Foreign Trade ( English foreign trade ) is the export , import and transit trade of material and immaterial goods , services and capital as well as their processing . The counterpart is domestic trade .
International trade differs significantly from domestic trade. In cross-border transactions , the spatial complicate distance , language differences and different political , legal and economic systems , the assessment of the business partner. The main difference is that foreign trade is usually more expensive than domestic trade. The reason for this is that the long cross-border transport route usually causes additional costs such as customs duties or transport costs or other transaction costs .
Only free trade enables unregulated foreign trade, while trade barriers up to protectionism restrict it or make it impossible. There can be no absolute free trade, however, because this is already in conflict with the various national goals and trade policies . Therefore, foreign trade policy tries as a process policy to shape international trade relations by intervening with the help of state regulatory measures through foreign trade instruments.
Foreign trade contributes to the international division of labor because, for example, agricultural products or mineral resources from agricultural countries are further processed in the industrialized countries . In this way, it also makes a contribution to corporate internationalization when domestic goods are exported on international markets up to the world market (“ made in Germany ”) or foreign goods are imported into national markets.
The intra-regional foreign trade concerns the foreign trade relations between the Member States of economic integration space (such as the European Union ), while the inter-regional foreign trade trade relations economic integration areas (such as between an EU member state and a third country recorded).
An intersectoral foreign trade exists when goods of different categories are traded. For example, Germany exports motor vehicles to Colombia and purchases coffee from there, among other things . To Intraindustry foreign trade , it is when the same category of products traded between countries: Germany exported motor vehicles as Japan and imported Japanese vehicles.
The legal basis for foreign trade is foreign trade law , which is mainly represented by the Foreign Trade Act (AWG) and the Foreign Trade Ordinance (AWV). In para. 1 AWG free trade is promoted, which is subject only to such limitations, providing the AWG or the AWV ( export license , export lists , import permit , import lists ).
Foreign trade can only take place on the basis of bilateral or multilateral trade agreements . They regulate which goods and services may and may not be exchanged between trading partners. The EU's common commercial policy is based on uniform principles in accordance with (1) TFEU . According to this, the European Parliament must give its approval to all trade agreements between EU member states and third countries.
Numerous trade customs have developed especially in foreign trade. Foreign trade between exporters and importers can only function smoothly if the exports and imports include standardized and generally recognized trade clauses in their delivery and payment conditions that clarify the transfer of risk , the transport costs and the transport risk . Regulations for this can be found in the Incoterms , while the ERA 600 contains the internationally recognized basis for the processing of documentary letters of credit.
Foreign trade in science
The foreign trade theory as a branch of the foreign trade theory tries to explain the effects on the trade relations of the market participants . The focus is on the theories of absolute and comparative cost advantages . These cost advantages arise primarily from internationally different wage levels , which necessitate the division into low-wage and high-wage countries because of different production costs and labor costs for the same good.
The ten largest export nations worldwide:
|1.||People's Republic of China||2.263||12.8|
|7th||Hong Kong b, c||550||3.1|
- b WTO Secretariat estimates
- c These figures include significant transfers in the context of re-exports (exports of foreign goods) and imports for re-exports
The ten largest import nations worldwide:
|country||Value a||proportion of|
|2.||People's Republic of China||1,841||10.2|
|7th||Hong Kong b||590||3.3|
- a FOB base of the port of export
Estimates by the WTO Secretariat
- b These figures include significant transfers in the context of re-exports (exports of foreign goods) and imports for re-exports
As early as 1664 it was clear to Thomas Mun that prosperity arises when other nations buy more from England than England consumes from them, when there is a trade surplus . Adam Smith , on the other hand, in his book Wealth of Nations , published in March 1776, attributed foreign trade to the fact that every country concentrated on the production of those goods for which it achieved an absolute cost advantage .
The undisputed effect of foreign trade on prosperity does not apply to all states, however, because the advantages one state derives from foreign trade can also be wholly or partially at the expense of other countries. Foreign trade thus causes a change in national income and acts as a buffer for domestic supply and demand shifts . Excess supply can be exported and excess demand imported. Globalization , multinational corporations and outsourcing are the results of foreign trade.
German foreign trade is shown in official foreign trade statistics according to the quantity and value of the goods as well as according to the countries of purchase and purchase. The economics captures all foreign trade activities in the trade and services balance . Important economic indicators for foreign trade are the external contribution , the foreign trade quota , export quota , import quota or degree of openness . The external contribution records the values of all exports and imports of tangible and intangible goods and services of a state within one accounting period . It shows whether a country exports more than it imports ( net export ) or vice versa ( net import ). The foreign trade quota puts exports and imports in relation to the gross domestic product .
