Throughout the centuries, trade has served as a driver of globalization, connecting nations throughout the world. People and companies have been buying and selling goods and services to others around the world in an effort to sustain local and national economies and personal livelihoods. Over the past fifty years, global trade has expanded exponentially. The World Trade Organization came into existence to provide a policy framework to ensure that trading partners are playing by the same set of rules.
The Global Trade module delivers the basic understanding of cross-border transactions of merchandise. The module provides students with a theoretical background of international trade and outlines the gains from trade. The causes, patterns, and direction of trade are embodied in the learning modules. Relevant dilemmas and debates on trade policy are focused to stimulate thinking about the political economy of international trade. This module encompasses from the rationale of trade to policy issues on globalization and economic openness with a comprehensive view.
|1. Grasp an overview of global trade: transactions of merchandise in the form of exports and imports, the place of trade in international economics and the balance of payments, the composition and dynamics of trade, and the link between globalization and trade.|
|2. Understand the classical Ricardian trade model of comparative advantage based on labor productivity, and the relevant concepts and tools: the production possibility frontier, opportunity costs, specialization, and direction of trade.|
|3. Understand the Heckscher-Ohlin model of comparative advantage based on differences in resource endowments, and the relevant concepts and tools: the curved production possibility frontier, production and consumption decisions, and gains from trade.|
|4. Combine the ideas of the Ricardian trade model and the Heckscher-Ohlin model of comparative advantage and derive the Standard trade model, and the relevant concepts and tools: relative supply and demand, world price, and terms of trade.|
|5. Discuss different policy instruments of international trade: tariffs, export subsidies, import quotas, and voluntary export restraint.|
|6. Discuss different policy issues of international trade: free trade, trade liberalization in the developing world, the effects of international negations, and the role of the World Trade Organization in globalization.|
|ADDITIONAL RESOURCES AND NOTES|
Testimonial from a Piloter of the Trade Module
Click to view the video with subtitles.