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Differentiate between bilateral trade and multilateral trade. Explain how ports are helpful in trade.

Answer:

Bilateral trade: It is the exchange of goods between two countries. Bilateral trade agreements give preference to certain countries in commercial relationships, facilitating trade and investment between the home country and the foreign country by reducing or eliminating tariffs, import quotas, export restraints and other trade barriers. Bilateral trade agreements can also help minimize trade deficits.

Multilateral trade: A trading system that facilitates the exchange of financial instruments between multiple countries. Multilateral trading allows eligible contract participants to gather and transfer a variety of securities, especially instruments that may not have an official market. These facilities are often electronic systems controlled by approved market operators or larger investment banks. Traders will usually submit orders electronically, where a matching software engine is used to pair buyers with sellers.

Ports are backbone of world trade, and play a key role in inward and outward movement of goods, and countries, which built good ports with excellent infrastructure became competitive manufacturing centers/hubs. Good quality port infrastructure is essential for the growth of trade and competitiveness of the manufacturing sector For example, Port sector plays an important role in the growth of Indian economy, 90 per cent of trade by volume and 70 percent of trade by value is carried out by maritime transportation, which involves handling through port. Trade or manufacturing based economy cannot grow without sufficient high quality port infrastructure.