Introduction
These Class 12 Geography Chapter 8 Notes explain the concept of international trade, its history, basis, balance of trade, free trade, WTO, trade blocs and ports. The chapter highlights the importance of global trade in economic development and international relations. (NCERT Pages 70–76)
This chapter is highly important for CBSE Board Exams, UPSC, SSC, State PSC and CUET examinations.
Chapter Overview
This chapter explains international trade and global trade systems.
Major Topics Covered
- Meaning of International Trade
- Barter System
- History of International Trade
- Basis of International Trade
- Balance of Trade
- Types of International Trade
- Free Trade
- Dumping
- World Trade Organisation (WTO)
- Regional Trade Blocs
- Concerns Related to International Trade
- Ports and Gateways of International Trade
- Types of Ports
NCERT NOTES
International Trade (NCERT Page 70)
These notes explain international trade.
Meaning of International Trade
International trade means exchange of:
- Goods
- Services
between countries across national boundaries.
Countries trade to obtain goods they cannot produce or can purchase cheaply elsewhere.
(NCERT Page 70)
Levels of Trade (NCERT Page 70)
These notes explain levels of trade.
Levels of Trade
| Level |
|---|
| National Trade |
| International Trade |
Trade is mutually beneficial for both buyer and seller.
(NCERT Page 70)
Barter System (NCERT Page 70)
These notes explain barter system.
Barter System
Meaning
Direct exchange of goods and services without money.
Example
- Pots exchanged for plumbing services.
Barter system existed in primitive societies.
(NCERT Page 70)
Introduction of Money (NCERT Pages 70–71)
These notes explain evolution of money.
Early Forms of Money
| Early Currency |
|---|
| Cowrie shells |
| Salt |
| Gold |
| Silver |
| Skins |
| Rice |
The word “salary” comes from Latin word Salarium, meaning payment by salt.
(NCERT Page 71)
History of International Trade (NCERT Pages 71–72)
These notes explain historical development of international trade.
Early Trade
Important Features
| Feature |
|---|
| Trade restricted to local markets |
| Luxury goods dominated long-distance trade |
| Transport was risky |
Silk Route
Important Facts
| Fact |
|---|
| Connected Rome and China |
| Length: 6,000 km |
Goods Traded
| Goods |
|---|
| Chinese silk |
| Roman wool |
| Precious metals |
European Colonialism and Slave Trade
Important Facts
| Fact |
|---|
| Began during 15th century |
| Europeans captured African natives |
| Slaves transported to Americas |
Countries Involved
| Country |
|---|
| Portuguese |
| Dutch |
| British |
| Spaniards |
Industrial Revolution and Trade
Important Changes
| Change |
|---|
| Demand for raw materials increased |
| Industrial nations exported finished goods |
| Non-industrial nations exported raw materials |
Modern Trade Organisations
Important Organisation
| Organisation |
|---|
| GATT |
| WTO |
WTO helped reduce trade tariffs.
(NCERT Pages 71–72)
Why Does International Trade Exist? (NCERT Page 72)
These notes explain reasons for international trade.
Reasons for International Trade
Main Principles
| Principle |
|---|
| Comparative advantage |
| Complementarity |
| Transferability |
Specialisation and division of labour promote international trade.
(NCERT Page 72)
Basis of International Trade (NCERT Pages 72–73)
These notes explain the basis of international trade.
Difference in National Resources
Factors
| Factor |
|---|
| Geological structure |
| Mineral resources |
| Climate |
Examples
| Product | Region |
|---|---|
| Wool | Cold regions |
| Rubber | Tropical regions |
| Cocoa | Tropical regions |
Population Factors
Cultural Factors
| Example |
|---|
| Chinese porcelain |
| Iranian carpets |
| Indonesian batik |
Population Size
| Impact |
|---|
| Large internal trade |
| Limited external trade |
Stage of Economic Development
| Country Type | Exports |
|---|---|
| Agricultural countries | Agro products |
| Industrial countries | Machinery and finished goods |
Foreign Investment
Importance
| Importance |
|---|
| Industrial development |
| Trade expansion |
| Market creation |
Transport
Importance
| Importance |
|---|
| Expands trade |
| Supports long-distance trade |
| Reduces transport barriers |
(NCERT Pages 72–73)
Balance of Trade (NCERT Page 73)
These notes explain balance of trade.
