Theoretical and Practical Basis of International Trade Relations in the Context of Globalization and International Economic Integration

and the Russian Federation is also Vietnam's geopolitical, geostrategic and geoeconomic position in the region and in ASEAN.

- Assess the current status of trade relations between Vietnam and the Russian Federation, point out the limitations and causes that hinder the development of trade between the two countries. Based on theoretical and practical research, the thesis affirms the potential and benefits of developing trade relations between Vietnam and the Russian Federation in the new context, on that basis build a strategic determination to develop this relationship.

- Proposing solutions to develop Vietnam - Russian Federation trade relations in the context of international economic integration, including solutions

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Promote the export of advantageous Vietnamese products to the Russian Federation market, link direct export activities with investment in the Russian Federation to increase the added value of our agricultural export products, as well as create

conditions for deeper penetration into the distribution channels of the host country.

- Supplementing the source of documents for research, managers and practical activities on the development process of trade relations between Vietnam and the Russian Federation - both countries are very close to becoming official members of the World Trade Organization.

7. Structure of the thesis

In addition to the introduction, conclusion, list of references and appendix, the content of the thesis is structured into 3 chapters:

Chapter 1: Theoretical and practical basis of international trade relations in the context of globalization and international economic integration

Chapter 2: Current status of Vietnam - Russian Federation trade relations in the period 1992 - 2005

Chapter 3: Solutions to develop trade relations between Vietnam and the Russian Federation

Chapter 1

Theoretical and practical basis of international trade relations in the context of globalization

and international economic integration

1.1. Theory of international trade

1.1.1. Some basic concepts

The development of human civilization is closely linked to exchange activities.

Exchange, trade, product exchange relations in each tribe, each village, each region, gradually expanded beyond the national scope into international trade relations, this is an inevitable and objective development. In the work Capital, C. Marx defined international trade as "the expansion of commercial activities beyond the scope of a country. It is the field of exchange of goods on the world market. Through international trade activities, countries trade goods and services to make profits"  32.p20 

After World War II, the world's economic and political order

đ; was rearranged, along with the rapid progress and development of science and technology đ; leading to the diverse development of economic and trade relations between countries. The concept of foreign economic relations đ; is used by countries with centrally planned economies, "including various activities such as foreign trade, international cooperation on investment and attracting foreign investment capital, international cooperation on science - technology and other foreign exchange earning service activities...."  41.tr15 

The concept of international trade has a broader content than the concept of foreign trade. Its objects include not only tangible goods but also services closely related to ordinary goods such as technical services, purchase and sale of patents, transportation services, e-commerce and other international trade services.

In 1948, GATT was established, the concept of international trade was used and associated with the regulatory content of GATT, this Agreement mainly

regulating trade in tangible goods in a context of high protection. Based on GATT, in 1995 the WTO was established under the Marrakesh Agreement. The WTO operates based on laws and rules regulating most areas of international trade, formed on the basis of basic principles such as: trade without discrimination, protection only by tariffs and building a stable foundation for international trade; trade is increasingly

liberalized and facilitated according to global trends, making international trade relations constantly develop, thereby promoting the process of trade liberalization worldwide. Since then, international trade has developed strongly, expanding to service sectors such as banking, insurance, air transport, maritime transport, tourism, construction, consulting... These types of services, along with the trade sector associated with investment and intellectual property rights, have developed very rapidly and become an important part of international trade.

With the birth of the WTO, from January 1, 1995, the concept of international trade has been;

widely used. In terms of characteristics, international trade is defined as the buying and selling of goods and services across national borders, or between partners of different nationalities. These definitions are most commonly used when considering the function of trade, the role of trade as a bridge between supply and demand for goods and services in terms of quantity, quality and production time. In many cases, the exchange of goods and services

accompanied by the exchange of factors of production such as labor, capital, especially when referring to trade in the context of regional and world economic integration. In the context of modern international business, international trade is understood as the purchase and sale of goods and services between partners of different nationalities, geographical boundaries are no longer the only criteria to determine international trade activities as before.

The basis of international trade is due to the objective requirements of the development and internationalization of productive forces, the foundation of which is based on the international division of labor and the exchange of comparative advantages between countries, for the development goals of those countries. International trade relations are all exchange and cooperation activities between countries and between trade blocs based on trade agreements, commitments, bilateral and multilateral agreements. Today, many countries participate in the process of globalization, economic integration and mutual development, strengthening international trade relations is an objective necessity. Developing international trade relations is to expand and strengthen activities in international trade.

1.1.2. Some theories on international trade

1.1.2.1. Mercantilism

In the history of international relations, foreign trade activities were carried out very early and people found practical benefits from this activity, but the theory of international trade only really appeared in the 15th century. Around the year 1450, the feudal mode of production dissolved, the capitalist mode of production was born, in the early period of the capitalist mode of production, production was not yet developed, to have accumulation, it was necessary to go through foreign trade activities, buying and selling, especially the unequal exchange between capitalist countries and colonial countries. With the discovery of America, a wave of trade developed strongly to transport gold from America to Europe. The role of commercial capital at that time was emphasized. From that vibrant and rich practice, the mercantile economic theory was born.

The economic doctrine of the mercantilist school, represented by Thomas Mun, highly values the role of money, considering money as the basic standard of wealth and goods as only a means to increase the amount of money. To have money, one must go through commercial activities, first of all foreign trade. In foreign trade, one must achieve a trade surplus, the result of profit is due to buying less and selling more, buying cheap and selling expensive.

As the economic ideology of the bourgeoisie in the period of primitive accumulation of capitalism, mercantilism, although not knowing the economic laws, limited in theory, did not point out the basis or cause of economic activities.

