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Trade Promotion

"The values that cannot be bought with money and no one can bring it to you, except EAS Vietnam can create your next future values!

International trade

nternational trade includes all economic transactions that are made between countries. Among the items commonly traded are consumer goods, such as television sets and clothing; capital goods, such as machinery, and raw materials and food. Other transactions involve services, such as travel services and payments for foreign patents. International trade transactions are facilitated by international financial payments, in which the private banking system and the central banks of the trading nations play important roles.

International trade and the accompanying financial transactions are conducted generally toward the purpose of providing a nation with commodities it lacks in exchange for those that it produces in abundance; such transactions., functioning with other economic policies, generally improve the standard of living of a nation. This article provides a historical and contemporary overview of the structure of international trade, of the classic controversy over free versus controlled trade, and of the problems that arise in transactions between nations.

The theory of international trade

Accounts of barter of goods or of services among different peoples can be traced back almost as far as the record of human history. International trade, however, is specifically an exchange between members of different nations, and accounts and explanations of such trade begin (despite fragmentary earlier discussion) only with the rise of the modern nation-state at the close of the European Middle Ages. As political thinkers and philosophers began to examine the nature and function of the nation, trade with other nations became a particular topic of the inquiry. It is, accordingly, no surprise to find one of the earliest attempts to  describe the function of international trade within that highly nationalistic body of thought now known as “mercantilism.” Mercantilist analysis, which reached the peak of its influence upon European thought in the 16th and 17th centeries, focused directly upon the welfare of the nation. It insisted that the acquisition of wealthin the form of gold,was of paramount  importance for national policy. Mercantilist took the virtues of gold amost as an article of faith; consequently, they never undertook to explain adequately why the pursuit of gold deserved such a high priority in their economic plans.

The trade policy dictated by Mercantilist philosophy was accordingly simple: encourage exports, discourage imports, and take the proceeds of the resulting export surplus in gold. Because of the nationalistic bent, Mercantilist theorists either brushed aside or else did not realize that, from an international viewpoint., this policy would necessarily prove self defeating. The nation that successfully gains an export surplus must ordinarily do so at the expense of one or more other nations that record a matching import surplus. Mercantilists’ idea often were intellectually shallow, and indeed their trade policy may have been little more than a rationalization of interests of a rising merchant class that wanted wider markets – hence the emphasis on expanding exports – coupleed with protection agaist competition in the form of imported goods . Yet mercantilist policies, as will be noted later, are by no means completely dead today.

The role of the international economy.

In the modern view of development, an open, expanding internatinal economy is the greatest support that the developed countries can provide for developing countries. Foreign aid can be extremely helpful in situations in which policies are conducive to development, but development will in any event be accelerated if the international economy is experiencing healthy growth. Removal of the trade barriers that developed countries have erected agaist developing countries is at leeast as important as economic aid. Trade barriers are many. They include instrictions on temperate-zone agricultural products and sugar; restrictions on the simpler labour – intensive manufactured goods (which often can be produced more cheaply in developing countries) including especially the Multifibre Arrangement under which imports of textiles clothing into developed countries are greatly restricted, and tariff escalation, or higher rates of duties on processed products as compared with raw materials, which discourages the growth of processing industries in the developing countries. The removal of these trade barriers can help those developing countries that have already shown their capacity to take advantage of avaiable external economic opportunities to grow even more satisfactorily and cam also provide additional incentives for other developing countries to alter their economic policies.