Bolivarian Republic of Venezuela

University Institute of Technology and Administration

Enlargement Altos Mirándonos

Miranda-Los Teques

Foreign Trade

Inter
nation
al
Trade

Teacher: Student:

Alberto Espinoza Victor Angel Esparragoza

C.I: 29640319

Los Teques, november 10, 2020

 Introduction
Since time immemorial, the subject of international trade has been studied. It has
an ancient origin that dates back to the first organized civilizations, where the
Mediterranean civilizations took advantage of their geographical location to trade
their surplus with other peoples.
 International Trade
International Trade is an economic modality used to promote development and
optimal quality of life among countries that reach multilateral agreements in order
to preserve a lifestyle that meets all the needs of the community. We all know that
no country is capable of surviving on its own, it needs a population market that can
only be found outside its borders. International trade complements the needs of
each country, for example, Havana is a country that lacks oil, while Venezuela has
the largest crude oil reserves in the world, which is why Venezuela sends Cuba the
oil it needs to produce fuels and their derivatives in exchange for basic services
and practical methods of teaching and medicine.

Origin of international trade

The origins of trade go back to the end of the Neolithic, when agriculture was
instituted. At the beginning it was a subsistence agriculture, where the crops
obtained were the fair ones for the population dedicated to the agricultural matters.
However, as new developments in this activity were incorporated, the harvests
obtained were greater and greater and the surpluses facilitated a local exchange of
other goods for food, which gave way to work with metals, the wheel, the winch,
navigation, writing, new forms of urban settlement, etc. Throughout the Middle
Ages, transcontinental trade routes began to emerge in an attempt to meet the
high European demand for goods and merchandise. Among the most famous
routes is the Silk Route, but there were also other important ones such as the spice
import routes.

Different trends in international trade, in chronological order

Greek. When slavery is established and develops in an extraordinary way, the
economic thought evolves and ideas begin to be developed that correspond to this
new mode of production; Plato was one of the first scholars of society, but Aristotle
was the one who advanced more the economic thought of those days. Plato
explains the division of labor as a consequence of the diverse natural aptitudes of
men and the great quantity of human needs. Aristotle was the one who most
advanced the economic thought of the time. He laid the foundations of the theory
of value by distinguishing between use value and exchange value (although not
precisely).
 Models of international trade
1- Adam Smith's absolute advantage

The classic theory of international trade has its roots in the work of Adam Smith the
hand in which the author defends the little regulation of trade, proposes that
international trade is regulated only with the supply and demand, this thought that
the goods would be produced in the country where the cost of production was
lower and from there they would be exported to other countries.

2- Theory of comparative advantage - David Ricardo

This theory is an evolution from Adam Smith's theory; for David Ricardo, what is
decisive is not the absolute costs of production, but the relative costs, resulting
from the comparison with other countries. According to this theory a country would
always gain advantages from international trade, even if its production costs were
higher for all types of products manufactured, because this country would tend to
specialize in that production in which it was comparatively more efficient.

3- Heckscher-Ohlin

This model is based on David Ricardo's theory of comparative advantage and

states that countries specialize in exporting goods whose production is factor-
intensive in the country where it is abundant, while they tend to import those goods
that are factor-intensive in the country where it is relatively scarce.

4- Severity of trade

This model establishes that trade between two countries is proportional to the
economic size of both countries, measured by their respective gross domestic
product (GDP), and decreases with distance between them, all other variables
remaining constant.

International trade barrier.

Barriers to international trade Barriers to trade are impositions imposed by
governments on the flow of goods and services between countries. Some
restrictions such as tariffs are obvious, but others such as changes in monetary
policy are more subtle and difficult to identify.
 Types:
Tariffs: are taxes that the exporter must pay when wants to enter the importing
country some product.

Special taxes: certain products are taxed under some kind of justification, such as
the good of public health.

Voluntary export restriction: the exporter, in theory, of his own free will or as a
result of a negotiation, decides to export a lower amount than he could.

Advantages of international trade

Since the beginning of humanity, international trade has tried to acquire goods and
services from other countries, companies or persons, in this way they would
develop more efficiently for us. Thus, we can specialize in the production of those
items in which we have a competitive advantage, in other words, those in which we
actually provide value to the outside world. This implies international specialization.
As countries, by focusing only on those tasks that we actually do well, we will
specialize in the realization of those tasks. This will further increase the efficiency
with which we perform such functions. International trade allows participating
countries to take advantage of economies of scale by better absorbing fixed costs.
By increasing the volume of production of those goods and services that we
actually perform well, we will be able to produce at lower unit costs. In addition, it
promotes competition because countries will have incentives to innovate and seek
cost reductions to continue to maintain their competitive advantage over the
outside world.
 Conclusion
International trade is currently of great importance to all nations that practice it, and
that importance is not only economic, but also political, because that activity allows
the State that develops it, to establish a series of strategies, attitudes and positions
that not only produce the income of foreign exchange, so essential for the
maintenance or growth of its economy.
 Bibliographic

monografias.com

noticias.infocif.es

moisesbittan.com

ifp.es

iebschool.com

conceptodefinicion.de

wikipedia.org

comercioyaduanas.com

economipedia.com