International trade is the exchange of capital , goods , and services across international borders or territories because there is a need or want of goods or services. (see: World economy )
51-503: An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an exporter ; the foreign buyers is an importer . Services that figure in international trade include financial, accounting and other professional services, tourism, education as well as intellectual property rights. Exportation of goods often requires
102-504: A company has a significant share of the whole market, they may find it worthwhile to invest in making the market bigger. This option is not generally open to minor players, though they may still profit by targeting specific offerings as market extensions. All other gaps relate to the difference between existing sales (market share) and total sales of the market as a whole. The difference is the competitor share. These gaps therefore, relate to competitive activity. The product gap —also called
153-485: A component of gross domestic product , along with domestic consumption , physical investment , and government spending . Foreign demand for a country's exports depends positively on income in foreign countries and negatively on the strength of the producing country's currency (i.e., on how expensive it is for foreign customers to buy the producing country's currency in the foreign exchange market ). International trade In most countries, such trade represents
204-465: A foundation for measuring investment of time, money and human resources required to achieve a particular outcome (e.g. to turn the salary payment process from paper-based to paperless with the use of a system). Note that "GAP analysis" has also been used as a means of classifying how well a product or solution meets a targeted need or set of requirements. In this case, "GAP" can be used as a ranking of "Good", "Average" or "Poor". (This terminology appears in
255-547: A key player in metals. There were already concerns that the UAE was a main recipient of majority of the smuggled gold from DRC. Lists Data on the value of exports and imports and their quantities often broken down by detailed lists of products are available in statistical collections on international trade published by the statistical services of intergovernmental and supranational organisations and national statistical institutes. The definitions and methodological concepts applied for
306-555: A significant share of gross domestic product (GDP). While international trade has existed throughout history (for example Uttarapatha , Silk Road , Amber Road , salt roads ), its economic, social, and political importance has been on the rise in recent centuries. Carrying out trade at an international level is a complex process when compared to domestic trade . When trade takes place between two or more states , factors like currency, government policies, economy, judicial system , laws, and markets influence trade. To ease and justify
357-429: A similar effect to subsidies ; tariffs reduce the industry's incentives to produce goods quicker, cheaper, and more efficiently, becoming ever less competitive. The third basis for a tariff involves dumping . When a producer exports at a loss, its competitors may term this dumping . Another case is when the exporter prices a good lower in the export market than in its domestic market. The purpose and expected outcome of
408-513: A similar effect, they are not usually regarded as trade barriers. The most common foreign trade barriers are government-imposed measures and policies that restrict, prevent, or impede the international exchange of goods and services. International agreements limit trade-in and the transfer of certain types of goods and information, e.g., goods associated with weapons of mass destruction, advanced telecommunications, arms and torture and also some art and archaeological artifacts . For example: Although
459-879: A specific production, thereby increasing the advantages of specific trade over specific local production. Forms of local products that are highly localized may not be able to meet the efficiency of more large-scale, highly consolidated production in terms of efficiency, including environmental impact. A systematic, and possibly first large-scale, cross-sectoral analysis of water , energy and land in security in 189 countries that links total and sectorial consumption to sources showed that countries and sectors are highly exposed to over-exploited, insecure, and degraded such resources with economic globalization having decreased security of global supply chains . The 2020 study finds that most countries exhibit greater exposure to resource risks via international trade – mainly from remote production sources – and that diversifying trading partners
510-504: A substitute for trade in factors of production. Instead of importing a factor of production, a country can import goods that make intensive use of that factor of production and thus embody it. An example of this is the import of labor-intensive goods by the United States from China . Instead of importing Chinese labor, the United States imports goods that were produced with Chinese labor. One report in 2010, suggested that international trade
561-526: A tariff is to encourage spending on domestic goods and services rather than their imported equivalents. Tariffs may create tension between countries, such as the United States steel tariff in 2002 , and when China placed a 14% tariff on imported auto parts. Such tariffs may lead to a complaint with the World Trade Organization (WTO) which sets rules and attempts to resolve trade disputes. If that
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#1732858854615612-401: A tax on a specific good or category of goods exported from or imported to a country, is an economic barrier to trade. A tariff increases the cost of imported or exported goods, and may be used when domestic producers are having difficulty competing with imports. Tariffs may also be used to protect an industry viewed as being of national security concern. Some industries receive protection that has
663-648: Is growing. In fact, the GDP growth is expected to hit 7% by the IMF. However, exporters, who export products and get paid mostly in dollars, suffer because of the depreciation of the dollar against the Armenian dram. Moreover, Armenia’s other exporting bright spot is the IT industry, since a lot of companies and individuals work for US-based companies and get paid in US dollars. Because of the drastic change in
