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Mercantilism is a system of views of economists of the 17th century, focused on the active intervention of the state in economic activity. Representatives of the direction: Thomas Maine, Antoine de Montchretien, William Stafford. The term was proposed by Adam Smith, who criticized the works of the mercantilists. Basic provisions:
- the need to maintain an active trade balance of the state (excess of exports over imports);
- recognition of the benefits of attracting gold and other precious metals to the country in order to increase its well-being;
- money is an incentive for trade, since it is believed that an increase in the mass of money increases the volume of the mass of commodities;
- welcome protectionism, aimed at importing raw materials and semi-finished products and exporting finished products;
- restriction on the export of luxury goods, as it leads to the leakage of gold from the state.
Adam Smith's Absolute Advantage Theory
The real wealth of a country consists of the goods and services available to its citizens. If any country can produce this or that product more and cheaper than other countries, then it has an absolute advantage. Some countries may produce goods more efficiently than others. The country's resources flow into profitable industries, as the country cannot compete in unprofitable industries. This leads to an increase in the productivity of the country, as well as the qualification of the workforce; long periods of production of homogeneous products provide incentives for the development of more efficient methods of work. Natural Benefits:
- climate;
- territory;
- resources.
Acquired Benefits:
- production technology, that is, the ability to produce a variety of products.
David Ricardo's theory of comparative advantage
Specialization in the production of a product that has the maximum comparative advantage is also beneficial in the absence of absolute advantages. A country should specialize in exporting the goods in which it has the largest absolute advantage (if it has an absolute advantage in both goods) or the smallest absolute disadvantage (if it has an absolute advantage in neither). Specialization in certain types of goods is beneficial for each of these countries and leads to an increase in total production, trade is motivated even if one country has an absolute advantage in the production of all goods over another country. An example in this case is the exchange of English cloth for Portuguese wine, which benefits both countries...
Heckscher-Ohlin theory
According to this theory, a country exports goods for the production of which it intensively uses a relatively surplus factor of production, and imports goods for the production of which it experiences a relative shortage of factors of production. Necessary conditions for existence:
- countries participating in international exchange have a tendency to export those goods and services for the manufacture of which they use mainly production factors that are in excess, and, conversely, a tendency to import those products for which there is a shortage of any factors;
- the development of international trade leads to the equalization of "factor" prices, that is, the income received by the owner of this factor;
- there is a possibility, given sufficient international mobility of factors of production, to replace the export of goods by the movement of the factors themselves between countries.
Leontief's paradox
The essence of the paradox is that the share of capital-intensive goods in exports will grow, while the share of labor-intensive goods will decrease.
Product life cycle
Some types of products go through a cycle consisting of five stages:
- product development. The company finds and implements a new product idea. During this time, sales are zero and costs rise.
- bringing the product to market. No profit due to high marketing costs, slow growth in sales
- fast market conquest, profit increase
- maturity. Sales growth is slowing down, as the bulk of consumers have already been attracted. The level of profit remains unchanged or decreases due to an increase in the cost of marketing activities to protect the product from competition
- decline. Decreased sales and reduced profits.
Michael Porter's theory
This theory introduces the concept of a country's competitiveness. It is national competitiveness, from Porter's point of view, that determines success or failure in specific industries and the place that a country occupies in the world economy. National competitiveness is determined by the ability of the industry. At the heart of explaining a country's competitive advantage is the home country's role in stimulating renewal and improvement (that is, in stimulating the production of innovations). Government measures to maintain competitiveness:
- government impact on factor conditions;
- government influence on demand conditions;
- government impact on related and supporting industries;
- government influence on the strategy, structure and rivalry of firms.
Rybchinsky's theorem
The theorem consists in the assertion that if the value of one of the two factors of production increases, then in order to maintain a constant price for goods and factors, it is necessary to increase the production of those products that intensively use this increased factor, and reduce the production of the rest of the products that intensively use the fixed factor. In order for the prices of commodities to remain constant, the prices of the factors of production must be constant. The prices of factors of production can only remain constant if the ratio of the factors used in the two industries remains constant. In the case of an increase in one factor, this can only happen if there is an increase in production in the industry in which this factor is intensively used, and a decrease in production in another industry, which will lead to the release of a fixed factor, which will become available for use along with a growing factor in an expanding industry. .
Stolper-Samuelson theorem
In 1941, American economists P. Samuelson and W. Stolper improved the Heckscher-Ohlin model of foreign trade, imagining that in the case of homogeneity of factors of production, identity of technology, perfect competition and complete mobility of goods, international exchange equalizes the price of factors of production between countries. The authors base their concept on the Ricardian model with the additions of Heckscher and Ohlin and consider trade not just as a mutually beneficial exchange, but also as a means to reduce the gap in the level of development between countries.
Dynamics of development of international trade
About 60% of world GDP is accounted for by services, the vast majority of which is not subject to international trade (education, medical care, public administration, wholesale and retail trade). These are the so-called non-tradable, that is, services not participating in international trade. Share of merchandise exports in world GDP, from which services not involved in world trade are deducted, is significantly more than in the total volume of world GDP (according to some estimates, almost half of).
(World economy in the age of globalization / O. T. Bogomolov. M., 2007. P. 15.)Since the beginning of the XIX century. before 1914 the volume of world trade had grown almost a hundredfold.
