Ever Booming International Trade

Bill Gates (USA) As a co-founder of Microsoft, Bill Gates has undeniably influenced the world we live in today. What's more, his success with the tech giant has led him to a truly remarkable fortune of $89 billion more than half of his capital is from international trade. So we'll understand about the International Trade and its importance

International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. In most countries, such trade represents a significant share of gross domestic product

In simple words, it means the export and import of goods and services. Export means selling goods and services out of the country, while import means goods and services flowing into the country

Key features: 

1. International trade is the exchange of goods and services between countries. 

2. Trading globally gives consumers and countries the opportunity to be exposed to goods and services not available in their own countries, or which would be more expensive domestically. 

3. The importance of international trade was recognized early on by political economists like Adam Smith and David Ricardo. 

4. Still, some argue that international trade actually can be bad for smaller nations, putting them at a greater disadvantage on the world stage. 

TYPES OF INTERNATIONAL TRADE

There are three types of international trade

     Export Trade

     Import Trade

     Entrepot Trade

NEED FOR AN INTERNATIONAL TRADE

, when there are not enough resources or capacity to meet the domestic demand. So, by importing the needed goods, a country can use their domestic resources to produce what they are good at.

PRICE

If foreign companies can produce or offer goods and services more cheaply, then it may be beneficial to go for foreign trade.

ADVANTAGES OF INTERNATIONAL TRADE

COMPARATIVE ADVANTAGE;

 It allows countries to specialize in producing only those goods and services, which it is good at

ECONOMIES OF SCALE ;

If a country wants to sell its goods in the international market, it will have to produce more than what is needed to meet the domestic demand. So, producing higher volume leads to economies of scale, meaning the cost of producing each item is reduced.

COMPETITION;

 Selling goods and services in the foreign market also boosts the competition in that market. In a way, it is good for local suppliers and consumers as well. Suppliers will have to ensure that their prices and quality is competitive enough to meet the foreign competition.

 TRANSFER OF TECHNOLOGY; International trade often leads to the transfer of technology from a developed nation to the developing nation. Govt. in the developing nation often lay terms for foreign companies that involve developing local manufacturing capacities.

 MORE JOB CREATION; Increase in international trade also creates job opportunities in both countries. That’s a major reason why big trading nations like the US, Japa, and South Korea have lower unemployment rates.

DISADVANTAGES OF INTERNATIONAL TRADE

UNFAIR TO NEW COMPANIES

A THREAT TO NATIONAL SECURITY 

OVER-DEPENDENCE

A THREAT TO NATIONAL SECURITY

PRESSURE ON NATURAL RESOURCES

CURRENT NEWS 

Chinese Exports Jump, Gap With US Grows as Tensions Persist

China has reported its exports and imports surged in May and its politically sensitive surplus with the U.S. grew as the pandemic was waning in important markets in the West.

MYOPINION 

Exports of Indian iron and steel to China jumped by a massive 319.14 per cent over 2019, with shipments touching $2.38 billion during January to December 2020. Iron and steel exports to China in 2019 were around $567 million. and recently china is suffering with covid 19 . and its  effects heavily.