CHAPTER 1

EVOLUTION OF
INTERNATIONAL
TRADE
Presented By:
ABARERA, MARILYN D.
CRUZEM, LORIEZZETH JOYCE P.
MAGPANTAY, ERIKA MAY G.
MANGURALI, JAIREEN MAY
MATIONG, ISABEL MAE P.
 INTRODUCTION

THE WORLD TRADE

ORGANIZATION
• The World Trade Organization (WTO) is the only
global international organization dealing
with the rules of trade between nations.

• The goal of WTO is to

ensure that trade flows as smoothly, predictably,
and freely as possible and to help producers of
goods and services, exporters, and importers
conduct their business.
 INTRODUCTION

The following are

some of the many
roles of WTO:
It operates a global system of trade rules.
It acts as a forum for negotiating trade agreements.
It settles trade disputes between its members.
It supports the needs of developing countries.
 Lesson 1.1

Evolution of International
Trade Theory: A Glimpse
• Classical (country-based): Nations trade with
each other.

• Modern (firm-based): Companies compete

globally.
 Lesson 1.1

Adam Smith,
who wrote Wealth of Nations in 1776.
he promoted free trade

David Ricardo
•who wrote Principles of Economics.
•he introduced the idea of
comparative advantage
Lesson 1.1

Standard Theory Of
International Trade

states that a coutry’s wealth is

determined by its holdings of
gold and silver.
 Lesson 1.1
Free Trade vs
Mercantilism

• Free Trade → more choices & affordable goods

• Mercantilism → restricts imports, limits

consumer choice
 Lesson 1.1

Division of Labor – splitting work into tasks so

people become more efficient and specialized.

Trade Surplus – when a country exports more

than it imports.

Industrial Capitalism – when factories became

the main producers of goods.
 Lesson 1.1

Absolute Advantage – when a country can

produce something faster, cheaper, and more
efficiently than others

Comparative Advantage – even if a country is not

the best at everything, it should focus on
producing goods where it has the lowest
opportunity cost. That way, all countries benefit.
 Lesson 1.1

Marginal Cost – the extra cost of producing one

more unit of a product.

Opportunity Cost – the value of the next best

alternative that you gave up.
 Lesson 1.1

The Standard Theory of International Trade later

became the Theory of International Trade and
Commercial Policy. This is one of the oldest areas of
economics. Since ancient Greece, people have
debated if trade is good or bad for a country, and
what trade policy is best.
Lesson 1.2

BARTER

Involves a direct
trade/exchange of
goods and services.
 ANCIENT TIMES
Barter was a local
phenomenon, which
involved people in the same
locality.

MIDDLE AGES
The Europeans started
traveling across the
globe and used barter
services to trade their
goods.
ADVANTAGES
Does not involve money

Very simple

DISADVANTAGES
It is difficult to find people who need
what the other people have.
There is no standard measure of value.

Time consuming
 TRADE AND BARTER
They were the busines solutions for people
who lived before the convenience of
money and credit card

EARLY HUMANS
They very little needs and there was no
need for exchange of goods.
SYSTEM TRADING
where groups
started exchanging
their goods for what
they needed, which
the other groups
had.
NOMADIC LIFE
people started settling
down in areas, where
they began growing
plants and raising farms
and animals.
 EVOLUTION OF THE
BARTER SYSTEM
The system of
trading, wherein 6000 BC
goods and MESOPOTAMIA
services , without
any medium, like PHOENICIANS
money, is called BABYLONIA
barter.
Lesson 1.3

