Global Trade

SUBMITTED TO MS.GEETA GHEMANI

(FACULTY ECO. & BS.)
WHAT IS GLOBAL TRADE

International trade is the exchange of goods and services between co

untries. This type of trade gives rise to a world economy, in which pric
es, or supply and demand, affect and are affected by global events. P
olitical change in Asia, for example, could result in an increase in the c
ost of labor, thereby increasing the manufacturing costs for an Americ
an sneaker company based in Malaysia, which would then result in an
increase in the price that you have to pay to buy the tennis shoes at y
our local mall. A decrease in the cost of labor, on the other hand, woul
d result in you having to pay less for your new shoe
AIMS AND OBEJECTIVES
The Aim of International Trade and Finance Program is to raise traders, e
01 ntrepreneurs
. and experts (in foreign trade)

02 1.To enable the candidates compete in national as well as i

n. international markets.

To educate administrators and entrepreneurs who have advanced lev

03 el knowledge

To make the right decisions orally and verbally in these fields even
04 under difficult conditions.

05 To afford the predictable and unpredictable risks and take decisions

quickly and accurately.
.
 Factors That Affect Global Trade

Factor endowments Exchange rate

Factor endowments include labor, land and c A domestic currency that has ap
apital. Labor describes the characteristics of t preciated significantly may pose
he workforce. Land describes the natural res a challenge to the cost-competiti
ources available, such as timber or oil. Capit veness of exporters, who may fin
.al resources include infrastructure and produ
d themselves priced out of export
ction capacity. The Heckscher-Ohlin model of
international trade emphasizes differences in markets .
these areas to explain trade patterns. For ex
ample, a country with an abundance of unskil
.
led labor
Demand
Trade policies
Demand for particular products o
Barriers to trade also affect the b r services is an important compo
alance of exports and imports for a nent of international trad
given country. Policies that restrict
imports or subsidize exports chang
e the relative prices of those goods
, making it more or less attractive t
o import or export.
The Advantages Of Global Trade
(i) Optimal use of natural resources:
International trade helps each country to make optimum use of its natural resources. Each cou
ntry can concentrate on production of those goods for which its resources are best suited. Wastage
of resources is avoided.

(ii) Availability of all types of goods:

It enables a country to obtain goods which it cannot produce or which it is not producing due to
higher costs, by importing from other countries at lower costs.

(iii) Specialisation :
Foreign trade leads to specialisation and encourages production of different goods in different co
untries. Goods can be produced at a comparatively low cost due to advantages of division of labour.

(vi) Advantages of large-scale production:

Due to international trade, goods are produced not only for home consumption but for export to
other countries also. Nations of the world can dispose of goods which they have in surplus in the inte
rnational markets. This leads to production at large scale and the advantages of large scale producti
on can be obtained by all the countries of the world.
 WORLD TRADE ORGANISATION

The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At it
s heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. Th
e goal is to ensure that trade flows as smoothly, predictably and freely as possible. The WTO deals with regulation of trade in goods,
services and intellectual property between participating countries by providing a framework for negotiating trade agreements and a di
spute resolution process aimed at enforcing participants' adherence to WTO agreements, which are signed by representatives of me
mber governments[7]:fol.9–10 and ratified by their parliaments.[8] The WTO prohibits discrimination between trading partners, but provide
s exceptions for environmental protection, national security, and other important goals. [9] Trade-related disputes are resolved by indep
endent judges at the WTO through a dispute resolution process.[9]
Members Of WTO

