Shipping & Freight Definitions — cargo, logistics and transport terms from Apparel Search
International trade is the exchange of goods and services across international borders, and in most countries it represents a significant share of GDP. It has been present throughout much of history, along routes such as the Silk Road and the Amber Road, but its economic, social and political importance rose in recent centuries mainly because of industrialization, advanced transportation, globalization, multinational corporations and outsourcing. International trade is also a branch of economics, which together with international finance forms the larger branch of international economics. Traditionally trade was regulated through bilateral treaties between two nations, and for centuries most nations had high tariffs and many restrictions. In the years since the Second World War, multilateral treaties such as GATT and the World Trade Organization have attempted to create a globally regulated trade structure. At the regional level, arrangements include MERCOSUR in South America, NAFTA between the United States, Canada and Mexico, and the European Union between independent states, each setting common rules for the countries that take part.
Traditionally trade was regulated through bilateral treaties between two nations. For centuries under the belief in Mercantilism most nations had high tariffs and many restrictions on international trade. In the nineteenth century, especially in Britain, a belief in free trade became paramount and this view has dominated thinking among western nations for most of the time since then. In the years since the Second World War multilateral treaties like the GATT and World Trade Organization have attempted to create a globally regulated trade structure.
Communist and socialist nations often believe in autarchy, a complete lack of international trade. Fascist and other authoritarian governments have also placed great emphasis on self-sufficiency. No nation can meet all of its people's needs, however, and every state engages in at least some trade.
Free trade is usually most strongly supported by the most economically powerful nation in the world. The Netherlands and the United Kingdom were both strong advocates of free trade when they were on top, today the United States, the European Union and Japan are its greatest proponents. However, many other countries - including several rapidly developing nations such as India, China and Russia - are also becoming advocates of free trade.
Traditionally agricultural interests are usually in favor of free trade while manufacturing sectors often support protectionism. This has changed somewhat in recent years, however. In fact, agricultural lobbies, particularly in the United States, Europe and Japan, are chiefly responsible for particular rules in the major international trade treaties which allow for more protectionist measures in agriculture than for most other goods and services.
During recessions there is often strong domestic pressure to increase tariffs to protect domestic industries. This occurred around the world during the Great Depression leading to a collapse in world trade that many believe seriously deepened the depression.
The regulation of international trade is done through the World Trade Organization at the global level, and through several other regional arrangements such as MERCOSUR in South America, NAFTA between the United States, Canada and Mexico, and the European Union between twenty five independant states. There is also the newly established Free Trade Area of the Americas (FTAA), which provides common standards for almost all countries in the American continent.
The risks that exist in international trade can be divided into two major groups:
| The above article is licensed under the GNU Free Documentation License. From Wikipedia, the free encyclopedia (https://en.wikipedia.org/wiki/international_trade). Modified by Apparel Search 6/6/05. |
| Clothing Industry |
International Trade and the Apparel BusinessFew industries show international trade as clearly as clothing. Fiber may be grown in one country, spun and woven in a second, sewn into garments in a third, and sold to shoppers in a fourth, with each crossing adding transport, documentation and payment steps. That division of work follows cost, skill and capacity: a country with experienced sewing factories and suitable labor costs takes the making stage, while design, branding and retail often stay closer to the final customer. The result is lower prices and wider choice for buyers, but also longer and more exposed supply chains, where a delay, a licence change or a currency problem in one country can affect a selling season in another. For an apparel importer, those risks are practical: insolvency or default leaves finished garments unpaid for, and non-acceptance can leave goods stranded. Planning therefore covers payment terms, insurance and inspection before shipment. Protection, Free Trade and Recession PressureAttitudes to trade rules shift with economic conditions. Agricultural interests have traditionally favored free trade while manufacturing sectors often supported protectionism, although agricultural lobbies in the United States, Europe and Japan later pressed for more protectionist measures in agriculture than for most other goods and services. During recessions, pressure to raise tariffs to protect domestic industries grows, as in the Great Depression, when collapsing world trade deepened the downturn. Clothing businesses feel this directly, because tariffs and quotas change the landed cost of an imported line. Common QuestionsWhy did international trade grow in importance in recent centuries?Its economic, social and political importance rose mainly because of industrialization, advanced transportation, globalization, multinational corporations and outsourcing. Trade itself is much older, present throughout history along routes such as the Silk Road and the Amber Road. How is international trade regulated at the global level?Regulation is done through the World Trade Organization at the global level, and through regional arrangements such as MERCOSUR in South America, NAFTA between the United States, Canada and Mexico, and the European Union. Since the Second World War, multilateral treaties such as GATT have also attempted to create a globally regulated structure. What economic risks exist in international trade?Economic risks include the risk of insolvency of the buyer, the risk of protracted default, meaning failure to pay within six months after the due date, and the risk of non-acceptance. Political risks separately include cancellation or non-renewal of export or import licences, expropriation, import bans after shipment, and exchange controls. More to Explore
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