TIẾNG ANH KINH TẾ International trade ESP2 unit 1

International Trade I Overview of International trade International trade: Purchase, sale, or exchange of goods and services across national borders Foreign Direct Investment (FDI): Purchase of physical assets or a significant amount of the ownership of a company in another country to gain a measure of management control Portfolio Investment: Investment that does not involve obtaining a degree of control in a company II Benefits of International trade • Open doors to new entrepreneurial opportunity across nations • Provide a country’s people with greater choice of goods and services • An important engine for job creation in many countries III Theories of International trade 1.Mercantilism: Trade theory holding that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports Absolute advantage: Ability of a nation to produce a good more efficiently than any other nation Comparative advantage: Inability of a nation to produce a good more efficiently than other nations, but an ability to produce that good more efficiently than it does any other good Factor proportions theory: Trade theory holding that countries produce and export goods that require resources (factors) that are abundant and import goods that require resources in short supply IV The balance of trade • Visible trade consists of all those goods which can be seen and touched such as machines, televisions, motorcycles, refrigerators, food, raw materials… • Invisible trade refers to all those items which we export, which cannot be seen or touched such as sales of insurance, banking services, airline seats or sea cargo space… • The balance of trade is the difference in value between imports and exports of goods over a particular period V The balance of payments • The balance of payments is the difference between the amount of money one country pays to other countries, especially for imports, and the amount it receives, especially for exports Current account • Current account is a national account that records transactions involving the import and export of goods and services, income receipts on assets abroad, and income payments on foreign assets inside the country • Current account surplus (a trade surplus): When a country exports more goods, services, and income than it imports • Current account deficit (a trade deficit): When a country imports more goods, services and income than it exports Capital account • Capital account: A national account that records transactions involving the purchase or sale of assets VI Exporting Export procedures -Transport the goods to the docks or airport -Pass them through customs -Clear them through another set of customs on arrival -Present them to the correct customers Export documents -Declaration of dangerous goods: Required by international law for certain classes of goods such as explosives or volatile chemicals -Certificate of insurance: Needed by the shipping company, or airline, or by your customer, so that they can be assured that the value of the goods is covered should an accident happen -Health certificate: Needed for drugs and similar products and for transport of animals -Import licence: Permission to import your goods Needed for certain countries and products VII Reasons for governmental intervention in trade • Cultural motives -The cultures of countries are slowly altered by exposure to the people and products of other cultures -Cultural influence of the United States: the United States, more than any other nations, is seen as a threat to national cultures around the world Reasons… 2.Political motives -To protect jobs -To preserve national security -To respond to ‘unfair’ trade -To gain influence Reasons… Economic motives -To protect infant industries -To pursue strategic trade policy VIII Methods of restricting trade Tariffs: Government tax levied on a product as it enters or leaves a country -To protect domestic producers -To generate revenue Quotas: Restriction on the amount (measured in units or weight) of a good that can enter or leave a country during a certain period of time -Reasons for import quotas: +To protect domestic producers by placing a limit on the amount of goods allowed to enter the country +To force companies of other nations to compete against one another for the limited amount of imports allowed -Reasons for export quotas: +To maintain adequate supplies of a product in the home market +To restrict supply on world markets, thereby increasing the international price of the good Embargoes: Complete ban on trade (imports and exports) in one or more products with a particular country Local content requirements: Laws stipulating that a specified amount of a good or service be supplied by producers in the domestic market Administrative delays: Regulatory control or bureaucratic rules designed to impair the rapid flow of imports into a country Currency controls: Restrictions on the convertibility of a currency into other currencies IX Organizations in international trade The International Monetary Fund (IMF)- set up in 1974 to ensure that the world’s currencies were kept at reasonably stable rates against each other The United nations Conference on Trade and Development (UNCTAD) - set up in the mid-1960s, has interests in many areas regarding international trade It is concerned with: -Transport by sea and the charges which shipping companies levy -the activities of multinational companies; those giant companies which have factories making products in many different countries (e.g Ford, General Motor, IBM…) -how barriers to trade work and, especially, how they work to the disadvantage of the poorer countries of the world -setting up systems to protect the prices of certain commodities (copper, tin, tea, sugar…) which are particularly important to the economies of the world’s poorer countries The General Agreement on tariffs and trade (GATT) – set up after World War II with the object of reducing the average levels of tariffs on manufactured goods throughout the world World Trade Organization (WTO) - created on January 1, 1995 – the only international organization regulating trade between nations -Main goals: +to help the free of trade +to help negotiate further opening of markets +to settle trade disputes between its members Questions to answer What is the difference between the balance of trade and balance of payment? Name three items of invisible trade Outline three ways in which businesses benefit from international trade Why might the Vietnamese government urge the Vietnamese consumers to “Buy Vietnamese”? Thank you for your attention! ... January 1, 19 95 – the only international organization regulating trade between nations -Main goals: +to help the free of trade +to help negotiate further opening of markets +to settle trade disputes... Organizations in international trade The International Monetary Fund (IMF)- set up in 19 74 to ensure that the world’s currencies were kept at reasonably stable rates against each other 2 The United nations...I Overview of International trade International trade: Purchase, sale, or exchange of goods and services across national borders