ORIGIN OF MONEY
Problem with Barter
Barter- goods for goods
Problems:
•Double coincidence of wants
•No common standard of value
•Goods were perishable or bulky
Items of value: salt, metals,
animals
Also: shells, feathers, animal teeth
Agreed values allowed wider
trade
Limitations: heavy, perishable,
hard to transport
•Traders used metal pieces Metal as Money
•Advantages: durable, easy to
carry, measurable
•First recognizable coins
appeared in China (1000 BC)
•8th century BC: miniature hoes &
billhooks
•770 BC: bronze rings and chisels
•Later: round coins replaced tool-
shaped money
•700 BC: first paper money
•By 1271: advanced money supply
system (Marco Polo's visit)
 The Lydian Contribution: Bimetallism
•First mint (industrial coin facility)
in Lydia (Western Turkey)
•Minting - stamping metal to
make coins
•600 BC: King Alyattes- electrum
coins
•560 BC: King Croesus(son of
King Alyattes)- pure gold & silver
coins
•Croeseid: This was the name of
the pure gold and silver coins
issued by King Croesus.
•First bimetallic system- "as rich
as Croesus"
The Evolution of Money
in Canada
•Early European colonists in North
America used IOUs (promissory
notes) instead of a barter system.
•Early 1600s: barter with Indigenous
peoples (beaver pelts, moose skins,
wheat)
•1670: special coins minted for
colonies
•1685: card money (playing cards used
as money) Jacques de Meulles
•Spanish dollars also circulated
(stamped with fleur-de-lys)
•First distinctive Canadian coins
•French livre - official currency
(1781-1794)
•Colonial Canada:
-Coins from France
-Paper money & treasury
notes
-1729: card money as legal
tender

•October 15, 1759, the French

government suspended
payments for Canadian expenses
Evolution of
Money
 Barter System: Trade in the
Philippines was originally
based on barter, long before
Spanish colonization.

PRE- Allied Cowries (Ovulidae

triviidae): These marine
gastropods were highly
valued for their glossy, often
HISPANIC vibrantly patterned shells.
Gold Barter Rings: Crafted
ERA from the Philippines’ naturally
abundant gold, these rings
served both as personal
adornment and early
currency.
Piloncitos: Small, bead-like
gold pieces known as
piloncitos were among the
first local forms of coinage
used in ancient Philippine
trade.
SPANISH ERA
(1521-1897)
Spaniards ruled the Philippines for
300 years. The cobs or macuquinas
(silver coins) of colonial mints where
the earliest coins brought in by the
galleons from mexico and other
spanish colonies
.
Barrillas were stuck in the
philippines as ordered by the
royalty of spain.
Coins from other spanish colonies
also reached the philippines and
were counter stamped to legalized
thier circulation in the country.
REVOLUTIONARY
PERIOD
1898-1899

The Philippine Republic of 1898 One peso and five - peso revolutionary
under General Emilio Aguinaldo notes printed as Republika Filipina Papel
issued its own coins and paper Moneda de Un Peso and Cinco Pesos were
currency backed by the country's freely circulated. These were hand-signed
natural resources.
by pedro paterno, mariano limjap and
telesforo chuidian
 AMERICAN
PERIOD
1990-1941
With the coming of the Americans in 1898,
modern banking, currency, and credit systems
were instituted making the Philippines one of
the most prosperous countries in East Asia.

The coins issued under the system bore

the designs of Filipino engraver and
artist, Melecio Figueroa.
 JAPANESE
OCCUPATION
1942-1945

These war notes had no back up

reserves, thus, Filipinos dubbed it
as "Mickey Mouse" money.

On the other hand, guerrilla notes or resistance currencies, which

are in low denominations, were issued by different provinces and,
in some instances, municipalities through their local currency
boards to show resistance against the Japanese occupation.
 THE PHILIPPINE
REPUBLIC

With the establishment of the Central Bank of the

Philippines in 1949, the first currencies issued were
the English series notes printed by the Thomas de la
Rue & Co., Ltd. in England and the coins minted at
the US Bureau of Mint.

The "Filipinization" of the republic coins and notes began in the late
60s and is carried through to the present. In the 70s, the Ang Bagong
Lipunan (ABL) series notes printed at the Security Printing Plant
were circulated starting 1978. In 1983, the Flora and Fauna coin series
was initially issued. The New Design Series of banknotes issued in
1985 replaced the ABL series. Ten years later, a new set of coins and
notes were issued carrying the logo of the new Bangko Sentral ng
Pilipinas.
LESSON 1.5

MOBILE PAYMENTS AND

INTERNET PAYMENTS
MOBILE PAYMENTS

-are money rendered for a product or service

through a portable electronic device.

