International economic relations

1.

INTERNATIONAL ECONOMIC
RELATIONS
Akad. Year 2018/2019
Prof. zw. dr hab. Bohdan Jeliński

2.

P r o g r a m m e
1.
2.
3.
4.
5.
6.
World economy. Basic meanings and relations
Global market development
International trade
Basic forms of international trade
Fundamental theories of international trade
Movement of international production and trade factors
* International trade in services
* International migration
* International technology transfer
* Foreign Direct Investments movements
7. International trade policy
8. World economy sustainable development

3.

1.World economy

4.

The modern world economy as a special organic
holistic system, began to be formed on the basis of world
market since the end of XIX – beginning XX century.
Now we can talk about the world economy as a global
economic system that is based on:
international economic division of labour
internationalization and integration of production
and exchange,
and operates on principles of market economy.

5.

The history of the world economy begins with the
international division of labour (IDL) associated with the
exchange activity and its products between states.
The international division of labour exists in two basic forms:
the international specialization
international production cooperation.
International specialization is a form of division of labour
between the countries in which the increase in the concentration
of homogeneous production is based on the progressive
differantiation of the national production.

6.

The international production cooperation is
the result of the specialization of national industries,
which interact in the international division of labour.
The international division of labour (IDL) was
unifying element that created the world economy as a
set of interrelated international exchange of national
economies, projecting its subsystems.

7.

In the second half of the XX century in the evolution of IDL is a
qualitative shift, which has resulted in the export of capital acrosss
national borders. Internationalization has covered all stages of the
movement of capital ( monetary industrial, commercial), has found some
form as follows:
the integration of national economies into the regional economic
complexes with the structure and proportions of the opening on
the consumption of the whole region, as well as the regulations
of interstate economic ralations,
transnationalization, that is out of production and business
corporations in the form of branches and subsidiaries across
national boundaries
division of transnational corporations, in the territory of nations,
operating largely as economically, organizationally and legally
independent entities, whose relations with tha national states are
built on special contracts.

8.

Internal angular momentum of the integration
processes and transnationalization is the emergence of a new
phenomenon of the global economy:
• world economic division of labour
• intra and inter regional division of labour
• global (transnational) division of labour.
Global economic division of labour is an
extraterritorial nature. It can not be represented on a
territorial basis and in the forms of public – private division
of labour. In such a case, single production proces is divided
into transactions carried out in different countries.

9.

The activities of transnational corporations as one
of the organizational forms of global economic division of
loabour create regular circulation on a planetary scale of:
goods
natural resources
services
financial resources
knowledge
technology
management experience.

10.

Through participation in the transnational
division of labour, the national economy has direct access
to the world market .
The product manufactured by transnational enterprises
in one or several multinational corporations, has tendency to
occupy a niche market and become the main suppliers of
niche products that meet the world,s demand.
A single global economic space,
create
multinational business environment in which there are
common economic, technological, legal and socio-cultural
requirements fo the subject of industrial and commercial
activities.

11.

The world community is still in the early formation
of a single world economic space. It is still graded on
numerous stages unity.
The main intrinsic subsystems of the world economy
in the second level, should be considered:
economic
technology
legal
socio-cultural .

12.

The economic subsystem is a common economic
space of free movements of goods and services, capital
and labourt, informations across the borders of states and
the free interchange of national curriences.
Economic subsystem is formed as the
development and implementation of uniform standards for
international trade, production and investment and
monetary affairs.
The common economic space also provides for
uniform rules and standards of the organization and
management of international processes embodied in the
principles of international management.

13.

The technological subsystem is a set of requirements
imposed by the STR, and which provide competitive in the
global market. These technology requirements can be
reduced to basic parameters:
the
nature of information and computer
technology,
research intensity
resource-saving, waste-free and envirenmentally
friendly type of technology
biotech, we have the technology, which is besed on
innatural processes.

14.

These paremeters provide maintaining world-class
efficiency, productivity, quality and novelty products, implementation
of the principles of modern management, The implementation of these
equirements is virtually impossible and ineffective under seperate
national technology spaces.
Legal subsystem is the reduction of general riles of business
law and the norms of business behawior. They form a single legal
framework, as the creationof rules of private international, civil and
patent low. The trend of further convergence of legal systems od the
states, which extends to human rights, lays the foundation for global
legal space.

15.

Socio-cultural subsystem is formed much more
slowly and contradictory than other subsystems of the single
world economic space. The proces of formation of the unique
social and cultural environment provides:
• achieving a high general standard of living and
reducing disparities between „rich” and „poor”
countries. Created for this purpose the EU structural
funds, various United Nations trust funds
• one approach to social policy
• formation of new thinking, breaking the old way of
thinking
• developing common standards of bisiness conduct
and ethics inmanagement
• peaceful decision national and international
problems.

16.

The system of the world economy has three levels:
the world economy as a collection of national
economies,
the world economy as a supranational regional
economic space
the world economy as a transnational (global)
economic space.
Analysis of the formation of the world economy as a
whole or global system, makes it possible to determine the
place of international economic relations in the world economic
system and define the subject of the course „International
Economic Relations”

17.

