Definition

Benefits of participating in international trade

Modern theories international trade

Mercantilism

Adam Smith's Theory of Absolute Advantage

Theory comparative advantage David Ricardo

Heckscher-Ohlin theory

Leontief's paradox

Product life cycle

Michael Porter's theory

Rybczynski's theorem

Samuelson and Stolper theory

territory;

Gained benefits:

production technology, that is, the ability to produce a variety of products.

David Ricardo's Theory of Comparative Advantage

Specialization in the production of a product that has maximum comparative advantage is also beneficial in the absence of absolute advantages. A country should specialize in exporting goods in which it has the greatest absolute advantage (if it has an absolute advantage in both goods) or the least absolute disadvantage (if it has an absolute advantage in neither product). Specialization in certain types goods is beneficial for each of these countries and leads to an increase in total production, trade is motivated even if one country has an absolute advantage in the production of all goods over another country. An example in this case would be the exchange of English cloth for Portuguese wine, which brings income to both countries, even if the absolute costs of production of both cloth and wine in Portugal are lower than in England.

Heckscher-Ohlin theory

According to this theory, a country exports a product for the production of which it uses intensively a relatively abundant factor of production, and imports goods for the production of which it experiences a relative shortage of factors of production. The necessary conditions existence:

countries participating in international exchange have a tendency to export those goods and services for the production of which they mainly use production factors that are available in abundance, and, conversely, a tendency to import those products for which there are no factors;

the development of international trade leads to the equalization of “factor” prices, that is, the income received by the owner of a given factor;

It is possible, given sufficient international mobility of factors of production, to replace the export of goods by moving the factors themselves between countries.

International trade(Foreign trade) is

Leontief's paradox

The essence of the paradox was that the share of capital-intensive goods in exports could grow, while labor-intensive goods could decline. In fact, when analyzing trade balance USA, the share of labor-intensive goods did not decrease. The solution to Leontief's paradox was that the labor intensity of goods imported by the United States is quite high, but price labor in cost product is significantly lower than in export supplies USA. Capital intensity of labor in USA significant, together with high labor efficiency, this leads to a significant impact of labor prices in export supplies. The share of labor-intensive supplies in US exports is growing, confirming the Leontief paradox. This is due to the growth in the share of services, labor prices and the structure of the American economy. This leads to an increase in the labor intensity of the entire American economy, not excluding exports.

Product life cycle

Some types of products go through a cycle consisting of five stages:

product development. Organization finds and implements new idea product. At this time, sales volume is zero, costs grow.

Export

Export (English export) in economics is the export abroad of goods sold to a foreign buyer or intended for sale on a foreign market.

Exporting also includes the export of goods for processing in another country, the transportation of goods in transit through another country, the export of goods brought from another country for sale in a third country (re-export), etc. Indirect export is export with the participation of intermediaries.

Sources

wikipedia.org - Wikipedia - the free encyclopedia

glossary.ru - Glossary.ru

Investor Encyclopedia. 2013 .

See what “Foreign trade” is in other dictionaries:

International trade- trade between countries, consisting of export (export) and import (import) of goods and services. Foreign trade is carried out mainly through commercial transactions formalized by foreign trade contracts. In English: Foreign trade See also:… … Financial Dictionary

To collect statistical data on foreign trade operations, the assessment of VO is very important, since on its basis the following is subsequently calculated:

• trade balance;
• average prices;
• the efficiency of foreign trade operations in general and other significant parameters.

Foreign trade turnover is closely related to the concept of foreign trade.

What is foreign trade

Trade relations of one state with other countries, including import operations (import) and export operations (export) of goods, are called foreign trade. This term applies exclusively to individual countries.

Foreign trade helps:

• receive additional income from the sale of national products abroad;
• saturate the state's domestic market;
• increase labor productivity;
• cope with limited resources within the country.

In total foreign trade transactions different states form world (international) trade. International trade is the oldest form of economic relations between states, which has a huge impact on the development of the world economy as a whole.

How is foreign trade turnover calculated?

So, the main concepts of foreign trade are export and import.

• Exports are the total volume of goods produced in a country that are exported from it over a certain time period.
• Imports are a set of goods produced outside a certain state and imported into it over a certain period.

Export and import transactions are recorded at the moment the goods cross the border. They are displayed in foreign economic and customs statistics. The export operation of the seller state corresponds to the import operation of the buyer state.

