Emissions trading or cap and trade is a government-mandated, market-based approach to controlling pollution by providing economic incentives for achieving reductions in the emissions of pollutants. Various countries and groups of companies have adopted such trading systems, a central authority allocates or sells a limited number of permits to discharge specific quantities of a specific pollutant per time period. Polluters are required to hold permits in amount equal to their emissions, polluters that want to increase their emissions must buy permits from others willing to sell them. Financial derivatives of permits can be traded on secondary markets, in theory, polluters who can reduce emissions most cheaply will do so, achieving the emission reduction at the lowest cost to society. Cap and trade is meant to provide the private sector with the flexibility required to reduce emissions while stimulating technological innovation, there are active trading programs in several air pollutants. For greenhouse gases, which climate change, permit units are often called carbon credits.
The United States has a market to reduce acid rain. Pollution is the example of a market externality. An externality is an effect of some activity on an entity that is not party to a market related to that activity. Emissions trading is an approach, among others, to address pollution. The overall goal of an emissions trading plan is to minimize the cost of meeting a set emissions target. In an emissions trading system, the government sets a limit on emissions. The government may sell the permits, but in many existing schemes, the baseline is determined by reference to the participants historical emissions. To demonstrate compliance, a participant must hold permits at least equal to the quantity of pollution it actually emitted during the time period, if every participant complies, the total pollution emitted will be at most equal to the sum of individual limits. In effect, the buyer pays a charge for polluting, while the seller gains a reward for having reduced emissions, in many schemes, organizations which do not pollute may trade permits and financial derivatives of permits.
In some schemes, participants can bank allowances to use in future periods, in some schemes, a proportion of all traded permits must be retired periodically, causing a net reduction in emissions over time. Thus, environmental groups may buy and retire permits, driving up the price of the remaining permits according to the law of demand, in most schemes, permit owners can donate permits to a nonprofit entity and receive a tax deduction. Usually, the government lowers the overall limit over time, with an aim towards an emissions reduction target
Trade justice is a campaign by non-governmental organisations, plus efforts by other actors, to change the rules and practices of world trade in order to promote fairness. These organizations include consumer groups, trade unions, faith groups, aid agencies, the organizations campaigning for trade justice posit this concept in opposition to free trade, the advocates of which often claim pro-poor outcomes. They point to extinction, social unrest, as consequences of globalisation, in the past, the responses sought by critics of the international trade system included various penalties on unfair goods. Today, the trade justice movement concentrates more on the abolition of subsidies and dumping. The Trade Justice Movement in the UK was the first formal coalition of groups to use the trade justice. In many countries fair trade is used as well as or instead of trade justice, campaigners lobby their own governments with the intention of creating pressure on them to prioritise poverty reduction when making international trade rules.
In trading blocs such as the European Union, the seek to influence policy across a number of member state governments. Trade Justice and Fair Trade were originally used by supporting social justice. They contrasted fair trade with unfair international trade practices and it is associated particularly with labour unions and environmentalists, in their criticism of disparities between the protections for capital versus those for labour and the environment. The use of the term has expanded beyond campaigns to reform current trading practices, now it has become a movement to allow consumers to choose not to participate in these practices. Fairtrade labelling or Fairtrade certification allows consumers to identify goods especially commodities such as coffee and this view is strenuously contested by trade law officials and many domestic policy makers. The mostly widely referred to demand of trade justice campaigners is access to the markets of developed countries or rich countries, when developing countries export to developed country markets, they often face tariff barriers that can be as much as four times higher than those encountered by developed countries.
