Reasons for International Trade

International trade refers to import and export of goods and services by various countries among themselves. Here is the list of reason why countries do international trade –

1. Since some countries have more natural resources due to their locations as compared to others it leads to international trade. For example gulf countries have huge reserves of oil but they lack other resources so they export oil to other countries and import the other resources which they need from other countries.

2. It may be also due to the technology, some are better equipped to produce technologically goods which are cheap as well better which leads to international trade.

3. There are some countries which enjoy substantial cost advantage in producing certain products due to availability of cheap labor and therefore they can produce goods at relatively cheap rates and then can import to other countries therefore leading to international trade.

4. Some goods are of such nature they that are found in certain parts of world only but their demand is from all over the world therefore countries in which they are found export to others leading to international trade.

1 comment… add one
  • eliakim william

    nice ideas on trade

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