What Is The Importance Of International Trade?

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9 Answers

Iris Phillips Profile
Iris Phillips answered
International trade is defined as an exchange of goods, services and capital across international territories or borders. For the majority of countries, international trade represents a huge share of the GDP, or gross domestic product. Without it, countries would have to rely entirely on the resources present and services or goods produced inside their own territory.

As a result of international trade, there has been significant growth in globalization over the last few decades. This is partly due to a range of factors:

  • Advancement in communications and transportation technologies
  • Global competition, increased opportunities and better prices
  • Consumers are aware of and demand foreign goods or services
  • Removal of international business restrictions by governments
  • Provision of services simplifying international business
  • Cooperation and agreements on an international level
These factors have also resulted in improved political relationships between countries, and in particular between some of the major economic powers.

International trade is therefore of vital importance to a continual growth in globalization. It presents consumers with an opportunity to access products and services not available in their own countries and gives businesses greater opportunities to market their products. As a result of this, competition increases and prices are more competitive, an advantage for consumers.

It is also important in a technological aspect, as both increased competition and the greater distances to be covered in the transport of goods lead to an increase in development and innovation of new, more advanced or altogether better products, manufacturing techniques or processes, services and means of transportation.

In addition, international trade has an important influence on the international political climate. As restrictions regulating business across borders are lifted, and countries co-operate and come to agreements on a commercial level, they are more likely to also co-operate on other levels, and political relationships are enhanced and improved.
Katie Harry Profile
Katie Harry answered
The basic objectives for which any country indulges in International trade are: To maximize its exports and increase its market share in the world. The small scale industries and exporters also get the benefit of growing. Another objective is to increase their geographical reach in different countries and get foreign exchange.

The entrepreneurs are also encouraged by a country’s exports, and hence they get more opportunity to develop and establish themselves. The image and credibility is also improved in the different countries and regions, and the country gets a chance to take part in strengthening competition and to perform better.
William Harkin Profile
William Harkin answered
Countries agreeing to trade with each other on a mutual basis.
Anonymous Profile
Anonymous answered
International trade is the exchange of capital, goods, and services accross international borders or territories.
Ady Mat Profile
Ady Mat answered
To bring in foreign wealth and currency. To meet the required finished and raw material demand as well as specialized services of the economy.
Anonymous Profile
Anonymous answered
International trade is necessary for three main reasons:

  • It allows countries to get new ideas from one another
  • It allows countries to resources that they need
  • It reduces the risk of an economic collapse

International trade allows countries to learn from each other and take in new ideas.

The key reason why international trade is needed between countries is because the resources that a country needs are not available everywhere.

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