(a) Explain the following: (i) counter trade (ii) entrepot trade (iii) import trade (iv) invisible trade (b) State four barriers to international trade.
Question 1 Report
(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
- Imposition of tariffs (import and export duties).
- Import quotas limiting the quantity of goods that may be brought in.
- Foreign exchange control and shortage of foreign currency.
- Total ban (embargo) or import prohibition on certain goods.
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