Since the second half of the 20th century, when international exchange, according to M. Pebro's definition, acquires an "explosive character", world trade has been developing at a high pace. The WTO states that recent decades The volume of world trade is growing much faster than the total world production. So, for 1950-2000. world trade grew 20 times, and production - 6 times. In 1999, total exports amounted to 26.4% of world production, compared with 8% in 1950. In the period 1950-1998. world exports grew 16 times. According to Western experts, the period between 1950 and 1970 can be characterized as a "golden age" in the development of international trade. In the 1970s, world exports dropped to 5%, falling further in the 1980s. In the late 80s, he showed a noticeable revival. Since the second half of the 20th century, the uneven dynamics of foreign trade has manifested itself. In the 1990s, Western Europe was the main center of international trade. Its exports were almost 4 times higher than those of the United States. By the end of the 80s, Japan began to emerge as a leader in terms of competitiveness. In the same period, it was joined by the "new industrial countries" of Asia - Singapore, Hong Kong, Taiwan. However, by the mid-1990s, the United States was once again taking a leading position in the world in terms of competitiveness. Before the crisis of 2007-2008, on average, world trade grew by 6% annually during the 1990-2000s. The export of goods and services in the world in 2007, according to the WTO, amounted to 16 trillion US dollars. The share of the group of goods is 80%, and services 20% of the total volume of trade in the world. The annual turnover of trade in goods and raw materials by 2012 is about $20 trillion. According to the UNCTAD report (2013), the growth rate of world trade in goods and services, after their rapid recovery in 2010, again fell to 5% in 2011 and to less than 2% in 2012.
At the present stage, international trade plays an important role in the economic development of countries, regions, the entire world community:
- foreign trade has become a powerful factor in economic growth;
- the dependence of countries on international trade has increased significantly.
The main factors affecting the growth of international trade:
- development of the international division of labor and internationalization of production;
- activities of transnational corporations.
INCOTERMS
All conditions are grouped into four categories for ease of understanding:
- "E" - a condition that imposes a minimum obligation on the seller: the seller must only place the goods at the disposal of the buyer at the agreed place - usually at the seller's own premises
- EXW. Ex Works (specified location): item from the seller's warehouse.
- "F" - a condition requiring the seller to deliver the goods for transportation in accordance with the instructions of the buyer
- FCA. Free Carrier (specified place): the goods are delivered to the customer's carrier.
- FAS. Free Alongside Ship (indicated port of loading): the goods are delivered to the customer's ship.
- FOB. Free On Board (port of loading indicated): the goods are loaded onto the customer's ship.
- "C" - a condition that imposes on the seller the obligation to conclude a contract of carriage under normal conditions at his own expense
- C.F.R. Cost and Freight (destination port specified): the goods are delivered to the customer's port (without unloading).
- CIF. Cost, Insurance and Freight (destination port specified): the goods are insured and delivered to the customer's port (without unloading).
- CPT. Carriage Paid To (Specified Destination): The goods are delivered to the customer's carrier at the specified port.
- C.I.P. Carriage and Insurance Paid to (Specified Destination): The item is insured and delivered to the customer's carrier at the specified destination.
- "D" - the condition under which the seller is responsible for the arrival of the goods at the agreed place or destination at the border or in the country of import
International trade in the system of the international economy.
The role of international trade in the system of the international economy.
International trade is an important and most developed area of international economic relations, reflecting the state and prospects for the movement of various commodity forms both between national economies and within and between transnational corporations that view the world as a single economic space.
Through international trade, the economies of different countries are interconnected like never before. It is a powerful factor in the development of the economies of individual countries and the international economy as a whole.
The scale of international trade is constantly growing. In modern conditions, this trend towards an increase in the volume of international trade is manifested very clearly. Trade in services also shows a clear upward trend, although the latter is developing relatively more slowly than trade in goods.
It is important to note that the growth of international trade volumes noticeably outstrips the growth of production volumes. This is due to the deepening of the international division of labor, the formation and development of the world economic division of labor, which underlies international economic integration.
All countries, one way or another, depend on international trade. But the measure of dependence is different. It is defined as the ratio of the value of international trade (export + import) to the domestic national product.
D head \u003d E + I / GNP x 100,
where E and I, respectively, are exports and imports, and GNP is the country's gross national product.
For small developed countries (Belgium, the Netherlands, Switzerland, Denmark, Sweden, etc.), this percentage varies from 45-90%. For large developed countries (Germany, Japan, England, France, etc.) - from 25-35%. For the US, this percentage is 9%. For developing countries, dependence on international trade is great. The inclusion of these countries in the international and world economic division of labor should be guided by interdependence in international trade.
Specific features of international trade.
International trade is a special area of international economic relations. It has a number of specific features that distinguish international trade from domestic. These specific features distinguish international trade as a subject of special study. The specific features of international trade usually include
Different currencies;
Political intervention and control;
Differences in the movement of factors of production between countries.
1. Different currencies. Each country uses a different currency. But we are talking not only about the existence of individual national currencies, but also about the possible change in their price ratio.
2. Political intervention and control. The government actively intervenes and strictly controls international trade relations and monetary and financial relations related to trade operations. These interventions and controls are markedly different in degree and nature from those applied to domestic trade. The government of each sovereign country, through its trade and fiscal policies, generates its own system of duties and restrictions on imports, export subsidies, its own tax laws, and so on. The use of the above tools of intervention and control is illegal within any country.
3. Differences in the movement of factors of production between countries. Capital moves within the country more freely than between countries, which is due to the presence of institutional barriers, differences in tax laws, and other measures of state regulation of the economy and business. The assumption of some ability of factors of production to move between countries leads to the following conclusion. International trade fills a gap created by differences in the degree of mobility of resources within and between countries.
The economic basis of trade. Specialization and comparative advantage.
The argument for international trade boils down to the fact that whenever opportunity costs differ between countries, specialization and trade increase the world's standard of living. It is freedom of trade that allows all countries to specialize in the production of goods in which they have a comparative advantage. Free trade allows you to maximize world production.
International trade is based on two components:
1. Differences in the distribution of economic resources between countries. In this case, we are talking not only about human and natural, but also about investment goods.
2. Differences in technologies or combinations of resources that can ensure the efficient production of any goods.
The interaction of these 2 components can be illustrated by many examples. Thus, the industrially developed countries have an obvious advantage in the production of capital-intensive goods (machinery, equipment, etc.), and the underdeveloped countries - in the export of agricultural products, raw materials, etc. But comparative advantage must be seen not in static but in dynamics. As national economies develop (changes in the quantity and quality of the labor force, the volume and composition of capital, the emergence of new technologies, changes in the scale and quality of land and natural resources, etc.), their role and place in the international division of labor changes. It is the principle of comparative advantage that serves as a guideline for specialization. Recall that this principle states that total output will be greatest when each good is produced by the country that has the lowest opportunity cost.
