International Trade and Tariff Reform PDF

International Trade and Tariff Reform PREPARED BY: MICHAEL JOHN A. MIGUEL LCB. Conceptualization of International Trade The Caravan and Caravel Trade - The word “caravan” is a Persian origin, which was adopted into the later Arabic vocabulary. - It refers to a “body of traders” trav...

International Trade and Tariff Reform PREPARED BY: MICHAEL JOHN A. MIGUEL LCB. Conceptualization of International Trade The Caravan and Caravel Trade - The word “caravan” is a Persian origin, which was adopted into the later Arabic vocabulary. - It refers to a “body of traders” travelling together for greater security against bandits. - Caravel trade – trade across seas. Growth and Development Pax Romana – Roman Peace Early Fairs – the fair function as a place for display and exhibit of goods of the commercial world.  Place of Exchange  Agora – especially designated marketplace in Greek City.  Forum – markets during the early time in Rome, which means meeting place 1. Mercatus – the concourse of people engaged in buying and selling. Means to buy or to traffic 2. Nundinae – markets occurring every ninth day 3. Forestalling – buying merchandise before it reaches the market ❖ Law Merchant or Lex Mercatoria – Law of Trade 4. Banking Institutions 5. Ports of Entry – a domestic port open to both foreign and coastwise trade 6. Laissez Faire – doctrine which demands the minimum interference by the government in economic and political affairs  Fundamentals of Trade  Trade – an economic activity which deals with an exchange of goods and services motivated by a desire or profit. Kinds of Trade  International Trade  Local or Domestic trade  Basic Similarities  Both deal in the same object of exchange goods and services  Both kinds of trade are carried on by individuals and business firms  Both domestic and international trade are stimulated by the desire for profit  Striking Difference  Independent Currency System  Tariffs and Other Trade Restrictions  Movement of Labor and Capital  Nature of the market Factors that account for the existence of International Trade  Difference in Environmental Conditions  Stage of economic development  Population distribution  Transportation and communication facilities  Press structure Items of International Trade  Goods – visible items  Service – invincible items  Classification of Goods and Services based on movement and destination  Imports – goods or commodities bought from a foreign country entering into another  Exports – goods sold by a country and destined for a foreign one.  Nature of International Trade A country’s export is simple the import of another  No country can export unless another country imports  For every export, there is a corresponding import Balance of Trade  The ratio between a country’s export and imports  Advantages of International Trade 1. International trade gives rise to improved production and specialization through geographical division of labor. 2. International trade helps to assemble the things each nation needs 3. It helps raise people’s standard of living 4. It serves as a vehicle for alleviating the economic difficulties that attend congested regions of the world. 5. Exchange of goods tend to increase the total utility of the goods entering the transactions 6. To the economic benefit we derive from international trade, cultural advantages may be added  Disadvantages 1. Bitterstruggle for Market and Raw Materials 2. Desire for Economic Self – Sufficiency 3. Economic Independence Thank You!