1. By: Dr Fayaz Ahmad Lone 1

2. What is Trade? Trade refers to the exchange of goods and services. It may be internal trade or external trade. 2Dr Fayaz Ahmad Lone

3. Introduction The fundamental reason for international trade is to sell something that we do not need and to buy something we do need. Trade creates jobs, attracts investments, attracts new technology and materials, and offers Saudi People a wider choice in products and services. 3Dr Fayaz Ahmad Lone

4.  It is the purchase, sale, or exchange of goods and services across national borders.  International Trade involves activities related to the global exchange of goods and services to satisfy needs. These activities include acquiring, developing and managing physical, financial, and human resources. Introduction 4Dr Fayaz Ahmad Lone

5. International Trade  Exchange of goods and services between countries.  International Trade consists of transactions that are devised and carried out across national borders to satisfy the objectives of individuals, companies, and organizations.  International Trade is the exchange of Capital, Goods and services across international boarders and territories. 5Dr Fayaz Ahmad Lone

6. Benefits of International Trade  Meeting our needs  Job Creation  Attracting Investment  New Technology and Materials  Diverse products  Cheaper Products 6Dr Fayaz Ahmad Lone

7. Disadvantages of International Trade  Culture identity Issue  Social Welfare and Environmental Issue  Political Issue  Restricted growth of home Industry  Dependent on other Countries 7Dr Fayaz Ahmad Lone

8. Saudi Arabia’s Economy Major Exports: Petroleum oils, crude (77%) Petroleum oils, refined (6%) Polymers of ethylene, in primary forms(3%) Petroleum gases (2%) 8Dr Fayaz Ahmad Lone

9. Saudi Arabia’s Economy Major Imports: Cars(7%) Medicaments, packaged(3%) Iron ores and concentrates(2%) Automatic data processing machines(2%) Transmission apparatus forradio, telephone and TV(2%) 9Dr Fayaz Ahmad Lone

10. Saudi Arabia’s Economy Major Trade partners (Exports): Asia, (37%) North and Central America (8%) Japan (7%) China (7%) United States (7%) 10Dr Fayaz Ahmad Lone

11. Saudi Arabia’s Economy Major Trade partners (Imports): China(14%) Germany(10%) Japan(9%) Korea Republic(6%) United States(6%)11 11Dr Fayaz Ahmad Lone

12. 12 Volume of International Trade  International Trade continues to increase every year between different nations.  World political environment and economic condition affects volume of International Trade  World Merchandise exports are $9.2 trillion and service exports are approaching $2.1 trillion. Dr Fayaz Ahmad Lone

13. 13 Trade Dependence and Independence Trade Dependence means remaining dependence on other countries for trade and Trade independence means that out trade is not dependent on other countries Dr Fayaz Ahmad Lone

14. 14 Trade Dependence and Independence Total dependence Total independence Potential effects of dependence: + Infuses needed capital + Creates jobs and raises wages + Imports technology and skills – Economic problems transferred – Political turmoil can spill over Dr Fayaz Ahmad Lone

15. 15 Dependency Effect on Developing and Transition Nations Developing and transition nations often depend on their developed neighbor countries with whom they share borders. Dr Fayaz Ahmad Lone

16. 16 Dangers of Trade Dependency If a country experiences economic recession or political turmoil, the dependent nations can experience economic problems. Dr Fayaz Ahmad Lone

17. 17 Regional Economic Integration It is the process whereby countries in a geographic region cooperate with one another to reduce or eliminate barriers to the international flow of products, people, or capital. Dr Fayaz Ahmad Lone

18. 18 Levels of Regional Economic Integration There are following levels of Regional Economic Integration  Free- Trade Area  Customs Union  Common Market  Economic Union  Political Union  Dr Fayaz Ahmad Lone

19. 19 Free- Trade Area: Economic integration whereby countries seek to remove all barriers to trade between themselves, but each country determines its own barriers against non-members Customs Union : Economic integration whereby country remove all barriers to trade between themselves but erect a common trade policy against non-members Levels of Regional Economic Integration Dr Fayaz Ahmad Lone

20. 20 Common Market: Economic integration whereby countries remove all barriers to trade and the movement of labor and capital between themselves but erect a common trade policy against non-members. Economic Union: Economic integration whereby countries remove barriers to trade and the movement of labor and capital, erect a common trade policy against non-members, and coordinate their economic policies. Levels of Regional Economic Integration Dr Fayaz Ahmad Lone

21. 21 Political Union: Economic and political integration whereby countries coordinate aspects of their economic and political systems. Levels of Regional Economic Integration Dr Fayaz Ahmad Lone

22. Free-Trade Area Customs Union Common Market Economic Union Political Union Greater integration 22Dr Fayaz Ahmad Lone

23. 23 Benefits of Regional Integration  Trade Creation  Greater Consensus  Political Cooperation  Employment Opportunities Dr Fayaz Ahmad Lone

24. 24  Trade Creation: Increase in the level of trade between nations that results from regional economic integration.  Greater Consensus: (1): The Benefits of trying to eliminate trade barriers in smaller groups of countries. (2): It can be easier to gain consensus from fewer members as opposed to. Benefits of Regional Integration Dr Fayaz Ahmad Lone

25. 25  Political Cooperation: A group of nations can have significantly greater political weight than each nation has individually.  Employment Opportunities: Expand employment opportunities by enabling people to move from one country to another. Benefits of Regional Integration Dr Fayaz Ahmad Lone

26. 26 Drawbacks of Regional Economic Integration  Trade diversion  Shifts in Employment  Loss of National Sovereignty Dr Fayaz Ahmad Lone

27. 27  Trade diversion : Diversion of trade away from nations not belonging to a trading bloc and toward member nations  Shifts in Employment: Industries requiring mostly unskilled labor  Loss of National Sovereignty : Successive levels of integration require that nations surrender more of their national sovereignty Drawbacks of Regional Economic Integration Dr Fayaz Ahmad Lone

28. 28 Integration in Middle East Gulf Cooperation Council (GCC) Members: Saudi Arabia Bahrain Kuwait Oman Qatar The United Arab Emirate Dr Fayaz Ahmad Lone

29.  Saudi Arabia  Egypt  Iraq  Jordan  Kuwait  Libya  Mauritania  Palestine  Sudan  Tunisia  Syria  United Arab Emirates  Yemen 29 Council of Arab Economy Unity Members Dr Fayaz Ahmad Lone