Benefit from international trade.
International trade contributes to the growth of world production. Specialization based on the use of comparative advantages contributes to a more efficient allocation of world resources, and hence the growth of world production.
International trade increases the income and standard of living of the participating countries. As a result of specialization and trade, countries have more of each type of product. Consequently, workers can buy more goods with their wages.
Every free-trading country can go beyond its productive capacity not only through its own resources or the use of NTO results, but through international trade:
With the help of international trade, every free-trading country is able to overcome the narrow scale of production;
The effect of international specialization and trade is comparable to the possession of large volumes of the best quality resources or the introduction new technology and technology;
As a result of international trade, each free-trading country can make full use of geographic and human specialization. As a result, more real income can be obtained from the use of the amount of resources that this country has.
International trade encourages competition and limits monopoly. Increased competition from foreign firms is forcing local firms to move to production technologies with the lowest costs. This forces local firms to implement the latest scientific and technical progress, improve product quality and ultimately contribute to economic growth.
Free trade gives consumers the opportunity to choose from a wider range of products.
The benefits of international specialization and trade based on the principle of comparative advantage are clear. A nation that ignores this principle would probably pay with a decline in the standard of living of the population and a slowdown in economic growth.
Bibliography
For the preparation of this work, materials from the site were used.
Essence and structure of the international economy
The International Economics (ME) is a component of the theory of the market economy, which studies the patterns of relationships between entities from different states in the field of the exchange of goods, the movement of production factors, as well as financing and the formation of international politics. At the same time, it is a global economic mechanism, which is represented by various national economies connected by the system of international economic relations (IER).
Characteristic features of the world economy:
- interdependence of national economies (a set of interacting economies of different countries of the world);
- structuredness and the presence of many levels (the establishment of constituent elements, the structure is presented on the basis of industries, associations of countries and forms of international economic relations);
- self-development (the activity of the international economy is aimed at meeting the needs and demands of society, but there are internal contradictions, the goal may change depending on the conditions of the external environment).
Remark 1
The global economy has a complex structure. It is considered as a set of industries and as a complex of various groups of countries and a system of economic relations.
The sectoral structure of the ME is a complex of homogeneous economic units, which are characterized by specific production conditions and a special purpose in the process of expanded reproduction.
Within the framework of the industry structure, there are:
- primary sector: agriculture, extractive industry;
- secondary sector: construction, manufacturing industry;
- tertiary sector: services.
In the international economy, there is the following classification of countries: developed countries; developing countries; countries with economies in transition.
Development and regulation of international trade
International trade occupies a special place in the system of international economic relations. The internationalization of the economy began precisely with the sphere of trade. International trade causes specialization and exchange. A country that sells its products to other countries specializes in the production of certain goods in volumes above domestic demand. Surpluses are exported in exchange for goods that are in demand in the country where they are not produced at all or in insufficient quantities.
Definition 1
International trade is a type of economic relationship between producers of goods and services from different countries, which is formed on the basis of the international division of labor.
International trade is characterized by: the volume of world trade; commodity structure of exports and imports; commodity structure dynamics; geographical structure of world trade.
Modern trends in the development of international trade:
- the development of trade in comparison with the branches of material production and the entire world economy as a whole;
- growth in the share of the manufacturing industry in the structure of international trade;
- the geographical structure is dominated by developed countries and China;
- development of intra-company trade within transnational corporations (TNCs);
- expansion of trade in services (emergence of distance learning, consumption abroad, commercial presence, movement individuals as service providers abroad).
International trade is regulated by the state and through international agreements and the creation of international organizations.
The methods of state regulation are:
- tariff methods - the introduction of customs duties, taxes and fees levied by the state for the transportation of goods and other valuables abroad (excises, etc.);
- non-tariff methods - a set of direct and indirect restrictions on international activity through a system of economic, political and administrative measures (quotas, licensing, embargoes, etc.)
The main international agreements governing activities in the field of international trade are: GATT (General Agreement on Tariffs and Trade) - the predecessor of the WTO, was in force until January 1, 1995; WTO (World Trade Organization); GATS (General Agreement on Trade in Services); TRIPS (Treaty-Related Aspects of Intellectual Property Rights).
International trade in the system of international economic relations
International trade has arisen and is developing on the basis of the international division of labor, the specialization of countries in the production of certain products. The foreign economic exchange of goods will allow the participants in relations to increase the productivity of their production, because eliminates the need to independently produce goods and services within the country.
Thanks to international trade, the state can specialize in those sectors of the economy in which enterprises are highly competitive and import those goods and services, the domestic production of which is inferior to foreign ones.
The key reason for the international trade of countries is the presence of greater opportunities than in the domestic market. But when entering a foreign market, factors should be taken into account environment, which can lead to the failure of foreign economic activity:
- Cultural factors (language difference, stereotypes, norms, traditions, values, etc.);
- Economic factors (economic climate, competition structure, pricing, product and promotion policies);
- Political and legal factors (political forces and movements, legislation in the field of business and trade).
Remark 2
A characteristic feature of world trade is not only the ability to acquire and sell goods and services, but also to create joint ventures, subsequently transnational corporations. The national identity of such companies cannot be determined, its business units are located in countries with cheap resources (raw materials, materials, labor), and the sale of finished products is carried out in countries with high incomes.
