According to an economic survey published by the Organization for Economic Cooperation and Development (OECD) in 2005, Chinese exports grew at an average rate of 6% since the mid-1980s. Although China’s export growth was affected by a global slowdown, the country overtook the US to become the world’s second largest exporter by end-2007. The OECD had predicted that China would become the world’s largest exporter by 2010.
Trade data shows fluctuations in trade volumes and trade flows both in case of regional and cross border trade. Trade statistics reflect how change in demand affects the exchange of goods and services between the trading nations.Trade information provides an idea about the overall performance of the world economy.
Trade commissions (or trade com) and trade promotion boards keep a tab on the trading activities across the world. A trade commission enforces protection and antitrust laws to guard consumers and sustain fair competition in the market. On the other hand, a trade promotion board builds demand at the middleman level.
The significant of trade commissions and trade promotion boards pertain to distinct areas of trade.
Trade Commissions
Firms that are involved in international trade activities, i.e. the import and export of goods and services, are called trade companies. Since the operations of these companies span across national borders, they require international business licenses. Also, they are required to abide by the relevant trade agreements and policies set in place by both the producing and consuming countries. Regulations may define which goods are legitimate, how tariffs are to be calculated and what customs laws apply.
Apart from the global trading agreements, there are many regional trading blocs designed for reducing protectionism and fostering world trade. Some of the trade blocs in the world are as follows:
1. European Free Trade Association (EFTA)
Countries such as United Kingdom, Austria, Denmark, Norway, Sweden, Portugal and Switzerland joined for a better trade in the region in the year 1960. Under this EFTA group they abolished all types of protectionism. In the year 1972 both UK and Denmark abandoned their membership.
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.
A trade policy generally focuses on the following specifications in terms of international trade:
The Heckscher-Ohlin model assumes huge importance in the context of international trade. Developed by two renowned Swedish economists named Eli Heckscher and Bertil Ohlin, this general equilibrium model of international trade is based on four economic theorems. The Heckscher-Ohlin model has been developed on the Ricardian theory of international trade, considering the fact that pattern of trade is guided by the endowments of factors of production.
