Nowadays, when we walk into a supermarket, we find many foreign goods --- oranges from China, grapes from Chile, coffee from Brazil, and much more. This is international trade at work.
International trade is the exchange of services and goods across international territories and boundaries. It allows us to expand and extend our markets for both services and goods that may have not been available to us otherwise. This is the reason why you have several options to choose from. Will you pick the French wine or the Italian wine? Will you choose the German car or the American car? Will you try the Japanese tea or the Korean tea? Because of international trade, we are presented with more options and more freedom to choose the products and services that we find suitable. The market also contains greater competition. Ergo, there are more competitive prices and cheaper products.
International trade gives rise to a world economy in which supply and demand affect and are affected by international events. For example, political change in one country could result in an increase in the labor cost. This increase leads to another increase in manufacturing costs for a foreign company based in that country. It will then result in an increase in the price that consumers have to pay for that particular product in the local shop or store. On the other hand, when the cost of labor decreases, consumers pay less.
Global trading provides countries and consumers the opportunities to be exposed to various goods and services that are not available in their own countries. Almost every type of good can be found on the global or international market --- clothes, food, jewelry, eater, stocks, and currencies. Aside from goods, services are also traded, such as banking, tourism, transportation, and consulting. A product that is bought from the global market is called an “import.” A product that is sold to the global market is called an “export.”
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