Foreign Trade Foreign trade is nothing but trade between the different countries of the world. It is also called as International trade. Foreign trade is exchange of capital, goods, and services across international borders or territories. In most countries, it represents a significant share of gross domestic product (GDP). Importance for a Country to participate in Foreign Trade All countries need goods and services to satisfy wants of their people.
This means that countries have to work together more closely and rely on each other for prosperity. International trade occurs because individuals, businesses and governments in one country want to buy goods and services produced in another country. Trade provides people with greater selection of goods and services to chose from and often these goods are available at prices lower than those in the domestic economy. International trade is the system by which countries exchange goods and services. Countries trade with each other to obtain things that are better quality, less expensive or simply different from what is produced at home.
In other words, trade will be beneficial even if one country is less efficient in the production of two goods, so long as it is less inefficient in the production of one of goods. Due to the increasing development of production forces and the larger extent of specialization, the number of goods and services to meet human needs and wants has been more and more diversified, leading to interdependence among nations. In other words, specialization promotes trade demand and vice versa. A country cannot specialize its production without trading with others. It is international specialization that gives a manifestation of comparative advantage rule.
International trade is also knows as a globe trade which give the country opportunity to expands their markets for both good and services that otherwise may not have been available in other countries. This type of trade also give advantages for world to rise the economy in term of prices, supply and customer demands, affect and are affected by global events. All of the good and services can be found on international market. International trade will involve two types of process which be export and import. Export is a function of international trade in which the goods produced in a country will be sent to another country for future sale or trade.
The best example to understand the importance of international trade/ business can be seen in China, previously China was a closed economy but after its foreign investment policy, it has made tremendous growth in terms of its economy. Thus, it cannot be denied that international business is very much required for any country’s development and prosperity. Conclusion This paper analyzed the case ‘The Global Financial Crisis and Protectionism’. While doing so, this paper pointed out why calls for protectionism are greater during sharp economic contractions. It then tried to explain why the increase in protectionist measure even during the sharp contraction of 2008-2009 was fairly modest.
International Trade consist of two word which has its own meaning, and also has its meaning when it is combined. Firstly, Trade is a concept of exchanging goods and services between two or more entities. When it comes to International, this trade activity is happen along international borders which means between two or more different countries. In simple word, International Trade basically is the exchange of goods and services along the international borders. People have enganged in trade for thousands of years.
International trade is defined as the exchange of capital, goods, and services between countries, which would involve the activities of the government and individual. This type of trade gives upswing to a world economy, in which supply and demand or prices, affect and are affected by global events. Consumers and countries have the opportunity to be exposed to goods and services not available in their own countries through the trading globally. Export is a product that sold to the global market, while the import is bought from the global market. In most countries, international trade represents an important share of gross domestic product (GDP).
It has also spurred industrialization, technological progress, outsourcing and global value chains which in one way or another have an impact to international trade. International trade has become one of the important factors in promoting growth and development for most countries. International trade has opened chances for countries to diversify their economy through getting experience and access to new technologies and commodities which enhances efficiency for country’s production and thus improving their GDP. It is important to know that a current trend of trade does not much involve the exchange of finished products and raw materials i.e. cloth and banana, rather involve a movement of finished and intermediate products which add value to commodities.
In the contemporary society, there are an increasing number of people involved in the globalisation. I choose the topic of international trade. And in the following paragraphs, I am going to introduce what is international trade, other possible benefits of trading globally and the bottom line. (Heakal 2015) Thanks to the international trade that allows us to expand the market for goods and services. And also, as a result of international trade, the market contains greater competition with more competitive price and cheaper products.
Countries around the globe trade with each other. Foreign trade is beneficial to nations since it allows them to produce goods and dispose of some of them abroad in exchange for those foreign products demanded domestically. The dominant feature of international trade theory is the assumed superiority of free trade and non intervention. This paper tries to argue that government intervention in international trade may not always be harmful. It may prove to be ieal in most cases, depending upon the situation in hand.