II. MICROECONOMIC MECHANISMS FOR WORLD ECONOMY AND INTERNATIONAL ECONOMIC RELATIONS AFFAIRS
International Trade in World Economy and International Economic Relations System
Basic features of modern international trade
The Nature of International Trade
Today international trade is one of the major driving forces of economic development. It appears as a sphere of international economic relations and is formed by merchandise trade, trade in services and products of intellectual labor of all countries in the world. Today, it accounts about 80% of all international operations.
A single country takes part in international trade in the form of foreign trade, i.e. it is the trade between the country and other ones, which consists of two opposing flows of goods and services: export and import.
International trade is trading between residents of different countries, which may be individuals and legal persons, firms, TNC, non-profit organizations, etc. It provides the voluntary exchange of goods, services, products of intellectual labor between the parties of a trade agreement. Since this exchange is voluntary, both parties of the agreement must be confident that they will get benefit from this exchange, otherwise the agreement will not be signed.
International trade is a characteristic feature of the existence of the global market, which is the realm of commodity-money relations between the two countries and is based on the international division of labor and other factors of production. The product, which is located on the world market in the phase of the exchange, performs the function of information as reported on the mean values of aggregate demand and supply. Therefore, countries have the opportunity to evaluate and adapt the parameters of its products and production what, how much and for whom to produce) to the demands of the global market.
International trade of goods was historically the first and until the certain period of time, the main sphere of international economic relations. Only at the end of the 20th century, different forms of financial operations became dominant in the international economic system. But international trade is still very important, which is proved by the growth of international trade volumes. According to the WTO experts, international trade volume increased by 7.6% in 2006, 15.2% in 2007, 15.4% in 2008. Such rapid development of international trade, is mainly connected with strengthening of international relations liberalization process, increase of demand on manufactured goods, percentage of which composes 70% in total volume of international export. However in 2009 international trade volume reduced to 13.1% due to the world financial crisis. In 2010, the decline in world trade has stopped: the increase was 13.8%, and in 2011 and 2012 - respectively 5.0% and 3.7% [6. p.50].
International trade today, as before, remains an important growth driver for international economics. International trade flows are well ahead of the growth of world gross domestic product (figure 3.1).
Figure 3.1. Growth rate of volumes of world trade and world GDP, 2005-2013
This is the result of the deepening of the international division of labor, the formation and development of new types of division of labor, which lie at the heart of international economic integration and intracompany exchange. In this regard, it is important to note that in the EU - the most integrated international economic grouping - trade goes ahead of production by 3 times.
Rapid growth of international trade has a favorable effect on the economy of developing countries by stimulating their exports (table 3.1, fig. 3.2).
Table 3.1. The dynamics of development of the world trade in goods and services
Source: [6, 32 ].
Figure 3.2. Economic growth in developing and transition countries in comparison with industrialized ones, 2005-2012
Source: [6, 32].