and
domestically produced goods.
• Tariffs(Custom Duties)
• Total ban(Embargos)
• Quotas
• Subsidies
• Administrative Policies

9. REASONS FOR TRADE PROTECTIONISM
• To prevent labour exploitation in developing economies
• To prevent dumping
• To safeguard infant industries
• Source of government revenue
• To safeguard domestic employment
WORLD TRADE ORGANISATION(WTO)
An international body dealing with the rules of trade between
nations. It is a forum for negotiating and formalizing
agreements between nations, as well as resolving disputes.
WTO OBJECTIVES
• supervise and expand international trade
• monitor national trade policies
• provide technical assistance to developing nations
• set and enforce rules for international trade
• increase the transparency of decision-making processes

10. Thank you
Questions If any