trade introdution
TRANSCRIPT
-
8/3/2019 Trade Introdution
1/34
INTRODUCTION TO TRADEJERRY JOHN. MBA,PGDM
ABBS
-
8/3/2019 Trade Introdution
2/34
WHAT IS TRADE?
Trade is the transfer ofownership of goods andservices from one person or entity to another.
Trade is sometimes loosely
called commerce or financial transaction or barter. A network that allows trade is called a market. The
original form of trade was barter, the direct
exchange of goods and services. Later one side of the barter were the metals,
precious metals (poles, coins), bill, paper money.
http://en.wikipedia.org/wiki/Ownershiphttp://en.wikipedia.org/wiki/Commercehttp://en.wikipedia.org/wiki/Financial_transactionhttp://en.wikipedia.org/wiki/Markethttp://en.wikipedia.org/wiki/Barter_(economics)http://en.wikipedia.org/wiki/Barter_(economics)http://en.wikipedia.org/wiki/Markethttp://en.wikipedia.org/wiki/Financial_transactionhttp://en.wikipedia.org/wiki/Commercehttp://en.wikipedia.org/wiki/Ownership -
8/3/2019 Trade Introdution
3/34
Modern traders instead generally negotiatethrough a medium of exchange, such
as money. As a result, buying can be separated
from selling, or earning.
The invention of money (and later credit,paper money and non-physical money)greatly simplified and promoted trade.
Trade between two traders is called bilateraltrade, while trade between more than twotraders is called multilateral trade.
http://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Earninghttp://en.wikipedia.org/wiki/Earninghttp://en.wikipedia.org/wiki/Money -
8/3/2019 Trade Introdution
4/34
Trade exists for man due to specialization anddivision of labour, most people concentrate
on a small aspect of production, trading forother products.
Trade exists between regions because
different regions have a comparativeadvantage in the production of some tradablecommodity, or because different regions' size
allows for the benefits ofmass production. As such, trade at market prices between
locations benefits both locations.
http://en.wikipedia.org/wiki/Comparative_advantagehttp://en.wikipedia.org/wiki/Comparative_advantagehttp://en.wikipedia.org/wiki/Mass_productionhttp://en.wikipedia.org/wiki/Market_pricehttp://en.wikipedia.org/wiki/Market_pricehttp://en.wikipedia.org/wiki/Mass_productionhttp://en.wikipedia.org/wiki/Comparative_advantagehttp://en.wikipedia.org/wiki/Comparative_advantage -
8/3/2019 Trade Introdution
5/34
Retail trade consists of the sale of goods ormerchandise from a very fixed location, such
as a department store, boutique or kiosk, orby mail, in small or individual lots fordirect consumption by the purchaser.
Wholesale trade is defined as the sale ofgoods or merchandise to retailers, toindustrial, commercial, institutional, or other
professional business users, or to otherwholesalers and related subordinated services
http://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Department_storehttp://en.wikipedia.org/wiki/Boutiquehttp://en.wikipedia.org/wiki/Kioskhttp://en.wikipedia.org/wiki/Mailhttp://en.wikipedia.org/wiki/Consumption_(economics)http://en.wikipedia.org/wiki/Wholesalehttp://en.wikipedia.org/wiki/Merchandisehttp://en.wikipedia.org/wiki/Retailerhttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Retailerhttp://en.wikipedia.org/wiki/Merchandisehttp://en.wikipedia.org/wiki/Wholesalehttp://en.wikipedia.org/wiki/Consumption_(economics)http://en.wikipedia.org/wiki/Mailhttp://en.wikipedia.org/wiki/Kioskhttp://en.wikipedia.org/wiki/Boutiquehttp://en.wikipedia.org/wiki/Department_storehttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Retail -
8/3/2019 Trade Introdution
6/34
-
8/3/2019 Trade Introdution
7/34
PRE-HISTORY
Trade originated with the start ofcommunication in prehistoric times.
Trading was the main facility of prehistoricpeople, who bartered goods and servicesfrom each other before the innovation of themodern day currency. Peter Watson dates
the history of long-distancecommerce from circa 150,000 years ago
http://en.wikipedia.org/wiki/History_of_communicationhttp://en.wikipedia.org/wiki/History_of_communicationhttp://en.wikipedia.org/wiki/Prehistorichttp://en.wikipedia.org/wiki/Peter_Watson_(business_writer)http://en.wikipedia.org/wiki/History_of_international_tradehttp://en.wikipedia.org/wiki/History_of_international_tradehttp://en.wikipedia.org/wiki/Circahttp://en.wikipedia.org/wiki/Circahttp://en.wikipedia.org/wiki/History_of_international_tradehttp://en.wikipedia.org/wiki/History_of_international_tradehttp://en.wikipedia.org/wiki/History_of_international_tradehttp://en.wikipedia.org/wiki/History_of_international_tradehttp://en.wikipedia.org/wiki/Peter_Watson_(business_writer)http://en.wikipedia.org/wiki/Prehistorichttp://en.wikipedia.org/wiki/History_of_communicationhttp://en.wikipedia.org/wiki/History_of_communication -
8/3/2019 Trade Introdution
8/34
ANCIENT HISTORY
Trade is believed to have taken placethroughout much of recorded human history.
