International Trade: Features and Global Participation

Characteristics of Current Foreign Trade

• Worldwide Expansion and Steady Growth

  This expansion is explained by the international division of labor, the unequal distribution of natural resources (requiring countries to buy goods and services they do not produce), and improved means of transport.

• Formation of Country Trading Blocs

  These blocs eliminate customs duties among member countries. Their aim is to encourage and facilitate trade, achieving a stronger position in world trade negotiations.

• Types of Trade Relations Between Countries

  • Protective Trade: Establishes tariffs or border taxes to protect domestic products from foreign competition.
  • Free Trade: Involves no fees or tariffs.
  • Mixed Trade: Features no tariffs between countries forming a single trading bloc, but applies tariffs for countries outside the bloc.

• Role of International Trade Organizations

  International organizations have been created to facilitate trade. The most important is the World Trade Organization (WTO), which promotes the reduction of tariffs in international business transactions, acts as an arbitrator in disputes between its members, and combats unfair trade practices.

• Continuous Growth in Volume of Traded Goods

  The most important categories of goods traded are:

  • Manufacturing (machinery, transport equipment, automobiles, textiles) – accounting for 70% of total value
  • Chemicals
  • Fuels
  • Food products
  • Minerals

Major Areas of Foreign Trade

The various countries of the Earth are not equally involved in international trade.

• Leading Commercial Areas: EU, USA, and Japan

  These regions exchange manufactured goods, technology, and capital through relationships of equality. They purchase raw materials and energy from developing countries in exchange for manufactured goods and technology. They account for 57% of world exports and 62% of world imports.

• Countries with Smaller World Trade Share

  These countries primarily export raw materials, energy products, and some manufactured goods, while importing manufactured goods and technologies.

• Significant Emerging Trade Participants

  • Middle Eastern Countries: Maintain important trade based on oil exports.
  • China, India, and Newly Industrialized Countries: Sell affordable manufactured goods to developed countries and collectively form the 2nd largest share of world merchandise exports.

• Regions Undergoing Economic Restructuring

  This includes Russia and Eastern European countries, as well as developing countries like Central and South America, and Oceania (due to its geographical isolation).

• Lowest Participation in World Trade: Africa

  African countries account for only 2% of international trade in goods, primarily due to their poverty.