Course Introduction and Background

International trade, the cross-border exchange of goods and services, is now widely acknowledged as an important engine of growth in most developing and transition economies. The recent ministerial meetings of WTO have further demonstrated the importance of international trade and investment flows, with many developing economies joining hands to vigorously defend their interests in this area.

International trade, the cross-border exchange of goods and services, is now widely acknowledged as an important engine of growth in most developing and transition economies. The recent ministerial meetings of WTO have further demonstrated the importance of international trade and investment flows, with many developing economies joining hands to vigorously defend their interests in this area. While countries need to actively engage in negotiations with others to create a favourable international environment, each must also ensure that its domestic environment is favourable to trade development.

Whether the domestic environment is favourable can ultimately be measured by the economic cost of importing or exporting specific goods and services into or from the domestic market. In most economies, major transaction cost factors would include transportation and financing (including insurance) as well as red tape. Unpredictable and/or uncompetitive transportation, financing or procedurals and documentation costs can all be formidable barriers to trade for SMEs.

The Financing of trade and investment has long been identified as one of the most challenging issues faced by new enterprises and SMEs in developing or transition economies. The issue of financing is particularly important, as financing is needed not only during the export process itself, but also for the production of the goods and services to be exported, which may include imports of raw material or intermediate goods. Lack of financing at any time during the production and/or the export process will result in a failed transaction. The key question this course will address is: How can the public and private sector work together to facilitate the flow of international trade and investment which fuels growth and economic development?