Presentation of modern international trade volumes and directions. Organization of international trade. International trade development indicators
Methods of international trade International commercial activity “Commerce (trading business)” Institute of International Business and Economics Tsareva V.D., Professor of the Department of Marketing and Commerce
Goals and objectives: Goal: to teach students to correctly choose methods of trade in international markets, as well as foreign Intermediaries, providing maximum advantages in the indirect sale of national products in the markets of other countries Objectives: - to show the variety of methods of international trade; -highlight the advantages of direct and indirect trade in the markets of individual goods and services; -give an idea of the types of intermediary operations in modern international trade; -highlight the features of the international activities of various intermediaries.
Key concepts: Trading methods are ways of carrying out a trade exchange (trade operation, or trade transaction). Trade and intermediary operations - operations related to the purchase and sale of goods performed on behalf of the supplier (manufacturer or exporter/importer) by a trade intermediary independent of him on the basis of an agreement concluded between them or a separate order. Resellers - carry out transactions on their own behalf and at their own expense, work with regular customers; Commission agents carry out one-time instructions from the principals and act on their own behalf, but at the expense of the principals. Agents act on the market on behalf and at the expense of the principal. The company itself concludes transactions or only mediates. It is typical to conclude a contract for a long period. Legally independent.
Advantages of direct trade: REDUCES PRODUCTION COSTS REDUCES RISK AND DEPENDENCE OF OPERATING RESULTS ON POSSIBLE DISCONNECTIVITY AND INCOMPETENCE OF INTERMEDIARIES ALLOWS THE MANUFACTURER TO CONSTANTLY BE IN THE FOREIGN MARKET AND TAKE IT INTO CONSIDERATION CHANGES AND RESPOND TO THEM IN A TIMELY manner
Advantages of the indirect method: The intermediary has higher commercial qualifications There is no need to concentrate financial and intellectual resources at the stage of entering a foreign market The risk caused by ignorance of the economic, political, legal and social conditions in different countries, their traditions and customs is reduced
Traditional functions of intermediaries in international trade: 1. Combining goods from different manufacturers into one set that meets the demand of the local local market 2. Disaggregation of consignments of goods in the interests of local retail trade 3. Adaptation of goods to the conditions of the local local market 4. Physical movement of goods, including transportation and warehousing 5. Setting prices as a result of constant contact with the local market and various manufacturers 6. Promotion of the product and its advertising 7. Finding a buyer and selling the product 8. Providing credit to the buyer
New functions of intermediaries: 1.purchase and sale of goods at your own expense; 2.financing operations (they have financial companies, connections with banks); 3. insurance (they have their own insurance companies); 4.transportation (they have their own fleet); 5. technical service (they have warehouses of spare parts); 6.production and processing (they have enterprises not only for processing, but also in other industries); 7.foreign operations (have branches abroad); 8. Subordination of dealerships that focus on the sale of specific goods.
Trade and intermediary operations Trade and intermediary operations are understood as operations related to the purchase and sale of goods performed on behalf of a supplier (manufacturer or exporter/importer) by a trade intermediary independent of him on the basis of an agreement concluded between them or a separate order.
Types of trading and intermediary firms: a.Trading - carry out transactions on their own behalf and at their own expense, work with regular clients; b. Commission - carry out one-time instructions from the principals and act on their own behalf, but at the expense of the principals. c.Agency – act on the market on behalf and at the expense of the principal. The company itself concludes transactions or only mediates. It is typical to conclude a contract for a long period. Legally independent. d. Brokerage is a special type of intermediary whose duties include the function of bringing together counterparties. According to the laws of many countries, brokers cannot buy or sell themselves. e.Factors are trade intermediaries who perform a wide range of responsibilities on behalf of the exporter, and factors not only export the principal’s products, but also finance export transactions (payment of an advance to the manufacturer, issuance of a loan to the buyer).
The essence of a dealer operation: Dealer operations are operations in which the reseller, in relation to the exporter, acts as a buyer purchasing goods on the basis of a purchase and sale agreement. He becomes the owner of the goods and can sell them at his discretion in any market and at any price. The relationship between the exporter and this kind of intermediary terminates after the parties fulfill their obligations under the sales contract.
