TheWorldEconomyTutor:QiangLuoStudent:SibeiLu1Introduction……….………………...………………………………32Gainsfrominternationaltrade……………………………………….33Thefreetrade……………………………………………/…………..34Absoluteandcomparativeadvantage………………….…………….35Reasonoftradebarriers…………………………………………46Tradebarriers……………………………..…………………………47UsesofTheWorldTradeOrganisation(WTO)……………….…….58TheroleofEuropeanUnioninpromotingtrade…………………….59Compositionofthebalanceofpayments……………………………510GeneraltrendsinUKtrade…………………………………………611Thebalanceofpaymentsaffectedbyexchangerates………………712AdvantagesanddisadvantagesofthesinglecurrencyoftheUK…..713Twoeffectsonindividualsandbusinessesofsinglecurrency……...714CharacteristicsofLessDevelopedCountries(LDCs)……………...815ThetwocurrentissuesthatfaceLDCs……………………………..816ImpactsofmultinationalsonNewlyIndustrializedCountriesandLDCs………………………………………………………………..917Conclusion………………………………………………………….918Reference…………………………………………………………...9IntroductionInthisreport,Iwillintroducefreetraderelevantorganizationswithexample,suchaswhatisfreetrade,whatareitsbenefitsandsoon.Theresourcesofthisreportwillbebasedonknowledgegotinthelessonsandtheinformationondifferentwebsite.GainsfrominternationaltradeNow,manycountriesstrivetodevelopinternationaltrades,whichbecauseitbringmanybenefitstopeople.Firstly,theresourcesaroundtheworldareusedefficientlybecauseofinternationaltrades,andtosupportmorechancesofdevelopmenttomanycountries,forexample,thecostofriceislowerinChinathanotherdevelopedcountries,andChinacanexportricetochangesomeproductsthatproduceinChinawithhighcost.Secondly,internationaltradecanmakeenhancethecompetition,creativityandspiritofinnovationofenterprisesandcountries,forexample,ChinatookpartinWOT,automobileindustrygotstrongimpactofimportedcarwithlowtaxation,butthenthereappearsomeChineseautomobilebusinesssuchasBYDandGEELY.Thirdly,somedevelopingcountriescanraisecapitalbyinternationaltradetoreducethegapbetweendevelopedcountries.Forexample,inthelast30years,exportingisthemainmethodtopusheconomicgrowthinChina,andithadobviouseffect.ThefreetradeFreetradeisasystemoftradepolicythatallowstraderstotradeacrossnationalboundarieswithoutinterferencefromtherespectivegovernments.Underafreetradepolicy,pricesarereflectionoftruesupplyanddemand,andarethesoledeterminantofresourceallocation.Forexample,manyfruitsthatareproducedinTaiwanaretreatedbyzerotariff,andfrom12thSeptember2010,thereareanotherfivekindsoffruitgotthistreatment,thisisakindoffreetrade.AbsoluteandcomparativeadvantageAbsoluteadvantageissaidtooccurwhenonecountycanproduceagoodorservicetoapre-determinedqualitymorecheaplythananothercountry.ComparativeadvantageistheoriginalbasisforInternationalTrade,althoughtherearenowsomequalificationstheoriginalconcept.Forexample:TableT-shirtCountryA2402160CountryB601800WewillclearlyseethatCountryAhasanabsoluteadvantageoverCountryBinbothcommodities.ButtheadvantageithasismuchgreaterforTable.ForCountryAthecostof1Tableis9balesofT-shirt,whichis2160/240ForCountryBitis30,whichis1800/60ButifwelookatthecaseofT-shirtthenwewillfindthathereforCountryAthecostofabaleofT-shirtis1/9ofatractor,andCountryBitis1/30.Intermsoftheoutputoft...
