Import/Export

Marketing
M O D U L E 1 : OV E R VI EW O F I N T E RNATI ONAL
TR A DE
Growth and Direction of
International Trade
International trade - is the exchange of goods and
services across national boundaries. It is the most
traditional form of international business activity
and has played a major role in shaping world
history.
It allows manufacturers and distributors to seek out
products, services, and components produced in
foreign countries.
Reasons for trading
internationally

Cost advantages or in order to learn about

advanced technical methods used abroad.
To acquire resources that are not available at
home.
Exports create high-wage employment.
Why do some countries export or
import more than others?

Trade and exchange rate regime (import tariffs,

quotas, and exchange rates),
Presence of an entrepreneurial class,
Efficiency enhancing government policy, and
Secure access to transport (and transport costs)
and marketing services.
Developments in Trade

1994- World Trade Organization (WTO) was established

replacing the GATT (General Agreement on Tariffs and
Trade) under the Final Act of the Uruguay Round.
WTO became the principal agency of UN with the
responsibility over international trade.
The Final Act of the Uruguay Round was signed by 124
governments.
The agreement also strengthened existing multilateral
rules in agriculture, textiles, and clothing and provided
for a more effective and reliable dispute-settlement
mechanism.
Developments in Trade

There has been a steady growth in the role of

developing countries in world trade.
Opening up of China and Eastern Europe for trade
and investment.
China joined the WTO in 2001.
Focus has now shifted from demanding tariff cuts
by wealthy countries for their exports to requesting
technical assistance to increase production and
exports.
Developments in Trade

There has been a marked increase in the

establishment of common markets and free trade
areas, thus further increasing economic linkages
among nations through trade, investment, and the
operation of multinational companies.
Small and medium-sized businesses are increasing
their share of exports.
The world economy is driven by advances in
communications and information technology as
well as government policies to reduce obstacles to
the flow of trade and capital flows.
Developments in Trade

Fast economic growth in many countries and

pressure on limited resources. Business adjustment
to security costs after 9/11.
GATT and the WTO

The General Agreement on Tariffs and Trade

(GATT) was established in 1945 as a provisional
agreement pending the creation of an International
Trade Organization (ITO).
The ITO draft charter failed when the US Congress
did not approve it.
Other countries also declined to proceed with the
ITO without the participation of the United States.
GATT and the WTO

The GATT has used certain policies to reduce trade

barriers between contracting parties (CPs):

Nondiscrimination
Trade liberalization
Settlement of trade disputes
Trade in goods
The European Nation

Twenty-eight Western and Eastern European countries:

Austria (1995) Belgium (1958) Bulgaria (2007)
Croatia (2013) Cyprus (2004) Czech Republic
(2004)
Denmark (1973) Estonia (2004) Finland (1995)
France (1958) Germany (1958) Greece (1981)
Hungary (2004) Ireland (1973) Italy (1958)
Latvia (2004) Lithuania (2004) Luxembourg (1958)
Malta (2004) Netherlands (1958) Poland(2004)
Portugal (1986) Romania (2007) Slovakia (2004)
Slovenia (2004) Spain (1986) Sweden (1995)
United Kingdom (1973)
The European Nation

Candidate countries on the road to EU membership:

Albania
Montenegro
Serbia
Turkey
The former Yugoslav Republic of Macedonia

Potential candidates to become EU member states:

Bosnia and Herzegovina
Kosovo
The European Nation

The European Unions aim back in the days was to

end the frequent bloody wars between neighbour
states that have culminated in the Second World
War.
In 1950, the European Coal and Steel Community
began the uniting of European countries
economically and politically to gain a lasting peace.
In 1957, the Treaty of Rome created the European
Economic Community (EEC) or the Common
Market.
The European Nation

In 1986 the Single European Act was signed, which

also created the Single Market.
In 1993, the Single Market is completed with the
four freedoms:
Movement of goods
Movement of services
Movement of people
Movement of money
Britain Exit (Brexit)

Brexit is an abbreviation for "British exit," referring

to the UK's decision in a June 23, 2016 referendum
to leave the European Union (EU).
The vote's result surprised pollsters and roiled
global markets, causing the British pound to fall to
its lowest level against the dollar in 30 years.
"Leave" won the referendum with 51.9% of the
ballot, or 17.4 million votes; "Remain" received
48.1%, or 16.1 million.
Britain Exit (Brexit)
The reason for Leaving the EU

European debt crisis,

Immigration,
Terrorism, and
The perceived drag of Brussels' bureaucracy on the
British economy.
What is the effect of the Brexit
to the Philippine Economy?
The Philippines is mainly affected with the events
occurring in the financial market.

Some experts are cautious of the possible impact

of Brexit to Overseas Filipino Workers (OFWs) in
the UK.

Other local economists and financial experts said

Brexit has little direct impact on the Philippine
economy.
ASSIGNMENT:

(Yellow Pad Paper)

1. How can trade liberalization be made to work for

the poor?
2. Evaluate the performance (GDP per capita,
distribution of income, etc.) of the Philippines
before and after trade liberalization.