International trade
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International trade is the exchange of
capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or more formally ''majuscule'') and smaller lowercase (or more formally ''minusc ...
,
goods In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods ...

goods
, and
services Service may refer to: Activities :''(See the Religion section for religious activities)'' * Administrative service, a required part of the workload of Faculty (academic staff), university faculty * Civil service, the body of employees of a governm ...
across
international borders Borders are geography, geographic boundaries of political geography, political entities or legal jurisdiction (area), jurisdictions, such as governments, sovereign states, federated states, and other subnational entity, subnational entities. Bord ...
or territories because there is a need or want of goods or services. In most countries, such
trade Trade involves the transfer of goods from one person or entity to another, often in exchange for money. Economists refer to a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of r ...

trade
represents a significant share of
gross domestic product Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period. GDP (nominal) per capita does not, however, reflect differences in the cost of living __NOTOC__ ...
(GDP). While international trade has existed throughout history (for example
Uttarapatha Ancient Buddhist and Hindu texts use Uttarapatha as the name of the Northern part of Jambudvipa (equivalent of present day North India), one of the "dvipa, continents" in Hindu history. In modern times, the Sanskrit word ''uttarapatha'' is sometime ...
,
Silk Road The Silk Road () was and is a network of trade route A trade route is a logistical network identified as a series of pathways and stoppages used for the commercial transport of cargo. The term can also be used to refer to trade over bodies of ...

Silk Road
,
Amber Road File:Baltis amber road.jpg, 250px, The route from the Baltic Sea The Amber Road was an ancient trade route for the transfer of amber from the coastal areas of Sicily and later from the North Sea and the Baltic Sea to the Mediterranean Sea. Prehis ...

Amber Road
,
scramble for Africa The Scramble for Africa, also called the Partition of Africa, or the Conquest of Africa, was the invasion, occupation, division, and colonisation of Africa, colonization of most of Africa by seven Western Europe, Western European powers during a ...
,
Atlantic slave trade The Atlantic slave trade, transatlantic slave trade, or Euro-American slave trade involved the transportation by slave traders of various enslaved African African(s) may refer to: * Anything from or pertaining to the continent of Africa: ** P ...
,
salt road A salt road (also known as a salt route, salt way, saltway, or salt trading route) refers to any of the prehistoric Prehistory, also known as pre-literary history, is the period of human history Human history, also known as world hist ...
s), its economic, social, and political importance has been on the rise in recent centuries. Carrying out trade at an international level is a complex process when compared to
domestic trade Domestic may refer to: In the home * Anything relating to the human home A home, or domicile, is a space used as a permanent or semi-permanent residence for an individual, group or family. It is a fully or semi sheltered space and can h ...
. When trade takes place between two or more
states State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * The State (newspaper), ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, Un ...
factors like currency, government policies, economy, judicial system, laws, and markets influence trade. To ease and justify the process of trade between countries of different economic standing in the modern era, some international economic organizations were formed, such as the
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade between nations. Governments use the organization to establish, revise, and enforce the rules that govern international ...
. These organizations work towards the facilitation and growth of international trade. Statistical services of intergovernmental and supranational organizations and governmental statistical agencies publish
official statistics Official statistics are statistics published by Government, government agencies or other public bodies such as international organizations as a Public good (economics), public good. They provide quantitative or qualitative information on all major a ...
on international trade.


Characteristics of global trade

A product that is transferred or sold from a party in one country to a party in another country is an
export An export in international trade International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. In most countries, such trade rep ...

export
from the originating country, and an
import An import is the receiving country in an export An export in international trade International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of go ...

import
to the country receiving that product. Imports and exports are accounted for in a country's current account in the
balance of payments The balance of payments (also known as balance of international payments and abbreviated B.O.P. or BoP) of a country is the difference between all money flowing into the country in a particular period of time (e.g., a quarter or a year) and the o ...

balance of payments
. Trading globally may give
consumer A consumer is a person or a group who intends to order, orders, or uses purchased goods, products, or services Service may refer to: Activities :''(See the Religion section for religious activities)'' * Administrative service, a required part o ...
s and countries the opportunity to be exposed to new
market Market may refer to: *Market (economics) *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an island shared by Finland and Sweden Art, entertainment, and media Films *Market (1965 film), ''Market'' (1965 ...
s and products. Almost every kind of product can be found in the
international market Global marketing is defined as “marketing Marketing refers to activities a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personal ...
, for example: food, clothes, spare parts, oil, jewellery, wine, stocks, currencies, and water. Services are also traded, such as in
tourism at the archaeological site of Chichén Itza. in Vienna. Tourism is travel for pleasure or business; also the theory and practice of touring (disambiguation), touring, the business of attracting, accommodating, and entertaining tourists, and th ...

