International trade is exchange of capital, goods, and services across international borders or territories. It refers to exports of goods and services by a firm to a foreign-based buyer (importer)In most countries, it represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on the rise in recent centuries.

Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance of globalization. International trade is a major source of economic revenue for any nation that is considered a world power. Without international trade, nations would be limited to the goods and services produced within their own borders.

International trade is in principle not different from domestic trade as the motivation and the behavior of parties involved in a trade does not change fundamentally depending on whether trade is across a border or not. The main difference is that international trade is typically more costly than domestic trade. The reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or a different culture.

Another difference between domestic and international trade is that factors of production such as capital and labor are typically more mobile within a country than across countries. Thus international trade is mostly restricted to trade in goods and services, and only to a lesser extent to trade in capital, labor or other factors of production. Then trade in goods and services can serve as a substitute for trade in factors of production.

Instead of importing the factor of production, a country can import goods that make intensive use of the factor of production and are thus embodying the respective factor. An example is the import of labor-intensive goods by the United States from China. Instead of importing Chinese labor the United States is importing goods from China that were produced with Chinese labor. International trade is also a branch of economics, which, together with international finance, forms the larger branch of international economics.

• Free Trade Area of the Americas (22)
• North American Free Trade Agreement (5)
• World Trade Organization (20)

• Activism (12)
• Central American Free Trade Agreement - CAFTA@ (8)
• News and Media (17)

See also:

• Business: International Business and Trade (919)
• Science: Social Sciences: Political Science: Trade Policy (23)
• Society: Issues: Economic: Sanctions (50)
• Society: Issues: Global (50)
• Society: Politics: Globalization (76)

• Thunderlake: Government Trade Policy Agencies
  thunderlake.com
  Annotated links to international affairs, and foreign trade and research resources.
• Global Trade Negotiations
  cid.harvard.edu
  News articles, working papers and links to various trade-related resources, such as NGO sites and government positions on trade policy.
• Thunderlake: Functional Trade Policy Issues
  thunderlake.com
  Functional trade policy issues including development, agriculture, environment, labour, finance, investment, and transport.