ECN 221 – Economic Principles
February 18, 2013
Professor Nick Bergan
One of the most confusing intolerance times is that free trade discussions are unlimited while free trade itself is growing and growing. For more than a while the government attempted to a global agreement to “lower trade barriers that have gone nowhere.” (Naim, 2007) The very last time trade was discussed they had reason to celebrate was in the late 1900’s this was when “125 nations agreed to a significant drop in trade barriers and the creation of new institution charged with supervising and liberalizing international trade, the World Trade Organization.” (Naim, 2007) “Keep in mind that, despite all the misgivings about international trade, the fact remains that countries share of economic activity related to exports is growing very fast, 1.5 faster than those with more stagnant exports.” (Naim, 2007) People know that economic growth alone may not be the right thing to help poverty; people must learn that without some kind of growth, all the efforts made will fall short. As trade grows the need for better rules is needed.
The purpose of this paper is to address and discuss international trade. potential gains, the different types, the aspects and the impact of international trade. An international trade begins with what countries can do to survive the economics toughest times that must have some kind of trade. “Trading will give consumers and other countries the chance to be exposed to goods and services and not available in their countries. Almost every kind of product can be found on the international market: food, clothes, spare parts, oil, jewelry, wine, stocks, currencies, and water. Services are also traded: tourism, banking, consulting, and transportation.” (Investopedia, 2012) There are rewarding opportunities in the field of international trade intermediation, but new entrants need to be apprised of industry challenges. (Perry, 1992)
International trade is “the exchange of goods and services along international borders. This trade allows for greater competition and more competitive pricing in the market. The competition results in more affordable products for the consumer.” (business dictionary, 2013) International trade also known as foreign trade has maintained since the dawn of time. Trading goods which are transported on the backs of tradesmen across tribal boundaries, and bartered and sold among neighboring, and, hopefully, accommodating tribesman. (wisegeek, 2013) Even though international trade rose national gross domestic product by providing vastly expanded economic opportunity. International trade is most commonly recognized in the exchange of goods or products. However, trading services, such as expertise in a particular field, or the ability to facilitate the trade of goods, is another common form of foreign trade.
“There are many potential gains from international trade that benefit the businesses and countries that engage in trade around the world. International trade creates new markets for domestically produced products, and it often results in the introduction of new products into domestic markets. Different countries have access to different resources and are, therefore, able to produce some products more cheaply and efficiently than others. One of the major gains from international trade is that some products that would be expensive to product domestically can be imported at a much lower cost. Though there are many gains from international trade, disadvantages also exist such as the high initial costs of entering a new foreign market and the necessity of dealing with strict international trade laws.” (wisegeek, 2013)
International trade is simply the exchange of services and goods across various geographical borders. The types of international trade include inter-firm trade and intra-industry...