There is evidence of the exchangeofobsidian and flint during the stone age.
Materials used for creatingjewellery weretraded with Egypt since 3000 BC.
http://en.wikipedia.org/wiki/Obsidianhttp://en.wikipedia.org/wiki/Flinthttp://en.wikipedia.org/wiki/Stone_agehttp://en.wikipedia.org/wiki/Jewelryhttp://en.wikipedia.org/wiki/Egypthttp://en.wikipedia.org/wiki/Egypthttp://en.wikipedia.org/wiki/Jewelryhttp://en.wikipedia.org/wiki/Stone_agehttp://en.wikipedia.org/wiki/Flinthttp://en.wikipedia.org/wiki/Obsidian -
8/3/2019 Trade Introdution
9/34
Long-range trade routes first appeared in the 3rdmillennium BC, when Sumerians in Mesopotamia tradedwith the Harappa civilization of the Indus Valley.
ThePhoenicians were noted sea traders, travelling acrossthe Mediterranean Sea, and as far north as Britain forsources often to manufacture bronze.
For this purpose they established trade colonies the Greekscalled emporia.
From the beginning ofGreekcivilization until the fall of
the Roman empire in the 5th century, a financially lucrativetrade brought valuable spice to Europe from the far east,including India and China.
http://en.wikipedia.org/wiki/3rd_millennium_BChttp://en.wikipedia.org/wiki/Sumerianshttp://en.wikipedia.org/wiki/Mesopotamiahttp://en.wikipedia.org/wiki/Mesopotamiahttp://en.wikipedia.org/wiki/3rd_millennium_BChttp://en.wikipedia.org/wiki/Indus_Valley_Civilizationhttp://en.wikipedia.org/wiki/Indus_Valley_Civilizationhttp://en.wikipedia.org/wiki/Indus_Valley_Civilizationhttp://en.wikipedia.org/wiki/Sumerianshttp://en.wikipedia.org/wiki/Indus_Riverhttp://en.wikipedia.org/wiki/Mesopotamiahttp://en.wikipedia.org/wiki/Indus_Valley_Civilizationhttp://en.wikipedia.org/wiki/Indus_Riverhttp://en.wikipedia.org/wiki/Mediterranean_Seahttp://en.wikipedia.org/wiki/Mediterranean_Seahttp://en.wikipedia.org/wiki/Mediterranean_Seahttp://en.wikipedia.org/wiki/Prehistoric_Britainhttp://en.wikipedia.org/wiki/Mediterranean_Seahttp://en.wikipedia.org/wiki/Bronzehttp://en.wikipedia.org/wiki/Prehistoric_Britainhttp://en.wikipedia.org/wiki/Bronzehttp://en.wikipedia.org/wiki/Emporia_(ancient_Greece)http://en.wikipedia.org/wiki/Emporia_(ancient_Greece)http://en.wikipedia.org/wiki/Roman_empirehttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Civilizationhttp://en.wikipedia.org/wiki/Roman_empirehttp://en.wikipedia.org/wiki/Spicehttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Spicehttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Spicehttp://en.wikipedia.org/wiki/Roman_empirehttp://en.wikipedia.org/wiki/Civilizationhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Emporia_(ancient_Greece)http://en.wikipedia.org/wiki/Bronzehttp://en.wikipedia.org/wiki/Prehistoric_Britainhttp://en.wikipedia.org/wiki/Mediterranean_Seahttp://en.wikipedia.org/wiki/Phoenicianshttp://en.wikipedia.org/wiki/Indus_Riverhttp://en.wikipedia.org/wiki/Indus_Valley_Civilizationhttp://en.wikipedia.org/wiki/Mesopotamiahttp://en.wikipedia.org/wiki/Sumerianshttp://en.wikipedia.org/wiki/3rd_millennium_BChttp://en.wikipedia.org/wiki/3rd_millennium_BC -
8/3/2019 Trade Introdution
10/34
Roman commerce allowed its empire to flourish andendure.
The Roman empire produced a stable and secure
transportation network that enabled the shipment of tradegoods without fear of significant piracy.
The fall of the Roman empire, and the succeeding DarkAges brought instability to Western Europe and a nearcollapse of the trade network in the western world.
Trade however continued to flourish among the kingdomsof Africa, Middle East, India, China and Southeast Asia.
Some trade did occur in the west.
For instance, Radhanites were a medieval guild or group(the precise meaning of the word is lost to history)ofJewish merchants who traded between
the Christians in Europe and the Muslims of the Near East.
