Trade Commence !
Trade Commence !
Trade Commence
Trade includes trade and ancillary services. If we express this in the form of an equation then
income = trade + ancillary services.
Trade
Trade is the process of exchanging goods and services on the basis of money to satisfy human needs and wants.
This trade can be classified into two:
• Domestic trade
* Foreign trade
Domestic trade Home trade
Is a wholesale sale activity that takes place within the political or geographical boundaries of a country using that country's currency unit and according to domestic laws. This is done as retail and wholesale trade.
Foreign trade foreign trade
Export and import trades that take place between two or more countries outside the political or geographical boundaries of a country using an international currency unit and according to international laws are called international trade.
Retail Business
Retail business is a business that deals with the purchase and sale of goods and services for the purpose of final consumption.
Characteristics of Retail Business
• Purchase and sale of goods and services for the purpose of final consumption
* Various types of goods are kept for sale
* Generally, consumer goods are sold in large quantities to create an opportunity for consumption
* Goods are sold on credit
* Able to establish close contact with consumers
Services provided by Retail Business Manufacturer
* Continuous purchase of the manufacturer's products
* Introducing the newly introduced products by the manufacturer to the customer
* Displaying the manufacturer's advertisements, banners, etc.
* Providing immediate feedback after receiving the information from the customers
Wholesaler
* Purchasing goods stored by the wholesaler
* Changing consumer tastes and preferences Providing market information to the wholesaler
* Contributing to the development of wholesale business activities
To the consumer
* Providing the required goods in the required quantity and at the required place
* Providing goods on credit
* Introducing new products Providing information and advice
* Providing various facilities to the consumer
Modern trends in retail business
* Being equipped with modern facilities Parking lot
Children's park
* Some businesses are established to use new technologies
• Pricing
* Color coding
* Digital measurements
* Electronic payment services Credit card
* Supervision systems
Non-point retail trade A method in which consumers order and receive goods without going to the outlets and use telephone, fax, internet etc. to purchase goods
Wholesale trade
Is the sale of goods and services to the buyer for the purpose of resale and the purchase of products for the purpose of resale. The person engaged in this business is called a wholesaler.
Characteristics
* Purchase and sale of the same type of goods takes place
* Goods are made for the purpose of resale.
* Trade discounts are provided
* Storage of goods in bulk
* Product improvement is carried out more often
* Transporting and handing over the goods to the appropriate place
Market research is more beneficial to the manufacturer
* Providing market information
* Obtaining goods from the manufacturer in bulk
* Providing various services to the manufacturer Raw material water
To the retailer
* Supplying goods in bulk
* Transporting and handing over the goods to the retailer
* Providing credit facilities
* Engaging in services such as selecting, packaging, mixing goods
Foreign trade When a country engages in business activities beyond the political boundaries/geographical boundaries of a country with another country or several countries, it is considered international or foreign trade.
The basis for the emergence of foreign trade is the way natural resources are shared.
Each country has its own unique natural resources and the related products are produced only by its own countries.
For example, oil in the Middle East.
Comparative cost advantages
If a country can produce goods at a lower cost than importing them, it should produce and export those goods, and if it can import them at a lower cost than producing them, it should import those goods. International trade is necessary on the basis of.
Example: Clothing production
* Legal monopoly in some countries regarding some products (Patent and Copy Wright) and
* The skills and technology required for some products are not available in all countries and are limited
• Example: Robot technology, Motor vehicle technology
. Product development Use of various development strategies to market its products all over the world
. Reduction of trade barriers Most of the barriers to trade, such as water taxes and water, have been removed
Types of Foreign Trade
Import Trade
Export Trade
Re- Exports
Export Trade
1. Import Trade
Importing or purchasing goods and services from other countries or countries is called import trade. For example, bringing computers to Sri Lanka from the United States.
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2. Export Trade
Importing or selling goods or services from one country to another country or countries is called entrepot trade. Sri Lanka sending tea to Iraq
3. Re-export
Trade Importing goods from one country to another country or countries with or without customs duties is called fish export trade. Here, the administrative tax paid during import can be reclaimed during export. For example, importing fabrics and other products, manufacturing clothes and exporting them to other countries
4. Export trade
Is the process of re-exporting imported goods from abroad, without bringing them into the country, with or without re-arranging them at the port.
An example of export trade is Sri Lanka importing tea from India and exporting it to Iran.
Advantages of engaging in foreign trade
1. Exporting surplus products
2. A country can import products that it cannot produce itself
3. Earning foreign exchange
4. Obtaining economic benefits When producing products on a large scale for a wider market, an economic saving can be achieved
5. Developing trade relations and international cooperation
6. Developing new technical and management skills
7. Supporting economic development.
Example: Creating jobs,
raising the standard of living of the people,
obtaining the highest quality of resources.
Free trade is the opportunity for various groups to freely import and export goods without any restrictions.
The imposition of tariffs on trade between countries is called tariff barriers.
Barriers that hinder free trade in addition to tariffs are called non-tariff barriers.
1. Import restrictions / quotas
2. Export restrictions / quotas
3. Import / export bans
4. Trade agreements
5. Strict foreign exchange rates
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Trade blocs, trade blocs
Trade blocs are agreements between a number of countries to form a common tax, customs and trade-related agreement.