2. Global market development
G L O B A L IS A NEW SCIENTIFIC CATEGORY, WHICH
TREATS THE PROCESSES AND EVENTS ON A WORLD SCALE
The processes and events on a world scale have the common name –
globalization
Globalization is an approach which expands and deepens the economy
and economic theory as well as other scientific fields.
Subject of economic globalization are:
the state
national companies
international companies
transnational companies
regional economic structures
international economic organizations

18.

World economy development 1990-2017 x)
Items
GDP
Investments
- FDI
Export of goods
and services
Openess coefficient
1990
2000
2008
2009
2015
2017
24 433 31 895 60 780 55 003 74 407 79 841
5 811
205
2017
1990
3,26
6 466 13 824 12 404 18 651 19 764
3,40
1 271
1 430
6,97
1 697
1 114
1 921
4 414
7 036 19 990 15 716
20953 22 558
5,11
18%
22%
28%
-
x) Value in constant prices - bln USD
33%
27%
28%

19.

20.

International economic cooperation potential in 2017
Countries
Export
(%)/Rank
Population
(%)
100,0
100,0
100,0
Developed countries
42,0
63,0
15,0
USA
24,3
8,7/2
4,3
Germany
4,6
8,2/3
1,1
Japan
6,1
3,9/4
1,7
Great Britain
3,2
2,5/10
0,9
Poland
0,8
1,3/22
0,5
Developing countries
58,0
37,0
85,0
China
15,0
12,8/1
18,5
India
3,3
1,7/20
17,9
Rusian Federation
0,2
2,0/16
1,9
Brazil
2,6
1,2/26
2,8
World
PKB (%)

21.

G e n e r a l l y, the structure of international
economic relations contain:
• the international trade in goods and services
• the international movement of capital
• the international migration
• the international transfer of technology
• the currency and monetary relations
• the global financial system and international
financial markets.

22.

3. International trade growth
International trade is one of major driving
forces of economic development . It appears as a
sphere of international economic relations and is
formed by merchandise trade, trade in services and
products of intelectual labor of all countries in the
world. Today, it accounts about 80 % of all international
operations.

23.

Share of global export in the gross world product
in the years 1870-2016
35
%
31,2
30
28,2
26,3
25,8
25,7
25
20
17,2
15
10,5
10
5
7,9
5,5
4,6
0
1
1870
1913
1950
1973
1998
2008
2012
2013
2014
2015
2016
27,1

24.

Intensification of trade relations and
manufacturing cooperation between different
countries is one of the most distinctive features
resulting from changes in the global economy. This
process, known as the internationalization of the
economy, has contributed to a dynamic growth of
foreign trade and consolidation of national
economies. This phenomenon, which has been
gaining speed since the mid – 1970s, has
generated, a new quality in the proces of
internationalization of economic growth, know as
globalization.

25.

Internationalization is the proces of increasing
involvment of enterprises in international markets.
Those enterpreneurs who are interested in the field
of internatiobalization of business need to possess the ability
to think globally and have an understanding of international
cultures. By appreciating undunderstanding different beliefs,
values, behaviours and business strategies of a variety of
companies within other countries, enterpreneurs will be able
to internationalize succesfully.

26.

Globalization involves three fundamental areas of
change:
technical and technological
political
economic
Economic globalization is a historical proces which
stems from innovation and technological progres and
causes countries to become increasingly interdependent
on a global scale, in particular through a rise in the
volume of commodity trade and cash flow (IMF).

27.

28.

International trade is the total of trade
in goods and services, equalling exports and
imports for countries which partticipate in such
trade.
Export means a paid sale of domestic
goods abrroad or providing services to entities
licated in a different customs area.

29.

Import, as seen from the buyer’s
viewpoint, means increasing domestic supply to
include foreign products. Importers meet the
demand of the domestic economy for goods and
services which would be impossible or
unprofitable to create at home due to local
conditions (e.g. climate) or lack of specific
means of production.

30.

The export elasticity coefficient
represents the supply potential of an economy,
while the import elasticity coefficient – its
demand potential.
During a market downturn, the difference
between the coefficients is minimal.

31.

Foreign commercial exchange contributes to the
economic growth of a country mainly indirectly through
additions to the national income. It is dificult to state clearly
which portion of the national income accrues thanks of foreign
trade and which due to internal factors related to demand and
supply. There exists, however, a relationship which displays a
direct connection between foreign trade and the gross domestic
product (GDP).
GDP = C + I + G + (X - M)
where:
GDP – Gross Domestic Product (expenditure approach)
C – Personal Consumption Expenditures
I – Gross Private Domestic Investment
G - Government Consumption Expenditures and Gross Investments
(X-M) – foreign trade balance (net exports)
X – export
M - import

32.

If the state engages in foreign trade, three relations may occur
between exports (X) and imports (M). Foreign trade balance may
have one of the three outcomes:
X > M, foreign entities absorb part of the national income, which means
that the country’s export is higher than import, the balance is positive and
the national income for distribution is lower than produced by that
balance. At the same time, distributed GDP is lower than GDP produced;
X < M when a country’s import exceeds export it results in a negative
foreign trade balance, which allows that country to take over part of the
national income produced abroad and , as a result, to increase the
distributed GDP compared to the GDP produced;
X = M, when the foreign trade balance equals zero, although net exports is
egual to that of closed economy, the magnitude of GDP remains different
(in favour of open economy).

