Absolute advantage: A country has an absolute advantage if its output per unit of input of all goods and services produced is higher than that of another country.
Autarky: An autarky is an economy that does no trade with the outside world, or an ecosystem not affected by influences from its outside, and relies entirely on its own resources.
Ad valorem tax: (in Latin: to the value added) - a tax based on the value (or assessed value) of property.
Aggregate demand: is the sum of all demand in an economy. This can be computed by adding the expenditure on consumer goods and services, investment, and not exports (total exports minus total imports).
Aggregate supply: is the total value of the goods and services produced in a country, plus the value of imported goods less the value of exports.
Average propensity to consume: is the proportion of income the average family spends on goods and services.
Average propensity to save: is the proportion of income the average family saves (does not spend on consumption).
Average total cost: is the sum of all the production costs divided by the number of units produced.
Assessment: A study to determine whether, and to what extent, labour practices comply with the provisions of a code of labour practice. The term can refer to the study of a workplace but can also apply to more general studies such as to an industry within a country.
Audit: A thorough formal examination of the labour practices of a particular workplace or company, based on corroborated evidence.
AFTA: (otherwise known as the Andean-FTA): The Andean Free Trade Agreement is being negotiated between the United States, Colombia, Ecuador, and Peru (with the possibility of including Bolivia at a later time).
Balance of trade: The difference in value over a period of time between a country's imports and exports.
Barter system: System where there is an exchange goods without involving money.
Base year: In the construction of an index, the year from which the weights assigned to the different components of the index is drawn. It is conventional to set the value of an index in its base year equal to 100.
Bimetallism: Bimetallism is a monetary standard in which the value of the monetary unit can be expressed either with a certain amount of gold or with a certain amount of silver: the ratio between the two metals is fixed by law.
Bear: An investor with a pessimistic market outlook; an investor who expects prices to fall and so sells now in order to buy later at a lower price.
Bid price: The highest price an investor is willing to pay for a stock.
Bill of exchange: A written, dated, and signed three-party instrument containing an unconditional order by a drawer that directs a drawee to pay a definite sum of money to a payee on demand or at a specified future date. Also known as a draft. It is the most commonly used financial instrument in international trade.
Birth rate: The number of births in a year per 1,000 population.
Bond: A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal.
Boom: A state of economic prosperity
Break even: This is a term used to describe a point at which revenues equal costs (fixed and variable).
Budget: A summary of intended expenditures along with proposals for how to meet them. A budget can provide guidelines for managing future investments and expenses.
Budget deficit: is the amount by which government spending exceeds government revenues during a specified period of time usually a year.
Bull: An investor with an optimistic market outlook; an investor who expects prices to rise and so buys now for resale later .
Bilateral Trade Agreement: A trade agreement between a small group of countries - this term should indicate a trade agreement between just two countries, but it gets loosely used in trade agreements with five or more countries.
Code implementation: The policies, procedures and activities that a company needs to put in place in order to implement a code of practice.
Cotton Corporation of India Ltd. CCI CAFTA: The Central American Free Trade Agreement (otherwise known as DR-CAFTA) is a pending agreement that has been negotiated between the United States, five Central American countries.
Code initiatives: Organisations, such as ETI, whose role is to establish and/or encourage the implementation of codes of labour practice.
Code of practice/conduct: A set of standards concerning labour practices adopted by a company and meant to apply internationally, and, in particular, to the labour practices of its suppliers and subcontractors.
Collective bargaining: The right to collective bargaining refers to the right for workers' organisations to negotiate with employers or employers' organisations on behalf of their members to determine working conditions and terms of employment.
Continuous improvement: It refers to a system of constant or ongoing incremental improvements to a process or product based on constant or ongoing examination and evaluation of the process or product.
Corporate Social Responsibility (CSR): A concept of business ethics based on the idea that companies have stakeholders who are broadly defined as anyone or group affected by the activities of the company.
Cash Crops: Crops such as coffee or cut flowers grown specifically for export.
Civil Society: This term refers to all of the organizations which are not public or for-profit institutions.
Codes of Conduct: Represent voluntary guidelines for treatment of workers and business behavior. In some cases the acceptance of inspections by independent agencies is a key factor of the guidelines.
Comparative Advantage: A component of free market theory that states that if each nation made just those things which it could produce cheaper relative to a foreign country and then trade with other nations to get that which they could produce relatively cheaper, wealth would expand and everyone would benefit.
