International Trade Overview

Advantages of International Trade

• Countries engage in international trade due to unequal distribution of natural resources and to increase production, raising people's standard of living.
• International trade provides cheaper goods and services for customers and makes better goods and services available in the market.
• It allows countries to specialize in producing goods and services they are good at, through comparative advantage.
• International trade leads to more competition, providing goods and services with the best quality and price.
• It provides more job opportunities for members of both countries involved.
• Easy transfer of technology from developed to developing countries is facilitated through international trade.
• Countries can reduce production costs by transferring production to another country.

Disadvantages of International Trade

• A country might become overdependent on other countries' products or services, reducing demand in the local market.
• New local companies may struggle to compete against bigger countries with stronger markets.
• Foreign companies may exploit a country's natural resources, leaving the country worse off after they leave.

International Trade Law

• A set of laws and agreements that manage and supervise international trade between countries.
• Countries and businesses must follow these rules and regulations to conduct trade correctly across borders.

Types of International Trade

• Export trade: countries provide goods and services to other countries.
• Import trade: countries buy goods or services from other countries to resell in the local market.
• Re-export trade: a combination of export and import trade, involving importing products from one country and exporting them to another for profit.