Is the buying and selling of goods and services in oder to satisfy human needs and wants.Trade between two countries is known as bi-lateral trade and that among many countries is multi-lateral trade.
Why Zimbabwe trade with other countries
- Zimbabwe, like many other countries does not have all that it requires.Therefore it requires goods and services in oder to satisfy human needs and wants.
- This is to obtain what it does not posses under climatic conditions.
- Accessing a wide range of goods and services thereby uplifting the standard of its people.
- Supplement shortages.
- Make goods available all the year eg seasonal goods.
Difference between home and international trade
- HOME TRADE
- Trade among citizens.
- Short distances are involved.
- Fewer or no middlemen
- No tariffs charged because there is less state interference.
- Less transporting risks.
- Local currency is used.
- Citizens speak local language.
- Documents used are fewer.
- Transport costs are lower.
- INTERNATIONAL TRADE
- Trade between citizens of different countries
- Long distances are involved.
- More middlemen.
- More tariffs are charged.
- More risks are involved.
- Foreign currency is used.
- Citizens of different countries speak international languages.
- Cost of transport are higher.
- More documents needed.
- Involve import and export.
- Trade in services only.
- Usually calculated over a year.
- Invisible balance=Exported services- imported services.
- This include the tourist industry.
- Trade in goods only.
- calculated in given years..
- Visible balance=Exported goods-Imported goods.
- A group of center that removed trade restrictions between member states in order to facilitate trade.
- REASONS FOR FORMING TRADING BLOCKS
- To reduce reliance outside the blocks.
- To promote trade among member states by reducing tariffs.
- To assist each other economically in times of problems.
- To mobilize resources together.
- To bargain as a group with negotiating for financial assistance.
These are measure taken by the govt to reduce imports.