Trade Importance and Methods PDF

TRADE Importance of trade "PIE TInG Lifts GDP! ○ Product Quality ○ Industrialization ○ Employment ○ Tax Increases ○ Income Growth ○ GDP, GNP, and Foreign Exchange increase ○ Living standards improve economic development of a c...

TRADE Importance of trade "PIE TInG Lifts GDP! ○ Product Quality ○ Industrialization ○ Employment ○ Tax Increases ○ Income Growth ○ GDP, GNP, and Foreign Exchange increase ○ Living standards improve economic development of a country. example : Trade plays a vital role in the economic development of a country. First, it improves the **quality of products** by fostering competition and innovation. Through increased **industrialization**, trade promotes the growth of industries by encouraging investments and advancements in technology. Additionally, it creates more **employment opportunities**, which in turn leads to **higher income levels** for the population. With the rise in **tax revenues** from expanded business activities, governments are able to invest more in national development. Trade also positively impacts the country's **GDP**, **GNP**, and **foreign exchange reserves**, further strengthening the economy. All these factors combined contribute **improving the living standards** of the population, making trade an essential aspect of national prosperity. INTERNATIONAL TRADE "SCTO - Trade Flows!" International trade is essential for the growth and development of economies worldwide. One of the primary reasons is the need to export surplus goods, which helps countries manage excess production and gain foreign exchange. Additionally, the growth in communication and transport facilities has made it easier to conduct business globally, allowing for quicker and more efficient movement of goods. Organizations such as the IMF, World Bank, and WTO play a crucial role in promoting trade by providing financial assistance, creating trade agreements, and reducing barriers. Furthermore, trading blocs like the EU foster collaboration between countries, encouraging free trade and economic integration, thus further facilitating international trade. METHODS TO REDUCE IMPORTS "PQ-LILT Green!" Produce high-quality goods Quota on imports Lower taxes on local products Increase taxes on imports Luxury items restricted Tap into local raw materials Green: Generate power through renewable resources like water, wind, and solar To reduce imports and strengthen the domestic economy, countries can adopt several strategies. One effective method is to produce high-quality goods within the country, which reduces reliance on foreign products. Governments can also apply quotas to limit the quantity of certain imports and increase taxes on imported goods, making them less attractive to consumers. At the same time, they can lower taxes on locally produced goods to encourage their consumption. Another key measure is to avoid importing luxury items, which are non-essential. Additionally, using local raw materials for production can decrease dependence on foreign supplies. Finally, countries can generate energy through renewable resources such as water, wind, and solar power, reducing the need for imported fuels and promoting sustainability. EXPORTS MAIN EXPORTS Raw cotton to UK Cotton yarn to China Cotton cloth to Middle Eastern Europe Ready made garments , spices , rice to Middle Eastern Countries Carpets , Sports goods, Surgical instruments to USA Fish to Japan Why is it difficult to export ? Quality Competition Child labour (trade barrier) Not good relation with other countries  Low skilled labour Exporting goods can be challenging due to several factors. Maintaining high quality is essential, as products must meet international standards; otherwise, they may be rejected. Additionally, fierce competition from other countries makes it difficult to gain market share. The prevalence of less skilled labor can also affect production quality and efficiency. Furthermore, child labor practices can act as a trade barrier, as many buyers avoid ethically questionable products. Lastly, poor relationships with other countries can hinder trade agreements, complicating the export process. These challenges collectively make exporting a complex endeavor. METHODS TO INCREASE EXPORT Produce Good quality products EPZs and Industrial estates Incentives to investors Export value added products Competitive prices Increase/ better telecommunication Reliable power supply  Skilled labour through training and education To boost exports, several strategies can be implemented. Producing high-quality products is essential for building consumer confidence. Establishing Export Processing Zones (EPZs) and industrial estates can streamline production and reduce costs. Offering incentives to investors encourages businesses to enter the export market, while focusing on value-added products increases revenue. Maintaining competitive prices attracts international buyers, and improving telecommunication enhances trade efficiency. A reliable power supply is vital for uninterrupted production, and investing in skilled labor through training improves overall quality. These methods collectively strengthen the export environment.