Concept Of Export In International Trade
The concept of export reflects one of the cardinal aims and goal of an international trade. The process of export of goods to a foreign country require an absolute request and demand made by a corresponding consignee from the home base country which the goods will be used and attracts higher demand with greater economic importance at the end of the day.
Concept Of Export In International Trade
The concept of export reflects one of the cardinal aims and goal of an international trade. The process of export of goods to a foreign country require an absolute request and demand made by a corresponding consignee from the home base country which the goods will be used and attracts higher demand with greater economic importance at the end of the day.
The concept of export of products from a country requires local sufficiency. This is because; a country that involves in export must have an abundance of the same goods she wants to export locally, hence the concept is wholely anchored on local sufficiency of same product meant for export at the end of the day (Ndikom, 2012). Obviously, no country that will engage in an export process without having the goods in sufficient quantity and supply for the satisfaction of the local economy. The saturation of the products for the sufficiency of the local economy is the anchor for the exports to other countries (Ndikom, 2012).
Characteristics or Conditions for International Trade between two Countries
1. Where each country can produce one commodity but not the other, both countries will benefit from the trade (Lawal, 1982).
2. Where each country can produce one commodity more cheaply than the other, it will pay both countries to trade because this will lead to a more efficient allocation of resources and higher productivity. Obviously, the gains from this type of trade are quite substantial.
3. Where one country can produce both commodities more cheaply than the other, which reflects the fact that, it will still be beneficial to specialise in the line of greater comparative advantage, and not to consider absolute advantage for it is comparative cost differences that matter in the international specialisation and exchange (Lawal, 1982).
The Gains/Benefits of International Trade
Over the years, economic transactions and commercial relationship between nations of common interests within the confines and scope of the international trade have reflected to a large extent a lot of “Gains or Advantages” that are no mean feat at the end. It is pertinent to note here that, such gain or advantage could only be possible if each nations of common interest cold devote itself to what it can produce cheaply. However, this brings about efficient allocation of resources because each country specialises in producing the commodities in which she has comparative advantage over others. This obviously means that, countries direct their factors of production to area where they can produce more, which is possible through the process of engaging in the international trade (Lawal, 1982). The advantage or gains of international trade between nations of common interest are as follows:
a. There is an increase in the total world output of commodities.
b. There is an increase in the production of goods to the highest level as a result of each country specialising in the production of such commodities where the resources can be fully utilised.
c. There is an increase in the standard of living all over the world.
d. Each country gets more of different types of products.
e. Obviously, through international trade, products that cannot be produced in an area, can be easily traded (Lawal, 1982).
f. Thus, there is an increase in number and variety of goods not produced in an area that are traded (Lawal, 1982).
g. There is this opportunity of an additional new markets opening as new products are produced.
h. There is the possibility of an improved communication links between nations of common interest to actually facilitate easy transportation of commodities, thus, the physical gap among countries is bridged (Lawal, 1982).
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