Trade involves the transfer of goods or services from one person or entity

to another, often in exchange for money. Economists refer to a system or

network that allows trade as a market.

In one modern view, trade exists due to specialization and the division of
labor, a predominant form of economic activity in which individuals and
groups concentrate on a small aspect of production, but use their output in
trades for other products and needs Trade exists between regions because
different regions may have a comparative advantage (perceived or real) in
the production of some trade-able commodity—including production of
natural resources scarce or limited elsewhere. For example: different
regions' sizes may encourage mass production. In such circumstances,
trade at market prices between locations can benefit both locations.
International trade is the exchange of goods and services across national borders. In most
countries, it represents a significant part of GDP. While international trade has been present
throughout much of history (see Silk Road, Amber Road), its economic, social, and political
importance have increased in recent centuries, mainly because of Industrialization, advanced
transportation, globalization, multinational corporations, and outsourcing

Empirical evidence for the success of trade can be seen in the contrast between countries such
as South Korea, which adopted a policy of export-oriented industrialization, and India, which
historically had a more closed policy. South Korea has done much better by economic criteria
than India over the past fifty years, though its success also has to do with effective state
institutions

One of the top advantages of international trade is that you may be able to increase your number
of potential clients. Each country you add to your list can open up a new pathway to business
growth and increased revenues.

Sales can dip for certain products domestically as Americans stop buying them or
move to upgraded versions over time , Selling a product to an overseas market can
extend the life of an existing product as emerging markets seek to buy American
products.

One of the significant advantages of international trade is market diversification.

Focusing only on the domestic market may expose you to increased risk from
downturns in the economy, political factors, environmental events and other risk
factors. Becoming less dependent on a single market may help you mitigate
potential risks in your core market.(better risk management)

Doing business in other countries can boost your company's reputation. Successes
in one country can influence success in other adjacent countries, which can raise
your company's profile in your market niche. It can also help increase your
company's credibility, both abroad and at home. This is one of the advantages of
international trade that may be difficult to quantify and, therefore, easy to ignore.
CHAOUCH EL HADJ ABDELHAK

Department of management science , business and economic science

1st group

1st year master

ENGLISH EXAM
The importance of trade & international trade

Mrs : K-Y NOURA