I. Importance of international trade

The so-called international trade refers to international economic activities in which countries discuss trade in goods and services; Figure 17- 1 shows that the growth rate of global trade is faster than that of global output; In 2008, the American subprime mortgage detonated Lehman Brothers and declared bankruptcy, which led to the global stock market and other financial industries. Therefore, the relationship between the global economy is the most appropriate.

Figure 17- 1 Global Commodity Trade and Output Growth

Second, the types of international trade:

The types of international trade are divided into the following two types:

(1) Visible trade: the exchange of goods and financial goods between the two countries; For example, Taiwan Province Province exports computers to the United States and buys military weapons from the United States.

(2) Invisible trade: labor exchange between the two countries; Including finance, insurance, transportation, etc. For example, Citibank of the United States invests in the domestic financial industry to facilitate the introduction of transportation services from Japan to Taiwan Province Province; Taiwan Province Province imported foreign workers from Southeast Asia.

17- 1-2 reasons for international trade

First of all, countries have different resource endowments.

In the whole Middle East of Iraq, although the ground is a desert that can't be planted, it is covered with black gold, so the oil industry has arisen. Australia and New Zealand have fertile land and clean water, so animal husbandry is developed. China and Viet Nam have cheap labor, and labor-intensive industries have been established here. Different countries have different resource endowments, and each country focuses on producing products that belong to its own advantages. It is of great benefit to implement specialization and free trade.

Second, countries have different levels of production technology and professional division of labor.

Every country has different levels of expertise. For example, there are many computer-related technologies in China, so the export value of computer-related industries is the best in the world. Germany is a top automobile industry; The watch industry is Switzerland; Therefore, it is necessary to rely on international trade to enable global consumers to have products with high technical level produced by other countries.

Third, the factors of production lack liquidity.

The land in the factors of production is fixed and cannot be moved; Labor countries have relevant laws and regulations to restrict their flow; The above-mentioned natural or man-made trade barriers prevent the free flow of production factors, so when one party rich in production factors can rely on the other party with insufficient international trade flow, resources can be fully and effectively utilized and global consumers can benefit from it.

Fourth, the temporary imbalance between supply and demand in the domestic market.

When irresistible natural disasters come, such as wind, flood and drought, it is most likely to disrupt weather-dependent agriculture. Therefore, when the crop output is insufficient or surplus, the government can rely on import and export to solve the problem of imbalance between supply and demand.

17- 1-3 benefits of international trade

British economist Robertson said that "trade is the engine of economic growth", and its overall benefits to the country and society are as follows:

I. Promoting international division of labor and making effective use of resources

If a country changes from a closed economy to an open economy, it usually helps to improve social welfare, as shown in figure 17-2, as shown in the following figure:

(1) closed economy:

D and S are respectively the demand curve and the supply curve in a closed society. At the equilibrium point E, the equilibrium price is P0, the equilibrium transaction volume is Q0, the consumer surplus is δδP0EA, the producer surplus is δδP0EF, and the social welfare is P0EF.

(2) Open economy:

When the government opened the import, the international price of this commodity was P 1, so the domestic price dropped from P0 to P 1. Facing the price of P 1, domestic manufacturers are only willing to supply Q 1, but the demand of consumers is Q2, the surplus of consumers is δp 1CA, and the surplus of producers is δp 1BF. After the open economy, consumer surplus increased P0P 1CE, producer surplus decreased P0P 1BE, and social welfare increased Δ δEBC.

Figure 17-2 Benefits of International Trade

Second, consumers enjoy the benefits of trade.

After international trade, consumers have more goods to choose from at home and abroad. Under the fierce competition of domestic and foreign manufacturers, consumers can naturally enjoy the benefits of trade.

Third, improve production efficiency.

After international trade, facing the vast international market, manufacturers will make full use of equipment, adopt new production technology and management system, realize economies of scale, reduce production costs and increase international competitiveness.

Fourth, promote competition.

International trade, open imports, manufacturers have to be "cautious" in the face of overseas competitors, so we must improve product quality and strengthen service efficiency to attract new knowledge.

17-2 international trade policy

17-2- 1 free trade

First, the significance of free trade:

It refers to a system in which goods and services are traded between countries without government intervention or tariff barriers, allowing countries to trade according to economic principles.

Advocates: represented by Adam Smith and Ricardo of the classical school, based on the principle of international division of labor.

