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 are scientific and technological progress.
A bit of history
This type of trade originated in ancient times. Thus, in formations that were based solely on subsistence farming, only an insignificant part of products was allocated for international exchange. Basically, such goods included spices, luxury goods and certain types of mineral raw materials.
The search for new terms of trade was a powerful incentive for the development of its international type. Thus, there was a transition from a subsistence economy to commodity-money relations. During this period, national states were created with the establishment of production relations both within them and beyond.
International trade during the formation of production
The formation of a large industrial sector made it possible to overcome a high step 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 improved mechanisms for transporting various goods.
In other words, prerequisites began to be created for expanding trade and economic ties between different states. At the same time, there was an urgent need to expand international trade.
The conditions of international trade at the present stage allow us to create the most developed form of international economic relations. Its need is due to such factors:
- the formation of the world market as a historical prerequisite for capitalist production;
- uneven development of certain industries in different countries; for example, finished products of industries that are most dynamically developing, which are not in demand on the domestic market, can be exported outside its borders;
- the tendency that has arisen at the present stage of economic development to an endless expansion of production volumes, while the domestic market is limited by the solvency of the population; that is why production transcends the borders of domestic demand alone, and business entities use the terms of foreign trade to participate in a stubborn struggle for foreign markets.
Thus, the interest of some states in international relations is explained by the need to market products on 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 fairly high profit due to the use of cheap labor and raw materials from developing countries.
Foreign trade after the Second World War
The terms of trade during this period contributed to its dynamic development. The prerequisites for this state were, of course, the scientific and technological revolution, which stimulated the expansion and renewal of fixed capital due to the creation of completely new industries, as well as a radical technical reconstruction of obsolete industries.
One of the most important factors in the high rates of economic development in this period is its government regulation to intensify the process of accumulation, primarily capital, and also to prevent the development of economic crises.
The search for new terms of trade became necessary in connection with 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 a modern business environment
The development of trade of international importance in a market economy is influenced by such factors as the withdrawal of capital, which stimulates its growth. The export of capital in the process of carrying out entrepreneurial activity may entail a certain removal of goods outside the borders of a given 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 states, then after World War II, the direction of capital exports changed slightly. Now it can move between industrialized countries, which helps to strengthen their production and capital.
Types of subjects of international trade
Foreign trade conditions contributed to the formation of two types of companies of international importance, which have enterprises in various countries.
These include: 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 internal corporate turnover, the share of these business entities is almost a third of total world exports.
Development of external relations
The expansion of foreign economic relations determines 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 is due to the limited size of their domestic market.
Today, one of the most important factors in achieving highly efficient production is the direct inclusion of the state in the division of labor at the international level. The development of trade in such conditions will contribute to increased efficiency in production. At the same time, it becomes possible to purchase food and raw materials outside a given state if their value is lower in the foreign market than in the domestic one.
If the equality of costs for manufacturing products in different countries is observed, then international trade in a market economy is necessary for the growth of production volumes, as well as the optimization of its size.
The main types of trade of international importance
It is believed that any business entity should have access to a foreign market. Moreover, the form of ownership has absolutely no significance for the implementation of this type of activity.
Since the main role in international relations is assigned to the sale, it is necessary to consider the following types of trade as part of writing this article:
- Realization (acquisition) of finished products represented by the following goods: machinery and equipment, devices and apparatus, transport and communications, as well as auxiliary equipment.
- Trade in parts (disassembled products). The export of such products in the form of parts and assemblies is used in the framework of international trade in order to overcome administrative and customs barriers, as well as to increase competitiveness. Low rates are set for such types of trade, which will facilitate the work of assembly shops outside the exporting state.
Foreign 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 may 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 trade is turnkey construction. This type may include such contract work:
- preparation of a feasibility study for the facility;
- development of design assignment, working and technical projects;
- supply of building materials;
- construction of administrative and industrial buildings;
- supply of various equipment, spare parts and tools;
- adjustment, installation and commissioning of equipment.
As for the trade in raw materials, among its varieties it is necessary to distinguish the following types:
- agricultural raw materials;
- mineral raw materials;
- chemical industry products.
This type of trade, on the one hand, worsens the situation of exporters of raw materials, which is associated with the emergence of synthetic substitutes. On the other hand, it improves their situation in connection with the gradual growth of production in some countries.
