International trade is the exchange of goods and services between countries (i.e. between one country and another). This form of trade is either in goods, termed visibles or services termed invisibles eg. trade in services such as tourism, shipping and insurance.
International trade is with a view to:
- Acquisition of what cannot be produced eg. raw materials (imports)
- Foreign exchange from exports
- Industrialization – mobilization of domestic resources for industrial development
- Transfer of expertise
- Competitive business environment which increases the scope of concern on quality and relatively stable commodity prices.
- Attracting foreign direct investment (FDI) – establishment of international trade ventures and opportunities broadens the base for employment required to increase effective demand necessary for economic growth and development.
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