714-491: Is that trade barriers can make exporting uneconomical and risky. For small and medium-sized enterprises (SMEs) with fewer than 250 employees, export is generally more difficult than serving the domestic market. The lack of knowledge of trade regulations , cultural differences, different languages and foreign-exchange situations, as well as the strain of resources and staff, complicate the process. Two-thirds of SME exporters pursue only one foreign market. Another disadvantage
765-498: Is the dependency on almost unpredictable exchange rates. The depreciation of foreign currency badly affects exporters. For example, Armenia exports different things - from foodstuff to software. In 2022, the country had an enormous number of Russian visitors and tourists because of the military situation in Russia. This resulted in a change in exchange rates and the appreciation of the Armenian dram. At first, it may seem that Armenia’s economy
816-490: Is the effect of trade liberalization on aggregate productivity. Due to the increase of the number of international business activities through a multilateral trading system, RA Government Program, which was approved in February 2019, the government policy became the objective of economic growth. The period established for the program was 2019-2024. Export quality is developed by developing the export volumes and services. Tariffs ,
867-591: Is the gap between the total potential for the market and actual current usage by all consumers in the market. Data for this calculation includes: Existing consumer usage makes up the total current market, from which market shares, for example, are calculated. It usually derives from marketing research, most accurately from panel research, but also from adhoc work. Sometimes it may be available from figures that governments or industries have collected. However, these are often based on categories that make bureaucratic sense but are less helpful in marketing terms. The ' usage gap'
918-463: Is the third week of May. Every year the President declares that week to be World Trade Week. The trade-offs between local food production and distant food production are controversial with limited studies comparing environmental impact and scientists cautioning that regionally specific environmental impacts should be considered. A 2020 study indicated that local food crop production alone cannot meet
969-439: Is thus: This is an important calculation. Many, if not most, marketers accept existing market size—suitably projected their forecast timescales—as the boundary for expansion plans. Though this is often the most realistic assumption, it may impose an unnecessary limit on horizons. For example: the original market for video-recorders was limited to professional users who could afford high prices. Only after some time did
1020-442: Is transferred or sold from a party in one country to a party in another country is an export from the originating country, and an import to the country receiving that product. Imports and exports are accounted for in a country's current account in the balance of payments . Trading globally may give consumers and countries the opportunity to be exposed to new markets and products. Almost every kind of product can be found in
1071-442: Is understood, it is possible to compare that expectation with the company's current level of performance. This comparison becomes the gap analysis. Such analysis can be performed at the strategic or at the operational level of an organization. Gap analysis is a formal study of what a business is doing currently and where it wants to go in the future. It can be conducted, in different perspectives, as follows: Gap analysis provides
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#17328588546151122-479: Is unlikely to help countries and sectors to reduce these or to improve their resource self-sufficiency . A number of people in Africa , including children, were using informal or " artisanal " methods to produce gold . While millions were making a livelihood through the small-scale mining, governments of Ghana , Tanzania and Zambia complaint about the increase in illegal production and gold smuggling . Sometimes
1173-399: Is unsatisfactory, the exporting country may choose to put a tariff of its own on imports from the other country. Exporting avoids the cost of establishing manufacturing operations in the target country. Exporting may help a company achieve experience curve effects and location economies in their home country. Ownership advantages include the firm's assets , international experience, and
1224-532: The PRINCE2 project management publication.) The need for new products or additions to existing lines may emerge from portfolio analysis, in particular from the use of the Boston Consulting Group Growth-share matrix —or the need may emerge from the regular process of following trends in the requirements of consumers. At some point, a gap emerges between what existing products offer and what
1275-519: The eclectic paradigm , companies with meager ownership advantages do not enter foreign markets. If the company and its products are equipped with ownership advantage and internalization advantage, they enter through low-risk modes such as exporting. Exporting requires significantly less investment than other modes, such as direct investment . Export's lower risk typically reduces the rate of return on sales versus other modes. Exporting allows managers to exercise production control, but does not provide them
1326-491: The international market , for example: food, clothes, spare parts, oil, jewellery, wine, stocks, currencies, and water. Services are also traded, such as in tourism , banking , consulting , and transportation . Advanced technology (including transportation ), globalization , industrialization , outsourcing and multinational corporations have major impacts on the international trade systems . International trade is, in principle, not different from domestic trade as
1377-414: The optimized allocation and integration of the inputs (resources), and the current allocation-level. This reveals areas that can be improved. Gap analysis involves determining, documenting and improving the difference between business requirements and current capabilities. Gap analysis naturally flows from benchmarking and from other assessments. Once the general expectation of performance in an industry