Conditionality: Countries must adopt specified economic policies as a condition for receiving a loan from multilateral financial institutions such as the International Monetary Fund or the World Bank.
Call money: Price paid by an investor for a call option. There is no fixed rate for call money. It depends on the type of stock, its performance prior to the purchase of the call option, and the period of the contract. It is an interest bearing band deposits that can be withdrawn on 24 hours notice.
Capital: Capital is the contribution to productive activity made by investment is physical capital (machinery, factories, tools and equipments) and human capital (eg general education, health).
Capital account: Part of a nation's balance of payments that includes purchases and sales of assets, such as stocks, bonds, and land.
Capital budget: A plan of proposed capital outlays and the means of financing them for the current fiscal period.
Capital gain tax: Tax paid on the gain realized upon the sale of an asset. It is a tax on profits from the sale of capital assets, such as shares.
Cartel: An organization of producers seeking to limit or eliminate competition among its members, most often by agreeing to restrict output to keep prices higher than would occur under competitive conditions.
Census: Official gathering of information about the population in a
particular area.
Central bank: Major financial institution responsible for issuing currency, managing foreign reserves, implementing monetary policy, and providing banking services to the government and commercial banks.
Centrally planned economy: An economic system in which the production, pricing, and distribution of goods and services are determined by the government rather than market forces.
Closed economy: An economy in which there are no foreign trade transactions or any other form of economic contacts with the rest of the world.
Collateral security: Additional security a borrower supplies to obtain a
loan.
Commercial Policy: encompassing instruments of trade protection employed by countries to foster industrial promotion, export diversification, employment creation, and other desired development-oriented strategies. They include tariffs, quotas, and subsidies.
Compound interest: Interest paid on the original principal and on interest
accrued from time it became due.
Cost benefit analysis: A technique that assesses projects through a comparison between their costs and benefits, including social costs and benefits for an entire region or country.
Cross elasticity of demand: The change in the quantity demanded of one product or service impacting the change in demand for another product or service.
Crowding out: The possible tendency for government spending on goods and services to put upward pressure on interest rates, thereby discouraging private investment spending.
Currency appreciation: An increase in the value of one currency relative to another currency.
Currency board: Form of central bank that issues domestic currency for foreign exchange at fixed rates.
Currency substitution: The use of foreign currency (e.g., U.S. dollars) as a medium of exchange in place of or along with the local currency (e.g., Rupees).
Customs duty: Duty levied on the imports of certain goods. Includes excise equivalents Unlike tariffs customs duties are used mainly as a means to raise revenue for the government rather than protecting domestic producers from foreign competition.
Deflation: a reduction in the level of national income and output, usually accompanied by a fall in the general price level.
Developed country: is an economically advanced country whose economy is characterized by a large industrial and service sector and high levels of income per head.
Direct investment: Foreign capital inflow in the form of investment by foreign-based companies into domestic based companies.
Direct tax: A tax that you pay directly, as opposed to indirect taxes, such as tariffs and business taxes. The income tax is a direct tax, as are property taxes.
Double taxation: Quantitative measure of the change in size/volume of economic activity, usually calculated in terms of gross national product (GNP) or gross domestic product(GDP).
Duopoly: A market structure in which two producers of a commodity compete with each other.
Desk-based risk assessments: A preliminary assessment by a sourcing company of its suppliers. The desk-based risk assessment normally takes the form of a questionnaire sent to suppliers with the intention of highlighting the areas of greatest risk in terms of labour practices.
Exchange control: A governmental policy designed to restrict the outflow of domestic currency and prevent a worsened balance of payments position by controlling the amount of foreign exchange that can be obtained or held by domestic citizens.
Exchange rate: The price of one currency stated in terms of another currency.
Export incentives: Public subsidies, tax rebates, and other kinds of financial and nonfinancial measures designed to promote a greater level of economic activity in export industries.
Exports: The value of all goods and nonfactor services sold to the rest of the world; they include merchandise, freight, insurance, travel, and other nonfactor services.
Exchange control: A governmental policy designed to restrict the outflow of domestic currency and prevent a worsened balance of payments position by controlling the amount of foreign exchange that can be obtained or held by domestic citizens.
Freedom of association: The right of all workers to join or form a trade union of their own choosing and carry out trade union activities without interference from their employer or from public authorities.
Fair Trade: These companies negotiate directly with the growers or producers of products to establish a fair price for the product.
