How does trade differ from commerce in terms of their objectives and scope within the economy?

Trade refers specifically to the buying and selling of goods and services. Its objective is to facilitate the direct sale, transfer, or exchange of goods between sellers and buyers for cash or credit. The scope of trade is limited to the buying-and-selling activity only — it includes internal trade (wholesale and retail) and external trade (import, export and entrepot). Trade creates person utility by establishing a link between producers and consumers.

Commerce, on the other hand, has a much wider scope. Its objective is to facilitate the entire process of exchange and distribution of goods by removing all the hindrances (person, place, time, risk, finance and knowledge) that arise between producers and consumers. The scope of commerce includes both trade and auxiliaries to trade — transport, warehousing, insurance, banking, advertising and packaging.

In short, trade is a part of commerce. Commerce is the broader umbrella that ensures goods are supplied at the right time, at the right place and in the proper quantity through both buying-selling and supporting services.