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History of foregin trade:- One fourth of total global production is exported
- Trade has generated gains
- Trade transactions include both goods and services
- Trade theories in the economics literature focus on sources of comparative
advantage
Importance of foreign trade:
- Acts as a simulator of economic growth of a country
- Helps to utilize resources of various countries
- What makes foreign trade important for the economy of a country:
o It helps in expansion of business and in dissolving monopolistic entities which
increases competition
§ Encourages product innovation
§ Raises the product quality and standard
o Helps in expansion of employment opportunities and enables better
utilization of manpower and other resources
§ Expansion of domestic suppliers
o Cost-reduction
o Helps in raising income and investment level in the host country
o Filling savings gaps, trade and technology gaps
o Increasing government revenue in form of corporate taxes
§ Important factor determining relationship between countries
§ World economic integration and political peace
Advantages and disadvantages of foreign trade:
- Advantages
o Makes specific products and services available in different countries that do
not produce or have the ability to produce certain types of goods
- Disadvantages
o Potential loss of job
o Rise of internalisation
True or false: export is more important for a country than import?
- Buying is equally good as selling
- Both great for the increase of the wealth of a nation
Strong foreign trade means strong influence
How come services are so important for nations but are much less important in
international trade?
- International trade is the exchange of goods and services between countries
- Exports create jobs and boost economic growth
- It reduces jobs in domestic industries that can’t compete on a global scale
, How do countries promote foreign trade of their companies?
Export initiatives and market development programme
Foreign trade-fair programme
In case of USA:
- International trade administration, manages this global trade site to provide access
to ITA info on promoting trade and investment
- Ensuring fair trade and compliance with trade laws and agreements
How do countries protect their companies from foreign trade?
- Trade protectionism is a policy that protects domestic industries from unfair
competition from foreign trade ones
- Four primary tools are tariffs, subsidies, quotas and currency manipulation
What do trade representatives do?
- Conduct negotiations at bilateral and multilateral levels:
o Promotion, documentation, financial support
What’s the government support?
- Support from government is crucial
o Allow Belgian companies that are negotiating a contract to offer appealing
and competitive finance
o Allow Belgian companies to conduct projects in developing countries and
thereby contribute to their development
o They give subsidies for exporting and importing for fair trade in other
countries
BETA is responsible for:
- Deciding on and organising trade missions
- Organising, developing and circulating information about external markets to
regional services
- Tasks of common interest
TIVA
- Significant higher contribution made by services in global value chains
- Role of imports in export performance
- The true nature of econ interdependences
- The role of emerging economics GVCs
What is credendo?
- Insurance against ‘certain’ risks related to commercial transactions
o Non-payment, contract cancellation and loss of property
Utility of missions
Quantitative analyses
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