Distribution Transaction: Distribution transactions are transactions in which the exporter grants to a reseller, called a contract merchant, the right to sell his goods in a specified territory for an agreed period on the basis of a contract for the right to sell. The agreement establishes only general conditions governing the relationship between the parties for the sale of goods in a certain territory. To fulfill it, the parties enter into independent sales contracts, which establish the quantity and quality of the goods supplied, price, delivery conditions, method of payment and form of payment, payment terms, quality guarantee conditions, and the procedure for submitting complaints.
Responsibilities of the distributor: Receiving orders from foreign buyers and placing them with the manufacturer on his own behalf and at his own expense (he acts as a buyer on the order of a foreign counterparty). Organization of a warehouse in the importing country and delivery of goods to the final consumer from the warehouse. Organization of advertising. Demonstration of samples of goods in the warehouse
The essence of “commission transactions” Commission transactions involve the performance by one party, called the commission agent, on behalf of another party, called the principal, of transactions in its own name, but at the expense of the principal. The relationship between the principal and the commission agent is regulated by a commission agreement (commission agreement). In accordance with it, the commission agent does not buy the goods of the principal, but only makes transactions for the purchase and sale of goods at the expense of the principal. This means that the consignor remains the owner of the goods until they are transferred to the disposal of the final buyer. The risk of accidental loss and accidental damage to such goods, unless otherwise agreed by the parties, lies with the principal. The commission agent, however, is obliged to take all measures to ensure the safety of the goods entrusted to him and to be responsible for their loss or damage if this occurs through his fault.
The essence of an agency operation: Agency operations are operations in trade that consist of entrusting one party, called the principal, to another party, independent of it, called the agent (trade, commercial), to perform actual and legal actions related to the sale or purchase goods in the agreed territory at the expense and on behalf of the principal. Agency transactions are carried out on the basis of a more or less long-term (usually multi-year) agreement called an agency agreement.
Distinctive features of agency operations: An agent is in most cases a legal entity registered in the commercial register. Although the agent is obligated to act within the limits of the authority defined in the agency agreement, he is not subject to the direct control and supervision of the principal. The agent only facilitates the completion of the purchase and sale transaction, but does not participate in it (as a party to the contract) and does not purchase goods at his own expense. He acts only as a representative of the principal within the framework of the responsibility assigned to him by the agency agreement.
Questions for self-control: 1. What methods are used in modern international trade? 2. What are the main advantages and disadvantages of direct trade? 3. What are intermediary operations and what role do they play in international trade? 4. List the main forms of modern forms of mediation. 5. Show us the difference between a dealer and a distributor? 6. Describe the difference between commission trading, highlight modern forms of commission trading? 7. Compare the two concepts6 agent and broker. What is the difference between an agent and a broker? 8. What is the difference between an industrial agent and a sales agent? 9. Name the main forms of resident mediation.
Recommended literature: 1. Grachev Yu.N. Foreign economic activity. Organization and technology of foreign trade operations. / Textbook - M.: JSC "Business School "Intel - Synthesis", - 362 pp. 2. Sidorov V. P. Organization of international commercial activities: Educational and practical manual. / - Vladivostok: Publishing House in VGUES, – 124 P. 3. Fomichev V.I. International trade: Textbook. - M.: INFRA-M, – 410 P.
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Presentation on the topic: international trade
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International trade is a system of international commodity-money relations, consisting of foreign trade of all countries of the world. It arose in the process of the emergence of the world market in the 16th-18th centuries. the term was first used in the 12th century by the Italian economist Antonio Margaretti, author of the economic treatise “The Power of the Popular Masses in Northern Italy.”
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The advantages of participating in international trade are intensification of the production process, increased specialization, creation of opportunities for the emergence and development of mass production, increased efficiency in the introduction of new technologies, increased employment; international competition creates the need to improve enterprises; export earnings serve as a source of capital accumulation aimed at industrial development.
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Classical theories of international trade Mercantilism is a system of views of economists of the 15th-17th centuries, focused on the active intervention of the state in economic activity. Representatives of the direction: Thomas Maine, William Stafford. The term was proposed by Adam Smith, who criticized the works of mercantilists. Key provisions: the need to maintain an active trade balance of the state (the excess of exports over imports); recognition of the benefits of attracting gold and other precious metals to the country in order to increase its well-being; money is a stimulus for trade, since it is believed that an increase in the supply of money increases the volume of commodity supply; welcome protectionism aimed at importing raw materials and semi-finished products and exporting finished products; restrictions on the export of luxury goods, as it leads to the leakage of gold from the state.