Balance of Trade
Meaning
Difference between value of exports and imports.
Types of Balance of Trade
| Type | Meaning |
|---|---|
| Positive/Favourable | Exports > Imports |
| Negative/Unfavourable | Imports > Exports |
Negative balance exhausts financial reserves.
(NCERT Page 73)
Types of International Trade (NCERT Page 73)
These notes explain trade types.
Bilateral Trade
Meaning
Trade between two countries.
Multilateral Trade
Meaning
Trade with many countries.
Important Term
| Term | Meaning |
|---|---|
| MFN | Most Favoured Nation |
(NCERT Page 73)
Free Trade and Trade Liberalisation (NCERT Page 73)
These notes explain free trade.
Free Trade
Meaning
Opening economies by reducing trade barriers.
Trade Barriers
| Barrier |
|---|
| Tariffs |
| Restrictions |
Advantages
| Advantage |
|---|
| Global competition |
| Increased trade |
Problems
| Problem |
|---|
| Harm to developing economies |
| Unequal competition |
Free trade may allow dumped goods to damage domestic industries.
(NCERT Page 73)
Dumping (NCERT Page 73)
These notes explain dumping.
Meaning of Dumping
Selling goods in another country at unfairly low prices.
Dumping harms domestic producers.
(NCERT Page 73)
World Trade Organisation (WTO) (NCERT Page 74)
These notes explain WTO.
WTO
Formation
| Organisation | Year |
|---|---|
| GATT | 1948 |
| WTO | 1995 |
Headquarters
- Geneva, Switzerland
Members
- 166 countries (as of December 2024)
Functions
| Function |
|---|
| Promotes free trade |
| Resolves trade disputes |
| Creates trade rules |
Areas Covered
| Area |
|---|
| Trade |
| Banking |
| Telecommunication |
| Intellectual rights |
Criticism of WTO
| Criticism |
|---|
| Benefits rich countries |
| Developing countries disadvantaged |
| Environmental concerns ignored |
(NCERT Page 74)
Regional Trade Blocs (NCERT Page 74)
These notes explain trade blocs.
Regional Trade Blocs
Meaning
Groups of countries promoting regional trade.
Objectives
| Objective |
|---|
| Encourage trade |
| Remove tariffs |
| Increase regional cooperation |
Around 120 regional trade blocs generate 52% of world trade.
Trade blocs promote intra-regional trade.
(NCERT Page 74)
Concerns Related to International Trade (NCERT Page 74)
These notes explain concerns of international trade.
Benefits
| Benefit |
|---|
| Better living standards |
| Worldwide goods availability |
| Diffusion of culture |
| Higher production |
Negative Impacts
| Negative Impact |
|---|
| Dependency |
| Exploitation |
| Environmental degradation |
| Resource depletion |
Excessive global trade can harm environment and sustainability.
(NCERT Page 74)
Gateways of International Trade – Ports (NCERT Page 75)
These notes explain ports.
Ports
Meaning
Gateways through which international trade occurs.
Functions
| Function |
|---|
| Docking |
| Loading |
| Unloading |
| Storage |
Importance
| Importance |
|---|
| Supports trade |
| Connects countries |
| Indicates hinterland development |
(NCERT Page 75)
Types of Ports According to Cargo Handled (NCERT Page 75)
These notes explain cargo-based port classification.
Industrial Ports
Handle
| Cargo |
|---|
| Grain |
| Sugar |
| Oil |
| Chemicals |
Commercial Ports
Handle
| Cargo |
|---|
| Manufactured goods |
| Packaged products |
| Passenger traffic |
Comprehensive Ports
Important Feature
- Handle both bulk and general cargo.
(NCERT Page 75)
Types of Ports According to Location (NCERT Page 75)
These notes explain location-based classification.
Inland Ports
Features
| Feature |
|---|
| Located away from sea |
| Connected by rivers/canals |
Examples
| Example |
|---|
| Kolkata |
| Manchester |
| Memphis |
Out Ports
Features
| Feature |
|---|
| Deep water ports |
| Serve parent ports |
Example
| Example |
|---|
| Piraeus (Greece) |
(NCERT Page 75)
Types of Ports According to Specialised Functions (NCERT Pages 75–76)
These notes explain specialised ports.