33.

If the gross national product for a given year
exceeds domestic consumption, in order to
maintain general balance, it is necessary for
exports to exceed imports, or in other words, to
invest domestic savings abroad.
On the other hand, if domestic consumption
surpasses GDP produced, it is necessary to
compensate for the resulting shortage with import
exceeding export, that is, to finance the shortage
using foreign savings.

34.

Foreign trade brings the state a variety of direct
benefits of a quantitative nature , such like:
● balance of foreign trade turnover
● participation in world export
● economy oppenes coefficient
● terms of trade

35.

Foreign trade brings the state a varity of indirect
benefits of a qualitative nature. It is possible to distinguish four
main functions served by foreign trade in the economic growth
of a given country:
● transformative function which impacts the changes in
the substantive structure of the product produced,
● resource – forming function which impacts country’s
domestic savings,
● multiplier function which impacts the volume of global
supply in a country,
● effectiveness function, which allows improvement in the
effectiveness of governance.

36.

Polish foreign trade development 1989 - 2017
1989
1992
bln USD
Export of goods
bln USD
%
bln USD
2008
2016
2017
%
bln USD
%
bln USD
%
bln USD
-
13,2
-
73,8
-
171,9
-
203,7
-
228,2
3,5
46,1
7,66
58,0
58,4
78,1
133,9
77,8
162,4
79,7
181,9
79,7
1,38
18,1
1,80
13,6
2,8
3,8
8,9
5,2
5,8
2,9
6,9
3,0
FDI inflow
.
.
0,4
-
12,7
-
14,7
-
11,4
-
6,4
Export of
services
-
-
6,7
-
13,5
-
35,5
-
49,8
-
59,2
GDP
66,9
-
88,7
-
252,9
-
530,2
-
467,0
-
526,1
EX / GDP*
-
29,2
-
32,4
43,6
43,4
PLN / 1 EUR
%
13,5
- UE
- Russia
%
2004
20,1
0,65**
-
15,8
1,36
*/ Economy oppenes coefficient **/ PLN/ 1 USD
3,65
2,41
4,36
4,27
-

37.

Year
Wo r l d t r a d e
development
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Agriculture
Raw materials
products
298,8
559,9
293,1
542,0
271,0
485,0
267,9
446,0
280,7
442,0
265,5
426,8
294,2
326,0
336,6
361,0
382,6
364,0
401,4
421,0
414,7
488,3
418,2
457,9
447,9
453,9
429,3
437,9
500,9
473,2
589,4
545,3
604,2
622,9
596,2
639,9
568,6
508,1
547,8
587,5
550,8
854,0
552,6
779,2
585,2
790,0
684,1
973,5
784,2
1311,6
853,0
1814,0
946,4
2314,3
1135,3
2670,9
1345,7
3542,8
1182,2
2274,9
1364,9
3029,2
1662,6
4069,5
1651,3
4144,9
1737,2
4023,0
1765,4
3788,9
1569,0
2441,7
1588,9
2079,5
1736,0
2634,2
Industrial
goods
1092,4
1086,3
1047,4
1049,7
1134,8
1182,4
1426,8
1699,8
1982,8
2115,5
2391,2
2470,5
2668,2
2668,4
3097,7
3718,8
3852,6
4031,3
4122,5
4260,1
4689,7
4511,3
4753,3
5501,0
6618,8
7301,6
8255,0
9509,0
10445,9
8362,4
9992,4
11511,0
11472,5
11826,4
12242,9
11418,9
11239,6
12160,5
Services
367,1
377,3
368,2
357,2
368,2
383,5
452,5
536,7
604,7
662,5
788,7
832,6
931,8
950,0
1042,5
1179,4
1273,1
1329,8
1346,9
1405,9
1491,3
1492,7
1597,6
1851,4
2250,4
2516,2
2845,4
3421,4
3847,1
3488,7
3827,7
4295,4
4397,0
4644,4
5197,7
4937,0
4963,0
5351,2
Total export
2318,1
2298,7
2171,6
2120,7
2225,7
2258,2
2499,6
2934,1
3334,2
3600,4
4082,9
4179,2
4501,7
4485,6
5114,3
6032,9
6352,8
6597,1
6546,1
6801,2
7585,8
7335,8
7726,1
9010,0
10965,0
12484,9
14361,1
16736,6
19181,5
15308,1
18214,1
21538,5
21665,7
22450,8
23849,4
21164,2
20686,6
22757,3

38.

World trade development 2010 - 2050
in bln USD (constant prices 2005 r)
287
197
123
37
2010
52
2015
70
2020
2030
2040
Źródło: The World 2050, PWC, London 2017
2050

39.