Poverty claims that those barriers cost poor countries $100 billion a year – twice as much as they receive in aid, most trade justice campaigners focus in some way on the agricultural subsidies of rich countries that make it difficult for farmers in poor countries to compete. For example, they argue that the European Unions agricultural export subsidies encourage overproduction of goods such as tomatoes or sugar, local farmers cannot sell their goods as cheaply and go out of business. The campaign points to the treatment of agriculture at the WTO, recently rich countries have begun to talk about cutting export subsidies, but they often demand greater access to poor country markets in return. Corporate development Dumping Economic development Fair trade International development Social development Sociocultural evolution Trade and development WTO
Free trade is one of the most debated topics in economics of the 19th, 20th, and 21st century. Arguments over free trade can be divided into economic, the World Trade Organization was created to open up markets and promote international trade based on the Free Trade paradigm. The WTO creates and monitors agreements to reduce trade barriers, and arbitrates in disputes over foreign market access and its definition of Free Trade is trade on a level playing field, so that the unlimited exchange of goods between countries is not necessarily Free. Therefore, any import restriction makes the domestic society as a whole worse off than it would be with unlimited imports, the artificial handicap of a foreign subsidy seems much less just to local production than advantages deriving from geography, natural resources, or native skill. Electorates often prefer fairplay to Utilitarian considerations, if trade barriers are already low, the threat of a trade war of tit-for-tat tariff increases may reduce the temptation for either partner in bilateral trade to raise import barriers.
It would tend to decrease the power and revenue flowing to government bureaucrats. In the history of trade, two types of arguments have been advanced in favor of allowing purchases from abroad, and free trade in the broader sense. One set of arguments for free trade could be classified as moral arguments listed below, another set of arguments is essentially economic, that free trade will make society more prosperous. These are mostly technical arguments from the discipline of economics, starting especially with Smiths The Wealth of Nations, the 18th and 19th century intellectuals who backed free trade rarely did so under the rubric of increasing material wealth. In many cases this was given as the least important reason for free trade, they argued that international society would be improved by increased commerce. Some of these, and later, sociopolitical arguments are listed here, adam Smith thought that protectionism against free trade was a scam on the public on behalf of producers, carried out in the name of nationalism.
Even if overall economic interests had not been harmed by tariffs, classical economic analysis shows that free trade increases the global level of output because free trade permits specialization among countries. Specialization allows nations to devote their resources to the production of the particular goods. The benefits of specialization, coupled with economies of scale, increase the production possibility frontier. An increase in the production possibility frontier indicates that the absolute quantity of goods. Not only are the quantity of goods and services higher. Free trade policies are often associated with general laissez-faire economic politics and parties, voluntary exchange, by virtue of its voluntary nature, is assumed to be beneficial to the parties involved—why else would they engage in the exchange. Thus, the restriction of voluntary exchange restricts commerce and ultimately the accumulation of wealth in the absence of real-world externalities such as infant industry protection, here is the production possibilities frontier for a fictional country, Country A
Fair trade is a social movement whose stated goal is to help producers in developing countries achieve better trading conditions and to promote sustainable farming. Members of the movement advocate the payment of prices to exporters. The movement seeks to promote equity in international trading partnerships through dialogue, transparency. It promotes sustainable development by offering better trading conditions to, and securing the rights of, Fair trade is grounded in three core beliefs, producers have the power to express unity with consumers. Secondly, the trade practices that currently exist promote the unequal distribution of wealth between nations. Lastly, buying products from producers in developing countries at a price is a more efficient way of promoting sustainable development than traditional charity. Specifically, fair trade is a partnership, based on dialogue and respect. There are several recognized fair trade certifiers, including Fairtrade International, IMO, Make Trade Fair, in 2008, Fairtrade International certified approximately of products.
The World Trade Organization publishes annual figures on the trade of goods. The fair trade movement is popular in the UK, where there are 500 Fairtrade towns,118 universities, over 6,000 churches, according to Fairtrade International, nearly six out of ten consumers have seen the Fairtrade mark and almost nine in ten of them trust it. Some criticisms have been raised about fair trade systems, some research indicates that the implementation of certain fair trade standards can cause greater inequalities in some markets where these rigid rules are inappropriate for the specific market. In the Fair trade debate there are complaints of failure to enforce the fair trade standards, with producers, there are a large number of fair trade and ethical marketing organizations employing different marketing strategies. Most fair trade marketers believe it is necessary to sell the products through supermarkets to get a sufficient volume of trade to affect the developing world, the Fairtrade brand is by far the biggest of the fair trade coffee brands.