Oil Ports
Functions
| Function |
|---|
| Oil processing |
| Oil shipping |
Examples
| Example |
|---|
| Abadan |
| Tripoli |
| Maracaibo |
Ports of Call
Functions
| Function |
|---|
| Refuelling |
| Water supply |
| Food supply |
Examples
| Example |
|---|
| Aden |
| Honolulu |
| Singapore |
Packet Stations
Features
| Feature |
|---|
| Ferry ports |
| Passenger and mail transport |
Examples
| Example |
|---|
| Dover |
| Calais |
Entrepot Ports
Meaning
Collection centres for export goods.
Examples
| Example |
|---|
| Singapore |
| Rotterdam |
| Copenhagen |
Naval Ports
Functions
| Function |
|---|
| Strategic importance |
| Warship services |
Indian Examples
| Example |
|---|
| Kochi |
| Karwar |
(NCERT Pages 75–76)
Important Concepts and Terms
These concepts are highly important for exams.
| Term | Meaning |
|---|---|
| Barter System | Exchange without money |
| Balance of Trade | Difference between exports and imports |
| Dumping | Selling at unfairly low prices |
| WTO | Organisation regulating global trade |
| Trade Liberalisation | Reduction of trade barriers |
| Entrepot Port | Collection centre for exports |
Important Tables and Classification
These tables are useful for quick revision.
| Type of Trade | Meaning |
|---|---|
| Bilateral Trade | Trade between two countries |
| Multilateral Trade | Trade among many countries |
| Type of Port | Function |
|---|---|
| Industrial Port | Bulk cargo |
| Commercial Port | General cargo |
| Comprehensive Port | Bulk + general cargo |
| Port Type | Example |
|---|---|
| Inland Port | Kolkata |
| Out Port | Piraeus |
| Naval Port | Kochi |
Important Questions
These questions are highly important for CBSE and UPSC.
Very Short Answer Questions
- Define international trade. (NCERT Page 70)
- What is barter system? (NCERT Page 70)
- What is dumping? (NCERT Page 73)
- What is balance of trade? (NCERT Page 73)
- What is WTO? (NCERT Page 74)
Short Answer Questions
- Explain causes of international trade. (NCERT Pages 72–73)
- Discuss balance of trade. (NCERT Page 73)
- Explain free trade. (NCERT Page 73)
- Describe functions of WTO. (NCERT Page 74)
- Explain regional trade blocs. (NCERT Page 74)
Long Answer Questions
- Explain the basis of international trade. (NCERT Pages 72–73)
- Discuss advantages and disadvantages of international trade. (NCERT Page 74)
- Explain classification of ports. (NCERT Pages 75–76)
- Discuss evolution of international trade. (NCERT Pages 71–72)
- Explain importance of ports in global trade. (NCERT Pages 75–76)
FAQs
These FAQs help in quick revision.
1. What is international trade?
International trade is exchange of goods and services between countries. Answer Section Highlight (NCERT Page 70)
2. What is favourable balance of trade?
When exports exceed imports, it is called favourable balance of trade. Answer Section Highlight (NCERT Page 73)
3. What is dumping?
Selling products abroad at unfairly low prices is called dumping. Answer Section Highlight (NCERT Page 73)
4. What is WTO?
WTO is an international organisation regulating global trade. Answer Section Highlight (NCERT Page 74)
5. What are entrepot ports?
Entrepot ports are collection centres where goods are gathered for export. Answer Section Highlight (NCERT Page 76)
Quick Revision Summary
These points are useful for last-minute revision.
- International trade means exchange between countries.
- Barter system involved direct exchange without money.
- Silk Route connected Rome and China.
- Industrial Revolution expanded global trade.
- Trade depends on comparative advantage.
- National resources form basis of trade.
- Balance of trade compares exports and imports.
- Bilateral trade occurs between two countries.
- Free trade reduces tariffs and restrictions.
- Dumping harms domestic producers.
- WTO was established in 1995.
- Regional trade blocs promote regional trade.
- International trade can harm environment.
- Ports are gateways of international trade.
- Comprehensive ports handle bulk and general cargo.
- Naval ports serve strategic purposes.
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