massimiliano di pace1 international trade concepts - globalisation - internationalisation -...

Massimiliano Di Pace 1

INTERNATIONAL TRADE CONCEPTS

- globalisation

- internationalisation

- international trade



Globalisation:

possibility for everybody (all operators from every area of the world) to sell everything (every good and service), to everybody (all

consumers in every area of the world)



Other concepts relating to Globalisation:

process leading regional economies, societies, and cultures to integration on account of

communication and trade



Other concepts relating to Globalisation:

integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration,

and the spread of technology



The United Nations ESCWA (United Nations Economic and Social Commission for

Western Asia, headquartered in Beirut, one of the 5 regional commissions under the

administrative direction of the United Nations Economic and Social Council) has written

that globalisation "is a widely-used term that can be defined in a number of different ways”



ESCWA states that “when used in an economic context, globalisation refers to the reduction and removal of barriers between

national borders in order to facilitate the flow of goods, capital, services and labor...

although considerable barriers remain to the flow of labor”



The concept of Globalisation was introduced in the 60s, when multinational corporations started to disseminate the world with their

products, and became widespread in the 80s, when some brands and logos were well

known in every country (i.e. Coca Cola, Mc Donald’s, Benetton, Exxon-Esso, Mercedes)



The term “global village” was “coined” in the ’60s by the mass media sociologist

Marshall McLuhan

In the recent years many authors have written on globalisation (Baldwin, Beck, Giddens,

Harley, Pollin, Sen, Stiglitz)



The globalisation is the result of break down of borders, and practically, as far as trade is concerned, of the overcome of traditional

trade barriers



The trade barriers are:- tariffs (or duties)- quotas- standards- customs rules- (custom officials’ corruption)



As a matter of fact globalisation has been promoted by international organisations such

as Gatt (today Wto)

Imf has played an important role for stabilisation of currencies rates and for easing

financial capital flows



At regional level there are important examples of globalisation:

Eu single market

Nafta

Mercosur

Asean



The level of globalisation can be measured according to some parameters:

- percentage of Gdp due to Exports- workforce engaged in exporting companies- movements of capitals, as a proportion of Gdp- foreign workers, weighted by population



The effects of globalisation are multifold:

- standardisation of goods and services

- increasing competition

- broader choice for consumers and economic operators

- more intense capital flows



- stronger labour mobility- faster pace of technological innovations- higher mutual influence of economies - major need of policies coordination for governements - more difficult control activities for crime fighting and fiscal monitoring



- greater importance of international languages

- challenges for environmental protection

- risk of political strains on commodities



Globalisation has stirred up ideological debate

- no global movements: developed in opposition to the perceived negative aspects of globalisation

- commercial disputes: between developed countries and developing countries



Critics on globalisation relate to: - unfair exploitation of poor countries- multinational companies imposing their products- delocalisation towards countries with lower labour cost and more flexible environmental rules- external policies driven by commercial purpose- income inequality worsened between and within nations- fading away of local cultures



The concept of internationalisation can be referred to:- economies- companies

When referred to economies, internationalisation means that your internal market is open to foreign

companies, and that your national companies operate overseas



When referred to companies, internationalisation can have 2 possible

meanings:

1° (stricter concept): a company is “international”, when it is present in foreign

markets with its own facilities (such as branches, local companies), for commercial or

productive purposes



2° (broader concept): a company is “international”, when it sells abroad directly, even if it has not

permanent facilities in foreign market (i.e. selling during local exhibitions)

According to the latter concept, the internationalisation process of a company starts with

exports



As a matter of fact, companies, before establishing facilities abroad, they consolidate their experience of sales in a foreign market , and just after that they consider to build up a

facility, which is at the beginning a commercial branch, and afterwards, if

necessary, a manufacturing local company



International trade is the exchange of goods carried out by different countries

Goods are usually are valued at the frontier of the exporting country (cif or fob)



Under the theoretical point of view we cannot call “export” the sale of goods in other

countries members of the same single market (i.e. Eu countries)



The exchange between countries may include also:- sale of services (i.e. transportation, tourism, communications, insurance, financial services, information services, business and personal services);- transfer of income (salary paid to non-residentWorkers, investment income due to financial assets)- current transfers (remittance of foreign workers to homeland)



The previous transfers are registered in the current account of balance of payments

Other transfers are registered in the capital account:- transfer of financial capitals (funds)- transactions of intangible assets (patents, goodwill)

Others in the financial account:- direct investments (equity capital)- portfolio investment (equity and debt securities) - other investments (including derivatives, reserve assets)

massimiliano di pace1 international trade concepts - globalisation - internationalisation -...

Documents

international economy

international organisations

world slide

level of globalisation

stiglitz slide

mercedes slide

concept of globalisation

globalisation baldwin