Packers in developed countries pay a fee to The Fairtrade Foundation for the right to use the brand and logo and retailers can charge as much as they want for the coffee. The coffee has to come from a fair trade cooperative. Additionally, the cooperatives are paid an additional 10c per lb premium by buyers for community development projects, the cooperatives can, on average, sell only a third of their output as fair trade, because of lack of demand, and sell the rest at world prices. The exporting cooperative can spend the money in several ways, some is spent on social projects such as building schools, health clinics and baseball pitches. Sometimes there is left over for the farmers
International trade is the exchange of capital and services across international borders or territories. It is the exchange of goods and services among nations of the world, in most countries, such trade represents a significant share of gross domestic product. While international trade has existed throughout history, its economic, trading globally gives consumers and countries the opportunity to be exposed to new markets and products. Almost every kind of product can be found on the market, clothes, spare parts, jewellery, stocks, currencies. Services are traded, banking and transportation, a product that is sold to the global market is an export, and a product that is bought from the global market is an import. Imports and exports are accounted for in a current account in the balance of payments. Industrialization, advanced technology, including transportation, multinational corporations, increasing international trade is crucial to the continuance of globalization. Without international trade, nations would be limited to the goods, the main difference is that international trade is typically more costly than domestic trade.
Another difference between domestic and international trade is that factors of such as capital and labor are typically more mobile within a country than across countries. Thus international trade is restricted to trade in goods and services. Trade in goods and services can serve as a substitute for trade in factors of production, instead of importing a factor of production, a country can import goods that make intensive use of that factor of production and thus embody it. An example is the import of goods by the United States from China. Instead of importing Chinese labor, the United States imports goods that were produced with Chinese labor, International trade is a branch of economics, together with international finance, forms the larger branch called international economics. The history of international trade chronicles notable events that have affected the trade between various economies, there are several models which seek to explain the factors behind international trade, the welfare consequences of trade and the pattern of trade.
</ref></ref>==Largest countries by total international trade== Source, International Trade Centre President George W. Bush observed World Trade Week on May 18,2001, mcKenzie, Lionel W. Specialization and Efficiency in World Production. A Ricardo-Sraffa Paradigm Comparing the Gains from Trade in Inputs and Finished Goods, the definitions and methodological concepts applied for the various statistical collections on international trade often differ in terms of definition and coverage. Metadata providing information on definitions and methods are published along with the data. Ptas. mcgill. ca Historical documents on international trade available on FRASER
A trade route is a logistical network identified as a of pathways and stoppages used for the commercial transport of cargo. The term can be used to refer to trade over bodies of water, among notable trade routes was the Amber Road, which served as a dependable network for long-distance trade. Maritime trade along the Spice Route became prominent during the Middle Ages, during the Middle Ages, organizations such as the Hanseatic League, aimed at protecting interests of the merchants, and trade became increasingly prominent. In modern times, commercial activity shifted from the trade routes of the Old World to newer routes between modern nation-states. Innovative transportation of modern times includes pipeline transport and the relatively well-known trade involving rail routes, one of the vital instruments which facilitated long distance trade was portage and the domestication of beasts of burden. Organized caravans, visible by the 2nd millennium BCE, could carry goods across a distance as fodder was mostly available along the way.
The domestication of camels allowed Arabian nomads to control the long distance trade in spices, caravans were useful in long-distance trade largely for carrying luxury goods, the transportation of cheaper goods across large distances was not profitable for caravan operators. With productive developments in iron and bronze technologies, newer trade routes—dispensing innovations of civilizations—began to rise, evidence of maritime trade between civilizations dates back at least 90 millennia. Navigation was known in Sumer between the 4th and the 3rd millennium BCE, and was known by the Indians. The Egyptians had trade routes through the Red Sea, importing spices from the Land of Punt, maritime trade began with safer coastal trade and evolved with the manipulation of the monsoon winds, soon resulting in trade crossing boundaries such as the Arabian Sea and the Bay of Bengal. South Asia had multiple maritime trade routes which connected it to Southeast Asia, Indian connections to various Southeast Asian states buffered it from blockages on other routes.
