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We will learn about international trade in its broadest sense, and learn about the details and procedures of international trade operations, and the importance of this type of trade for societies, countries and economic systems as a whole.
If we want to define International trade, it is a group of international behaviors that depend on the exchange of goods or services between different countries on an international scale that crosses borders, in order to secure the needs of the different groups of societies residing in those countries by investing the surplus of countries’ products and exporting it to other countries in need of this. The surplus, and thus the surplus is exchanged according to a specific trading system called international trade.
International trade constitutes a good percentage of the revenue of most countries around the world, and enables these countries to better utilize their resources by making use of the surplus from their various products and resources, as they export them to other countries that have a shortage of these products, goods or resources, and the return is financial Or other goods and products that the first country lacks and that the second country possesses. In short, it can be said that international trade is a form of exchange between countries.
International trade has been present in the life of different societies and civilizations since ancient times, and its importance has increased dramatically with the development of the economic, living and life systems of societies, and international trade has become of great importance in recent years and has appeared in different forms, patterns, methods and styles.
International trade and Local trade
In theory, there are not many differences between international trade and Local trade, but in practice international trade is always more complex and includes many details not found in trade when it is done locally within a single country.
Trade internationally requires more time, more costs and more procedures when compared to domestic trade. It needs to transport and distribute products to other countries, and this means more costs for transportation and shipment of goods, in addition to the taxes and fees that are involved in transporting products outside the borders, and this means more costs and more procedures that require more time.
How does international trade work?
As we mentioned above, international trade can take place in many forms and methods. Commercial operations may be at the governmental level, that is, between governments themselves, or it may be at a lower level between private companies and institutions, or even at an individual level.
In order to be able to export a product abroad or import a product from abroad, you must know the trade agreements concluded between the two countries, for example there may sometimes be agreements between two countries that are geographically close, and these agreements allow the exchange of goods and products completely freely and without any fees or fines.
On the contrary, it sometimes happens that there are differences between two countries, therefore it is not allowed to import products and goods from a specific country, and also it is not allowed to export goods to it, and this applies even to companies and private sector institutions and not only at the governmental level.
In all cases, government agencies are always the first to control all import and export operations, and they determine what products can be imported and brought into the country and what is prohibited from importing them, and the same is true for what is exported.
Any international trade process goes through a number of stages:
- Determine the goods and products to be imported or exported.
- Communicating with the responsible authorities, the factory in the foreign country in the event of import, or with the distributor in the foreign country who will receive the goods in the event of export.
- Securing the logistical requirements for the process, such as transportation and shipping matters, extracting official documents and customs clearance, and securing storage places for products.
- The delivery of products to the last destination, whether in terms of import or export.
Advantages of international trade
- Countries and societies that have a strong international trade system are always reflected in their economies and thus have strong economic systems as well, and the results of this matter are shown in the following.
- It provides various goods and products to consumers, even if their country does not own these products directly, by importing them from abroad. Thus, making various goods, products and services available to consumers in the local markets.
- Efficiency is achieved in the distribution and marketing of products and goods, as well as playing a role in improving the quality of those products due to the increase in competition when the products are available in the markets in abundance.
- Improved economic efficiency in society, as institutions increase revenues from international trade, profits increase, and spending increases on developing those institutions, as well as the products and services provided, and even the creation of new items.
- It makes commercial enterprises less vulnerable to financial and economic risks and crises, since they operate in more than one market and country, and therefore an event in one of the countries or markets will have a limited impact on the widespread enterprise.
- Allows a high amount of competition between different institutions, companies and brands that compete with each other in different markets and countries to obtain the largest share in the market, and thus this competition leads to those parties competing to provide the best form of products, where competition is made for quality, prices and many other characteristics. Which reflects positively on the consumer.
- It contributes to improving the economies of countries and societies, by creating more job opportunities, and securing new markets for the export of surplus domestic production, in addition to the great financial return.
These are some of the most prominent and important benefits and the benefits that can result from them for countries and societies, as well as the institutions and commercial entities that carry out these activities between different countries and markets.
International trade and its relationship to electronic commerce
With the development of international trade and its increasing importance in the lives of societies and countries and for economic systems as a whole, a new type of trade appeared alongside it, which is e-commerce, which emerged with the emergence of the Internet and the development of technologies used in it.
There are not many similarities between e-commerce and international commerce, as e-commerce mostly includes all other forms of trade such as domestic, domestic and foreign trade, while international trade is a part of e-commerce.
In recent times, the importance of e-commerce has increased at the expense of international trade, and many trade activities have taken place in electronic form instead of the traditional methods of trade. However, this did not negatively affect them, on the contrary, the sales numbers and returns from trade increased in general, and the means of electronic commerce facilitated many of the complications that they included, such as matters of payment, distribution and marketing of products and goods, and their availability in different countries.
Thus, technology in its various forms has facilitated the procedures of various commercial operations, whether international or domestic trade, and made the procedures easier and simpler than they were before the emergence of e-commerce.