http://en.wikipedia.org/wiki/Roman_commercehttp://en.wikipedia.org/wiki/Piracyhttp://en.wikipedia.org/wiki/Piracyhttp://en.wikipedia.org/wiki/Dark_Ages_(historiography)http://en.wikipedia.org/wiki/Western_Europehttp://en.wikipedia.org/wiki/Dark_Ages_(historiography)http://en.wikipedia.org/wiki/Dark_Ages_(historiography)http://en.wikipedia.org/wiki/Western_Europehttp://en.wikipedia.org/wiki/Radhanitehttp://en.wikipedia.org/wiki/Jewhttp://en.wikipedia.org/wiki/Jewhttp://en.wikipedia.org/wiki/Christianhttp://en.wikipedia.org/wiki/Christianhttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Muslimhttp://en.wikipedia.org/wiki/Christianhttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Muslimhttp://en.wikipedia.org/wiki/Near_Easthttp://en.wikipedia.org/wiki/Near_Easthttp://en.wikipedia.org/wiki/Muslimhttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Christianhttp://en.wikipedia.org/wiki/Jewhttp://en.wikipedia.org/wiki/Radhanitehttp://en.wikipedia.org/wiki/Western_Europehttp://en.wikipedia.org/wiki/Dark_Ages_(historiography)http://en.wikipedia.org/wiki/Dark_Ages_(historiography)http://en.wikipedia.org/wiki/Piracyhttp://en.wikipedia.org/wiki/Roman_commerce -
8/3/2019 Trade Introdution
11/34
MIDDLE AGES During the Middle Ages, Central Asia was the
economic centre of the world.
The Sogdians dominated the East-West trade routeknown as the Silk Road after the 4th century AD up tothe 8th century AD, with Suyab and Talas rankingamong their main centres in the north.
They were the main caravan merchants ofCentralAsia.
From the 8th to the 11th century,theVikings and Varangians traded as they sailed fromand to Scandinavia.
Vikings sailed to Western Europe, while Varangiansto Russia. The Hanseatic League was an alliance oftrading cities that maintained a trade monopoly overmost ofNorthern Europe and the Baltic, between the
13th and 17th centuries.
http://en.wikipedia.org/wiki/Sogdianahttp://en.wikipedia.org/wiki/Silk_Roadhttp://en.wikipedia.org/wiki/Silk_Roadhttp://en.wikipedia.org/wiki/Suyabhttp://en.wikipedia.org/wiki/Tarazhttp://en.wikipedia.org/wiki/Suyabhttp://en.wikipedia.org/wiki/Tarazhttp://en.wikipedia.org/wiki/Central_Asiahttp://en.wikipedia.org/wiki/Caravan_(travellers)http://en.wikipedia.org/wiki/Central_Asiahttp://en.wikipedia.org/wiki/Central_Asiahttp://en.wikipedia.org/wiki/Vikinghttp://en.wikipedia.org/wiki/Vikinghttp://en.wikipedia.org/wiki/Varangianshttp://en.wikipedia.org/wiki/Scandinaviahttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Hanseatic_Leaguehttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Hanseatic_Leaguehttp://en.wikipedia.org/wiki/Monopolyhttp://en.wikipedia.org/wiki/Northern_Europehttp://en.wikipedia.org/wiki/Baltic_regionhttp://en.wikipedia.org/wiki/Baltic_regionhttp://en.wikipedia.org/wiki/Monopolyhttp://en.wikipedia.org/wiki/Northern_Europehttp://en.wikipedia.org/wiki/Baltic_regionhttp://en.wikipedia.org/wiki/Baltic_regionhttp://en.wikipedia.org/wiki/Northern_Europehttp://en.wikipedia.org/wiki/Monopolyhttp://en.wikipedia.org/wiki/Hanseatic_Leaguehttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Scandinaviahttp://en.wikipedia.org/wiki/Varangianshttp://en.wikipedia.org/wiki/Vikinghttp://en.wikipedia.org/wiki/Central_Asiahttp://en.wikipedia.org/wiki/Central_Asiahttp://en.wikipedia.org/wiki/Caravan_(travellers)http://en.wikipedia.org/wiki/Tarazhttp://en.wikipedia.org/wiki/Suyabhttp://en.wikipedia.org/wiki/Silk_Roadhttp://en.wikipedia.org/wiki/Sogdiana -
8/3/2019 Trade Introdution
12/34
AGE OF DISCOVERY
Vasco da Gama pioneered the European Spice trade in1498 when he reached Calicut after sailing aroundthe Cape of Good Hope at the southern tip of theAfrican continent.
Prior to this, the flow of spice into Europe from Indiawas controlled by Islamic powers, especially Egypt.
The spice trade was of major economic importanceand helped spur the Age of Discovery in Europe.
Spices brought to Europe from the Eastern worldwere some of the most valuable commodities for theirweight, sometimes rivalling gold.
http://en.wikipedia.org/wiki/Vasco_da_Gamahttp://en.wikipedia.org/wiki/Spice_tradehttp://en.wikipedia.org/wiki/Calicuthttp://en.wikipedia.org/wiki/Cape_of_Good_Hopehttp://en.wikipedia.org/wiki/Age_of_Discoveryhttp://en.wikipedia.org/wiki/Goldhttp://en.wikipedia.org/wiki/Goldhttp://en.wikipedia.org/wiki/Age_of_Discoveryhttp://en.wikipedia.org/wiki/Cape_of_Good_Hopehttp://en.wikipedia.org/wiki/Calicuthttp://en.wikipedia.org/wiki/Spice_tradehttp://en.wikipedia.org/wiki/Vasco_da_Gamahttp://en.wikipedia.org/wiki/Vasco_da_Gamahttp://en.wikipedia.org/wiki/Vasco_da_Gamahttp://en.wikipedia.org/wiki/Vasco_da_Gama -
8/3/2019 Trade Introdution
13/34
In the 16th century, the SeventeenProvinces were the centre of free trade,
imposing no exchange controls, andadvocating the free movement of goods.