By making use of the trade routes, bulk commodity trade became possible for the Romans in the 2nd century BCE. A Roman trading vessel could span the Mediterranean in a month at one-sixtieth the cost of over-land routes, the peninsula of Anatolia lay on the commercial land routes to Europe from Asia as well as the sea route from the Mediterranean to the Black Sea. Records from the 19th century BCE attest to the existence of an Assyrian merchant colony at Kanesh in Cappadocia, trading networks of the Old World included the Grand Trunk Road of India and the Incense Road of Arabia. Parts of the Mediterranean world, Roman Britain, Tigris-Euphrates river system, beyond this was a margin which included not only temperate areas such as Europe, but the dry steppe corridor of central Asia. This was truly a world system, even though it occupied only a portion of the western Old World. Whilst each civilization emphasized its ideological autonomy, all were part of a common world of interacting components.
These routes - spreading religion and technology - have historically been vital to the growth of urban civilization
Protectionist policies protect the producers and workers of the import-competing sector in a country from foreign competitors. According to proponents, these policies can counteract unfair trade practices, protectionists may favor the policy in order to decrease the trade deficit, maintain employment in certain sectors, or favor the growth of certain industries. In recent years, protectionism has become closely aligned with the anti-globalization movement, There is a broad consensus among economists that the impact of protectionism on economic growth is largely negative, although the impact on specific industries and groups of people may be positive. The doctrine of protectionism contrasts with the doctrine of free trade, a variety of policies have been used to achieve protectionist goals. Tariff rates usually vary according to the type of goods imported, import tariffs will increase the cost to importers, and increase the price of imported goods in the local markets, thus lowering the quantity of goods imported, to favour local producers.
Tariffs may be imposed on exports, and in an economy with floating exchange rates, since export tariffs are often perceived as hurting local industries, while import tariffs are perceived as helping local industries, export tariffs are seldom implemented. Import quotas, To reduce the quantity and therefore increase the price of imported goods. The economic effects of a quota is similar to that of a tariff. Economists often suggest that import licenses be auctioned to the highest bidder, administrative barriers, Countries are sometimes accused of using their various administrative rules as a way to introduce barriers to imports. Anti-dumping legislation, Supporters of anti-dumping laws argue that they prevent dumping of cheaper foreign goods that would cause local firms to close down, however, in practice, anti-dumping laws are usually used to impose trade tariffs on foreign exporters. Direct subsidies, Government subsidies are given to local firms that cannot compete well against imports. These subsidies are purported to protect jobs, and to help local firms adjust to the world markets.
Export subsidies, Export subsidies are often used by governments to increase exports, Export subsidies have the opposite effect of export tariffs because exporters get payment, which is a percentage or proportion of the value of exported. Export subsidies increase the amount of trade, and in a country with floating exchange rates, have similar to import subsidies. Exchange rate control, A government may intervene in the exchange market to lower the value of its currency by selling its currency in the foreign exchange market. Doing so will raise the cost of imports and lower the cost of exports, international patent systems, There is an argument for viewing national patent systems as a cloak for protectionist trade policies at a national level. Peter Drahos explains that States realized that patent systems could be used to cloak protectionist strategies, There were reputational advantages for states to be seen to be sticking to intellectual property systems. In the modern trade arena many other initiatives besides tariffs have been called protectionist, for example, some commentators, such as Jagdish Bhagwati, see developed countries efforts in imposing their own labor or environmental standards as protectionism
Mercantilism was an economic theory and practice that was dominant in Western Europe during the 15th to the mid-18th centuries. Mercantilism is a form of economic nationalism and its goal is to enrich and empower the nation and state to the maximum degree, by acquiring and retaining as much economic activity as possible within the nations borders. Manufacturing and industry, particularly of goods with military applications, were prioritized, Mercantilism sought to ensure the nation produced as much volume and variety of output as possible, so as to limit its dependence upon foreign suppliers. Economic autarky was an element of mercantilism. These aims were primarily accomplished by, Imposing high tariffs on the importation of finished goods, Imposing low, or no taxes on the export of finished goods, and imposing high taxes on the exportation of raw materials. Seeking new markets for manufactured products, so as to artificially increase the demand for domestic production. These policies generally resulted in a balance of trade, which led to the accumulation of precious metals.