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Adam Smith's Theory of Absolute Advantage A country's real wealth consists of the goods and services available to its citizens. If a country can produce a particular good more and cheaper than other countries, then it has an absolute advantage. Some countries can produce goods more efficiently than others. Natural advantages: climate; territory; resources. Acquired advantages: production technology, that is, the ability to produce a variety of products.
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David Ricardo's Theory of Comparative Advantage Even when a country does not have an absolute advantage in anything, trade can be beneficial. the law of comparative advantage - it is more profitable for each country to produce and export those goods in the production of which labor productivity at its enterprises exceeds labor productivity at similar enterprises in other countries. The difference in production costs arises as a result of differences in production methods and in the availability of production factors.
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Examples of comparative advantage The United States exports airplanes, tractors, wheat, electronic computer equipment, and optical instruments, but imports ships, some brands of cars and motorcycles, shoes, and clothing. Great Britain has comparative advantages in the production of tractors, explosives, paints, wool and fur, but not in the production of steel, synthetic and cotton fabrics, footwear and clothing. Saudi Arabia has a comparative advantage in oil production, as it has large deposits. Chile and Zambia can produce copper relatively cheaper.
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This theory introduces the concept of country competitiveness. It is national competitiveness that determines success or failure in specific sectors of production and the place that a country occupies in the world economic system. National competitiveness is determined by the capacity of industry. At the heart of the explanation of a country's competitive advantage is the role of the home country in stimulating renewal and improvement (that is, in stimulating the production of innovation). Government measures to maintain competitiveness: government impact on factor conditions; government impact on demand conditions; government impact on related and supporting industries; government impact on the strategy, structure and rivalry of firms.
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Since the second half of the 20th century, international exchange has become “explosive”, and world trade has been developing at a high pace. In the period 1950-1998. World exports increased 16-fold; the period between 1950 and 1970 can be described as a “golden age” in the development of international trade. In the 70s, world exports fell to 5%, falling further in the 80s. In the late 80s he showed a noticeable revival. In the 90s, Western Europe was the main center of international trade. Its exports were almost 4 times higher than US exports. By the end of the 80s, Japan began to become a leader in terms of competitiveness. During the same period, the “new industrial countries” of Asia - Singapore, Hong Kong, Taiwan - joined it. By the mid-90s, the United States again took a leading position in the world in terms of competitiveness. Exports of goods and services in the world in 2007, according to the WTO, amounted to 16 trillion. US dollars. The share of the group of goods is 80%, services 20% of the total trade volume in the world.
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International trade Export - the removal of goods from a country for sale or use in other countries. The economic efficiency of exports is determined by the fact that the country exports those products whose production costs are lower than world prices. Import is the bringing into a country of foreign goods from abroad. When importing, a country acquires goods whose production is currently uneconomical. The total amount of exports and imports is foreign trade turnover with foreign countries.
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In 1966, the UN Commission on International Trade Law was created, a subsidiary body of the UN General Assembly. In 1995, a global international organization in the field of international trade rules, the WTO, was founded. The World Economic Forum is an international non-governmental organization whose activities are aimed at developing international cooperation. The forums are held in Davos. Members of the World Economic Forum (WEF) are about 1,000 large companies and organizations from around the world, including Russia.
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The export structure includes approximately 4 thousand different types of products, but the goods that account for the largest volumes by value are limited to only 10 items, including primarily oil, gas, non-ferrous and precious metals, and diamonds. Fuel and energy resources account for about 45% of total exports, ferrous and non-ferrous metals and products made from them - 20%, chemical products - 8-10%, timber and pulp and paper products - about 4%, machinery, equipment and vehicles - about 10%.
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A “free trade area” is a group of countries that have abolished all tariffs on trade among themselves, but have not adopted uniform tariffs on trade with other countries. A “customs union” is a group of countries that not only abandoned tariffs on trade among themselves, but also imposed a common tariff on other countries. Offshore zones are a financial center that attracts foreign capital by providing special tax and other benefits to foreign companies registered in the country where the center is located.
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Tariffs, or customs duties, are taxes on imported goods, expressed as a percentage of their value or in the form of a fixed fee per unit of goods regardless of its value. Such taxes go to the treasury and are used to cover government expenses. By raising the prices of goods coming from abroad, tariffs help domestic producers with higher production costs than foreign competitors compete successfully in domestic markets.