Trade in the East Indies was dominated
by Portugal in the 16th century, Holland in the17th century, and the British in the 18thcentury.
The Spanish Empire developed regular tradelinks across both the Atlantic andthe Pacific Oceans.
http://en.wikipedia.org/wiki/Seventeen_Provinceshttp://en.wikipedia.org/wiki/Seventeen_Provinceshttp://en.wikipedia.org/wiki/Exchange_controlhttp://en.wikipedia.org/wiki/East_Indieshttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Hollandhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/Spanish_Empirehttp://en.wikipedia.org/wiki/Atlantic_Oceanhttp://en.wikipedia.org/wiki/Pacific_Oceanhttp://en.wikipedia.org/wiki/Pacific_Oceanhttp://en.wikipedia.org/wiki/Atlantic_Oceanhttp://en.wikipedia.org/wiki/Spanish_Empirehttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/Hollandhttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/East_Indieshttp://en.wikipedia.org/wiki/Exchange_controlhttp://en.wikipedia.org/wiki/Seventeen_Provinceshttp://en.wikipedia.org/wiki/Seventeen_Provinces -
8/3/2019 Trade Introdution
14/34
In 1776, Adam Smith published the paperAn Inquiry intothe Nature and Causes of the Wealth of Nations.
It criticised Mercantilism, and argued
that economicspecialisation could benefit nations just asmuch as firms.
Since the division of labour was restricted by the size ofthe market, he said that countries having access to larger
markets would be able to divide labour more efficientlyand thereby become more productive.
Smith said that he considered all rationalisationsofimport and export controls "dupery", which hurt the
trading nation as a whole for the benefit of specificindustries.
In 1799, the Dutch East India Company, formerly theworld's largest company, became bankrupt, partly due to
the rise of competitive free trade.
http://en.wikipedia.org/wiki/Adam_Smithhttp://en.wikipedia.org/wiki/An_Inquiry_into_the_Nature_and_Causes_of_the_Wealth_of_Nationshttp://en.wikipedia.org/wiki/An_Inquiry_into_the_Nature_and_Causes_of_the_Wealth_of_Nationshttp://en.wikipedia.org/wiki/Mercantilismhttp://en.wikipedia.org/wiki/Economichttp://en.wikipedia.org/wiki/Specialization_(functional)http://en.wikipedia.org/wiki/Division_of_labourhttp://en.wikipedia.org/wiki/Productivehttp://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Exporthttp://en.wikipedia.org/wiki/Dutch_East_India_Companyhttp://en.wikipedia.org/wiki/Bankrupthttp://en.wikipedia.org/wiki/Bankrupthttp://en.wikipedia.org/wiki/Dutch_East_India_Companyhttp://en.wikipedia.org/wiki/Exporthttp://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Productivehttp://en.wikipedia.org/wiki/Division_of_labourhttp://en.wikipedia.org/wiki/Specialization_(functional)http://en.wikipedia.org/wiki/Economichttp://en.wikipedia.org/wiki/Mercantilismhttp://en.wikipedia.org/wiki/An_Inquiry_into_the_Nature_and_Causes_of_the_Wealth_of_Nationshttp://en.wikipedia.org/wiki/An_Inquiry_into_the_Nature_and_Causes_of_the_Wealth_of_Nationshttp://en.wikipedia.org/wiki/Adam_Smith -
8/3/2019 Trade Introdution
15/34
AGE OF REASON
In 1817,David Ricardo, James Mill and RobertTorrens showed that free trade would benefit theindustrially weak as well as the strong, in thefamous theory of comparative advantage.
In Principles of Political Economy andTaxation Ricardo advanced the doctrine stillconsidered the most counterintuitivein economics:
When an inefficient producer sends themerchandise it produces best to a country able to
produce it more efficiently, both countries benefit.
http://en.wikipedia.org/wiki/Robert_Torrenshttp://en.wikipedia.org/wiki/David_Ricardohttp://en.wikipedia.org/wiki/James_Millhttp://en.wikipedia.org/wiki/Robert_Torrenshttp://en.wikipedia.org/wiki/Robert_Torrenshttp://en.wikipedia.org/wiki/Principles_of_Political_Economy_and_Taxationhttp://en.wikipedia.org/wiki/Principles_of_Political_Economy_and_Taxationhttp://en.wikipedia.org/wiki/Principles_of_Political_Economy_and_Taxationhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Principles_of_Political_Economy_and_Taxationhttp://en.wikipedia.org/wiki/Principles_of_Political_Economy_and_Taxationhttp://en.wikipedia.org/wiki/Robert_Torrenshttp://en.wikipedia.org/wiki/Robert_Torrenshttp://en.wikipedia.org/wiki/James_Millhttp://en.wikipedia.org/wiki/David_Ricardo -
8/3/2019 Trade Introdution
16/34
The ascendancy of free trade was primarily basedon national advantage in the mid 19th century.
That is, the calculation made was whether it was inany particular country's self-interest to open itsborders to imports.