1428-570: The segment or positioning gap —is that part of the market a particular organization is excluded from because of product or service characteristics. This may be because the market is segmented and the organization does not have offerings in some segments, or because the organization positions its offerings in a way that effectively excludes certain potential consumers—because competitive offerings are much better placed for these consumers. This segmentation may result from deliberate policy. Segmentation and positioning are powerful marketing techniques, but
1479-516: The UAE. In July 2020, a report by Swissaid highlighted that the Dubai-based precious metal refining firms, including Kaloti Jewellery International Group and Trust One Financial Services (T1FS), received most of their gold from poor African states like Sudan . The gold mines in Sudan were seldom under the militias involved in war crimes and human rights abuses . The Swissaid report also highlighted that
1530-400: The ability to develop either low-cost or differentiated products . The locational advantages of a particular market are a combination of costs, market potential and investment risk . Internationalization advantages are the benefits of retaining a core competence within the company and threading it though the value chain rather than to license , outsource , or sell it. In relation to
1581-674: The chief global strategist of International Resources Holding (IRH), Sibtein Alibhai, from the UAE approached a number of gold traffickers in Democratic Republic of Congo. The firm is a unit of IHC, which is controlled by Sheikh Tahnoun bin Zayed. In 2023, IRH acquired Zambia’s Mopani copper-cobalt complex in exchange of a commitment to put in over $ 1 billion into the mine. It was also aggressively looking for mining deals, particularly in Africa, to turn into
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1632-411: The comparison of actual performance with potential or desired performance. If an organization does not make the best use of current resources, or forgoes investment in productive physical capital or technology, it may produce or perform below an idealized potential. This concept is similar to an economy's production being below the production possibilities frontier . Gap analysis identifies gaps between
1683-408: The consumer demands. The organization must fill that gap to survive and grow. Gap analysis can identify gaps in the market. Thus, comparing forecast profits to desired profits reveals the planning gap . This represents a goal for new activities in general, and new products in particular. The planning gap can be divided into three main elements: usage gap, existing gap, and product gap. The usage gap
1734-2081: The demand for most food crops with "current production and consumption patterns" and the locations of food production at the time of the study for 72–89% of the global population and 100–km radiuses as of early 2020. Studies found that food miles are a relatively minor factor of carbon emissions, albeit increased food localization may also enable additional, more significant, environmental benefits such as recycling of energy, water, and nutrients. For specific foods regional differences in harvest seasons may make it more environmentally friendly to import from distant regions than more local production and storage or local production in greenhouses. Qualitative differences between substitutive products of different production regions may exist due to different legal requirements and quality standards or different levels of controllability by local production- and governance -systems which may have aspects of security beyond resource security, environmental protection , product quality and product design and health . The process of transforming supply as well as labor rights may differ as well. Local production has been reported to increase local employment in many cases. A 2018 study claimed that international trade can increase local employment. A 2016 study found that local employment and total labor income in both manufacturing and nonmanufacturing were negatively affected by rising exposure to imports. Local production in high-income countries, rather than distant regions may require higher wages for workers. Higher wages incentivize automation which could allow for automated workers' time to be reallocated by society and its economic mechanisms or be converted into leisure-like time. Local production may require knowledge transfer , technology transfer and may not be able to compete in efficiency initially with specialized , established industries and businesses, or in consumer demand without policy measures such as eco-tariffs . Regional differences may cause specific regions to be more suitable for
1785-552: The exchange rates, these people and companies who export their service to the US or other countries and get paid in US dollars, make around 25% less revenue. Exports could also devalue a local currency to lower export prices. It could also lead to imposition of tariffs on imported goods. The variety of export motivators can lead to selection bias. Size, knowledge of foreign markets, and unsolicited orders motivate firms to along specific dimensions (research, external, reactive). In macroeconomics , net exports (exports minus imports) are
1836-416: The gulf between the existing outcome and the desired outcome. This step process can be illustrated by the example below: A gap analysis can also be used to compare one process to others performed elsewhere, which are often identified through benchmarking. In this usage, one compares each process side-by-side and step-by-step and then notes the differences. One then analyzes each deviation to determine if there
1887-838: The illicit gold coming into Dubai from Africa is imported in large quantities by the world's largest refinery in Switzerland , Valcambi . Another report in March 2022 revealed the contradiction between the lucrative gold trade of West African countries and the illicit dealings. Like Sudan , Democratic Republic of Congo (DRC), Ghana and other states, differences were recorded in the gold production in Mali and its trade with Dubai, UAE. The third largest gold exporter in Africa, Mali imposed taxes only on first 50kg gold exports per month, which allowed several small-scale miners to enjoy tax exemptions and smuggle gold worth millions. In 2014, Mali's gold production
