International trade involves the exchange of goods and services across borders. Types of international trade include intra-industry, intra-firm, intercompany, and inter-industry trade. Intangible items such as skills and services are also involved.
International trade is simply the exchange of services and goods across various geographical borders. Types of international trade include intercompany trade, intra-industry trade, intra-firm trade, inter-industry trade. All of these types of international trade involve the import or export of goods and services. The only difference is the scope and methods in which the various operations are applied.
One type of trade included under the types of international trade is intra-industry trade where importers import goods similar to those produced in the country. An example of this type of sale can be seen in the import of cars. Virtually every country that manufactures cars also imports other types of cars from other countries.
In intra-company trade, international trade is limited to various branches or subsidiaries of a multinational corporation. The company can be a franchise or it can simply be a large organization with international outlets. Intercompany trade occurs between different types of companies that produce different types of goods. This type of trading can be seen in the case of a raw material supplier and a company that imports the raw materials, based in another country.
Inter-industry trade refers to the method of exchange whereby parties from two countries exchange goods that are not manufactured in either country. For example, a country that has oil can export oil to a country that has no oil deposits, and as such is unable to produce oil. The destination country can in turn export apples to the oil-producing country. The oil-producing country may not have the right climate for growing apples. In this case, there was cross-industry trade between the two countries, as the items traded were items that could not be manufactured or produced in either country. Sometimes the reasons countries are unable to manufacture the items may include a lack of technical capability to produce the item or a lack of raw materials.
While it is mainly the material items in trade between industries that are included in the types of international trade, intangible items such as skills and services are also involved. For example, country A might recruit experts from country B to help them design and build a subway system. Country B could also recruit skilled agricultural workers from Country A to come and help them implement an effective agricultural irrigation system. In this case, there has been an exchange of expertise.
Protect your devices with Threat Protection by NordVPN
