International Trade

Trade across borders inflames passions and creates controversies that are absent in discussions of trade within countries. Early chapters of this book demonstrated the importance of trade in the evolution of the contemporary global economic system. This chapter provides an introduction to understanding the political economy of the modern global trading system. One striking feature of the contemporary international trading system arises from the conflict between the continuing political importance of the national border and its declining economic relevance. Political conflicts over trade exist simultaneously with the growth of transnational production (see Chapter 7), wherein production by firms is less restricted by national frontiers than at any time in history. This chapter provides an introduction to international trade through an examination of the material and normative structures that constitute the international trading system. It begins with a brief definition of some key terms, and an introduction to the importance of the means of exchange.