Topic 7 of 7 · Form 4
International trade
International (foreign) trade is buying and selling goods and services between countries.
Notes for this topic 1 file, in order
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International (foreign) trade is buying and selling goods and services between countries.
Why countries trade
Differences in natural resources, climate and skills; specialisation; access to goods not produced locally; larger markets.
Imports and exports
- Visible trade: goods (Zimbabwe exports gold, platinum, tobacco, diamonds, lithium; imports fuel, machinery, vehicles).
- Invisible trade: services (tourism, banking, insurance, transport).
- Balance of trade = visible exports − visible imports.
- Balance of payments includes visible and invisible trade plus capital flows.
Documents
Letter of credit, bill of lading, certificate of origin, customs declaration (ZIMRA), commercial invoice, export permit and import licence.
Barriers to trade
Tariffs (customs duties), quotas, embargoes, exchange controls, language differences and long distances.
Trade agreements
SADC and COMESA free trade areas and the African Continental Free Trade Area reduce tariffs between member states. Beitbridge and Chirundu are busy border posts.
Check yourself
- Distinguish between visible and invisible trade.
- Give two barriers to international trade.
- What is the role of ZIMRA at a border post?
Show answers
- Visible trade is in goods; invisible trade is in services.
- Any two: tariffs, quotas, embargoes, exchange controls, language, distance.
- To collect customs duties and check imports and exports.
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