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Quotas are a more stringent protectionist measure. They assume the establishment of direct quantitative restrictions on the import of certain goods. Foreign producers can no longer improve their competitive positions by lowering prices. In addition, when quotas are established, as a result of limiting the volume of imports, the number of importers is also reduced. Firms that have secured the right to import under such circumstances receive additional profits, since as a result of the introduction of quotas, a shortage of quota goods arises, and domestic market prices for them exceed world prices. Thus, quotas often lead to corruption, since officials distributing import licenses may be offered bribes.
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Subsidies. Tariffs and quotas are set by importing countries to protect national markets from competition with foreign-made goods. However, if domestically produced and exported products begin to lose competitiveness, tariffs and quotas are rendered useless. In such cases, the state sometimes helps national producers strengthen their competitive position by giving them the opportunity to sell goods on the world market at prices below actual production costs. Such measures make it possible to increase the volume of exports, however, since such an increase in volume is artificial, the end result is an irrational use of resources.
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Indirect trade barriers. Such barriers include customs regulations, classification and valuation of goods, technical standards and sanitary requirements, transport policies, government procurement policies, subsidies for exports and consumption of locally produced products, and taxation. Requiring long-term storage of imported goods at a country's borders or other regulations that increase the price of goods—such as higher shipping charges for imported goods, government purchasing policies that favor domestic producers, and taxes on goods produced abroad—restrict international trade.
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Free trade ranking Since 2008, the WEF report on the state and stimulation of world trade has been published. Part of the report is a ranking of countries according to the degree of favorable conditions for the movement of goods and investment across borders. According to the 2010 report, the first place in the list of 121 countries was shared by Singapore and Hong Kong. The last places in the ranking are occupied by Venezuela and Chad. Russia took 109th place in terms of the integral indicator and 113th in terms of accessibility of external and domestic markets.
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Topics for independent study International technology exchange Transport services on the global market International tourism Multinational corporations European Union VTO International trade of CIS countries Offshore zones International trade between developed and developing countries
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Dumping Sale of goods on foreign and domestic markets at artificially low prices, lower than average retail prices, and sometimes lower than cost (production and distribution costs) - market liberalization. Full implementation of all tasks of world trade liberalization will help increase the daily incomes of citizens of developed countries.
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International trade is a system of international commodity-money relations, consisting of foreign trade of all countries of the world. International trade arose during the emergence of the world market in the 16th-18th centuries. Its development is one of the important factors in the development of the world economy of the New Age.
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Modern theories of international trade Mercantilism Adam Smith's theory of absolute advantage David Ricardo's theory of comparative advantage Heckscher-Ohlin theory Product life cycle Michael Porter's theory
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Mercantilism: the main provisions of the need to maintain an active trade balance of the state (excess of exports over imports); recognition of the benefits of bringing gold and other precious metals into the country in order to improve its welfare; money is a stimulus for trade, since it is believed that an increase in the supply of money increases the volume of the commodity supply; protectionism aimed at importing raw materials and semi-finished products and exporting finished products is welcomed; restrictions on the export of luxury goods, as it leads to the outflow of gold from the state.
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Adam Smith's Theory of Absolute Advantage Country Wealth Goods Services Some countries can produce goods more efficiently than others. The country's resources flow into profitable industries, since the state cannot compete in unprofitable industries. The country's productivity increases. The qualifications of the workforce are improving. The development of more effective work methods is stimulated. Natural advantages: climate, territory, resources. Gained advantages: production technology
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David Ricardo's theory of comparative advantage Export of goods England Portugal Specialization in the production of goods that have maximum comparative advantages is beneficial even in the absence of absolute advantages. Leads to an increase in the total volume of production Trade is motivated Beneficial for each of these countries England Portugal 1 barrel of wine is produced by 120 people. 1 barrel of wine is produced by 80 people; 1 roll of cloth is produced by 70 people; 1 roll of cloth is produced by 90 people.
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Heckscher Ohlin's theory Export of goods Import of goods Excess factor of production Lack of factors of production Countries participating in international exchange: Equalize “factor” prices, that is, the income received by the owner of a given factor; It is possible, given sufficient international mobility of factors of production, to replace the export of goods by moving the factors themselves between countries.