Third, the advantages of free trade.

(1) Realizing international division of labor: As a result of international professional division of labor, the international goal of "making the best use of people and things" can be achieved. (2) Promote the effective use of resources and improve the progress of production technology: under free trade, if domestic manufacturers do not use the most efficient production scale, their products will lose their competitiveness in the international market and be replaced by products from other countries. (3) Balance the price levels of various countries: expand the market scale, reduce production costs, balance the price levels of various countries, and increase the world total output. (4) Improve the consumption welfare of people all over the world: Under the principle of international division of labor, people all over the world can enjoy high-quality and cheap products and improve their consumption welfare.

4. Difficulties in implementing free trade:

(1) Countries have different degrees of economic development: there are even decades of differences in production technology, resource utilization and consumption concepts. It is really not easy to bring developing countries and backward countries to the same level.

(2) Different political positions or systems: there are differences between the free economic system, the socialist economic system and the capitalist economic system, and the gap is not easy to cross.

(3) In order to protect their basic industries, economically backward countries often adopt protective trade: this is the sad song of economically backward countries, so local consumers, driven by patriotism, have to consume more expensive goods than other countries.

(4) It is beneficial to economically developed countries, but not to developing countries and backward countries: the products produced by economically developed countries have good technology, and under mass production, the prices are cheap, which can only be left behind by developing countries and backward countries.

17-2-2 trade protection

First, the significance of protecting trade.

In order to safeguard the national economic interests of the country and protect domestic industry and commerce, it adopts economic and political protective tariff policies against other countries.

Second, advocates: represented by the German economist F.List.

Third, the reasons for the implementation of protection trade

(a) Protection of infant industries

F. Liszt, an economist of German historical school, believes that a country should foster its infant industry (newly established industry) in the process of economic development so as to avoid being destroyed by mature foreign industries, but when it develops to a certain extent, if it is an important industry with development prospects, it will continue to be protected, and when the protected industry is mature, it should be immediately revoked; However, agriculture should not take protective measures to avoid losing the benefits of regional division of labor.

(2) Maintain economic independence

China's important industries must be self-sufficient and not dependent on imports from other countries, so as to maintain economic independence, especially in extraordinary times, and avoid being looked down upon.

(3) Preventing dumping

The so-called dumping means that a country sells its products abroad at a price lower than its domestic market in order to crack down.

Industry in estuary countries. In order to prevent cheap dumping of foreign goods and damage to domestic products, a protective tariff policy has been adopted. For example, in 2007, China government imposed 140% anti-dumping duty on shoes imported from the mainland to protect the domestic footwear industry.

(4) maintain high wages.

In order to resist the low-price competition of industrial products in low-wage countries, high-wage countries must adopt protective policies to maintain their high wage levels.

(5) Increase domestic employment opportunities.

If protective tariffs are adopted to reduce the import of foreign goods, the demand for domestic goods will increase, thus improving the employment opportunities of domestic workers.

(6) Obtaining customs revenue

If we can impose protective tariffs on imported goods, it will make the government's fiscal revenue rich.

(seven) to maintain the balance of production costs.

The tax amount of a country's protective tariff should be equal to the difference between the production cost of its own goods and imported goods, so as to keep their relative prices equal.

(8) Maintaining the balance of international payments.

When a country's trade deficit cannot be improved quickly and effectively, protective tariff or quota system is adopted to restrict imports to balance the trade deficit.

Fourth, the defects of trade protection.

(a) short-term protection of trade, long-term inefficient use of resources.

Protected industries are like "flowers in a greenhouse". Without the stimulation of foreign competitors, there is limited room for improvement, which will only make resources inefficient.

(2) Appropriate and reasonable protective trade policies are helpful to a country's economic development and stability.

Properly and reasonably protect our basic industries and avoid being controlled by other countries. When protected industries are growing, we must remove the umbrella in time to make them strong enough to compete with other countries.

(3) The extremely protective trade policy violates the principle of international professional division of labor.

Excessive and extreme protection policies will make "love enough to harm people." If you don't take off your umbrella at the right time, it will become a "helpless struggle." Once the protection policy is withdrawn, it will eventually be vulnerable and defeated.

(4) It is easy to arouse retaliatory tariffs of other countries and form an economic war.