The WTO has 164 members and 23 observer governments. [92] Liberia became the 163rd member on 14 J
uly 2016, and Afghanistan became the 164th member on 29 July 2016. [93][94] In addition to states, the Euro
pean Union, and each EU Country in its own right,[95] is a member. WTO members do not have to be fully i
ndependent states; they need only be a customs territory with full autonomy in the conduct of their externa
l commercial relations. Thus Hong Kong has been a member since 1995 (as "Hong Kong, China" since 19
97) predating the People's Republic of China, which joined in 2001 after 15 years of negotiations. The Rep
ublic of China (Taiwan) acceded to the WTO in 2002 as "Separate Customs Territory of China: Taiwan, Pe
nghu, Kinmen and Matsu" (Chinese Taipei) despite its disputed status.[96] The WTO Secretariat omits the o
fficial titles (such as Counsellor, First Secretary, Second Secretary and Third Secretary) of the members of
Chinese Taipei's Permanent Mission to the WTO, except for the titles of the Permanent Representative an
d the Deputy Permanent Representative.[97]
 The world’s leading trading nations
The WTO recently released some new data on world trade. Among other things, the
se numbers provide an interesting snapshot of the world’s leading trading nations in
2014.
Last year, China was the world's largest merchandise trader, with combined export
s and imports worth US$4,303 billion. The United States was close behind in secon
d place, with total trade worth US$4,032 billion, followed by Germany (US$2,728 bill
ion).1
China was the world’s largest exporter of goods in 2014, accounting for more than 1
2 per cent of total exports. The United States was the world’s largest importer, with
an almost 13 per cent share.
 INDIA in international trade
India's global trade increased by 16.32 per cent to USD 767.9 billion in 2017-18, according to the
Commerce Department data. In 2016-17, the trade stood at USD 660.2 billion. "While India's global tr
ade grew by 16.32 per cent between 2016-17 and 2017-18, India's total trade with LAC (Latin America
n countries) grew by 19.63 per cent," the department said in a series of tweets.

While India's global trade grew by 16.32 per cent between 2016-17 and 2017-18, India's total trade wi
th LAC (Latin American countries) grew by 19.63 per cent," the department said in a series of tweets.

It said that bilateral trade with LAC including Bolivia, Peru, Chile and Brazil has recorded healthy grow
th in 2017-18 as per the provisional numbers.

"Bolivia has emerged as a major trade partner of India in LAC region with bilateral trade registering a
growth of 205 per centage ..
 How To Increase Global Trade In India
Till last week, the politically sensitive question of India's food subsidy
dominated the public discourse on the World Trade Organisation's Trade
Facilitation Agreement (TFA).

Now that those concerns have been addressed and the protocol finally
adopted, the big question is: how far will the TFA transform the country's
rade environment and power India up the "Doing Business" ranks? Traders,
usinessmen, experts and economists agree that the TFA marks an important
step for India to integrate more fully with the global supply chain.

But there is, at best, cautious optimism about an agreement that has been
hailed worldwide as a game changer that could add $1trillion to global trade.

Much depends on commitments that India will have to spell out on the 11 sets
of specific trade-facilitating issues or "articles".
Together with other developing countries and least developing countries, India will have to
determine the timing and entry of its commitments for each of these articles under three
categories, A, B and C.

These determine, respectively, which articles will be binding as soon as the agreement
comes into force; those that require a transitional period; and those that can be designated
for implementation after receiving capacity building or technical support. In essence, about
90 per cent of the TFA involves reforms of customs procedures.

Much of this already been implemented under the International Convention on the
Simplification and Harmonisation of Customs Procedures, (or the Revised Kyoto
Convention) of 2000, which India signed in 2002.
GROWTH THROUGH THE YEARS

GLOBAL TRADE GLOBAL TRADE

. 30 billion us $ around Expected to

the world increase by 20%

2016 2017 2018 2019

GLOBAL TRADE
GLOBAL TRADE
Expected to
16 billion us $.around increase by 20%
the world
CONCLUSION

international trade and investment is constituted by economic relati

on. This irregularity is embedded in a situation where prosperous countries are impatient to stipulate free trade for others
but are hesitant to compel it on themselves and are capable to evade doing so. The current market of international trade p
romotes growth and aims to reduce poverty. Different theories have different assumptions but the modern theory is consid
ered to be more effective then the other as it focuses on both i.e. exports as well imports. The protectionism concept is eff
ectively being used by the countries in order to avoid exploitation and also ensures smooth going in trade.