Legal Definitions - International trade

International trade refers to the buying and selling of goods, services, or capital across national borders. It involves commercial transactions where products, services, or investments move between entities (such as individuals, businesses, or governments) located in different countries, rather than solely within the same nation. These cross-border exchanges are fundamental to the global economy and are typically governed by a framework of international agreements, national laws, and customs regulations.

Here are some examples illustrating international trade:

• A technology company based in South Korea manufactures advanced semiconductor chips. These chips are then exported and sold to various electronics manufacturers in Taiwan, Germany, and the United States, who use them as components in their own products like computers and smartphones. This is an example of international trade because physical goods (semiconductor chips) are produced in one country (South Korea) and sold to businesses in multiple other countries, crossing international borders for their ultimate use.

• Farmers in Australia grow large quantities of wheat, which is then shipped to flour mills and food producers in countries like Indonesia and Egypt. These importing nations rely on the Australian wheat to produce bread, pasta, and other staple foods for their populations. This demonstrates international trade as an agricultural commodity (wheat) is exchanged from producers in one nation (Australia) to consumers and processors in other nations (Indonesia, Egypt).

• A software development firm located in India provides remote IT support and custom application development services to a large financial institution headquartered in the United Kingdom. The Indian firm's team works on projects and offers technical assistance, receiving payment for their specialized expertise. This illustrates international trade in services, where professional skills and labor are provided by a company in one country (India) to a client in another country (the United Kingdom).