1.
Trade route
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A trade route is a logistical network identified as a of pathways and stoppages used for the commercial transport of cargo. The term can also 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, automobiles, 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, trade and technology - have historically been vital to the growth of urban civilization
2.
Bribery
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Bribery is the act of giving money, goods or other forms of recompense to a recipient in exchange for an alteration of their behavior that the recipient would otherwise not alter. Gifts of money or other items of value which are available to everyone on an equivalent basis. Offering a discount or a refund to all purchasers is a rebate and is not bribery. Giving the rebate to influence them to look favorably on the utilitys rate increase applications, however. The bribe is the gift bestowed to influence the recipients conduct, in economics, the bribe has been described as rent. Bribery in bureaucracy has been viewed as a reason for the higher cost of production of goods, one must be careful of differing social and cultural norms when examining bribery. Expectations of when a transaction is appropriate can differ from place to place. Tipping, for example, is considered bribery in some societies, in some Spanish-speaking countries, bribes are referred to as mordida. In Arab countries, bribes may be called baksheesh or shay, french-speaking countries often use the expressions dessous-de-table, pot-de-vin, or commission occulte. While the last two expressions contain inherently a negative connotation, the expression dessous-de-table can be understood as a commonly accepted business practice. In German, the term is Schmiergeld. The forms that bribery take are numerous, for example, a motorist might bribe a police officer not to issue a ticket for speeding, a citizen seeking paperwork or utility line connections might bribe a functionary for faster service. Bribery may also take the form of a commission, a profit made by an agent, in the course of his employment. Euphemisms abound for this Bribers and recipients of bribery are likewise numerous although bribers have one common denominator, Bribery around the world is estimated at about $1 trillion. The reason for this dissociation is to make the steps of a corrupt deal already an offence and, thus. Besides, such a dissociation makes the prosecution of bribery offences easier since it can be difficult to prove that two parties have formally agreed upon a corrupt deal. A grey area may exist when payments to smooth transactions are made, in some countries, this practice is the norm, often resulting from a developing nation not having the tax structure to pay civil servants an adequate salary. Nevertheless, most economists regard bribery as a bad thing because it encourages rent seeking behaviour, a state where bribery has become a way of life is a kleptocracy
3.
Mercantilism
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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, however, 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, Genoa, 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
4.
Free trade
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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, moral, 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, rather, 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
5.
International Monetary Fund
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The International Monetary Fund is an international organization headquartered in Washington, D. C. It now plays a role in the management of balance of payments difficulties. Countries contribute funds to a pool through a system from which countries experiencing balance of payments problems can borrow money. As of 2016, the fund had SDR477 billion, the rationale for this is that private international capital markets function imperfectly and many countries have limited access to financial markets. The IMF provides alternate sources of financing and this assistance was meant to prevent the spread of international economic crises. The IMF was also intended to help mend the pieces of the economy after the Great Depression. As well, to provide investments for economic growth and projects such as infrastructure. The IMFs role was altered by the floating exchange rates post-1971. It shifted to examining the economic policies of countries with IMF loan agreements to determine if a shortage of capital was due to economic fluctuations or economic policy, the IMF also researched what types of government policy would ensure economic recovery. Rather than maintaining a position of oversight of only exchange rates and their role became a lot more active because the IMF now manages economic policy rather than just exchange rates. In addition, the IMF negotiates conditions on lending and loans under their policy of conditionality, nonconcessional loans, which include interest rates, are provided mainly through Stand-By Arrangements, the Flexible Credit Line, the Precautionary and Liquidity Line, and the Extended Fund Facility. The IMF provides emergency assistance via the Rapid Financing Instrument to members facing urgent balance-of-payments needs, the IMF is mandated to oversee the international monetary and financial system and monitor the economic and financial policies of its member countries. This activity is known as surveillance and facilitates international cooperation, the responsibilities changed from those of guardian to those of overseer of members’ policies. In 1995 the International Monetary Fund began work on data dissemination standards with the view of guiding IMF member countries to disseminate their economic and financial data to the public. The executive board approved the SDDS and GDDS in 1996 and 1997 respectively, the system is aimed primarily at statisticians and aims to improve many aspects of statistical systems in a country. It is also part of the World Bank Millennium Development Goals, some countries initially used the GDDS, but later upgraded to SDDS. The IMF does require collateral from countries for loans but also requires the government seeking assistance to correct its macroeconomic imbalances in the form of policy reform, if the conditions are not met, the funds are withheld. The concept of conditionality was introduced in a 1952 Executive Board decision, conditionality is associated with economic theory as well as an enforcement mechanism for repayment
6.
