International trade, aneb mezinárodní obchod s byznys angličtinou

Free trade

Companies all around the world trust in free trade which enables them to import and export goods to countries all around the world. These countries can then offer products that are either cheaper in their country, unique or rare. If countries are able to export cheap or specialized products, they can raise their living standards and income. And individual countries can have either an absolute advantage when they have the cheapest product in the world or a comparative advantage if they are more efficient in production of certain products than some other countries. Efficiency of production can be influenced by e.g. climate conditions, availability of rare materials, skilled workers or because of scale of economies which means that production costs are reduced due to a large-scale production. All of these factors can consequently influence the market price which arises from a combination of supply and demand. 

Balance of payments

Balance of payments could be described as the accounting record of all monetary transactions made between a country and the rest of the world. It describes the amount of exports (the goods and services sold to different countries) and imports (the goods and services brought from different countries). If exports are higher than imports, it means that the country has a positive balance of trade or also a trade surplus. On the other hand, if a country has higher imports, it has a negative balance of trade or a trade deficit. There are two more terms that can describe and distinguish individual international markets. These terms are visible trade if the company buys/ sells goods and invisible trade if the company exports or imports services.

WTO

World Trade Organisation is an organisation whose effort is to stimulate free trade and reduce protectionism. Protectionism can be described as a tendency of individual countries to protect their own goods and either keep the imports down or to make them more difficult and the goods more expensive by adding for example a tax on imported goods in order to help local products. Another tool to prevent imported goods enter the market are import quotas or limits to the number of products that can be brought to the market. WTO also aids to protect countries from selling products on foreign markets at below cost price so that these products cannot either destroy or weaken competitors. Despite these efforts, there are many free trade areas without any tariffs or taxes in Europe, Asia, Africa and America.  

Risks in International Trade Markets

Except for dumping, there are more risks that can appear on an international trade market such as a risk of concession in an economic control, risk of exchange rate or risk of insolvency of the buyer. From the political point of view, risks of the imposition of an import ban after the delivery of the goods, risks due to war or risks of non-renewal of import and export licenses can damage or block the international trade.