International trade of goods was historically the
first and until the certain period od time, the main sphere
of international economic relations. Only at the end of the
20th century, different forms of financial operations
became dominant in the international economic system.
Rapid development of international trade is mainly
connected with strenghening of international relations
liberalization proces, increase of demand on
manufactured goods, percentage of which composes
circa 70 % in total value of international export.

40.

International trade evolution

41.

4. Basic forms of international trade
International trade is a total value of contracts
signed at world market of different goods. Each one market
has had own specific organization and activity. Becouse of
that , we can divide world market for:
● free markes
● formal markets
● informal markets.

42.

Free market is a sum of individual contracts signed directly
between two firms from two countries.
Formal market is a sum of contracts signed indirectly under
the given conditions in particular place and time.
Informal market work without any formal regulations.
On formal market is possible to finalize contract only throught
middleman.
Middleman is a firm or person who could has a form/name:
goods stock exchange
dealer
auction
commission
own trade office
join-venture
production division abroad

43.

Informal market exist in a form of:
international raw materials agreements
international cartel agreements
regional trade agreements
intercorporations turnovers.

44.

5. International Trade Theories
International trade have a rich history to work out theories of international trade.
Up to now we can identify three grups of international trade theories:
preclassical theories
classical theories
neoclassical theories.
Within preclassical theories we can select:
awe of market deficyt theory
reasonable price theory
mercantilism

45.

Within the group of classical theories we can select:
* absolute advantage theory
* comparative advantage theory
* factor proportions theory.
Within the group of neoclassical theories we can select:
product life-cycle theory
country similarity theory
theory of economic of scale.

46.

Mercantilism was the was the first one, which
proposed the theoretical understanding of
international trade three key questions:
why does international trade exist and what
are its economic basis?
how much profitable is the trade for each of
the participating countries?
what is it necessary to choose for economic
growth; free trade or protectionism?

47.

A state, according to mercantilists, shoud:
● stimulate export and export more goods than import and
this approach will provide the gold inflow
● restrict the importation of goods, especially luxury goods
that will provide export balance of trade
● forbid the production of final products in its colonies
● forbid the exportation of raw materials from the parent
states to the colonies and allow free importaqtion of raw
materials, which are not obtained within the country
● stimulate an export of mainly cheap raw commodities from
the colonies
● forbid any trade of its colonies with other countries, except
the parent state, which can resell the colonial goods abroad
by itself.

48.

Nowadays, neomercantilism appears to be when the countries with
high rates of unemployment try to limit importin order to stimulate
domestic production and employment.
Mercantilism school dominated in economy during about
1,5 century. By the beginning od the 18-th century, international trade
had a huge numer of possible restrictions. The rules of trade were
contrary to the needs of production and there waqs a need for a
transition to free trade.
The theory o f international trade found its next
development in the writings of economists of the classical school.

49.

Development of international trade during the transition period of the developed
countries to large machne production led to the emergence of the
absolute advantage theory, developed by A. Smith.
A. Smith hold the view that the wealth of nations depends not so much on the
accumulated stoch of precious metals, but on the possibility of economy to produce final
goods abd services. Therefore, the main task of the country is not the accumulation of
gold and silver, butmaking arrangements to develop production on the basis of
cooperation and divition of labour.
A. Smith was the first one, who answered the guestion „Why is a country
interested in international exchange”. He believed that when two countries are trade
partners, they need to benefit from trade.
A. Smith theory became known as the absolute advantage theory, becouse it
was based on the absolute advantage: a country exports the goods, which costs of
production are lower than in a partner country, and imports the goods produced abroad
with lower costs.
The main conclusion of the theory ofabsolute advantage, is that every
country benefits from international trade and it is decisive for forming the external
sector of economy.

50.

The rule of international trade, depending on absolute
advantage, excluded countries without absolute advantage
from international trade. D. Ricardo developed the absolute
advantage theory and proved that the existence of absolute
advantege in the national production of any commodity is not
necessary precondition for the development of international
trade. He said that the international exchange is possible and
desirable in the presence of comparative advantages
countries.

51.

Comparative advantage theory states that if countries specialize in
the production of the commodities that have relatively lower costs
in comparisin with other countries, a trade will be mutually
beneficial for bith countries, regardless if whether the production in
one of tchem is more effective than in the other one. In the D.
Ricardo model, domestic prices are determined only by cost – by
supply conditions.
The limitations of the comparative theory are as below:
it does not take into account the impact of foreign trade
on income distribution within a country
impact of fluctuations in prices and wages
impact of international cpital movements
and does not explain the trade between almost identical

52.

The essence of absolute and comparative advantage theories
Sample
The production potential of two countries is equal = 1000
workers
Each country is able to produce:
country A 50 watches and 250 tons of wheat
country B
Total production
5 watches
and 125 tons of wheat
55 watches and 375 tons of wheat

53.

The essence of international division of labor/international
trade
Country
Production without
specialization x)
Production with
specialization
Profits from
specialization
Exchange of
goods/Foreign trade
Consumption xx)
watches
wheat
watches
wheat
watches
wheat
watches
wheat
watches
wheat
Country A
50
250
70
150
+20
-100
10
export
120
import
60
270
Country B
5
125
0
250
-5
+125
10
import
120
export
10
130
Total
55
375
70
400
+15
+25
X
X
70
400
x) without foreign trade /production is equel to comsumption,
xx) both countries realize foreign trade.

