International and Domestic Trade: A Comprehensive Guide

Trade

Definition and Types

Trade is the buying and selling of products and services to satisfy the needs of the population. There are two main types of trade:

• Domestic trade
• International trade

Elements of Trade

• Sellers: Individuals or companies that have goods or services they want to sell.
• Buyers: Individuals or companies that buy products.
• Goods: Products that are bought and sold for money.
• Markets: Places where commercial transactions take place (e.g., physical markets, farmers' markets, online marketplaces).

Characteristics of Trade Today

• Large quantities of goods are in constant movement between different regions.
• There is a worldwide network of trading partners.
• Trade, along with transportation, provides jobs for people.
• It is dominated by an ever-smaller number of large companies.

Factors that Influence Trade

• An efficient infrastructure and transport network.
• The population's purchasing power and consumer confidence.
• Positive financial results.
• Business confidence.
• A large market.
• Prices, taxes, advertising, and discounts.

Domestic Trade

Domestic trade is the commerce that happens inside a country's borders, allowing consumers to buy the products they need. There are two main types of domestic traders:

Wholesalers

These large distribution companies buy enormous quantities of goods from producers and sell them to shops.

Retailers

Retailers buy smaller numbers of goods from wholesalers and sell them to the public. Different types of retailers include:

• Traditional retailers: Have small, family-run shops.
• Department stores: Offer consumers a huge range of products.
• Large shopping centers: Belong to multinational chains and sell large quantities of goods at lower prices.
• Street markets: Sell a wide variety of products.

Every year, Spain's National Statistics Office (INE) carries out a Consumer Spending Survey (EPF).

International Trade

International trade is the exchange of goods and services between different countries. It includes imports and exports.

International Trade Indicators

• The Balance of Trade: The difference in value between the goods that a country exports and the goods it imports. If the value of exports is higher, the balance is positive; if it's lower, the balance is negative.
• The Balance of Payments: This encompasses all of a country's monetary transactions, including goods and capital. It's in surplus when a country's revenue is higher than its expenditure; the reverse creates a deficit.

Types of International Trade

International trade includes the movement of visible goods and services and those that are intangible.

Visible Goods and Services

These include energy sources, agricultural products, and manufactured products.

Intangible Goods and Services

Many intangible products have equal or even greater economic importance than visible ones:

• Flows of capital: Large international companies trade their capital on the world's stock markets.
• Flows of information: The exchange of information is essential for companies to be competitive.

Secretary of State for Trade

The Secretary of State for Trade is the minister responsible for a country's international trade policy.