ABSTRACT
The cost of transporting crude materials and crude food is relatively high compared with the value of the goods themselves; so transport costs had much to do with the volume of international trade. The reduction in trade barriers and the economic opening of countries such as China and Mexico, falling costs of getting goods to market are reasons for the increase in international trade. Trade with parts and semi-finished products increased considerably faster than trade with other goods. The mutual dependence of countries is increasing through international trade and distribution of production sites. Also foreign direct investments increased worldwide three times as fast as production. With decreasing transportation costs and increasing importance of product differentiation the share of similar products traded rose. Agricultural trade is concerned the increase in value of agricultural products traded is attributable partly to higher prices and partly to the higher quantities.