As a rule, export accounting is carried out at FOB (free of board) prices. In international trade relations this means that the price of the goods includes the costs of its transportation on board an international ship or other transport and insurance until loading is completed.

Imports are recorded at CIF (cost, insurance, freight) prices. This means that the price of the goods includes the costs of its transportation and insurance, customs duties to the buyer’s port of shipment. That is, all these costs are borne by the seller. The formula for the total volume of foreign trade turnover is as follows:

VO = Import of goods + Export of goods

A country's VO is calculated in monetary units, since miscellaneous goods cannot be compared in physical measurement, for example, in tons, liters or meters.

How is the balance of foreign trade turnover calculated?

The balance of foreign trade turnover is also a significant concept for assessing the economy of a particular country. It can be calculated using the following formula:

Balance VO = Export of goods - import of goods

The balance of foreign trade turnover can be either positive or negative. A positive VO balance (the government sells more than it buys) indicates economic growth. On the contrary, a negative balance indicates that the market is oversaturated with imported goods, and the interests of domestic producers may be infringed.

World foreign trade turnover

World trade turnover is the total exports of all countries and is expressed in US dollars.

The participation of a particular state in world trade is reflected by indicators such as export and import quotas.

• Export quota is the ratio of export transactions to gross domestic product (GDP). This indicator allows you to understand what part of the goods and services produced within the state is sold on the international market.
• Import quota is the ratio of import operations to the volume of domestic consumption of state products. Shows the share of goods imported into the country in domestic consumption.

Statistics about the world foreign trade turnover collected, summarized and systematized. For this purpose, international nomenclatures were developed (they are taken into account during the construction of national foreign trade classifications).

Foreign economic activity: training course Makhovikova Galina Afanasyevna

1.1 Foreign trade and foreign economic activity: concept, features, development trends

Foreign economic relations- these are international economic, trade, political relations involving the exchange of goods, various shapes economic assistance, scientific and technical cooperation, specialization, production cooperation, provision of services and joint entrepreneurship. The main forms of foreign economic relations include the following.

1. Trade. Using this form, the purchase and sale of consumer goods is carried out: clothing, shoes, perfumes, haberdashery, cultural goods, as well as food products and raw materials. There is also a trade exchange of products for industrial consumption: components, parts, spare parts, rental, bearings, assemblies, etc. It is possible to purchase goods and equipment for public consumption: urban transport, equipment for hospitals, clinics, resorts, medicines, devices and security equipment environment. The purchase and sale of intellectual work products is carried out: licenses, know-how, engineering products.

2. Joint entrepreneurship. This form of foreign economic relations can be implemented in industrial sector in plants, factories, enterprises; V agriculture, science, education, medicine, transport, culture, art, credit and financial sphere.

3. Provision of services. Intermediary, banking, exchange services, insurance, tourism, international transportation cargo. The volume of services provided by computer networks available in developed countries of the world is growing rapidly.

4. Cooperation, assistance. Scientific, technical, and economic cooperation are becoming increasingly widespread in foreign economic relations. Scientific and cultural exchanges are intensifying, and the number of sporting events is growing.

Foreign trade at the present stage is the most intensively developing form of international economic relations.

The interest of almost all countries in expanding their foreign trade is associated primarily with the need to sell national products on foreign markets, the need to obtain certain goods from outside and, finally, the desire to extract high profits through the international division of labor, which allows for savings in social labor in the process of rational production and sharing its results between different countries.

The priority in foreign trade should be considered to be the development of exports, since the purchase of imported goods can be carried out either in the presence of foreign currency or a competitive product.

To get the most economic effect It is necessary to export high-tech products that allow obtaining maximum foreign exchange earnings per unit of labor input, and those goods that have the highest labor input per unit of investment should be imported.

The difference between the concepts of “foreign economic relations” and “foreign economic activity” is as follows. Foreign economic relations relate to the level of macroeconomic (interstate) regulation, and foreign economic activity - to the micro level, i.e. to the level of firms and enterprises.

The functions of Russia's foreign economic relations are currently aimed at ensuring export supplies for federal needs and interstate economic (including currency, credit, trade) agreements Russian Federation. Foreign economic relations are implemented “from top to bottom”: the volumes and list of goods and services are determined at the government level. They are implemented through the government procurement system (through organizations designated as government customers) and through limits with centralized provision of material and currency resources.

