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International Trade

International Trade. By: group B Nila Regmi Ruchi Agrawal Pratima Nepal Sonam Agrawal Vandana Poddar Namrata Nepal Sagun Sharma. International trade is a transaction that take place between two or more regions, countries and nations beyond their political boundary.

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International Trade

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  1. International Trade By: group B NilaRegmi RuchiAgrawal Pratima Nepal SonamAgrawal VandanaPoddar Namrata Nepal Sagun Sharma

  2. International trade is a transaction that take place between two or more regions, countries and nations beyond their political boundary. • This type of trade gives rise to a world economy, in which prices, or supply and demand, are affected by global events.

  3. Need for international trade: • Enhances the domestic competitiveness • Takes advantage of international trade technology • Increase sales and profits • Extend sales potential of the existing products

  4. Enhances the potential for expansion of your business. • Gains a global market share. • Reduce dependence on existing markets. • Stabilize seasonal market fluctuations.

  5. International business in Nepal: • May not be among the best known of trading centers in Asia. • Nepali government has tried to make the Nepali economy more conducive to investment by entering into various trade agreements and investment protection pacts.

  6. The export areas that Nepal does best in are the production of garments and carpets industry. • It is heavily reliant on the Indian economy and exports. • There is also a level of political instability in the country that makes large long term investing slightly difficult.

  7. Volume of Trade • The total quantity of futures contracts bought and sold during a trading day. • Volume tells investors about the market's liquidity. • Volume also tends to be higher near the market's opening and closing times, and on Mondays and Fridays.

  8. Trading volume has slumped to the lowest level since September 2007 • Trading volume is down more than 30%, compared with the average August over the past five years. • "One of the big knocks on this rally is that volume has been light"

  9. In June 2012 compared with May 2012, the volume of retail trade1 rose by 0.1% in the euro area (EA17) and fell by 0.3%. • In June 2012, compared with May 2012, “Food, drinks and tobacco” rose by 0.4% in the euro area and fell by 0.1%. • The non food sector declined by 0.7% in both zones.

  10. DIRECTION OF TRADE • Concerned with the trade flows • Destinations of these merchandise exports • Trend from 1970 to 2004

  11. DIRECTION OF TRADE STATISTICS • Statistics on exports and imports by partner countries are maintained in the database and disseminated through publications and magnetic tapes. • Published by IMF.

  12. SOURCE:DIRECTION OF TRADE STATISTICS(DOTS)

  13. Regionalization of Trade • Regional blocs are old phenomenon but has spread in the whole corner of the world. • A trade pact (also known as trade agreement) is a wide ranging tax, tariff and trade pact that often includes investment guarantees. • The trade agreements are: EU(European Union), NAFTA(North American Free Trade Agreement)

  14. European Union • Is an economic and political entity  of 27 member stateswhich are locatedprimarilyinEurope • Founders of EU: Belgium, France, (then-west) Germany,Italy, Luxembourg and the Netherlands • aim to ensure the free movement of people, goods, services, and capital, enact legislation in justice and home affairs, and maintain common policies on trade,agriculture, fisheries and regional development.

  15. NAFTA • Is an agreement signed by the governments of Canada, Mexico,and the United States,creating a trilateral trade blocin North America. • The agreement came into force on January 1, 1994. • The goal of NAFTA was to eliminate barriers to trade and investment between the US, Canada and Mexico.

  16. New patterns of trade emerge • Changes in geography • World trade in goods will total around US$35t, two and a half times its value in 2010. At the same time, world trade in services will double to around US$6t. • Europe’s exports to Africa and the Middle East by 2020 are forecasted to be almost twice as large as Europe’s exports to the US. • China’s dominance in low-end manufactured goods will increasingly come under pressure.

  17. Changes in supply • Companies seek out the lowest-cost provider for components, regardless of location. • Relationships and trust are the most important factor enabling success in international trade.

  18. Changes in sectors • The machinery and transport equipment sector will make the largest contribution to trade over the next ten years. (example; electric products such as computers, televisions and washing machines, as well as industrial goods ) • There is enormous potential for Western companies to benefit from growth in banking, insurance and other financial services.

  19. Trend in Trade • Total imports and exports of G7 and BRICS grew by 1.0% and 0.6% respectively. • In contrast, trade slowed sharply in China, with exports contracting (by 4.2%) for the second consecutive quarter and imports contracting (by 3.8%) for the first time since the first quarter of 2009.

  20. Imports and exports grew in Germany (by 0.9% and 1.8% respectively), Japan (by 1.5% and 2.1%), the United Kingdom (by 2.7% and 1.6%), the United States (by 4.0% and 2.0%), India (by 5.7% and 5.9%) and South Africa (by 6.3% and 4.8%). • Import growth was flat in France and contracted (by 3.2%) in Italy but exports rose in both countries (by 0.7% and 1.3% respectively).

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