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Michael Porter's theory This theory introduces the concept of country competitiveness. It is national competitiveness, from Porter’s point of view, that determines the success or failure in specific industries and the place that a country occupies in the world economic system. Government measures to maintain competitiveness: government impact on factor conditions; government influence on demand conditions; government impacts on related and supporting industries; government influence on firm strategy, structure, and competition. Old car recycling program
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Support for the Russian automobile industry Basic information about the state program for recycling old cars. Validity period: from March 8, 2010, extended until January 1, 2012 Mechanism of action: a program participant receives a certificate of recycling of an old car, with which he can purchase a new car made in Russia at a price reduced by 50,000 rubles. Geography of implementation: the program operates throughout the Russian Federation. Nissan cars participating in the program: Teana, X-Trail Ford cars participating in the program: Ford Focus, Ford Mondeo.
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The role of international trade At the present stage, international trade plays an important role in the economic development of countries, regions, and the entire world community: foreign trade has become a powerful factor in economic growth; countries' dependence on international trade has increased significantly. The main factors influencing the growth of international trade: the development of the international division of labor and the internationalization of production; NTR; activities of transnational corporations TNCs;
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Regulation of foreign trade Frederie co Bastiat (1801 - 1850) - French liberal economist, supporter of free trade. He advocated freedom of enterprise - a decisive condition for establishing social harmony in society. Supporter of the thesis about the mutually beneficial coexistence of labor and capital. TO THE HOUSE OF DEPUTIES We are subject to fierce competition from a foreign rival who has such superior light-producing apparatus that he can flood our national market by offering his product at reduced prices. This rival is none other than the sun. We are petitioning for a law to be passed to close all the windows, openings and cracks through which the sunlight usually enters our homes, thereby impairing the profitable industry with which we have been able to bestow upon the country. Signed: manufacturers of candles and candlesticks.
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Protectionism is a policy of protecting the domestic market from foreign competition through a system of certain restrictions: import and export duties, subsidies and other measures; such a policy contributes to the development of national production.
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Measures of state regulation of imports Customs duties - indirect taxes (fees, payments) on imported, exported and transit goods received by the state budget; are collected by the customs authorities of a given country when crossing the border from the owner of foreign-made goods imported into the country for sale.
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Measures of state regulation of imports IMPORT QUOTA - 1) non-tariff, that is, not related to prices and taxes, quantitative restrictions on the import of certain types of goods into the country, established by the government in order to protect its own economy and protect the domestic market; 2) an indicator characterizing the volume of imports of a certain product, established in accordance with the needs for it and the volume of its own production.
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Measures of state regulation of imports Foreign trade license - preliminary permission issued by government authorities for the import or export of a certain product. Used to regulate foreign trade. Foreign trade licenses are of the following types: general, one-time (validity period cannot exceed 1 year), individual (name of the importer, validity period, quantity of goods, price, destination), exclusive (exclusive right to export-import a separate product).
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General Agreement on Trade and Tariffs (GATT) was signed by 23 countries in 1947. Until 1995, this agreement was the main document regulating international trade. The World Trade Organization (WTO), created in 1995, replaced the General Agreement on Tariffs and Trade (GATT) as the sole international body dealing with the global rules of trade between nations.
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Topic 3. REGULATION OF INTERNATIONAL TRADE Foreign trade policy: protectionism and free trade Tariff regulation of foreign trade activities Non-tariff regulation of foreign trade activities Financial methods of stimulating exports Liberalization of international trade and GATT/WTO Customs union: a form of economic integration
Question 1. Foreign trade policy: protectionism and free trade State regulation of foreign trade is a set of methods and tools used by the state to influence interstate economic relations in its national interests. Foreign trade policy is a policy that determines the conditions for access to goods and services traded in international trade, and as well as their suppliers to the national markets of individual countries. Regulation of foreign trade is carried out in two directions: carrying out protectionist trade policies and free trade policies.
