What is Trade

As trade is called any negotiation that involves the purchase, sale or exchange of products, goods or services. It comes from the Latin commercewhich means ‘purchase and sale of merchandise’.

In this sense, as a trade it can also be called the set of negotiations that are part of this process.

It can also refer to the store or establishment where these types of negotiations take place, as well as the area of ​​a town or city where these types of transactions are mostly recorded: “Let’s go to the trade from the city”.

Likewise, as commerce is designated the class or group of people engaged in commercial activity: “trade expressed itself in favor of the new measures”.

Formal and informal trade

There are two basic types of commerce, which are distinguished from each other by being or not subject to current legal statutes on commercial matters: formal commerce and informal commerce.

The Informal commerce it will be everything that an individual performs outside the formal structures of the State, evading the payment of taxes and other legal formalities. The most common example of informal trade It is that of street vendors, but also that referred to illegal businessessuch as the sale of prohibited drugs or the trade in parts from robberies or thefts.

For his part, he formal trade understands that regulated by the State in the commercial code, subject to current legal regulations, and declared periodically before the competent fiscal organisms. The importance of formal trade is that it has the ability to boost a country’s economy, boost it, diversify it, and produce wealth for its citizens.

Fair Trade

Fair trade is a system that is sustained in a voluntary, ethical, respectful and fair commercial relationship between producers and consumers.

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It promotes greater equity in international trade, that is to say: the right of producers to have better commercial conditions, as well as that of workers to have an adequate participation in the benefits and better social conditions; strengthens the economic position of small producers and owners (especially those belonging to developing countries), with the aim of avoiding their marginalization from the world economy; all of this adjusted to the corresponding legal framework, with decent working conditions, and under a scheme of environmental and sustainable development policies.

In this sense, the fair Trade seeks to change the conventional rules and habits of international trade towards fairer and more equitable practices, for this reason, it is promoted by non-governmental organizations, social and political movements, and even by the United Nations Organization.

Foreign trade

As foreign trade is called the set of commercial transactions, based on the exchange of products, goods and services, of one State with another or other States. This type of relationship can be export (sell) or import (buy).

Foreign trade favors the generation of wealth from exports, as well as the satisfaction of internal needs in the purchase of products, goods or services that can supply or cover demands in the internal market.

As such, foreign trade is subject to a series of international rules, treaties, conventions and agreements, which include a set of procedures and regulations related to import or export exchanges.

internal trade

As internal or internal trade is called one that involves the set of commercial transactions, related to the sale, purchase and exchange of goods and serviceswhich is carried out between citizens and companies that are within the limits of the same State and that, consequently, are subject to the same legal regulations.

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It is divided into national internal trade, which includes the set of commercial transactions that are registered within the country in question, and local internal trade, which is related to commercial operations that are carried out only within a specific locality.

See also Commercial Code

electronic commerce

E-commerce, digital commerce or e-commercerefers to that type of transaction between people and companies that involves the purchase, sale or exchange of products, goods or services, which is carried out through computer networks, mainly the Internet, and whose payment system is also electronic, more usually through credit cards.