tourism
,
banking A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital ma ...

banking
,
consulting A consultant (from la, consultare "to deliberate") is a professional A professional is a member of a profession or any person who earns their living from a specified professional activity. The term also describes the standards of education and ...

consulting
, and
transport Transport (in British English British English (BrE) is the standard dialect of the English language English is a West Germanic languages, West Germanic language first spoken in History of Anglo-Saxon England, early medieval Engl ...

transport
ation. Advanced
technology Technology ("science of craft", from Ancient Greek, Greek , ''techne'', "art, skill, cunning of hand"; and , ''wikt:-logia, -logia'') is the sum of any Art techniques and materials, techniques, skills, Scientific method, methods, and Business ...

technology
(including
transportation Transport (in British English British English (BrE) is the standard dialect of the English language English is a West Germanic languages, West Germanic language first spoken in History of Anglo-Saxon England, early medieval Engl ...

transportation
),
globalization Globalization, or globalisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, -ize (-isation, -ization), see spelling differences), is the process of foreign relations ...

globalization
,
industrialization Factories, refineries, mines, and agribusiness are all elements of industrialisation Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian societ ...
,
outsourcing Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity that is or could be done internally, and sometimes involves transferring employees and assets from one firm to another. Th ...

outsourcing
and
multinational corporation A multinational company (MNC) is a corporate A corporation is an organization—usually a group of people or a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Nat ...
s have major impacts on the international trade
system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects have an effect upon one another. The idea of a two-way effect is essential in the concept of interaction, as opposed to a one-way causal e ...

system
.


Differences from domestic trade

International trade is, in principle, not different from
domestic trade Domestic may refer to: In the home * Anything relating to the human home A home, or domicile, is a space used as a permanent or semi-permanent residence for an individual, group or family. It is a fully or semi sheltered space and can h ...
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. However, in practical terms, carrying out trade at an international level is typically a more complex process than domestic trade. The main difference is that international trade is typically more costly than domestic trade. This is due to the fact that a border typically imposes additional costs such as
tariff A tariff is a imposed by a of a country or of a on or of goods. Besides being a source of for the government, import duties can also be a form of regulation of and policy that taxes foreign products to encourage or safeguard domestic indu ...
s, time costs due to border delays, and costs associated with country differences such as language, the legal system, or culture ( non-tariff barriers). Another difference between domestic and international trade is that
factors of production In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods a ...
such as capital and
labor Labour or labor may refer to: * , the delivery of a baby * , or work ** , physical work ** , a socioeconomic relationship between a worker and an employer Literature * , an American quarterly on the history of the labor movement * ', an academic ...
are often more mobile within a country than across countries. Thus, international trade is mostly restricted to trade in goods and services, and only to a lesser extent to trade in capital, labour, or other factors of production. Trade in goods and services can serve as a substitute for trade in factors of production. Instead of importing a factor of production, a country can import goods that make intensive use of that factor of production and thus embody it. An example of this is the import of labor-intensive goods by the United States from China. Instead of importing Chinese labor, the United States imports goods that were produced with Chinese labor. One report in 2010, suggested that international trade was increased when a country hosted a network of immigrants, but the trade effect was weakened when the immigrants became assimilated into their new country.


History

The
history of international trade The history of international trade chronicles notable events that have affected the trade between various countries. In the era before the rise of the nation state, the term 'international' trade cannot be literally applied, but simply means tra ...
chronicles notable events that have affected trading among various economies.


Theories and models

There are several models that seek to explain the factors behind international trade, the welfare consequences of trade and the pattern of trade.


Most traded export products


Largest countries by total international trade

The following table is a list of the 21 largest trading states according to the
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade between nations. Governments use the organization to establish, revise, and enforce the rules that govern international ...
.


Top traded commodities by value (exports)

Source:
International Trade Centre The International Trade Centre (ITC) () is a multilateral agency which has a joint mandate with the World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates interna ...


Observances

In the United States, the various U.S. Presidents have held observances to promote big and small companies to be more involved with the export and import of goods and services. President
George W. Bush George Walker Bush (born July 6, 1946) is an American politician and businessman who served as the 43rd president of the United States The president of the United States (POTUS) is the head of state and head of government of the Unit ...

George W. Bush
observed World Trade Week on May 18, 2001, and May 17, 2002. On May 13, 2016, President
Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician and attorney who served as the 44th from 2009 to 2017. A member of the , Obama was the first African-American president of the United States. He previously serv ...

