O-level commerce Notes(5/5)

International trade

Trade

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.

Invisible trade

Trade in services only.
Usually calculated over a year.
Invisible balance=Exported services- imported services.
This include the tourist industry.

Visible trade

Trade in goods only.
calculated in given years..
Visible balance=Exported goods-Imported goods.

Trading blocks

A group of center that removed trade restrictions between member states in order to facilitate trade.
Examples( SADC.AU.)
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.