Why has international trade become less risky, less costly and even less time consuming then the past? Will business confidence likely grow even more in the future? There are multiple reasons for these common questions.
Firstly, international trade has become less risky because traditional trade was regulated through bilateral treaties between two nations. For centuries under the belief in mercantilism most nations had high tariffs and many restrictions on international trade. Now most international trade among developed nations is based on Free Trade. Currently, the regulation of international trade is done through the World Trade Organization at the global level, and through several other regional arrangements such as MERCOSUR in South America, the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico, and the European Union between 27 independent States.
Secondly, international trade has become less risky because of falling trade barriers. Trade barriers are often criticized for the effect they have on the developing world. Because rich-country players call most of the shots and set trade policies, goods such as crops that developing countries are best at producing still face high barriers. Trade barriers such as taxes on food imports or subsidies for farmers in developed economies lead to overproduction and dumping on world markets, thus lowering prices and hurting poor-country farmers.
In addition, international trade has become less time consuming because humans have more resources then the past did. We have planes, trains, cargo ships, pipelines and even transport trucks that haul massive trailers. Example, my father owns an automotive recycling company, if he orders a part from anywhere in Canada or the U.S. He can receive it within two days. A week at the max if things are ordered from china.
Lastly, I think business confidence will grow in the future. With the new business opportunities, more jobs will be open and people wont have to get laid off of work! More income will be brought into the families home. Children will have the necessary education to consume a career. And hopefully the world will stop hiding terrible crisis’ and become balanced.
This is why I think international trade has become less risky, less costly and even less time consuming than in our past.