We need to know about International Economics

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*** What is international trade?

##Trade activities related to the import and export of goods and services between different countries can be termed as international trade. In other words, the country-based exchange of goods and services is the subject of international trade. Different economists have come up with different definitions of international trade. According to Kindleberger, "the transaction of goods or services between two or more independent and sovereign countries is called international trade." According to economists Weizermann and Holtman, "international trade consists of transactions between residents of different countries."

#The basis of international trade The evolution of time accelerated the development of human civilization. With the development of human civilization, international trade began and the scope continued to grow. The basics of international trade are discussed below:

(1) Skills: Different countries in the world are skilled in producing different products, in which each product is produced cheaply in each country. Which serves as the basis of international trade.

(2) Geographical conditions and resources: Due to climate, weather, human resources, natural resources and geographical location, etc., different countries of the world have become special experts in the production of different products. The country that acquires expertise in the production of goods concentrates on the production of those goods and in return for the goods it produces procures the necessary goods and services from other countries, this is the beginning of international trade.

(3) Increase in quality of life: In addition to internal specialization, the standard of living also increases through international specialization, which creates mutual demand. Which serves as the basis of international trade.

(4) Technological Development: As a result of technological development, demand for various goods and services is being created in the daily life of the people which is increasing the scope of international trade.

(5) Labor Skills and Labor Division: With the development of civilization, human resource development and labor skills are increasing. On the other hand, the efficiency of mass production is increasing through the labor department. Such skills are creating a competitive environment, which serves as the foundation of international trade.

(6) Unrestricted mobility of materials: Lack of unrestricted mobility of materials between different countries creates differences in the cost of production, which serves as the basis for international trade.

(7) Increasing mutual cooperation: In today's world, mutual cooperation between different countries is gradually increasing for various purposes such as establishing peace, expanding markets, exchanging technology, etc. Which is serving as the basis of international trade.

(8) Growth of economic well-being: About 75% of the current world GDP comes from international trade. So there is no alternative to expanding international trade to enhance the economic welfare of different countries, serving as the basis of international trade.

(9) Benefits of mass production: It is very difficult for any manufacturing company to survive without the benefits of mass production. Expansion of the international market is essential to ensure the benefits of mass production. That is to say, mass production facilities serve as the basis of international trade.

#Development of International Trade With the development of human civilization, the scope of various needs of human beings continues to increase. People's demand for food and clothing has never stopped, many new things are constantly haunting people. In this context, it is not possible for any country in the world to fill all the gaps alone. The interdependence of one country over another for various purposes is gradually increasing. Therefore, the scope of mutual exchange and international trade is increasing. In the early days of international trade, there was interdependence for food, clothing, and other basic necessities, but now there is a multiplicity of interdependencies for technology, science, social networking, transportation, mining, and essential minerals. That is why only 40% of the world's trade in goods and the remaining 70% in services. This dramatic change in international trade is being observed especially for the development of technology. Only thirty years ago, in the early eighties, the most widely used technology in the world was radio, black-and-white television. In just these few years, technology has made unimaginable advances. Increased technology dependence. As a result, the scope of world trade has greatly expanded. Although the various economic superpowers after World War II have been divided into various alliances or camps as well as competing for arms, various countries in the world today are competing to expand international trade, especially export trade, by forming economic alliances or tariffs. At present, the expansion of international trade has become a major issue in international diplomacy.

(1) Increase in production capacity: Differences in production capacity are due to differences in soils, technology and techniques in different regions of the world, and differences in the availability of materials. Naturally, a country is quite skilled in the production of a particular product / service, but is relatively less skilled in the production of other goods / services. In this case, through the exchange of necessary technology and techniques, it is possible to significantly increase the production capacity of the countries engaged in international trade. International economics studies are needed for this purpose.

(2) Ensuring proper use of materials and products: Through the study of international economics, the use of materials and manufactured products of different countries of the world can be ensured, which can be multiplied by domestic production by producing products according to the demand of different countries.

(3) Bringing dynamism to economic development: The main goal of the international economy is to gain an idea of ​​why different countries participate in trade, how much profit can be made from trade, how profits are distributed among different nations and productive materials within the country. Therefore, there is a need for international economics lessons to bring dynamism to economic development.

(4) Increase in world production: In the modern world, materials are not moving freely due to political and economic sanctions between different independent countries. In this situation, the study of international economics can give an idea of ​​how it is possible to increase world production by removing various sanctions.

(5) Solutions to various economic problems: In today's world, economic problems such as hunger, poverty, overpopulation, currency instability, economic recession, etc. are affected in one way or another by international relations. Is possible.

(6) Optimal use of resources and risk reduction: How to make the most of the most natural use of natural resources, including human resources, and how to minimize the risk of using these resources is known through international economics lessons.

(7) Domestic currency and foreign exchange rates within the country: If the value of a country's currency decreases or increases or if the exchange rate of foreign currency increases or decreases, it is possible to know the changes in the prices of goods, services and assets of the country.

