TRADING IN

SINGAPORE

IMPORT AND EXPORT

Export selling of products abroad.
Primary exports - commodities: machinery and

equipment (including electroics), consumer goods,

pharmaceuticals and other chenmicals, mineral fuels

Primary exports partners:Hong Kong (11.6

percent of total exports), Malaysia (11.5 percent), US

(11.2 percent), Indonesia (9.7 percent), China (9.7
percent), Japan (4.6 percent)

IMPORT AND EXPORT

Import - buying of products abroad.
Primary imports - commodities:machinery and

equipment, mineral fuels, chemicals, foodstuffs,

consumer goods

Primary imports partners:US (14.7 of total

imports), Malaysia (11.6 percent), China (10.5

percent), Japan (7.6 percent), Indonesia (5.8 percent),
South Korea (5.7 percent)

IMPORT AND EXPORT

Merchandise trade buying and selling of tangible

products.

Service Trade buying and selling of intangible

products.

THEORIES OF
INTERNATIONAL TRADE
Theory of Absolute advantage a theory suggesting that

under free trade, each nation gains by specializing in

economic activities in which it is more efficient producer.

Ex: Computer, Machinery, etc

Free trade The idea that free market forces should

determine the buying and selling of goods and services with

little or no intervention.

Absolute Advantage the economic advantage one nation

enjoys because it can produce a good or service more

efficiently than anyone else.

THEORIES OF
INTERNATIONAL TRADE
Theory of Comparative Advantage a theory suggesting that a

nation gains by specializing in production of one good in which it

has comparative advantage.

Example : Singapores educational ecosystem

Comparative advantage The relative advantage in one

economic activity that one nation enjoys in comparison with other

nation.

Product life cycle theory a theory suggesting that patterns of

trade change over time as production shifts and as the product

moves from new to maturing to standardized stages.

Ex: nothing to electronics trade

THEORIES OF
INTERNATIONAL TRADE
Strategic Trade Theory the strategic intervention by

governments may help domestic firms reap first-mover

advantages in certain industries.
National Competitive Advantage of Industries
Competitive advantage of different industries in a nation

depends on the four interacting aspects of a diamond.

Factor endowments
b) Domestic demand
c) Firm strategy, structure, and rivalry
d) Related and supporting industries
a)

REALITIES OF
INTERNATIONAL TRADE
Tariff Barrier is a means of discouraging imports by placing a tariff (tax)

on imported goods.
Import Tariff is a tax imposed on a good brought in from another country.

Nontariff Barrier is a means of discouraging imports using means other

than taxes on imported goods.

Subsidy a government payment to domestic firms
Import quota a restriction on the quantity of goods brought into a country