FDI: Foreign Direct Investment is the purchase by the investors or corporations of one country of non-financial assets in another country.
Free trade: The theory of free trade contends that everyone in the world will be better off if each nation eliminates tariffs and other barriers to the flow of products across borders.
Free on Board: Indicates that all delivery, inspection and elevation, or loading costs involved in putting commodities on board a carrier have been paid.
FTA: A free trade area is a term used for a group of states that have reduced or eliminated trade barriers between themselves, but who maintain their own individual tariffs as to other states.
GATT: The General Agreement on Tariffs and Trade, established in 1947 was the international negotiating framework for eight rounds of international negotiations over tariff reductions and trade rules.
Globalization: The term frequently used to identify a trend toward increased flow of goods, services, money, and ideas across national borders and the subsequent integration of the global economy.
Gross domestic product: (GDP) The total of goods and services produced by a nation over a given period, usually 1 year. Gross Domestic Product measures the total output from all the resources located in a country, wherever the owners of the resources live.
Gross national product (GNP): is the value of all final goods and services produced within a nation in a given year, plus income earned by its citizens abroad, minus income earned by foreigners from domestic production.
Government Procurement Policies: Rules utilized by governments for purchasing of goods and services.
Informal work/er: Informal work refers to work performed in an employment relationship that is not recognised or protected under legal or regulatory frameworks.
Inspection: A visit made to a workplace by an authorised outside organisation or individual for the purpose of checking whether a code of labour practice is being applied.
Intellectual Property Rights: The right to control and derive the benefits from writing (copyright), inventions (patents), processes (trade secrets) and identifiers (trademarks). See also Trade Related Intellectual Property Rights.
Monitoring: Monitoring refers to the surveillance of labour practices against a standard by a person (or persons) with a continuous or frequent presence in the workplace and unobstructed access to management and staff.
Offshoring: It can be defined as relocation of business processes (including production/manufacturing) to a lower cost location, usually overseas.
Protectionism: It is the economic policy of relying on tariffs for government revenue in order to reduce or eliminate other forms of taxation, such as income and sales taxes.
Privatization: The process of private, for-profit businesses taking over the provision of public services.
Race to the Bottom: The constant search for cheaper wages, lower taxes and weaker environmental and other regulations, produces a downward spiral in socio-economic conditions in the United States and in countries around the world.
Sanction: A punitive mechanism used. to encourage a country to adopt or revise its policies. Trade sanctions might include increases in tariffs.
Sourcing company: A company that purchases product from another company, for either direct or indirect onward sale to the consumer.
Sovereignty: The principle that the state exercises absolute power over its territory, system of government, and population.
Subsidies: Grants of money made by the government to either a seller or a buyer of a certain product or service, thereby altering the price or cost in a way which affects the output.
Sustainability: Meeting the needs of the present without compromising the ability of future generations to meet their own needs.
Stakeholder: The term refers to any individual, community or organisation that affects or is affected by the operations of a company.
Sustainable Growth: Growth that does not negatively affect the poor, workers and the environment; economic growth that is just and fair and improves the likelihood of such growth in the future.
Tariff: A duty(or tax) applied to goods transported from one country to another, or on imported products.
Trade union organisation: There are two kinds of trade union organisations - those that have workers as members and those that have trade unions as members.
Trade Bloc: A trade bloc is a large free trade zone or near-free trade zone formed by one or more tax, tariff and trade agreements.
Trade Deficit: The value of a nation's imports exceeds the value of its exports.
Trade Liberalization: The reduction of tariffs, quotas, and other barriers to permit more foreign trade and investment.
VAT: A form of indirect sales tax paid on products and services at each stage of production or distribution, based on the value added at that stage and included in the cost to the ultimate customer.
Verification: Verification concerns the impartial examination and certification of claims made about the actual observance of code provisions by suppliers or of claims made about the activities that a company undertakes to give effect to its code.
