The forms and types of

international trade
Presented by Hlib Balahanskiy
Group IER-19-eng1
Introduction

• International trade refers to the exchange of goods and services

between countries. In simple words, it means the export and import of
goods and services. Export means selling goods and services out of the
country, while import means goods and services flowing into the
country.
• International trade supports the world economy, where prices or
demand and supply are affected by global events. For instance, the US
changing visa policies for software employees will impact the Indian
software firms. Or, an increase in the cost of labor in exporting countries
like China could mean you pay more for the Chinese goods in the US.
Types of For practical purposes, international trade is
divided into three major types. These are:

International • Import Trade

• Export Trade
Trade • Entrepot Trade
Import Trade
• To put it simply, import trade means purchasing goods and services from
a foreign country because they cannot be produced in sufficient
quantities or at a competitive cost in your own country.
• For example, India imports 82% of its crude oil requirements from
countries like UAE and Venezuela. This is because these countries
possess massive oil fields and are quite competent in exploring,
processing, and transporting oil at an economical rate. Similarly, UAE
imports agriculture and apparel based products from India because it is
easier and cheaper to import these, rather than produce them in their
own country.
Types of imports
1. Import of goods or certain technologies from abroad for their
further implementation on the national market of the importing
country and receipt of the paid provision of production or
consumer services from the counterparty country.
2. Import from a foreign country of domestic goods that were
imported there. Such importation is called re-importation.
3. Import raw materials/components/semi-finished products/parts for
further processing and then return export abroad.
4. Import of goods for a certain time to participate in exhibitions,
fairs, auctions, etc.
5. Import of goods within the framework of TNCs and in the system of
direct production links.
Export Trade

• Quite like its import counterpart, export trade is a type of international

trade which relies on selling locally manufactured goods and services to
foreign countries. In theory, it is considered to be just the opposite of
import trade.
• For example, India exports inorganic chemicals, oilseeds, raw ores, iron
and steel, plastics, and dairy products to a country like China. In return,
China exports electrical equipment, organic chemicals, silk, mineral
fuels, and fertilizers to India. These goods are exchanged between both
countries so that they can make the most of their respective production
capacities.
Types of exports

1. Export of goods that have been produced or processed in a particular

country.
2. Export of raw materials/semi-finished products for further processing in
another country under the control of customs and with a further return.
3. The export of goods that have already been imported from a foreign
country, including goods that were sold at an international auction,
commodity exchange, etc. The export of goods according to the presented
scheme is called re-export
4. Export to a foreign country of national goods for a short time with a further
return, for example, participation in exhibitions, fairs, etc., as well as the
export of already imported foreign goods, for example, participation in
auctions, exhibitions, etc.
5. Export of goods within the framework of a transnational corporation (TNC)
and in the system of direct production relations.
 Entrepot Trade
Entrepot trade, in simple terms, is a specific form of international trade that comprises both
– import and export trade. Under this type, goods and services are imported from one
country so that they can further be exported to another country. This is to say that the
imported goods are not used for consumption or sale in the importing country. Instead, the
importing country just adds some value to the goods before exporting them yet again. For
example, if India imports rubber from Thailand, processes it, and re-exports it to another
country like Japan, it would be referred to as Entrepot trade.
Most countries deal in Entrepot trade because of the following reasons:
• Lack of access or direct connection between any two countries
• Better processing or logistical facilities available with a third country
• Absence of a trade agreement between two countries
• No trade finance in banking facilities available in the importing country
 Types of export-import operations
• International leasing. Common in the middle of the XX century and is a
method of buying and selling production equipment. Leasing refers to
the long-term lease of production machines, equipment, vehicles, etc.
• International bidding is a common modern form of organizing
international bidding. This is when one of the countries in the form of a
competition sells goods to other states, choosing the winner who
offered the most favorable conditions.
• Exchange trading is an important form of organizing international
trading. This form of trading is conducted on commodity exchanges,
where states enter into large transactions for the wholesale purchase
and sale of goods. In an ideal approach, exchange trading should call
for the establishment of fair prices, the formation of international
exchange rates, and the increase in the capitalization of firms.
Types of export-import operations

• Licensed trade is also a modern form of international trade.

This type of trade appeared as soon as scientific and technical
knowledge became a commodity. One country sells licenses
to another for the right to use inventions, industrial designs,
trademarks, know-how, etc.
• International auction trade. Another form of organization of
international trade, which is the sale of goods by public
auction in the form of an international auction, which is
arranged for buyers from different countries. At such
auctions, goods with special qualities are put up.
 • https://www.searates.com/ru/blog/post/the-
classification-of-international-trade
• https://blog.upskillist.com/everything-you-
need-to-know-about-international-trade/
References • https://efinancemanagement.com/internation
al-financial-management/international-
trade#:~:text=There%20are%20three%20types
%20of,Import%20Trade%2C%20and%20Entrep
ot%20Trade.
Thank you for your attention!