We’ve all heard of the phrase “love makes the world go round”, right? This may be true for some things, however when it comes to international trade, the only place where the ‘sugar, spice and everything nice’ exists is in a tangible manner.
International trade has been around for centuries and can be defined as the exchange of goods or services across international borders.
So, why is it important and how does it make the world go round?
International trade is the economic interaction between different countries, driven by enterprises and/or individuals that either export or import goods or services, and has a direct impact on the global economy. It allows for lower production costs (and ultimately total costs) from one region over another, highly specialised industries to market and sell their products, regions benefitting from a surplus of natural resources, and ultimately allowing the consumer to source products from different regions/cultures.
Due to the import and export movement of the goods or services supplied and consumed from one region to another, this creates a push and pull effect, giving an impression that it is driving the world. In another instance, not being able to consume or source goods from highly specialised organisations, certain regions could not function quite as effectively and efficiently; thus again giving an impression that trade is directly related to the speed at which the world runs.
Imagine a world where Steve Job’s products or Sir Richard Branson’s services could not be shared. Where the transfer of knowledge through books etc. could not be passed to other regions.
Would our world still be run as efficiently or effectively as it is to this day?
International trade. It makes our world go round.