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.
This chapter explains international trade and global trade systems.
These notes explain international trade.
International trade means exchange of:
between countries across national boundaries.
Countries trade to obtain goods they cannot produce or can purchase cheaply elsewhere.
(NCERT Page 70)
These notes explain levels of trade.
| Level |
|---|
| National Trade |
| International Trade |
Trade is mutually beneficial for both buyer and seller.
(NCERT Page 70)
These notes explain barter system.
Direct exchange of goods and services without money.
Barter system existed in primitive societies.
(NCERT Page 70)
These notes explain evolution 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)
These notes explain historical development of international trade.
| Feature |
|---|
| Trade restricted to local markets |
| Luxury goods dominated long-distance trade |
| Transport was risky |
| Fact |
|---|
| Connected Rome and China |
| Length: 6,000 km |
| Goods |
|---|
| Chinese silk |
| Roman wool |
| Precious metals |
| Fact |
|---|
| Began during 15th century |
| Europeans captured African natives |
| Slaves transported to Americas |
| Country |
|---|
| Portuguese |
| Dutch |
| British |
| Spaniards |
| Change |
|---|
| Demand for raw materials increased |
| Industrial nations exported finished goods |
| Non-industrial nations exported raw materials |
| Organisation |
|---|
| GATT |
| WTO |
WTO helped reduce trade tariffs.
(NCERT Pages 71–72)
These notes explain reasons for international trade.
| Principle |
|---|
| Comparative advantage |
| Complementarity |
| Transferability |
Specialisation and division of labour promote international trade.
(NCERT Page 72)
These notes explain the basis of international trade.
| Factor |
|---|
| Geological structure |
| Mineral resources |
| Climate |
| Product | Region |
|---|---|
| Wool | Cold regions |
| Rubber | Tropical regions |
| Cocoa | Tropical regions |
| Example |
|---|
| Chinese porcelain |
| Iranian carpets |
| Indonesian batik |
| Impact |
|---|
| Large internal trade |
| Limited external trade |
| Country Type | Exports |
|---|---|
| Agricultural countries | Agro products |
| Industrial countries | Machinery and finished goods |
| Importance |
|---|
| Industrial development |
| Trade expansion |
| Market creation |
| Importance |
|---|
| Expands trade |
| Supports long-distance trade |
| Reduces transport barriers |
(NCERT Pages 72–73)
These notes explain balance of trade.
Difference between value of exports and imports.
| Type | Meaning |
|---|---|
| Positive/Favourable | Exports > Imports |
| Negative/Unfavourable | Imports > Exports |
Negative balance exhausts financial reserves.
(NCERT Page 73)
These notes explain trade types.
Trade between two countries.
Trade with many countries.
| Term | Meaning |
|---|---|
| MFN | Most Favoured Nation |
(NCERT Page 73)
These notes explain free trade.
Opening economies by reducing trade barriers.
| Barrier |
|---|
| Tariffs |
| Restrictions |
| Advantage |
|---|
| Global competition |
| Increased trade |
| Problem |
|---|
| Harm to developing economies |
| Unequal competition |
Free trade may allow dumped goods to damage domestic industries.
(NCERT Page 73)
These notes explain dumping.
Selling goods in another country at unfairly low prices.
Dumping harms domestic producers.
(NCERT Page 73)
These notes explain WTO.
| Organisation | Year |
|---|---|
| GATT | 1948 |
| WTO | 1995 |
| Function |
|---|
| Promotes free trade |
| Resolves trade disputes |
| Creates trade rules |
| Area |
|---|
| Trade |
| Banking |
| Telecommunication |
| Intellectual rights |
| Criticism |
|---|
| Benefits rich countries |
| Developing countries disadvantaged |
| Environmental concerns ignored |
(NCERT Page 74)
These notes explain trade blocs.
Groups of countries promoting regional trade.
| 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)
These notes explain concerns of international trade.
| Benefit |
|---|
| Better living standards |
| Worldwide goods availability |
| Diffusion of culture |
| Higher production |
| Negative Impact |
|---|
| Dependency |
| Exploitation |
| Environmental degradation |
| Resource depletion |
Excessive global trade can harm environment and sustainability.
(NCERT Page 74)
These notes explain ports.
Gateways through which international trade occurs.
| Function |
|---|
| Docking |
| Loading |
| Unloading |
| Storage |
| Importance |
|---|
| Supports trade |
| Connects countries |
| Indicates hinterland development |
(NCERT Page 75)
These notes explain cargo-based port classification.
| Cargo |
|---|
| Grain |
| Sugar |
| Oil |
| Chemicals |
| Cargo |
|---|
| Manufactured goods |
| Packaged products |
| Passenger traffic |
(NCERT Page 75)
These notes explain location-based classification.
| Feature |
|---|
| Located away from sea |
| Connected by rivers/canals |
| Example |
|---|
| Kolkata |
| Manchester |
| Memphis |
| Feature |
|---|
| Deep water ports |
| Serve parent ports |
| Example |
|---|
| Piraeus (Greece) |
(NCERT Page 75)
These notes explain specialised ports.
| Function |
|---|
| Oil processing |
| Oil shipping |
| Example |
|---|
| Abadan |
| Tripoli |
| Maracaibo |
| Function |
|---|
| Refuelling |
| Water supply |
| Food supply |
| Example |
|---|
| Aden |
| Honolulu |
| Singapore |
| Feature |
|---|
| Ferry ports |
| Passenger and mail transport |
| Example |
|---|
| Dover |
| Calais |
Collection centres for export goods.
| Example |
|---|
| Singapore |
| Rotterdam |
| Copenhagen |
| Function |
|---|
| Strategic importance |
| Warship services |
| Example |
|---|
| Kochi |
| Karwar |
(NCERT Pages 75–76)
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 |
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 |
These questions are highly important for CBSE and UPSC.
These FAQs help in quick revision.
International trade is exchange of goods and services between countries. Answer Section Highlight (NCERT Page 70)
When exports exceed imports, it is called favourable balance of trade. Answer Section Highlight (NCERT Page 73)
Selling products abroad at unfairly low prices is called dumping. Answer Section Highlight (NCERT Page 73)
WTO is an international organisation regulating global trade. Answer Section Highlight (NCERT Page 74)
Entrepot ports are collection centres where goods are gathered for export. Answer Section Highlight (NCERT Page 76)
These points are useful for last-minute revision.