International Trade Terms
Category: International Trade
Trade Deficit
A Trade Deficit occurs when the value of a country’s imports exceed its exports for a specific period of time, usually a year. The relationship between imports and exports are called the trade balance. When exports exceed imports it is called a trade surplus. Trade deficits can occur in both developing and advanced countries. The United States, for example, has been running a trade deficit for many years. While a trade surplus contributes to the GDP of a nation, a trade deficit will reduce GDP.
Trade Barrier
Trade barriers refer to government-imposed policies to restrict international trade. Most commonly, a country’s government employs tariffs, duties, embargoes and subsidies as trade barriers. However, imposing trade barriers are against the concept of free trade, popularized by developed nations.
India and China in World Trade
India and China the two emerging economies have increased their respective share in the world trade. After 1980s the economic performance in both the nations are experiencing a better trend. The percentage share of both the nations in the world trade on various sectors over the years are as follows:
Trade Policy
Trade policy defines standards, goals, rules and regulations that pertain to trade relations between countries. These policies are specific to each country and are formulated by its public officials. Their aim is to boost the nation’s international trade. A country’s trade policy includes taxes imposed on import and export, inspection regulations, and tariffs and quotas.
Constituents of Trade Policy
A trade policy generally focuses on the following specifications in terms of international trade:
