BUMA 20043: International Business and Trade

Identify and explain the effects of import and export in the economy.

As the world continuously turnaround and evolves, changes continuously happen. One
minute you’re just sitting in your office while having a coffee break then the next one you are
being ushered to the president’s office for a talk about the promotion that you’ll get for the job
excellence you have shown for the past months/years. This kind of change entails a lot more
changes like having a good set of corporate friends where you could gain fun, knowledge, and
experience thereof. Also, being promoted could lead someone to have a better lifestyle which
means his/her wants and needs as well as preferred goods, brands and quality that they have
been looking for as a customer may also change.

These vast changes, from what I think, is the very reason why businessmen and
companies started thinking of going global. The growing needs and wants of the customers urge
the commerce world to open up the ports which makes way for the goods to be transferred
across the world. This is where export and import have been initiated.

Imports and exports are the backbone of international trade. Import means the purchase
of foreign products and bringing them into one’s home country. While exporting means selling
goods and services from the home country to a foreign nation. Import and exports have benefits
and limitations of their own. Benefits that one can get from exporting are increase in sales
potential and increase in profit. Some of the benefits derived from importing are listed below:

1. Introducing new products to the market

2. Reducing Cost
3. Becoming a leader in the industry
4. Providing high quality products

Disadvantages brought by exporting could be businessmen losing their focus on their

home markets and existing customers. Exporting may increase the cost that a businessman
pays due to the administration of the trade. Exports also means managing more remote
relationships.
Limitations in Importing are caused by various risk factors such as:

 Foreign exchange risk

 Piracy risk
 Political risk
 Legal risk
 Cultural risk

Reference:

What are the Benefits of Importing and Exporting Products? (2017). Retrieved from accb.com:
https://www.aacb.com/benefits-of-importing-and-exporting/
Ruben Anlacan, J. (2011). Advantages and Disadvantages of Importing. Retrieved form
businesscoachphil.com: http://www.businesscoachphil.com/should-you-import