1938-606: The involvement of customs authorities. For any firm, Global expansion strategies may include: Exporting is mostly a strategy used by product based companies. Many manufacturing firms begin their global expansion as exporters and only later switch to another mode for serving a foreign market. There are four main types of export barriers: motivational, informational, operational/resource-based, and knowledge. Trade barriers are laws, regulations , policy , or practices that protect domestically made products from foreign competition. While restrictive business practices sometimes have
1989-421: The legal system, and so on. Another difference between domestic and international trade is that factors of production such as capital and labor are often 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, labour, or other factors of production. Trade in goods and services can serve as
2040-629: The motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not. However, in practical terms, carrying out trade at an international level is typically a more complex process than domestic trade. The main difference is that international trade is typically more costly than domestic trade. This is due to the fact that cross-border trade typically incurs additional costs such as explicit tariffs as well as explicit or implicit non-tariff barriers such as time costs (due to border delays), language and cultural differences, product safety,
2091-677: The option to exercise as much marketing control. An exporter enlists various intermediaries to manage marketing management and marketing activities . Exports also has effect on the Economy. Businesses export goods and services where they have a competitive advantage. This means they are better than any other country at providing that product or have a natural ability to produce either due to their climate or geographical location etc. Exporting may not be viable unless appropriate locations can be found abroad. High transport costs can make exporting uneconomical, particularly for bulk products. Another drawback
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2142-426: The outbreak of COVID-19 sufficiently changed the world economy, people started doing business, so international trade is a key for economic growth. Armenia's economy is dependent on international flows, tourism, and inner production. Competitive export Industries were established which helped the growth of Gross Domestic Product (GDP) to generate financial resources. The market shifted to more efficient exporters, which
2193-682: The pattern of trade. The following table is a list of the 25 largest trading states according to the World Trade Organization in 2021 and 2022. Source: International Trade Centre In the US, the various U.S. Presidents have held observances to promote big and small companies to be more involved with the export and import of goods and services. President George W. Bush observed World Trade Week on May 18, 2001, and May 17, 2002. On May 13, 2016, President Barack Obama proclaimed May 15 through May 21, 2016, World Trade Week, 2016. On May 19, 2017, President Donald Trump proclaimed May 21 through May 27, 2017, World Trade Week, 2017. World Trade Week
2244-461: The procedure involved criminal operations and even human and environmental cost. Investigative reports based on Africa's export data revealed that gold in large quantities is smuggled out of the country through the United Arab Emirates , without any taxes being paid to the producing states. Analysis also reflected discrepancies in the amount exported from Africa and the total gold imported into
2295-453: The process of trade between countries of different economic standing in the modern era, some international economic organizations were formed, such as the World Trade Organization . These organizations work towards the facilitation and growth of international trade. Statistical services of intergovernmental and supranational organizations and governmental statistical agencies publish official statistics on international trade. A product that
2346-418: The technology extend to the mass market. In the public sector, where service providers usually enjoy a monopoly, the usage gap is probably the most important factor in activity development. However, persuading more consumers to take up family benefits, for example, is probably more important to the relevant government department than opening more local offices. Usage gap is most important for brand leaders. If
2397-491: The trade-off—against better focus—is that market segments may effectively be put beyond reach. On the other hand, product gap can occur by default; the organization has thought out its positioning, its offerings drifted to a particular market segment. The product gap may be the main element of the planning gap where an organization can have productive input; hence the emphasis on the importance of correct positioning. A gap analysis can also be used to analyze gaps in processes and
2448-471: The various statistical collections on international trade often differ in terms of definition (e.g. special trade vs. general trade) and coverage (reporting thresholds, inclusion of trade in services, estimates for smuggled goods and cross-border provision of illegal services). Metadata providing information on definitions and methods are often published along with the data. Gap analysis#Market potential In management literature, gap analysis involves
2499-540: Was exported from Africa, and the UAE accounted for 93% of the undeclared exports. Following the Emirates, next two prime importers were Switzerland and India. Majority of the artisanal gold extracted in the 18 African countries ends up in the Emirates. As per Swiss regulations, gold’s place of origin is usually where it is last refined, because of which smuggled gold linked to conflicts and human rights violations legally enters Switzerland. A United Nations report revealed that
2550-403: Was increased when a country hosted a network of immigrants, but the trade effect was weakened when the immigrants became assimilated into their new country. The history of international trade chronicles notable events that have affected trading among various economies. There are several models that seek to explain the factors behind international trade, the welfare consequences of trade and
2601-404: Was of 45.8 tonnes, while the UAE's gold import were at 59.9 tonnes. In May 2024, a report released by Swissaid revealed that the prime recipient of tens of billions of dollars of smuggled African gold each year had been the UAE. Between the 2012 and 2022, 2596 tonnes of gold undeclared was exported out of Africa to the UAE. In 2022 alone, 435 tonnes (worth about $ 31 billion) of gold not declared
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