How to Do International Trade

Lutfi

How to Do International Trade
How to Do International Trade

Rancakmedia.com – How to do international trade? Basically no country can fulfill all the demands of its own people. This is what causes a country to collaborate with other countries in trade or what is usually called international trade.

International trade is carried out to meet a country's need for goods or services that cannot be supplied locally due to certain circumstances. Meanwhile, international trade is a trading activity between one country and another country based on a mutual agreement, quoted from the social studies learning materials on the website of the Ministry of Education, Culture, Research and Technology or Ministry of Education and Culture.

In addition, international trade can be described as commercial transactions of parties from more than one country as a consequence of International Trade Wahono Diphayana (2018), which explains the book.

Exports and imports of goods, obtaining raw materials from abroad and investing in other countries are examples of commercial transactions. Residents of a country with citizens of another country, individuals from different countries, people with the government of another country or the government of one country with another country can carry out international trade activities.

Benefits of conducting international trade

Indeed, international trade activities have been going on since BC for thousands of years. Trade activities between countries are getting smoother along with developments in communication technology and technology.

Therefore, international trade is an important component of the economic development of any country. Many countries benefit from international trade to increase GDP (GDP).

Benefits of International Trade

Building Good Relations Between Countries

Trade between countries also helps develop good relations with other countries. If relations between the countries run smoothly, cooperation between the two will likely expand to various sectors and not be limited to trade. This cooperation can also cover other fields, including culture, politics, education, military and technology.

Efficiency and Specialization Creation

A country that specializes in economics will have sustainable international trade. In that sense, countries and their residents will have different unique talents in producing goods and services from other countries.

Increasing the Prosperity of the Country

The activities of economic actors including producers, consumers and the government are indicators of a country's prosperity. This will provide prosperity for each economic actor through international trade activities.

Producers will enjoy prosperity if they can increase their income by increasing sales of goods or services to other countries with minimal tariff or non-tariff barriers.

Reducing Unemployment

If the international trade market grows, the production of goods or services will also increase in a country. This has also increased the demand for work in various sectors. If that happens, the unemployment rate will also decrease immediately.

Knowledge and Technology Transfer (IPTEK)

International trade also plays a role in mobilizing science and technology, especially in poor countries from rich countries.

International trade will allow a country to sell technologically advanced goods, such as modern machinery and equipment to countries that need them more. Technology mobilization in importing countries will thus be faster.

Price Stability

International trade in a country's domestic market can indirectly influence prices. With international trade, imports can overcome the shortage of goods which results in high prices to increase stocks in the local market.

On the other hand, export activities to unload goods can be carried out if the country has excess stock which causes the price of goods to be low.

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Lutfi

Hi, let me introduce myself, Lutfi Hulasoh, I am a writer and techno blogger. I started creating a personal blog writing informative articles about the latest trends and developments in technology. My writing covers a wide range of topics, from mobile applications to artificial intelligence, and I can also provide easy-to-understand explanations to help readers understand complex concepts.