Mercantilism has made certain theoretical contributions in pointing out the role of foreign trade in economic development, especially the idea of State intervention in the economy, such as the State holding a monopoly on foreign trade or issuing and enforcing legal conditions that create barriers for domestic trading companies to monopolize foreign trade. Mercantilism has had a profound influence on the economic practices of countries and international trade relations for many centuries, laying the ideological foundation for the development of international trade.

1.1.2.2. Theory of absolute advantage

Since the end of the 18th century, along with the development of capitalism, new economic theories of various schools were born. The theory of absolute advantage in international trade by Adam Smith (1723-1790) - a typical economist of the British classical school, is a typical representative of the economic theory of this period. He started from a simple trade model based on the idea of absolute advantage to explain the benefits of international trade for each country.

According to Adam Smith, international trade originates from the principle of division of labor. He believes that specialization, technical progress and investment are the driving forces of economic development. Adam Smith developed the theory of "absolute advantage", according to him, each country needs to specialize in the production sectors with "absolute advantage" and the decisive criteria for choosing the sector to specialize in international division of labor are the natural conditions of geography, climate, and resources that only that country has. In other words, the difference in natural conditions is the cause of international trade and determines the structure of international trade. From this argument, he supports freedom of business, because each individual and business has the goal of maximizing profits, thus allowing freedom of business.

will benefit the whole society. International trade can also increase the volume of production and consumption of the whole world, when each country specializes in producing the goods in which it has an advantage and exchanges with each other.

The theory of absolute advantage is a basis for each country to evaluate its ability to participate in international trade with countries with different economic structures, or between countries with complementary economic structures. This theory not only provides directions for specialization and exchange between countries, but is also a tool for countries to increase their wealth. However, in reality, the absolute advantage of each country is not much, there are countries that do not have absolute advantages compared to other countries and the majority of world trade is international cooperation not only based on absolute advantage but must be based on a more comprehensive advantage, which is relative advantage or comparative advantage.

1.1.2.3. Theory of comparative advantage

In 1815, in his work "Essay on Foreign Trade in Grain", economist R. Forens developed the idea of "absolute advantage" into the idea of "relative advantage" or "comparative advantage". Two years later (1817), David Ricardo (1772 - 1823) continued to develop the idea of "comparative advantage" into the theory of "comparative advantage" or also known as the law of relative advantage. He argued that if a country is less efficient than another country in producing and exporting most types of products, that country can still participate in international trade to create benefits for itself. According to him, all countries at any level and conditions of production benefit when participating in international trade. When participating in international trade, a country with low efficiency in the production of goods will specialize in producing and exporting goods whose production is least disadvantageous (those are goods with a comparative advantage), and import goods whose domestic production is most disadvantageous (those are goods with no comparative advantage).

The basis of Ricardo's theory of comparative advantage is the difference between countries not only in natural conditions, but also in general production conditions. When researching, D.Ricardo based on a series of simplifying assumptions of the labor value theory to prove that labor is the only input factor. But in reality, different production sectors will have different labor structures. Comparing only the labor content of different goods will lead to deviations in relative value, because the production of goods requires different proportions of production factors.

Thus, both the theory of absolute advantage and relative advantage emphasize the supply factor, considering the production process in each country as the factor that determines the activity.

International trade, through international trade, countries have the opportunity to choose the products they will produce, exchange and consume.

Nowadays, when considering the comparative advantage of each country, besides the "static comparative advantage" as mentioned in previous theories, people pay more attention to "dynamic competitive advantage" which is closely related to the competitive environment and the quality of human resources, which are decisive factors.

to the economic and commercial development and growth of the country.

1.1.2.4. Neoclassical theory

In 1939, Haberler introduced the opportunity cost theory to clearly demonstrate the law of comparative advantage. Haberler argued that the law of comparative advantage is sometimes considered as the law of opportunity cost. According to this theory, “the opportunity cost of a commodity is the amount of other commodities that people have to give up to produce and trade one more unit of that commodity”  9.tr15  .

A country that has a low opportunity cost in producing a certain good will have a comparative or relative advantage in producing that good and will not have an advantage in producing the other good. Based on the comparison of the production cost of this product with the production cost of another product; leading to

came to the conclusion that each country should not produce all kinds of products, but should only focus on producing a number of products with low production costs.

lowest production (product with comparative advantage). Through expanding the production of specialized products, countries can exchange their products with each other.

In the first decades of the 20th century, under the influence of many factors, first of all the scientific and technological revolution, the world economy and the international division of labor had many profound changes. In 1919 and 1935, two Swedish economists, E.Heckcher (1897 - 1952) and B.Ohlin (1899 - 1979) continued to perfect the theory of comparative advantage, adding more arguments.

new point when considering opportunity cost and the law of proportionality of production factors, indicating the mechanism of operation of the law of "relative advantage" by the theorem on price equilibrium of production factors. The two men added a new model, referring to two input factors of production, labor and capital, along with a series of assumptions. The Heckcher - Ohlin (H - O) theorem is stated:

“A country will export goods whose production requires intensive use of its relatively abundant and cheap factors; and import goods whose production requires intensive use of its relatively scarce and expensive factors. In short, a relatively labor-rich country will export labor-intensive goods and import capital-intensive goods”  39.tr59  .

In essence, the Heckcher - Ohlin theory is based on the difference in relative prices of goods between countries to explain the origin of international trade. The HO model, đ; was further expanded and developed by famous economists such as Rybczynski, Woelfgang Stolper, Paul Sammuelson, James William to affirm the scientific ideas and great practical value of the HO theorem. The HO model đ; was developed and widely used in analyzing issues of trade and growth, trade and income distribution. However, in the face of the complex development of international trade today, this model has not fully met the requirements.

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