(a) Explain the following: (i) counter trade (ii) entrepot trade (iii) import trade (iv) invisible trade (b) State four barriers to international trade.

Answer Details

(a) Explanations

• (i) Counter trade: a form of international trade in which goods are exchanged for other goods instead of money, or in which a country agrees to buy goods from another country as a condition for selling to it (for example barter and buy-back arrangements).
• (ii) Entrepot trade: the re-export trade, in which goods are imported into a country and then re-exported to another country, usually after being stored, graded or repackaged, without being consumed in the importing country.
• (iii) Import trade: the branch of foreign trade that involves buying and bringing in goods and services from other countries into one's own country.
• (iv) Invisible trade: the buying and selling of services (rather than physical goods) between countries, such as banking, insurance, shipping, tourism and transportation.

(b) Four barriers to international trade

1. Imposition of tariffs (import and export duties).
2. Import quotas limiting the quantity of goods that may be brought in.
3. Foreign exchange control and shortage of foreign currency.
4. Total ban (embargo) or import prohibition on certain goods.