John Stuart Mill proved that a country withmonopoly pricing power on the internationalmarket could manipulate the terms of
trade through maintaining tariffs, and that theresponse to this might be reciprocity in trade policy
http://en.wikipedia.org/wiki/John_Stuart_Millhttp://en.wikipedia.org/wiki/Pricing_powerhttp://en.wikipedia.org/wiki/Terms_of_tradehttp://en.wikipedia.org/wiki/Terms_of_tradehttp://en.wikipedia.org/wiki/Tariffhttp://en.wikipedia.org/wiki/Reciprocity_(international_relations)http://en.wikipedia.org/wiki/Reciprocity_(international_relations)http://en.wikipedia.org/wiki/Tariffhttp://en.wikipedia.org/wiki/Terms_of_tradehttp://en.wikipedia.org/wiki/Terms_of_tradehttp://en.wikipedia.org/wiki/Pricing_powerhttp://en.wikipedia.org/wiki/John_Stuart_Mill -
8/3/2019 Trade Introdution
17/34
Ricardo and others had suggested this earlier.
This was taken as evidence against the universal doctrineof free trade, as it was believed that more of the economic
surplus of trade would accrue to a countryfollowing reciprocal, rather than completely free, tradepolicies.
This was followed within a few years by the infantindustry scenario developed by Mill promoting the theory
that government had the "duty" to protect youngindustries, although only for a time necessary for them todevelop full capacity.
This became the policy in many countries attempting
to industrialise and out-compete English exporters. Milton Friedman later continued this vein of thought,
showing that in a few circumstances tariffs might bebeneficial to the host country; but never for the world atlarge.
http://en.wikipedia.org/wiki/Economic_surplushttp://en.wikipedia.org/wiki/Economic_surplushttp://en.wikipedia.org/wiki/Economic_surplushttp://en.wikipedia.org/wiki/Economic_surplushttp://en.wikipedia.org/wiki/Infant_industryhttp://en.wikipedia.org/wiki/Infant_industryhttp://en.wikipedia.org/wiki/Infant_industryhttp://en.wikipedia.org/wiki/Protectionismhttp://en.wikipedia.org/wiki/Protectionismhttp://en.wikipedia.org/wiki/Industrializehttp://en.wikipedia.org/wiki/Englandhttp://en.wikipedia.org/wiki/Industrializehttp://en.wikipedia.org/wiki/Englandhttp://en.wikipedia.org/wiki/Englandhttp://en.wikipedia.org/wiki/Industrializehttp://en.wikipedia.org/wiki/Protectionismhttp://en.wikipedia.org/wiki/Infant_industryhttp://en.wikipedia.org/wiki/Infant_industryhttp://en.wikipedia.org/wiki/Economic_surplushttp://en.wikipedia.org/wiki/Economic_surplus -
8/3/2019 Trade Introdution
18/34
20TH CENTURY The Great Depression was a major economic
recession that ran from 1929 to the late 1930s. During this period, there was a great drop in
trade and other economic indicators.
The lack of free trade was considered by many asa principal cause of the depression.
Only during the World War II the recession endedin the United States.
Also during the war, in 1944, 44 countries signedthe Bretton Woods Agreement, intended toprevent national trade barriers, to avoiddepressions.
http://en.wikipedia.org/wiki/Great_Depressionhttp://en.wikipedia.org/wiki/World_War_IIhttp://en.wikipedia.org/wiki/World_War_IIhttp://en.wikipedia.org/wiki/Great_Depression -
8/3/2019 Trade Introdution
19/34
It set up rules and institutions to regulatethe international political economy: the
International Monetary Fund and theInternational Bank for Reconstruction andDevelopment (later divided into the World
Bank and Bank for International Settlements). These organisations became operational in
1946 after enough countries ratified the
agreement. In 1947, 23 countries agreed tothe General Agreement on Tariffs and Trade topromote free trade.
http://en.wikipedia.org/wiki/International_political_economyhttp://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Tradehttp://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Tradehttp://en.wikipedia.org/wiki/International_political_economy -
8/3/2019 Trade Introdution
20/34
FREE TRADE..
Free trade advanced further in the late 20th century and early
2000s: 1992 European Union lifted barriers to internal trade
in goods and labour. January 1, 1994 the North American Free Trade
Agreement (NAFTA) took effect
1994 The GATT Marrakech Agreement specified formation of theWTO. January 1, 1995 World Trade Organizationwas created to
facilitate free trade, by mandating mutual most favourednation trading status between all signatories.
EC was transformed into the European Union, which accomplished
the Economic and Monetary Union (EMU) in 2002, throughintroducing the Euro, and creating this way a real single marketbetween 13 member states as of January 1, 2007.
2005, the Central American Free Trade Agreement was signed; Itincludes the United States and the Dominican Republic.
http://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/Good_(accounting)http://en.wikipedia.org/wiki/Labour_(economics)http://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Marrakech_Agreementhttp://en.wikipedia.org/wiki/Free_tradehttp://en.wikipedia.org/wiki/Free_tradehttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/Most_favoured_nationhttp://en.wikipedia.org/wiki/Most_favoured_nationhttp://en.wikipedia.org/wiki/Free_tradehttp://en.wikipedia.org/wiki/Most_favoured_nationhttp://en.wikipedia.org/wiki/Most_favoured_nationhttp://en.wikipedia.org/wiki/Central_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Central_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Most_favoured_nationhttp://en.wikipedia.org/wiki/Most_favoured_nationhttp://en.wikipedia.org/wiki/Free_tradehttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/Marrakech_Agreementhttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Labour_(economics)http://en.wikipedia.org/wiki/Good_(accounting)http://en.wikipedia.org/wiki/European_Union -
8/3/2019 Trade Introdution
21/34
PROTECTIONISM
Protectionism is the policy of restraining anddiscouraging trade between states andcontrasts with the policy of free trade.
