International trade in uk

International trade

International trade is the export of goods and services

between the countries
A product that is sold to the global market is export and a
product that is bought from the global market is import
International trade is considered as the Engine of
Growth b

United Kingdoms import

purchases

during 2015
Machines, engines, pumps: US$83.4 billion (13.3% of
total UK imports)
Vehicles: $76.8 billion (12.3%)
Electronic equipment: $61 billion (9.7%)
Oil: $50.8 billion (8.1%)
Pharmaceuticals: $33.1 billion (5.3%)
Gems, precious metals: $30 billion (4.8%)
Medical, technical equipment: $18.2 billion (2.9%)
Plastics: $17.7 billion (2.8%)
Aircraft, spacecraft: $15.6 billion (2.5%)
Clothing (not knit or crochet): $11.3 billion (1.8%)
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Imports of Raw materials

Constrictions, chemical, machinery and equipments are
some of the sectors that are most depends on access
raw material

Raw materials imported to UK

from India and Sri lanka ($646 billion)

Mango
Banana
Spices
Rubber
Cotton

The UK mainly exports

Machinery and transport equipment (38percent)
Chemical products (18 percent)
Miscellaneous manufactured articles
(14 percent)
Mineral fuels, lubricants and related
materials (9 percent)
Manufactured products (8 percent)

Export partners

United States: US$66.5 billion (14.5% of total UK exports)

Germany: $46.4 billion (10.1%)
Switzerland: $32.2 billion (7%)
China: $27.4 billion (5.9%)
France: $27 billion (5.9%)
Netherlands: $26.6 billion (5.8%)
Ireland: $25.5 billion (5.5%)
Belgium: $17.8 billion (3.9%)

The united kingdom borders Ireland by land Belgium, Germany,

Denmark, France , the Netherlands and Norway by sea
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International trade broadening the

horizons of UK market
Greater sales volumes
Organization can improve its reputation with UK
customers
organization's ability to compete in several markets
Existing products and services can be introduced into
new markets
The reliance a business has on its domestic market can
be reduced

 Research conducted by Nottingham University has also

shown that businesses trading internationally are more
productive than those that do not
Spend more on innovation
labor productivity is high

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Production cost

International trade results in low production cost

Promotes efficiency in production
Will be able to gain larger share in the market
Consumer will have good quality products to consume

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Emerging and dynamic economies

South Korea
India
Brazil

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Impact of Global factors

On UK business

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Global factors

PESTLE factors
Per capita income
World trade organization
Government

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Impact of globalization
Globalization involves the increased integration and
interdependence of the global economy
It means there will be a rise in trade, and increase in
movement of labor and capital

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Factors
Global factors impacting UK business include
increasing sale of international trade and increasing
levels of multiculturalism in UK organizations.
Increasing levels of inter dependency of national
incomes and others. The impact of global factors on
UK business organizations can be effectively
analyzed using PESTEL, Per capita income, World
trade Organization.

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PESTEL Factors
Political Factors :
This refers to the changes in government and government policies. Political
factors greatly influence the operation of business. For example: companies
operating in the European Union have to look for the regulations created by
the EU. Unilever
The political arena has a huge influence upon the regulation of businesses,.
Business must consider the stability of the political environment, governments
policy.
Health and safety: Each company must look forward on employee. So every
Employee should have a insurance policies according to the agreement
Regulating the environmental performance of large industrial installations
under the Industrial Emissions Directive, including their usage of raw materials,
water and energy and their waste production
.

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 Economic Factors:
These factors involve changes in the global economy. A rise in living standards would
ultimately effect and increase in demand for products so, providing greater
opportunities for businesses to make profits. Case of a rise in economic activity the
demand of the product will increase and hence the price will increase. Other
economic changes that affect business include changes in the interest rate, wage
rates, and the rate of inflation. Incase of low interest rates and increase in demand
Businesses will be encouraged to expand and take risks. Therefore, business
strategies should have room for such fluctuations.

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 Social Factors:
These factors are related to changes in social structures. it's is
very important adjust their business according to the social and
cultural differentiation which vary from region to region. Example
Tea
And also It consist of language, life patterns, religion,
Population, Age, gender, etc
UK facing a biggest issue related to population is lack of old age
homes.
Business will be impacted by cultural issues as well.

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 Technological Factors:
These factors greatly influence business strategies as they
provide opportunities for businesses to adopt new innovations,
and inventions,
Technology help business reduce costs and develop new
products, Production increases
. Example Labor cost ,robot technology, Virtual communication
Some industry which lead in the market using technology:
Automation industry
Mercedes has safety, performance and technical features many
years ahead of other brands.
Phone Brands:

Legal factors

Laws keep changing over a period of time. From the point of view of
business it is important that they are aware of these changes in the areas of
consumer protection legislation, environmental legislation, health & safety
and employment law, etc.
Hourly payment to employee
Interest based banking banned in some countries

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Comparative advantage
UK firms can benefit from specializing in goods where
they have a comparative advantage
This will lead to lower prices for consumers.
Examples: GM Cricket bats and equipments which
manufacture in uk.
UK is specializing in this product.

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Shifting sectors (Out sourcing)

Globalization will lead to a shift in the sectors of the
economy
Example: UK no longer has a comparative advantage in
many manufacturing industries, Developing countries
now have an advantage due to lower labor costs
This process can lead to temporary structural
unemployment
Can be offset by specialization in other areas e.g. in
Financial and insurance services.
Helping other countries Economy growth.
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Increased competition
Globalization means that domestic monopolies will now
face more international competition
This will help reduce costs and prices for firms entire
world
Increase the competition and costumer enjoys the cost.

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Migration
Globalization makes it easier for migrants to enter and
work in the UK. This can help the UK fill job vacancies.
However, it can also place greater stress on UK housing
and public services because of the net migration of
people into the UK

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Per capita income

GDP per capita

$43,770 (nominal; 13th; 2015)
$41,158 (PPP; 27th; 2015)
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World trade organization

The world trade organization is the only international
organization dealing with the global rules of trade
between nations
Its main function is to ensure that trade flows as
smoothly, predictably and freely as possible

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Government
Tariff
Government puts a high tax on import so that users cant
buy at low price so local domestic market is safe
Quota
Quantity how many units they can import form the other
countries, Agreement basis
Motivates them to manufacture
Embargo
Ban on imports in a particular country
Example Sri Lanka war issue
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Policies of the
European union

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Policies of European union

Internal market policy

Trans European network
Taxation policy
European union trade policy

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Internal market policy

EU is considered as a single market so all UK people are
free to move, live, work and study of trade in any country
in EU
Increases mobility of the workers

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Trans european policies

This Policy aims to create transport networks across
European union (road, rail) becomes easier for
companies to transfer goods and services across EU

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Taxation policy
Business make a valuable contribution which
government can base on road contract, airport, railways
of education

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Europian union trade policy

Sets the best possible legal economic and political
environment so business can do that better
Single market power
30 million EU jobs depend on trade
Trade is the weapon against economic crisis in Europe

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