(8) Concepts of Mutual Dependence: It is possible to get a comprehensive idea about the nature of mutual economic interdependence between different countries, the role of government policy in determining the prices of goods and materials, competition in business etc.

(9) Market expansion: The success of any manufacturing organization depends on the size of the market. International market expansion is essential for the expansion of market size in today's world. Therefore, there is a need to study international trade in order to expand the size of the market.

(10) Prevention of monopoly trade: If there is a handful of companies in the country for the production of goods and services, a monopoly market emerges in the field of production. This disrupts the desired production and makes the veggie lash smile. Therefore, in this case, it is possible to increase the welfare of the fry by resisting the monopoly trade through international trade.

#Differences between domestic trade and international trade :

We can refer to the purchase and sale of goods and services within the geographical boundaries of a country as domestic trade. For example: Organized trade with a trader from Chittagong or any other area of ​​Bangladesh within Bangladesh. We can refer to the import-export activities of goods and services of any independent country with any other country as international trade. For example, the import-export activities organized between an organization or a trader in Bangladesh and an organization or trader in India can be identified as international trade. The differences between the two are highlighted below:

(1) Dynamics of trade: This type of trade can run smoothly as there are no restrictions on domestic trade. On the other hand, in the case of international trade, this type of trade cannot run smoothly due to various tariffs and barriers and geographical distance.

(2) Currency and banking system used: Although domestic trade is organized in domestic currency, international trade is organized in globally recognized foreign currency. Moreover, in the case of domestic trade, the country's banks are involved, but in the case of international trade, domestic banks as well as foreign banks are involved.

(3) Exchange rate: The exchange rate between the two countries does not affect the domestic trade but it does affect the international trade deeply. While exports increase due to rising currency exchange rates, imports decline, the opposite is also true. Inside

(4) Political considerations: The government of a country thinks of the welfare of its people, but does not think of how the foreign people will be affected by the policy adopted by it. A country may impose tariffs on goods imported from abroad for its convenience or impose any other kind of prohibition. As a result, international trade is hampered, but domestic trade is not affected.

(5) Differences in policy: Different countries follow different types of monetary policy, trade policy and fiscal policy. Although these policies affect trade conditions, exchange rates, and domestic demand, international trade is affected, but domestic trade is not.

(6) Material mobility: Language, religion, weather, social customs, immigration laws, etc. affect the mobility of materials and international trade. Such an effect is not so pronounced in the case of domestic trade.

(7) Differences in tastes and preferences: There is not much difference in tastes and preferences among the people of different regions of a country. So domestic trade is not very much influenced by tastes and preferences. On the other hand, people of different countries have wide differences in tastes and preferences, so international trade is greatly influenced by tastes and preference.

#Hexar of International Trade - Olin Theory / Dedicated Material Theory / Modern Theory HECKSCHER - OHLIN THEORY / FACTOR ENDOWMENT THEORY / MODERN THEORY

His theory of international trade was published in 1919 in an article entitled Reading in the Theory of International Trade. His views on this theory have long been largely unnoticed by economists. Later, in 1939, his student Bartill Olin gave a clear and detailed explanation of this idea. So after the names of these two economists, this theory is known as Hexar-Olin theory. According to this theory, trade takes place due to the difference in the vested material between the two countries, hence it is also known as vested material theory. Their theory has gained recognition in the international economy as a modern theory of international trade.The main point is that the difference in the price of the material is due to the difference in the availability of the material between different countries, which leads to the difference in the price of the material. And this is the basis of Hexar-Olin theory. The basic premise of this theory is that in the case of two countries producing goods, the country which is rich in materials will partially specialize in the production of those materials and will export the other goods. The following hypothetical conditions are required to explain this theory.

Quick explanation: In order to explain the tatra in the light of the mentioned presumptive condition, let's take two countries, Bangladesh and America, ready-made garments and cloth. Where readymade garments are labor intensive, cloth capital is intensive. Bangladesh is rich in labor and America is rich in capital. According to Hexar-Olin, this situation could lead to lucrative trade between the two countries. In case of trade, US capital will be partially specialized in the production of textiles and Bangladesh will be partially specialized in the production of labor intensive garments.

# ECONOMIC INTEGRATION IN SOUTH ASIA Economic organizations such as the ECONOMIC INTEGRATION IN SOUTH ASIA are vital to the development and expansion of foreign trade in the world's backward regions. The UN Commission on Asia, Africa and Latin America is currently focusing on trade agreements between developing countries in poor areas. In this context, economic integration can play an important role in improving the living standards of a large population in South Asia. At this stage, we will first discuss economic integration in Asia and then in South Asia, especially SAFTA.Union in Asia) There is a need to supplement the shortage and surplus of services. Although there are differences in religion and ethnicity between different countries, the possibility of forming a customs union in Asia to make up for the shortfall and the possibility of making it fruitful are highlighted from different perspectives. Necessary supplements in case of deficit and surplus: The industrial rich countries of Asia especially Japan, China, South Korea, India etc. have shortage of essential fuel oil. Besides, Saudi Arabia, Kuwait, Iraq, Iran and other countries have huge surplus of fuel oil. Despite the surplus of fuel oil in these countries, there has been a huge shortage of essential industrial products, which can be easily obtained from industrialized countries. Thus a tariff union could be formed in Asia due to the necessary supplementation of deficits and surpluses.