This policy often takes of form oftariffs andrestrictive quotas.
Protectionist policies were particularly
prevalent in the 1930s, between the greatdepression and the onset of World War II.
http://en.wikipedia.org/wiki/Tariffshttp://en.wikipedia.org/wiki/Import_quotahttp://en.wikipedia.org/wiki/Great_depressionhttp://en.wikipedia.org/wiki/Great_depressionhttp://en.wikipedia.org/wiki/Great_depressionhttp://en.wikipedia.org/wiki/Great_depressionhttp://en.wikipedia.org/wiki/Import_quotahttp://en.wikipedia.org/wiki/Tariffs -
8/3/2019 Trade Introdution
22/34
RELIGION
Muslim teachings encourage trading (andcondemn usury).
Judeo-Christian teachings encourage tradersto avoid dishonest gain
http://en.wikipedia.org/wiki/Judeo-Christianhttp://en.wikipedia.org/wiki/Judeo-Christianhttp://en.wikipedia.org/wiki/Judeo-Christianhttp://en.wikipedia.org/wiki/Judeo-Christian -
8/3/2019 Trade Introdution
23/34
DEVELOPMENT OF MONEY
The first instances of money were objects
with intrinsic value. This is called commodity money and includes
any commonly available commodity that hasintrinsic value; historical examples include
pigs, rare seashells, whale's teeth, and (often)cattle.
In medieval Iraq, bread was used as an early
form of money. In Mexico under Montezuma cocoa beans
were money.
http://en.wikipedia.org/wiki/Commodity_moneyhttp://en.wikipedia.org/wiki/Iraqhttp://en.wikipedia.org/wiki/Mexicohttp://en.wikipedia.org/wiki/Mexicohttp://en.wikipedia.org/wiki/Iraqhttp://en.wikipedia.org/wiki/Commodity_moneyhttp://en.wikipedia.org/wiki/Commodity_money -
8/3/2019 Trade Introdution
24/34
Currency was introduced as a standardisedmoney to facilitate a wider exchange of goodsand services.
This first stage of currency, where metals wereused to represent stored value, and symbols torepresent commodities, formed the basis of
trade in the Fertile Crescent for over 1500 years. Numismatists have examples of coins from the
earliest large-scale societies, although thesewere initially unmarked lumps of precious metal.
Ancient Sparta minted coins from iron todiscourage its citizens from engaging in foreigntrade.
http://en.wikipedia.org/wiki/Currencyhttp://en.wikipedia.org/wiki/Numismatisthttp://en.wikipedia.org/wiki/Precious_metalhttp://en.wikipedia.org/wiki/Coinshttp://en.wikipedia.org/wiki/Coinshttp://en.wikipedia.org/wiki/Precious_metalhttp://en.wikipedia.org/wiki/Numismatisthttp://en.wikipedia.org/wiki/Currency -
8/3/2019 Trade Introdution
25/34
CURRENT TRENDS Doha rounds.
The Doha round of World Trade Organization negotiationsaims to lower barriers to trade around the world, with afocus on making trade fairer for developing countries.
Talks have been hung over a divide between therich developed countries, represented by the G20, and themajor developing countries.
Agricultural subsidies are the most significant issue uponwhich agreement has been hardest to negotiate.
By contrast, there was much agreement on tradefacilitation and capacity building.
The Doha round began in Doha, Qatar, and negotiationshave subsequently continued in: Cancn,Mexico; Geneva, Switzerland; and Paris, France and HongKong.
