How much do you know about global trade? Are you an expert? A novice? Whether you are an expert or not, you probably aren't aware of all facts about global trade, and you probably don't need to be. However, these are five key facts you must know:
- We Are Trading More than Ever Before
There are more humans now than ever before. And we are, on average, wealthier than we have ever been. Most people in the past did not have access to surplus wheat, let alone smart phones or other technological devices. Therefore, it’s only natural that we are trading more goods and services than we have in the past. Globally, we trade about $18.4 trillion in goods and $5.9 trillion in services (all figures USD). - More of Us Are Trading
Not only are there more of us now, but there are also more of us trading. While inequality among people and nations remains a major issue, more countries are now involved in international trade, so there are opportunities to address these issues. - Trading Components Is Becoming Increasingly Important
We tend to think of global trade involving the shipment of finished goods. However, this is rarely the case. There are fewer container ships carrying finished automobiles or laptop computers than there are ships carrying individual components of these products. Because of globalization, it often makes sense for a corporation to extract resources in one country, manufacture components in another, and then assemble everything in a third.
- Tariffs Have Decreased While Regulations Have Increased
It should come as no surprise that we now have more free trade agreements, or FTAs, than ever before. Tariffs and other trade barriers are eliminated in these agreements, which gives the impression of a completely unregulated market. However, this is simply not the case because many of these FTAs include mandatory regulations and restrictions. These include minimum labor standards, efficiency standards, environmental protection, and buying and selling quotas. - Trade Agreements Are Lacking Focus On E-Commerce
How recent do you consider eBay to be? It most likely does not appear to be cutting-edge technology, and for good reason: it is over 125 years old. Despite this, no global e-commerce rules have been established. A few years ago, an international trade agreement for information technology was updated, but it still does not mention services like search engines, social media platforms, and app stores. There is still a lot of work to be done at the intersection of global trade and e-commerce.
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