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• Trade


  • Means buying and selling goods and services
  • A voluntary exchange of goods or services between different economic actors
  • The producers build the goods, then it transfers to the whole seller, then to a retailer and finally reached to the customer
  • Trades act as intermediaries between producer and consumer
• Classification of Trade

  • Internal Trade
  • International Trade
• Internal Trade


  • Also called as home trade
  • Consist of sale and exchange of goods within the boundaries of a country
  • The movement of goods is through internal transport system owned by the state government, or by any private agencies
• Wholesale Trade


  • They are the people who buy in bulk from producers and sell in small quantities to the retailers
  • The wholesaler served as a link between producer or manufacturer of good and the retail traders
• Retail Trade


  Are the traders who buy goods from wholesalers or sometimes directly from producers and sell them to the consumers
• International Trade


  • Refers to the exchange of goods and services between the countries
  • In simple words, it means the export and import of goods and services
  • International trade supports the worlds economy, where prices or demands and supply are affected by global events
  • The movement of goods is through international transport system
• Import


  Means purchasing goods and services from a foreign country because they cannot be produced in sufficient quantities or at a competitive cost in your own country
• Export


  Type of international trade which relies on selling locally manufactured goods and services to foreign countries
• Entrepot


  • Compromises both – import and export trade
  • Goods and services are imported from one country so that they can further be exported to another country
• Evolution of Trade Agreements

  • General Agreement on Tariffs and Trade (GATT)
  • World Trade Organization (WTO)
• GATT

  • Established in 1947 in Bretton Woods Conference signed by 23 countries
  • Purpose: To eliminate protectionism, encourage free trade among countries, and aim of reducing barriers to international trade
  • To restore or boost the economy after world war 2
  • Provisions: Tariff Reduction, Most-Favored-Nation (MFN) Principle, Dispute Agreement
• WTO


  • Established in 1995 signed by 164 countries
  • Transformation from GATT to WTO: Expansion of GATT coverage, Broaden the scope of international trade rules, Strengthening of the institutional framework
  • Provisions: Dispute Settlement Mechanism, Trade in Services and Intellectual Property, Trade Liberalization, Capacity Building and Technical Assistance
• Both GATT and WTO have played crucial roles in promoting international trade and economic development
• By reducing tariffs and other trade barriers, they have helped to increase global trade flows, stimulate economic growth, and raise living standards around the world
• These agreements have fostered a rules-based international trading system, providing stability and predictability for businesses and government alike
• The dispute settlement mechanisms established by GATT and strengthened by WTO have helped to prevent and resolve trade conflicts, reducing the risk of trade wars and promoting peaceful resolution of disputes
• GATT and the WTO represents important milestones in the history of international trade, laying the ground work for greater economic cooperation and integration on a global scale
• While challenges remain, particularly in addressing the needs and concerns of developing countries, these institutions continue to play a vital role in shaping the future of global trade