Examples of trade blocs include the European Union (EU) ASEAN (ASEAN)
Group of (G8)
European Union (EU)
This is an organization formed by 26 countries in Europe for their regional, economic, social, political and cultural development. It was initiated by a treaty signed by six European countries in 1987. Its member states have implemented a common trade agreement, agricultural and fisheries policy, and regional development policy. In 1990,
the EU's EU member states were: Austria, the Netherlands, Portugal, Spain, the Czech Republic, Bulgaria, Italy, and Mosta, and Austria.
Latvia Romania Macedonia Poland Slovenia Belgium Cyprus Lithuania Ireland Luxembourg France Germany a.moe.gov.lk Hungary Slovakia Croatia Association of South East Asian Nations (ASEAN).
This is an organization formed by ten countries in Southeast Asia for political, economic, social, and cultural development. It was first established in 1961 by three countries such as the Philippines, Malaysia, and Thailand.
ASEAN (ASEAN) member countries Philippines, Indonesia, Vietnam, Cambodia, Malaysia, Singapore, Thailand, Brunei Group of Eight (G8)
This is a trading bloc formed by the world's major countries. The fuel crisis that arose in 1973 and the global recession were factors that influenced the formation of this alliance.
The member countries of the G8 are the United States of America (USA) ,West Germany Germany, Japan, Russia, United Kingdom (UK), Italy, France Russia has now left the G8 organization.
Trade Agreement
An agreement between two or more countries to exchange goods for a specified period of time is called a trade agreement. An agreement between two countries is called a bilateral agreement, while an agreement between several countries is called a multilateral agreement.
Examples: North American Free Trade Agreement (NAFTA)
South Asian Free Trade Area (SAFTA)
North American Free Trade Agreement (NAFTA)
The main objectives of the free trade agreement, which was formed on January 1, 1994, by three North American countries, namely the United States of America, Canada, and Mexico, are as follows:
1. Removal of trade barriers between the three countries
2. Removal of tariffs
3. Exchange of workers
The special feature of this agreement is that only the products of the three countries are covered by this agreement. The South Asian Free Trade Area (SAFTA) is exempt from customs duties only on products marked as "Made in the United States of America", "Made in Canada" or "Made in Mexico" when they are moved between these three countries.
South Asian Free Trade Area (SAFTA)
This organization was formed among the SAARC countries with the aim of achieving the following objectives:
1. Expanding cooperation among the SAARC countries
2. Creating a free trade area within the South Asian countries
3. Globalizing the economic system of the SAARC countries.
This agreement was signed during the 12th SAARC Summit held in Islamabad in 2004. After the entry into force of this agreement,
a general agreement was reached between the signatory countries on the agreement without any barriers:
* Elimination of customs duties
* Provision of port and transport facilities
* Provision of trade-related services
Asia-Pacific Trade Agreement (APTA) This agreement,
which was initiated in 1975 under the name of the Bangkok Agreement, was renamed the Asia-Pacific Trade Agreement on November 2, 2005.
Its member countries are Bangladesh, India, Sri Lanka, South Korea, Mongolia.
This is the oldest leading trade agreement in the Asia-Pacific region. The aim of this trade agreement is to reduce trade barriers as much as possible so that non-member countries can import goods and services from member countries more easily than importing goods and services from member countries, thereby accelerating economic development among member countries.
The Asian Development Bank
provides loans to member countries and helps alleviate poverty in those countries. The Asian Development Bank is a regional organization of 48 countries in Asia. This is an organization that was founded on December 19, 1966, by 19 Pacific Rim countries, bringing the total to 67 countries.
It is headquartered in Manila, Philippines. Its main objective is to promote the social and economic development of its member countries. International Bank for Reconstruction and Development (IBRD)
This is an organization that was established on 27th of May 1945 through the Bretton Woods Agreement to rebuild the economies of Europe devastated by World War II and to reduce poverty in developing countries.
• The International Bank for Reconstruction and Development's activities are
• to provide loans for development programs in developing countries.
• The main goal is to transform the world into a prosperous place and reduce poverty.
The International Monetary Fund is an organization created by the United States to provide financial and technical assistance and to supervise exchange rates and balance of payments. It is located in the city of
The main objectives of the International Monetary Fund are to improve
• The financial cooperation of the world countries,
• provide opportunities for international trade,
• expand employment opportunities, promote economic development,
• reduce poverty, and ensure financial stability.
The impact of trade associations, trade agreements, and international organizations on foreign trade
01. Eliminate tariffs and non-tariff barriers to free trade
02. Improve cooperation between countries
03. Provide a stable market for their countries' products through trade agreements
04. Reduce the disadvantages caused by price fluctuations by obtaining a stable price
05. Provide equal rights for all member countries
06. Increase global financial cooperation and ensure financial stability
07. Expand employment opportunities, promote economic development, and reduce poverty Modern trends in foreign trade
Expanding foreign trade worldwide through e-commerce
* Formation of new business networks and business alliances to accelerate economic development and better address economic challenges.
* Focusing on using products with advanced technology rather than relying solely on traditional exports.
* Engaging in foreign trade policies to promote high-value products
* Current focus on export packaging in Sri Lanka
Trade Commence !
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