Definition of international trade: issues, flows, trends

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What is the definition of “International Trade”?

International trade includes all commercial exchanges of goods and services between foreign countries. It can act on all the activities of production, marketing, export or import.

What is the WTO?

Inaugurated in 1995, theWTO, which is the World Trade Organization, is responsible for regulating international trade between countries.

The opening of international trade is beneficial for all, the WTO is therefore responsible for facilitating free trade while providing assistance to governments that have difficulty settling commercial disputes, whether financial or administrative.

What are the issues surrounding international trade?

International trade is linked to globalization, which has constantly changed our society and trade between countries.

What is globalization?

The Globalization is a historical process resulting from human innovation and technical and scientific progress, leading to the interdependence of countries. This process of opening up to a global market corresponds to a free exchange of national economies of capital, services, goods, people, techniques and information.

What are free trade agreements?

International trade is promoted through free trade agreements or treaties between countries. These formal agreements allow many states to facilitate trade, including lowering tariff barriers such as customs duties or facilitating administrative procedures.

Towards a sustainable trade?

The development of international trade has not been without effect on the environment : air, water and soil pollution caused by transport and continuous production.

In 1992, global development issues were raised at the United Nations Conference on Environment and Development in Rio. Thus, the need for awareness for the protection of nature and the regulation of the working conditions of the different actors was stressed.

Also, the notion of sustainable trade is developing today. Still in development, this idea emphasizes the need for all trade in goods and services to generate social, economic and environmental benefits while remaining consistent with the basic principles of sustainable development.

The challenge is to create virtuous economic value by reducing poverty and social inequalities, preserving and reusing resources and raw materials.

What indicators are measured in international trade?

International trade can be measured by the flow of exports and imports of services and goods between different countries or geographical areas.

When working in international trade, certain indicators can be used to measure the evolution of a market, such as:

  • The price of raw materials in the sector concerned;
  • The cost of land, sea and air transport;
  • The evolution of taxes.

What are the trends in international trade?

International trade as an engine of growth

International trade has been a well-established phenomenon since the 19th century, far superior to world production. This is also confirmed after the Second World War, then between 1980 and 2015 when international trade is multiplied by 7.8 while the GDP (Gross Domestic Product) is by 6.8 (information provided by the WTO and the World Bank). In this regard, global trade can be seen as a main driver of growth.

Manufactured goods and services in international trade

International trade goes hand in hand with technological developments and global innovations. Trade in agricultural products has been neglected in favor of manufactured goods and services. The latter hold the central place in international trade.

The place of the Triad

International trade has become more geographically concentrated among three areas. The major world powers, the Triad consisting of Europe, Asia and North America, account for 85% of world trade.

This trend is evolving, but has still left out certain geographical areas such as Africa, the Middle East, Latin America and Central and Eastern Europe.

What are the common mistakes around the notion of international trade?

International trade and globalization

It is quite common for the notions of international trade and globalization to be confused. Globalization encompasses the free movement of goods, services, capital and people.

International trade, on the other hand, only involves the flow of goods and services between countries.

State power over international trade

International trade suggests that states control it. However, if a country is led to consider a negative trade balance, it is not the State which is jointly responsible for the debts and which pays the deficit. It is more about the country or the nation concerned which will have the obligation to find the missing capital, in particular with the help of bank loans.

What training for international trade?

In order to pursue a career in international trade, it is necessary to study in order to understand international issues, to study foreign languages and to understand the concepts of the organization of a company and the economic world in which the company evolves.

To this end, a generalist business school program seems the most appropriate. ESCE has been offering a post-baccalaureate Grande Ecole program since 1968, to train students in international development.

The main mission of the school is to train responsible international managers and

able to adapt to the increasing complexity of organizations and environments.

The curriculum offered by ESCE allows you to:

  • Complete 12 to 18 months of academic exchanges;
  • Doing part of your schooling in a work-study program in a company;
  • Study foreign languages such as Chinese, Arabic, German and Spanish, in addition to English, which remains mandatory.

It is of course possible to join the course throughout your schooling, as part of your Master’s degree, for example.

What jobs can you do in international trade?

The professions of international trade are wide, the student can aim for a career as:

  • Commercial director ;
  • Import/export manager;
  • Marketing Manager ;
  • Business development project manager;
  • Head of International Affairs;
  • Broker…


Updated 19 April 2023