Understanding Trade and Benefits of International Trade for a Country
Understanding Trade and Benefits of International Trade for a Country
What is to trade with and what is the benefit of the trade itself? From that question we can explain that in the science of economics, commerce has more than one definition we can get, what more if we talk about the economic experts or experts who define it.
Sourced from some references of books that discuss about the economy that includes a review of international trade so your learning as a writer will explain a little about the understanding and benefits of international trade according to the title or theme carried and following a brief review.
Understanding of the trade itself can be specific or generally depends on the trade sector what is the topic of discussion. If it is generally interpreted then trade is a process of swapping goods or services in order to obtain a profit. So what is international trade? Here's the review!
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| Understanding Trade and Benefits of International Trade for a Country |
1. General Understanding of International Trade
International Trade is a form of interaction between a State and other State in the form of social interaction that is buying and selling goods or service atua based on a mutual agreement.
International trade can also be interpreted as a form or process of exchange of goods and services on the basis of agreement from parties involved in the process of exchange of such goods.
So from the above two explanations, we can conclude that international trade is an activity of selling and buying a beast that involves or occurs between one State with another State based on an agreement or shared needs.
Some factors that trigger the occurrence of international trade or between one country to the other is the non-fulfillment of all needs due to the limitations of natural resources owned by a State. Not all needs can be produced by itself to meet the needs and wants or not then a State would require goods and services from other countries to meet the needs or needs of its people. Such resources may be human, financial or capital resources, natural resources and resources in the form of an excess or skill owned by a State but not owned by the other State.
Trade involves many circles or classes of which consists of:
- Government with government (State with other State)
- Individuals with other individuals
- Government with individuals and
- Individuals with other Countries
So from the factor of involvement that has been described above, it can be concluded that it is a trigger factor occurs buying and selling or exchange of goods, thus international trade will produce a satisfaction-based interaction needs based on agreements that include:
- The occurrence of cooperation in the field of import export between a State with other State
- The effect of imported exports on the growth of international payment interest in a country
- Expansion of the economic sector involving technology that is beneficial to the economic growth of a State
- Movements and improvement of the resources of a State be it human, natural resources and business capital of a State.
2. International Trade Benefits
Many of the benefits that can be derived from the interaction process that is exchange of goods and services in international trade itself, among others are:
- Creation of new jobs in the country.
- Fulfillment of the needs of the State and individuals to goods and services that can not be produced by a neagara himself.
- Creation of state foreign exchange
- The creation of technology transfer in the presence of trade is by studying the technology used by other countries to create a goods or services that can not be created alone and increase knowledge about the technology itself.
- Market expansion that is beneficial to the global economic growth of a State which facilitates the production process of a State so as to reduce the production cost of a State.
- Creation of a close relationship or good friendship between a State.
- Accelerate the growth and development of a country's economy.
Apart from these several things, if examined in general, other positive impacts that can occur with the existence of international trade include, Changes in the culture of a country's people from poor to become sufficient and the creation of economic sustainability of the sector on the income of the State and individuals are beneficial to the reduction of poverty Country.
Therefore, it can be concluded that economic cooperation between a State can not be avoided because all forms of fulfillment of the needs of a State can not be fulfilled without any interaction process of international trade. Each State has limited resources both natural resources and human and capital resources, therefore economic expansion is required by the creation of trade between one country and another based on an agreed agreement to meet all forms of the needs of a State in order to obtain mutual benefit.
So the brief explanation above may be useful and thank you.