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1.0 INTRODUCTION
1.1 DEFINITION
International trade is the exchange of goods and services across international boundaries or territories.
1.2 Historical Background
In the past, trade was done between citizens and groups with minimal state involvement and regulations. The trade relations that existed between traders of one empire and another were such trade relations with minimal institutionalised control. However, with increasing complexities and inter-dependency of nations, trade matters increasingly also became state matters not just the concern of certain traders within a community. Much later, trade became regulated through bilateral treaties between two nations, and of recent, multilateral regulation is playing an increasing significance. Thus, although international trade has been present throughout much of history, its political, social and economic importance is only becoming obvious and on the rise in recent times.
1.3 Importance of International Trade
The importance of International trade can not be overestimated. It has been a crucial factor behind the rise and fall of empires, dynasties and Nations. It is an important source of income, employment and rural development of any nation. It is a major factor for the growth and development of nations over the time and has been responsible for the prosperity or otherwise of these nations. It is basic to globalization. At the dawn of the 21st Century, trade volume among countries is increasing. Regional economic groupings are also increasingly being witnessed in every part of the globe.
With the end of Cold War, nations have seen the need to co-operate economically and create a platform on which a sound economic footing can be built. In pursuance of this laudable move, most countries have liberalised their economy and trade regime. Thus it has been recognised that free trade, a core component of globalisation, increases economic opportunities, raises...