Added: 04/20/2006 |
The role of international tradeAs it is known, the international trade takes a leading place in forming the system of the World economic relations. It should be emphasized that today's international trade presents the trade between various countries all over the world - import and export of merchandise. In general, it includes: various juridical persons - corporations, nations and separated individuals. It also presents the means, by the help of which, countries can develop the specialization, improve the productivity of their resources and therefore - increase the total production volume.
The modern international trade has a dynamic character, since commodity turnover structures of various countries and regions are constantly changed. Such dynamic development of the foreign commerce can be simply explained by its positive impact on the level and quality of the country's economic development.
The advantages of the international trade are obvious. The structure of national resources is different for each country, so the country can produce the certain goods, but have different expenses. Additionally, the free trade stimulates a competition and restricts a monopoly at the same time. Taking into account all these factors, we can say that the international trade provides the country with the economic growth.
Each country has to possess official reserves, i.e. some volume of the foreign currency, which is used for regulating the payment balance. Decreasing these reserves determines the deficit of the payment balance of the country. Increasing these reserves characterizes the value of an active or positive balance.
It is clear that a small deficit is quite admissible for a country, as it can be completely liquidated during the next year. Nevertheless, the deficit is profitable for customers, because in this case they can get more foreign commodities. As to a huge deficit, which takes place in the international trade, it can lead to the loss of the country's competitiveness in the world market. This situation can bring the country to the complete exhaustion of its official or foreign currency reserves. For this reason, the government can set certain trade barriers and impose special duties on the foreign goods in order to compensate the deficit.
However, these means usually are not sufficient and the country starts selling the real estate and financial actives. Both the General Agreement on Tariffs and Trade and the international bank of commerce play a big role in the international trade development. As to the GATT, it presents the multilateral treaty, which sets the total rules, accepted by more than one hundred countries all over the world for effecting international trade operations.
The international bank of commerce is considered to be a financial intermediary that controls all funds, which are necessary both for business and household sectors. Hence, acting in such a way, it provides customers with essential services and stimulates the economic growth of the country at the same time.
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