NEAR FIELD
COMMUNICATION (NFC)

-payments are the technology that allows

contactless payments using close-proximity radio
frequency identification.
 Lesson 1.5

SOUND WAVE-BASED(SWB) OR
SOUND SIGNAL-BASED(SSB)

-mobile payments or pay-by-sound use an

advanced, ultra-low power wireless transmission
technology.

MAGNETIC SECURE
TRANSMISSION(MST)

-makes use of magnet signal to process

payment using a secure tokenization system.
Lesson 1.5

QUICK
RESPONSE(QR)CODES

-are the trademark of a type of matrix barcode

(type 2D barcod) readable by smartphones.

Four important advantages:

it stores a large volume of data.

it can be scanned from a screen, not just paper.
it can be read even if part of the code is
damaged.
it is safer because information can be encrypted
Lesson 1.5
SHORT MESSAGE/MESSAGING
SERVICE (SMS) OR PREMIUM SMS
PAYMENTS

-use to pay for a product or

services via text message.
DIRECT CARRIER BILLING (DCB)
-is where the payment will be added to
your phone billor prepaid SIM card.
INTERNET PAYMENTS

-can be done on desktops, laptops, or even phones

(as in mobile phones)
-can also be used to send money to friends or
family members
LESSON 1.5

WIRELESS APPLICATION PROTOCOL

(WAP)
-used to be the most common facility on
smartphones through a more limited-capacity WAP
browser or app
AUTO PAY

-is scheduled to be automatically paid

on a certain date.

PAYMENT LINKS OR PAY BY

LINK
-it is most commonly referring to a button or
link sent to process a transaction for a
specified merchant.
Lesson 1.5

NEOBANK

-literally means “new bank” and is from the

greek word NEOS meaning NEW. it is
umbrella term for the new generation of
cutting-edge, FULLY DIGITAL BANKING
SERVICES classified as a type of financial
technology (fintech) solution.
 Lesson 1.6

Virtual Currency
Virtual Currency and E-Money

Virtual currency: A digital form of money that exists only on

a computer or network. It doesn't have a physical form like a
coin or paper bill.

E-money: A digital representation of fiat currency (like the

dollar or peso) that's stored in an electronic wallet. Examples
include G-Cash, PayMaya, and PayPal. It's tied to real
currency, unlike virtual currency.
 Lesson 1.6

Cryptocurrency and Blockchain

Cryptocurrency: A type of digital currency that is

decentralized, meaning it is not controlled by a single
bank or government. It is built on blockchain
technology

Blockchain: A digital ledger that records all

cryptocurrency transactions in a secure,
transparent, and decentralized way. It's a
"distributed ledger" made up of blocks of data.
 Lesson 1.6

Cryptocurrency exchanges: Platforms that

allow you to convert cryptocurrencies to fiat
currency or other cryptocurrencies. Some are
centralized (like Binance, Coinbase) and
others are decentralized.

Cryptography: The process of protecting

information using codes. It's used in
cryptocurrencies to secure transactions and
verify ownership.
 Lesson 1.6

Key Cryptocurrency Concepts

Decentralized vs. Centralized: Decentralized

cryptocurrencies (like Bitcoin) are not controlled by a
central authority. Centralized systems (like traditional
banks) rely on an intermediary to process
transactions.

Proof of Work (PoW): A system used by some

cryptocurrencies (like Bitcoin) where miners solve
complex mathematical puzzles to add new blocks
to the blockchain, earning a reward. This requires
significant computing power.
Lesson 1.6

Proof of Stake (PoS): A more energy-efficient

alternative to PoW. In this system, validators
are chosen to create new blocks based on how
many coins they hold (or "stake").
 Lesson 1.6
Top Cryptocurrencies

Bitcoin Ethereum Ripple

Stellar Cardano Dodge

THANK YOU!