TheNecessityofInternationalTrade.doc

1、The Necessity of International TradeAbstract: international trade has been around for a very long time, but why it is so important to us? It result from a chain of events, there are mainly three reasons Keywords: International Trade, Resource, Economic, Political, necessityInternational trade, also

2、known as world trade, foreign trade or overseas trade, is the exchange of goods and services between countries. It contains Import Trade, Export Trade, Transit Trade, Visible Trade, Invisible Trade, Direct Trade and Indirect Trade.During its steady growth, international trade has shown three charact

3、eristics. First, the proportion of commodities with a high scientific and technological level and high added value has increased constantly. International trade is quite different from home trade; International trade is the exchange of goods and services between countries, while the domestic trade i

4、s in the same economic legal system in a country under the commodity exchange. And the risk of international trade is larger than that of domestic trade. Also the international trade is more complicated than domestic trade. As Economic globalization has became a trend of todays economy, Internationa

5、l Trade is becoming more and more important to us. No country in the world can be economically independent without a decline in its economic growth. Even the richest countries buy raw materials for their industries from the poorest countries. If every country produces only for its own needs, then pr

6、oduction and consumption of goods would be limited. Issues of international trade are among the most important that must be faced by countries that aspire to economic development. International trade is beneficial for all participants .We can buy everything we need from the international market. And

7、 it really promotes the development of the worlds economy.Why the international trade is so necessary to us? There are three factors: the Resource reasons, the Economic reasons and the Political reasonsA. The Resource reasonsThe international trade is the outcome of the development of productivity;

8、the Private property came into being with the development of productivity, and then there is a need for trade. The world is divided into different countries, the resource is distributed in various countries, the resource contains Natural resources, skilled workers, Capital resources, due to the natu

9、ral geographical condition No nation has all of the economic resources that it needs. An industrial country may not produce agriculture production while an agricultural country may not produce some industrial product that they need. Or the things they made cannot meet high demand in their own countr

10、ies, they can not self-sufficient, so they need to import products from other countries, International trade enables a country to obtain products that cannot be produced at home at all or that cannot be produced in adequate quantities and at acceptable costs. In this way, trade between different cou

11、ntries is necessary.B. The Economic reasonsCountries also want to gain economically by trading with each other. The desire for benefits makes international trade necessary. In some developing countries the cost of human resource is low, so the production cost is relatively low; the company can earn

12、more profits by buying products from other countries, for example ,clothes and shoes is very cheap made in china because the low cost of human resource, so a lot of foreign countries imports them from china. Under the concept of free trade, the best products are produced and sold in a free competiti

13、ve market. Such benefits of production efficiency like better quality and lower price are available to all peoples of the world. peoples Preference for different choices, foreign trade takes place because of innovation of style, international trade gives people more choices, Global trading provides

14、countries and consumers the chance to be exposed to those services and goods that are not available in their own country. Clothes, food, jewelry, stocks, wines, spare parts etc. and many more products are available in international market. even they can get the same kind of things from their own cou

15、ntries, they still prefer the design of foreign goods, such as people prefer the design of the German cars and the electronic products of Japan Because of their high quality and beautiful style. Theres a keen competition on the world market, so the company has to make its cost as low as possible, by

16、 international trade, Companies are able to conduct their purchases and sales on a worldwide scale in accordance with their business needs, utilize resources anywhere in the world more effectively, realize corporate global strategy and ensure the maximization of profit. One fundamental principle in

17、international trade is that one should buy goods and services from a country which has the lowest price, and sell his goods and services to a country which has the highest price. This is good for the buyers and for the sellers.With the development of international trade, currently the worlds product

18、ivity level has been greatly raised. The situation of commodity shortages has basically ended. Great changes have taken place in the relationship between market supply and demand. Regulation of international market supply demand relations, mutual exchange of needed products is always the important f

19、unction in international trade. Because of the difference in World production levels by science, technology and the distribution of production elements and other factors, production capacity and market supply is different in different countries. Some goods are always in short supply, while the other

20、s are oversupply. Through international trade, we can increase the supply of Raw and semi-finished materials and resource products which are short in our own country, in this way we can not only satisfy the consumers demands for commodities but also provides a new way to sell the excess products. It

21、 eliminates the contraction between the market supply and demand, thereby adjusting the national market supply demand relations.International trade can full utilization of production factors all over the world, nowadays labor, capital, land, technology and other production factors in all countries i

22、s often not proportionally distributed, without international trade domestic scale of production and the development of social productive forces will be constrained by the shortage of factors of production, part of the production elements will be left unused or wasted, can not play its productive po

23、tential, Through international trade, these countries can exchange their factors of production by means of international service trade, capital transfer, land leasing, technical trade, So that the shortage of factor of production is alleviated or eliminated, the surplus factor of production is able

24、to make full use of, at the same time expand the scale of production and accelerate the development of economy.International trade can strengthening economic relations between countries and promotes the development of economy. In the modern world different countries in the world take extensive inter

25、national trade activities, developed countries and developing countries are linked together, the competition of the international market also accelerate the development of the whole worlds productivity, This is not only to promote the further development of the developed countries, but also promote

26、the least-developed countries and regional economic development. Improve the level of production technology, optimizing the industrial structure. In todays world, through international trade the countries can introduce advanced technology and equipment, modern managerial expertise and qualified spec

27、ialists, As a result the level of productivity is improved, and economic development accelerated. At the same time, through international trade, domestic industrial structure get coordinate and perfect gradually Developing international trade can Increase revenue, improve the national welfare standa

28、rd, improve the development of international trade, can provide a government development finance income source, Government can impose tariffs on goods that past the customs territory, and collect Fees and Charges for Services Rendered, Application of Internal Taxes to Exports. Tariff and tax is stil

29、l in some countries, especially the developing countries, an important source of fiscal revenue. International trade can also increase the national welfare, it can get more benefits for the domestic consumers by import goods that is in urgent need and import goods that is cheaper, better quality, an

30、d more fashionable . In addition, the expansion of international trade, especially the increase exportation of labor intensive products, will provide more employment opportunities for the domestic market.C. The Political reasonsDifferent countries have different economic policies. Foreign trade poli

31、cy is affected by many factors， The general trend that economy grows and the countrys political and economic situation，The level of development of productive forces as well as in the world market position ,all of this will Influence the international trade. one country might trade with another count

32、ry in order to support the latters government which upholds the same political doctrine, In order to seek policy support or Preferential tax, international traders may want to buy commodity from other countries to get more profits.Conclusion： International trade has become an indispensable part of t

33、he whole worlds economy, during its steady growth, international trade has shown three characteristics. The proportion of commodities with a high scientific and technological level and high added value has increased constantly; international traders are faced with many problems such as language, law

34、s, customs, regulations, tariff barriers, International trade can also be limited due to the high cost of transporting bulky or perishable goods, In todays world, trade barriers in international trade are still widespread. In spite of these problems, the international trade will promote balanced and

35、 steady development of economic globalization. the development of international trade on the Basis of equality and mutual Benefit is an important element in promoting friendly relations among States .We must take ways to promote the expansion of international trade and ensure that world trade flows freely.References:国际贸易理论与实务（英文版）对外经济贸易大学出版社国际贸易英语教程 西安交通大学出版社