Countries should seek consumer welfare for each other's people on the basis of reciprocity, but if one party

Selfish mentality will trigger the retaliatory tariff of "an eye for an eye, a tooth for a tooth", and eventually both sides will lose, and no one will win.

Note: Anti-dumping duty: Anti-dumping duty refers to the tax levied on products dumped by foreign manufacturers to China at a price lower than the production cost or their domestic selling price. Another kind of tax, called "balanced tax", refers to the tax levied to counter the export subsidies given by the government of the exporting country.

17-2-3 methods of protecting trade

1. Protective tariff: The so-called tariff refers to the tax levied on the entry and exit of goods, which is divided into the following categories.

Several kinds:

(1) Import tax: it refers to the taxation of imported goods, which is the most common way to protect trade; Under the protection of tariffs, the cost and price of imported goods have increased, which has relatively weakened the price competitiveness with domestic goods.

(2) Export tax: refers to the taxation of export commodities, but most countries do not levy export tax to encourage export to earn foreign exchange.

(3) Export subsidy: refers to the subsidy for export commodities, so as to reduce the cost and price of export commodities and improve the price competitiveness in the international market.

Second, non-tariff trade control:

(1) automatic export restriction (VER):

Through consultation between the two sides, the exporting country voluntarily limits its export quantity.

(2) Import licensing system:

The import of imported goods must first apply to the competent authority (China is the International Trade Bureau of the Ministry of Economic Affairs) to issue an "import license", and then the import is allowed.

(3) Input quota system (quota):

The government stipulates the quantity or type of imported goods in a certain period of time.

(4) barter exchange system:

The competent departments of the two countries signed a trade agreement, stipulating the quantity or amount of goods purchased by the two countries within a certain period of time.

(5) Input-output chain system:

The government stipulates that the acquisition of import rights must be based on the fulfillment of export obligations; In other words, when importing goods of a certain value, we must export domestic goods of the same value.

(6) Dual exchange rate system:

Adopt different exchange rates for import and export commodities or different kinds of imports in order to increase exports and reduce imports.

(7) Trade administrative control:

For example, the Japanese authorities stipulate that all textiles imported into Japan must be able to withstand 50 pounds of tension, otherwise they are not allowed to be imported.

3. Import and export exchange ratio

The so-called terms of trade, referred to as TOT, refers to the import quantity that a unit of export can exchange in the international market; In terms of relative price, that is, the ratio of the international price of export products to the international price of imported products. The formula is simplified as follows:

Terms of trade = import quantity; Export quantity (m); (x) = international export price; International import price.

When a certain amount of exports can get more imports, or the price of exports rises faster than imports, that is, the TOT value becomes larger, that is, m > X, which is called terms of trade improvement, that is, fewer exports get more imports. On the contrary, when the TOT value becomes smaller, that is, m < x, it is called trade.

The deterioration of conditions means more exports in exchange for less imports.

Classroom test

1。 Which of the following is not the cause of international trade? Different countries have different production technologies. (2) The factors of production are highly mobile. (c) Different countries have different resource endowments. (d) Temporary imbalance between supply and demand in the domestic market.

(C)2。 What does Robertson say is the engine of economic growth? (a) investment (b) savings (c) trade (d) foreign exchange

(C)3。 Which of the following is wrong about the benefits of free trade? (a) Improving consumer welfare; (b) Efficient use of resources; (c) Convergence of production technologies among countries; And (d) the benefits of international division of labor.

(A)4。 Countries that export their products abroad at a price lower than the production cost or the domestic market are called.

(a) Dumping (b) Distribution (c) Subsidies (d) Export licenses.

(4) In the control of non-tariff trade, it is said that a government stipulates that a certain amount of goods must be exported first. (a) quota system (b) import license system (c) barter system (d) import and export chain system.

(B)6。 When the terms of trade improve, it means that the quantity of exports can be exchanged for the quantity of imports, which is relatively less than (a) and more than (b), just like (c), and (d) is incomparable.

(C)7。 Economists who put forward "protecting infant care industry" in the theory of protection trade are (a) Adam Smith (b) Ricardo (c) Liszt (d) Marshall.

(C)8。 What will happen if a country adopts a long-term protective trade policy? (1) The national financial revenue is abundant; Emerging industries are booming; Abuse of domestic resources; Domestic workers keep high wages.

(B )9。 At present, some countries in the world adopt protective tariffs, which usually refer to (a) export taxes and (b) import taxes.

Transit tax.