Free «International trade» Essay Sample

International and world trades are some of the terms used in trading to explain the trade environment in a particular situation. The effects of this dependence of one country on the products it can't produce and how it benefits from other countries, the products that a country can do without but imports it to suit the luxury needs of its citizen have also been discussed with Tanzania, a developing country in eastern Africa being used for the case study. From the paper it will be noted that a country cannot survive on its own because it's normally hard for a country to be self sustaining when it comes to its requirements.

The term internal trade is used to define the business transactions that occur within certain limits in a particular business environment. In economics, this term means the trade taking place within the borders of a particular country. World output is defined as the process of producing, the total amount of products produced in the world. The relationship between the two is that trade output is affected by world output, in a supply and demand type of relationship. In the incident that world output is low in a particular year; internal trade will also be low. In times of economic resection people will not purchase as many commodities as they would want to be comfortable. These resections weaken counries currencies hence making imports more expensive (Das, 1999).

Trade patterns are viewed through examining the internal trade and the world trade, providing answers on trade patterns and the possible future growth. This review includes the type of merchandise that is exchanged and the growing role of financial services and investment income flows in current account transactions. In case international trade was to fail, and each country depends on what it produces to sustain its economy the country would go into a state of economic crisis. The country obtains oil from the Middle East to run the numerous numbers of industries, transport would be affected and people would not go to work. The fuels used to run machines aren't produced in the country and this would cause jobs to be lost in the event that energy was lacking. The country is not agriculturally driven and thus the country would experience a healthy food shortage due to dependence on genetically modified foods.

The inflow of specialized labor like doctors would be cut off and this would cause the country to under develop causing economic crisis due to low quality of research in crucial areas in scientific development. The country also imports technology from other countries like china whose growth in the innovation sector is very high. They also share ideas and the cutting of business ties would affect both countries. Commodities such as drugs and their low materials are not also made in this country so incase of epidemics would cause deaths and also reduce the population. The citizens would not enjoy diversity in the products they need and this would lead to monotony that may cause civil unrest. Inter country trading causes the locals to compete with the foreigners and this would ensure competitive pricing and good quality in the commodities offered (Cottier, 2009).

In a country like Tanzania which imports tones of products from the international community that it does not require, such as luxury products. The country may do without the luxury vehicles it imports from other countries. The country will also do without the expensive beauty products it buys from the developed nations. The country also imports flowers from the neighboring country and it can do without. The problem with denying the citizens the pleasure to buy goods and services they need to make their life more comfortable is that they will tend to rebel the system of government. The country in case of breakup of ties the country will not be able to obtain weapons for its defense since it lacks industries. Importation of services such as telecommunications and foreign exchange through services such as tourism would suffer. (Shrybman, 2001).

In conclusion, almost all countries must maintain good trade with other country so as to obtain those commodities that its unable to produce due to the absence of technological knowhow or the weather conditions not being favorable to sustain growth. The more the internal trade will result to the increase of world trade.


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