Gateways of International Trade

International Trade

International Trade is the exchange of goods and services between several nations. It contributes to and strengthens the global economy. The most common trade commodities are clothes, capital goods, raw materials, foods, machinery, etc.

International Trade has increased unprecedentedly over the years that involve services such as travel and tourism, warehousing, banking, advertising, distribution, communication, and foreign transportation. International Trade causes an increase in the production of foreign goods and services and foreign investments in an international country.

Types of International Trade

1. Bilateral trade: Bilateral trade is executed between two countries. In this type of trade, both countries get into an agreement to trade specified goods and commodities between them. For instance, country X may agree to trade goods and raw materials with the agreement to purchase some other commodity from country Y and vice versa.
2. Multilateral trade: Multilateral trade is done between many trading countries. The same country is allowed to trade with many other countries. The country could also grant the status of MFN-Most Favoured Nation to some of its trading partners.
3. Free Trade: Free trade is a trade policy that opens up economies to trade without any restrictions. It is also known as trade liberalisation. It is done by bringing down the trade barriers or restrictions such as tariffs. Free trade enables goods and services from anywhere and everywhere to trade and compete with domestic services and products.

Issues with Free Trade or Trade Liberalisation

1. Globalisation accompanying free trade can cause adverse effects to the economies of developing countries by not giving them an equal playing field by imposing unfavourable conditions and restrictions.
2. Trade liberalisation should not let rich countries enter the market. In addition, it should allow the under-developed countries to protect their markets from foreign products.
3. Countries are also required to be cautious about their dumped goods accompanying free trade; dumped goods at cheap prices can cause harm to domestic producers.

Gateways of International Trade

Ports

• The chief gateways of the world are ports and harbours
• Travellers and cargo travel from one part of the world to another part through these ports
• The ports offer facilities such as loading, docking, unloading, and storage of cargoes while travelling through these ports
• To offer such facilities to cargo, the port authorities make some arrangements to maintain navigable channels, provide labour, arrange barges and tugs, and also provide managerial services
• The significance of such ports is judged by the number of ships they can handle at a time and the size of the cargo
• The quantity of cargo handled by a specific port is a gauge of the level of development of their hinterland

Types of Ports

Based on Cargo Handled

• Industrial Ports: Industrial ports are the type of ports that specialise in bulk cargo such as chemical, ore, oil, sugar, grain, and other similar materials
• Commercial Ports: Commercial ports are the type of ports that generally handle manufactured goods and cargo-packaged products
• In addition, these ports handle passenger traffic
• Comprehensive Ports: Comprehensive ports are those ports that handle general cargo and ports in huge volumes
• Many of the world’s greatest ports are classified as comprehensive ports

Based on Location

• Inland Ports

• Inland ports are those ports that are linked to the sea through a canal or a river
• They are located far away from the seacoast
• For instance, Memphis is located on the river Mississippi, Manchester is linked through a canal Kolkata is located on the river Hooghly is a branch of the Ganga river, and the Rhine has many ports like Duisburg and Mannheim
• Inland ports are easily accessible to barges or flat-bottom ships

• Out Ports

• Outports are deepwater ports that are built away from the actual ports
• Outports serve the actual ports through receiving ships that are not able to approach them, because of their huge size
• For instance, Athens and its outpost Piraeus are located in Greece

Based on Specialised Function

• Oil Ports

• Oil ports are those ports that deal in the shipping and processing of oil
• Some of the oil ports are refinery ports, and some are tanker ports
• For instance, Abadan on the Gulf of Persia is a refinery port, and Esskhira in Tunisia, Maracaibo in Venezuela, and Tripoli in Lebanon are tanker ports

• Ports of Call

• Ports of Call are those ports that are originally developed as the calling points on the main sea routes, where the ships used to take food items and anchor for watering and refuelling
• After some time, such ports developed themselves into commercial ports
• For instance-Singapore, Honolulu, and Aden

• Packet Station

• Packet stations are also called ferry ports
• Such ports are exclusively concerned with the transportation of mail and passengers across water bodies that cover short distances
• Packet stations take place in pairs in such a way that they face each other across the water bodies
• For instance, Calais in France and Dover in England occurred across the English Channel

• Entrepot Ports

• Entrepot ports are those ports that act as collection centres where the goods are brought from different countries across the world for export
• For instance, Rotterdam is an entrepot for Europe, Copenhagen for the Baltic region, and Rotterdam for Europe

• Naval Ports

• Naval ports are those ports that have only strategic importance
• Such ports serve warships and also repair workshops for them
• For instance, Karwar and Kochi are Naval ports in India

Impact of International Trade

• Positive Aspect

Operating international trade is mutually beneficial to nations around the world if it leads to a higher level of production, worldwide availability of services and goods, better standard of living, regional specialisation, etc.

• Negative Aspect

Undertaking international trade could prove to be destructive to nations around the world if it leads to uneven levels of development, exploitation, dependence on other countries, and a commercial rivalry that can lead to wars.

• Other Impacts of Global Trade 

Global trade can impact everything from the well-being of the people to the health of the people around the world. As more and more countries compete to trade, production and natural resources spiral up and the country’s resources get used up very fast than they can be filled up again.

• Impacts on Environment

International trade can impact marine life as forests are being cut down and the river bases are selling off to private drinking water companies around the world. Multinational companies trading in gas mining, oil, agri-business, and pharmaceuticals are expanding their operations at all costs, creating more pollution.

Conclusion

International trade has many more advantages than disadvantages, and it also contributes to increased economic development for the economies involved. The increased volume and production of goods and services exchanged between nations has resulted in a massive expansion in the size of the global economy during the last decade.