International Trade Is The Exchange Of Goods And Services Between Countries

International Trade Is The Exchange Of Goods And Services Between Countries

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At its simplest, international trade is the exchange of goods and services between countries. About a fourth of all goods and services produced in the world are exported to another country (Yuan & Guanghua, 2015). This type of trade gives rise to a world economy, in which prices, or supply and demand, affect and are affected by global events. Political change in Asia, for example, could result in an increase in the cost of labor, thereby increasing the manufacturing costs for an American sneaker company based in Malaysia, which would then result in an increase in the price that you have to pay to buy the tennis shoes at your local mall. A decrease in the cost of labor, on the other hand, would result in you having to pay less for your new shoes. Trading globally gives consumers and countries the opportunity to be exposed to goods and services not available in their own countries. Almost every kind of product can be found on the international market: food, clothes, spare parts, oil, jewelry, wine and even water. Services like tourism, consulting and transportation are also traded (Ferrarini, 2012). A product that is sold to the global market is an import, and imports and exports are accounted for in a country’s current account in the balance of payments (the method countries use to monitor all international monetary transactions at a specific period of time). By definition, any trade is subjectively of mutual benefit to the parties. The outcome of any trade is that everyone involved is better off. It follows that the more that members of a community engage in trade the better off economically that community will be, and most economics accept this assessment. In taking part in international trade, countries essentially work to get t...

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...r, despite being at a competitive disadvantage and not receiving the level of benefit that developed countries do, it is not to say that developing nations should not partake in trade at all as a country is unlikely to be able to be 100% self-sufficient. Rather, they need to push for sustainable development and press on to be given a right aid for trade to enhance their infrastructure and human capital, to stop only a wealthy few profiting from free trade. They should continue to find their competitive advantages but also support those famers or local businesses that are put out of business as a result of international trade. This is the only way that developing and developed nations alike have a possibility to benefit more equally from international trade, and to beat the ideals of Western trade propaganda and rather sit more happily and realistically in the middle.

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