Introduction………………………………………………………………...3
1 Theoretical foundations of the organization of international trade ... 5
1.1 Essence and basic concepts……………..………………..5
1.2 Theories of international trade……...….…………………8
1.3 The system of regulation of trade relations.………...….11
2 Structure of international trade…………………………..21
2.1 Geographical structure of world trade……………21
2.2 Commodity structure of world trade……………………24
3 Organizations regulating world trade……………..33
3.1 World Trade Organization…………………....….…33
3.2 UNCTAD……………………..……………………………..38
Conclusion…………………………………………………………....43
List of used literature………………………………..45
Introduction
International trade is the most developed and widespread form of international economic relations. It occupies the main place among the modern foreign policy interests and problems of the countries of the world. Therefore, the study of its essence, dynamics of development and modern structure is an important element for determining foreign policy states of its development programs and confirms its relevance.
Based on this, we can formulate the following goal of this course work, which consists in the collection, systematization and analysis of information on international trade. The purpose of the course work involves the following main tasks: the definition of forms, values and essence of world trade; study of the current state of world trade and trends in its development; determination of the features of the structure of world trade at the present stage; consideration of modern policy in relation to international trade.
The object of study in this course work is international trade itself, and the subject of relations and processes of functioning and development of international trade.
The study of this topic has been and is being done almost constantly. This is a necessary condition both for the work of individual organizations associated with foreign trade and for the activities of each state in the implementation of its foreign policy and the development of medium- and long-term development programs. Therefore, the monitoring of the state of international trade, as well as the processes of forecasting and planning, do not stop, which is reflected in the wide interest in this topic.
In the work, analysis was used as the main method, which involves considering international trade in two aspects:
firstly, the rate of its growth in general (export and import) and relative to the growth of production;
secondly, shifts in the structure: commodity (the ratio of the main groups of goods and services) and geographical (shares of regions, groups of countries and individual countries).
The subject of the work itself involves the study of not only the quantitative characteristics of changes in international trade, but also the qualitative side of these changes.
The work is based on the works of leading domestic scientists.
1 Theoretical foundations of international trade organization
1.1 Essence and basic concepts
Structural shifts taking place in the economies of countries under the influence of the scientific and technological revolution, specialization and cooperation of industrial production enhance the interaction of national economies. This contributes to the intensification of international trade. International trade, which mediates the movement of all intercountry commodity flows, is growing faster than production. According to the World Trade Organization, for every 10% increase in world production, there is a 16% increase in world trade. This creates more favorable conditions for its development. When there are disruptions in trade, the development of production also slows down.
International trade is a form of communication between producers of different countries, arising on the basis of the international division of labor, and expresses their mutual economic dependence.
International trade is the paid total trade turnover between all countries of the world. However, the concept of international trade is used in a narrower sense. It denotes, for example, the total turnover of industrialized countries, the total turnover of developing countries, the total turnover of the countries of a continent, region, for example, the countries of Eastern Europe, etc.
World prices vary depending on the time of year, place, conditions for the sale of goods, features of the contract. In practice, world prices are taken to be the prices of large, systematic and stable export or import transactions concluded in certain centers of world trade by well-known firms - exporters or importers of the relevant types of goods. For many commodities (cereals, rubber, cotton, etc.), world prices are set in the course of operations on the world's largest commodity exchanges.
Foreign trade - trade of any country with other countries of the world, consisting of export (export) and import (import) of goods and services. It is carried out mainly through commercial transactions formalized by foreign trade contracts.
Main foreign trade operations:
Export - export abroad of goods of national origin or largely processed in the country for the purpose of their sale.
Import - the importation of foreign goods for the purpose of their use in the domestic market. Export-import operations are the most frequent in international trade.
Countertrade - foreign trade operations, in the course of which documents (agreements or contracts) fix firm obligations of exporters and importers to make a full or partially balanced exchange of goods. In the latter case, the difference in value is covered by cash payments.
Sooner or later, all states face the dilemma of choosing a foreign trade national policy. There have been heated discussions on this topic for two centuries.
Foreign trade policy - state economic policy that influences foreign trade through taxes, subsidies and direct restrictions on imports and exports. Since the economy of all countries in one way or another depends on exports and imports, the state legislates certain rules for foreign trade. Historically, two opposite types of foreign trade policy have developed: protectionism and free trade.
Protectionism is a system of import restrictions, when high customs duties are introduced, the import of certain products is prohibited, and other measures are used to prevent the competition of foreign products with local ones. The policy of protectionism encourages the development of domestic production that can replace imported goods.
Freedom of trade is a foreign trade policy in which the customs authorities only register the import or export of goods. They do not charge import and export duties, do not apply any quantitative or other restrictions on foreign trade turnover. Such a policy is usually pursued by countries with high efficiency of the national economy. In this case, local entrepreneurs not only withstand foreign competition, but also overcome protectionist customs barriers, expanding the access of their goods to the world market.
It is in the interest of each country to specialize in the industry in which it has the greatest advantage or the least weakness, and for which the relative advantage is greatest.
National production differences are determined by different endowment with production factors - labor, land, capital, as well as different internal needs for certain goods. The effect exerted by foreign trade (in particular, exports) on the dynamics of national income growth, on the size of employment, consumption and investment activity, is characterized for each country by quite definite quantitative dependencies and can be calculated and expressed as a certain coefficient - a multiplier (multiplier). Initially, export orders will directly increase output, and hence wages, in the industries that fulfill this order. And then secondary consumer spending will kick in.
Various legal entities, corporations, their associations, states, and individuals participate in modern world trade. It is a means by which countries can develop specialization, increase the productivity of their resources, and thus increase overall output.
In addition, an important feature is the most diverse economic and political risks in international trade, due to geographical, political, national factors.
Modern international trade is dynamic. The structure and volume of exports, imports of trade in various countries and regions of the world is constantly changing. The analysis shows an exceptionally rapid growth in trade after the Second World War.
1.2 Theories of international trade
At different times, various theories of world trade appeared and were refuted, which in one way or another tried to explain the origin of this phenomenon, to determine its goals, laws, advantages and disadvantages. The following are the most common theories of international trade.
