Question

What are the types of international trade?

Answer 1

International trade may be categorized into two types:

• Bilateral trade: Bilateral trade is done by two countries with each other. They enter into an agreement to trade specified commodities amongst them. For example, country A may agree to trade some raw material with an agreement to purchase some other specified item to country B or vice versa.
• Multi-lateral trade: As the term suggests multi-lateral trade is conducted with many trading countries. The same country can trade with a number of other countries. The country may also grant the status of the “Most Favoured Nation” (MFN) to some of the trading partners.