05-08-2020

What is trade?
Basically exchange, that’s facilitated by Money now, but earlier batter types system.
What’s Legal Tender? (In a way that law recognizes) Technically it’s the law that decides the
legal tender.
These amenities changed the face of trade.
Technology developed to a point where it was possible for people to travel. People became
exposed. The routes for travel became very important.
People travelling around the world also carry the culture with them, giving rise to
globalization. Trade also lead to discovery of new countries. Discovery and integration
happened.
These lead to trade becoming something international.
Again changed another tech revolution-> industrial revolution.
Merchants facing issues, being controlled, realizing stuff related to trade politics and rivalries
etc..
The industrial revolution lead to changes in trade, new inventions, changes etc.…
IR did not happen simultaneously around the world. Hence different times in different
countries. For example, the European countries. They already had advantages of sea routes
and trades, imports, their IR accelerated at large rates. The imports of raw material lead to
produce of many things at their own (Europe). All the place specific exotic goods did not
matter anymore as they were all produced there itself.
Lead to 2 imp phenomena
1. Colonialism
2. Imperialism
Borders exist! Borderless trade is an utopia. But borders are imp for trades. Trade acted as a
catalyst for development. Trade, technology etc.… responsible for it basically.
(Tomorrow’s discussion/focus on WW) (https://www.theglobalist.com/world-trade-vs-world-
war/)

10-08-2020
Realization of the industrialists and merchants etc. at the same time
Q. How the desire to have profits effects the want for political power?
English EIC had monopoly in India. No one else was allowed to trade and stuff in India.
Followed by the Group of merchants who came to trade gained political control of the
country, set up military base etc. Eventually they got the queens “blessings” for the political
approach/control. This was coz they thought they would benefit more by having political &
Military control, that is actually imperialism and colonialism.
When the EIC had to compete with the French, Dutch companies when it came to trade,
causing rivalries, conflicts. These conflicts, rivalries further added up to the world wars.
11-08-2020
What stops these countries from going into war is that they have a significant economic
relationship. Hence trade kinda prevents them from going on war.
India does not have a trade law per se and what india follows in the set of rules it agreed to.
India just has trade policies.
What are the economic reasons of trade? ->
https://www.economicsonline.co.uk/Global_economics/Why_do_countries_trade.html
https://saylordotorg.github.io/text_international-economics-theory-and-policy/s05-01-the-
reasons-for-trade.html
What is free trade, protectionism?
https://smallbusiness.chron.com/trade-vs-protectionism-3830.html
India and the PM’s ‘Aatmanirbhar things’?
What do economists have to say about the international trade system? If the trade can happen
in an even playing field.
Countries should trade and it is beneficial for them to trade with one another. So they should
not think about being protectionists, and should rather trade amongst themselves. ~Adam
Smith (Economist)
https://www.fff.org/explore-freedom/article/economic-ideas-adam-smith-free-trade-crony-
capitalism-benefits-commercial-society/ (Adam Smith’s theory on trade)
Adam Smith had 2 major questions.
1. Should countries trade with one another?
2. If yes, then what commodities should the countries trade in and what is the deciding
factor?
When making a trade, the party going forward with it should depend it on what kind of
advantage is to the party; what they achieve from the trade, or y doing what will they gain
more, for example export more and import less.
Export must mostly be of the manufactured products, and importing the raw materials. Coz
when u manufacture the goods, from the raw materials, u add/enhance the value of the final
product, hence increasing the selling cost of the product/ selling it at higher cost. And if u
produce/ manufacture products, it also generates employment. Hence consequently increasing
the cycling (getting money> choice to buy> buy etc.)
But the problem with having this favorable trade conditions is that it cannot work that way
simultaneously for all the countries at the same time. What mercantilists are saying cannot be
achieved at the same time.
What they are saying can also induce the territories to colonies, eg- the colonization of India.
Mercantilism still exists.
Free trade as a policy decision u let the demand and supply decide what kind of good come it.
The govt. does not create policies to influence/effect the trade pattern, and borders have no
role in it either. Basically, the forces of demand and supply, the market decides the trade
pattern.
The govt. does levy duties, policies to protect the trade process, but it’s in compliance with
the demand and supply forces.

Fine out what do u produce most efficiently, and then find out if there is any country that
produces it more efficiently than you do.
Adam Smith though that giving monopoly to private sector isn’t a good idea.
One of the Qs asked at that time was, if we allow free trade wouldn’t our personal industries
suffer? AS’s answer> No. It would rather improve, and become more efficient
Explain opportunity cost in reference to comparative advantage
David Ricardo’s theory of free trade
Challenges in free trade

European countries and the free trade system.

The democracy in the European countries and its effects on the international trade system.
The high trade system

In 1864-1960: No rules at that time, yet the free trade functioned well.

In the trades, time was of essence after the 2nd world war. Why so?

GATT to WTO
https://www.wto.org/english/docs_e/legal_e/gatt47.pdf - the GATT agreement.
Art 22, 23- contracting parties, resolving disputes.
GATT acted as more of a consultative forum. Made recommendations, and all the contracting
parties had to come to a positive consensus with regard to that.
Major fails of GATT coz of the deadlines, the positive consensus of every country in dispute,
just a recommending body hence decisions not binding.

International trade disputes

https://www.wto.org/english/tratop_e/dispu_e/dispu_e.htm#:~:text=Resolving%20trade
%20disputes%20is%20one,settlement%20mechanisms%20in%20the%20world.
https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm
https://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htm
Prospective Project topics
~deadline Oct 10-15. Research questions 4-5 pages max. Your opinion on the topic. Fact based
opinion is better.

- He trading principles
- Current affairs based questions
- Contemporary developments, maybe due to covid and all
- IPR and WTO
- ITL as a branch of international law.
- Trade issues
- Contact part of issues in trade