International Trade Is The Exchange Of Goods And Services Between Countries Essay

1810 WordsOct 7, 20168 Pages
International Trade “International trade is the exchange of goods and services between countries. This type of trade gives rise to a world economy, in which prices, or supply and demand, affect and are affected by global events.” In this week’s assignment, I will present the importance of trade in the world and how it has changed over the past decades with details surrounding the five main reasons for international trade. International trade has existed in theory, forever as people have traded for items to solidify a need. Trade liberalization blossomed because of the Great Depression. In 1933 the United States’ unemployment rate was at 24.9%, there was a collapsed banking system, deflation, and high tariffs existed. By 1934, the U.S. Congress, passed the Reciprocal Trade Agreements Act (RTAA) authorizing the U.S. president to negotiate tariff reductions with countries. At the same time, a global group was created known as the GATT, General Agreement on Tariffs and Trade. It was established to regulate tariffs/reduce taxes on imported goods and establish rules for trading among countries. GATT remained until, January 1995, when WTO- World Trade Organization replaced GATT, as the organization overseeing the global trading system. WTO is for governments to negotiate trade agreements and to settle trade disputes. WTO is located in Geneva, Switzerland and there are 164 countries who are members as of July 29 2016. An interactive map of all members can be found via
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