International Trade

Definition of International Trade

International trade refers to the exchange activities carried out by various countries (or regions) in the world in terms of goods and labor services, etc. It is the main form of interconnection between countries (or regions) on the basis of international division of labor, reflecting the economic interdependence of countries (or regions) in the world, and is constituted by the sum of foreign trade of each country.

Differentiating the definition of “foreign trade

One view: Some experts believe that from a certain perspective, foreign trade or international trade refers to the exchange of goods, services and requirements between countries in the world, and that international trade is a manifestation of the division of labor between countries, reflecting the mutual economic coexistence of countries in the world. From a national perspective, it can be called foreign trade; from an international perspective, it can be called international trade.

Another view: foreign trade refers to the exchange of goods, technologies and services between a country (or region) and other countries (or regions). Therefore, it is important to specify specific countries when referring to foreign trade. For example, China’s foreign trade, etc.; certain island countries such as Britain and Japan also refer to foreign trade as overseas trade.

National trade classification

According to the direction of the movement of goods international trade can be divided into
1, import trade (import Trade): the introduction of goods or services from other countries to the country’s market sales.
2, export trade (Export Trade): the country’s goods or services exported to other countries market sales.
3, transit trade (Transit Trade): A country’s goods through the territory of country C shipped to the market of country B sales, for country C is transit trade. Due to the hindering effect of transit trade on international trade, WTO member countries do not engage in transit trade with each other.
Import trade and export trade is for both sides of each transaction, for the seller, it is export trade, for the buyer, it is import trade. In addition, when the goods imported into the country and then exported, become re-export; exported goods abroad and then imported into the country, known as reimport.

According to the form of goods international trade can be divided into

1, tangible trade (Visible Trade): the import and export of goods in physical form. For example, machinery, equipment, furniture, etc. are the physical form of goods, the import and export of these goods is called tangible trade.
2, the invisible trade (Invisible Trade): no physical form of technology and services import and export. The transfer of patent rights, tourism, financial and insurance enterprises provide services across borders are goods without physical form, and their import and export is called invisible trade.

According to the relationship between the producer and consumer countries in trade international trade (whether or not there is a third country to participate) can be divided into

1, direct trade (Direct Trade): refers to the commodity producing countries and commodity consuming countries do not buy and sell goods through a third country. The exporting country side of the trade is called direct exports, the importing country side is called direct imports.
2 indirect trade (Indirect Trade) and transit trade (Transit Trade): refers to the commodity producing countries and commodity consuming countries through a third country to buy and sell goods, indirect trade in the producing countries are called indirect exporters, the consuming countries are called indirect importers, while the third country is the country of transit trade, the third country is engaged in transit trade.

By trade content is divided into.

Service trade, processing trade, commodity trade, general trade.

According to the number of trade participating countries

1.Bilateral trade refers to the trade between two countries on the basis of bilateral settlement by agreement. In this kind of trade, each party pays for its imports from the other party with the exports of the other party, which is mostly implemented in countries with foreign exchange control. In addition, bilateral trade also refers to the trade between the two countries in general.
2.Multilateral trade, also known as polyglot trade, refers to the trade between three or more countries through an agreement on the basis of multilateral settlement for mutual purchase and sale. Obviously, under the trend of economic globalization, multilateral trade has become more common.

The characteristics of international trade

International trade in goods is a range of commodity exchange, and domestic trade in nature is not different, but because it is carried out between different countries or regions, so compared with domestic trade has the following characteristics.
1, international trade in goods to involve different countries or regions in the policy measures, legal system differences and conflicts that may exist, as well as language and culture, social customs and other differences, the issues involved are far more complex than domestic trade.

2.The number and amount of transactions in international trade of goods are generally larger, the transportation distance is longer, and the performance time is longer, so the risks borne by both sides of the transaction are far greater than those in domestic trade.

3.International trade in goods is easily affected by political and economic changes, bilateral relations and changes in the international situation of the countries where the two parties are trading.

4.In addition to the two sides of the transaction, the international trade in goods also involves the collaboration and cooperation of transportation, insurance, banking, commodity inspection, customs and other departments, and the process is much more complicated than domestic trade.