Foreign economic activity is a set of production, economic, organizational, economic and commercial functions firms and enterprises.

According to the Law “On government regulation foreign trade activities“This activity means entrepreneurship in the field of international exchange of goods, works, services, information, and results of intellectual activity. The concept of foreign economic relations is much broader.

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Definition 1

Foreign trade is trade between any countries in goods or services, consisting of paid imports and exports.

In its turn, international trade is a form of exchange of products and services among various countries, associated with the general internationalization of economic life, the intensification of the division of labor in the conditions of the scientific and technological revolution.

The role and importance of foreign trade

Foreign trade involves the interaction of countries among themselves within the framework of the movement of goods (services) across established state borders. Foreign trade gives a particular state a number of advantages.

• The state receives income, which is considered additional, from the sale of goods or services in the territory of other states;
• Foreign trade in goods and services allows the state to expand the domestic market for its goods and services;
• This type of trade allows the state to obtain those national resources that are located on the territory of the state in limited quantities;
• If a state supplies a product or service within the global market, this provides an additional opportunity to increase labor productivity in that state.

Export and import of goods

Export of goods implies the removal of goods or services from the country to foreign markets, for which the state receives income in foreign currency. By increasing the share of exports, the state thereby increases aggregate demand in its country, which is similar to the investment process, thereby increasing employment in its state.

Definition 2

Import is the opposite concept of export, when a foreign product or service is imported into the territory of a state with subsequent payment for this product (service). Imports reduce employment and reduce aggregate demand in the country, which is due to the outflow of capital from the country.

In 1947, a trade and tariff agreement was developed, which defined general rules and principles of foreign trade throughout the world. Today, this document has been replaced by the World trade Organization, formed in 1996. This organization not only forms the basic principles and rules of foreign trade, but also expands the sphere of influence by regulating the processes of purchase and sale, including not only goods and services, but also intellectual property.

Is foreign trade profitable?

This question was once answered by A. Smith, who formulated the theory of comparative advantage. This theory states that the export of goods or services becomes profitable for the state only if the costs of producing this product or service in the producing country are much lower than in other countries. If a state releases a product on a foreign market at a price relatively lower than that of its competitors, therefore, such a product or service has a comparative advantage, which indicates its successful sale on the world market.

A. Smith also noted that the state cannot be the leader in production on the world market for all goods; therefore, it makes sense to import only those goods or services whose production is cheaper abroad than in the territory of one’s own country.

If this theory of comparative advantage is observed in the state, then benefits will come from both imports and exports.

Note 1

Thus, foreign trade is an integral element of trade of any modern state. Some states work more for export, others for import, but foreign trade is carried out in any case as an obligatory element of the country's foreign policy.

Foreign trade is assessed using the basic concepts of exports, imports and foreign trade turnover.

- this is the quantity of goods (in physical or value terms) exported from the country.

- this is the quantity of goods (in physical or value terms) imported into the country from abroad.

Foreign trade turnover- represents the sum of a country's exports and imports.

Foreign trade turnover formula

Foreign trade turnover = Export + Import.

It should be remembered that the country’s foreign trade turnover is calculated in monetary units, since it includes heterogeneous goods that are not comparable in physical terms. For individual goods, exports and imports can be measured in natural units (pieces, tons, meters).

Foreign trade balance formula

A very important concept is the balance of foreign trade.

Balance of foreign trade = Export - Import.

The balance of foreign trade can be positive or negative and rarely goes to zero. Accordingly, we can talk about positive or negative country's trade balance. A negative trade balance means the occurrence of a passive trade balance. And, conversely, a positive balance characterizes an active trade balance countries.

World export growth rate

To analyze the development of such a multifaceted phenomenon as foreign trade, a system of indicators is used. Some indicators reflect the growth rate of world trade. These, for example, include the growth rate of world exports (Te):

Te = (Ea:Eo) x 100%,

• E1 - export of the current period,
• E0 - export of the base period.
• In addition, a number of indicators are used to characterize the dependence of the country’s economy on foreign trade:

Export quota (Ke):

Ke = (E / GDP) x 100%,

• E - export value;
• GDP is the country's gross domestic product for the year.

Import quota (Ci):

Ki = (I / GDP) x 100%,

• where I is the cost of imports.