Benefits of Foreign Trade

"The benefits of foreign trade"

is very extensive for a country's economy. One of the benefits of foreign trade is as a contributory factor to increase the GDP of a country that do foreign trade. Not only that, foreign trade provides many benefits to a country in many ways. The benefits of foreign trade is indirectly instrumental in the development and advancement of a country.

The benefits of foreign trade for development and advancement of a country are as follows:
1. Obtain the goods that can not be produced or manufactured in the country.
A country would need a variety of goods or products to meet domestic needs, but the fact that not all goods or products that are needed can be generated or produced by the country. So the presence of foreign trade, a country can bring in or import goods or products from other countries to meet in the country. As an example of America to bring oil from Arab countries, and instead bring in Arab countries or importing weapons from America.

2. Source of Foreign Exchange State.
Benefits of the next foreign trade is as a source of foreign exchange. By conducting foreign trade, a country will obtain additional foreign exchange obtained from the difference between exports and imports.

3. Benefit from specialization.
Although a country able to produce or manufacture goods or products with other countries, but allows for the country to bring in or import from other countries. It is necessary to improve the efficiency of factors of production owned by that country.

4. Technology transfer.
By conducting foreign trade, means that an indirect transfer will occur more modern technology for a country. This happens because of a country's relations with other countries that indirectly, the progress or procedure will affect a country's production or spread to other countries.

Foreign trade benefits for businesses and communities involved.
1. Expand market share.
Foreign trade has a very broad market areas and promising for business. With the foreign trade, business in the country is not only isolated by the domestic market share. They can expand its business by way of an agreement to conduct foreign trade that has a broader market share.
2. Expanding employment opportunities
The extent of foreign market share would be offset by increased demand for goods or products produced domestically. So, companies involved in this case would require much labor to produce goods or products to meet the demand of overseas market share.

3. Improving the quality of an item or product produced.
With the agreement of foreign trade, will indirectly impact the increased competition for business. This will make firms in the country trying to remain in existence and able to compete by improving the quality of goods or products produced.

4. Increasing the skills and expertise of the workforce.
To improve the quality of goods or products produced by a company, the first thing important role is labor. The workforce is expected to have good skills and expertise.

Foreign Trade

"Foreign trade" is a form of cooperation relating to the sale and purchase between two or more countries. Foreign Trade conducted among residents of a country with a population of another country or it could be between the government of a country with individuals from other countries. Overseas Trade, better known as import-export activities.

With the foreign trade helped to encourage industrialization, transportation advances, globalization and the presence of multinational companies. In many countries, foreign trade is a driving factor to increase the GDP of a country.

When compared to domestic trade, foreign trade is more complicated and complex. The complexity is due to different policies of a country to another. In addition, the complexity of foreign trade is also caused by differences in customs, import quotas, culture, language and currency of a country to another. So to conduct foreign trade activities, a country or individuals must be able to adapt to these differences.

In general, the main obstacle of the most fundamental in the transaction lies in the differences in language. Most of the foreign trade carried out using the international language is English. Now the question, whether all the entrepreneurs to master English? Of course not. So to overcome the language barrier, usually between two parties using the services of an interpreter or use the services of a guide to facilitate the transaction.

In conducting foreign trade, a country has its own strategy to maintain its presence. As contonya Japan is a country, as we know the Japanese state has a strategy known as dumping politics. In its development, politics of dumping is widely used by countries around the world. Politics dumping is a marketing strategy that is done by setting the selling price abroad is cheaper than the selling price in the country. The main purpose of politics is to control the dumping of foreign market share according to which has been targeted.

As for things that need to be considered in conducting foreign trade is technically payment. Technical errors in determining the payment may result in bankruptcy or loss in business. So, in conducting foreign trade, an exporter must determine whether the technical payment on the basis of mutual agreement between both parties. There are many technical options in determining the payment in foreign trade. Some of them are:
1. Cash in advance
2. L / C
3. Draft
4. Consignment
5. Open Account

Foreign Trade can provide many benefits to a country. One is to expand the marketing area. So a country does not have to worry about excess production of an item that can lead to decline in the price of a product. The products produced by a country that do foreign trade will be absorbed by the global or international markets.

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