International Trade Blog

Trade is as old as world because since the beginning of time people have traded one thing for another. While in Middle and Renaissance ages international trade was considered as trade of natural resources, latter people understood that it is quite wise and profitable to improve a resource or item to increase its value and thus make more money by selling it.

Of course simple trade of natural resources can be very profitable as there are no added costs, just the cost of producing it, but it is only profitable for large countries or corporations with access to an abundance of natural resources. For smaller countries and companies it is actual more profitable to trade items with added value. A simple example – you can trade iron ore which is quite simple to produce and is fairly cheap or you can turn this iron ore into steel. That requires additional time and cost, but the added value significantly increases its value. For countries with few or no natural resources this is the only way to conduct a profitable and sensible trade. So they import fairly cheap raw materials and turn them into items with added value. Generally in long term the trade in value added items is considered more viable. It is also a more efficient usage of raw materials and rare natural resources. Currently many governments encourage their companies to produce and export more value added items. Some governments even offer special beneficial programs for manufacturers of high value added goods.

Well you might say that trade is trade no matter what you trade, but you must remember that sooner or latter we will have used up all natural resources. So a value added goods trade is a better option in the long term. It might be a bit harder to do than simple trade, but in long term the profits will be much higher. But after all what you do is up to you. This is just an opinion.

Finally some good news arrived from the European frontlines against global economic crisis. The economies of both countries have shown signs of growth between the times April and June bringing an end to a recession that ruled for a year.

This was achieved thanks to a solid collaboration between the governments and population. Governments issued stimulus packages which stimulated exports and the population on the other hand increased spending habits therefore injecting the market with more money. Although some of these actions were carefully planed, the positive outcome was somewhat of surprise because no one actually expected results to be so quick. But this does not mean that Europe as a whole is safe because there is still a small decline of economic activity in Euro zone. None the less the UK market reaction to the success in Germany and France was quite positive as the FTSE 100 index rose. This only strengthens the belief that all economies are connected and that one positive change can influence the whole system.

Increased export and decreased import had a positive effect on the GDP of Germany and this provided the hope that the worst times are behind. But some analysts believe that there still are problems with the banking system in Europe and that this positive effect is dependant on government spending and eventually will come to a hold. So the question remains how strong this recovery actually is?

France also enjoyed positive changes in export levels and consumer spending. Especially the consumer spending is an encouraging factor as it is steadily holding up. This happened mainly thanks to government schemes and lowered prices. Still the experts warn that this economic recovery is very fragile.

No matter what, these are still very good news for everyone. This only shows that there is an end to this crisis and that international markets will sooner or later regain their health. This on the other hand will rejuvenate international trade and general welfare of people. Let’s hope that this happens as soon as possible.

Yeah the global economic crisis is ruling the world and the export sector has suffered huge loses, but who said that there is only international trade? There is also national or domestic trade and in general it can turn out very profitable.

Well the global export levels might be down, so maybe ot would be wise to turn our attention towards domestic trade. For some countries domestic trade can be as profitable as international trade. By this I mean the countries like USA, China, Russia, India and some other larger countries. Though to be successful in your corresponding domestic market you must carefully research the needs of the given market. What does the market need and what does the customer require. It would be pointless to start selling exclusive cars in Outer Mongolia. It would be just plain stupid. Food and first need item would be the correct logical choice. Even if your domestic market is oversaturated with different offers there is always a way to break into a market. Be elastic if your domestic is over flooded with food item then maybe look farther that it ant turn your attention to such public services like restaurants and low cost eateries. There is always a way to make money no matter the overall situation. So even if international trade seems unprofitable there will always be the domestic market and if somebody is making money of it why should not you do the same?

No one can actually tell when exactly this global crisis will end. So what should we do in the meantime, just sit with our hands in pockets and do nothing. Hell no! If there is money to be made why should we remain on the sideline? You probably won’t be able to make millions, but you sure as hell can make a living. Although who am I to say that you cannot make millions. These are uncertain and weird times. You can loose all your fortune at a heartbeat, but at the same time various possibilities present themselves to you at such a time. Use whatever means possible and take advantage of all tools at your disposal. This might be a time of despair, but at the same time it can be a chance of a lifetime.

The economic crisis has hit more or less everybody in the world and while some might secretly be very happy that, for example, USA is hit hard and struggling, we sometimes forget that on some levels we are all connected. That is why they call it global economic crisis.

We must admit that the US dollar is the most widespread currency. Many national currencies are aligned to the dollar and very much react to the changes of the dollar’s value. Many governments have obtained huge securities from USA and the low value of the dollar decreases its own value. The same connectivity applies to the economy. Basically as long as USA economy is struggling so will many other country economies. Because, lets face it, USA is currently the most powerful country in the world. Countries like China, Japan, Mexico and many others are quite dependent from trade with USA. Although the relationship between China and USA is not the best one, China has understood that the unstable US economy and the low value of dollar is affecting them all as their own exporters are struggling just because of this fact. So China has requested talks with USA president Obama about the economic situation and possible solution. A commendable fact in deed! No matter the previous relationships we must see farther our own yard and apparently some countries have began to do just that..

