主讲教师：夏夕美

1. International trade practices 主讲教师：夏夕美 Import & Export Practices

2. Picture of the Course Import & Export Practices

3. brief introduction to international trade 1 Works before signing contract 2 3 contract 4 Fulfill contract 5 Other type of trade diagram of the Course Import & Export Practices

4. brief introduction to international trade 主讲教师：夏夕美 Import & Export Practices

5. what is international trade？ • International trade, also known as world trade, foreign trade or overseas trade, is The fair and deliberate exchange of goods (trade in goods)and exchange of services (trade in services) across national boundaries. Import & Export Practices

6. Forms of International Trade • It concerns trade operations of both import and export and includes the purchase and sale of both visible and invisible goods. • Import is purchase of goods or service • Export is sale ofgoods or service Import & Export Practices

7. Forms of International Trade • 1. visible trade • involves the import and export of goods and merchandise. • 2. invisible trade • involves the exchange of services between nations. • Travel, Tourism, and Transportation (旅游业、交通运输业) 2) Performance of Activities Abroad (国外商务活动) 3) Use of Assets From Abroad (国外资产的运用) Import & Export Practices

8. Forms of International Trade • 3. A third very important category is investment , is the means by which nations utilize the capital of other nations to build factories and develop mines for their own industrial base. • In fact, FDI （外商直接投资）is now more important than trade as a vehicle for international economic transactions. Import & Export Practices

9. 国际贸易分类 • 3.复出口（re-export trade）是指输入本国或本地区的商品未经加工就出口的情况。 • 4.复进口？ • 5.过境贸易（transit trade）又称间接贸易，是指外国商品途径本国，最终销售地为第三国的贸易。 • 6.转口贸易是指商品的生产国和商品消费国之间的交易若要通过第三国（或地区）的交易者来完成。 Import & Export Practices

10. 国际贸易分类 • 按统计边界可分为总贸易和专门贸易 • 1.在对外贸易统计时，若以国境为界，凡进入国境的商品算作进口，离开国境的商品算作出口，则一定时期内的进出口额之和便为该国的总贸易（general trade）。 • 2.若以关境为界，凡运入关境的商品算作进口，运出关境的商品算作出口，则一定时期内的进出口额和便为该国的专门贸易(special trade)。 Import & Export Practices

11. 国际贸易分类 • 按照贸易关系划分 • （1）直接贸易（Direct Trade）是指贸易商品从生产国直接运销到消费国，没有第三方参与的贸易活动。 • （2）间接贸易(Indirect Trade)是指通过第三国或其他中间环节，把商品从生产国运销到消费国的贸易活动。 Import & Export Practices

12. 国际贸易分类 • 按结算方式划分 • （1）现汇贸易（Spot Exchange Trade ）又称自由结汇贸易，是指在国际商品买卖中，以货币作为偿付工具的贸易方式。 • （2）易货贸易（Barter Trade）又称换货贸易，是指以货物经过计价作为偿付工具的贸易方式。 *记账贸易？ Import & Export Practices

13. 国际贸易分类 • 按贸易方式划分 • 1.商品贸易 • 包销、代理、寄售、招标、拍卖、商品交易所交易等 • 2.加工贸易 • 3.补偿贸易 • 4.租赁贸易 Import & Export Practices

14. 国际贸易分类 • 按照贸易政策划分 • 自由贸易政策 • 保护贸易政策 • 统制贸易政策 Import & Export Practices

15. Effectiveness ofInternational Trade • key indicators: balance of trade(贸易差额) • A favorable balance of trade(贸易顺差), or trade surplus (贸易盈余): the value of the country‘s exports exceeds that of its imports. • An unfavorable balance of trade (贸易逆差), or trade deficit (贸易赤字): the value of the country's imports exceeds that of its exports. Import & Export Practices

16. Effectiveness ofInternational Trade Import & Export Practices

17. 1 Resource reason 1 1 2 economic reason 3 political reason Why do foreign trade?Foreign trade takes place for many reasons: Import & Export Practices

