1. Chapter 2: The Dynamic Environment of
International Trade
Sakinah Shukri
@MSUmalaysia

3. Trade : Transfer of ownership of goods from
one person to another by getting something
in exchange from buyer
 International Trade: beyond national boarders
 Why we need International Trade
-Globalize our product
-Demand from other country
-Competition
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4. http://www.trade.gov/mas/ian/build/groups/public/@tg_ian/docum
ents/webcontent/tg_ian_003364.pdf

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The system of accounts that records a
nations international financial transactions.
Maintained on a double entry bookkeeping
Transaction is annually and need to be
balanced
International Economic Position (central
bank, gov agency, treasuries )

6. 1.Current Account (Value.of Company)
exports, imports, service to transfer fund
activity
2.Capital Account
Direct investment, portfolio investment, short
term capital movement
3.Reserves Account
Export and imports of gold
Foreign exchange & liabilities

7. A Economic policy of retraining trade to protect
the infant market
It will help to protect fair competition between
goods and services
 8 Policies

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Protect of infant industry
Protect home market
Need to keep money at home market
Encouragement of capital accumulation
Maintenance of the standard of living and real
wages
Conservation of natural resources
National Defense
Bargaining

9. Government establish the barrier, control
activity
 Tariffs
 Quotas
 Voluntary Exports Restraints (VER)
 Boycotts and embargoes
 Monetary Barriers
 Standards
 Anti dumping penalties

10. 1.
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Tariffs- tax imposed by a government on
goods entering at its borders
Quotas- specific unit or dollar limit applied
to a particular of goods
Voluntary Export Restraints- Similar to
quotas but follow market agreement
(Textile)
Boycott and Embargoes- gov restriction
against a particular product
Monetary Barrier- through blocked currency
and exchange rate
Standards- protect and check quality and
health

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New anti dumping penalties had emerged to
form a new tariff and non tariff.
Keeping foreign market out of a market
“Predatory market”- a foreign producer
intentionally sells its product in the United
States for less than the cost of production.

12. General Agreement on Tariffs and Trade
1. Trade shall be conducted on a non
discriminatory basis
2. Protection shall be afforded to domestic
industries through customs tariffs
3. Consultation shall be the primary method
used to solve global trade problems
-legal basis for further negotiations and aimed
eliminating barriers

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World Trade Organization
Sets many rules governing trade
Provide a panel exports to hear and
systemize rules
Issues binding decision
Equal representative
Bond their market and open more activity

14. Global Institutional
 Help to maintain stability in the financial
markets and by assisting countries that are
seeking economic development and structure
 Stabilize foreign exchange rate
 Promote growth international trade
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Reduce poverty and improve standard of
living
Lending money to gov
Assistance to gov development project
Lending money to private sector
Provide investor “non commercial risk”
Promote growth of international investment

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WTO
http://www.wto.org/english/thewto_e/whatis
_e/tif_e/org6_e.htm
Sak.Onkvisit., & John J.Shaw.,(2009)
International Marketing: Strategy and
theory.5th edn.Milton Park.Routledge
http://www.oecd.org/eco/growth/2501905.p
df (Trading between Develop and Developing
Countries)