The global crisis can be beaten, but it can be only beaten by combined global efforts. There is no off switch for the crisis and it will not magically stop at a certain date. At least temporary we should forget all the bad blood between us all and try to pull the cart out of the dirt all together. When the situation is resolved we can return to previous state of mind. We must remember who actually suffers the most during this crisis. It is not the countries or the large corporations; it is the people, me included. So let’s stop screwing around and do something about it.

International trade might be quite a common thing nowadays and we conduct business with every possible nation, but do we really use the huge potential of Africa?

Well China and India might be the emerging global players, but these are not the only countries with industrial potential and massive labor force. Somehow we have forgotten a whole continent – Africa. Speaking in geographical terms it is a lot closer than Asia so the potential transportation costs should be considerably closer, but this huge continent has only a handful of countries that can play a serious part in the spectacle of global market. Why is that so? After all Africa possesses huge quantity of valuable natural resources which in a normal case would be one of requirements for a substantial industrial base. But in reality an industrial base of Africa is almost non-existent. When we mention Africa we almost immediately and only think of Republic of South Africa, but there are other countries as well who theoretically have the potential to become at least an advanced country. Continue reading »

As the world evolves and humanity strives to equality the idea of conducting business and trade ethically seems an unrealistic goal. But is this the actual goal we should strive for?

Trade has existed since the beginning of time and we understand this concept as equal exchange of goods. That sounds good in theory, but what we all actually try to achieve is make profit by buying cheap and selling for profit. Basically that means using any means necessary to acquire an item as cheap as possible. Such a concept has been there for a long time just think of all the trade Europeans conducted with natives from all newly discovered lands. Although there are no more lands to discover today people still find ways to get the most out of international trade. In general we all might condemn countries that oppress their people and their civil rights; we still buy items manufactured in these countries. And guess what somebody sells these items and makes a lot of money. One could say they are profiting from the misery of such people. Is it ethical? Probably not most of us sure are happy that such trade exists because it offers a possibility to afford things we might not be able to acquire. Continue reading »

It is probably safe to say that global recession affects us all, but I would have never thought that one of Asia’s powerhouses could be in trouble. Yet Japan is in big trouble, its economy is in downward spiral due to declining export levels.

Japan is one of market leaders in electronics, cars and IT technologies so one might think that the added high value would be enough to stabilize the economy. But actually we forgot one thing – during a global economic crisis the spending habits op people change. Simply said if people do not receive as much money as before and unemployment is a constant scare then they will not spend money on fancy things such as; high end electronics and cars. The only enterprises that may feel somewhat safe in an economic crisis are the food producers because people will always eat no matter how big the crisis is. So because of this simple fact Japan’s economy is in such a bad position. Continue reading »

Today globalization is big and everyone is trading with each other, but in most cases when we think of international trade we think about huge corporations or government controlled enterprises conducting business with each other and making profits. Actually international trade is open for everyone and can be profitable to the smallest enterprise or even an individual person.

In most cases small and even medium sized enterprises conduct their business locally, meaning they buy goods from a local wholesaler and sell them to the local customers. In general nothing is wrong with that. Domestic market can be very profitable and exporting for a small enterprise can seem tricky, but why buy the goods from a wholesaler? Of course it is easier, but in no way it is more profitable because the actual price of the goods is significantly smaller if you import it directly. Yes it can be difficult and requires some know-how on your part, but on the other hand the profit you can gain from that is considerably larger. Basically the wholesaler acts as a mediator and why you should pay money for something you are able to do on your own. Importing can be tricky; especially the first few times when you are dealing with reprehensive for some exotic countries, but business in general can be risky. On the other hand importing can be very easy because you have the internet and various tools at your disposal and if you know a bit of English no one can stand in your way and the potential for profit is unlimited. Why should not you use the enormous potential of global international market?

This is only about the import part, but when you become experienced in it you can turn the tables and think about export thus expanding your operations from a domestic market to global market and infinite possibilities. And if you do not want to export there is still an option to become a huge wholesaler and use your know-how to earn your money by providing your service to the more inexperienced.

As the global market grows trade is conducted between various countries with differing traditions and although it might not sound important knowing the traditions of your prospective business partner might come in hand. A successful business deal might even depend on them.

Russia is the biggest country in the world with vast amounts of natural resources and huge industrial base so doing business with Russia can be quite lucrative. But the Russian people are somewhat different than their European counterparts. To successfully conduct business in Russia you have to try to better understand the soul of the Russian people. Continue reading »

What actually is international trade and what is the point of it? This is the first question for every new enterprise. In short – international true is the exchange of goods and services between two countries. Sounds simple, but let’s review it a little bit.

Trade is the most ancient form of communication. People from various places and with different languages met and they could not even understand each other, but were able to exchange something between another. Was it a fur for a tool or food for a weapon it does not matter because it was the principle of trade? As the world evolved people realized that they cannot produce everything. Northern countries realized that they will not be able to make wine and southern countries realized that they liked the fur from the north that was not available to them. So they started to trade between each other and thus international trade was born. Continue reading »