INTERNATIONAL TRADE

International Trade and Investment

International Trade and Investment

Introduction

The international trade is the exchange of goods, services and capital between countries. This type of trading has existed for centuries (see Silk Road), but it is experiencing a resurgence due to economic globalization. The international trade theory is the branch of economics that studies and models of international trade. In addition there is a law of international trade operations, including formalized by inciters Chamber of Commerce.

International trade patterns are viewed by analyzing and examining trade and world output. This process will help provide useful insights into the international trade environment. International trade is always important to our nation and other nations around us. International trade has impacted the American economy in many ways. The largest impact is the growth in the American economy. Cross border trade has dramatically grown in the last several decades and many predict that it will continue to grow or even accelerate in the early years of the 21st Century.

Discussion

History of International Trade

The United States is the world's leading when importing goods but is just one of the world's leaders in trading between nations. This is because the country thrives from exporting goods which aids the country in decreasing employment and increasing income. With that in mind, history shows there has been an increasing combination of economies worldwide due to an improvement in international trading. Between 1980 and 2002 international trade and world output significantly increased due to trading goods becoming cheaper compared to goods not traded. More so, Gross Domestic Product ratio to trading increased during this same period in which all the main economies show an increase of their trade to GDP in the past 20 years. Unfortunately, the reports also point out the decrease and increase from region to region. Gross Domestic Product ratio to trade did increase by nearly 50 percent in non-Japan Asia, nearly 15 percent in Latin-American countries and the United Kingdom, but less than 10 percent in the United States and Japan

Developments in international trade

Past two decades, international trade has greatly increased, especially for developed countries, and for newly industrialized countries, promoting the growth of the latter. The least developed countries have not experienced such an increase in international trade. The volume of world trade has increased fifteen-fold between 1950 and 2010 and it still has tripled between the fall of the Berlin Wall in 1990 and 2010 (Allen Lane Stieglitz, 2006, Pp. 103).

International Trade Economic Assumptions

Each large or small country is part of the global economy. It is seen as a technological, informational, economic, environmental and communications whole. The global economy began to take shape thanks to international trade. Each country's natural goal-economic is benefit from the public division of labor in international trade. Currently, no state can make all the supplies needed to meet the needs of the population. It happened that each country produces goods that are profitable to produce (DICKEN, 1998, Pp. 76-80).

Features of International Trade

Regional agreements are of different types, each reflecting different degrees of economic ...