Article | International trade

Trade is simply the business of buying and selling of goods, products and services in order to make profit. Trade could be internal(within) or international (across boundaries).
Internal trade refers to trade conducted within a country while international trade refers to trade carried out across international boundaries or between countries and involves the use of two or more currencies. International trade is a significant percentage of gross domestic product (GDP) of most countries.

Requirements For International trade:

• Trade Agreement
• Modes of Transportation (air, sea & land)
• Product or services
• Monetary Policy
• Knowledge of Trade restrictions, barrier, Tariffs, etc
• Economic Policy
• Communication
• Currency and Foreign Exchange
• Favorable Social-political conditions
• Economic stability
• Insurance....

Importance of International Trade

• Mineral and Natural Resources: These are evenly distributed across regions of the world. So there is need to trade these various resources across international boundaries in order to reduce the effects of scarcities in one country and surpluses in other.
• Differences in climatic conditions accounts for variety of goods produced in different parts of the world
• Exchange of ideas and technology: Countries with vast technical knowledge and specialized skills engage in international trade with countries where these skills are required
• Foreign exchange earnings: Revenue generation across international boundaries is another reason nations participate in international trade
• Surplus of finished goods and materials within a country also account for trade with other countries that need such goods
• International trade and business provides employments in areas such as banking, ICT, shipping, insurance, consultancy and so on.
• Nations participate in international trade simply because of economic integration.