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Summary International Trade (&Law)
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INTERNATIONAL TRADE & LAW2022-2023
2IBM02 Jan Gorremans & Wim De Bruyn
,International Trade & Law – Trade part
Chapter 1: Introduction to international trade
0. Introduction
0.1 What is international trade?
- What is bringing money out of a country
o = export
- 3 main things in SCM
o = money, data, goods
- What is bringing money into the country?
o = import
- Trade
o = bringing things in and export things out
- We need transportation – distribution & logistics
o Communication
o National differences
o Financing
o Export & import
o Risks
o Globalization (want yellow kiwi’s – it is possible because of globalization)
o Institutions & organizations
o Tariffs
o Documents
o Strategic choices (choose to make iPhones in China, because of several reasons)
o Supply chain
o Payment methods (vb. boat in Suez is stuck, if it is still on the boat, when do you pay? With the goods,
after the goods, before the goods…?)
o …
- This year:
o SCM – logistics
o Economics
o !! Politics (law) – GEO politics
§ VB. Trade war America vs China
§ VB. Agreement trade agreement about the yellow kiwi’s – how can New Zealand get those easily
to Europe?
§ VB. Biden did the green deal
§ VB. Gas – expensive è we now get LNG (liquid … gas) from America
0.2 “Trade is central to ending global poverty” – WTO, world bank
- The role of trade in supporting growth and reducing poverty
- 2018: the past 20y the part of the world population in extreme poverty, the part of living in extreme poverty is =
A doubled, B equal, C half
o C = half è factfulness (book)
1
,0.3 “Open trade policies enable economic growth for all” – World bank
- Trade is
o central to ending global poverty. Countries that are open to international trade tend to grow faster,
innovate, improve productivity and provide higher income and more opportunities to their people
- Open trade also benefits
o lower-income households by offering consumers more affordable goods and services
- Integrating with the world economy through trade and global value chains helps drive economic growth and
reduce poverty - locally and globally
- Huge downside of trade!!
o Trade is positive, it reduces poverty in the world
o Climate is the downside – much pollution (CO2)
0.4 But can we do it in a sustainable way?
- “Air pollution pollution deaths cost global economy $225 Billion”
– World Bank”
- Different critiques on globalization (ch2)
- Link with UN SDG’s
- However,…. (foto grafiek)
o Trade has resulted in increased CO2 emissions
o Always take the triple bottom line into account
§ People planet & profit
0.5 Filmpje – but can we do it in a sustainable way?
0.6 Emissions of international versus local trade
- Transport
- Meat love
1. Why international trade?
1.1 Why international trade?
- Wealth of Nations, Adam Smith (1776)
- Smith applied the doctrine of laissez-faire to international trade. All nations would benefit from unregulated, free
trade that would allow individual countries to specialize in goods they were best suited to produce because of
natural and acquired advantages
- Smith’s theory of trade has come to be known as the theory of absolute advantage
1.2 David Ricardo
- On the principles of political economy and taxation, David Ricardo (1817)
- The principle of comparative advantage postulates that all nations can gain from trade if each specializes in
producing what they are relatively more efficient at producing and import the rest
- “do what you do best, import the rest”
1.3 Last few centuries
- Greater openness and liberalized trade
- However
- Protectionism has always immersed
- Can you think of a recent example?
- Advanced nations are realizing that economic growth and stability depend on a strategic mix of trade policies
o both free trade and protectionism (see Ch 02 on globalization)
2
, 2. World trade – trade growth
2.1 Trade growth
- World trade volumes today are 42 times the level of 1950
(4220% growth)
- World trade values today are over 302 times the level of
1950
- Growth acceleration since establishment of WTO in 1995
(4.1% annual volume growth)
Exports
- Asia is growing the fastest
- All regions are increasing but the pace is different
Imports
- Asia is growing the fastest (increased disposable income!)
- South America is decreasing imports
Countries
- US is still leading
- China is not far behind
- Germany is far ahead from other European countries
- First South-American country is Brazil
- First African country is South-Africa
2.2 What after COVID-19
- Big decrease in the first half of 2020 (even bigger than the financial crisis of 2008)
- Steady recovery since the second half of 2020
2.3 Important conclusions
- Global trade concentrated in a few countries
- Leading exporters = leading importers
- Leaders are often Western industrialized countries
o US: large import value (trade deficit)
o China and Far East: growing
§ Japan, South Korea, Hong Kong
§ Vietnam, the Philippines grow rapidly!
§ China circumventing Trade War
o South America: only Mexico and Brazil in top 30
o Africa: not in top 30
o Belgium: decreased, but still high
3
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