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WORLD TRADING SYSTEM: WHAT DO WE KNOW AND DON’T KNOW?

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Presentation on theme: "WORLD TRADING SYSTEM: WHAT DO WE KNOW AND DON’T KNOW?"— Presentation transcript:

1 WORLD TRADING SYSTEM: WHAT DO WE KNOW AND DON’T KNOW?

2 Meaning of Trade TAKING STOCK OF KNOWLEDGE

3

4 15-4 COUNTER TRADE  Denotes a whole range of barter-like agreements  Primarily used when a firm exports to a country whose currency is not freely convertible  Developing countries  Importing country may lack the foreign exchange reserves required  8 to 10% of world trade in form of countertrade  Example: Venezuelan government’s contract with Caterpillar.

5 Goods vs. Services TAKING STOCK OF KNOWLEDGE

6 GOODS AND SERVICES  Goods are things you can buy that you can touch. Can you buy apples? Can you touch apples? Then the apples are goods. Can you touch and buy jump ropes, swing sets, bats and balls, caps, pans, or pencils? These items are all called goods.

7 GOODS AND SERVICES  From time to time we also buy things that cannot be touched. For example, we buy haircuts when we go to the barber shop or the salon. We buy repairs and cleaning for our teeth when we go to the dentist. In both cases, we are buying a SERVICE. It is something done for us.

8 Traded vs. Non-Traded Products / Services TAKING STOCK OF KNOWLEDGE

9 Local and Global Trade (economic vs. political vs. cultural borders) TAKING STOCK OF KNOWLEDGE

10 Country A Country B Country C FLOWS ACROSS ECONOMIC BORDERS Barriers

11 Trade with System vs. Trade without System TAKING STOCK OF KNOWLEDGE

12 THE EFFECT OF TRADE WITHOUT SYSTEM January February March April May June July August September October November December 1929 1930 1931 1932 1933 $3.0bn $0.9bn Trade figures: per month

13  Focus on  the flows of goods and services across countries (beyond national economic border),  rules and regulations governing the flow, and  impacts of strengthening the flows on economic, social, and environmental aspects of developing countries WORLD TRADING SYSTEM

14  Value chain FLOW OF GOODS AND SERVICES Who is involved? How do they benefit? Cotton How do they manage the production? What are the impacts? apparel Is there any standard set? Is there any taxes charged? How is it shipped overseas? shirt

15 Country A Country B Country C FLOWS ACROSS ECONOMIC BORDERS Barriers

16 Multilateral Regional Bilateral RULES AND REGULATIONS

17 IMPACTS OF LIBERALIZATION TO DEVELOPING COUNTRIES CottonapparelshirtCottonapparelshirt Before liberalization in terms of economic, social, and environment After liberalization in terms of economic, social, and environment

18 Value Chain Country A Value Chain Country B WORLD TRADING SYSTEM Barriers, Rules, Regulations Impacts of Liberalization

19  Trade and development Policies  Import Substitution  Export led Growth  Sustainable and Inclusive TRADE DEVELOPMENT POLICY

20 FUTURE TREND


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