Meaning of International Trade:
International (Foreign) trade is nothing but trade between the different countries of the world. It is also called as International trade, External trade or Inter-Regional trade. It consists of imports, exports and entrepot. The inflow of goods in a country is called import trade whereas outflow of goods from a country is called export trade. Many times goods are imported for the purpose of re-export after some processing operations. This is called entrepot trade. Foreign trade basically takes place for mutual satisfaction of wants and utilities of resources.
• Exchange of goods and services between the people of two countries included the changes in currency.
• The business of buying and selling commodities beyond national borders.
Types of Foreign Trade
Foreign Trade can be divided into following three groups:
1. Import Trade:
The activity of purchasing goods and services from foreign countries and brought into domestic to be used by domestic individual and organizational.
Categories
• Directly through foreign agent or dealer
• Indirect through local agent which acted as firm intermediary with foreign customer.
Example:
Malaysians import Kurma from Saudi Arabia country during Ramadhan.
2. Export
Export is the activity of sell goods and services to overseas to individual or organization in foreign countries whether by individual or organization.
Categories:
• Directly through dealer or foreign agent
• Indirect through local agent which acted as firm intermediary with foreign customer
Example:
Malaysia export palm oil to US
3. Entrepot Trade: Entrepot trade is also known as Re-export. It refers to purchase of goods from one country and then selling them to another country after some processing operations.
