Definition and types of trade - SS3 Geography Lesson Note

Trade refers to the exchange of goods and services between individuals, businesses, or countries. It' is a fundamental economic activity that allows people to acquire products they can't produce themselves or can't produce as efficiently as others. Trade can be categorized into two main types: national trade and international trade.

National Trade:

National trade, also known as domestic trade, involves the buying and selling of goods and services within the borders of a single country. It encompasses all economic activities that occur between individuals, businesses, and government entities within the nation.

Types of National Trade:

1. Retail Trade: This involves the sale of goods directly to consumers, typically through stores, supermarkets, or e-commerce platforms.
2. Wholesale Trade: Wholesalers purchase goods in bulk from manufacturers and sell them to retailers or other businesses at a higher price, making a profit in the process.
3. E-commerce: With the rise of the internet, online retail and business-to-business (B2B) e-commerce have become significant components of national trade, allowing goods and services to be exchanged electronically.

International Trade:

International trade, often referred to as global trade, is the exchange of goods and services between different countries. It involves the import and export of products, and it's essential for the global economy as it allows nations to specialize in producing what they do best and obtain what they lack from other countries.

Types of International Trade:

1. Export Trade: This is when a country sells its goods and services to other nations. Exports can include products like cars, electronics, agricultural goods, or even services like consulting and tourism.
2. Import Trade: Import trade is the opposite of export trade. It involves a country purchasing goods and services from other nations to meet domestic demand or to access items not produced locally.
3. Balance of Trade: The balance of trade is the difference between a country's exports and imports. A surplus occurs when exports exceed imports, while a deficit occurs when imports exceed exports.

International trade can further be categorized based on the level of development and specialization, including:

1. Inter-industry Trade: This involves countries trading different types of products or services, such as machinery for agricultural products.
2. Intra-industry Trade: This occurs when countries trade similar goods or services within the same industry, often due to differences in product quality or specialization.