International trade is exchange of capital, goods, and services across international borders or territories.[1] In most countries, it represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on the rise in recent centuries. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance of globalization. International trade is a major source of economic revenue for any nation that is considered a world power. Without international trade, nations would be limited to the goods and services produced within their own borders. International trade is in principle not different from domestic trade as the motivation and the behavior of parties involved in a trade does not change fundamentally depending on whether trade is across a border or not. The main difference is that international trade is typically more costly than domestic trade. The reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or a different culture. Another difference between domestic and international trade is that factors of production such as capital and labor are typically more mobile within a country than across countries. Thus international trade is mostly restricted to trade in goods and services, and only to a lesser extent to trade in capital, labor or other factors of production. Then trade in good and services can serve as a substitute for trade in factors of production. Instead of importing the factor of production a country can import goods that make intensive use of the factor of production and are thus embodying the respective factor. An example is the import of labor-intensive goods by the United States from China. Instead of importing Chinese labor the United States is importing goods from China that were produced with Chinese labor. International trade is also a branch of economics, which, together with international finance, forms the larger branch of international economics. Regulation of international trade Traditionally trade was regulated through bilateral treaties between two nations. For centuries under the belief in Mercantilism most nations had high tariffs and many restrictions on international trade. In the 19th century, especially in the United Kingdom, a belief in free trade became paramount.[citation needed] This belief became the dominant thinking among western nations since then. In the years since the Second World War, controversial multilateral treaties like the General Agreement on Tariffs and Trade (GATT) and World Trade Organization have attempted to create a globally regulated trade structure. These trade agreements have often resulted in protest and discontent with claims of unfair trade that is not mutually beneficial. Free trade is usually most strongly supported by the most economically powerful nations, though they often engage in selective protectionism for those industries which are strategically important such as the protective tariffs applied to agriculture by the United States and Europe.[citation needed] The Netherlands and the United Kingdom were both strong advocates of free trade when they were economically dominant, today the United States, the United Kingdom, Australia and Japan are its greatest proponents. However, many other countries (such as India, China and Russia) are increasingly becoming advocates of free trade as they become more economically powerful themselves. As tariff levels fall there is also an increasing willingness to negotiate non tariff measures, including foreign direct investment, procurement and trade facilitation.[citation needed] The latter looks at the transaction cost associated with meeting trade and customs procedures. *Absolute advantage *Balance of trade *Borderless Selling *Columbian Exchange *Commercial Revolution *Comparative advantage *Customs union *Ecological Economics *Economics *Export *Free trade *Free trade area *Globalization and Health *Gravity model of trade *Import (international trade) *International trade law *International Trade Awards *Internationalization *List of countries by current account balance *List of countries by imports *List of countries by exports *List of international trade topics *List of economists *Market Segmentation Index *Mercantilism *Monopolistic competition in international trade *Most favoured nation clause *OPEC *Political risk *Protectionism *Single Window System *The Grand Exchange *Trade bloc *Trade facilitation *Trade finance *TradeRoots *UNCTAD *World Trade Organisation Economic risks *Risk of insolvency of the buyer, *Risk of protracted default - the failure of the buyer to pay the amount due within six months after the due date *Risk of non-acceptance *Surrendering economic sovereignty *Risk of exchange rate *Susceptibility to changing standards & regulations within other countries Political risks *Risk of cancellation or non-renewal of export or import licenses *War risks *Risk of expropriation or confiscation of the importer's company *Risk of the imposition of an import ban after the shipment of the goods *Transfer risk - imposition of exchange controls by the importer's country or foreign currency shortages *Risk of different tax rates *Surrendering political sovereignty *Influence of political parties in importer's company *Relations with other countries