54.

Two Swedish scientists E. Heckscher and B. Ohlin in 30-s of XX
century work out new theory of international trade – the factor
proportions theory.
The essence of the Heckscher-Ohlin theory is as follows: each
country will export that factor abundant goods for the production if
which it uses relatively abundant and cheap factor of production and
will import the goods which require relatively scarce and expensive
resources.
The most important assumption of this theory is a different fictor
intensityof individual commodities ( one commodity is labor-intensive, the
other one is capital-intensive) and different abundant of individual countries
( one country has relatively more capital, the other one has relatively less
capital but relatively more labour).
The factor proprtions theory is an important instrument for the
analysis of international economy, showing the principle of general
equilibrium, which is subject to economic development.

55.

In the analysis of trade flows in the „triangle” of the United States – Western
Europe – Japan, the Heckscher-Ohlin theory faces difficulties and contradictions, which
attracted the attention of many economists, particulary the American Nobel Laureate
Wassily Leontief. The results of the Leontief-s research were names „Leontief-s
paradox”.
W . Leontief explain this paradox by division of labour into skilled and
unskilled. The United States exported the goods, whose production in other countries was
impossible or inefficient due to the lower labor skill. W. Leontief created the model of
„labor skill”, according to which, insted of the three factors (capital, land, labor) the
production includes four factors: skilled labor, unskilled labor, capital and land.
The main alternative theories usually include:
the product life-cycle theory,
the country similarity theory
the theory of economies of scale.

56.

The product life-cycle theory were developed by Raymond Vernon in 1966.
A product cinsistently passes four stages of life cycle:
The stage of appearence of a new product on the market shows the low sales.
The costs of implememtation of this product make the profits low too.
The stage of growth is characterized by growth of profits and sales growth
In the stage of maturity, the development of competition and marketsaturation
stabilize the sales and profits
In the stage of Decay, the products become obsolete, the sales and profits fall
off.
R. Vernon proves that in building up of trade ralations between countries an
important role played by technologies and researches, that the industrialized countries
have much more technological and scientific possibilities to develop a new product.

57.

The country similarity theory
was deeveloped by Swedish
economist Stefan Linder in 1961, where he takes as a basis the volume of
exchange of similar goods between countries with a comparable level of
development, without regard to the Hecjscher-Ohlin theorem.
The new approach was founded on the following pronciples:
The conditions of production depend on the conditions of demand.
efficiency of production is as high as demand
The conditions of domestic production depend mainly on the
domestic demand. It is the domestic representative demand that is
the basis of production and is necessary, but not a sufficient
conditio to export the goods
The foreign market is just a continuation of internal one, and the
international exchange is only the continuation of the interregional
one.
There is a conclusion, that international trade in manufactured
goods will be more intensive between the countries with the similar
income levels.

58.

The theory of economies of scale is not related to the theories
of camparative advantage or to the ratio of production factors. It recognizes the
different levels of markets monopolization and non-optimal using of factors of
production.
According to this theory, incountries with a large domestic market,
production must be placed to ensure the growth of the economic of scale effect of
production.
Becouse of the international trade, the number of
firms and variety of manufactured goods manufactured by
them increase and the price of goods reduced.

59.

6. Movements of international
production and trade factors
A.International trade in services
The term „services” covers a heterogeneous range of intangible
products and activities that are difficult to encapsulate within simple
definitione.
Services are the result of a production activity that changes the
conditions of the consuming units (transformation services) or facilitate the
exchange of products or financial assets (margin services). Services are
often difficult to separate from goods with which they may be associated
in varying degrees.
International trade in services provide monetary values by type of
services and by partner country.
.

60.

Services are classified according to the following main
categories:
-
manufacturing services on physical inputs owned by others
maintenance and repair services, not included elsewhere
transport
travel
construction
insurence and pension services
financial services
charges for the use of intellectual property, not included elsewhere
telecommunication, computer and information services
other business services
personal, ciltural and recreational services
government goods and services (public goods), not included
elsewhere.

61.

The provision of services often requires the physical
proximity of customer
and supplier, for example
accommodation services. On the other hand, nowadays services are
increasingly supplied via electronic means (over the internet, by
phone/mail, ctc.). Services may be supplied also through foreign
affiliates in the host country (e.g. a non-resident bank creates a
subsidiary in the host economy to supply banking services).
Services play a major role in all modern economies. An
efficient services sector is considered to be crucial for trade and
economic growth as well as for dynamic and resilient economies.
Value of world export of services
1980
1990
2000
2008
2017
367,1 mld USD
788,7 mld USD
1491,3 mld USD
3847,1 mld USD
5351,2 mld USD
-
15,8 % of world trade
19,3 % of world trade
19,6 % of world trade
20,0 % of world trade
23,5 % of world trade

62.

