- What is international trade?
- Characteristics of international trade
- Importance of international trade
- Advantages of international trade
- Difference with foreign trade
We explain what international trade is, its importance, advantages and characteristics. Also, differences with foreign trade.
Countries can participate in international trade as sellers or buyers.What is international trade?
When we talk about foreign trade, international trade or world trade, we refer to the set of economic transactions that involve the exchange of goods and services between the different countries and their respective internal markets.
This exchange allows products to travel and position themselves in other regions, reaching new consumers. Along the way, it also generates an important currency exchange.
In the world, most countries participate in one way or another in the Commerce international, either as sellers (exporters) or buyers (importers) to some extent or another, for which they have economies "Open".
This opening began during the second half of the 20th century and especially in the 1990s, thanks to the incorporation of Latin American nations, large suppliers of raw material. At the same time, the Asian markets and Europe from the east.
This phenomenon of globalization of the economy has allowed foreign trade to grow in volume and importance, as it significantly affects internal or local trade (internal borders).
Characteristics of international trade
International trade, as it involves not individuals or entities, but entire countries, always occurs in international currencies (hard currencies, such as the US dollar) and according to a fixed set of rules determined by the countries involved.
Some nationsFor example, they protect their own industries from foreign products through tariff barriers, that is, import taxes, to make foreign products more expensive and prevent them from competing with local ones. But not all have the same relationship with imports, and some countries promote consumption more dependent on abroad than others.
The balance of payments of a country compares the financial volume imported with the exported one, determining how autonomous a nation is commercially. If you export more than you import, you have an advantageous commercial position vis-à-vis other nations, while if you import more than you export, you face the international market in a weaker position.
Importance of international trade
Since its emergence and massification on a planetary scale, international trade has only grown in importance. On the one hand, because the volume of money and goods it mobilizes is enormous, thus promoting the productive development of nations and allowing others to obtain goods and services They cannot provide for themselves.
But on the other hand, the commercial relationship of the countries dictates an important portion of their diplomatic relations. Consequently, it is common to associate economic measures and global cycles of the capitalism at the outbreak of wars and tensions between the various hegemonic powers of the world.
Advantages of international trade
The possibility of buying goods and services produced abroad carries certain indisputable advantages. For example, access to products of international quality, made in industrialized countries that would otherwise be impossible to have, allows less advanced nations technologically access innovations.
In addition, this type of exchange encourages regional specialization, so that countries can enter to compete with what they do best, and thus lead a certain sector of international trade, no matter how small.
Finally, by diversifying the risk, the international trade allows to obtain diverse inflows of money. In other words, the countries are not entirely dependent on the domestic market. Although the latter is also a double-edged sword, since it implies a high degree of dependence on the outside.
Difference with foreign trade
International trade and foreign trade, how are they different?This difference is actually about the extent to which we think of both concepts, since they are generally considered synonyms. Thus, when we speak of international trade, we are generally referring to all commercial transactions that occur between countries, that is, from a joint perspective.
On the contrary, when speaking of foreign trade, we assume ourselves within a nation, and we refer to those activities that said country trades abroad, that is, that it exports to other countries.