International trade班级： 2010 级 3B6成员 :

卢艺 ： 国际经济与贸易 102 本科班 10151040203

王芳： 国际经济与贸易 102 本科班 10151040201 翟玉姣 ：国际经济与贸易 102 本科班 10151040239 郑雅玲 ：国际经济与贸易 102 本科班 10151040225

The Contents of International Trade

1.1 What Is International Trade? 1.2 Economic Globalization 1.3 Advantages and Disadvantages of International Trade 1.4 Risks And Barriers To International Trade 1.5 Regulation Of International Trade 1.6 International Trade Terms(INCOTERMS 2000) 1.7 World trade organization

International trade is the exchange of goods and services, that is,

exports and imports between two or more countries or regions,

involving the use of one or more currencies. International trade is

also known as foreign trade, world trade or global trade.

The guiding principle of international trade is comparative advantage,

which indicates that every country, no matter where their level of

development is, can find something that it can produce cheaper than

another country.

1.1 What Is International Trade?

Theory of comparative advantage(比较优势理论 )

大卫 - 李嘉图（David Ricardo ， 1772 ～ 1823 ）

Theory of comparative advantage is presented by David Ricardo,he thinks that each country should concentrate on producing and exporting their products to have a “comparative advantage”,importing it’s“comparative disadvantage” products.in accordance with the principle of benefits both the minimum the weight of the lesser of two diadvantages. （两利相权取其重，两弊相权取其轻）

International Trade

Foreign Trade Law of the People's Republic of China defines

international trade as foreign trade, that is, import & export of

goods and technologies and international trade in services ．

According to Organization for Economic Cooperation &

Development (OECD), world trade includes imports &

exports of goods and services ．

The World Trade Organization covers global trade on such topics

as goods, services and intellectual property rights.

Nations like the United Kingdom and Japan also call international

trade as overseas trade because they are island countries which

have to ship goods to other nations over the seas.

International Trade is business whose activities involve the crossing of national borders, including not only international trade and foreign manufacturing but also the growing services industry in areas such as transportation, insurance, banking, tourism, advertising, retailing, wholesaling, and mass communications, etc.

International Trade includes all business transactions that involve two or more countries. Such business relationship may be private or governmental. In the case of private firms the transactions are for profit. Government-sponsored activities in international business may or may not have a profit orientation.

The Field of International Trade

1.2. Economic Globalization

Globalization of the economy depends on the role of human migration （人类迁徙） , international trade （国际贸易） , movement of capital （资本流动） , and integration of financial markets （金融市场一体化） . The International Monetary Fund notes the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions, free international capital flows, and move rapid and widespread diffusion of technology.

The importance of technology

The rise of technology has allowed the environment to be characterized as a global one. The global economy gave business the ability to market products and services all over the globe. It has also allowed them to develop partnerships and alliances throughout the world, which has become essential for success in today’s business.

Advantages to consider:

Enhance your domestic competitiveness Increase sales and profits Gain your global market share Reduce dependence on existing markets Exploit international trade technology Extend sales potential of existing products Stabilize seasonal market fluctuations Enhance potential for expansion of your business Sell excess production capacity Maintain cost competitiveness in your domestic market

1.3Advantages and Disadvantages of International Trade

Disadvantages to keep in mind:

You may need to wait for long-term gains Hire staff to launch international trading Modify your product or packaging Develop new promotional material Incur added administrative costs Wait long for payments Apply for additional financing Deal with special licenses and regulations

7

1.4 Risks And Barriers To International Trade

Political / legalforces

Economicforces

1

2Environmentaluncontrollablescountry market A

Environmentaluncontrollablescountrymarket B

Environmentaluncontrollablescountrymarket C

Competitivestructure Competitive

Forces

Level of Technology

Price Product

Promotion Place

Geography and

Infrastructure

Foreign environment(uncontrollable)

Structure ofdistribution

Economic climate

Cultural forces

3

45

6

7Political/

legalforces

Domestic environment(uncontrollable)

(controllable)

Country riskCountry risk comprises political, social and economic

components, including: Exchange control regulations ( 外汇管制条例 ) Changes in government policies Trade embargoes （贸易禁运） Lack of foreign currency （缺乏外币） War

Commercial riskThis is the exposure to a loss caused by: A buyer's inability to pay due to financial constraints A seller's inability to supply the correct quality and quantity

of goods A bank‘s inability to honor its undertakings ( 银行无法兑现承

诺 )

Risks in International Trade

Barriers to International Trade

Socio-cultural Barriers language religion customs and manners Economic Barriers exchange rate extra costs ( freight, packing cost, insurance, cost of documents, etc.) Trade Barriers tariffs (specific duties 从量税 , ad valorem duties 从价关税 , common duties, etc.) non-tariffs( quota, license, new barriers)

The Reason for Setting up Trade Barriers

To protect the own country's jobs by shielding home country from foreign competition. To encourage local production to replace imported goods. To protect newly founded industries. To reduce problems in balance of payments. To stimulate export activity. To encourage local and foreign direct investment. To prevent foreign companies from dumping (which means selling goods below cost so as to obtain market share). To arrive at the political aims.

