√ Definition of International Trade, Characteristics, Forms, Factors, Objectives, Benefits & Examples
Definition of International Trade, Characteristics, Forms, Factors, Objectives, Benefits & Examples – This time around knowledge will discuss international trade. an explanation that includes the definition, characteristics, forms, driving factors, inhibiting factors, objectives, benefits and examples of international trade. For more details, please see the review below.
Definition of International Trade, Characteristics, Forms, Factors, Objectives, Benefits & Examples
Let's discuss International Trade in great detail.
Understanding International Trade According to Experts
- Wikipedia
The definition of international trade according to Wikipedia is trade carried out by residents of other countries on the basis of a mutual agreement. - Huala Adolf
The definition of international trade according to Huala Adolf is a voluntary exchange process based on the will of each country.
Characteristics of International Trade
The characteristics of international trade are as follows:
- Its trading area covers the whole world
- The means of payment used is the currency of a foreign country
- The quality of traded goods is international standard
- Transactions can be made without face to face
- The applicable law is international law
- To import goods usually subject to taxes, customs and others.
Forms of International Trade
International trade can be divided in the following forms:
-
Bilateral Trade
An international trade carried out by two countries. -
Regional Trade
A trade carried out by countries that are still in a certain area. Such as ASEAN, European Union -
Multilateral Trade
A trade conducted between countries without being limited to certain areas.
Factors Driving International Trade
In an international trade there are several driving factors that exist, namely:
- Natural Factors or Natural potential
- In order to meet the needs of goods and services in the country
- There is a desire to gain profits and increase state revenues
- There are differences in mastering science and technology in processing economic resources
- There are excess products in the country so that new markets are needed to sell these products
- There are differences in circumstances in natural resources, climate, labor, culture, and population causing differences in production results and production limitations
- There is a similarity in taste for an item
- Opportunities to open cooperation, political relations and support from other countries
- The era of globalization has resulted in no single country in the world being able to live alone
Factors Inhibiting International Trade
While the inhibiting factors in international trade are
- The insecurity of a country, for example there is a conflict or war
- Currency between different countries
- There is an international economic policy from the government
- Unstable foreign exchange rates
- Payments made between countries are difficult and come with great risks
- There is an import policy from a country
- The quality of resources in a country
- Anti-dumping regulations
- Regional economic organization
International Trade Purposes
The purpose of international trade is
- Protection of industry or production in the country
- Adequate demand for goods and services in the country
- The field of work has become wider
- The entry of foreign exchange from the process of exporting and importing goods
- Get other advantages in the field of politics, defense, security, and also social culture
Benefits of International Trade
The benefits of international trade are:
- Items needed can be obtained
- Get a cheaper price than producing the goods yourself
- Perform export and import activities of goods
- The country's foreign exchange increases from the export of goods
- Carry out technology transfer from other countries or modern technology transfer
- Economic growth and development can run faster
- Gross National Income can increase.
- Friendship with other countries or between countries
- Expand the market and increase profits
Examples of International Trade
An example of international trade is the process of export and import
-
Export
Export is trade that sells goods from within the country to abroad. Payment systems, quality and quantity of goods, as well as terms of sale are usually agreed upon by both parties. For example, Indonesian coffee exports to European countries and countries in Asia, exports of tuna, exports of palm oil, cinnamon and so on.
-
Import
Import is a trade activity, namely the purchase of goods or services from a country into the country. The person or actor who carries out the process of importing goods is called an importer. An example is Indonesia importing rice from Thailand, importing soybeans from America and importing fighter planes, Boeing from American countries.
Thus has been explained about Definition of International Trade, Characteristics, Forms, Factors, Objectives, Benefits & Examples, hopefully can add to your insight and knowledge. Thank you for visiting
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