World Trade Organization
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The World Trade Organization is an intergovernmental organization which regulates international trade. The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade, most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round. The WTO is attempting to complete negotiations on the Doha Development Round, as of June 2012, the future of the Doha Round remained uncertain, the work programme lists 21 subjects in which the original deadline of 1 January 2005 was missed, and the round is still incomplete. This impasse has made it impossible to launch new WTO negotiations beyond the Doha Development Round, as a result, there have been an increasing number of bilateral free trade agreements between governments. As of July 2012, there were various groups in the WTO system for the current agricultural trade negotiation which is in the condition of stalemate. The WTOs current Director-General is Roberto Azevêdo, who leads a staff of over 600 people in Geneva, a trade facilitation agreement, part of the Bali Package of decisions, was agreed by all members on 7 December 2013, the first comprehensive agreement in the organizations history. Seven rounds of negotiations occurred under GATT, the first real GATT trade rounds concentrated on further reducing tariffs. Then, the Kennedy Round in the mid-sixties brought about a GATT anti-dumping Agreement, because these plurilateral agreements were not accepted by the full GATT membership, they were often informally called codes. Several of these codes were amended in the Uruguay Round, only four remained plurilateral, but in 1997 WTO members agreed to terminate the bovine meat and dairy agreements, leaving only two. Well before GATTs 40th anniversary, its members concluded that the GATT system was straining to adapt to a new globalizing world economy. In response to the problems identified in the 1982 Ministerial Declaration, the GATT still exists as the WTOs umbrella treaty for trade in goods, updated as a result of the Uruguay Round negotiations. GATT1994 is not however the only legally binding agreement included via the Final Act at Marrakesh, the highest decision-making body of the WTO is the Ministerial Conference, which usually meets every two years. It brings together all members of the WTO, all of which are countries or customs unions, the Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements. When agricultural export subsidies were agreed to be phased out and adoption of the European Unions Everything, the WTO launched the current round of negotiations, the Doha Development Round, at the fourth ministerial conference in Doha, Qatar in November 2001. This was to be an effort to make globalization more inclusive and help the worlds poor, particularly by slashing barriers. The initial agenda comprised both further trade liberalization and new rule-making, underpinned by commitments to strengthen substantial assistance to developing countries. Among the various functions of the WTO, these are regarded by analysts as the most important and it provides a forum for negotiations and for settling disputes. Another priority of the WTO is the assistance of developing, least-developed and low-income countries in transition to adjust to WTO rules and disciplines through technical cooperation and training
7.
Timeline of international trade
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The history of international trade chronicles notable events that have affected the trade between various countries. In the 21st century, China, the European Union and the United States are the three largest trading markets in the world, records from the 19th century BCE attest to the existence of an Assyrian merchant colony at Kanesh in Cappadocia. The domestication of camel allows Arabian nomads to control long distance trade in spices, the Egyptians trade in the Red sea, importing spices from the Land of Punt and from Arabia. Indian goods are brought in Arabian vessels to Aden, the ships of Tarshish, a Tyrian fleet equipped at Ezion Geber, make several trading voyages to the East bringing back gold, silver, ivory and precious stones. Tiglath-Pileser III attacks Gaza in order to trade along the Incense Route. The Greek Ptolemaic dynasty exploits trading opportunities with India prior to the Roman involvement, the cargo from the India and Egypt trade is shipped to Aden. With the establishment of Roman Egypt, the Romans initiate trade with India, the goods from the East African trade are landed at one of the three main Roman ports, Arsinoe, Berenice or Myos Hormos. Myos Hormos and Berencie appear to have been important ancient trading ports, gerrha controls the Incense trade routes across Arabia to the Mediterranean and exercises control over the trading of aromatics to Babylon in the 1st century BC. Additionally, it served as a port of entry for goods shipped from India to the East, due to its prominent position in the incense trade, Yemen attracts settlers from the fertile crescent. Pre-Islamic Meccans use the old Incense Route to benefit from the heavy Roman demand for luxury goods, in Java and Borneo, the introduction of Indian culture creates a demand for aromatics. These trading outposts later serve the Chinese and Arab markets, following the demise of the incense trade Yemen takes to the export of coffee via the Red Sea port of al-Mocha. The Abbasids use Alexandria, Damietta, Aden and Siraf as entry ports to India, at the eastern terminus of the Silk Road, the Tang Dynasty Chinese capital at Changan becomes a major metropolitan center for foreign trade, travel, and residence. This role would be assumed by Kaifeng and Hangzhou during the Song Dynasty, guangzhou was Chinas greatest international seaport during the Tang Dynasty, but its importance was eclipsed by the international seaport of Quanzhou during the Song Dynasty. Merchants arriving from India in the city of Aden pay tribute in form of musk, camphor, ambergris and sandalwood to Ibn Ziyad. Indian exports of spices find mention in the works of Ibn Khurdadhbeh, al-Ghafiqi, Ishak bin Imaran, the Hanseatic League secures trading privileges and market rights in England for goods from the Leagues trading cities in 1157. Due to the Turkish hold on the Levant during the half of the 15th century the traditional Spice Route shifts from the Persian Gulf to the Red Sea. In 1492 a Spanish expedition commanded by Christopher Columbus arrive in America, Portuguese diplomat Pero da Covilha undertakes a mission to explore the trade routes of the Near East and the adjoining regions of Asia and Africa. The exploration commenced from Santarém to Barcelona, Naples, Alexandria, Cairo, Portuguese explorer and adventurer Vasco da Gama is credited with establishing another sea route from Europe to India
8.
