International Trade (Part-A)
The activity or process of buying, selling, or exchanging goods or services is called trade. International trade refers to the exchange of goods and services among countries across national boundaries. Trade on the Silk Road was a significant factor in the development of the great civilization of China, India, Egypt, Persia, Arabia and Rome. The Barter system was the initial form of trade in the primitive societies. At that time there was no standard criteria to determine the value of goods and services. The barter services became popular during The Great Depression in the 1930's, which witnessed scarcity of money. International trade is a major source of economic revenue for any nation. It is the result of specilisation in production.
During the 19th century, European countries started exporting manufactured goods for exchange of foodstuffs and raw materials from their colonies. Europe, U.S.A. and Japan, emerged as important trading countries of manufactured goods.
In the second half of the twentieth century, the developing countries like India and China developed their industries and started competing with the developed countries. Trade in technology forms the base of international trade.
Bilateral trade is done between two countries with each other. Multi-lateral trade is conducted with many trading countries. Exchange of goods takes place on regular basis. It is not limited to certain commodities. The country may also grant the status of the “Most Favoured Nation” (MFN) on some of the trading partners. Free trade is a system of trade policy that allows traders to act and transact without any interference from the government.
International trade brings in different varieties of a particular product from different destinations. Industrialisation, advanced transportation, globalisation, multinational corporations, and outsourcing are all having a major impact on the international trade system.
On the basis of handling of the cargo, ports can be classified into industrial ports, commercial ports, and comprehensive ports and provide the facilities of docking, loading, unloading, and storage facilities for the cargos.