The Importance Of International Trade

‘International trade’…. The backbone of strong economic systems

 

In the context of international trade is one of the most important economic factors between countries because of the diverse goods it provides to consumers, and raising the standard of living, in addition to providing many opportunities for employment, the importance of international trade is its main role that strengthens the benefit of countries with each other.

 

International trade has also evolved as a result of geographical expansion, so that the world is in great need of it; Therefore, the importance of international trade for societies and nations could be reflected on the following points:-

 

• It is the most exploitable means of state resources and compensation for the underdevelopment in other countries.
• Helps provide many ‘specialty’ goods and services that provide each at lower prices.
• Stimulate countries to increase their production of goods.
• The rise and growth of the international economy due to the excellence of each country in producing certain commodities known for it and exporting it to other countries .
• Its creates many new markets, supporting marketing capability 
• Countries help build strong economic system, as well as promote economic development which contribute to the easy development  of countries 
• It increases the well-being of communities by providing many services and goods that allow consumer and investors to choose 
• Help to take the advantages abundant raw material  both for exporting and importing countries.
• They are important factors that help measure the capabilities of countries in both ‘competition, production in global markets, and product marketing’.
• It facilitated cultural and cultural exchange between countries and strengthened diplomatic relations as a result of making deals and agreements through import and export.    

 

Services Of International Trade

“Tourism And Travel” The Most Important Services Traded In International Trade  

International trading in services has grown significantly recently, as trading in goods were of greater prevalence till it reached approximately, the triple of services, that is due to its intangible nature in contrary to goods.

That intangible nature of services makes it undergo more restrictions, that’s because It is non-transferable so  requires physical proximity between service providers and customers, unlike international trade in goods which is tangible, storable, transportable and consumable in any place at any time.

Further, some services are provided by the public sector or it may be obliged by national legislation which may restrict its trading across borders. Also, the need of the buyer & seller to be face to face limits its proliferation. 

Despite all this, the progress in communications technology allowed more services to be traded, the most important among them are “Travel Services, Transportation Services, Business Services, Financial Services and Insurance, Communications and Computing Services, Intellectual Property Services, Professional and Administrative consulting Services, and Technical Services”.

 

Impact of international trade 

International trade & developing countries

The international trade is of great impact on the economical growth & and fulfilling basic humanitarian needs as it has a vital role in the progress of the developing countries, thus helping to reduce poverty & creating opportunities for emerging countries to participate in larger markets around the globe.

The best example is its help to Brazil, a strong agricultural sector, expand the world’s largest markets, making it the largest source of both soybean and beef around the world.

International trade provided the chance for the developing countries to be part of international production networks and supply chains, as the European firms use them for certain functions, such as ‘data processing and customer service” in which communication technology has facilitated the transfer of service functions from industrialized countries to less industrialized ones.