International trade

Foreign trade or international trade is the exchange of goods, services and capital across international borders or territories. In most countries, it is of considerable importance in relation to gross domestic product ( GDP) (see: export ratio, import ratio, degree of openness ). While there are international trade in history for a long time (see Silk Road, Amber Road ), the economic, social and political importance has increased in the last few centuries. Industrialization, improved transportation, globalization, multinational corporations and outsourcing have a big impact on the international trade system. Increasing international trade is crucial for the continuation of globalization. Foreign trade is an important source of economic revenue of many countries. Without foreign trade nations would be limited to those produced within their own borders goods and services.

International trade is in principle not different from domestic trade as the motivation and behavior do not differ fundamentally on a trading involved when trading on a boundary takes place. The most important difference is that foreign trade is more expensive than the domestic trade in general. The reason for this is that a border typically causes additional costs, such as tariffs, cost of delays at the border and costs associated with differences in countries such as language, law or other culture.

Regulation of international trade

Traditionally, international trade was regulated through bilateral treaties between two nations. For centuries, had most of the nations by faith in the mercantilism high tariffs and many restrictions on foreign trade. In the years since the Second World War reached multilateral treaties like the General Agreement on Tariffs and Trade ( GATT) and subsequent world trade rounds, since 1995 under the World Trade Organization ( WTO), an increasingly internationally regulated trade structure. The ongoing since 2001 round of negotiations is called the Doha Round.

Protectionism

During recessions arises often strong domestic political pressure to increase tariffs to protect the domestic economy. This happened around the world during the Great Depression in the late 1920s. Many economists have shown that the former tariff increases have contributed to the collapse of world trade. Even during the economic crisis 2007-2009 was repeatedly warned against protectionist measures.