The founders of the mercantilist theory were Thomas Man and Antoine Montchretien. The policy of protectionism is considered ideologically close to mercantelism. This policy aims to encourage exports and restrict imports and thus protect domestic producers. Within the framework of this theory, it was believed that the main goal of each state is wealth, and the world has limited wealth, and an increase in the wealth of one country is possible only at the expense of reducing the wealth of another country. At the same time, the role of the state in international economic policy was reduced to maintaining a positive trade balance and regulating foreign trade to stimulate exports and reduce imports.
The mercantilists were the first to emphasize the importance of international trade and were the first to describe the balance of payments. The main drawback of this theory is that here the development of countries is seen as possible only through the redistribution of wealth, and not through its growth.
A. Smith's theory of absolute advantages. It was believed that the well-being of nations depended not only on the amount of gold, but also on the ability to produce goods and services. Consequently, the task of the state is to develop production through the division of labor and cooperation. The formulation of the theory itself is as follows: countries export those goods that they produce at lower costs, i.e., in the production of which they have absolute advantages, and import those goods that are produced by other countries at lower costs, i.e., in the production of which there is an advantage located with trading partners.
Smith laid the foundations of the labor theory of value, formulated the doctrine of income and the principles of taxation. A major drawback of this doctrine was the complete disregard for the role of the state in the course of economic processes.
This theory shows the advantages of the division of labor, but at the same time does not explain trade in the absence of absolute advantages.
D. Ricardo's theory of comparative advantage is formulated as follows: if countries specialize in the production of those goods that they can produce at relatively lower costs compared to other countries, then trade will be mutually beneficial regardless of whether production in one of them is absolutely more effective than the other or not.
This theory was the first to prove the existence of gains from trade and describe aggregate demand and aggregate supply. Although at the same time it does not take into account transport costs and the impact of foreign trade on the distribution of income within the country, acting only in conditions of full employment.
Heckscher-Ohlin's theory of ratio of factors of production. Operates with the concepts of factor intensity (the ratio of the cost of production factors to create a product) and factor saturation (provision with production factors). According to this theory, each country exports those factor-intensive goods for the production of which it has relatively excess factors of production, and imports those for the production of which it experiences a relative shortage of factors of production. This theory derives the reason for the influence of different factors of production on international trade. International trade leads to equalization of prices for factors of production in trading countries. According to this concept, the export of goods can be replaced by cross-border movements of factors of production other than land, the reward received by the owner of the factor for its use is the price of the factor. Proponents of this theory are negative about the restrictions that impede the movement of both goods and factors of production, as they advocated the freedom of foreign trade.
International trade is a system of international commodity-money relations, consisting of the foreign trade of all countries of the world. International trade arose in the process of the emergence of the world market in the XVI-XVIII centuries. Its development is one of the important factors in the development of the world economy of modern times.
The term international trade was first used in the 12th century by the Italian economist Antonio Margaretti, the author of the economic treatise The Power of the Masses in Northern Italy.
Benefits of participating countries in international trade:
- the intensification of the reproduction process in national economies is a consequence of increased specialization, creating opportunities for the emergence and development of mass production, increasing the degree of equipment workload, and increasing the efficiency of introducing new technologies;
- an increase in export deliveries entails an increase in employment;
- international competition necessitates the improvement of enterprises;
- export earnings serve as a source of capital accumulation aimed at industrial development.
Theories of international trade
The development of world trade is based on the benefits it brings to the countries participating in it. The theory of international trade gives an idea of what is the basis of this gain from foreign trade, or what determines the direction of foreign trade flows. International trade serves as a tool through which countries, by developing their specialization, can increase the productivity of available resources and thus increase the volume of goods and services they produce, improve the welfare of the population.
Many well-known economists dealt with international trade issues. The main theories of international trade - Mercantilist theory, A. Smith's Theory of absolute advantages, D. Ricardo's and D. S. Mill's Theory of comparative advantages, Heckscher-Ohlin theory, Leontief's paradox, Product life cycle theory, M. Porter's theory, Rybchinsky's theorem, and also The Theory of Samuelson and Stolper.
Mercantilist theory. Mercantilism is a system of views of economists of the XV-XVII centuries, focused on the active intervention of the state in economic activity. Representatives of the direction: Thomas Maine, Antoine de Montchretien, William Stafford. The term was proposed by Adam Smith, who criticized the works of the mercantilists. The mercantilist theory of international trade arose during the period of primitive accumulation of capital and the great geographical discoveries, based on the idea that the presence of gold reserves is the basis of the prosperity of the nation. Foreign trade, the mercantilists believed, should be focused on obtaining gold, since in the case of a simple commodity exchange, ordinary goods, being used, cease to exist, and gold accumulates in the country and can be reused for international exchange.
Trading was considered as a zero-sum game, when the gain of one participant automatically means the loss of the other, and vice versa. To obtain the maximum benefit, it was proposed to increase state intervention and control over the state of foreign trade. The trade policy of the mercantilists, called protectionism, was to create barriers in international trade that protect domestic producers from foreign competition, stimulate exports and restrict imports by imposing customs duties on foreign goods and receiving gold and silver in return for their goods.
The main provisions of the Mercantilist theory of international trade:
- the need to maintain an active trade balance of the state (excess of exports over imports);
- recognition of the benefits of attracting gold and other precious metals to the country in order to increase its well-being;
- money is an incentive for trade, since it is believed that an increase in the mass of money increases the volume of the mass of commodities;
- welcome protectionism aimed at importing raw materials and semi-finished products and exporting finished products;
- restriction on the export of luxury goods, as it leads to the leakage of gold from the state.
Adam Smith's theory of absolute advantage. In his work An Inquiry into the Nature and Causes of the Wealth of Nations, in a polemic with the mercantilists, Smith formulated the idea that countries are interested in the free development of international trade, since they can benefit from it regardless of whether they are exporters or importers. Each country should specialize in the production of the product where it has an absolute advantage - a benefit based on the different value of production costs in individual countries participating in foreign trade. The refusal to produce goods in which countries do not have absolute advantages, and the concentration of resources on the production of other goods lead to an increase in total production volumes, an increase in the exchange of products of their labor between countries.
