Trade system Essay

Trade system Essay

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Contents
Introduction to International Trade 3
History and Evololution of International Trade 3
Trends in International Trade 3
Theories of International Trade 5
Absolute Advantage by Adam Smith 5
Comparative Advantage by David Ricardo 6
Gravity Model by Tinbergen 7
Benefits form trade for the poorest of nations 8
Conclusion and Recommendations 9
Bibliography 10



Introduction to International Trade
International trade is an activity wherein there is an exchange of goods, services, and capital for a consideration that happens across the national borders of a nation. Thus, the two parties which undertake such an activity ate called importer (the one who is buying) and an exporter (the one who is selling). This usually represents a significant proportion a nation’s overall output which is measured through its GDP (Gross Domestic Product). The only reason why such a trade happens is because there are gains from trade and like what we see in any transaction, be it domestic or international, the aim is to benefit from that transaction for both the parties where one or both fulfils their needs for a consideration being given in exchange.

History and Evololution of International Trade
The very history of International Trade can be traced back to the 19th century B.C. where the records attest to the existence of a merchant colony of Assyrian at Kanesh in Cappadocia, now in Turkey. Then we have traces of Cargo being shipped from India and Egypt for trade in Aden. Then we have Alexandria in the 5th century A.D. to the Portuguese explorer, Vasco De Gama in India in the end of the 15th century A.D. In the modern times we have the East India Company, Dutch Expeditions, and more.
As trade modernized, technology developments, growth in popul...


... middle of paper ...


...on and Sovereignty- a struggle against opportunism. the journal of international business, 56-61.
Ricardo, D. (2013). The Principles of Political Economy and Taxation . Retrieved November 27, 2013, from http://socserv2.socsci.mcmaster.ca: http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/ricardo/prin/index.html
Smith, A. (1776). An Inquiry into the Nature and Causes of the international trade. London.
stat.wto.org. (2010). Time-Series. Retrieved nov 25, 2013, from Time Series-subject selection: http://stat.wto.org/Statistical Program/WSDBstatProgramseries.aspx
Stearns, P. (2001). The Encyclopedia of World History: Ancient, Medieval, and Modern, Chronologically Arranged. Houghton Mifflin Company.
www.wto.org. (2013). International Trade Statistics, 2012. Retrieved November 28, 2013, from www.wto.org: http://www.wto.org/english/res_e/statis_e/its2012_e/its2012_e.pdf


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