International trade refers to the exchange of goods and services across national borders. It provides several benefits such as raising living standards, providing employment, and allowing consumers to enjoy a greater variety of goods. While international trade and domestic trade share similarities like dealing in goods and services and being stimulated by profit, they also have key differences like the use of different currencies, the presence of tariffs in international trade, and differences in labor and capital movement between countries. The main bases that drive international trade include differences in environmental conditions, levels of economic development between countries, population distribution, transportation and communication infrastructure, and price structures between countries. The advantages of international trade include increased revenues, decreased competition, longer product lifespans, easier cash flow management,
International trade refers to the exchange of goods and services across national borders. It provides several benefits such as raising living standards, providing employment, and allowing consumers to enjoy a greater variety of goods. While international trade and domestic trade share similarities like dealing in goods and services and being stimulated by profit, they also have key differences like the use of different currencies, the presence of tariffs in international trade, and differences in labor and capital movement between countries. The main bases that drive international trade include differences in environmental conditions, levels of economic development between countries, population distribution, transportation and communication infrastructure, and price structures between countries. The advantages of international trade include increased revenues, decreased competition, longer product lifespans, easier cash flow management,
International trade refers to the exchange of goods and services across national borders. It provides several benefits such as raising living standards, providing employment, and allowing consumers to enjoy a greater variety of goods. While international trade and domestic trade share similarities like dealing in goods and services and being stimulated by profit, they also have key differences like the use of different currencies, the presence of tariffs in international trade, and differences in labor and capital movement between countries. The main bases that drive international trade include differences in environmental conditions, levels of economic development between countries, population distribution, transportation and communication infrastructure, and price structures between countries. The advantages of international trade include increased revenues, decreased competition, longer product lifespans, easier cash flow management,
International trade refers to the exchange of goods and services across national borders. It provides several benefits such as raising living standards, providing employment, and allowing consumers to enjoy a greater variety of goods. While international trade and domestic trade share similarities like dealing in goods and services and being stimulated by profit, they also have key differences like the use of different currencies, the presence of tariffs in international trade, and differences in labor and capital movement between countries. The main bases that drive international trade include differences in environmental conditions, levels of economic development between countries, population distribution, transportation and communication infrastructure, and price structures between countries. The advantages of international trade include increased revenues, decreased competition, longer product lifespans, easier cash flow management,
Local Business is a company which provides goods and services to a local
population. The term may also be used to describe a franchise or corporate branch operating within a local area.
International business refers to the trade of goods, services, technology,
capital and/or knowledge across national borders and at a global or transnational scale. International business is also known as globalization.
International trade is the exchange of capital, goods,
and services across international borders or territories. It is the exchange of goods and services among nations of the world.
Global trade also known as international trade, is simply the import and
export of goods and services across international boundaries.
What is Globalization? Globalization refers to the shift toward a more integrated and interdependent world economy. Globalization has several facets, including the globalization of markets and the globalization of production.
The globalization of markets refers to the merging of historically distinct and separate national markets into one huge global marketplace. Falling barriers to cross-border trade have made it easier to sell internationally.
Importance of International Trade between different countries is an
important factor in: a) Raising living standards b) Providing employment c) Enabling consumers to enjoy a greater variety of goods.
Basic Similarities of International and Domestic trade*
1. Both deal in the same objects of exchange, that is, goods and services. 2. Both kinds of trade are carried on by individuals and business firms. 3. Both domestic and international trade are stimulated by the desire for profit.
Striking differences
1. Independence Currency System. Purchases and sales of goods within
a domestic market are, as a general rule, negotiated with money or currency that is uniform in all parts of the country.
2. Tariffs and Other Trade Restrictions. The existence of tariffs
constitutes another difference between domestic trade and international trade. 3. Movement of Labor and Capital. In the particular case of labor, it is customary to observe that young people generally move from regions of least labor opportunities.
4. Nature of the market. Differences in the habits and tastes of the
people, in their language and business customs, make the carrying of foreign trade a more complicated pursuit than domestic trade.
IMPORTANT BASES OF INTERNATIONAL TRADE
1. Difference in Environmental Conditions. As already indicated no
nations is self-sufficient.
2. Stage of Economic Development. The underdeveloped, at times
described as the poor countries and the highly developed, frequently referred to as the rich countries.
The underdeveloped countries are usually exporters of raw materials while
highly develop countries, are exporters of manufactured articles and finished products.
3. Population Distribution. The character as well as the density of
population affect greatly the flow as well as the direction of international trade.
4. Transportation and Communication Facilities. In the days of ancient
civilization, trade did not assume consideration importance because of the lack of surpluses and the lack of adequate transportation facilities.
5. Price Structure. If trade is legally free to move, it is because of the
difference in money costs and money prices of goods in different countries which determines their movement.
What Are the Advantages of International Trade?
1. Increased revenues
One of the top advantages of international trade is that you may be able to increase your number of potential clients. Each country you add to your list can open up a new pathway to business growth and increased revenues.
2. Decreased competition
Your product and services may have to compete in a crowded market in the U.S, but you may find that you have less competition in other countries.
3. Longer product lifespan
Focusing only on the domestic market may expose you to increased risk from downturns in the economy, political factors, environmental events and other risk factors.
Selling a product to an overseas market can extend the life of an existing
product as emerging markets seek to buy American products. 4. Easier cash-flow management
Getting paid upfront may be one of the hidden advantages of international
trade.
When trading internationally, it may be a general practice to ask for payment
upfront. Expanding your business overseas could help you manage cash flow better.
5. Better risk management
One of the significant advantages of international trade is market
diversification. Focusing only on the domestic market may expose you to increased risk from downturns in the economy, political factors, environmental events and other risk factors.
6. Benefiting from currency exchange
Those who add international trade to their portfolio may also benefit from currency fluctuations. For example, when the U.S. dollar is down, you may be able to export more as foreign customers benefit from the favorable currency exchange rate.
7. Access to export financing
Another one of the advantages of international trade is that you may be able to leverage export financing.
8. Disposal of surplus goods
One of the advantages of international trade is that you may have an outlet to dispose of surplus goods that you're unable to sell in your home market.
9. Enhanced reputation
Doing business in other countries can boost your company's reputation. It
can help increase your company's credibility, both abroad and at home.
10. Opportunity to specialize
International markets can open up avenues for a new line of service or
products. It can also give you an opportunity to specialize in a different area to serve that market.
Some disadvantages of international trade:
1. Shipping Customs and Duties
International shipping companies like FedEx, UPS and DHL make it easy to ship packages almost anywhere in the world. ● However, one of the disadvantages of international trade is that most of these destination countries' customs agencies charge extra fees on items shipped to them. ● In addition to the cost of their product, a company needs to understand what the end consumer will be charged by the international shipping company. This is sometimes referred to as the “landed cost."
2. Language Barriers ● Despite the availability of online translators, language is still one of the major disadvantages of international trade. ● The marketplace is filled with examples of poorly translated products with names that got misconstrued in another language.
3. Cultural Differences ● What makes this one of the major disadvantages of international trade is that cultural differences, many times, are never documented. They are the unwritten rules of commerce in the country that are hard to uncover and can be even more difficult to solve.
4. Servicing Customers After international customers make a purchase, how will they be serviced when they are so far away? Again, language and cultural differences need to be considered to overcome one of the major disadvantages of international trade.
5. Returning Products Since not all international customers will be satisfied with a company's products, a process must be in place to return them and process a refund.
6. Intellectual Property Theft The wider a product is distributed, the more likely that it may be illegally copied by a competitor. This can be in the form of proprietary information or market branding.