18. 1.Resource reason 1 2 1 1 3 4 5 6 climatic conditions and terrain natural resource technologies and labor Capital resources Geographic location & transport cost Insufficient production Import & Export Practices

19. 1.Resource reason • The difference in these factors enables some countries to grow certain plants and leaves other countries with the only choice to import the produce they consume. • 1) climatic conditions and terrain • Climatic conditions and terrain are very important for agricultural produce. Import & Export Practices

20. 1.Resource reason • 2) natural resource • Some countries are the major suppliers of certain natural resources because the distribution of natural resources around the world is somewhat haphazard.Raw materials are scattered around the world. Import & Export Practices

21. 1.Resource reason • 3) technologies and labor • The US, Japan, and many European countries have strong research and development capabilities and advanced technologies. They also have skilled workers who are able to manufacture sophisticated equipment and machinery Import & Export Practices

22. 1.Resource reason • Because of the lack of capital, many developing countries are unable to modernize their industries and economies with advanced machinery, equipment, and plant they are not yet able to manufacture. • 4) Capital resources • Capital is in fact a produced wealth that has been cumulated over the years of economic development. Import & Export Practices

23. 1.Resource reason • 5) Geographic location & transport cost • There are many examples of countries developing close economic relationships chiefly because they are geographically close to each other. Import & Export Practices

24. 1.Resource reason • 6) Insufficient production • a country often does not have enough of a particular item to meet its needs. • foreign trade takes place because of innovation or style. Import & Export Practices

25. 2. economic reason • In addition to getting the products they need, countries also want to gain economically by trading with each other. • one nation can sell some items at a lower cost than other countries. Import & Export Practices

26. 3. political reason • Political objectives can sometimes outweigh economic considerations between countries. One country might trade with another country in order to suppose the latter’s government which upholds the same political doctrine. In short, motivations for countries to trade or not to trade with each other and to maintain lower or higher trade barriers can come not just from economic factors or international pressures, but also from international and domestic political needs. Import & Export Practices

27. summary • 1. Resource Acquisition (寻求资源) • 2. Benefits Acquisition (追求利润) • 3. Diversification (多种经营) • 4. Expand sales（扩大销售） Import & Export Practices

28. Foundation of International Trade • In today‘s complex economic world, neither individuals nor nations are self-sufficient. Nations have utilized different economic resources; people have developed different skills. This is the foundation of international trade and economic activities. Import & Export Practices

29. 1 Specialization 2 The labor theory of value The Theory of Absolute Advantage 3 4 The Theory of Comparative Cost Basic Theory of International Trade Import & Export Practices

30. 1. Specialization • There were some things he was more capable of doing than others and that it would benefit him to concentrate his efforts on the production of those goods in which he was particularly proficient and to leave others to produce the goods that called for skills which he did not possess. This was the beginning of specialization • In his original state man was self-sufficient, providing food, shelter and clothing for his family. Import & Export Practices

31. 2. The labor theory of value • For classical economists , the value of a good is determined by the cost of production , with the relative cost of production of various goods revealed by the labor content (how many hours). • This theory is known as the labor theory of value . Import & Export Practices

32. 3. The Theory of Absolute Advantage In his work The Wealth of Nations (1776), Adam Smith assumed that each country could produce one or more commodities at a lower real cost than its trading partners. • It then follows that each country will benefit from specialization in those commodities in which it has an “absolute advantage”, (i .e , being able to produce at a lower real cost than another country) ,exporting them and importing other commodities which it produces at a higher real cost than another country Import & Export Practices

33. 3. The Theory of Absolute Advantage • According to Adam Smith , trade between two nations is based on absolute advantage . • The theory of absolute advantage holds a commodity will be produced in the country where it costs least in terms of resources (capital, land, and labor). This theory is illustrated in the following table. Import & Export Practices

