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International trade has many potential benefits for participating countries, yet governments regularly impose barriers to trade. By using real-life examples, discuss the benefits of international trade and the reasons why restrictions are imposed.

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Introduction

International trade has many potential benefits for participating countries, yet governments regularly impose barriers to trade. By using real-life examples, discuss the benefits of international trade and the reasons why restrictions are imposed. Introduction We have been trading across boundaries since we found ways to move past borders. International trade is exchange of capital, goods, and services across international borders. There are two main ways for international trade, Exporting: Sale a product that produced in a country for consumers of another country, and Importing: Buy a product that produced in another country for consumers of your country. After international trade has taken part in the world in histories, it has gain political, economic, social importance in centuries, with all those importance of international trade; it has many benefits for participating countries. Throughout this essay I will interpret international trade and its potential benefits, and discuss the barriers which are associated with it, and at the end I will contribute a conclusion based on these aspects. Benefits of International Trade There are many items in a country that it doesn't have some that natural resources; such as oil and natural gas, metals, timber, coffee, tropical fruits, etc and this country need or want them, thus, every country in the world trades something from another country. ...read more.

Middle

For instance one of the 21 century's the largest movers in the international trading world that we have today are China where labour is plentiful and cheap, hence it become unprofitable for the domestic producers to compete with the Chinese producers. Thus, a barrier is essential for the survivals of the domestic producers. A barrier for trade is a specific term describes a government strategy that restricts international trade. The most known barriers to trade are tariffs, quotas, and non-tariffs barriers. Tariffs: A tariff is a tax on imports, which is collected by government. Because of tariffs imports decreases and also it raises the price of the good to the consumer. There are 2 mains tariffs type, An "ad valorem tariff" is the percentage on the market value of the imported goods. A "specific tariff", is a tariff of a specific amount of money that put onto market value of the imported goods. Also, tariff can call as duties or import duties. The diagram below is showing us effect of a tariff to a country. (Module Booklet, p.38) As we can see on the diagram; the domestic demand curve is "D", the domestic supply curve is "Sdomestic", and the equilibrium domestic price is "C". ...read more.

Conclusion

(Krugman, Paul R. (1987)) As we can read from a famous theorist is quote (Krugman P.), he wanted to state that as every individual country has some "comparative advantage" in the production of some goods and in the process they should take advantage of them in the international market as foreign money would be coming into the domestic economy. Conclusion To sum up, International trade is very important in now a days for a country's economy and also; imagine that if our choice were limited to what we can produce locally, for instance, as mentioned above because of comparative advantage or absolute advantage one country probability is not able to produce things lower opportunity cost than another country in this case; without the imports and exports, we would spend much money to produce for something than we could buy from foreign countries, and also we would be living in a small world that we have only lack of services and requires, so we might would be living without cotton clothes, tropical fruits, cars, coffee, wine, or even without natural gas that make our houses warm. Humans are needs that products and they always prefer to buy them as cheaper as they can. ...read more.

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