Question 1. Foreign trade policy: protectionism and free trade Protectionism is a policy of using restrictions aimed at impeding the access of foreign goods, services, capital, labor to the domestic market in order to weaken foreign competition in it. The external manifestation of protectionism is a positive trade balance
Question 1. Foreign trade policy: protectionism and free trade Arguments in favor of a protectionist regime Protecting the national economy Argument about the youth of the industry Argument about the aging industry Argument about tax levies Argument about the redistribution of income Employment argument
Question 1. Foreign trade policy: protectionism and free trade Arguments in favor of a protectionist regime Arguments about foreign economic relations Argument about the balance of trade Sanctions argument Argument of independence from other countries (energy) National defense argument Argument about strategic advantage Argument about terms of exchange
Question 1. Foreign trade policy: protectionism and free trade Disadvantages of protectionism: Conservation of technological backwardness Difficulty in identifying promising industries for a given country Rising prices, which, with high elasticity of demand, reduces state revenues Difficulty in identifying industries on which the country’s security depends Protectionism has a certain multiplying effect Protectionism harms the economic interests of consumers The national economy cannot optimally take advantage of international specialization
Question 1. Foreign trade policy: protectionism and free trade Types of protectionism: Sectoral protectionism Hidden protectionism Selective protectionism Integration protectionism
Question 1. Foreign trade policy: protectionism and free trade Free trade policy is the policy of eliminating restrictions in international trade in order to enhance international economic relations Advantages of free trade: Stimulates competition processes Allows international trade in accordance with the law of comparative competitive advantage Creates opportunities for the use of international specialization Helps expand market boundaries
Question 1. Foreign trade policy: protectionism and free trade State foreign trade policy is carried out through the use of economic and administrative methods of regulating foreign trade activities Instruments of state regulation: Customs and tariff instruments Quasi-tariff instruments Monetary and financial instruments Opportunistic duties State monopoly on foreign trade Establishment of technical barriers Quotas for foreign trade transactions Licensing
Question 2. Tariff regulation of foreign trade activities Customs duty is a special type of payment levied by the state when importing goods into the customs territory of a country or exporting goods from the customs territory of a country. Customs tariff is a systematic list of customs duties levied on goods when importing and exporting from a given country
Question 2. Tariff regulation of foreign trade activities Customs tariffs are based on commodity classifiers. The most common classifiers of goods is the Harmonized System for Description and Coding of Goods (came into force on January 1, 1988). Principles for the formation of customs tariffs: Multiple columns Tariff escalation - increasing the level of customs taxation as the product moves from raw materials to finished products, i.e. depending on the degree of processing
Question 2. Tariff regulation of foreign trade activities The main functions of customs duties are: Fiscal Protectionist Restrictive
Question 2. Tariff regulation of foreign trade activities Classification of customs duties By method of collection: ad valorem (percentage of customs value) specific (in a fixed amount) Combined By origin: autonomous conventional preferential
Question 2. Tariff regulation of foreign trade activities Opportunistic customs duties: Anti-dumping customs duties Dumping is the practice of exporting goods at prices significantly lower than those at which the goods are sold on the domestic market Compensatory customs duties (neutralize foreign export subsidies) Seasonal customs duties
Question 2. Tariff regulation of foreign trade activities Quasi-tariff regulatory instruments - regulatory measures that are not customs duties, but are considered as measures similar in nature to customs duties (port, customs duties, etc.) Indirect taxes that are levied on imports ( VAT, excise taxes) The collection of indirect taxes is aimed at equalizing the conditions of competition for foreign and domestic goods
Question 2. Tariff regulation of foreign trade activities. The economic role of import duties. In the economic literature, there is the concept of an economically large and an economically small country, depending on the amount of demand for imported goods. A country is considered large if a change in its demand for imports leads to a change in world prices. A large country, by introducing import tariffs, influences the level of world prices and achieves certain benefits by improving the terms of trade
Question 2. Tariff regulation of foreign trade activities In the long term, protectionism has a negative impact on the country's economy. This is manifested in the following: consumers bear the brunt of it; preservation of jobs in supported industries is accompanied by their loss in other sectors of the economy; trade wars arise; damage is caused to companies whose development depends on imports; there are always opportunities to bypass protective barriers
Question 3. Non-tariff regulation of foreign trade activities According to the most common classification of non-tariff measures adopted by the UN, they are divided into three categories: Foreign trade measures, the use of which is aimed at directly limiting imports in order to protect certain sectors of national production (licensing and quotas of imports, “voluntary” restrictions exports, etc.) Measures related to administrative formalities (technical standards and regulations, packaging requirements, etc.) Measures, the application of which is not directly aimed at restricting imports or promoting exports, but the action of which leads to this result ( public procurement policy)
