The International Trade

Ekonomia III

Magdalena Cupryjak

Nowadays, none of economies is not fully self-sufficient. To maintain a high standard of living and meet their needs most countries in deficit purchases goods or their substitutes from other countries of the World.

This phenomenon is called international trade, foreign or otherwise. This is the total value of exports and imports. The main objective of foreign trade is that each country specializes in the production of such goods and services whose production costs are the lowest in the country. It is important sector of the national economy. The value of foreign trade are included in the trade balance (this is difference between the value of goods sold abroad and purchased from abroad), which is part of the balance of payments or revenue and expenditure of the state¹.

International trade is important for the maximization of economic development, ensuring the supply of essential raw materials, goods, food, consumer goods and technology. In addition to the exchange of material goods to foreign trade turnover also consists of assets and credit and current turnover, such as trade in goods, purchase and sale of licenses abroad, know-how, the maintenance of diplomatic missions, the obligations arising from the migration of the population.

The basic forms of trade is the import, export, re-export and transit trade.

Import is the purchase of goods and services abroad for use in the domestic market. Poland imports mainly electrical machinery products, chemical, light and fuel and energy. The main import partners are Germany, Italy, Russia and the United Kingdom. In 2013 Poland imported $ 203 billions, making it the 25th largest importer in the world. During the last five years the Imports of Poland have Decreased at an annualized rate of -0.1%, from $ 204 billions in 2008 was $ 203 billions in 2013. The most recent Imports are led to Crude Petroleum Which Represent 8.37% of the total Imports of Poland , Followed by Vehicle Parts, Which account for 3.02%².

Picture 1. Poland imports.

Source: http://www.tradingeconomics.com/poland/imports

Imports in Poland increased by 5.4 percent to 14748 EUR Million in November of 2015 from 13996 EUR Million a year earlier. It was the lowest value since June. Imports in Poland averaged 9073.76 EUR Million from 2000 until 2015, reaching an all time high of 15287 EUR Million in October of 2014 and a record low of 3418 EUR Million in January of 2000. Imports in Poland is reported by the Central Statistical Office of Poland (GUS)³.

Export is a foreign entity is the sale of goods and services produced in the country. The basis of Polish exports are metallurgical products, wood and paper and chemical industries. The main export partners include Germany, the Netherlands, Russia and Italy. In 2013 Poland exported $ 193 billions, making it the 26th largest exporter in the world. During the last five years the exports of Poland have Increased at an annualized rate of 4.3%, from $ 157 billions in 2008 was $ 193 billions in 2013. The most recent exports are led by Vehicle Parts Which Represent 5.25% of the total exports of Poland, Followed by Cars, Which account for 2.92%⁴.

Picture 2. Poland exports.

Source: http://www.tradingeconomics.com/poland/exports

Exports in Poland increased by 12.6 percent year-on-year to 15504 EUR Million in November of 2015 from 13765 EUR Million a year earlier. It was the highest value on record. Exports in Poland averaged 8435.02 EUR Million from 2000 until 2015, reaching an all time high of 15504 EUR Million in November of 2015 and a record low of 2499 EUR Million in January of 2000. Exports in Poland is reported by the Central Statistical Office of Poland (GUS)⁵.

Transit trade is a trade where the company carrying out the transaction is not either in the country of import or export. This form of trading is beneficial when there are difficulties direct trade with a particular country with political or military reasons. The object of such transactions are usually cotton, tobacco serial products.

Poland is the 26th largest export economy in the world and the 21st most complex economy according to the Economic Complexity Index (ECI). As of 2013 Poland had a negative trade balance of $10 billions in net imports. As compared to their trade balance in 1995 when they still had a negative trade balance of $6.52B in net imports.

As regards the country as a whole, international trade is determined by external trade policy, which is to have the formation of such diversions of trade that are most relevant to the needs of the national economy. Economic instruments used in trade policy are:

• Customs

• Taxation of export

• quotas of foreign goods turnover

• Manipulating the exchange rate

• Export credits

• Financing of export production.

These measures aim to reduce imports and stimulate exports.

The most important international organization dedicated to the supervision and monitoring of trade in global terms is the World Trade Organization⁶. It performs three basic functions;

• Regulatory - is a forum for negotiation, cooperation and dispute settlement

• A control - control the activities of reforms and agreements,

• Operational - providing technical assistance to Member States⁷.

The WTO aims to broadly understood protection and surveillance of trade. Specific objectives can include;

• This is the forum for negotiations existing trade relations in the fields

• Administers dispute resolution

• Manages the Trade Policy Review Mechanism

• Works with the International Monetary Fund, the International Bank for Reconstruction and Development and the World Bank group to formulate a coherent economic policy⁸.

The countries trade with each other for the same reasons that individuals and companies within a single country: both sides stand to gain. They refer them because trade allows them to exchange goods they need, things that produce. In some countries, you can produce something that can not be in others.

Sources:

1. Websites:

• www.wto.org, World Trade Organization,

• www.tradingeconomics.com

• www.atlas.media.mit.edu

• www.investopedia.com

1^ “What is international trade?”, website: http://www.investopedia.com/articles/03/112503.asp

2^ Website: http://atlas.media.mit.edu/en/profile/country/pol/

3^ Website: http://www.tradingeconomics.com/poland/imports

4^ Website: http://atlas.media.mit.edu/en/profile/country/pol/

5^ Website: http://www.tradingeconomics.com/poland/exports

6^ „Understanding WTO. Who we are.”, World Trade Organization, website: https://www.wto.org/english/thewto_e/whatis_e/who_we_are_e.htm

7^ ‘Understanding WTO. What we stand for.”, World Trade Organization, website: https://www.wto.org/english/thewto_e/whatis_e/what_stand_for_e.htm

8^ „Understanding WTO. What we do.”, World Trade Organizations, website: https://www.wto.org/english/thewto_e/whatis_e/what_we_do_e.htm

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