One of the most confusing intolerance times is that free trade discussions are unlimited while free trade itself is growing and growing. For more than a while the government attempted to a global agreement to “lower trade barriers that have gone nowhere.” (Naim, 2007) The very last time trade was discussed they had reason to celebrate was in the late 1900’s this was when “125 nations agreed to a significant drop in trade barriers and the creation of new institution charged with supervising and liberalizing international trade, the World Trade Organization.
” (Naim, 2007) “Keep in mind that, despite all the misgivings about international trade, the fact remains that countries share of economic activity related to exports is growing very fast, 1.5 faster than those with more stagnant exports.” (Naim, 2007) People know that economic growth alone may not be the right thing to help poverty; people must learn that without some kind of growth, all the efforts made will fall short. As trade grows the need for better rules is needed.
The purpose of this paper is to address and discuss international trade. potential gains, the different types, the aspects and the impact of international trade. An international trade begins with what countries can do to survive the economics toughest times that must have some kind of trade. “Trading will give consumers and other countries the chance to be exposed to goods and services and not available in their countries. Almost every kind of product can be found on the international market: food, clothes, spare parts, oil, jewelry, wine, stocks, currencies, and water. Services are also traded: tourism, banking, consulting, and transportation.” (Investopedia, 2012) There are rewarding opportunities in the field of international trade intermediation, but new entrants need to be apprised of industry challenges. (Perry, 1992)
International trade is “the exchange of goods and services along international borders. This trade allows for greater competition and more competitive pricing in the market. The competition results in more affordable products for the consumer.” (business dictionary, 2013) International trade also known as foreign trade has maintained since the dawn of time. Trading goods which are transported on the backs of tradesmen across tribal boundaries, and bartered and sold among neighboring, and, hopefully, accommodating tribesman. (wisegeek, 2013) Even though international trade rose national gross domestic product by providing vastly expanded economic opportunity. International trade is most commonly recognized in the exchange of goods or products. However, trading services, such as expertise in a particular field, or the ability to facilitate the trade of goods, is another common form of foreign trade.
“There are many potential gains from international trade that benefit the businesses and countries that engage in trade around the world. International trade creates new markets for domestically produced products, and it often results in the introduction of new products into domestic markets. Different countries have access to different resources and are, therefore, able to produce some products more cheaply and efficiently than others. One of the major gains from international trade is that some products that would be expensive to product domestically can be imported at a much lower cost. Though there are many gains from international trade, disadvantages also exist such as the high initial costs of entering a new foreign market and the necessity of dealing with strict international trade laws.” (wisegeek, 2013)
International trade is simply the exchange of services and goods across various geographical borders. The types of international trade include inter-firm trade and intra-industry trade. Both types of international trade involve the importation of goods and service. There is a difference in the methods and range in which the various trades are applied. “One type of trade included in types of international trade is intra-industry trade in which importers import goods that are similar to those produced in the country. An example of this type of sale can be seen in the importation of automobiles.” (wisegeek, 2013) In intra-firm trade, the international trade is confined to various arms or supplementary of a multi-national corporation. “Inter-firm trade occurs between different types of companies that produce different types of goods. This type of trade may be seen in case of a supplier of raw materials and a company that is importing the raw materials, which is bases in another country.” (wisegeek, 2013)
“Inter-industry trade refers to the method of trade whereby parties from two countries exchange goods that are not manufactured in either country. Sometimes the reasons why the countries are not able to manufacture the items may include a lack of technical ability to produce the item or lack of raw materials. Even though it is mainly material items in inter-industry trade that are included in types of international trade, intangible items like skills and services are also involved.”(wisegeek, 2013)
“International trade is conducted by businesses that are efficient enough to be competitive on the international market. Businesses in different countries tend to specialize in different sections; for example, industrialized countries may have companies that specialize in high-tech manufacturing or financial services, while developing countries may export mainly agricultural products. Governments impose tariffs or quotas to protect some domestic industries from foreign imports, and these are a barrier to international trade. Trading internationally has been facilitated by international agreements and organizations such as the World Trade Organization (WTO). Negotiations have led to reductions in tariffs and quotas that had been a brake on international trade. Although international agreements are often hard to reach, negotiations in the WTO ensure that international trade issues are thoroughly considered.” (wisegeek, 2013)
“International trade disputes may be resolved more easily as a result of the introduction of mechanisms for dispute resolution through agencies such as the United Nations Commission on International Trade Law (UNCITRAL). Countries have facilitated international trade for businesses by signing bilateral investment protection agreements that make certain guarantees for investors and provide for dispute resolution.” (wisegeek, 2013)
International trade is a trade that rises above international borders. This is in direct contrast to domestic trade which is the trade that occurs within a territory or local market. International trade has been made possible by advances in technology that make it easier to communicate and coordinate the transfer of goods and services across territories. The impact of international trade can be seen in various areas including the economy, jobs, outsourcing and unfair labor practices. “One impact of international trade is its effect on the economy of the nation’s engaging in the trade.
This effect is felt by both less developed and more developed nations. Most developed countries benefit by purchasing raw materials and finished products from less developed countries. Less developed countries gain by getting much needed financial resources from the trade. For instance, some developing countries in Africa and the Middle East have some natural resources like crude oil, metals and precious stones that they can sell to other countries are dependent on the financial resources. Another of International trade is its effect on jobs in the more developed countries. Most companies engage in outsourcing, which is a direct outcome of international trade.”
The particular impact of international trade leads to the fears that some dishonest business associates might employ cheap labor in a manner that is detrimental to the workers from poor countries. Some concerns also arise about the potential of using underage labor in the manufacturing sector, especially the apparel and toy-making sectors. This is an undesirable impact of international trade.
In conclusion, international trade affects the entire American economy. The early industrial years of American economy was based entirely on the exporting goods to other countries and these exports created the revenue to sustain the country. I addressed and discussed international trade, potential gains, the different types, the aspects, and the impact of international trade. What can international trade which begins with what countries can do to survive the economics toughest times that must have some kind of trade. Trading will give consumers and other countries the chance to be exposed to goods and service and sometimes not available for other countries.
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