massimiliano di pace1 international trade concepts - globalisation - internationalisation -...
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Massimiliano Di Pace 1
INTERNATIONAL TRADE CONCEPTS
- globalisation
- internationalisation
- international trade
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INTERNATIONAL TRADE CONCEPTS
Globalisation:
possibility for everybody (all operators from every area of the world) to sell everything (every good and service), to everybody (all
consumers in every area of the world)
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INTERNATIONAL TRADE CONCEPTS
Other concepts relating to Globalisation:
process leading regional economies, societies, and cultures to integration on account of
communication and trade
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INTERNATIONAL TRADE CONCEPTS
Other concepts relating to Globalisation:
integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration,
and the spread of technology
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INTERNATIONAL TRADE CONCEPTS
The United Nations ESCWA (United Nations Economic and Social Commission for
Western Asia, headquartered in Beirut, one of the 5 regional commissions under the
administrative direction of the United Nations Economic and Social Council) has written
that globalisation "is a widely-used term that can be defined in a number of different ways”
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INTERNATIONAL TRADE CONCEPTS
ESCWA states that “when used in an economic context, globalisation refers to the reduction and removal of barriers between
national borders in order to facilitate the flow of goods, capital, services and labor...
although considerable barriers remain to the flow of labor”
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INTERNATIONAL TRADE CONCEPTS
The concept of Globalisation was introduced in the 60s, when multinational corporations started to disseminate the world with their
products, and became widespread in the 80s, when some brands and logos were well
known in every country (i.e. Coca Cola, Mc Donald’s, Benetton, Exxon-Esso, Mercedes)
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INTERNATIONAL TRADE CONCEPTS
The term “global village” was “coined” in the ’60s by the mass media sociologist
Marshall McLuhan
In the recent years many authors have written on globalisation (Baldwin, Beck, Giddens,
Harley, Pollin, Sen, Stiglitz)
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INTERNATIONAL TRADE CONCEPTS
The globalisation is the result of break down of borders, and practically, as far as trade is concerned, of the overcome of traditional
trade barriers
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INTERNATIONAL TRADE CONCEPTS
The trade barriers are:- tariffs (or duties)- quotas- standards- customs rules- (custom officials’ corruption)
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INTERNATIONAL TRADE CONCEPTS
As a matter of fact globalisation has been promoted by international organisations such
as Gatt (today Wto)
Imf has played an important role for stabilisation of currencies rates and for easing
financial capital flows
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INTERNATIONAL TRADE CONCEPTS
At regional level there are important examples of globalisation:
Eu single market
Nafta
Mercosur
Asean
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INTERNATIONAL TRADE CONCEPTS
The level of globalisation can be measured according to some parameters:
- percentage of Gdp due to Exports- workforce engaged in exporting companies- movements of capitals, as a proportion of Gdp- foreign workers, weighted by population
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INTERNATIONAL TRADE CONCEPTS
The effects of globalisation are multifold:
- standardisation of goods and services
- increasing competition
- broader choice for consumers and economic operators
- more intense capital flows
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INTERNATIONAL TRADE CONCEPTS
- stronger labour mobility- faster pace of technological innovations- higher mutual influence of economies - major need of policies coordination for governements - more difficult control activities for crime fighting and fiscal monitoring
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INTERNATIONAL TRADE CONCEPTS
- greater importance of international languages
- challenges for environmental protection
- risk of political strains on commodities
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INTERNATIONAL TRADE CONCEPTS
Globalisation has stirred up ideological debate
- no global movements: developed in opposition to the perceived negative aspects of globalisation
- commercial disputes: between developed countries and developing countries
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INTERNATIONAL TRADE CONCEPTS
Critics on globalisation relate to: - unfair exploitation of poor countries- multinational companies imposing their products- delocalisation towards countries with lower labour cost and more flexible environmental rules- external policies driven by commercial purpose- income inequality worsened between and within nations- fading away of local cultures
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INTERNATIONAL TRADE CONCEPTS
The concept of internationalisation can be referred to:- economies- companies
When referred to economies, internationalisation means that your internal market is open to foreign
companies, and that your national companies operate overseas
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INTERNATIONAL TRADE CONCEPTS
When referred to companies, internationalisation can have 2 possible
meanings:
1° (stricter concept): a company is “international”, when it is present in foreign
markets with its own facilities (such as branches, local companies), for commercial or
productive purposes
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INTERNATIONAL TRADE CONCEPTS
2° (broader concept): a company is “international”, when it sells abroad directly, even if it has not
permanent facilities in foreign market (i.e. selling during local exhibitions)
According to the latter concept, the internationalisation process of a company starts with
exports
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INTERNATIONAL TRADE CONCEPTS
As a matter of fact, companies, before establishing facilities abroad, they consolidate their experience of sales in a foreign market , and just after that they consider to build up a
facility, which is at the beginning a commercial branch, and afterwards, if
necessary, a manufacturing local company
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INTERNATIONAL TRADE CONCEPTS
International trade is the exchange of goods carried out by different countries
Goods are usually are valued at the frontier of the exporting country (cif or fob)
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INTERNATIONAL TRADE CONCEPTS
Under the theoretical point of view we cannot call “export” the sale of goods in other
countries members of the same single market (i.e. Eu countries)
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INTERNATIONAL TRADE CONCEPTS
The exchange between countries may include also:- sale of services (i.e. transportation, tourism, communications, insurance, financial services, information services, business and personal services);- transfer of income (salary paid to non-residentWorkers, investment income due to financial assets)- current transfers (remittance of foreign workers to homeland)
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INTERNATIONAL TRADE CONCEPTS
The previous transfers are registered in the current account of balance of payments
Other transfers are registered in the capital account:- transfer of financial capitals (funds)- transactions of intangible assets (patents, goodwill)
Others in the financial account:- direct investments (equity capital)- portfolio investment (equity and debt securities) - other investments (including derivatives, reserve assets)