International Trade PracticesInternational Trade Practices

国际贸易实务国际贸易实务

Part 1 OverviewPart 1 Overview

Chapter 1 Introduction to International TradeChapter 1 Introduction to International Trade

Chapter 2 Basic Theory of International TradeChapter 2 Basic Theory of International Trade

Chapter 3 Barriers to International TradeChapter 3 Barriers to International Trade

Chapter 4 E-CommerceChapter 4 E-Commerce

Chapter 1 Introduction to Chapter 1 Introduction to International TradeInternational Trade

What is International Trade? And Why

do countries trade?Invisible TradeInvestmentEffectiveness Measurement of

International Trade

International TradeInternational Trade

------the exchange of goods, services, ------the exchange of goods, services, and technologies across national boundaries. and technologies across national boundaries. It includes import and export operations.It includes import and export operations.

Why do countries trade?Why do countries trade?

Countries engage in international trade for the

following reasons:

1. Resources Reasons,

eg. Natural resources

Favorable climate conditions and terrain

Skilled workers and Capital Resources

Favorable geographic location and transportation

costs.

2. Economic Reasons

eg. Comparative advantage

Strong domestic demand

Scale economy

Innovation or style

3. Political Reasons In these cases, political objectives outweighed economic

considerations. eg. Former Soviet Union and Cuba.

Invisible TradeInvisible Trade ------the exchange of services ------the exchange of services between nations between nations

Such as

international cargo transportation,

International cargo transportation insurance,

and tourism.

FDI FDI ------a third important category in a ------a third important category in a nation’s balance of trade, and a more nation’s balance of trade, and a more important than trade as a vehicle for important than trade as a vehicle for international economic transactions international economic transactions

Measurement of Global TradeMeasurement of Global Trade

Two key indicators:

Balance of Trade & Balance of Payments

Chapter 2 Basic Theory of International TradeChapter 2 Basic Theory of International Trade

1. Classical Trade Theory

Adam Smith (1723-1790) and His

Absolute Advantage

David Ricardo (1772-1823) and His

Comparative Advantage

2. Neoclassical Trade Theory

3. Modern Trade theories

Theory of Absolute AdvantageTheory of Absolute Advantage

Wheat(one unit) Cloth(one unit)

Britain 200 days 100 days

France 100 days 200 days

Britain: (200+100)/100=3

France: (100+200)/100=3

Theory of Comparative AdvantageTheory of Comparative Advantage

Woolen(Labor/unit) Wine(Labor/unit)

Britain 100 120

Portuguese 90 80

Britain: (100+120)/100=2.2

Portuguese: (90+80)/80=2.125

Chapter 3 Barriers to International TradeChapter 3 Barriers to International Trade

1. Socio-cultural Barriers1. Socio-cultural Barriers

2. Economic Barriers2. Economic Barriers

3. 3. Trade BarriersTrade Barriers

1. 1. Socio-cultural BarriersSocio-cultural Barriers

Language

Religion

Customs and Manners

2. Economic Barriers2. Economic Barriers

Exchange Rate

Extra Costs: ocean freight; packing cost;

marine insurance; cost of document, etc.

3. 3. Trade BarriersTrade Barriers

Tariffs

Specific Duties

Ad valorem Duties

Compound Duties

Non-tariffs(NTBS)

Quota

Licensing System in Importing Countries

New Barriers

Reasons of Trade BarriersReasons of Trade Barriers

To correct a balance-of-payments deficit

For reasons of national security

To protect their own industries against

the competition of foreign goods.