Adam Smith's theory of absolute advantage suggests that a country's real wealth consists of the goods and services available to its citizens. If any country can produce this or that product more and cheaper than other countries, then it has an absolute advantage. Some countries may produce goods more efficiently than others. The country's resources flow into profitable industries, as the country cannot compete in unprofitable industries. This leads to an increase in the productivity of the country, as well as the qualification of the workforce; long periods of production of homogeneous products provide incentives for the development of more efficient methods of work.
Natural advantages for a single country: climate; territory; resources. Acquired advantages for a single country: production technology, that is, the ability to manufacture a variety of products.
The theory of comparative advantages of D. Ricardo and D. S. Mill. In his Principles of Political Economy and Taxation, Ricardo showed that the principle of absolute advantage is only a special case of the general rule, and substantiated the theory of comparative (relative) advantage. When analyzing the directions of development of foreign trade, two circumstances should be taken into account: firstly, economic resources - natural, labor, etc. - are unevenly distributed among countries, and secondly, the efficient production of various goods requires different technologies or combinations of resources.
The advantages that countries have are not given once and for all, D. Ricardo believed, therefore, even countries that have absolutely more high levels production costs can benefit from trade exchange. It is in the interests of each country to specialize in production in which it has the greatest advantage and the least weakness, and for which not absolute, but relative benefit is the greatest - such is the law of comparative advantage of D. Ricardo. According to Ricardo, total output will be greatest when each good is produced by the country that has the lowest opportunity (opportunity) costs. Thus, a relative advantage is a benefit based on lower opportunity (opportunity) costs in the exporting country. Hence, as a result of specialization and trade, both countries participating in the exchange will benefit. An example in this case is the exchange of English cloth for Portuguese wine, which benefits both countries, even if the absolute costs of production of both cloth and wine in Portugal are lower than in England.
Subsequently, D.S. Mill, in his work “Foundations of Political Economy”, gave explanations at what price the exchange is carried out. According to Mill, the price of exchange is set by the laws of supply and demand at such a level that the aggregate of each country's exports pays for the aggregate of its imports—such is the law of international value.
Heckscher-Ohlin theory. This theory of scientists from Sweden, which appeared in the 30s of the twentieth century, refers to the neoclassical concepts of international trade, since these economists did not adhere to the labor theory of value, considering capital and land to be productive along with labor. Therefore, the reason for their trade is the different availability of factors of production in the countries participating in international trade.
The main provisions of their theory boiled down to the following: firstly, countries tend to export those goods for the manufacture of which the factors of production available in the country are used in excess, and, conversely, to import goods, the production of which requires relatively rare factors; secondly, in international trade there is a tendency to equalize "factorial prices"; thirdly, the export of goods can be replaced by the movement of factors of production across national borders.
The neoclassical concept of Heckscher-Ohlin turned out to be convenient for explaining the reasons for the development of trade between developed and developing countries, when machinery and equipment were imported into developing countries in exchange for raw materials coming to developed countries. However, not all phenomena of international trade fit into the Heckscher-Ohlin theory, since today the center of gravity of international trade is gradually shifting to the mutual trade of "similar" goods between "similar" countries.
Leontief's paradox. These are the studies of an American economist who questioned the provisions of the Heckscher-Ohlin theory and showed that in the post-war period the US economy specialized in those types of production that required relatively more labor rather than capital. The essence of Leontief's paradox was that the share of capital-intensive goods in exports could grow, while the share of labor-intensive goods could decrease. In fact, when analyzing the US trade balance, the share of labor-intensive goods did not decrease. The resolution of Leontief's paradox was that the labor intensity of goods imported by the United States is quite high, but the price of labor in the cost of goods is much lower than in US exports. The capital intensity of labor in the United States is significant, together with high labor productivity, this leads to a significant impact on the price of labor in export deliveries. The share of labor-intensive supplies in US exports is growing, confirming Leontief's paradox. This is due to the growth in the share of services, labor costs and the structure of the US economy. This leads to an increase in the labor intensity of the entire American economy, not excluding exports.
Theory of the product life cycle. It was put forward and substantiated by R. Vernoy, Ch. Kindelberger and L. Wels. In their opinion, the product from the moment it enters the market until it leaves it goes through a cycle consisting of five stages:
- product development. The company finds and implements a new product idea. During this time, sales are zero and costs rise.
- bringing the product to market. There is no profit due to the high costs of marketing activities, sales volume is growing slowly;
- quick market conquest, increase in profits;
- maturity. Sales growth is slowing down, as the bulk of consumers have already been attracted. The level of profit remains unchanged or decreases due to an increase in the cost of marketing activities to protect the product from competition;
- decline. Decline in sales and shrinking profits.
Theory of M. Porter. This theory introduces the concept of a country's competitiveness. It is national competitiveness, according to Porter, that determines the success or failure in specific industries and the place that the country occupies in the world economy. National competitiveness is determined by the ability of the industry. At the heart of explaining a country's competitive advantage is the home country's role in stimulating renewal and improvement (that is, in stimulating the production of innovations). Government measures to maintain competitiveness:
- government impact on factor conditions;
- government influence on demand conditions;
- government impact on related and supporting industries;
- government influence on the strategy, structure and rivalry of firms.
A serious incentive to success in the global market is sufficient competition in the domestic market. The artificial dominance of enterprises through government support, from Porter's point of view, is a negative solution, leading to waste and inefficient use of resources. The theoretical premises of M. Porter served as the basis for the development of recommendations at the state level to increase the competitiveness of foreign trade goods in Australia, New Zealand and the United States in the 90s of the twentieth century.
Rybchinsky's theorem. The theorem consists in the assertion that if the value of one of the two factors of production increases, then in order to maintain a constant price for goods and factors, it is necessary to increase the production of those products that intensively use this increased factor, and reduce the production of the rest of the products that intensively use the fixed factor. In order for the prices of goods to remain constant, the prices of factors of production must remain unchanged. The prices of factors of production can only remain constant if the ratio of the factors used in the two industries remains constant. In the case of an increase in one factor, this can only happen if there is an increase in production in the industry in which this factor is intensively used, and a decrease in production in another industry, which will lead to the release of a fixed factor, which will become available for use along with a growing factor in an expanding industry. .