Barack Obama
proclaimed May 15 through May 21, 2016, World Trade Week, 2016. On May 19, 2017, President
Donald Trump Donald John Trump (born June 14, 1946) is an American Political career of Donald Trump, politician, Media career of Donald Trump, media personality, and Business career of Donald Trump, businessman who served as the 45th president of the ...

Donald Trump
proclaimed May 21 through May 27, 2017, World Trade Week, 2017. World Trade Week is the third week of May. Every year the President declares that week to be World Trade Week.


International trade versus local production


Local food

In the case of food production trade-offs in forms of
local food Local food is food that is produced within a short distance of where it is consumed, often accompanied by a social structure and supply chain different from the large-scale supermarket system A system is a group of Interaction, interacting ...

local food
and distant food production are controversial with limited studies comparing environmental impact and scientists cautioning that regionally specific environmental impacts should be considered. Effects of local food on greenhouse gas emissions may vary per origin and target region of the production. A 2020 study indicated that local food crop production alone cannot meet the demand for most food crops with "current production and consumption patterns" and the locations of food production ''at the time of the study'' for 72–89% of the global population and 100–km radiuses as of early 2020. Studies found that food miles are a relatively minor factor of carbon emissions, albeit increased food localization may also enable additional, more significant, environmental benefits such as recycling of energy, water, and nutrients. For specific foods regional differences in harvest seasons may make it more environmentally friendly to import from distant regions than more local production and storage or local production in greenhouses.


Qualitative differences and economic aspects

Qualitative differences between substitutive products of different production regions may exist due to different legal requirements and quality standards or different levels of controllability by local production- and
governance Governance is all the processes of interactions be they through the laws Law is a system of rules created and law enforcement, enforced through social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity ...

governance
-systems which may have aspects of
security Security is freedom from, or resilience against, potential Potential generally refers to a currently unrealized ability. The term is used in a wide variety of fields, from physics Physics (from grc, φυσική (ἐπιστήμη), phys ...

security
beyond resource security,
environmental protection Environmental protection is the practice of protecting the natural environment The natural environment or natural world encompasses all and non-living things occurring , meaning in this case not . The term is most often applied to the or s ...
, product quality and
product design Product design as a verb is to create a new product to be sold by a business to its customers. A very broad coefficient and effective generation and development of ideas through a process that leads to new products. Thus, it is a major aspect of n ...
and
health Health, according to the , is "a state of complete physical, and social and not merely the absence of and ".. (2006)''Constitution of the World Health Organization''– ''Basic Documents'', Forty-fifth edition, Supplement, October 2006. A var ...

health
. The process of transforming supply as well as
labor rights Labor rights or workers' rights are both legal rights Natural rights and legal rights are the two basic types of rights Rights are law, legal, social, or ethics, ethical principles of Liberty, freedom or entitlement; that is, rights are th ...
may differ as well. Local production has been reported to increase local employment in many cases. A 2018 study claimed that international trade can increase local employment. A 2016 study found that local employment and total labor income in both manufacturing and nonmanufacturing were negatively affected by rising exposure to imports. Local production in high-income countries, rather than distant regions may require higher wages for workers. Higher wages incentivize
automation Automation describes a wide range of technologies that reduce human intervention in processes. Human intervention is reduced by predetermining decision criteria, subprocess relationships, and related actions — and embodying those predetermi ...
which could allow for automated workers' time to be reallocated by society and its economic mechanisms or be converted into leisure-like time.


Specialization, production efficiency and regional differences

Local production may require
knowledge transfer Knowledge transfer refers to sharing or disseminating of knowledge and providing inputs to problem solving Problem solving consists of using generic or ad hoc Ad hoc is a List of Latin phrases, Latin phrase meaning literally 'to this'. I ...

knowledge transfer
,
technology transfer Technology transfer (TT), also called transfer of technology (TOT), is the process of transferring (disseminating) technology Technology ("science of craft", from Ancient Greek, Greek , ''techne'', "art, skill, cunning of hand"; and , ''wikt:- ...

technology transfer
and may not be able to compete in efficiency initially with specialized, established industries and businesses, or in consumer demand without policy measures such as eco-tariffs. Regional differences may cause specific regions to be more suitable for a specific production, thereby increasing the advantages of specific trade over specific local production. Forms of local products that are highly localized may not be able to meet the efficiency of more large-scale, highly consolidated production in terms of efficiency, including environmental impact.


