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Causes and obstacles of international trade

2019-04-19 News No comment

If you see news that Japan and Ukraine will be involved in any international trading system for certain commodities for a certain period of time, what do you think of? Do you think that these two countries will face any challenges when participating in this transaction. Will it be good? The reasons why countries engage in foreign trade are as follows:

1. Uneven distribution of natural resources: Unnatural distribution of natural resources, some countries are naturally blessed, and some countries have little or no natural resources. This requires international trade.
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  2. Differences in climatic conditions [especially when it comes to agricultural products]: The climatic conditions of the Earth vary from region to region. This change leads to the growth of different crops and therefore needs to be exchanged.
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  3. Technical differences: The level of technology is different from that of a country in the world. Some countries with advanced technology can reduce the cost of producing some industrial products and sell them to less developed countries.
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  4. Skill differences: Prisoners in a region can develop special skills in the production of goods, giving them a special reputation for skills. This may require foreign trade.
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  5. Expanding the product market: Foreign trade should exist because of the need to expand the commodity market produced by a country.
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  6. Effective use of natural resource differences: Foreign trade may occur due to differences in natural resource use efficiency.
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  7. Differences between production and consumption patterns: Differences between production and consumption patterns in different countries make international trade inevitable.
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  8. Differences in taste; differences in tastes of countries require international trade.
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  9. Aspirations to improve living standards: Countries engage in international trade to improve people's living standards.

Obstacle or problem

1. Language issues: Different languages ​​are used in different countries of the world. Communication between merchants from different languages ​​may be difficult.
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  2. Distance problem: Moving from one country to another may take days or weeks due to the distance. This may delay the rapid exchange of goods and services.
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  3. Many documents: There are two documents used in international trade. This makes foreign trade processing time too long and sometimes cumbersome, such as money orders, ship lists, certificates of origin, etc.
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  4. Currency differences: Each country has its own currency, which is different from the currencies of other countries. In foreign trade, money must be converted before a meaningful transaction occurs.
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  5. Tariffs: A country can impose import duties [tariffs] on imported goods, which will make the goods more expensive.

International trade often leads to trade imbalances between countries, and as a result, viable countries may not trade with winners. Foreign trade may be hindered by the political ideology of different countries. A country can decide cautiously not to trade with another country because of its political differences, such as the United States and Libya in 1988. A further problem may be that since the system is not standardized, there is no international uniformity in weighing and measuring the cargo system. Therefore, it must be converted, which hinders trade.

Man-made obstacles can be created by direct damage to products, quota systems or licenses to goods. Merchants from different countries, especially in Africa, have difficulty communicating with partners in other countries due to poor communication and transportation facilities. This has greatly hindered foreign trade. Finally, religious beliefs and cultures vary from country to country, and these may hinder international trade.

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