Typical of foreign trade are its higher transaction costs compared to domestic trade. The reason for import or export is the greater distance to be bridged between importer and exporter, which results in higher transport costs. At the same time, this also increases the transport risk.
In business administration , one speaks of institutional foreign trade when the core business of a company is foreign trade-oriented (foreign trade operation). Such companies generate the majority of their sales revenue through export or import. With the merchant in wholesale and foreign trade, there is an independent professional profile .
Compared to domestic trade, foreign trade harbors additional risks. This includes in particular country risk ( transfer risk stop , moratorium risk ), supply risks , political risks, transport risk , exchange rate risk , payment risk , payment risk ban and intercultural understanding risks . Most risks can be covered by export credit insurance ( Hermes cover ). Payment risks can be reduced or eliminated by down payments , advance payments or payment guarantees (at the exporter), delivery risks through default guarantees , delivery guarantees or contract performance guarantees (at the importer). The banking system has also created typical foreign trade safeguards (e.g. letter of credit , document collection ). Banks also conduct in international payments , the cash flows by, by the payment of the fee-paying importer for example via the payment system SWIFT and its correspondent banks in the payment receiving Exporter cash as international transfer route ( english clean payment ). In addition, they exchange foreign currencies for domestic currency and vice versa, take on foreign trade financing and carry out hedging transactions .
The term foreign trade refers in particular to the bilateral or multilateral trade relations of a state or economic area with other states. Foreign trade is therefore to be understood as part of the general economy of the state and in comparison to domestic trade. World trade , on the other hand, is based on a global perspective and encompasses the entirety of trade relations between a large number of states, their structures, mechanisms and the development of these relations.
- Foreign demand for domestic goods
- World trade / tables and graphs
- List of countries by foreign trade quota
- William Bernstein : A Splendid Exchange: How Trade Shaped the World from Prehistory to Today . Atlantic Books, 2008, ISBN 978-1-84354-668-9 .
- Clemens Büter: Foreign trade: Basics of global and intra-community trade relations. 1st edition. Physica, 2007, ISBN 978-3-7908-1724-9 .
- Paul Krugman, Maurice Obstfeld, Marc Melitz: International Economy: Theory and Politics of Foreign Trade. 9th edition. Pearson Studies, 2011, ISBN 978-3-86894-134-0 .
- Fritz-Ulrich Jahrmann: Foreign Trade. (Compendium of practical business administration) 13th edition. NWB Herne, 2010, ISBN 978-3-470-54263-8 .
- Federal Statistical Office - data and articles on foreign trade
- Graphic: Foreign trade of the EU , from: Figures and facts: Europe , www.bpb.de
- Graphic: EU-USA-China trade relations , from: Figures and facts: Europe , www.bpb.de.
- Entry into foreign trade , free e-book or PDF from PostFinance CH (accessed May 29, 2015)
- Wilhelm Christians, Financing Handbook , 1988, p. 373
- Joachim Zentes / Dirk Morschett, Foreign Trade: Marketing Strategies and Management Concepts , 2004, p. 8
- Springer Fachmedien Wiesbaden (ed.), Compact Lexicon Internationale Wirtschaft , 2013, p. 41
- Clemens Büter, Foreign Trade: Basics of International Trade Relations , 2017, p. 17
- WTO (ed.), Statistics on Trade and Customs , 2017
- WTO (ed.), Statistics on Trade and Customs , 2017
- Thomas Mun, England's Treasure by Forraign Trade , 1664, pp. 89 f.
- Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations , Volume 1, 1776, pp. 233 ff.
- Hubertus Adebahr / Wolfgang Maennig, Foreign Trade: Foreign Trade and World Economy , Volume II, 1987, p. 69
- Wolfgang Filc / Claus Köhler (eds.), Cooperation, Autonomy and Foreign Exchange Market , 1990, p. 39
- Ute Arentzen / Ulrike Lörcher, Gabler Lexikon Wirtschaft , 1995, p. 22
- Springer Fachmedien Wiesbaden (ed.), Compact Lexicon Internationale Wirtschaft , 2013, p. 42
- Joachim Zentes / Dirk Morschett, Foreign Trade: Marketing Strategies and Management Concepts , 2004, p. 20
- Springer Fachmedien Wiesbaden (ed.), Compact Lexicon Internationale Wirtschaft , 2013, p. 43