This Presentation includes the various Advantages & Disadvantages of International Trade. Protectionism Vs Free Trade.

1. International Trade
Group: 8

2. Domestic Trade
 “Domestic trade means, performing business
transactions within the borders of a nation”
 It is also known as internal trade or home trade

3. Domestic Trade Vs. International Trade

5. Introduction of International
Trade
 International trade is the exchange of goods and services
between countries
 A product that is sold to the global
market is an export, and a product
that is bought from the global market
is an import
 International Trade is considered as
the ”Engine of Growth”

6. Involves a lot things like:
+ Jobs
+ Consumption
+ Fashion
+ Natural Resources

7. Ctd…
 As a result of international trade, the market contains
greater competition and therefore more competitive prices,
which brings a cheaper product home to the consumer

8. Benefits of International Trade
 Diversify risk
 Better margins
 Earlier payments
 Grow your Business

9. Ctd...
 Inequalities and facilitate growth
 Economic community
 Long term growth
 Less competition

10. Risk in International Trade
 Transaction charges commission
 Lack of market data / information
 Foreign exchange rate
 Political instability

11. Ctd...
 Misunderstanding the local legal framework
 Not communicating effectively with your
business partners
 Not spend enough time
with your potential
business partners
 Unstable profits

12. Protectionism
 It is Means by which trade between countries is restricted in
some way
 Main means are:
 Tariffs: A tax on a good coming into a country, Increases
the price of the good and makes it less competitive.
 Quotas: Quantitative restriction on the number of goods
coming into a country
 Non-Tariff Barriers: like setting exacting standards on fuel
emissions from cars, the documentation required to be able to
sell drugs in different countries, the ingredients in products –
some of which may be banned in the destination country

13. Free Trade
 Free trade is a policy by which a government does not
discriminate against imports or exports by applying tariffs,
subsidies or quotas
 Features:
Trade of goods without taxes or
other trade barriers , The absence
of "trade-distorting" policies that
give some firms, households, or factors of production an
advantage over others, Free access to markets, to market
information, Inability of firms to distort markets through
government-imposed monopoly or oligopoly power

14. Protectionism vs. Free Trade
• when government put in place
policies that allow producers
from overseas nations to freely
sell their goods in our country
(promote trade)
Free Trade
• when government put in place
policies to stop overseas
producers freely selling goods
in our country (restrict trade)
Protectionism

15. Conclusion
 International Trade refers to exchange of goods & services
beyond the nations
 It opens up the opportunity for
specialization and therefore more
efficient use of resources,
international trade has the potential
to maximize a country's capacity to
produce and acquire goods
 Free Trade allows trading with no
restrictions on trade

16. Ctd…
 Opponents of global free trade have argued, however, that
international trade still allows for inefficiencies that leave
developing nations compromised
 Protectionism exists in
many different forms,
but the most common
are tariffs, subsidies &
quotas
 These strategies attempt to correct any inefficiency in the
international market