International trade is the exchange of goods and services between countries. The exchange includes import that the countries buy goods or services from other countries outside and export that the countries sell goods or services overseas. Trading of goods is available with clothes, food, stocks, wines, jewellery and many more products. Trading of services is also done like banking, consulting, tourism, or transportation. The international trade play an important role in the development of a country’s economy in general and in the development of an individual organisation in particular. Essentially, international trade help a country become richer because rather than the country tries to ...view middle of the document...
- It has a part in stabilizing seasonal market fluctuations.
- Organisations can exploit international trade technology to develop their own transactions.
- International competition will increase production efficiencies and will help to extend the size of organisations.
- Organisations will have chance to experience in cultural exchanges between nations.
Furthermore, economic integration has become a common trend in the development of economy. The degree of economic integration can be divided into six stages:
- Preferential trading area
- Free trade area
- Customs union
- Common market
- Economic and monetary union
- Complete economic integration
Economic integration has brought many benefits to the countries. The more integrated the economic become, the fewer trade barriers exist. The economic and political coordination is much better. The economy are integrated, the costs for both consumers and producers are reduced, as well as trade increases between the countries taking part in the agreement. Integration also has positive effect on innovation and growth by creating more competitions between these countries. The market becomes wider; therefore, it allows organisations to sell their product to more consumers with no limit. Preferential trade can contribute to replace domestic production by cheaper imports from other countries; therefore, it reduces inefficient local production and minimizes the inefficient use of resources. The removal of trade barriers is reduced and the tariffs can be removed entirely. Consequently, organisations can save a lot of money. Economic...