Foreign Trade
- Important part of economy
= Exchange of raw materials, goods, services and capital between countries
- Imports = goods bought from other countries
- Exports = goods sold to other countries
Main reasons:
- Some products can be only produced in one particular place (Skotch, French champaigne)
- Some products are cheaper to produce in some countries than others because of various factors – climate, natural resources. (bananas)
- Some foreign firms can produce higher quality products at more competitive prices
Benefits of FT:
- International division of labour
- Wider choice to the customer
- Lower production costs
- Increase in technical parameters of the production and productivity of labour
- Possibility of modernizing machinery and equipment
- Increase in the size of the market
- Resources can be used more efficiently and world´s produce can be more effectively distributed
Forms:
- Visible Trade – concerns raw materials, finished goods and foodstuff
- Invisible Trade – concerns banking, insurance, shipping services, roayalties
Subject:
- 3 % – movements of goods and services
- 97% – flows of capital, money and securities
Government:
- support FT by negotiating agreements
- Nowadays exists common market and custom unions along countries – they can trade without artificial restrictions
Agreements:
- Bilateral agreements (2 countries)
- Multilateral agreements (important international agreements)
NAFTA – Canada, USA, Mexico -> free trade zone
CEFTA – free trade zone in central Europe
WTO – over 120 member countries, reduce trade barriers, solving trade wars
OECD – 19 European countries + 5 Un European (USA, Japan, Australia, New Zealand)
Structure of Foreign Trade in Czech Republic:
- Commodity – according to the goods
- Czech Import:
- Oil
- Natural gas
- Machines and equipment
- Means of transport
- Consumer goods
- Food produce
- Czech Export:
- Machines and equipment
- Instruments
- Glass
- Textiles
- Food produce
- Cars
- Sugar
- Beer
- Teritorial – according to countries
- Our biggest trade partners:
- 60% EU countries – > 40% to Germany
- 25% to east of Europe
- the rest -> USA, developing countries