International Trade: Boon For World Economy

Globalization has revolutionized many trade practices. Its consequence is the contraction of the world wherein various diverse countries are engaged in the exchange of products and services with each other. The international trade is facilitated by a country which is engaged in the selling of product or rendering of service, known as the exporter and the country which buys such product or avails such services is called Importer. International trade consists of two main factors which facilitates the control over trade:

• Free trade: It eliminates all the limitations imposed on trade. Keen attention is paid to the demand and supply of products to facilitate smooth production process.

• Protectionism: Executed in the form of tariffs and quotas, Protectionism is to impose appropriate guidelines which will ease the proper functioning of the market. This is done because the improper working of market can hamper the growth of international trade.

International trade has resulted in many benefits from all the aspects:

• It has led to an increase in economic wealth: International trade has resulted in overall increased economic wealth of the nations which contributes to the economic development of the world as a whole.
• Opportunity for countries to explore the offerings of other nations as well: Whether it concerns clothes, products, accessories etc., international trade helps a country make use of the resources of other countries for their own benefits.
• Optimum utilization of resources of well heeled countries:Countries with rich resources can help the other resource-deficient countries by providing them high quality material at low costs. This act as beneficial to both the countries.
• It increases the productivity of the country: International trade enhances the productivity of countries which eventually leads to improvement in world economy. The countries make appropriate use of their resources to serve other nations in a better way for mutual growth.

Trade has been a part of civilization for centuries but the way international trading is done now has made the world a 'panacea' once again which will bring in more benefits in the times to come.

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