Definition of International Trade

It is known as International Trade to the exchange trade between two or more nations, or failing that between different economic regions, and outside the limits of the nation to which it belongs.

Action of buying and selling outside the limits of the country to which it belongs and that normally demands the payment of a customs duty

The indicated exchange consists of buying and selling goods, services or products, among others, and for which a right customs, whether in concept of export or from import, as appropriate.

It should be noted that it turns out to be a condition without equanom that the country that wants to establish economic relations beyond its borders has what is known in the commercial field as economy open.

Now, to protect their economies, but at the same time not to close commercially to the world, the countries and also the regions as blocs have decided to abolish the aforementioned customs duties and in their place common tariffs have been stipulated, to in this way allow the free movement of goods and products, to be economically preserved and fortified in relation to to its

competence direct.

How was this trade over time

The commercial practice between countries is not something of these times far from it, since the most remote times, different nations exercised it and although at times it was less intense than today it was always Present.

Since ancient times, trade between countries was very active, while it suffered a decline during the Middle Ages, resuming in a important after the discovery of America, as Europe would use its brand new colonial markets to expand and grow economically.

A paradigmatic case was demonstrated precisely by the Spanish colonies in America, which also decided to shout freedom with respect to Spain for an economic cause, since it prohibited them from engaging in commercial exchange with other nations that were not her.

The restriction was very harsh, however, many merchants decided to open an illegal place with other countries, for example England, which offered them better conditions and economic returns.

Meanwhile, independence politics it brought the economic hand in hand and the nations free from Spain were able to establish their own commercial laws and trade with whoever they wanted.

From the second part of the last century, and then gradually until reaching its maximum expression in the In the nineties, nations began to demonstrate a phenomenal opening of their economies towards the Exterior.

For example, at present, practically no economy remains oblivious to what happens to another that has been located on the other side of the planet and this is precisely because of the interrelation between the markets.

Liberalism versus protectionism

There are different economic theories that address this type of trade, while one of the most widespread is that of Scottish economist Adam Smith.

According to Smith, the products must be produced in those countries in which the cost to produce them is the lowest and then from that place they would be exported to the rest of the world.

Due to the above, Smith was a staunch defender of free trade, because he considered that growth and development would only be plausible on the basis of this model.

Meanwhile, for Smith the advantage would be those countries that were capable of producing more, investing less factors of production.

In this way the cost of production would also be lower.

Faced with this position we find the protectionist proposal that what it does is apply really high taxes to the imported products so that they cannot compete with the local industry, and thus discourage their purchase, and strengthen the industry national.

Make foreign products more expensive so that the consumer has to choose to buy local products since they are cheaper.

Generally, countries decide to apply this type of protection in situations of economic crisis.

One of the great differences between these two antagonistic models is that in liberalism prices are set freely by the market supply and demand, while in protectionism it is state intervention at all levels that establishes the regulation and restrictions, for example, establishes maximum prices in the local market, and the aforementioned tariffs on imports.

It is worth mentioning that the customs duties that have traditionally been charged at the behest of this type of trade, at present, have been eliminated by many nations and regional economic blocs, following the laws imposed by living in a globalized world, in which, for example, it is impossible for this type of trade to grow every time more.

For example, the European Community, or Mercosur, have eliminated the tariffs to those member countries, and in this way the goods circulate freely without paying any canon.

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