Historically, such policies sometimes led to war and may have motivated colonial expansion, high tariffs, especially on manufactured goods, are an almost universal feature of mercantilist policy. Mercantilism has been linked to bullionism ever since Adam Smith made the accusation, due to the fact that no author self-consciously used the label to refer to their own thoughts mercantilist authors can only be identified retrospectively. It is the supply of things necessary for life and suitable for clothing, the core of mercantile policy was a coherent national industrial policy, which was aimed at generating as much material wealth within the nation as possible. Doing so, it was thought, was the best way to increase the states military, the term mercantile system was used by its foremost critic, Adam Smith, but mercantilism had been used earlier by Mirabeau. Many nations applied the theory, one example being France which was the most important state economically in Europe at the time. King Louis XIV followed the guidance of Jean Baptiste Colbert, his general of finances.
Mercantilism was the dominant school of thought in Europe throughout the late Renaissance. Evidence of mercantilistic practices appeared in early modern Venice, however, as a codified school of economic theories, mercantilisms real birth was marked by the empiricism of the Renaissance, which first began to quantify large-scale trade accurately. England began the first large-scale and integrative approach to mercantilism during the Elizabethan Era, queen Elizabeth promoted the Trade and Navigation Acts in Parliament and issued orders to her navy for the protection and promotion of English shipping. It was written in the 1620s and published in 1664, numerous French authors helped cement French policy around mercantilism in the 17th century. This French mercantilism was best articulated by Jean-Baptiste Colbert, though policy liberalised greatly under Napoleon, in Europe, academic belief in mercantilism began to fade in the late 18th century, especially in Britain, in light of the arguments of Adam Smith and the classical economists
Balance of trade
The balance of trade, commercial balance, or net exports, is the difference between the monetary value of a nations exports and imports over a certain period. Sometimes a distinction is made between a balance of trade for goods versus one for services, generally trade surplus is seen as positive economic indicator, however in exceptional circumstances a trade deficit is due to government forex policy to achieve other macroeconomic goals. The balance of trade part of the current account, which includes other transactions such as income from the net international investment position as well as international aid. If the current account is in surplus, the net international asset position increases correspondingly. Equally, a deficit decreases the net asset position. The trade balance is identical to the difference between a countrys output and its domestic demand, measuring the balance of trade can be problematic because of problems with recording and collecting data. This cannot be true, because all transactions involve an equal credit or debit in the account of each nation, the discrepancy is widely believed to be explained by transactions intended to launder money or evade taxes and other visibility problems.
Especially for developing countries, the statistics are likely to be inaccurate. In export-led growth, the balance of trade will shift towards exports during an economic expansion, with domestic demand led growth the trade balance will shift towards imports at the same stage in the business cycle. Monetary balance of trade is different from physical balance of trade, developed countries usually import a lot of raw materials from developing countries. Typically, these materials are transformed into finished products. Financial trade balance statistics conceal material flow, most developed countries have a large physical trade deficit, because they consume more raw materials than they produce. Many civil society organisations claim this imbalance is predatory and campaign for ecological debt repayment. S debt that has funded the consumption, the U. S. has a trade surplus with nations such as Australia. The issue of trade deficits can be complex, Trade deficits generated in tradeable goods such as manufactured goods or software may impact domestic employment to different degrees than trade deficits in raw materials.