http://en.wikipedia.org/wiki/Trade_barrierhttp://en.wikipedia.org/wiki/Trade_barrierhttp://en.wikipedia.org/wiki/Fair_tradehttp://en.wikipedia.org/wiki/Trade_barrierhttp://en.wikipedia.org/wiki/Developing_countrieshttp://en.wikipedia.org/wiki/Fair_tradehttp://en.wikipedia.org/wiki/Developing_countrieshttp://en.wikipedia.org/wiki/Developed_countrieshttp://en.wikipedia.org/wiki/G20http://en.wikipedia.org/wiki/Developed_countrieshttp://en.wikipedia.org/wiki/G20http://en.wikipedia.org/wiki/Agricultural_subsidieshttp://en.wikipedia.org/wiki/Trade_facilitationhttp://en.wikipedia.org/wiki/Trade_facilitationhttp://en.wikipedia.org/wiki/Trade_facilitationhttp://en.wikipedia.org/wiki/Dohahttp://en.wikipedia.org/wiki/Canc%C3%BAnhttp://en.wikipedia.org/wiki/Canc%C3%BAnhttp://en.wikipedia.org/wiki/Genevahttp://en.wikipedia.org/wiki/Switzerlandhttp://en.wikipedia.org/wiki/Canc%C3%BAnhttp://en.wikipedia.org/wiki/Parishttp://en.wikipedia.org/wiki/Canc%C3%BAnhttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Genevahttp://en.wikipedia.org/wiki/Switzerlandhttp://en.wikipedia.org/wiki/Parishttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Parishttp://en.wikipedia.org/wiki/Switzerlandhttp://en.wikipedia.org/wiki/Genevahttp://en.wikipedia.org/wiki/Canc%C3%BAnhttp://en.wikipedia.org/wiki/Qatarhttp://en.wikipedia.org/wiki/Dohahttp://en.wikipedia.org/wiki/Trade_facilitationhttp://en.wikipedia.org/wiki/Trade_facilitationhttp://en.wikipedia.org/wiki/Agricultural_subsidieshttp://en.wikipedia.org/wiki/G20http://en.wikipedia.org/wiki/Developed_countrieshttp://en.wikipedia.org/wiki/Developing_countrieshttp://en.wikipedia.org/wiki/Fair_tradehttp://en.wikipedia.org/wiki/Trade_barrier -
8/3/2019 Trade Introdution
26/34
CHINA Beginning around 1978, the government of
the People's Republic of China (PRC) began an
experiment in economic reform. In contrast to the previous Soviet-style centrally
planned economy, the new measures progressivelyrelaxed restrictions on farming, agriculturaldistribution and, several years later, urban enterprisesand labour.
The more market-oriented approach reducedinefficiencies and stimulated private investment,particularly by farmers, that led to increased
productivity and output. One feature was theestablishment of four (later five) Special EconomicZones located along the South-east coast.
http://en.wikipedia.org/wiki/People's_Republic_of_Chinahttp://en.wikipedia.org/wiki/People's_Republic_of_Chinahttp://en.wikipedia.org/wiki/Economic_reforms_in_Chinahttp://en.wikipedia.org/wiki/Centrally_planned_economyhttp://en.wikipedia.org/wiki/USSRhttp://en.wikipedia.org/wiki/Centrally_planned_economyhttp://en.wikipedia.org/wiki/Centrally_planned_economyhttp://en.wikipedia.org/wiki/Special_Economic_Zonehttp://en.wikipedia.org/wiki/Special_Economic_Zonehttp://en.wikipedia.org/wiki/Special_Economic_Zonehttp://en.wikipedia.org/wiki/Special_Economic_Zonehttp://en.wikipedia.org/wiki/Special_Economic_Zonehttp://en.wikipedia.org/wiki/Special_Economic_Zonehttp://en.wikipedia.org/wiki/Centrally_planned_economyhttp://en.wikipedia.org/wiki/Centrally_planned_economyhttp://en.wikipedia.org/wiki/USSRhttp://en.wikipedia.org/wiki/Economic_reforms_in_Chinahttp://en.wikipedia.org/wiki/People's_Republic_of_China -
8/3/2019 Trade Introdution
27/34
The reforms proved spectacularly successfulin terms of increased output, variety,
quality, price and demand. In real terms, the economy doubled in size
between 1978 and 1986, doubled again by
1994, and again by 2003. In 2008, China's two-way trade totaled
US$2.56 trillion.
In 1991 the PRC joined the Asia-PacificEconomic Cooperation group, a trade-promotion forum. In 2001, it also joined theWorld Trade Organization.
http://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Demandhttp://en.wikipedia.org/wiki/Asia-Pacific_Economic_Cooperationhttp://en.wikipedia.org/wiki/Asia-Pacific_Economic_Cooperationhttp://en.wikipedia.org/wiki/Asia-Pacific_Economic_Cooperationhttp://en.wikipedia.org/wiki/Asia-Pacific_Economic_Cooperationhttp://en.wikipedia.org/wiki/Asia-Pacific_Economic_Cooperationhttp://en.wikipedia.org/wiki/Asia-Pacific_Economic_Cooperationhttp://en.wikipedia.org/wiki/Demandhttp://en.wikipedia.org/wiki/Price -
8/3/2019 Trade Introdution
28/34
INTERNATIONAL TRADE
International trade is the exchange of goods and
services across national borders. In most countries, it represents a significant part
ofGDP. While international trade has been presentthroughout much of history (see Silk Road, Amber
Road), its economic, social, and politicalimportance have increased in recent centuries,mainly because ofIndustrialization, advancedtransportation, globalization , multinational
corporations, and outsourcing. In fact, it is probably the increasing prevalence of
international trade that is usually meant by theterm "globalization".
http://en.wikipedia.org/wiki/Gross_Domestic_Producthttp://en.wikipedia.org/wiki/Amber_Roadhttp://en.wikipedia.org/wiki/Amber_Roadhttp://en.wikipedia.org/wiki/Industrializationhttp://en.wikipedia.org/wiki/Globalizationhttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Outsourcinghttp://en.wikipedia.org/wiki/Outsourcinghttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Globalizationhttp://en.wikipedia.org/wiki/Industrializationhttp://en.wikipedia.org/wiki/Amber_Roadhttp://en.wikipedia.org/wiki/Amber_Roadhttp://en.wikipedia.org/wiki/Gross_Domestic_Product -
8/3/2019 Trade Introdution
29/34
Empirical evidence for the success of tradecan be seen in the contrast between countries
such as South Korea, which adopted a policyofexport-oriented industrialization, and India,which historically had a more closed policy
(although it has begun to open its economy,as of 2005)
South Korea has done much better by
economic criteria than India over the past fiftyyears, though its success also has to do witheffective state institutions.