Theory of Samuelson and Stolper. In the middle of the XX century. (1948), American economists P. Samuelson and W. Stolper improved the Heckscher-Ohlin theory, imagining that in the case of homogeneity of factors of production, identity of technology, perfect competition and complete mobility of goods, international exchange equalizes the price of factors of production between countries. The authors base their concept on the Ricardian model with the additions of Heckscher and Ohlin and consider trade not just as a mutually beneficial exchange, but also as a means to reduce the gap in the level of development between countries.
Development and structure of international trade
International trade is a form of exchange of products of labor in the form of goods and services between sellers and buyers of different countries. The characteristics of international trade are the volume of world trade, the commodity structure of exports and imports and its dynamics, as well as the geographical structure of international trade. Export is the sale of goods to a foreign buyer with its export abroad. Import - purchase from foreign sellers of goods with its import from abroad.
Modern international trade is developing at a fairly high pace. Among the main trends in the development of international trade are the following:
1. There is a predominant development of trade in comparison with the branches of material production and the entire world economy as a whole. Thus, according to some estimates, over the period of the 1950s–1990s, the world's GDP increased by about 5 times, and commodity exports by at least 11 times. Accordingly, if in 2000 the world's GDP was estimated at $30 trillion, then the volume of international trade - exports plus imports - was $12 trillion.
2. In the structure of international trade, the share of manufacturing products is growing (up to 75%), of which more than 40% are engineering products. Only 14% is fuel and other raw materials, the share of agricultural products is about 9%, clothing and textiles - 3%.
3. Among the changes in the geographical direction of international trade flows, there is an increase in the role of developed countries and China. However, developing countries (mainly due to the promotion of new industrial countries with a pronounced export orientation from among them) managed to significantly increase their influence in this area. In 1950, they accounted for only 16% of world trade, and by 2001 - already 41.2%.
Since the second half of the 20th century, the uneven dynamics of foreign trade has manifested itself. In the 1960s, Western Europe was the main center of international trade. Its exports were almost 4 times higher than those of the United States. By the end of the 1980s, Japan began to emerge as a leader in terms of competitiveness. In the same period, it was joined by the "new industrial countries" of Asia - Singapore, Hong Kong Taiwan. However, by the mid-1990s, the United States was taking the world's leading position in terms of competitiveness. Export of goods and services in the world in 2007, according to the WTO, amounted to 16 trillion. USD. The share of the group of goods is 80%, and services - 20% of the total volume of trade in the world.
4. The most important direction in the development of foreign trade is intracompany trade within TNCs. According to some data, intra-company international deliveries account for up to 70% of all world trade, 80–90% of sales of licenses and patents. Since TNCs are the most important link in the world economy, world trade is at the same time trade within TNCs.
5. Trade in services is expanding, and in several ways. Firstly, this is a cross-border supply, for example, distance learning. Another mode of supply of services, consumption abroad, involves the movement of the consumer or the transfer of his property to the country where the service is provided, for example, the service of a guide on a tourist trip. The third way is a commercial presence, such as the operation of a foreign bank or restaurant in the country. And the fourth way is the movement of individuals who are service providers abroad, for example, doctors or teachers. The most developed countries of the world are the leaders in trade in services.
Regulation of international trade
The regulation of international trade is divided into state regulation and regulation through international agreements and the creation of international organizations.
Methods of state regulation of international trade can be divided into two groups: tariff and non-tariff.
1. Tariff methods are reduced to the use of customs duties - special taxes that are levied on products of international trade. Customs tariffs are a fee charged by the state for the clearance of goods and other valuables being transported abroad. Such a fee, called a duty, is included in the price of the goods and is ultimately paid by the consumer. Customs taxation involves the use of import duties to hinder the importation of foreign goods into the country, export duties are used less often.
According to the form of calculation, fees are distinguished:
a) ad valorem, which are charged as a percentage of the price of the goods;
b) specific, charged in the form of a certain amount of money from the volume, weight or unit of goods.
The most important purposes of using import duties are both the direct restriction of imports and the restriction of competition, including unfair competition. Its extreme form is dumping - the sale of goods on the foreign market at prices lower than those existing for an identical product on the domestic market.
2. Non-tariff methods are diverse and represent a set of direct and indirect restrictions on foreign economic activity through an extensive system of economic, political and administrative measures. These include:
- quotas (contingenting) - the establishment of quantitative parameters within which it is possible to carry out certain foreign trade operations. In practice, contingents are usually established in the form of lists of goods, the free import or export of which is limited to a percentage of the volume or value of their national production. When the quantity or amount of the contingent is exhausted, the export (import) of the relevant product is terminated;
- licensing - issuance of special permits (licenses) to business entities for conducting foreign trade operations. It is often used in conjunction with quotas to control license-based quotas. In some cases, the licensing system acts as a kind of customs taxation applied by the country to obtain additional customs revenues;
- embargo - a ban on export-import operations. It may apply to a specific group of goods or be introduced in relation to individual countries;
- currency control - a restriction in the monetary sphere. For example, a financial quota may limit the amount of currency an exporter can receive. Quantitative restrictions may apply to the volume of foreign investment, the amount of foreign currency exported by citizens abroad, etc.;
- taxes on export-import transactions - taxes as non-tariff measures that are not regulated by international agreements, like customs duties, and therefore are levied on both domestic and foreign goods. Government subsidies for exporters are also possible;
- administrative measures, which are mainly related to restrictions on the quality of goods sold on the domestic market. An important place is occupied by national standards. Failure to comply with the standards of the country may serve as a reason for the ban on the import of imported products and their sale on the domestic market. Similarly, a system of national transport tariffs often creates an advantage in paying freight to exporters over importers. In addition, other forms of indirect restrictions can also be used: the closure of certain ports and railway stations for foreigners, an order to use a certain proportion of national raw materials in the production of products, a ban on the purchase government organizations imported goods in the presence of national analogues, etc.