Tax
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A tax is a financial charge or other levy imposed upon a taxpayer by a state or the functional equivalent of a state to fund various public expenditures. A failure to pay, or evasion of or resistance to taxation, is punishable by law. Taxes consist of direct or indirect taxes and may be paid in money or as its labour equivalent, the legal definition and the economic definition of taxes differ in that economists do not regard many transfers to governments as taxes. For example, some transfers to the sector are comparable to prices. Examples include tuition at public universities and fees for utilities provided by local governments, governments also obtain resources by creating money and coins, through voluntary gifts, by imposing penalties, by borrowing, and by confiscating wealth. In modern taxation systems, governments levy taxes in money, but in-kind and corvée taxation are characteristic of traditional or pre-capitalist states, the method of taxation and the government expenditure of taxes raised is often highly debated in politics and economics. Tax collection is performed by a government agency such as the Canada Revenue Agency, when taxes are not fully paid, the state may impose civil penalties or criminal penalties on the non-paying entity or individual. The levying of taxes aims to raise revenue to fund governing and/or to alter prices in order to affect demand, States and their functional equivalents throughout history have used money provided by taxation to carry out many functions. A governments ability to raise taxes is called its fiscal capacity, when expenditures exceed tax revenue, a government accumulates debt. A portion of taxes may be used to service past debts, governments also use taxes to fund welfare and public services. These services can include education systems, pensions for the elderly, unemployment benefits, energy, water and waste management systems are also common public utilities. A tax effectively changes relative prices of products and they have therefore sought to identify the kind of tax system that would minimize this distortion. Governments use different kinds of taxes and vary the tax rates, historically, taxes on the poor supported the nobility, modern social-security systems aim to support the poor, the disabled, or the retired by taxes on those who are still working. A states tax system often reflects its communal values and the values of those in current political power. To create a system of taxation, a state must make choices regarding the distribution of the tax burden—who will pay taxes and how much they will pay—and how the taxes collected will be spent. In democratic nations where the public elects those in charge of establishing or administering the tax system, in countries where the public does not have a significant amount of influence over the system of taxation, that system may reflect more closely the values of those in power. All large businesses incur administrative costs in the process of delivering revenue collected from customers to the suppliers of the goods or services being purchased. Taxation is no different, the resource collected from the public through taxation is always greater than the amount which can be used by the government, the difference is called the compliance cost and includes the labour cost and other expenses incurred in complying with tax laws and rules
9.
