Domestic and Foreign Trade: Characteristics, Types, and Policies

Domestic and Foreign Trade

1.1 Characteristics and Transformations

Internal trade, involving over three million people, has undergone profound changes in supply and demand, often described as a "commercial revolution."

a) Changes in Demand

Increased purchasing power due to higher family incomes, diversification of clientele, dispersion of consumers, and declining purchase frequency, driven by the pace of modern life, have all impacted demand.

b) Changes in Commerce

The increasing diversification of products to reach more consumers, the spread of new distribution methods, and the utilization of new technologies that improve commercial equipment and facilitate payment have transformed commerce.

1.2 Types of Domestic Trade

1.2.1 Wholesale Trade

Wholesalers purchase products from manufacturers or other wholesalers, storing and selling them to retailers, not directly to consumers. They are strategically located in areas producing and consuming goods.

1.2.2 Retail Trade

Retailers purchase goods from manufacturers or wholesalers and sell directly to consumers. Traditionally located in city centers, retail trade shows significant differences between traditional and new forms of sales.

a) Traditional Retailing

Traditional businesses are small, local shops led by individual entrepreneurs, often with small staff and family. Facilities are often outdated, contributing to closures or relocations to the peripheries.

Other traditional forms include agricultural markets, weekly markets, trade fairs, and street vendors.

b) New Commercial Methods

Self-service: Products are available for customers to select and pay for at the checkout, saving on staff and transforming warehouse space into sales areas.

Large commercial premises: Include hypermarkets, department stores, popular stores, and regional malls.

Other new methods include mail-order, teleshopping, vending machines, and internet sales.

1.3 Areas of Internal Trade

Commercial spaces primarily function to sell products and services.

a) Factors Influencing Location

The existence of a transport system between producers, traders, and consumers, along with a large consumer market with adequate purchasing power, influences trade location. Businesses thrive in regions with better transportation, high population density, and higher per capita income.

b) Spanish Commercial Areas

These areas are geographic regions where the population is primarily directed to a major town to purchase non-essential goods.

1.4 Internal Trade Policy

a) The Trade Act

According to European legislation, the Trade Act recognizes the commercial freedom of movement of goods and competition, regulating various trade issues.

b) Plan to Improve Quality of Trade

This plan aims to solve the problems of traditional retailing.

In urban areas: The objective is to increase competitiveness compared to supermarkets, promoting the revitalization of historic centers and cooperation among traders.

In rural areas: The objective is to mitigate the reduction in trade due to demographic decline and aging, enhancing trade in municipalities that attract the rural environment.

2. Foreign Trade

Foreign trade involves the exchange of products and services worldwide. Imports and exports have grown significantly due to the opening of the international economy, entry into the European Community, and integration into globalization.

2.1 Exports, Imports, and Trade Balance

a) Exports

Exports have increased, with the highest value in equipment, the automotive sector, and food. The leading exporting communities are Catalonia, Madrid, and Valencia.

b) Imports

Imports have also increased due to the expansion of domestic demand, particularly in equipment, energy products, and automotive. The most significant importing communities are Catalonia, Madrid, and Andalusia.

c) Trade Balance

The trade balance is the difference between exports and imports. Madrid, Catalonia, and Andalusia have the steepest negative balances.