Question 3. Non-tariff regulation of foreign trade activities Contingent - measures of state regulation that limit the volume of specific goods allowed for import or export of a particular product during a certain period of time. An extreme form of quotas is a complete ban on trade with certain countries, i.e. establishing an embargo Licensing - issuing permits to export or import goods in specified quantities for a certain period of time Voluntary export restrictions (VER) - this is a type of export quota
Question 3. Non-tariff regulation of foreign trade activities In modern conditions, states use methods of hidden protectionism to protect the domestic market: Technical barriers Internal taxes and fees Public procurement policy Inclusion of a certain share of local components in the final product created
Question 3. Non-tariff regulation of foreign trade activities Choice of remedies: non-tariff barriers are gradually replacing trade duties. Reasons: Bypassing WTO principles The effect of disguised measures The effect of confidence The effect of control The effect of obtaining monopoly rent The effect of rising prices due to increased demand
Question 3. Non-tariff regulation of foreign trade activities Choice of means of non-tariff protection: quotas or voluntary export restrictions? Voluntary export restrictions provide the following benefits: Bypassing WTO rules Discrimination of supplying countries The secret aspect of the restriction The interest of the exporting country in obtaining rent
Question 4. Financial methods of stimulating exports Financial methods of stimulating exports aimed at reducing the cost of exported goods and thereby increasing their competitiveness in the world market (subsidies, lending and dumping) The World Trade Organization (WTO) prohibits the use of export subsidies By their nature, subsidies are: Direct Indirect Countervailing duties are used as a retaliatory measure
Question 4. Financial methods of stimulating exports Export support through dumping is a method of promoting goods to the foreign market by reducing prices below normal levels. State services such as stimulating exports through a credit insurance mechanism, providing enterprises with preferential loans and the necessary information are widely used.
Question 5. Liberalization of international trade and GATT/WTO The specifics of the implementation of trade policy within the framework of the country's participation in multilateral mechanisms are as follows: Requires consideration of the country's interests in relations with all member states of the relevant agreements. Requires alignment of the country's interests in trade in various goods and even in various sectors of the economy Multilateral mechanisms for regulating trade almost always have a more complex and developed international legal framework Aimed at achieving long-term economic and political goals
Question 5. Liberalization of international trade and GATT/WTO Creation of GATT/WTO In February 1946, the UN Economic and Social Council at its first meeting adopted a resolution in support of the convening of a conference to develop a charter for the International Trade Organization (ITO) In 1947, a meeting was held in Geneva first meeting of the conference (preparation of the HTA charter, negotiations on a general agreement on multilateral tariff reductions, consolidation of general provisions on obligations in the field of customs policy - the basis of GATT - General Agreement on Tariffs and Trade) In 1948, 20 countries signed a protocol to the tariff reduction agreement In 1995, the World Trade Organization (WTO) began to operate on the basis of GATT.
Question 5. Liberalization of international trade and GATT/WTO Principles of GATT: 1. Non-discrimination between trading partners. GATT contains a clause on: most favored nation treatment - the principle of non-discrimination at the customs border; national treatment - providing foreign goods with the same conditions in the field of taxes and duties as national goods 2. Reciprocity of tariff concessions. 3. Transparency of trade policy. Exceptions to general principles also play an important role. For example: A country is allowed to apply trade restrictions if imports cause significant harm to local production.
Question 5. Liberalization of international trade and the GATT/WTO By the mid-1990s, two circumstances undermined the role of the GATT in organizing international trade: The gradual weakening of multilateral agreements under the influence of most favored nation treatment. In 1964, the United Nations Conference on Trade and Development (UNCTAD) was created to compensate for the shortcomings of the GATT, which was poorly adapted to the needs of developing countries. The principle of this system is to encourage exports from developing to developed countries by almost completely eliminating customs duties without requiring reciprocity and inclusion in most favored nation treatment Strengthening non-tariff barriers (especially in trade in agricultural goods, textiles, automobiles and iron and steel products)
Issue 5. Liberalization of international trade and GATT/WTO Uruguay Round of negotiations (1986-1994): Reduction by 38% of customs duties on goods imported by developed countries, to an average of 3.9% Creation of the World Trade Organization, which was endowed with broad powers, which should complicate the unilateral application of trade sanctions For the first time, trade in certain types of services was included in the GATT agreements
Question 5. Liberalization of international trade and GATT/WTO Structure and composition of the WTO At the time of its creation, the WTO included 125 countries of the world, providing over 90% of world trade turnover. Currently, the WTO unites about 150 countries, more than 30 states have observer status in the WTO. The highest body of the WTO - Ministerial Conference In the intervals between ministerial conferences, the governing body is the General Council, to which are subordinated: Council on Goods Council on Services Council on Trade Aspects of Intellectual Property Issues
Question 6. Customs union: a form of economic integration The American economist J. Wiener in 1950 defined a customs union as an international organization that satisfies the following conditions: Abolition of customs duties between members of the union; Introduction of uniform customs duties on imports from third countries; Coordinated redistribution of customs revenues between member countries of the union.