In this era of increasingly interconnected economies,
enterprises may operate in several countries and have trading
partners all over the world. This is also reflected in the rising
importance of cross-border trade in services. In this setting,
international trade flows have become more complex, forming
global value chains.
Services provide vital suport to the economy as a
whole and more specifically to industry, for example through
finance, logistics and communications. Increased trade in
services and widespread availability of services may boost
economic growth by improving the performance of other
industries, since services can provide key intermediate inputs,
especially in an increasingly interlinked and globalised world.

63.

B . International migration
International migration, as a practice, has a long history
with some turning points. Disintegration of the middle age societies
and accompanied changes such as reneissance, commercial revolution,
colonization, agricultyral revelutions, industrial reveolution, emergence
of free market societies, modern education and technological
advancement are some factors which nave contributed to the growth of
international migration.
In the recent past, globalization has further enhanced migration,
mainly through revolutionary changes in information technology.
Economic blocks like the European Union, has opened the gates of
international migration in their member states becouse of working
power shortages and political reasons.

64.

The initial financial cost of migration has been drastically reduced
due to low transport costs, cheap accommodation facilities, online travel
arrangements and availability of reliable destinations with low cost insurence
packages, created easy conditions for migration.
International conventions on migrants, peaceful environment in
many parts of the world, encouragement of skilled and professional labour
migration and modernlow cost cimmunication facilities have become major
incentives for international migration.
Natural disasters and manmade disasters such as wors, conflicts
and deteriorating political environments at oresentpresent, further contribute
towards migration.
The international migration consists of the two basic
interdependent processes: emigration and immigration.
Emmigration is a departure of people/labour from one country to
another.
Immigration is the entrance of labour to the receiving country.
Also as part of international flows of people distinguish
remigration which is the return of the labour to the country of emigration.

65.

The main forms of migration are:
- permanent migration
- time migration
- the illegal migration
Differently directed flows of labour, which cross national
borders, form the international labor market functioning in
interrelation with the markets of the capital, the goods and services. In
other words, the international labor market exists in the form of labor
migration.
The international labor migration is caused by both factors of
internal economic development of each separate country and external factors:
- a condition of the international economy as whole
- economic relations between the countries.
During the certain periods, as motive forces of the international
labor mobility could be the: political, military, religious, national,
cultural, family and other social factors. The reasons of the international
labor migration can be understood also only as concrete set of the named
factors.

66.

The international labor migration, first of all, is the form of movement
concerning surplus population from the centre of accumuiation of the capital to
another. It is the economic nature of labor migration.
However in the international labor migration oy only the unemployment,
but also a part of working population are involved. In this case, the driving motive of
migration is the search of more favorable working conditions. The labor moves
from the countries with a low standard of living and salaries to the countries with
higher ones. So, an objective basis of labor migration is national distinctions in the
level of wages.
Nowadays, directins of the international labor migration were generated:
♦ migration from developing countries to industrially developed
countries,
♦ migration within the limits of industriallydeveloped countries,
♦ labor migration between developing countries,
♦ migration of scientisrs and the quolified experts from industrially
developed countries to the developing ones
♦ migration from the former Soviet Union to the dveloped countries,
♦ labor migration of within the limits of former USSR.

67.

In 2015, countries leading in emigration were Mexico, India,
China, Russa, Ukraine and in turn, countries leading in immigration
were the USA, Russia, Germany, Saudi Arabia and Canada.
Consequences of the international labor migration are various
enough. They show up in the countries of emigration, as well as in
countries of immigration, bringing certain benefits and losses to both
parties.
The world as a whole wins, as migration freedom allows
people to move to the countries where they can bring more
significant contribution to world production.

68.

C. International technology transfer
The international technological exchange (technology transfer) is
understood to be the complex od the economic relations of different countries
concerning the transfer of scientific and technological achievements.
The scientific and technical knowledge being bought and sold in the
world market, which is the result of scientific, engineering and experience of their
commercial exploitation, as well as engineering services for the use of scientific,
technical, technological an managerial developments. They are the object of
intellectual property, possessing both scientific and commercial values.
The typical subject of international technology transfer are:
a patents and certificates
a copyright
a trademark
original industrial designs
know-how information
a variety of technical, design, commercial and marketing
documentation.

69.

These products of intellectual work belong to
so-called nonmaterial forms of technology, and trade
operations in international practice are commonly
referred to as international technological exchange.
Thus, international technological exchange is
understood to be the complex of economic relations
betweencontractors of different countries for transfer of
scientific and technological achievements (nonmaterial
types of technology) with scientific and practical
values, on the commercial basis.

70.

It should be noted that there are also non-commercial
forms of international technological exchange:
technical, scientific and professional journals, patent
pulications, periodicals and other specialized literaturę,
database and databanks
international exhibitions, fairs, symposia, conferences
exchange of delegations
migration of scientists and specialists
training of scientists and specialists in companies,
universities and organizations
education of undergraduate and graduate students
activities of international organizations in the field of science
and technology.

71.

Under modern conditions, international technological exchange
has certain features:
the intensive development of market of high technologies
the monopoly of large firms in technological goods markets
predominant position of technology policy of TNCs
special relationship between TNCs and the developing countries
participation in international technological exchange of
„venture” firms
development of international technical assistance.
The main buyers in the market of technologies are as follows:
foreign subsidiaries of TNCs
individual independent firms.

