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WEEK 5
TOPIC: FOREIGN TRADE
CONTENT:
- Meaning of foreign trade
- Types of foreign trade: i. Bi-lateral foreign trade ii. Multilateral foreign trade
- Advantages and disadvantages of foreign trade
- Divisions and barriers to foreign trade
MEANING OF FOREIGN TRADE:
Foreign trade which is also called international trade, external trade refers to buying and selling across the border of a country i.e., trade between buyers and sellers at least two different countries. Foreign trade can be either export or import. Export means, selling goods or services abroad i.e. The seller is resident in the country while the buyer is resident in another country. Import on the other hand refers to buying of goods or services from abroad i.e., the buyer is resident in the country while the seller is resident in another country.
EVALUATION:
What is international trade?
SUB-TOPIC 2: DIFFERNCE BETWEEN HOME TRADE AND FOREIGN TRADE
| DOMESTIC TRADE | FOREIGN TRADE |
| 1. It is the trade within the country | Trade with other country |
| 2. It is not subject to restriction | There is restriction |
| 3. The same currency is used to transact trade | Different currency is used |
| 4. It involves short distance | It involves long distance |
| 5. Same weight and measures are used | Different measures and weight are used |
| 6. The same language is used and there is no language barrier | Different languages are used and there is language barrier |
| 7. There is free mobility of labour | There is restriction to mobility |
| 8. Goods are moved within the same boundaries | Goods are moved beyond geographical boundaries |
SIMILARITIES BETWEEN FOREIGN AND DOMESTIC TRADE
- Both are facilitated by aids to trade
- Currencies are involved in both case
- Both involves the act of buying and selling of goods and services
- Both are division of trade.
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