What is International Trade?

Good afternoon ladies and gentlemen. First of all, let me thank you all for coming here
today. Let me introduce myself. I’m CamilaCarabajal. I’m CEO of Coca Cola here in
Buenos Aires. Today’s topic is “International Trade”. The topic is very important for
you because you’ll understand the great impact international trade has in a country. By
the end of this talk, you’ll be familiar with concepts such as Comparative Advantage
and Proteccionism. I’ve divided my presentation into 3 parts. I’ll start off by defining
the concept of International Trade. Then, I’ll explain the increased efficiency of trading
globally. Finally I’ll end with the importance of globalization for International Trade. In
the end, you’ll have time for questions.

I think everybody has heard about international trade, but hardly anyone knows a lot
about it. So, I would like to give a definition of International Trade. It can be defined as
the exchange of goods and services between countries. It gives consumers and countries
the opportunity to be exposed to goods and services not available in their own countries,
or which would be more expensive domestically. A good example of this is Brazilian
coffee which is imported by European countries. As a result, it is available in other
countries. That´s all I have to say about the concept of International Trade.

Now, let´s move on to the increase efficiency. Countries are endowed with different
assets and natural resources some countries may produce the same good more
efficiently; and therefore, sell it more cheaply than other countries. If a country cannot
efficiently produce an item, it can obtain this by trading with another country.
Therefore, countries might produce more by focusing on those products with which they
have a comparative advantage. To illustrate this point, I can speak about China and
United States. Moreover, comparative advantages help to explain the unsuccessful of
protectionism. If a government imposes tariffs, it may produce a local benefit but that
country will grow to be at a disadvantage relative to countries that were already better
able to produce these items at a lower opportunity cost. Because of this, it does not
bring a long-term solution to a trade problem.

Now, I would like to discuss about the importance of globalization for International
Trade No country in the world has all the resources it needs; globalization has allowed
access to them because the exchanges of goods and services are done more quickly and
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in a less complicated way. Moreover, new relationships between companies, suppliers
and customers are done. As an illustration, I can mention the development of the
railways in Argentina which had an important role in the economic development of
Argentina between the end of the 19th century and the beginning of the 20th. Speaking
personally, both International Trade and Globalization need themselves to exist. We do
need free trade to the exchanges can be done easier.

So, that’s all I have to say. To recap briefly, on the first issue, the key point I want to
emphasize is the importance of international trade for countries because it gives them
the goods and services they need. Regarding the second issue, I think that now we all
see the importance of focusing on those goods with which countries have comparative
advantages due to the lower cost to produce them. The final point was the importance of
globalization for international trade and for me the big issue, as I said Globalization is
related to the development of international trade. Without globalization a country
wouldn’t be able to export or import goods due to higher cost or difficulty in carrying it
out.

To conclude I’d like to say that China is the leader in International Trade because it is
the largest exporter of the world due to its cheaper products. Because of this, it has a
huge trade surplus. Therefore, China is a good example for other countries because it
motivates them to follow in its footsteps and increase their exports to achieve stability in
their trade balances. In addition to this, I’d like to say that in BNW there’s no
International Trade because the government controls everything that people consume
and, probably, it imposes tariffs. Therefore, citizens cannot import goods or services not
available in that place. Moreover, it seems to me that they wouldn’t need new goods
because they are always happy.

Thank you for your attention. So, do you have any questions?

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