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The Importance of International Trade

Updated on November 3, 2009

The Importance of International Trade

Economics deals with the proper allocation and efficient use of scarce resources. International economics is also concerned with allocation of economic resources among countries. Such allocation is done in the world markets by means of international trade. Under the concept of free trade, the best products are produced and sold in a free competitive market. Such benefits of production efficiency like better quality and lower price are available to all peoples of the world.

One fundamental principle in international trade is that one should buy goods and services from a country which has the lowest price, and sell his goods and services to a country which has the highest price. This is good for the buyers and for the sellers. Another, with free trade, the less developed countries have the opportunities to accelerate the pace of their economic development. They can import machines and adapt foreign technology. They can send their scholars and technocrats to more progressive countries to gain more knowledge and skills which are relevant to the particular needs of their developing economies.

In the final analysis, no country in the world can be economically independent without a decline in its economic growth. Even the richest countries buy raw materials for their industries from the poorest countries. If every country produces only for its own needs, then production and consumption of goods would be limited. Clearly, such situation hampers economic progress. Furthermore, the standard of living of the people all over the world would have no chance to improve. Because of international trade, people with money can acquire goods and services which are not available in their own countries. Hence, satisfaction of consumers can be maximized.

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    • profile image

      basava 

      4 years ago

      it had lack points

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      5 years ago

      am very happy wit dis anwser on dis page nice one and educative

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      5 years ago

      nice

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      Alimwenemwakyusa 

      5 years ago

      Is very useful and educative

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      Turabiirwe Lovence 

      5 years ago

      good, it would be better if the point were stated first

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      5 years ago

      it is nice but there is lack of points of the information

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      5 years ago

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      5 years ago

      woaw! i lov dat,bravo!

    • profile image

      Ameet kumar 

      6 years ago

      For the study of international ecönomics your topic significance of internati0nal economics is perfect and useful for study in exam time

    • profile image

      Ameet kumar 

      6 years ago

      For the study of international ecönomics your topic significance of internati0nal economics is perfect and useful for study in exam time

    • profile image

      kali ramorobi 

      6 years ago

      fabulous and pretty. An industrious student need dis information and a genius scholar have to know dis staff

    • profile image

      JAYem07 

      6 years ago

      tnx for the nice info.

      it helps me a lot.

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      6 years ago

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      Megg agada 

      6 years ago

      Tanx bros nice job here

    • profile image

      mutala maipambe 

      6 years ago

      I have an exam in development studies, and we where told there'll be a question on inter-trade,thanks

    • profile image

      Pratima 

      6 years ago

      Not gud yr....

    • profile image

      ikpade buchi 

      6 years ago

      its useful and educative

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      kate gur 

      6 years ago

      very clear and understandable. Tanx

    • profile image

      Alex Boateng 

      6 years ago

      better explanation

    • profile image

      idoko gloria 

      6 years ago

      the significance or need for international trade is made practical and easy to understand in this text.bravo

    • profile image

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      6 years ago

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      Olanrewaju Adam 

      6 years ago

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      6 years ago

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      6 years ago

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      6 years ago

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      6 years ago

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      6 years ago

      Excellent...

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      6 years ago

      unafaa kuingwa na jamii

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      6 years ago

      thanks for such informations

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      Janevine Onyemalu 

      6 years ago

      Nice work and very precise.

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      6 years ago

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      6 years ago

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      6 years ago

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      6 years ago

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      6 years ago

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      6 years ago

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      6 years ago

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      Jay 

      6 years ago

      awesome facts! :)

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      6 years ago

      Excellent!

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      6 years ago

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      7 years ago

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      7 years ago

      nice an innformative ty . ...

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      7 years ago

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      7 years ago

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      7 years ago

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      7 years ago

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      7 years ago

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      7 years ago

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      7 years ago

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      8 years ago

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