# Possibility of Formation of Customs in Asia Different economists have examined the possibility of forming a customs union in Asia on the basis of theoretical and practical research.Can play a role. 1 Similarly, in India, Nepal, Myanmar, etc., beef is produced in large quantities, but in this country, the distribution of beef is prohibited or very little. On the other hand, there is a huge shortage of beef in Bangladesh, Pakistan, Indonesia, Malaysia, Middle East and other countries. Thus, the possibility of developing a customs union in Asia is bright for the existing complementarity in the distribution of various goods. 4. Convenient transportation: Most parts of Asia are forest-free plains, so they are connected by land. In addition, almost all countries except two can travel with each other by water. Which has paved the way for the formation of customs unions in Asia. 5. Big market advantage: About two thirds of the world's people live in Asia. So the Asia market is very big and diverse. Moreover, people's lives for continuous economic development in different countries of Asia. The market is constantly expanding and diversifying as the quality of travel increases, which has paved the way for the formation of customs unions in the region. Labor Exchange: There is a shortage of workers in various Asian countries such as Saudi Arabia, Kuwait, Malaysia, United Arab Emirates, Oman, South Korea, etc. Besides, there is surplus labor in Bangladesh, India, Pakistan, Philippines, Lebanon, Nepal etc. These countries can benefit from the exchange of necessary workers, which is important for the formation of a tariff union in Asia. 3, Differences in Vag habits: Differences in Vag habits are observed between different countries in Asia. Example.

# in South Asia SAARC (South Asia Association for Regional Co-operation) was formed in 1975 by 7 countries of South Asia to increase the potential for cooperation in the SAARC region. Subsequently, the South Asion Preferential Trad Agreement (SAPTA) was signed on April 11, 1993, with the aim of enhancing mutual cooperation between the two countries. In order to strengthen the economic and trade cooperation of the SAARC countries, it was decided to establish SAFTA (South Asian Free Trade Aea), which came into effect on January 1, 2006. Which is currently in the process of implementation. The implementation process of SAFTA has created a kind of stalemate and mutual suspicion and mistrust. Therefore, there is a possibility of the formation of a customs union in the SAARC region of South Asia, but it is being hindered step by step. Below are the different aspects of the

1. Mutual animosity: Different countries in South Asia have border disputes, common river water sharing, enclaves, etc. on various issues. Due to this contradiction, issues of mutual interest do not get much importance. Which is the main obstacle to the formation of customs unions in the region.

2. India's Largest Economy: Among the SAARC countries, India's GDP is about 10 times that of Bangladesh or Pakistan. In all, the size of the country's GDP is less than half that of India. Therefore, as a large economy, India does not have much interest in economic cooperation. Which is acting as an obstacle in the formation of customs union in this area.

3. Competitive Economy: Some of the export products of India, Bangladesh, Pakistan, Sri Lanka and Nepal are similar. For example, in the field of garment exports made in other countries of the world and in the production of textiles, one country is a competitor of another country. That is why the South Asian countries are unlikely to form a virtual union.

4. Product Sensitive List: A product sensitive list is a list of products in which the country concerned does not waive duty. The list of such products in each country is very long. For example, the number of products in the sensitive list of India is 480, 1233 in Bangladesh and about 1169 in Pakistan. With such a large number of goods on the sensitive list, it is not possible to build virtually any cooperation or customs union.

5. Mutual suspicion and mistrust: Mutual cooperation among the countries concerned is essential to form a customs union, but the existing hostile relations between the SAARC countries, especially between India and Pakistan, are a major obstacle to the formation of a customs union in the region.Cotton, fruits, food grains and vegetables are in great demand in the entire region. The demand for various products produced in Bangladesh and Pakistan is not less in India. There is a great potential for a pure union in the region by taking advantage of this opportunity. .

#Advantages of land trade: It is possible to build a simple land route between the countries of the region. In the meantime, as the process of implementing the Asian Highway begins, it is possible to build an effective road link between the countries of the region. Which can play a huge role in the formation of the Customs Union. The above discussion shows that all the countries in the region, as members of the World Trade Organization (WTO), are committed to overcoming the existing barriers to trade and to some extent complement the economy. The association is acting as an obstacle to its formation. Therefore, it can be said that in order to increase the mutual welfare by removing the existing contradictions, there is a huge possibility of developing tariffs in this area in the near future.

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