Foreign Trade Policy
UNIT I FOREIGN TRADE AND POLICY
OBJECTIVES To give broader understanding of the foreign trade and it’s policy. This unit given students an understanding of the aspects that how the various theories explain the development of foreign trade between the nations.
The main objectives of this unit are: • To analysis similarities and differences between internal and international trade. • • • To provide an overview of various theories in foreign trade. To evaluate the terms of trade between the nations. To analysis the concept of Balance of Payment and Adjustment Mechanism in Balance of Payment.
STRUCTURE 1. 1.1 1.2 Introduction Meaning of International Trade Similarities and Differences between Internal and International Trade 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Gains from International Trade Adam Smith’s Theory of Absolute Differences in Cost David Ricardo’s Theory of Comparative Cost Haberler’s Theory of Opportunity Cost in International Trade Heckscher-Ohlin Theory or Modern Theory of International Trade Terms of Trade International Trade in Services 1
1.10 1.11 1.12 1.13 1.14 1.15
Meanings of Balance of Payment Structure of Balance of Payment Balance of Payments Disequilibrium Adjustment Mechanism in balance of Payments Account Summary Self-Assessment Questions
1. Introduction:The international trade has been growing faster than world output indicates that the international market is expanding faster than the domestic markets. There are indeed many Indian firms too whose foreign business is gro wing faster than the domestic business. Business, in fact, is increasingly becoming international or global in its competitive environment, orientation, content and strategic intent. This is manifested/ necessitated/ facilitated by the following facts: (a) The Competitive business Environment (b)Globalisation of management (c) The universal liberlisation Policy by member countries.
Table - 1 Growth of World Merchandise Exports Year 1950 1960 1970 1980 1990 2000
OBJECTIVES To give broader understanding of the foreign trade and it’s policy. This unit given students an understanding of the aspects that how the various theories explain the development of foreign trade between the nations.
The main objectives of this unit are: • To analysis similarities and differences between internal and international trade. • • • To provide an overview of various theories in foreign trade. To evaluate the terms of trade between the nations. To analysis the concept of Balance of Payment and Adjustment Mechanism in Balance of Payment.
STRUCTURE 1. 1.1 1.2 Introduction Meaning of International Trade Similarities and Differences between Internal and International Trade 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Gains from International Trade Adam Smith’s Theory of Absolute Differences in Cost David Ricardo’s Theory of Comparative Cost Haberler’s Theory of Opportunity Cost in International Trade Heckscher-Ohlin Theory or Modern Theory of International Trade Terms of Trade International Trade in Services 1
1.10 1.11 1.12 1.13 1.14 1.15
Meanings of Balance of Payment Structure of Balance of Payment Balance of Payments Disequilibrium Adjustment Mechanism in balance of Payments Account Summary Self-Assessment Questions
1. Introduction:The international trade has been growing faster than world output indicates that the international market is expanding faster than the domestic markets. There are indeed many Indian firms too whose foreign business is gro wing faster than the domestic business. Business, in fact, is increasingly becoming international or global in its competitive environment, orientation, content and strategic intent. This is manifested/ necessitated/ facilitated by the following facts: (a) The Competitive business Environment (b)Globalisation of management (c) The universal liberlisation Policy by member countries.
Table - 1 Growth of World Merchandise Exports Year 1950 1960 1970 1980 1990 2000
References: (IS/ISO 9001, 9002, 9003 etc.) with totally identical text as published by International Organisation for Standardisation.