International Trade Benefits

This time we will discuss the factors of international trade and also the benefits of national trade for a country.


But before proceeding to the discussion, it’s good for you to know in advance about what is meant by national trade? (Read: Definition of International Trade l)


Table of contents :

Factors of International Trade Occurrence

International Trade Benefits

  1. It is easier to meet the needs of life
  2. Specialization benefits
  3. Expanding Market and Increase Income
  4. Technology Improvement
  5. Obtaining and Increasing Foreign Exchange
  6. Stabilizing Prices
  7. Expanding Job Opportunities
  8. Increasing the Prosperity of a Country

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Factors of International Trade Occurrence

A process will occur due to a number of factors, including international trade. The following are the factors that lead to international trade.


Differences in Natural Resources in Each Country

Differences in production factors for each country

Differences in science and technology

The economic conditions of each country are different

Save on production costs

The advantages of domestic products

Each country cannot produce all the goods that are owned by other countries

There is a desire to cooperate with other countries

International Trade Benefits

By conducting international trade, a country will get many benefits and benefits. International trade benefits include:


benefits of international trade


  1. It is easier to meet the needs of life

Each country has its own wealth of resources such as geography, climate, mastery of science and technology, and so on.


This affects the output of each country. The existence of international trade makes it easy for each country to meet their needs that are not produced by that country.


  1. Specialization benefits

What is meant by specialization here is the uniqueness of a country in production.


Even though a country is able to produce the same goods as other countries’ production, it is better if that country imports these goods from abroad if the price is cheaper.


Also Read:   Complete Accounting Fields

Japan is able to produce motorized vehicles much more efficiently than production in Indonesia, therefore it is better for Indonesia to import these motorized vehicles from Japan


rather than producing it yourself because the price is cheaper. These are the advantages of trade specialization:


Efficiency of production factors.

Enjoy more goods than can be produced domestically.

  1. Expanding Market and Increase Income

The existence of international trade will increase the market for the company. This is done by producing optimally, without fear of overproduction and falling selling prices.


Entrepreneurs can run their production machines to the fullest and sell the excess products produced abroad. In this case high productivity will increase income.


  1. Technology Improvement

International trade enables a country to learn more modern production techniques and more efficient management methods.


This knowledge is acquired because of the demand to increase production. Besides that, it is also not left behind from other countries.


  1. Obtaining and Increasing Foreign Exchange

By conducting international trade, countries will get and increase the value of foreign exchange. This is of course very useful for increasing state revenue.


  1. Stabilizing Prices

International trade can stabilize prices at home. For example, the price of domestic beef reaches Rp. 150,000.00 per kg.


Importing beef from other countries will put an emphasis on domestic beef prices so that the price level will fall and stabilize again.


  1. Expanding Job Opportunities

Improving the economy through international trade will increase job opportunities for workers, so that the unemployment rate will decrease.


  1. Increasing the Prosperity of a Country

International trade plays an important role in increasing the income of each country concerned.


Also Read:   Definition of Efficiency

This is because a country with advantages and disadvantages of an item can sell and get the goods it needs.


With this activity, the state’s needs will be met and on the other hand, the state’s income will increase.


So that an increase in state income will increase the welfare of the country concerned.

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