72.

The important role in international technology transfer
pay licenses. The growth of international license trade is due to a
numer of factors that encourage firms to sell nad buy licenses in the
world market. These factors are as below:
● commercial interests in the technology transfer,
● increased competition in the world market
● acceleration of the placing of new products in the
market
● gain to access to additional resources
● penetration and winning of difficult markets in the
countries with high tariff and non-tariff barriers

73.

● profits from the sale of licenses for the products that do not meet
the new strategic priorities
● countries with limited resources of scientific and technological
dvelopment, participating in international technological
exchange, have an opportunity to take a good position in the
world market without additional costs
● licenses help to create advertising of domestic products and
increase demand in other countries, as well as explore foreign
martkets
● political and legal motivation.

74.

International license relationships are mostly between
the developed countries. The proportion of the developed countries
as almost 98 % in the total revenues from international license trade.
In general, the turnover of license trade is about 30 bilion dollars per
year.
The common form of international technological exchange
is engineering.
Engineeringis a complex of engineering and consulting services for
using technology and other scientific and technological
developments.
The essence of international trade in engineering services
is to provide on the basis of the engineering agreement by one party
(a consultant) to the other one (a client) commercial engineering and
design, consulting, construction engineering services.

75.

The main characteristics of the market of engineering
services are as follows:
● results of the trade in engineering services are not embodied
in material types of product, but in some useful effect, which
may not have a material object
● engineering services related to the preparation and provision
of the process of production and realization, for intermadiate
consumtion of material goods and services
● the objects of sales are services, adapted for the use in
specific contexts and transfer of the average available
scientific and techncal, operational, commercial and other
expertise.

76.

D. Foreign Direct Investments movements
Foreign direct investment (FDI) has a special place among the
forms of international capital movements. This is due the following two main
reasons:
foreign direct investments is a real investments which, unlike portfolio
investments, is not purely financial assets denominated in the national
currency. It is investment in business, land and ither capital goods
foreign direct investments, unlike portfolio investment, usually
provides a managerial control over the object of the invested capital.
Foreign direct investment is a kind of foreign investment, intended
to invest in production and to provide the control over the activities of
enterprises by means of acquisition of a controlling interest.

77.

Selected indicators of FDI and international production and trade
growth
Item
Value at current prices (Billions of dollars ))
1990
2005-2007
2015
2016
2017
(pre-crisis average)
FDI inflows
205
1 415
1 921
1 868
1 430
FDI outflows
244
1 452
1 622
1 473
1 430
FDI inward stock
2 196
14 487
25 665
27 663
31 524
FDI outward
2 255
15 188
25 514
26 826
30 838
5,4
9,2
6,8
7,0
6,7
5 871
54 791
94 781
98 758
103 429
Employment by foreign affiliates (thousands)
27 034
57 392
69 683
71 157
73 209
GDP
23 433
52 383
74 407
75 463
79 841
4 414
14 957
20 953
20 555
22 558
Rate of return on inward FDI (%)
Total assets of foreign affiliates
Exports of goods and services

78.

Foreign direct investments is the basis of TNCs domination in
the world market. They allow the transnational corporations to use enterprises in
foreign countries for production and marketing of products and disseminating
rapidly new products and new technologies at the international level and, thus,
enhance their competitiveness, As far as they concerned, FDI are motivated
ultimately by profits.
The structure of the main factors of FDI from inwestor point of view are
as follows:
* marketing factors :
- market size
- market growth
- a tend to hold a market segment
- a tend to succeed in export of parent company
- the need to maintain close contact with customers
- dissatisfaction with the existing state of market
- export base
- following the buyers
- following the competition
* trade restrictions:
- trade barrirs
- preference of domestic goods by the local consumers

79.

* cost factors:
- a desire to be closer to sources of supply
- availability of labour resources
- availability of raw materials
- availibility of capital and technology
- low-cost labor
- low cost of other production costs
- low transport costs
- financial and other incentives offered by the government
- more favorable price level.
* investment climate:
- the overall attitude to foreign investment
- political stability
- restrictions in the ownership
- exchange rates adjustment
- stability of foreign currency
- the structure of taxes
- good knowledge of the country.

80.

The main factors of host country atractiveness for foreign
investors, are as follows:
- dynamics of the economy (economic potential)
- production capacity of industry
- dynamics of the market
- financial suport of the government
- human capital
- prestige of the state
- availability of raw materials
- the orientation to external markets (export potential)
- innovation potential
- social stability.
On the basis of expert estimates, the most attractive conditions for
FDI are possessed by the following countries: the USA, Canada, Germany,
Switzerland, and Asia-Pacific newly industrialized countries (NICs), as well
as Mid-South Europe countries.

81.

The analysis of FDI impact on the well-being of the individual
groups of population shows that foreign direct investment brings the
following:
* benefits:
to foreign firms and investors
to workers of the receiving country (workplaces)
to the population of the receiving country from possible increase
of social services because of taxes on income from FDI
* losses:
to workers of an investing country, as FDI means exports of
workplaces
to competing firms in the receiving country
to taxpayers of an investing country, as profits of TNCs are more
difficult to tax and the government either shift the shortfall in the tax
revenue to other payers or reduce the budget-funded social
programs.
In many countries in the sphere of investment policy there are
powerful cinflicting pressure groups, seeking to limit FDI inflow or their
wide attraction.