Question 6. Customs Union: a form of economic integration A customs union is a form of economic integration of several states. Depending on the level of integration, five types of economic cooperation can be distinguished: Association Free trade area Customs union Common market Economic union According to the Treaty of Rome in 1957, the European Economic Community was a customs union, which gradually transformed into a common market and economic union.
Question 6. Customs union: a form of economic integration The union of countries into a customs union leads to a number of consequences: The effect of the formation of exchange is associated with an improvement in the distribution of resources The effect of a shift in the directions of exchange worsens this distribution of resources The consequences of changing the terms of exchange Impact on consumption
Question 6. Customs union: a form of economic integration Conclusions: The higher the initial tariffs between the members of the union, the greater the increase in exchange will be. The lower the uniform customs duties in relation to other countries, the less pronounced the shift in exchange will be. The more countries will join the customs union, the more to a greater extent, the creation of exchange will prevail over its displacement
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International trade Exchange of goods and services between state-national economies The totality of foreign trade of all countries of the world The object of international trade is goods and services supplied to the world market. The basis of world trade is foreign trade turnover Export Import Volume of foreign trade = export + import
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- the direction of economic thought of the 16th-17th centuries, a prominent representative of which was T. Mann (1571-1641), studied the problems of foreign trade. Mercantilists believed that foreign trade was necessary for the country to accumulate gold, which was considered the main source of the nation's wealth. The influx of gold into the country is ensured if the export of goods for which the state receives gold is greater than the import, for which it is necessary to pay in precious metal. Therefore, mercantilists advocated expanding exports and limiting imports in every possible way. Mercantilism
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Adam Smith put forward the theory of world trade, justifying the need to liberalize imports and ease customs restrictions. Smith's approach is called the PRINCIPLE OF ABSOLUTE ADVANTAGE Each country should specialize in the production of goods whose average costs are less than the average costs in other countries. Absolute advantage for any product is determined by the endowment of appropriate resources. By exporting part of the goods, the country uses the proceeds to purchase goods in the production of which another country has an advantage
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David Ricardo (1772-1823) Theory of comparative advantage in foreign trade A country benefits if it specializes in the production of those goods whose average costs are relatively less than those of other countries producing the same goods
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NEOTECHNOLOGICAL THEORIES OF WORLD TRADE These theories explain, for example, the reasons for trade between countries, despite the fact that the structure and technical characteristics of production factors are similar. Within the framework of these theories, the capabilities of new developing equipment and technology are taken into account. Large-scale production Reduced unit costs Reduced prices Economists pay attention to the continuous technological changes carried out by firms in order to create competitive advantages. For example, Holland exports more than $1 billion worth of flowers a year, using advanced greenhouses heated by electricity or gas and air transport to deliver goods to consumers.
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Patterns of development of world trade World trade is growing very quickly, countries' export shares in GDP are increasing. In 1950 World exports of goods and services accounted for 13% of world GDP in 2000. – 17.1%, in 2015, according to forecast, will be 18.7%. The share of finished products, especially high-tech and knowledge-intensive products, is increasing. The prices of machinery and equipment produced by the leading countries of the world are rising rapidly. Declining demand in developed countries for raw materials and food produced by developing countries. Their position in world trade is deteriorating. The profitability of foreign trade for developed countries is growing. Increasing the global market for services, especially tourism, transport, financial, and technology transfer. The leaders are developed countries.
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To assess the profitability of international trade for a country, economists use the terms of trade index; the terms of trade index is the quotient of the average export price index divided by the average import price index of a country in a particular period of time. Its decrease shows that to purchase a unit of imported goods it is necessary to spend more and more revenue from exported goods