6.1 Introduction

Watch or Listen to the Following Media Clip 

Media 6.1 Why Do Countries Trade? [Video]. Mindlever Education Centre.

Learning Objectives

After reading this chapter, you should be able to understand and answer the following questions:

  1. Describe the International Chamber of Commerce (ICC) Incoterms.
  2. Explain different ways to facilitate and promote trade.
  3. Introduce Harmonized commodity classification system and its use in international trade.


This chapter will provide different ways to facilitate international freight flows. As you have seen in the previous chapters, complex international trade is important, and countries gain by participating in trade activities. Here, we will look into various approaches that can be used to simplify trade. The chapter starts with an introduction to Incoterms rules that manage trade complexity by guiding importers and exporters on cost and risk decisions. Then, realizing that international trade is beneficial, it should be facilitated and promoted through economic integration and trade security programs. Finally, we will look into the product classification system of Harmonized System Coding and how it helps simplify international trade.

Assessing What you Already Know

Play the simulation below multiple times to see how different choices lead to different outcomes. All simulations allow unlimited attempts so that you can gain experience applying the concepts.

Simulation: International Trade


Media Attributions and References

Mindlever Education Centre. (n.d.). Why do countries trade? [Video]. YouTube. https://youtu.be/-IW8ZzY3xt8.



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