Role And Importance Of International Trade

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This paper defines, and examines the role and importance of international trade. As many of us are aware, international relations between nations mean many things. International trade plays a major role in establishing those relationships. International trade can be described as the act of exchanging goods and services to and with other countries. It has a vast economic and political impact on the decisions that the government chooses to engross themselves in for the improvement of not just the country, but also its citizens. As the 1998 R. Kelly song says, “Money makes the world go round”. That is precisely what international trade is about. This paper not only goes into great detail about the meaning of international trade, but also how…show more content…
Sadly, there is a major disadvantage to international trade that is the amount of surplus countries are exporting to other countries. In some countries this dumping of surplus causes a loss in the market. Sean Ross another writer for Investopedia says, “GDP increases when the total value of goods and services that domestic producers sell to foreigners exceeds the total value of foreign goods and services that domestic consumers buy, otherwise known as a trade surplus” (Ross, 2015). While in most countries’ trade represents a significant share of gross domestic product (GDP) (Martins, 2017). Increasing international trade is the key to the continuance of globalization; this is because without international trade nations would be limited to the goods and services produced within their own borders (Rodrigue et al, 2017, Ch. 5). One of the components of gross domestic product is a measure of the value of exports and imports of goods and services. Our economy is based upon GDP. International trade consists of imports and exports by two or more countries exchanging goods and services (Heakal, 2015). Goods and services are exported and imported daily back and forth between countries. If net exports are positive, the GDP will then increase, if negative the GDP will decrease. International trade affects domestic markets because when the GDP decreases, tax rates increase having effects on students also (Brandly, 2002). International trade can improve
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