Barriers are set up just for the sake of a nation in conducting international trade. Every nation has its own specific features and while doing international trade, a nation does not want its benefits, its firms and industries hurt

1.5 Regulations Of International Trade

The regulation of international trade is done through the World Trade Organization at the global level . Traditionally trade was regulated through bilateral treaties between tow nations. For centuries under the belief in mercantilism most nations had tariffs and many restrictions on international trade. Free trade is usually most strongly supported by the most economically powerful nations, thought they often engage in selective protectionism for those industries which are strategically important such as the protective tariff applied to agriculture by the United State and Europe.

Rules and regulations issued by the International Chamber of Commerce

the Uniform Rules for Collections (ICC Publication No. 552,1995), 《托收统一规则 》

the Uniform Customs and Practice for Documentary Credits, ICC Publication No.600 《跟单信用证统一惯例》 ( 国际商会第 600 号出版物）

INCOTERMS 2000 《 2000 年国际贸易术语解释通则 》

Regulations issued by the United Nations United Nations Convention on International Bills of Exchange and

International Promissory Notes 《联合国国际汇票和国际本票公约》 United Nations Convention on Contracts for the International Sale of

Goods 《联合国国际货物销售合同公约 》

INCOTERMS 2000The global economy has given businesses broader access than ever before to markets all over the world. Goods are sold in more countries, in larger quantities, and in greater variety. But as the volume and complexity of international sales increase, so do possibilities for misunderstandings and costly disputes when sales contracts are not adequately drafted. Incoterms, the official ICC rules for the interpretation of trade terms, facilitate the conduct of international trade. Reference to Incoterms 2000 in a sales contract defines clearly the parties' respective obligations and reduces the risk of legal complications.

1.6 INCOTERMS 2000

Group E Departure EXW Ex Works (... named place)Group F Main carriage unpaid FCA Free Carrier (... named place) FAS Free Alongside Ship (... named port of shipment) FOB Free On Board (... named port of shipment)Group C Main Carriage Paid CFR Cost and Freight (... named port of destination) CIF Cost, Insurance and Freight (... named port of destination) CPT Carriage Paid To (... named place of destination) CIP Carriage and Insurance Paid To (... named place of destination)Group D Arrival DAF Delivered At Frontier (... named place) DDP Delivered Duty Paid (... named place of destination) DES Delivered Ex Ship(... named port of destination) DEQ Delivered Ex Quay (... named port of destination)

DDU Delivered Duty Unpaid(... named place of destination)

FOB

FOB means that the shipper use his freight forwarder to move the merchandise to the port or designated point of origin.

CFR FCA

CFR: C means the actual cost fo merchandise and F refers to the freight charges to a predetermined destination piont.

FCA: the seller is responsible for arranging transportation,but he is acting at the risk and the expense of the buyer.

CIP: this is primarily used for multimodal transport.It relies on the carrier's insurance,so the seller is only required to purchase minimum coverage.

CIF: this arrangment is similat to CFR,but instead of the buyer insuring the goods for the maritime phase of the voyage,the seller will insure the merchandise.

CPT: the seller has the same obligations found with CIF ,with the addition that the seller has to buy catgo insurance,naming the buyer as the insured while the goods are in transit.

1.7World Trade Organization

The world trade organization(WTO)is an international organization designed to supervise and liberalize international trade.

The WTO came into being on January 1,1995.

The WTO is governed by a Ministerial Conference,which meets every two years.

Logo

Mission and Functions

The WTO’s goal is to improve the welfare of the peoples of its member countries,specially by lowering trade barriers and providing a platform for negotiationof trade.

Regarded by analysts as the most important:1.it oversees the implementation,administration and operation of the covered agreements2.it provides a forum for negotiations and for settling disputes

Accession and Membership

The process of becoming a WTO member is unique to each applicant country,and the terms of accession are dependent upon the country’s stage of economic development and current trade regime.

The WTO has 151 members.WTO members do not have to be full sovereign nation-members.Instead,they must be a customs territory with full autonomy in the conduct of their external commercial relations.

Summary

The world has a long history of international trade. In fact, trading among nations can be traced back to the earliest civilizations. Trading activities are directly related to an improved quality of life for the citizens of nations involved in international trade. It is safe to say that nearly every person on earth has benefited from international trading activities.