International trade is the exchange of services and goods between different countries, which is associated with general economic activity, as well as the intensification of the division of labor at the international level. The terms of international trade and its successful development - scientific and technological progress.
A bit of history
This type of trade originated in ancient times. Thus, in formations that were based only on subsistence farming, only an insignificant part of the products was allocated for international exchange. These goods mainly included spices, luxury goods and certain types of minerals.
The search for new terms of trade was a powerful stimulus for the development of its international type. Thus, there was a transition from a subsistence economy to commodity-money relations. During this period, nation-states were created with the establishment of production relations both within them and beyond them.
International trade duringproduction formation
The formation of a large industrial sector made it possible to overcome a high stage in the development of productive forces at the international level. The search for new terms of trade has led to an increase in production scale and an improvement in the mechanisms for transporting various goods.
In other words, the prerequisites for expanding trade and economic ties between different states began to be created. At the same time, there was an urgent need to expand international trade.
The conditions of international trade at the present stage make it possible to create the most developed form of international economic relations. Its necessity is due to such factors:
- the formation of the world market as a historical prerequisite for capitalist production;
- unequal development of some industries in different countries; for example, finished products of the most dynamically developing industries, which are not in demand on the domestic market, can be exported outside it;
- the trend that has arisen at the present stage of economic development towards an endless expansion of production volumes, while the domestic market is limited by the solvency of the population; that is why production goes beyond the boundaries of only domestic demand, and business entities use the conditions of foreign trade to participate in a stubborn struggle for foreign markets.
Thus, the interest of some states in international relationsdue to the need to sell products in the foreign market. Also in this case, we are talking about the need to obtain specific goods from other states, which is associated with the desire to get a sufficiently high profit through the use of cheap labor and raw materials from developing countries.
Foreign trade after World War II
Trade conditions during this period contributed to its dynamic development. The prerequisites for this state of affairs were, of course, the scientific and technological revolution, which stimulated the expansion and renewal of fixed capital through the creation of completely new industries, as well as the radical technical reconstruction of obsolete industries.
One of the most important factors in the high rates of economic development in this period is its state regulation to intensify the process of accumulation, primarily capital, as well as to prevent the development of economic crises.
The search for new terms of trade has become necessary due to the increased power of enterprises in various industries. Such integral components of the development of any industrial sector as forecasting and planning began to appear.
International trade in modern economic conditions
The development of trade of international importance in a market economy is influenced by such a factor as the flight of capital, which stimulates its growth. The export of capital in the course of entrepreneurial activity may entail a certainremoval of goods from a particular state. Often it is associated with the supply of means of production for business entities that are created abroad.
If until recently financial investments were directed only to underdeveloped countries, then after the Second World War the direction of capital exports changed somewhat. Now it can move between industrialized countries, which contributes to the strengthening of their production and capital.
Types of international trade entities
Foreign trade conditions have contributed to the formation of two types of companies of international importance, which have enterprises in different countries.
It is customary to refer to them: TNCs (corporations) and MNCs (international corporations). The first type includes companies that are both national in capital and international in scope. The second type is represented by corporations united on an international basis, by capital and by industry.
These international companies have a significant impact on the external share. In this case, we are talking primarily about intra-corporate turnover, the share of these business entities is almost a third of all world exports.
Development of external relations
The expansion of foreign economic relations causes not only the search for new terms of trade, but also the importation of certain types of goods from abroad. International trade in modern conditions plays an important role for developing countries. This isdue to the limited size of their domestic market.
Today, one of the most important factors in achieving highly efficient production is the direct involvement of the state in the sphere of the division of labor at the international level. The development of trade in such conditions will contribute to the growth of efficiency in production. At the same time, it becomes possible to purchase food and raw materials outside of a particular state, if their cost is lower in the foreign market than in the domestic one.
If there is an equality of costs for manufacturing products in different countries, then international trade in a market economy is necessary to increase production volumes, as well as optimize its size.
Main trades of international importance
It is believed that any business entity should have access to the foreign market. At the same time, the form of ownership has absolutely no significance for the implementation of this type of activity.
Since it is the sale and purchase that plays the main role in international relations, in the framework of writing this article, it is necessary to consider the following types of trade:
- Sale (purchase) of finished products, represented by the following goods: machinery and equipment, instruments and apparatus, transport and communications, as well as auxiliary equipment.
- Trade in parts (unassembled products). The export of such products in the form of parts and assemblies is used in international trade for the purpose ofovercoming administrative and customs barriers, as well as to increase competitiveness. These types of trade are subject to low duties, which will facilitate the operation of assembly shops outside the exporting state.
Foreign economic trade related to production
Equipment trade reflects the needs of the global capital construction market. The exporting country has the opportunity to expand its capabilities.
In addition, related services can be sold. At the same time, in a short period of time, the importing country receives the most modern equipment.
The most complex form of trading is turnkey construction. This type may include the following contract work:
- preparation of a feasibility study of the facility;
- development of project assignment, working and technical projects;
- supply of building materials;
- construction of administrative and industrial buildings;
- delivery of various equipment, spare parts and tools;
- setup, installation and commissioning of equipment.
As for the trade in raw materials, the following types should be distinguished among its varieties:
- agricultural raw materials;
- minerals;
- products of the chemical industry.
This type of trade, on the one hand, worsens the position of exporters of raw materials, which is associated with the emergencesynthetic substitutes. On the other hand, it improves their situation due to the gradual increase in production in some countries.
Other forms of international trade
The list of types of foreign economic activity would be incomplete without mentioning trade in food, intellectual property and engineering and consulting services.