34. Absolute Cost Example Import & Export Practices

35. 3. The Theory of Absolute Advantage So Country A is more efficient in producing wheat than County B , and we say the former has an absolute advantage over the latter. • From the above table, we can see that a man in Country A can produce 50 units of wheat in a year but only 10 in County B. • On the other hand, one man in Country B can produce 40 units of cotton in a year but only 20 in Country A. Import & Export Practices

36. 3. The Theory of Absolute Advantage • and Country B would specialize in cotton and exchange some of them for Country A's wheat. Both countries will gain benefits through specialization and trade. • Similarly, Country B is more efficient with cotton and has an absolute advantage over Country A. • As a result, Country A would specialize in the production of wheat and trade some of them for Country B's cotton, Import & Export Practices

37. 4. The Theory of Comparative Cost • David Ricardo, in his work On the Principle of Political Economy and Taxation (1817), showed that absolute cost advantage are not a necessary condition for two nations to gain from trade with each other. Instead, trade will benefit both nations provide only that their relative costs, Import & Export Practices

38. 4. The Theory of Comparative Cost • In short, trade depend on differences in comparative cost or opportunity cost, and one nation can profitably trade with another even though its real costs are higher (or lower) in every commodity. • that is, the ratios of their real costs measured by labor-hour or another commodity, are different for two or more commodities. Import & Export Practices

39. The first country should specialize in the production and export of the commodity in which its absolute disadvantage is smaller, i.e. the commodity of its comparative advantage, 4. The Theory of Comparative Cost • According to the theory of comparative advantage , it holds that even if a country is less efficient than another in the production of both commodities, i.e. it has absolute disadvantage in producing both commodities, there is still a basis for mutually beneficial trade. Import & Export Practices

40. 4. The Theory of Comparative Cost • and import the commodity in which its absolute disadvantage is greater, i.e. the commodity of its comparative disadvantage. This theory can be illustrated in the following table. Import & Export Practices

41. Comparative Cost Example Import & Export Practices

42. 4. The Theory of Comparative Cost • The difference between this table and the previous one is that Country B has absolute disadvantage in the production of both wheat and cotton. However, it still has a comparative advantage in cotton since it is half as efficient in cotton but 5 times less efficient in wheat in comparison with Country A. Import & Export Practices

43. 4. The Theory of Comparative Cost • On the other hand, Country A has absolute advantage over Country B in both commodities. However, we say it has comparative advantage in wheat since it has greater absolute advantage in the commodity than in the other with respect to County B. • According to the theory, both countries can gain if Country A specializes in wheat and Country B specializes in cotton. Where comparative advantage exists, two trading partners are both able to share in the gains from trade. Import & Export Practices

44. Benefits of international trade • Cheaper goods • Greater variety with goods coming from more countries • Wider market with increasing number of trading partners • Growth of economy Import & Export Practices

45. problems of international trade Problems Monetary conversion Trade barriers Culture Problems Import & Export Practices

46. 1.Trade barriers • (1)reasons for trade restrictions • (2)methods of restrictions • A -----Tariffs • B-----Non-tariffs barriers Import & Export Practices

47. 1.Trade barriers • (1)reasons for trade restrictions • 1)diversified economy to be less independent on foreign countries both economically and politically • 2)a new industry needs to be protected • (an infant industry argument) Import & Export Practices

48. 1.Trade barriers • *reasons for trade restrictions • 3)the unfair competition argument • 4)domestic job need to be protected • 5)in order to maintain a balance of trade and balance of payment • 6)pure political reasons Import & Export Practices

49. 1.Trade barriers • (1) Trade Barriers/methods of restriction • 1)Tariffs • A. Concept : • A tariff is a duty or fee levied on goods being imported into the country. Import & Export Practices

50. 1.Trade barriers • B. Two types with different purposes: • Protective tariffs (import taxes，保护性关税): are designed to raise the retail price of imported products so that domestic goods will be more competitive and foreign business will be discouraged from shipping certain goods into the country. to save jobs for domestic workers .to keep industries (especially infant industries) from bankruptcy • B. Two types with different purposes: • revenue tariff （财政关税）: • is designed to raise money for the government. Import & Export Practices