Tell you the Basics of Foreign Trade and Exchange (1)

Americans drive cars made in Germany, use VCR’s made in Japan and wear clothing made in China. Japanese watch American movies, Egyptians drink American cola and Swedes jog in American running shoes. The world economy is more integrated than ever before.
What is international trade?
International trade shapes our everyday lives and the world we live in. Nearly every time we make a purchase we are participating in the global economy. Products and their components come to our store shelves from all over the world.
International trade is the system by which countries exchange goods and services. Countries trade with each other to obtain things that are better quality, less expensive or simply different from what is produced at home.
Goods and services that a country buys from another country are called imports, and goods and services that are sold to other countries are called exports. Trade mostly takes place between companies. However, governments and individuals frequently buy and sell goods internationally.
World Trade is Diverse
Most international trade consists of the purchase and sale of industrial equipment, consumer goods, oil and agricultural products. Services such as banking, insurance, transportation, telecommunications, engineering and tourism accounted for one-fifth of world exports in 2000.
WORLD EXPORTS ARE UP SHARPLY
Since the end of World War II, there has been a rapid increase in international trade.
In 1950, total world merchandise exports amounted to $58 billion
In 2000, exports were $6.3 trillion, over a 100-fold increase
Trade: Important for economic well being
With the increase in volume, trade has become very important to the economic well-being of many countries. In early 1960s, the United States bought less than $1 billion of foreign cars and parts. By 2001, this figure had increased to more than $189 billion.
Financial ties between United States and the rest of the world have grown significantly over time:
Number of foreign banking offices operating in the United States rose from fewer than 40 to over 600 at present.
Amount of foreign direct investment (FDI) was $158 billion in 2001.
Gross transactions of long-term U.S. government securities by foreigners rose from $144 billion in 1978 to over $9.1 trillion in 2000.
Foreign direct investment is the amount of money individuals invest in companies, assets and real estate of another country.
The cost of international transportation and communication has fallen drastically, resulting in greater integration among the economies of the world. Because of this interdependence, economic trends and conditions in one country can strongly affect prices, wages, employment and production in other countries. Events in Tokyo, London and Mexico City have a direct effect on the everyday life of people in the U.S., just as the impact of events in New York, Washington and Chicago is felt around the globe.
If stocks on the New York Stock Exchange plummet in value, the news is transmitted instantly worldwide, and stock prices all over the world might change. This means that countries have to work together more closely and rely on each other for prosperity.
For data on FDI in the U.S.
Trade: Why do it?
International trade occurs because individuals, businesses and governments in one country want to buy goods and services produced in another country.
Trade provides people with a greater selection of goods and services to choose from.
Often these goods are available at prices lower than those in the domestic economy.
Benefits of Trade