The Economic Role of International Trade - Essay Example

The Economic Role of International Trade The Economic Role of International Trade In the modern day, the need for expansion of trade activities and relations is critical to various countries around the world. International trade and relations serve to benefit many countries and communities. The most notable example of a country that benefits from international trade and relations is the United States of America. United States of America has numerous trade relations with other countries around the world such as Mexico and Canada. Consequently, the international trade relations between the United States of America and other countries has resulted in the growth of the global economy, as well as development. In addition, international trade leads to the creation of numerous job opportunities and circulation of quality goods and services around the world. Consequently, many countries and communities around the world must work hard to promote the growth and development of international trade and relations. International trade and relations between various countries around the world has resulted in the economic growth of different countries. Most countries around the world massively benefit from trade. In addition, business improves the collection of revenue and increased trading activities. According to Bowen, Hollander, & Viaene (“Applied International Trade”), international trade allows traders to access numerous markets around the world. As a result, many countries and traders amass massive income from international trade. These sums are used in the development and ensuring economic growth of countries. Consequently, the global economy is bound to grow and develop. Moreover, countries with substantial economies from internationals trade have also gained authority and power to control the global economy. This gives them an advantage since they have the ability to make decisions that affect the global markets and traders. In addition, international trade and relations also lead to the creation of numerous employment opportunities in various countries around the world. According to Passaris (“EU free trade: Good for Us”), trading activities result in numerous employment opportunities. Many traders in different countries massively invest their wealth to improve their earnings. They come up with new viable and success oriented businesses. The act of investing in other countries results in numerous employment opportunities. Moreover, these countries offer attractive salary packages to citizens of their host countries. Thus, citizens in these countries are assured of improved earnings. It also reduces the number of idle and unemployed youths around the world. As a result, various businessmen and entrepreneurs should come up with new businesses to help the people. Equally important, international trade leads to the advancement of technology and the culture of innovation around the world. The growth of international trade necessitates the need for improved service delivery and production of numerous quality goods. As a result, various countries and businessmen adopt the use of modern technology to ensure efficient production and supply of goods and services. Similarly, many traders around the world come up with different innovations that are relevant and useful in production and supply of goods and services. Through these innovation practices, a number of machines such as smartphones and service such as mobile money transfer have been adopted. These machines and services are useful in facilitating trading activities among traders and customers in different locations. Many countries and organizations have also expanded and improved their domestic trade with these innovations and machines that come up due to international trade. Equally important, international trade also leads to peaceful coexistence and unity among various countries around the world (Class Notes, Week 11). The need for trade and economic development has resulted in the creation of different agreement among many countries around the world. The most notable and excellent examples of trade agreements between countries are the East Africa Community (EAC) and the North American Free Trade Agreement (NAFTA). EAC is an agreement that promotes trade among three countries in Africa that are Kenya, Uganda, and Tanzania. Whereas, Weinstein & Seman (“Has the North American Free Trade Agreement fulfilled its promise? An assessment after 15 Years rsp3_1014 177”) state NAFTA is a trade agreement among countries in North America that are Canada, the US, and Mexico. Through these trade agreements, the states have enhanced peace and unity among themselves. The citizens and traders of these countries have friendly ties and also interact peacefully as a result of the international trading activities. Thus, countries around the world should enter into trade agreements to enhance the international peace and unity. Moreover, international trade enhances globalization. Many countries around the world are in contact and enjoy online interaction due to the growth and development of international trade. The rising need for various goods and service around the world has resulted in the adoption of online activities. As a resulted, many traders and customers use the advancement of the information technology to facilitate trading activities. In addition, globalization enhances the growth of markets around the world (Class Notes, Week 11). Customers and sellers also frequently interact and communicate through various sites such as the social media and trading sites like OLX. Through these, strangers manage to communicate and develop strong, friendly bonds despite the fact that they are in different locations. Such actions also lead to the creation of global media to promote global advertising (Mcchesney, p. 8) Additionally, international trade also leads to the circulation of numerous goods and services around the world. Many producers and buyers require a range of goods and services for different purposes. Some manufacturers need goods and services required in manufacturing quality products for their customers. Whereas, consumers also need a variety of quality goods and services for their basic needs. The international trade offers these goods and services. Various countries export their goods and services to other countries. These goods and services are used as either raw materials or consumption goods for other countries. As a result, many producers and consumers manage to satisfy their wants and needs. Thus, international trade is useful and appropriate for the supply of goods and services to numerous countries around the world. Further, international trade also leads to foreign direct investments in various countries around the world. The adoption of different trade agreements such as NAFTA and EAC promote direct trade foreign investments (McChesney, p. 9). International trade allows buyers, sellers, and investors to access foreign markets. These people use these opportunities to increase their business empires and invest in a number of foreign countries. Moreover, this trade also enables many businessmen to gain wealth that is useful in expanding their business. Thus, many wealthy and influential merchants use money from international trade to open up many businesses in other countries. Through these activities, it is clear that international trade facilitates increased foreign investments and the rise of new businesses other countries. Furthermore, international trade also results in improved infrastructure development in many countries around the world (“Has the North American Free Trade Agreement fulfilled its promise? An assessment after 15 Years rsp3_1014 177”). Numerous governments around the world are constructing roads and airports to facilitate trading activities. These roads, airports and railway lines are useful in transporting both traders and goods. For instance, currently, the Kenyan government are constructing a railway line that will be useful in facilitating transportation of goods and services around the Eastern Africa region. Moreover, international trade also provides massive revenue for numerous governments and organizations that is useful in constructing roads, airports and railways. Through this, the international trade plays an enormous role in the infrastructural development of many countries around the world. Besides, international trade also leads to improved living standards and welfare of many people around the world. Trade leads to the creation of employment opportunities with attractive and sustainable salaries. As a result, many citizens of different countries around the world manage to secure jobs in a number of foreign businesses in their countries. Many people who acquire these job opportunities are assured of sustainable salaries that are useful and adequate in improving their lives. In addition, government and other organizations get huge revenues that are helpful in improving the lives of their citizens. They also use these funds to improve the housing and other social amenities in their countries. Consequently, international trade is useful and appropriate in improving living standards. In conclusion, International trade leads to growth and development of the world economy. Various countries also benefit from this trade since it leads to the creation of numerous job opportunities with lucrative salary packages. Moreover, international trade also leads to improved living standards for a number of people around the world. Not only do individuals gain, but also countries since it leads to infrastructural development. This trade also results in globalization, peace, and unity among various countries around the world. Consequently, it is essential for numerous governments around the world to create conducive and favorable environments that support international trade. Different traders and customers must also cooperate to ensure growth and development of trade since it has numerous benefits to everyone in the community. Additional Sources Bowen, H. P., Hollander, A., & Viaene, J.-M. (2012). Applied International Trade. Palgrave Macmillan. Passaris, C. (2013). EU free trade: Good for Us. New Brunswick Telegraph-Journal  Weinstein, B., & Seman, M. (2009). Has the North American Free Trade Agreement fulfilled its promise? An assessment after 15 Years rsp3_1014 177. Retrieved 2 May 2015 from http://www.michaelseman.com/WeinsteinSemanNAFTA.pdf Read More