International trade is the purchase, sale, or exchange of goods and services across national borders (Wild, Wild, & Han, 2006). International trade is important in several countries because it can result in job creation. The value and volume of international trade continues to grow. Trade in services is also growing in many countries, and tends to be more important in the world's richest nations. Trade in services account for approximately twenty percent of all world trade (Wild, Wild, & Han, 2006). However, manufactured goods persistently dominate in the trade of merchandise.
World output influences the degree of international trade. If world output slows down, the volume of international trade will slow down as well; the higher the level of world output the greater the volume of trade. During times of economic recession, trade will generally be slow due to people being uncertain of their own financial future, thus purchasing less imported and domestic products.
Current members of the World Trade Organisation.
Seal of the United States International Trade Comm...
United StatesA country in recession will often result in a currency that is weak compared to other nations and can influence output and trade, resulting in more expensive imports compared to domestic products (Wild, Wild, & Han, 2006).
In most nations, customs agencies document the source of imports, the destination of exports, and the actual amount and value of goods entering into their country. This type of data can be revealing, and is not always accurate. Sometimes governments purposely distort the reporting of trade in military and other sensitive goods. Underground trade (black market) can also distort the true picture of trade between countries. However customs data usually shows general trade patterns amongst countries rather accurately. Merchandise is delivered from one shore to another by large ocean-going cargo vessels, which are needed to support patterns in international trade.
Broad patterns of merchandise trade among the nations continue...