International Trade

International Trade

Introduction

It is better for nations to buy and sell their products with each other. This is the point at which most of the scholars agrees that trade among counties makes the world better. Until now, international trade is debatable political issue that surrounds in domestically and among governments. It is to mention here that if someone buy foreign product that is produced cheaply in foreign country, it increases the living standard of both countries.

In United States, when anybody buys Sony's laptop, Canon copier or Lamborghini's car he is actually buying a foreign product (Helpman, 2011). Mentioned above products are among numerous foreign products that we buy today in America. Similarly most of American brands are manufactured outside America such as Dell outsources its most of the products from outside the America. Also as a tourist, American exchanges their currency with currency of the country they are visiting. It is to mention here that today US media widely criticize with the reports containing controversies regarding trade among Europe and US. These reports indicates various things about international trade and it mentions that products from Japan and China are freely sold here in US and Europe but products from US and Europe faces difficulties in Chinese and Japanese markets.

In this paper, international trade will be discussed along with the challenges and opportunities that can we have with international trade.

Discussion

As mentioned above, it is better for nations to buy and sell with each other. In this way when a firm or nation that buys from organization that produces in foreign country comparatively cheaply results in better standards of living for both companies and nations. Along with this, there are several other reasons for which customers buy foreign products such as customers buy foreign product as it is more suitable or fit accurately with needs of customers. It also results in enhanced revenue that a company can benefit from currency exchange rate difference.

The phenomenon of globalization is not new. In the mid of nineteen century there are at least two parts of globalization. Globalization in most recent period started after the World War II which was boosted strongly with transportations and communications technologies and these results in enhanced period of strong economic growth and trade (Pomfret, 2008). It is found that there is significant effect in structural changes in world economy with rise of globalization. After World War II Europe and Japan was among those economies that widely benefitted from globalization is restructuring their economies. There was a long term shift that occurred in global trade composition from increasing composition of manufactured goods against agricultural goods and non fuel minerals (Feenstra, 2011). It is also to mention here that exports from dominated economies hugely diluted over time, initially its exports was dominated by labor intensive products such as clothing and textile product and now their exports are dominated by capital intensive products such as computers and automobiles. Globalization was affected by the oil crisis that happened in ...