International trade is what? Definition, functions and types

Human society is unthinkable without international or world trade. It is historically the first form of economic ties between different countries. In this plan, international trade is a trade settlement and a fair, the activities of which have been known since time immemorial.

Currently, it plays an equally important role. The modern definition says that international trade is a special kind of commodity-money relations based on the export of raw materials or finished products.

It is based on the division of labor. Simply put, countries produce a certain commodity, which they, when entering into cooperation, are exchanged. Therefore, we can safely say that at present international trade is the interchange of national economies of the world by goods and services.

Factors that stimulate the progress of the international division of labor :

- socio-geographical: the difference in the topographic position, number and mental characteristics of the population;

- natural and climatic: differences in providing water and forest resources, as well as minerals.

Also, an important role is played by developed technologies and changes in economic indicators. All this contributes to a strong relationship between national economies.

Production is growing more slowly than international trade. This is confirmed by the data of the World Trade Organization. According to the results of her research, for every 10% of the increase in production, 16% of the growth in world trade volume is accounted for.

The organization of international trade is impossible without the notion of "foreign trade". It is divided into: trade in finished products, equipment, raw materials and services.

In a narrow sense, international trade is the aggregate commodity turnover of developed countries, developing, commodity circulation of the countries of any continent or region.

As practice shows, the country's interest in world trade is due to the following advantages:

- Attraction to world achievements;

- rational use of available resources;

- the ability to restructure the economy as soon as possible;

- meeting the needs of the population.

There are different types of international trade:

- trade in goods and services;

- exchange trade;

- trade fairs;

- auctions;

- counter trade;

- trade in compensatory transactions.

If everything is clear with the goods and services , then the rest of the items make you think, so for a full understanding of the picture, let's consider this issue in more detail.

So, a trade exchange is an association of sellers, intermediaries and buyers. Such unions help improve trade, accelerate commodity turnover and free pricing.

Fairs are trades that are held periodically at the agreed place. They are regional, international and local. In this period, exhibitions and fairs were widely spread, where you can order the goods you like.

Auctions are a form of selling goods previously exhibited for inspection. Such transactions take place at the appointed time in a strictly defined place. A distinctive feature of auctions is the limited responsibility for the quality of the goods.

Counter trade goes in several directions: barter and counter purchase.

Barter is a price-based exchange of goods. Such transactions take place without the participation of cash in them.

The last type of international trade is a compensation transaction, which differs from barter in that it involves not one but several goods.

Thus, world trade is carried out according to several types of transactions, which are constantly developing and improving.