International Trade is a Transaction of Buying and Selling Between Two Countries, Know the Benefits

Kapanlagi.com - Trade is a buying and selling activity that we often encounter in markets, shops, and other transaction places. In every trade activity, there must be parties involved as sellers and buyers, including in international trade. In general, international trade is a transaction of buying and selling that involves two countries.

International trade is an opportunity for each country to fulfill its needs, which are not fulfilled by domestic production. Therefore, international trade has a significant impact on the communities of both countries. International trade also plays a crucial role in the economic growth of a country.

International trade is an interesting thing to learn. Summarized from various sources, here is a review of international trade.

1. Definition of International Trade

(credit: freepik)

International trade is not only conducted on behalf of a country. In fact, international trade is a buying and selling transaction that can be carried out by an ordinary citizen, a company, a government institution, or a non-profit organization. So, as long as the seller and buyer come from different countries, the transaction can be classified as international trade.

International trade is important for every country. Just like any other trading activity, the main goal of international trade is to gain profit. On the other hand, the buying country engages in international trade to fulfill their needs.

In general, we are familiar with the terms export and import in international trade. Export is the activity of selling goods or services to foreign countries. Conversely, import is the activity of buying goods or services from foreign countries. This export and import activity is an example of international trade.

Because it involves two countries, international trade cannot be done arbitrarily. There are several things that need to be considered. These factors can even be said to be determining factors for the success of international trade. The determining factors for the success of international trade include inflation, geographical conditions, free markets, government policies, and technological progress gaps in the two countries.

2. Benefits of International Trade

(credit: freepik)

As mentioned earlier, international trade will bring many benefits to the people in both countries. In more detail, the benefits of international trade are as follows.

1. Increasing Income and Expanding Markets
International trade is an economic activity, especially buying and selling transactions involving two countries. International trade opens opportunities for entrepreneurs to maximize production. Then, sell it widely, even abroad. This will expand the market and increase income.

2. Increasing the Prosperity of the People
With international trade, the needs of the community will be easier to fulfill. Because, needs that cannot be fulfilled by the country can be obtained from other countries. The impact is that the prosperity of the society will also increase.

3. Maintaining Good Relations between Countries
The existence of international trade cooperation will certainly make the relationship between two countries better and closer. This is because each country will feel the mutual need for each other.

4. Creating Job Opportunities
The impact of international trade will be directly felt by the society. International trade will stimulate entrepreneurs to expand their businesses. Therefore, there will be more job opportunities created. This way, the society can directly feel the positive impact of international trade.

3. Types of International Trade Activities

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International trade is significant and must be conducted properly. As discussed earlier, there are several types of activities in international trade. The activities in international trade are as follows.

1. Export and Import
Export and import are processes of trading goods or commodities from the domestic market to foreign countries. Export is the activity of selling produced goods to foreign countries, while import is the activity of purchasing goods from other countries.

2. Barter
It turns out that international trade can also be conducted through bartering activities. Barter is a sales system through the delivery of goods abroad. However, payment in barter is made through direct exchange with needed goods domestically.

3.Border Crossing
This international trade is conducted by neighboring countries. Border crossing trade can be done directly by fellow citizens. The purpose of this trade is to facilitate border residents in meeting their needs and interacting with each other.

4.Consignment
Consignment is a sales system through the delivery of goods. Consignment is done through a free market with an auction system.

5. Package Deal
Package deal is a trade activity conducted with the aim of expanding the production output of a country. International trade of the package deal type is usually accompanied by a trade agreement.

That is an overview of international trade, which is a transaction involving the buying and selling between two countries. Hopefully, it is useful and can broaden your knowledge.

(kpl/psp)