Trade Abbreviations
APC: African, Caribbean and Pacific
ACT: Australian Capital Territory
ADB: African Development Bank
Asian: Development Bank
AID: (US) Agency for International Development
ASEAN: Association of South East Asian Nations
ASSR: Autonomous Soviet Socialist Republic
APEDA: Agriculture & Processed Food Products Export Development Authority
ASSOCHAM: Associated Chambers of Commerce and Industry
AEPC: Apparel Export Promotion Council
AIMO: All India Manufacturers Organisation
CACM: Central American Common Market
CARICOM : Caribbean Community and Common Market
CIS: Commonwealth of Independent States
COMESA: Common Market for Eastern and Southern Africa
CPSU: Communist Part of the Soviet Union
C/F: Cost, Insurance & Freight
C & F: Cost and Freight
CLE: Council for Leather Exports
CAPEXIL: Chemicals & Allied Products Export Promotion Council
CEPC: Carpet Export Promotion Council
TEXPROCIL: Cotton Textile Export Promotion Council
CSB: Central Silk Board
CCIC: Central Cottage Industries Corporation
CEPC: Cashew Export Promotion Council
CII: Confederation of Indian Industry
D/A: Documents against acceptance
D/P: Documents against payment
DDP: Delivered Duty Paid (Name, place of destination)
DDU: Delivered Duty Unpaid
DAF: Delivered at Frontier (named place)
DGCI&S: Directorate-General of Commercial Intelligence & Statistics
EBRD: European Bank for Reconstruction and Development
EC: European Community
ECE: (United Nations) Economic Commission for Europe
ECLAC: (United Nations)Economic Commission for Latin
ECOSOC: (United Nations) Economic and Social Council
ECOWAS: Economic Community of West African States
ECU: European Currency Unit
EFTA: European Free Trade Association
ESCAP: Economic and Social Commission for Asia and the Pacific (United
Nations)
ESCWA: Economic and Social Commission for Western Asia (United Nations)
EIC: Export Inspection Council
ECGC: Export Credit Guarantee Corporation of India Ltd.
EEPC: Engineering Export Promotion Council
ECSEPC: Electronics & Computer Software Export Promotion Coucil
FOB: Free on Board
FCA: Free Carrier (named place)
FAS: Free alongside Ship (name port of shipment)
FAO: Food and Agriculture Organization
FASII: Federation of Associations of Small Industries in India
FICCI: Federation of Indian Chamber of Commerce & Industry
FIEO: Federation of Indian Export Organisations
GATT: General Agreement on Tariffs and Trade
GDP : Gross Domestic Product
GMT: Greenwich Mean Time
GNP: Gross National Produdct
G&JEPC: Gem & Jewellery Export Promotion Council
HEPC: Handloom Export Promotion Council
IEC: Import, Export Code Number
IBRD: International Bank for Reconstruction and Development (World Bank)
ICC: International Chamber of Commerce
IDB: Inter-American Development Bank
IMF: International Monetary Fund
IIP: Indian Institute of Packaging
IIC: Indian Investment Centre
IIFT: Indian Institute of Foreign Trade
JCI: Jute Corporation of India Limited
JMCD: Jute Manufacturers Development Council
MPEDA: Marine Products Export Development Authority
MDA: Market development assistance
MAI: Market assistance initiative
MTC: Mica Trading Corporation
NAFTA: North American Free Trade Agreement
NATO: North Atlantic Treaty Organization
NTC: National Textile Corporation of India Ltd.
OECD: Organisation for Economic Cooperation and Development
OPEC: Organization of the Petroleum Exporting Countries
OCCI: Overseas Construction Coucil of India
PEC: Project and Equipment Corporation of India Limited
PLEXCOUNCIL: Plastic & Linoleum Export Promotion Council
RCMC: Registration-cum-Membership Certificate form for Registered Exporters
RSFSR: Russian Soviet Federative Socialist Republic
SIL: Special Imprest Licence
SAARC: South Asian Association for Regional Cooperation
SMEs: Small and Medium-Sized Enterprises
SGEPC: Sport Goods Export Promotion Council
SOPA: Soyabeen Processor Association of India
SEPC: Shellac Export Promotion Council
STC: The State Trading Corporation of India Limited
ISEPC: The Indian Silk Export Promotion Council
SREPC: The Synthetic and Rayon Textiles Export Promotion Council
HHEPC: The Handicrafts & Handloom Export Corporation of India Ltd.
MMTC: The Minerals & Metals Trade Corporation of India Ltd.
UNCTAD: United Nations Conference on Trade and Development
UNDP: United Nations Development Programme
UNEP: United Nations Environment Programme
UNESCO: United Nations Educational, Scientific and Cultural Organization
UNICEF: United Nations Children's Fund
USAID: United States Agency for International Development
USSR: Union of Soviet Socialist Republics
VAT: Value-added Tax
WEU: Western European Union
WHO: World Health Organization
WWEPC: Wool & Woollen Export Promotion Council
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