International trade
International trade is the buying and selling of goods and services between countries. Goods bought from abroad are imports, and goods sold abroad are exports.
"International trade has grown immensely in recent years."[1] One reason is that many governments have lowered their tariffs and other barriers to trade over time.[1] Another is transport. "Container ships, first put into service in the late 1950s, have hugely reduced the costs of long-distance transport."[2]
Measuring trade
How open a country is to trade is sometimes measured by adding its imports and exports together and showing the total as a percentage of its GDP.[1]
Barriers to trade
"Tariffs are taxes charged on imports or exports."[3] Governments can also use trade subsidies, and limits called quotas on how much can be imported or exported.[4] Once tariffs had become very low, more attention turned to non-tariff barriers, meaning barriers other than tariffs.[5] One trade rule is the countervailing duty, which a country can charge on imports when another country's government pays subsidies to help its exporters.[6]
Rules and managed trade
The economist Jagdish Bhagwati described two approaches. In rules-based trade, governments agree rules, and the amounts traded are not fixed in advance but come from the market.[7] In managed trade, governments set targets and limits on the quantities traded.[7]
Exchange rates
Changes in exchange rates also affect trade. According to Bhagwati, the arrival of flexible exchange rates added to complaints of unfair trade.[8] He gave the large change in the rate between the Japanese yen and the US dollar around the 1985 Plaza Accord as an example of a sudden shift.[8]
See also
References
- ↑ 1.0 1.1 1.2 Dullien, Sebastian; Goodwin, Neva; Harris, Jonathan M.; Nelson, Julie A.; Roach, Brian; Torras, Mariano (2018). Macroeconomics in Context: A European Perspective. Routledge. p. 460. ISBN 9781138185180.
- ↑ Dullien, Sebastian; Goodwin, Neva; Harris, Jonathan M.; Nelson, Julie A.; Roach, Brian; Torras, Mariano (2018). Macroeconomics in Context: A European Perspective. Routledge. p. 461. ISBN 9781138185180.
- ↑ Dullien, Sebastian; Goodwin, Neva; Harris, Jonathan M.; Nelson, Julie A.; Roach, Brian; Torras, Mariano (2018). Macroeconomics in Context: A European Perspective. Routledge. p. 456. ISBN 9781138185180.
- ↑ Bhagwati, Jagdish N. (2014). The World Trading System at Risk. Princeton University Press. p. 99. ISBN 9781400861590.
- ↑ Bhagwati, Jagdish N. (2014). The World Trading System at Risk. Princeton University Press. p. 15. ISBN 9781400861590.
- ↑ Bhagwati, Jagdish N. (2014). The World Trading System at Risk. Princeton University Press. p. 14. ISBN 9781400861590.
- ↑ 7.0 7.1 Bhagwati, Jagdish N. (2014). The World Trading System at Risk. Princeton University Press. p. 100. ISBN 9781400861590.
- ↑ 8.0 8.1 Bhagwati, Jagdish N. (2014). The World Trading System at Risk. Princeton University Press. p. 17. ISBN 9781400861590.