International Trade Has Benefits for the Consumer, Worker and for Businesses

When a consumer in the UK buys mangoes or bananas, coffee or a bottle of wine, they are experiencing the effects of international trade not only in the products that are on offer but often also in the price of those products.

But it doesn’t only apply to the products on the supermarket shelves. Increasingly the flat pack furniture a consumer buys at a competitive price, the clothes and shoes they wear, or the toys they buy for the children all have their origins in another country.

The chances are that the furniture originated in South East Asia, the clothes were made in India, the shoes in Brazil and the toys in China.

The same is true for businesses, who manage their overheads by “offshoring” using call centres in India or the Philippines to manage their communications with customers or potential customers, or having their websites hosted and managed, or their R & D carried out in India.

Part of the reason for this is that international trade with countries where production costs are cheaper because wage rates are lower and raw materials widely available means that there is greater competition and this means that the end price to the consumer is lower than it might be for the same goods to be manufactured at home.

It also makes possible a wider choice for consumers about the products that are available to them.

These examples illustrate the importance to the modern global economy of international trade not only to the consumer but also for businesses seeking to develop and grow.

Equally in an inter-connected global economy international trade can be a source of more jobs and therefore income in other countries that have developed expertise in particular areas as India has done with IT support services and China with manufacturing.

While it could be argued that this has increased levels of job insecurity as companies constantly look for locations where there is a plentiful and cheap source of labour and raw materials, it could also be argued that it also creates opportunities.

Rapidly growing economies such as the BRICs (Brazil, Russia, India and China) may have cheap labour and plentiful raw materials but as they seek to grow into fully mature economies they may experience skills shortages in certain areas of expertise.

They need time to develop that expertise and this provides opportunities for educational establishments such as universities to market their courses to overseas students. Equally it provides opportunities for consultants to offer their services overseas.

For example, there is a worldwide shortage of engineers in many fields and therefore there will be opportunities for qualified people in places where efforts are being made to improve the transport and energy infrastructures, such as Brazil.

There may not be the in-country facilities for manufacturing the heavy plant and machinery needed for such projects and this too provides opportunities for businesses in other countries.

Initial research into such possibilities can be carried out by using an online trading portal to advertise services, find the local contacts and organisations that can help and to understand the legalities that are in place in the target country.

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