REASONS OR BASIS FOR INTERNATIONAL TRADE

REASONS OR BASIS FOR INTERNATIONAL TRADE

Countries engage in international trade for the following reasons:

Uneven distribution of natural resources: Natural resources unevenly distributed. While sc countries are naturally blessed, others have little or no natural resources, necessitates international trade.

Differences in climatic condition: climatic condition of the earth caries fid one region to another. This variation gives rise to another. This variation j rise to growth of different crops, hencethe need for exchange.
Differences in technology: The technology differs from one nation the world to another. Some countries with advanced technology can produce some industrial products at reduced cost and sell to the less developed countries.
Differences in skills: The inhabitants of a region may develop special skills in the production of a commodity such that it acquires special reputation for its skill. This can necessitate foreign trade.

Expansion of market for products: Foreign trade came into existence because of the need to widen the market for goods produced by a country.
Differences in the efficient use of natural resources: Foreign trade may arise because of differences in efficiency in the use of natural resources.
Differences between patterns of production and consumption: The differences between patterns of production and consumption in different countries necessitate international trade.

Differences in taste: Differences in the taste of various countries call for international trade.

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