International trade is very important for any countries economy. The importance of international trade is described below.
- Import of unproduced products:
No country can’t produce every item that they need to consume in the world. With the help of international trade, all countries are able to import their unproduced product with other countries.
- Export of surplus product:
When a country produces a large number of goods than their needs, it can export its surplus production with the help of international trade. Besides, those countries can earn foreign currencies in these ways.
- Dealing with emergencies:
When a country faces natural calamities like Tsunami, earthquake, cyclone, excessive rain, and another disaster, then those countries need help to deal with emergencies. In that situation, international trade helps by providing food, medicine, and other essential items to deal with emergencies.
- Importation of essential food product:
Underdeveloped countries face an excessive need for food, medicine, and other essential items especially industrial goods. International trade helps other countries to feel up their basic demand by exporting these items.
- Knowledge of vocational and technical:
Many developing countries have a lack of knowledge of vocational and technical. International trade helps to generate capital, instrument, and technology to boost up local business.
- Expansion of the market:
Due to the poverty and low-income capacity of the people of underdeveloped countries, their domestic market is limited. Besides, international trade expands the business market outside a country.
- The mobility of capital :
The mobility of capital is increased because of international trade. The export-import of capital can increase the movement of finance within various countries. As a result, those countries’ capital productivity has been increasing and the economy can easily boost up to at once.
- Reduction of production cost:
International trade helps to specialize in local labor and geographic location. Throw this production is increased in all countries and besides, it helps to reduce production cost and product cost.
- Proper use of asset:
The proper use of national resources is possible to have international trade. A country can get a comparative advantage if he is able to produce a good better than others at a minimum cost. As a result, the wastage of national recourse is reduced and the highest production is possible at once.
- Purchase of product at a low price:
Various countries can produce goods at a low cost having a comparative advantage. The consumer also gets goods at a low price and consumes at a low price.
- Increase capability:
The production capability of various countries is increased due to international trade. Besides, there exists competition in the market because of international trade. That’s why every country is trying to ensure the good quality of their product to survive in the market.
- Increase international cooperation:
International trade increases the friendship and cooperation of various countries with each other. Various countries build cultural cooperation by exchanging their goods with each other. As a result, cooperation and friendship are built in various countries.
However, we learn so much Importance of international trade.