Hello, welcome to this Class on the divisions of foreign trade in Commerce, meaning, i.e, import, export and entrepot.
Introduction
“Explore the division of foreign trade in commerce, its key components, significance, and challenges. Learn how it shapes global markets and drives economic growth.”
Table Of Contents
- Import
- Export
- Entrepot.
Foreign trade plays a vital role in shaping the economic landscape of nations. It serves as a bridge connecting domestic markets to the global economy, enabling the exchange of goods, services, technology, and ideas.
The division of foreign trade within the broader domain of commerce is essential to understanding its structure, functions, and impact. This blog explores the key components of foreign trade, its significance, and how it contributes to economic growth and development.
Division Of Foreign Trade
International trade can be divided into import, export and entrepot.
So here we take a look at the divisions of foreign trade in commerce
1. IMPORT TRADE
Definition: Import trade is the act of buying goods and services from other countries. It involves purchase of goods and services from a foreign country. It is sometimes restricted to control a country’s balance of payment deficit. The goods are imported either in response to direct orders or on consignment.
Import trade is divided into the following:
- Visible Import
- Invisible Import
(a) Visible Import: Visible imports consists of goods that can be seen and touched, i.e, tangible goods which come from other countries. Nigeria’s visible imports for example, are automobiles, electronics, machinery and rice.
(b) Invisible Import: Invisible imports consists of services that cannot be seen or touched, rendered by other countries. Examples of invisible imports are banking, tourism and aviation. This will appear in the balance of payment.
2. EXPORT TRADE
Definition: Export trade is the act of selling goods and services to other countries. It is the selling of a country’s products abroad. Some governments frequently attempts to encourage exporters buy introducing export subsidy.
Exports can equally be divided into the following:
- Visible export
- Invisible export
(a) Visible export: Visible export consists of goods which are sold in oversea’s market, i.e, to other countries. In Nigeria, visible export are cotton, cocoa, palm oil, crude oil and textiles.
(b) Invisible export: Invisible export consist of services rendered to other countries. Such services are transport, banking, insurance and consultancy services.
3. ENTREPOT TRADE
Definition: Entrepot is a form of foreign trade in which goods are shipped to one port and subsequently re-exported and shipped to another port. If Customs duties have been paid on imported goods and are later re-exported, the duty can be claimed back. Simply put, entrepot is the re-exporting of goods imported from other nations.
Conclusion on the Division Of Foreign Trade
The division of foreign trade in commerce is integral to the global economy. It not only facilitates the exchange of goods and services but also fosters economic cooperation, technological advancements, and cultural exchange.
Revision Questions On divisions on foreign trade
- (a) What is import trade? (b) explain visible import and invisible imports.
- (a) What do you understand by export trade? (b) explain visible export and invisible exports.
- What is entrepot?
This class is a continuation from our previous class on international trade, types of international trade, advantages and disadvantages. [Click here to join the class]