Advantage And Importance Of International Trade

Generally, no country can produce all the goods and services that it requires. It has to buy from other countries what it cannot produce or can produce less than its requirements. Similarly, it sells to other countries the goods which it has in surplus quantities (Chand, 2016). This there leads to the development of international trade or foreign trade among nations and states all over the world.
International trade is simply known as the exchange of goods and services between nations of the world. At least two countries should be involved in the activities, that is, the aggregate of activities relating to trading between merchants across borders. Traders engage in economic activities for the purpose of the profit maximization engendered from differentials among international economic environment of nations (Adedeji, 2006). The Theory of comparative advantage make us to understand that countries trade with each other in goods and services because of the concept of differentials in the natural resources, human capital, financial capital and technical capabilities endowment of nations. Some countries are more endowed in these resources than others, even, many countries that are adequately blessed with good resources

Today’s world economic order (disorder) has simply rendered almost every modern economy to be heavily dependent on its foreign trade sector. And in no aspect is this trend more remarkable than the aspect of international competitiveness and the immense importance it now holds for the prospects of survival or failure of nations in their ability to obtain the maximum economic potentials from international trade. It can be stated that where international trade may be an engine that drives economic growth of nations, international competitiveness represents the fuel that empowers that engine (Ezeala-Harrison, 1999,