82.

7. International trade policy
International trade policy means a set of regulations
of international trade supposes purposeful of the state on
trade relations with other countries.
The main goals of foreign trade policy are:
● the volume change of export and imports
● changes in structure of foreign trade
● providing the country with the necessary resources
● the change in the ratio of export and imports prices.

83.

The basic line of government control of
international trade is the application of two different
types of foreign trade policy in combination:
liberalization (free trade policy) and protectionism.
Under the free trade policy is understood the
minimum of state interference in foreign trade, which
developed on the basis of free market forces of supply
and demend, and under the protectionism – the state
policy, which provides the protecting of the domestic
market from foreign competition through the use of tariff
and non-tariff trade instruments.
These two types of trade policy characterize
the measure of state intervention into international
trade.

84.

There are such forms of protectionism:
selective protectionism
collective protectionism
hidden protectionism.
Every country has economic, social and political
arguments, protecting interests of protectionism. The main
arguments for restrictions on foreign trade are:
♦ necessity of defense providing
♦ increase of domestic employment
♦ deversification for the sake of stability
♦ protection of infant industries
♦ protection for dumping
♦ cheap foreign labor force

85.

The instruments of state regulation of
international trade include the following:
► tariff methods that regulate mostly the imports
and protect domestic producers from foreign
competition, becouse they make prices of
foreign goods higher
► Non-tariff methods regulating both imports
and exports becouse they help to bring more
domestic products on the world market
making them more competitive.

86.

Most popular instrument of state regulation are
customs duties. Duties perform the following functions:
● a fiscal function
● a protectionist function
● a balance function.
Non-tariff barriers for international trade regulation
have quantitative nature. Quantitative restrictions include:
■ quotas (import, export and global)
■ licensing
■ voluntary export restraints

87.

The hidden international trade restrictions play the
essential role of non-tariff methods of trade policy. They include:
■ technical barriers
■ internal taxes and charges
■ public procurement
■ local content requirement.
Subsidies are direct payments toan exporter after the
export operation, which are equel to the difference between the
exoenditures and the received profit.
To hide the eport subsidies, governments use export
credits, providing financial incentives to develop exports by
domenstic producers. Export credits can be the following:
♦ subsidized credits for domestic exporters
♦ state credits for foreign importers.

88.

8. World economy sustainable
development

89.

Sustainable growth, traditionally, has meant the
reastically achievable growth that a company or national
economy could maintain without running into problems.
Today the term is frequantly used
by
environmentalists, meaning economic growth that can
continue over the long term without creating intolerable
pollution or using up all the non-renevable resources.

90.

91.

92.

Thank you

93.

94.

Globalization index 2016 and 2017
Country
Global
index
2017
Globalization factors 2016
Global index
2016
Economic
Social
Political
Netherlands
2 / 90,24
1 / 91,70
4 / 90,89
5 / 90,77
9 / 94,01
Germany
9 / 86,9
27 / 78,24
81 / 61,08
16 / 84,53
20 / 91,94
Poland
32 / 78,7
23 / 79,90
36 / 75,72
34 / 76,92
31 / 89,37
USA
25 / 79,9
34 / 75,71
89 / 59,40
28 / 79,15
16 / 92,19
China
87 / 61,2
73 / 60,73
126 / 49,97
87 / 53,32
47 / 84,81
Russia
56 / 69,1
45 / 69,40
111 / 54,91
56 / 66,55
18 / 92,10
Belgium
1 /90,47
-
-
-
-
Poland – Total globalization index
1992 – 42,8 ; 2004 – 62,2; 2008 – 610; 2011 – 59 ,5 ; 2014 – 61,3; 2017 - 78,7 ;

95.

Polish foreign trade development 1989 - 2016
1989
1992
bln USD
Export of goods
bln USD
%
bln USD
2008
2015
2016
%
bln USD
%
bln USD
%
bln USD
13,5
-
13,2
-
73,8
-
171,9
-
200,3
-
203,7
3,5
46,1
7,66
58,0
58,4
78,1
133,9
77,8
158,3
79,1
162,4
1,38
18,1
1,80
13,6
2,8
3,8
8,9
5,2
5,7
2,9
5,8
- UE
- Russia
%
2004
FDI inflow
.
.
0,4
-
12,7
-
14,7
-
7,5
-
11,4
Export of
services
-
-
6,7
-
13,5
-
35,5
-
43,4
-
43,9
GDP
66,9
-
88,7
-
252,9
-
530,2
-
474,8
-
467,0
EX / GDP*
-
29,2
-
32,4
42,2
43,6
PLN / 1 EUR
20,1
0,65**
-
15,8
1,36
*/ Economy oppenes coefficient **/ PLN/ 1 USD
3,65
2,41
3,77
4,36
%
79,7

96.

Country external stability model