International trade - it's uses, Benefits of International trade, Free Trade, Autarky.

1. AEC 301 – AGRICULTURAL
MARKETING, TRADE AND PRICES (2+1)
INTERNATIONAL TRADE – CONCEPT
AND NEED – FREE TRADE, AUTARKY.
Presented By…
Guhan.C, B.Sc.(Hons).Agri,
Id no : 2018033029,
JKKMCAS, Erode, TN.

2. INTERNATIONAL TRADE
• International trade is the exchange of capital, goods, and
services across international borders or territories.
• Exchange of goods and services among the nations of the
world.
• Trade starts when a country has abudant resources than
neighbour country.
• Also neighbour country is specialised in some other goods.

3. Contd…
• Both the countries get advantages in trade through balancing
market demand and supply
• Specialization often results in increased output and
economies of scale.
India Malaysia
Banana
Palm oil

4. Needs For IT
Scarcity and Choices
• Wants exceed resources
• Choices are necessitated by scarcity
Countries experience unequal endowments of resources
• Natural Resources
• Human Resources
• Capital and Technology
Prices of good and service

5. Characteristics Of IT
• 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.
• External trade support for creating employment and
increases standard of living.
• Main difference is that international trade is typically
more costly than domestic trade i.e. – Tariffs, cost
associated with country differences like currency, legal
system etc…

6. Contd…
• Capital and labour are mobile within the country than across
the country.
• Instead of importing factors of production, a country can
import goods that make intensive use of that factors of
production.
• Ex : Instead of import between Chinese
labour, the US imports goods that were
produced with Chinese labour.
• Without international trade, nations would be
limited to the goods and services produced
within their own borders.

7. Benefits of Trade
• Differences in factor endowments:
- Countries have different amounts of land,
labour,and capital.
• Benefits of increased competition:
- A greater degree of competition, lower
prices for consumers,
• Efficiency gains:
- Domestic firms will be forced to become more
efficient in order to be competitive in the global
market.
• Political benefits:
- Countries can leverage trade to forge closer
cultural and political bonds.

8. FREE TRADE
• A free-trade area is the region encompassing a trade bloc whose
member countries have signed a free-trade agreement (FTA).
• FTA involves cooperation b/w two countries, reduce tariff & more
trade of goods and services.
Features of Free Trade…
• Trade of goods without taxes or other trade barriers.
• Free access to markets & market information.
• The free movement of labour & capital b/w and
within countries.
• Absence of "trade-distorting" policies (such as
taxes, subsidies, regulations, or laws)

9. India FTA is with…
1. Association Of South East Asian Nations (ASEAN) 2010,
2. Asia Free Trade Agreement (AFTA),
3. India-Asian Comprehensive Economic Cooperation Agreement
(CECA),
4. India-Korea Comprehensive Economic Partnership
Agreement(CEPA),
5. India-Japan Comprehensive Economic Partnership Agreement
(CEPA).

10. Closed Economy (Autarky)
• Autarky – Greek word – means ‘self-sufficiency’.
• Autarky is the policy of being economically independent of
other nations by having no trade with them.
• Key benefits - immense measure of independence from other
states, since trade creates dependency in a state, both on
imports & exports.
Ex: North Korea – Semi-autarky nation.

11. LPG • LPG – Liberalization, Privatization and
Globalization.
1. Liberalization:
• Remove restrictions which hindrances in the
development and growth of the nation.
• Allows Private companies with or without
restrictions.
2. Privatization:
• Increasing the role of private sector companies and
the reduced role of public sector companies.
3. Globilization:
• Integrate the economy of one country with the global
economy.