http://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/Export-oriented_industrializationhttp://en.wikipedia.org/wiki/Export-oriented_industrializationhttp://en.wikipedia.org/wiki/Export-oriented_industrializationhttp://en.wikipedia.org/wiki/Export-oriented_industrializationhttp://en.wikipedia.org/wiki/South_Korea -
8/3/2019 Trade Introdution
30/34
TRADE SANCTIONS
Trade sanctions against a specific country aresometimes imposed, in order to punish thatcountry for some action.
An embargo, a severe form of externallyimposed isolation, is a blockade of all trade byone country on another.
For example, the United States has hadan embargo against Cuba for over 40 years.
http://en.wikipedia.org/wiki/Trade_sanctionshttp://en.wikipedia.org/wiki/Embargohttp://en.wikipedia.org/wiki/United_States_embargo_against_Cubahttp://en.wikipedia.org/wiki/Cubahttp://en.wikipedia.org/wiki/Cubahttp://en.wikipedia.org/wiki/United_States_embargo_against_Cubahttp://en.wikipedia.org/wiki/Embargohttp://en.wikipedia.org/wiki/Trade_sanctions -
8/3/2019 Trade Introdution
31/34
TRADE BARRIERS
Although there are usually few trade restrictionswithin countries, international trade is usuallyregulated by governmental quotas andrestrictions, and often taxed by tariffs.
Tariffs are usually on imports, but sometimescountries may impose export tariffs or subsidies.All of these are called trade barriers.
If a government removes all trade barriers, a
condition of free trade exists. A government that implements a protectionist
policy establishes trade barriers.
http://en.wikipedia.org/wiki/Subsidyhttp://en.wikipedia.org/wiki/Trade_barriershttp://en.wikipedia.org/wiki/Subsidyhttp://en.wikipedia.org/wiki/Trade_barriershttp://en.wikipedia.org/wiki/Trade_barriershttp://en.wikipedia.org/wiki/Subsidy -
8/3/2019 Trade Introdution
32/34
FAIR TRADE
The fair trade movement, also known as the tradejustice movement, promotes the useoflabour, environmental and social standards for theproduction ofcommodities, particularly thoseexported from the Third and Second Worlds tothe First World.
Such ideas have also sparked a debate on whethertrade itself should be codified as a human right.
Importing firms voluntarily adhere to fair tradestandards or governments may enforce them througha combination ofemployment and commercial law.
http://en.wikipedia.org/wiki/Manual_labourhttp://en.wikipedia.org/wiki/Environmental_movementhttp://en.wikipedia.org/wiki/Socialhttp://en.wikipedia.org/wiki/Commoditieshttp://en.wikipedia.org/wiki/Third_Worldhttp://en.wikipedia.org/wiki/Second_Worldhttp://en.wikipedia.org/wiki/First_Worldhttp://en.wikipedia.org/wiki/Human_righthttp://en.wikipedia.org/wiki/Employment_lawhttp://en.wikipedia.org/wiki/Commercial_lawhttp://en.wikipedia.org/wiki/Commercial_lawhttp://en.wikipedia.org/wiki/Employment_lawhttp://en.wikipedia.org/wiki/Human_righthttp://en.wikipedia.org/wiki/First_Worldhttp://en.wikipedia.org/wiki/Second_Worldhttp://en.wikipedia.org/wiki/Third_Worldhttp://en.wikipedia.org/wiki/Commoditieshttp://en.wikipedia.org/wiki/Socialhttp://en.wikipedia.org/wiki/Environmental_movementhttp://en.wikipedia.org/wiki/Manual_labour -
8/3/2019 Trade Introdution
33/34
Proposed and practiced fair trade policiesvary widely, ranging from the common
prohibition ofgoods made using slavelabour to minimum price support schemessuch as those for coffee in the 1980s.
Non-governmental organizations also play arole in promoting fair trade standards byserving as independent monitors of
compliance with fair trade labelingrequirements.
http://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Slave_labourhttp://en.wikipedia.org/wiki/Slave_labourhttp://en.wikipedia.org/wiki/Price_supporthttp://en.wikipedia.org/wiki/Non-governmental_organizationhttp://en.wikipedia.org/w/index.php?title=Fair_trade_labeling&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Fair_trade_labeling&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Fair_trade_labeling&action=edit&redlink=1http://en.wikipedia.org/wiki/Non-governmental_organizationhttp://en.wikipedia.org/wiki/Non-governmental_organizationhttp://en.wikipedia.org/wiki/Non-governmental_organizationhttp://en.wikipedia.org/wiki/Price_supporthttp://en.wikipedia.org/wiki/Slave_labourhttp://en.wikipedia.org/wiki/Slave_labourhttp://en.wikipedia.org/wiki/Good_(economics) -
8/3/2019 Trade Introdution
34/34
THANK U