3.2 International Trade

• The meaning and classification of international trade
• The importance and limitations of international trade
• Balance of trade and balance of payments
• Terms of sale and terms of payment in international trade
• Digital applications in international trade
• Mapping local products for export

• examine the concept of international trade in an economy
• explore the limitations of international trade to a country
• analyse the terms of sale and payment used in international trade
• explore digital applications in international trade
• map the local products that can be developed for export
• appreciate the importance of international trade in an economy

“What are the benefits of international trade?”

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1. International trade: meaning, importance and balance
   40 min · 1 practice tasks · quiz
   What international trade is and its types, its benefits and limitations, and the meaning of the balance of trade and the balance of payments.
2. Why countries trade at all
   40 min · 1 practice tasks · quiz
   Specialisation, the gain it produces, and why trade is not a contest that one side wins.
3. Classifying international trade
   40 min · 1 practice tasks · quiz
   Import, export and entrepot; bilateral and multilateral - and where Kenya fits in each.
4. Visible and invisible trade
   40 min · 1 practice tasks · quiz
   Goods you can count at a border, services and transfers you cannot, and why Kenya depends on the second.
5. The benefits of international trade
   40 min · 1 practice tasks · quiz
   Eight gains from trading across borders, and the cost attached to each of them.
6. The limitations of international trade
   40 min · 1 practice tasks · quiz
   Six real risks of trading across borders, what reduces each, and why none of them is an argument for closing the door.
7. Balance of trade
   40 min · 1 practice tasks · quiz
   Exports minus imports of goods, what a surplus and a deficit mean, and why a deficit is not automatically a failure.
8. Balance of payments
   40 min · 1 practice tasks · quiz
   The three accounts that record every transaction with the rest of the world, and why the whole thing must balance.
9. Correcting a trade deficit
   40 min · 1 practice tasks · quiz
   Raising exports or reducing imports, what each costs, and the trap of cutting the wrong imports.
10. Terms of sale
    40 min · 1 practice tasks · quiz
    EXW, FOB, CIF and DDP - who pays for which part of the journey, and where risk passes.
11. Terms of payment
    40 min · 1 practice tasks · quiz
    Cash in advance, letters of credit, bills of exchange and open account - and who carries the risk under each.
12. Documents in international trade
    40 min · 1 practice tasks · quiz
    The six documents that move with a shipment, what each proves, and why one error stops payment.
13. Barriers to trade
    40 min · 1 practice tasks · quiz
    Tariffs, quotas, embargoes, subsidies and standards - what each does, and why standards are the hardest to judge.
14. Trade blocs and levels of integration
    40 min · 1 practice tasks · quiz
    From a free trade area to a political federation, and where the EAC, COMESA, AfCFTA and the WTO fit.
15. Exchange rates and trade
    40 min · 1 practice tasks · quiz
    What happens to exports, imports and foreign debt when the shilling moves, and why no rate suits everybody.
16. Digital applications in international trade
    40 min · 1 practice tasks · quiz
    Six digital tools that have changed how goods cross borders, and the fraud risk that came with them.
17. Mapping local products for export
    40 min · 1 practice tasks · quiz
    A five-step screen for deciding whether a Kenyan product can be exported profitably, applied to real examples.
18. Terms of trade, digital platforms, and mapping exports
    40 min · 1 practice tasks · quiz
    The terms of sale and payment used in international trade, the digital platforms transforming it, and identifying local products Kenya could develop for export.