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6/03/22

10 benefits of international trade: international trade

What is International trade:

 International trade is simply the business transactions between two or more countries with the aim of making profit and developing their countries reputation and foster the growth of the economy as a whole. Most countries enjoy the benefits of international trade, which make their country to be self reliance because they have the opportunities to engage in the trading of the resources the have in their country. International trade organization has made is easy for nation to partake in business internationally as long as the meet the standard and requirements that is needed, which is the product to be export or import must meet the standard and must be save for consumption.

The benefits of international trade can not be over emphasize because many countries depend on international trade to sponsor their annual national budget because of their foriegn reserve all comes from international trade for example countries that produce oil and gas mostly depend on the international trade market to grow their economy.

The benefits of international trade help nation and encourage the unity and growth of every sector of the economy, both import and export are part of the international trade policies. Some the benefits of international trade are as follows;

International trade


What are the Benefits of international trade?

  1. Availability of various goods and services
  2. Production efficiency
  3. Create employment for your people
  4. The cost of consumption becomes cheaper
  5. Control trade prices 
  6. Encourage good relationship among countries
  7. Revenue generation
  8. Export and import access
  9. Market expansion
  10. Increase the national income of a countries.

1. Availability of goods and services;

The benefits of international trade brings about the availability of different goods and services in the economy of the country,goods of various types can be found in a country that involves in international trade practices. A nation may not be previledge to have a certain product for example let say a country is in there need of paim oil international trade provide the avenue for the country to import such product into their country, also the availability of services that may be hard to find in their nations can request for service outside their country such expertise are imported to they country that needs the services.

2. Production effective;

When a country know that they have the product to export to another country they will try to make sure that the production of those goods mmust meet the international standard. The quality of goods to be exported or imported will have to pass through an efficiently way of production, when a country produces quality goods an services they tend to have more customers and also retain their existing partners in the international market.

3. Create employment for young people;

Another benefits of international trade is that it create an enable environment for the youths to get employment opportunities in all sectors of the economy. When there is high demand of a certain product in the international trade market let say there is demand for cash crops such as coaco,rice, coffee this will encourage young people to venture into farming and agriculture because they know that their products will be purchased and they will make a living from it. Government have an important role to play at this moment by providing theirs youths with soft loans to produce this products and also buy it from them in the long run there will more products to sustain their country and the rest will to exported to other countries that are in need of such product, this will increase domestic production and the gross domestic product will grow to make the nation self sufficient increasing their national income and the disposal income of their citizens.

4. The cost of consumption becomes cheaper;

When goods and services becomes more effectively distrubuted in the economy due to the importations an exportation of various products, it result in favourable economy were by the prices of goods will be reduce and consumption will become cheap, the purchasing power and disposable income of individuals will increase  allowing them to buy all their major house hold needs. With this Development the country will experience peace and stability. This is as a result of the benefits of international trade.

5. Control trade prices;

With international trade prices of goods and services are controlled. The price control system will be effective because prices are determine by the forces of the international market and it will be in a uniformism not allowing any individuals or group of Business to hike prices at there own benefit to the detriment of the general public who are the final consumers. With international trade policies this excessive are controlled.

6. Encourage good relationship among countries;

Another benefits of international trade is that it foster and encourage relationships among member country allowing them do more business together. Giving room for investment opportunities and investors who are willing to do business, also partnership is ecourage , inter marriages among countries is another benefits of international trade for example an investor can come to a country and before living he or she may find love and decide to stay back in that country.

7. Revenue generation;

For a country to survive it need revenue to embark on developmental project that will benefit it general population, one of the benefits of international trade is that it generate revenue for the government through tax and levies that are collected from transactions made from international trade. Investors who export and import goods and services pay taxes before their products are cleared at the border or embassies, multinational company that do business in the country also remit certain percentage of income to the internal revenue borad of the states, this taxes are payed to allow these companies continue doing business in the country. Also international companies embark on projects on social cooperate responsibility to their host environment which is another benefits of international trade.

8. Export and import access;

International trade provide opportunities for export and import of goods and services from one country to another creating room for ideas sharing and collaboration between government and business partners  who do business together international create access for financial flow and transfer of technical know-how, technology, culture and tourism.

9. Market expansion;

Another benefits of international trade in that it help in market expansion, because of it potential to to generate income for individuals, many people will engage in international businesses that will benefit the market in their various countries expanding their economic base and national income, both demand and supply with be at equilibrium because demand will be equal to supply, scarcity will be reduce to the bearest minimum expanding the market opportunities and business opportunities.

10. Increase national income and GDP of the country;

The national income of a country is determine by the total economic activities of the nation both the micro and macro economy variables are put into consideration. International trade plays a major role at this point, the benefits of international trade is that it increase the foriegn reserve of the country and balance of payment and also the gross domestic product. Any country that does not take it international trade policies with importance will be losing a lot of recognition and revenue that will be use to develop it nation and the up with their annual budget.

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