Economies such as Japan and Germany which have savings surpluses, typically run trade surpluses, china, a high-growth economy, has tended to run trade surpluses. A higher savings rate generally corresponds to a trade surplus, the U. S. with its lower savings rate has tended to run high trade deficits, especially with Asian nations. The economist Paul Craig Roberts notes that the comparative advantage principles developed by David Ricardo do not hold where the factors of production are internationally mobile. In 2010, economist Ian Fletcher wrote Free Trade Doesnt Work, What Should Replace It and Why, small trade deficits are generally not considered to be harmful to either the importing or exporting economy
The goal is that the movement of capital, labour and services between the members is as easy as within them. The physical and fiscal barriers among the states are removed to the maximum extent possible. These barriers obstruct the freedom of movement of the four factors of production, a common market is usually referred to as the first stage towards the creation of a single market. It usually is built upon a trade area with relatively free movement of capital and of services. A unified market is the last stage and ultimate goal of a single market and it requires the total free movement of goods, services and people without regard to national boundaries. A common market allows for the movement of capital and services. It eliminates all quotas and “tariffs” – duties on imported goods – from trade in goods within it, however “non-tariff barriers” remain such as differences between the Member States’ safety, packaging requirements and national administrative procedures. They prevent for example manufacturers from marketing the same goods in all member states, the objective of a common market is most often economic convergence and the creation of an integrated single market.
It is sometimes considered as the first stage of a single market, the European Economic Community was the first example of a common market. Citizens can study, shop and retire in any member state, consumers enjoy a vast array of products from all member states and businesses have unrestricted access to more consumers. A single market is commonly described as frontier-free, several barriers remain such as differences in national tax systems, differences in parts of the services sector and different requirements for e-commerce. In addition separate national markets still exist for financial services, laws concerning the recognition of professional qualifications may not be fully harmonized. The European Union is the economic union whose objective is completing the single market. A completed, unified market usually refers to the removal of barriers. Complete economic integration can be seen many countries, whether in a single unitary state with a single set of economic rules. Movement of people and goods among the states is unrestricted and without tariffs, a single market has many benefits.
With full freedom of movement for all the factors of production between the countries, the factors of production become more efficiently allocated, further increasing productivity. For both business within the market and consumers, a market is a very competitive environment
Intellectual property refers to creations of the intellect for which a monopoly is assigned to designated owners by law. Intellectual property rights are the protections granted to the creators of IP, and include trademarks, patents, industrial design rights, and in some jurisdictions trade secrets. Artistic works including music and literature, as well as discoveries, words, symbols, the Statute of Monopolies and the British Statute of Anne are seen as the origins of patent law and copyright respectively, firmly establishing the concept of intellectual property. The first known use of the intellectual property dates to 1769. The first clear example of modern usage goes back as early as 1808, the German equivalent was used with the founding of the North German Confederation whose constitution granted legislative power over the protection of intellectual property to the confederation. According to Lemley, it was only at point that the term really began to be used in the United States. The history of patents does not begin with inventions, but rather with royal grants by Queen Elizabeth I for monopoly privileges, the evolution of patents from royal prerogative to common-law doctrine.
The term can be used in an October 1845 Massachusetts Circuit Court ruling in the patent case Davoll et al. v. Brown. The statement that discoveries are. property goes back earlier, in Europe, French author A. Nion mentioned propriété intellectuelle in his Droits civils des auteurs, artistes et inventeurs, published in 1846. Until recently, the purpose of property law was to give as little protection as possible in order to encourage innovation. Historically, they were granted only when they were necessary to encourage invention, limited in time, the concepts origins can potentially be traced back further. In 500 BCE, the government of the Greek state of Sybaris offered one years patent to all who should discover any new refinement in luxury. Intellectual property rights include patents, industrial design rights, plant variety rights, trade dress, geographical indications, a copyright gives the creator of an original work exclusive rights to it, usually for a limited time. Copyright may apply to a range of creative, intellectual, or artistic forms.
Copyright does not cover ideas and information themselves, only the form or manner in which they are expressed, an industrial design right protects the visual design of objects that are not purely utilitarian. An industrial design consists of the creation of a shape, configuration or composition of pattern or color, or combination of pattern, an industrial design can be a two- or three-dimensional pattern used to produce a product, industrial commodity or handicraft. Plant breeders rights or plant variety rights are the rights to use a new variety of a plant. The variety must amongst others be novel and distinct and for registration the evaluation of propagating material of the variety is examined, a trademark is a recognizable sign, design or expression which distinguishes products or services of a particular trader from the similar products or services of other traders