The high importance of MT for the development of the world economy has led to the creation by the world community of special international regulatory organizations, whose efforts are aimed at developing rules, principles, procedures for the implementation of international trade transactions and monitoring their execution by member states of these organizations.
A special role in the regulation of international trade is played by multilateral agreements operating within the framework of:
- GATT (General Agreement on Tariffs and Trade);
- WTO();
- GATS (General Agreement on Trade in Services);
- TRIPS (Treaty-Related Aspects of Intellectual Property Rights);
GATT. In accordance with the fundamental provisions of the GATT, trade between countries should be carried out on the basis of the most favored nation (MFN) principle, i.e., the most favored nation treatment (MFN) is established in the trade of GATT member countries, guaranteeing equality and non-discrimination. However, at the same time, exceptions from the NSP were established for countries that are members of economic integration groups; for countries, former colonies, which are in traditional relations with the former mother countries; for border and coastal trade. According to the most rough estimates, “exceptions” account for at least 60% of world trade in finished goods, which deprives PNP of universality.
GATT recognizes as the only acceptable means of regulating the MT customs tariffs, which are iteratively (from round to round) reduced. Currently, their average level is 3-5%. But here, too, there are exceptions that allow the use of non-tariff remedies (quotas, export and import licenses, tax incentives). These include cases of application of agricultural production regulation programs, violation of the balance of payments, implementation of regional development programs and assistance.
GATT contains the principle of renunciation of unilateral actions and decision-making in favor of negotiations and consultations, if such actions (decisions) can lead to restriction of free trade.
GATT - the predecessor of the WTO - made its decisions at the negotiations rounds of all members of this Agreement. There were eight in total. The most significant decisions that have guided the WTO in regulating the MT to date were taken at the last (eighth) Uruguay Round (1986-1994). This round further expanded the range of issues regulated by the WTO. It included trade in services, as well as a program to reduce customs duties, intensify efforts to regulate the MT with the products of certain industries (including agriculture) and strengthen control over those areas of national economic policy that affect the country's foreign trade.
It was decided to escalate customs duties as the degree of processing of goods increases while reducing duties on raw materials and eliminating them for certain types of alcoholic beverages, construction and agricultural equipment, office furniture, toys, pharmaceutical products - only 40% of world imports. The liberalization of trade in clothing, textiles and agricultural products continued. But customs duties are recognized as the last and only means of regulation.
In the field of anti-dumping measures, the concepts of "legitimate subsidies" and "eligible subsidies" were adopted, which include subsidies aimed at environmental protection and regional development, provided that their amount is not less than 3% of the total value of imports of goods or 1% of its total cost. All the rest are classified as illegal and their use in foreign trade is prohibited.
Among the issues of economic regulation that indirectly affect foreign trade, the Uruguay Round included requirements for a minimum export of goods produced at the joint venture, the mandatory use of local components, and a number of others.
WTO. The Uruguay Round decided to create the WTO, which became the legal successor of the GATT and retained its main provisions. But the decisions of the round supplemented them with the objectives of ensuring free trade not only through liberalization, but also through the use of so-called linkages. The meaning of linkages is that any government decision to increase the tariff is taken simultaneously (in conjunction with) the decision to liberalize imports of other goods. The WTO is outside the scope of the UN. This allows it to pursue its own independent policy and control over the activities of the participating countries to comply with the adopted agreements.
GATS. Certain specifics are different regulation of international trade in services. This is due to the fact that services, characterized by an extreme variety of forms and content, do not form a single market that would have common features. But it has general tendencies that make it possible to regulate it at the global level, even taking into account the new moments in its development that are introduced by TNCs that dominate it and monopolize it. Currently, the global services market is regulated at four levels: international (global), sectoral (global), regional and national.
General regulation at the global level is carried out within the framework of the GATS, which entered into force on January 1, 1995. Its regulation uses the same rules that were developed by the GATT in relation to goods: non-discrimination, national treatment, transparency (publicity and unity of reading laws), non-application of national laws to the detriment of foreign manufacturers. However, the implementation of these rules is hampered by the peculiarities of services as a commodity: the lack of a real form of most of them, the coincidence of the time of production and consumption of services. The latter means that the regulation of the terms of trade in services means the regulation of the conditions for their production, and this in turn means the regulation of the conditions for investing in their production.
The GATS consists of three parts: a framework agreement defining general principles and regulation of trade in services; special agreements acceptable to individual service industries; and a list of commitments by national governments to eliminate restrictions on service industries. Thus, only one level, the regional level, falls out of the field of activity of the GATS.
The GATS agreement is aimed at liberalizing trade in services and covers the following types of services: services in the field of telecommunications, finance and transport. The issues of export sales of films and television programs are excluded from the scope of its activities, which is associated with the fears of individual states (European countries) of losing the originality of their national culture.
Sectoral regulation of international trade in services is also carried out on a global scale, which is associated with their global production and consumption. Unlike GATS, the institutions that regulate these services are specialized. For example, civil air transportation is regulated by the International Civil Aviation Organization (ICAO), foreign tourism is regulated by the World Tourism Organization (WTO), maritime transportation is regulated by the International Maritime Organization (IMO).
The regional level of international trade in services is regulated within the framework of economic integration groupings, in which restrictions on mutual trade in services are lifted (as, for example, in the EU) and restrictions on such trade with third countries may be introduced.
The national level of regulation concerns foreign trade in services of individual states. It is implemented through bilateral trade agreements, which may include trade in services. A significant place in such agreements is given to the regulation of investments in the service sector.
Source - World Economy: tutorial/ E.G. Guzhva, M.I. Lesnaya, A.V. Kondratiev, A.N. Egorov; SPbGASU. - St. Petersburg, 2009. - 116 p.