International Trade - Research Paper Example

The competition effects in bestowing more reasonable goods or services to the customers. The trade of products and services also influences the global economic structure in relation to demand and supply, accessibility and availability of goods and services to the prospective customers around the globe (Grimwade 1-50). Thesis Statement The paper intends to briefly discuss about international trade and its historical background. The different problems, benefits and the present day standing with regard to international trade have also been highlighted within this study.

History of International Trade With regard to the historical concept, international trade can be stated as the basic notion of trading which had been conducted by Great Britain in the early part of 15th century. The European commenced to explore the trading activities through seas to discover new trade ways to the Asian market. With the similar context, the Portuguese explored England, Spain, and France and Africa set across the Atlantic Ocean and discovered colonies as the new market place for trade.

During the 17th century, the industrial revolution had occurred in Great Britain and it facilitated it as a stronger trading nation through supplying goods to those targeted colonies and purchased valuable raw materials from those dependencies (Meier, “Theoretical Issues Concerning the History of International Trade and Economic Development”). During the period of 17th and 18th century, “mercantilism” emanated in Europe to perform trade in a systematic body involving consideration dedicated to explore the trade beyond the national boundaries.

According to the concept of mercantilism, the trade should operate in a balanced way during the export and the import of goods or services. The favorable “balance of trade” consigns the equal value of exported and imported goods that are to be exchanged among the territories. However, trade among the regions was evaluated to be advantageous due to its capability to derive value to the domestic goods which surpassed the cost of imported goods, which is a key concept of “balance of trade”.

With this concern of trade revolution, the theory of Adam Smith has fundamentally developed the economic thoughts with regard to international trade. According to the Smith’s economic theory, financial growth of a country highly depends upon proper categorization and distribution of workers. The categorization performed according to skill and experience which is effective for an organization to produce more products from the existing resources and it is one of the major influences for the company to attain higher standard of income.

The division of workers is also important to allocate them according to the growth and the structure of the market. With this concern, the practice of such trading activities is more advantageous to increase national economic growth along with generating a feasible growth on the world’s economy as well (Irwin, “A Brief History of International Trade Policy”). Problems of International Trade International trade activity often brings with it certain difficulties. During the process of trade on a global basis, companies can face difficulties in terms of quality as well as international competitiveness with regard to their produced