Background on International Trade

What is the background of international trade? What caused people of different countries do trade? As an illustration, for example you are a grocery merchant in town A, while your friends in the city draper B. In city A, there are no sellers of clothing. The majority of residents in city A to merchants because it is considered more profitable groceries. Likewise, in the city of B. Due to the hostile natural conditions, the city's rare to find merchants groceries. If anything, the quality of basic foods that are sold are not so good. So, what happens next?

Was predictable that the A and B will conduct trade transactions. A will export a basic food and clothing imports, while B will export to import clothes and groceries. Interaction between A and B are called international trade. Why? Since it was past the boundaries of regions and countries.

The currency used was no longer the currency of each country, but the currency is valid internationally. Based on these simple illustration, we can know that the background of international trade is as follows.

1. Differences SDA (Natural Resources). The difference of natural resources became the main reason why the two countries conduct international trade. The difference of natural resources means that differences in the type of goods produced. If the item is important stuff, the inevitable international trade.

2. The difference in price of goods. In the illustration, is not explained that the difference in price can lead to the emergence of international trade. However, the reason for the difference in price of goods is true. Could have occurred conditions in the domestic prices of goods more expensive than the price of goods in foreign countries so that the traders in the country importing merchandise from abroad to earn more profits.

3. Difference in quality. Undeniable that as consumers we want good quality stuff. If not available in the country a good quality goods, we will run out of the country. That's what happened today. Most of the population of Indonesia is more loved abroad than products in the country because one of them is a quality problem.

4. The desire to expand overseas markets (expansion). Background of other international trade is to expand the market. For example, one of the fast-food restaurant who comes from the land of Uncle Sam to open branches in Indonesia instead of none other is to expand their market in Indonesia.

Some of it is the background of international trade. But, basically, the cooperation between the two countries in international trade can occur because of the difference. The difference makes the two countries interact with each other.