1 IT, Trend, Peculiarit

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Topic 1. General notions regarding international trade. Main trends and

peculiarities.

1.1 International trade: essence and basic notions

IT world economic flowsWorld economic flows (WEF) comprise: commercial flows, financial-currency flows, investments flows,

economic and technico-scientifical cooperation etc.

International economy:- Trade theory (real analysis);- International finance (monetary analysis).

Notions regarding IT

I nternational trade represents the exchange of goods, services and factors of production between two ormore countries, on the basis of the international division of labor.

World trade comprises the international trade of all the states of the world. Foreign trade represents the commercial relations of one country with the rest of the world. (it includes

exports, imports, re-export and transit).World trade in value terms represents the total value of exports and imports. X+M

Trade Balance (TB) = X-MActive balance (positive. trade surplus): X> M

Negative (trade deficit): X< MTB is equilibrated when the value of X equals the value of M (exports FOB and imports CIF)

Factors that affect the TB include:

- The cost of production (land, labor, capital, taxes, incentives, etc.) in the exportingeconomy; -

- The cost and availability of raw materials, and other inputs;- Exchange rate movements;- Multilateral taxes or restrictions on trade;- Non-tariff barriers;

- Prices of goods manufactured at home.The Degree of openness = (X+M)/GDPIn order to determine the degree of equilibrium of trade relations, it can be

determined the degree of cover of imports by exports.

Degree of cover of M by X = (Value of exports / Value of imports) *100

Merchandise trade: leading exporters and importers, 2011 (billion dollars and percentage)

Exporters – 18255 (value) Importers -18438 (value)

China

United StatesGermanyJapan

NetherlandsFranceKoreaItalyRussian Federation

. Belgium

. United Kingdom

. Hong Kong

United States

ChinaGermanyJapanFranceUnited Kingdom

NetherlandsItalyKorea

. Hong Kong

. Canada

. India



1.2. International Di vision of Labor. Trade special ization

IDL expresses:

- the process of international production specialization of national economies;- the place and role of each state in the world economic circuit;- the relations established among world states in the process of development of production and international

trade;- it follows up the adjustment of the economic potential of a state to the requirements of the world market.

Factors influencing the IDL:

- The natural physical-geographical conditions;- The size of the territory and number of population;- The technological level and the degree of diversification of production;- Economic traditions;- The geographical proximity of states and the existence of economic complimentarily relations among them;- Non economic factors.

IDL – types of specialization:

- Inter-sector specialization;- Inter-branch specialization;- Intra-branch specialization;- Technological specialization;- Organological (intra-firm) specialization.

Trends of restructuring the IDL:

- the increase of the share of developing countries in the manufactured goods market;- developed countries are specialized in the sphere of modern and high technological domains, developing

countries (the majority) became producers and suppliers of basic and classical industrial products;

- in developed countries it is registered lately a reorientation towards basic products and an increase of thecorrelation between processing and extracting industry;

- the appearance of some regrouping among developing countries, that are capable of producing some restructuringin the IDL (BRICS);

- the shaping of a complex and contra-dictionary process of adjusting of IDL to new conditions of acces tonatural resources, especially fuels, of drastic change of trade ratio between the basic type of products of IT.

1.3 The main peculiari ties of I T

IT was influenced by some specific factors after WWII:

- The collapse of colonial system and the appearance of 135 new national states;

- Technico -scientifical revolution;- The increase of the economic interdependence among states in the framework of globalization;- The trans-nationalization of the world economy;- The progress of informational technology.

Characteristics

IT represents one of the "engines" of world economic growth. In the last 20 years – growth rates higher

than 10%, except the year 2009, when was registered a dramatic decrease of -23% (value) in comparison with

2008.

In 2011 the volume of world exports equaled 18,2 tm., increasing with 20% in comparison with 2010 when

the increase was 22% in comparison with 2009 (in value terms) and 14% in real terms (volume).



Trends

1. In postwar period in comparison with previous one, IT registered the highest growth rate and dynamics

(except 2009).

The average growth rate of world exports in value terms were:

1950 – 2008 - 12 %

2009 – (- 23%)

2010 – 22%

2011 –

20%The world export increased in value terms more than 200 times in the period 1950 - 2008 from $ 61 bn. in

1950 to 15,8 trillion $ in 2008, registering 12,5 tr. in 2009, and 14,8 trillions in 2010, in 2011 – 18,2 tm.

2. The IT registered higher rates of growth comparatively to GDP growth as well as industrial and agricultural

production at the world level. The production was outreached by the export. International economic

cooperation in production – determined the increase of the share of production made as a result of

international trade. In the last years around 30% of world production is made as a result of IT, in comparison

with 5% in 1950. Trans-National Corporation (TNC) – over 30% of IT.

3. In postwar period, IT became higher than the gold and currency reserves of developed states in terms of rates

of growth. In the prewar period, the volume of gold and currency reserves of states were higher with 17%than the world imports. In 1980, gold and currency reserves represented just around 24% of the volume of

imports of developed countries.

The impact of world economic cri ses on IT:

The most dramatic decrease of IT was registered in 2009 (-23%) in value terms ($) and the decrease involume terms was (-12.2%), due to the decrease of prices for fuel and other raw materials. World GDPdecreased with 2.3% in 2009, the biggest decrease from the WW II. In 2010 world GDP increased by 3.6%,and world exports increased by 22% in value terms and 14% in volume terms.

World production in 2010Output of developed economies rose 2.6% in 2010 after falling 3.7% in 2009,Japan: +3.9% in 2010, (decrease — 6.3% in 2009);EU: +1.8% in 2010 (-4.2%, 2009),USA: +2.8% in 2010, (-2.4%, 2009)The developing economies and the CIS grew 7.0%, up from 2.1% in 2009China: + 10.3% in 2010 (9.1%, 2009) andIndia: + 9.7%, 2010, (5.8%, 2009),Brazil: +4.7% in 2010

North America: + 3% in 2010, (-2.7%) 2009Central and South America: +5.8% in 2010; (-0,8%) 2009

Europe: +1.9% in 2010, (-4%) 2009CIS: + 4.3% in 2010, (-7%) 2009Africa: + 4.7% in 2010, +2.1% in 2009Middle East: + 3.8% in 2010, (+0.8%) 2009Asia: + 6.3% in 2010, (-0.2% in 2009).

The impact of I T on developed (DE) and developing countr ies:

DE: prevail the positive one:

- The mobilization of domestic and foreign investments,

- The stimulation and diversification of export capacity,

- Encourages the development and transfer of technologies,- Are created new work places,

- Increases the income and welfare of consumers,

- It is reduced the level of poverty.



For developing countries:

The globalization through IT generates some costs and challenges, such as:

- Deindustrialization;

- The decline of traditional branches and of agriculture;

- The increase of unemployment rate;

- The increased marginalization of some regions and communities;

- Food insecurity;

- Exposure to financial shocks and crises;- Increase of economic inequality, social discrepancies and tensions.

1 IT, Trend, Peculiarit

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