World Customs Organization
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The World Customs Organization is an intergovernmental organization headquartered in Brussels, Belgium. The WCO maintains the international Harmonized System goods nomenclature, and administers the technical aspects of the World Trade Organization Agreements on Customs Valuation, in 1947, thirteen European countries established a Study Group to examine customs issues identified by the General Agreement on Tariffs and Trade. This work led to the adoption in 1948 of the Convention establishing the Customs Co-operation Council, on January 26,1953, the CCC’s inaugural session took place with the participation of 17 founding members. WCO membership subsequently expanded to all regions of the globe. In 1994, the organization adopted its current name, the World Customs Organization, today, WCO members are responsible for customs controls in 180 countries representing more than 98 per cent of all international trade. The HS multipurpose goods nomenclature is used as the basis for customs tariffs and it comprises about 5,000 commodity groups, each identified by a six digit code arranged in a legal and logical structure with well-defined rules to achieve uniform classification. The WCO revised Kyoto Convention is sometimes confused with the Kyoto Protocol, 3) ATA Convention and the Convention on Temporary Admission. Both the ATA Convention and the Istanbul Convention are WCO instruments governing temporary admission of goods, the ATA system, which is integral to both Conventions, allows the free movement of goods across frontiers and their temporary admission into a customs territory with relief from duties and taxes. The goods are covered by a document known as the ATA carnet that is secured by an international guarantee system. 4) The Arusha Declaration on Customs Integrity was adopted in 1993, the Arusha Declaration is a non-binding instrument which provides a number of basic principles to promote integrity and combat corruption within customs administrations. 5) The SAFE Framework of Standards to Secure and Facilitate Global Trade was adopted in 2005, 6) The Columbus Program is a customs capacity building program works to promote customs modernization and implementation of their standards to secure and facilitate world trade. Because of its complexity, the WCO launched a capacity building program called the Columbus Programme which focuses on needs assessments for WCO Members using the WCO Diagnostic Framework tool. The WCO Secretariat is headed by a Secretary General, who is elected by the WCO membership to a five-year term, the current WCO Secretary General is Kunio Mikuriya from Japan, who took office on 1 January 2009. The WCO is governed by the Council, which brings together all Members of the Organization once a year, additional strategic and management guidance is provided by the Policy Commission and the Finance Committee
10.
Tariff
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A tariff is a tax on imports or exports. In other languages and very occasionally in English, tariff or its equivalent may also be used to any list of prices. A customs duty or due is the tax levied on the import or export of goods in international trade. In economic sense, a duty is also a kind of consumption tax, a duty levied on goods being imported is referred to as an import duty. Similarly, a duty levied on exports is called an export duty, a tariff, which is actually a list of commodities along with the leviable rate of customs duty, is popularly referred to as a customs duty. This is no longer the case, Customs duty is calculated on the determination of the assessable value in case of those items for which the duty is levied ad valorem. This is often the transaction value unless a customs officer determines assessable value in accordance with the Harmonized System, However, for certain items like petroleum and alcohol, customs duty is realized at a specific rate applied to the volume of the import or export consignments. For the purpose of assessment of duty, products are given an identification code that has come to be known as the Harmonized System code. This code was developed by the World Customs Organization based in Brussels, a Harmonized System code may be from four to ten digits. For example,17.03 is the HS code for molasses from the extraction or refining of sugar, However, within 17.03, the number 17.03.90 stands for Molasses. Introduction of Harmonized System code in 1990s has largely replaced the Standard International Trade Classification, in drawing up the national tariff, the revenue departments often specifies the rate of customs duty with reference to the HS code of the product. A Customs authority in each country is responsible for collecting taxes on the import into or export of goods out of the country, Evasion of customs duties takes place mainly in two ways. In one, the trader under-declares the value so that the value is lower than actual. In a similar vein, a trader can evade customs duty by understatement of quantity or volume of the product of trade, a trader may also evade duty by misrepresenting traded goods, categorizing goods as items which attract lower customs duties. The Evasion of customs duty may take place with or without the collaboration of customs officials, Evasion of customs duty does not necessarily constitute smuggling. Many countries allow a traveler to bring goods into the country duty-free and these goods may be bought at ports and airports or sometimes within one country without attracting the usual government taxes and then brought into another country duty-free. Some countries impose allowances which limit the number or value of items that one person can bring into the country. These restrictions often apply to tobacco, wine, spirits, cosmetics, gifts, often foreign diplomats and UN officials are entitled to duty-free goods
11.
Foreign exchange controls
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Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents. Such controls used to be common in most countries, particularly poorer ones, until the 1990s when free trade, today, countries which still impose exchange controls are the exception rather than the rule. Often, foreign exchange controls can result in the creation of markets to exchange the weaker currency for stronger currencies. This leads to a situation where the rate for the foreign currency is much higher than the rate set by the government. As such, it is unclear whether governments have the ability to enact effective exchange controls, note that this list is very incomplete. Currency transaction tax Financial transaction tax Spahn tax Sterling Area Tobin tax
European Union
United States
China
Germany
United Kingdom
Japan
France
Netherlands
Hong Kong
South Korea
Italy
Canada
Belgium
India
Singapore
Mexico
Spain
Switzerland
Taiwan
Russia
Ireland
United Arab Emirates