Resource security

A systematic, and possibly first large-scale, cross-sectoral analysis of
water Water (chemical formula H2O) is an , transparent, tasteless, odorless, and , which is the main constituent of 's and the s of all known living organisms (in which it acts as a ). It is vital for all known forms of , even though it provide ...
,
energy In , energy is the that must be to a or to perform on the body, or to it. Energy is a ; the law of states that energy can be in form, but not created or destroyed. The unit of measurement in the (SI) of energy is the , which is the ...
and
land Land is the solid surface of Earth that is not permanently submerged in water. Most but not all land is situated at elevations above sea level (variable over geologic time frames) and consists mainly of Earth's crust, crustal components such a ...
in
security Security is freedom from, or resilience against, potential Potential generally refers to a currently unrealized ability. The term is used in a wide variety of fields, from physics Physics (from grc, φυσική (ἐπιστήμη), phys ...

security
in 189 countries that links total and sectorial consumption to sources showed that countries and sectors are highly exposed to over-exploited, insecure, and degraded such resources with
economic globalization Economic globalization is one of the three main dimensions of globalization commonly found in academic literature, with the two others being political globalization Political globalization refers to the growth of the worldwide political system ...
having decreased security of global supply chains. The 2020 study finds that most countries exhibit greater exposure to resource
risks In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environmen ...

risks
via international trade – mainly from remote
production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (goods and services) * Production as a statistic, g ...
sources – and that diversifying trading partners is unlikely to help countries and sectors to reduce these or to improve their resource
self-sufficiency Self-sustainability and self-sufficiency are overlapping states of being in which a person or organization needs little or no help from, or interaction with, others. Self-sufficiency entails the self being enough (to fulfill needs), and a self-sus ...
.


See also

* Aggressive legalism *
Export control Export control is legislation Legislation is the process or product of enrolled bill, enrolling, enactment of a bill, enacting, or promulgation, promulgating law by a legislature, parliament, or analogous Government, governing body. Before an ite ...
*
Free trade Free trade is a trade policy A commercial policy (also referred to as a trade policy or international trade policy) is a government's policy governing international trade International trade is the exchange of capital, goods, and service ...
*
Free-trade area A free-trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, import quotas and tariffs, and ...
*
Gravity model of tradeThe gravity model of international trade in international economics is a model that, in its traditional form, predicts bilateral trade flows based on the economic sizes and distance between two units. Research shows that there is "overwhelming evid ...
* Import (international trade) *
Interdependence Systems theory is the interdisciplinary study of systems, i.e. cohesive groups of interrelated, interdependent parts that can be natural or man-made, human-made. Every system is bounded by space and time, influenced by its environment, defined by i ...
*
International business International business refers to the trade of goods, services, technology, capital and/or knowledge across national borders and at a global or transnational scale. It involves cross-border transactions of goods and services between two or more ...
*
International trade law International trade law includes the appropriate rules and customs for handling trade between countries. However, it is also used in legal writings as trade between private sectors. This branch of law is now an independent field of study as mos ...
*
Internationalization In economics, internationalization or internationalisation is the process of increasing involvement of enterprises in international markets, although there is no agreed definition of internationalization. Internationalization is a crucial strategy ...
* Market Segmentation Index * Mercantilism * Monopolistic competition in international trade * Northwest Passage * Panama Canal * Suez Canal * Tariff * Trade Adjustment Assistance * Trade bloc * Trade finance * Transfer problem * United Nations Conference on Trade and Development (UNCTAD) ;Lists: * List of countries by current account balance * List of countries by imports * List of countries by exports * List of international trade topics
Export Import Data Provider


Notes


References

* * *


External links


Data


Statistics from intergovernmental sources

Data on the value of exports and imports and their quantities often broken down by detailed lists of products are available in statistical collections on international trade published by the statistical services of intergovernmental and supranational organisations and national statistical institutes. The definitions and methodological concepts applied for the various statistical collections on international trade often differ in terms of definition (e.g. special trade vs. general trade) and coverage (reporting thresholds, inclusion of trade in services, estimates for smuggled goods and cross-border provision of illegal services). Metadata providing information on definitions and methods are often published along with the data.
United Nations Commodity Trade Database

Trade Map, trade statistics for international business development




OECD
European Union International Trade in Goods Data

Food and Agricultural Trade Data
by FAO
USA Import Data


Other data sources



including the gravity model
Asia-Pacific Trade Agreements Database (APTIAD)

Asia-Pacific Research and Training Network on Trade (ARTNeT)

World Integrated Trade Solution (WITS)

Market Access Map, an online database of customs tariffs and market requirements

Trade Data Monitor, a database of monthly import/export statistics for all countries and commodities (subscription required)

ExportNation Trade Statistics

Export Port and Product List


Other external links


The Observatory of Economic ComplexityGlobal Trade Data
* The McGill Faculty of Law runs a Regional Trade Agreements Database that contains the text of almost all preferential and regional trade agreements in the world.
ptas.mcgill.ca

Historical documents on international trade
available on FRASER {{DEFAULTSORT:International Trade International trade, Official statistics