Glossary of International Trade Terms PDF

Glossary List **Term** **Definition** ------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------...

Glossary List **Term** **Definition** ------------------------------------------------------------------------ ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Balance of Payments A financial statement that summarizes a country\'s economic transactions with the rest of the world over a specific period, usually a year. It includes the current account, capital account, and financial account. Balance of Trade The difference between the value of a country\'s exports and imports of goods. A positive balance indicates a trade surplus, while a negative balance indicates a trade deficit. Capital and Financial Account A component of the balance of payments that records transactions related to investments and financial assets between a country and the rest of the world. Current Account Another component of the balance of payments, capturing trade in goods and services, as well as transfers like remittances and foreign aid. Current Account Deficit When a country imports more goods, services, and capital than it exports, leading to a negative current account balance. Foreign Investment Investments made by individuals or entities based in another country. This can be direct investment in businesses or indirect investment like purchasing government bonds. Foreign Debt The amount borrowed by a country from foreign lenders, usually in currencies other than its own. Free Trade Agreements Treaties between two or more countries to establish a free-trade area where commerce in goods and services can be conducted without tariffs or hindrances. Trading Blocs Groups of countries that have reached a specific trade agreement, aimed at promoting trade among themselves by reducing or eliminating trade barriers. Methods of Trade Protection Mechanisms used by governments to restrict international trade, often to protect domestic industries. These include tariffs, quotas, and subsidies. Tariffs Taxes imposed on imported goods, increasing their cost to protect domestic industries. Non-Tariff Barriers Trade barriers that restrict imports but are not in the form of a tax. Examples include quotas, subsidies, and bureaucratic requirements. Subsidies Financial assistance provided by the government to domestic industries to make them more competitive against foreign imports. Quotas A quantitative limit set by a government on the amount of a good that can be imported into the country. Bureaucratic Requirements Administrative rules and regulations that act as barriers to trade, such as product standards and customs procedures. Terms of Trade The ratio of the price of a country\'s exports to the price of its imports. It indicates how much a country can buy of what it exports. Protectionism The policy of protecting domestic industries against foreign competition through methods like tariffs, quotas, and subsidies. Trade Liberalisation The removal or reduction of trade barriers, like tariffs and quotas, to encourage free trade among countries. Bilateral Agreements Trade agreements between two countries aimed at reducing or eliminating trade barriers. Regional Agreements Trade agreements among multiple countries in a specific geographic region. Multilateral Agreements Trade agreements involving multiple countries, often on a global scale. Trade Creation The increase in economic activity resulting from the removal of trade barriers. Trade Diversion The shift in trade from a more efficient to a less efficient source, usually as a result of trade agreements or tariffs. Economic Efficiency The optimal allocation of resources in an economy to maximize output or minimize waste. Economic Growth The increase in an economy\'s output or Gross Domestic Product (GDP). Living Standards The level of wealth, comfort, and well-being experienced by individuals or communities. Resource Allocation How resources like labor, capital, and raw materials are distributed in an economy. Current and Capital Account Statements Financial statements detailing a country\'s economic transactions categorized into current and capital accounts. Australia--New Zealand Closer Economic Relations Trade Agreement (CER) A free trade agreement between Australia and New Zealand aimed at promoting trade and economic integration. European Union (EU) A political and economic union of 27 European countries with a single market and customs union. North American Free Trade Agreement (NAFTA) A trade agreement among the United States, Canada, and Mexico, replaced by the United States-Mexico-Canada Agreement (USMCA) in 2020. ASEAN--Australia--New Zealand Free Trade Agreement (AANZFTA) A trade agreement involving countries from the Association of Southeast Asian Nations (ASEAN), Australia, and New Zealand.