Global Commerce and the Tertiary Sector: Trade Mechanisms

The Tertiary or Services Sector

The tertiary or services sector encompasses activities that are not involved in the production of goods, but rather provide services, such as: transport, trade, tourism, health, education, administration, and cultural services.

Classification of Services

Services are typically distinguished based on management and role:

Classification by Management

• Public Services: Managed by the State, municipalities, autonomous regions, or other public entities.
• Private Services: Offered by private companies with the aim of making a profit.

Classification by Role

• Social Services: Meet essential needs of society, such as education and health.
• Commercial Services: These include various forms of commerce and business activities.
• Transportation Services: Handle the movement of people and goods. This includes transport by land, river, sea, and air.
• Leisure and Tourism Services: Associated with recreation, entertainment, and relaxation.

Understanding Trade and Commerce

Trade includes all activities related to the purchase and sale of products and services.

Internal (Domestic) Trade

Domestic trade takes place entirely within a country's borders and aims to supply goods to its inhabitants. It is generally divided into two main types:

• Wholesale Trade: A commercial company (the wholesaler) acquires goods in large quantities directly from the producer for resale to retailers.
• Retail Trade: The retailer is a trading company that acquires goods, often from the wholesaler, in smaller quantities for direct resale to consumers.

Forms of Internal Trade

Internal trade manifests in various forms:

• Small or Traditional Commerce: A small-sized facility where staff sell products directly to consumers.
• Large Format Stores (Department Stores): These include:
  • Supermarket: A medium-sized establishment selling various products, typically groceries.
  • Hypermarket: A very large establishment selling a wide variety of items (food and non-food).
  • Department Store: An establishment that sells all kinds of merchandise, often organized into departments.
  • Mall (Mart): A large complex that includes numerous small specialty shops.
• Non-Store Retailing: Includes mail order, television shopping, and internet (e-commerce).

Foreign (International) Trade

Foreign trade is the exchange of goods and services between different countries. Key components include:

• Importation (Imports): Purchasing goods and services that a country brings in from abroad.
• Exportation (Exports): Selling goods and services that a country sends abroad.

The Balance of Trade

The Balance of Trade is the difference between a country's total exports (income) and total imports (payments). It can be:

• Positive (Trade Surplus): Exports exceed imports.
• Negative (Trade Deficit): Imports exceed exports.
• Balanced: Exports roughly equal imports.

Geographic Distribution of Foreign Trade

Global trade characteristics vary significantly based on the economic status of the participating countries:

• Developed Countries: Typically export manufactured goods and import industrial raw materials and energy sources.
• Southeast Asian Industrial Countries: Highly specialized in manufacturing exports.
• Developing Countries: Primarily function as the main exporters of raw materials and energy sources.