Terms of Trade

Terms of Trade

Summary of Terms of Trade

An export-import price ratio derived by dividing indices of export prices by indices of import prices. For example, when export indices are 105 percent of a base period, and import indices are 98 percent of the same base period, then the terms of trade (export-import) price ratio would be 107 percent of the base period. When export prices received are higher than import prices paid, the terms of trade are said to be favorable’, when the condition is reversed, the terms of trade are unfavorable. (Main Author: William J. Miller)

Standard terms for electronic commerce

Differing terms and usages in various jurisdictions have created problems in efforts to align new rules or practice standards. Work is underway on E-Commerce terminology at organizations such as the ICC, along the lines of INCOTERMS (proposed “E-Terms”, Guidec, etc.); at ANSI and the UNECE’s work on standardized EDI message sets; and through newer private sector bodies such as the Internet Law and Policy Forum (ILPF). Some have suggested that broadening those efforts and adding other fora where appropriate may move up time schedules for implementation.

See Also

  • Trigger Price Mechanism
  • Base Price
  • Trade Agreements
  • Foreign Trade
  • Antitrust
  • Rye Terms
  • Terms Of Delivery
  • Withdrawal Price
  • Reference Price
  • Ordinary Course Of Trade
  • Minimum Import Price

Terms of Trade and International Trade Economy

In relation to international trade economy, Christopher Mark (1993) provided the following definition of Terms of Trade: The volume of exports that can be traded for a given volume of imports; changes in the terms of trade are measured by changes in the ratio of export prices to import prices. The terms of trade determine a country’s share of the “larger pie ” generated by trade based on in emotional specialization and comparative advantage. An improvement in the terms of trade can be interpreted as an increase in the country’s international competitiveness in the broadest sense –that is, its people are becoming better off as a result of their transactions with the rest of the world. In contrast, a country that expands its foreign market share by selling its exports at cut-rate prices may experience declining terms of trade, in which case it is not genuinely “competitive.”

Terms of Trade in International Trade

Meaning of Terms of Trade, according to the Dictionary of International Trade (Global Negotiator): The ratio of unit value prices of a country’s exports to the unit value prices of its imports.

Concept of Terms of Trade

An introductory definition of Terms of Trade is provided here: the ratio in prices between a country’s exports and its imports

Terms of Trade (in the Human Development Area)

In this context, Terms of Trade means:

the ratio of the export price index to the import price index measured relative to a base year. A value of more than 100 means that the price of exports has risen relative to the price of imports.

Resources

See Also

  • Foregin Policy
  • Foreign Affairs

Hierarchical Display of Terms of trade

Trade > Trade > Trading operation > Value of trade
Finance > Monetary relations > Balance of payments > Trade balance

Terms of trade

Concept of Terms of trade

See the dictionary definition of Terms of trade.

Characteristics of Terms of trade

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Resources

Translation of Terms of trade

Thesaurus of Terms of trade

Trade > Trade > Trading operation > Value of trade > Terms of trade
Finance > Monetary relations > Balance of payments > Trade balance > Terms of trade

See also

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