ABSTRACT
Traditionally, cross-border commercial transactions were associated with trade in physical products. As other chapters note, other forms of international transactions, such as trade in services and FDI flows, are taking on increasing importance in the world of international business. Nevertheless, trade in products remains a key commercial activity for all states and therefore a vitally important area of the global economy. There has been a unique political economy attached to the opening of trade in tangibles and much of this chapter is devoted towards developing an understanding of why – despite the evident advantages of open markets – a number of core sectors remain highly protected. The chapter analyses the basic frame-
work for trade in goods, before examining core challenges for merchandise trade in the twentyfirst century. However, before these issues are addressed, it is worthwhile considering why states trade in the first place.
